4 ms·

That's not a problem with fixed price contracts so much as selecting the lowest bidder. An agency which is allowed to pick the more expensive contract that is j

That's not a problem with fixed price contracts so much as selecting the lowest bidder. An agency which is allowed to pick the more expensive contract that is justifiably better usually won't succumb to these problems.

bumby 6y ago
“Best value” can be very hard to get approved when lower bids exist. Circling back to the incentive theme, I have a feeling contracting officers are graded, in part, by how much they “save”. (In quotes because you can often pay much more in the long run by selecting the lowest bidder). I’ve found people are very risk adverse in this regard and would prefer to select the lowest bid instead of potentially defending their decision during a protest.
- zie 6y ago
  I think it all depends on your local purchasing department(every govt agency/department gets their own, pretty much). Our department's attitude can be summed up(by me) as: select the best solution to meet your needs, mostly irregardless of cost, but be sure you can articulate why you are buying from A. I.e. You can pick whatever vendor you want, provided you are happy to stand up, under oath, in court and talk about WHY you selected vendor A over vendors B, C and D. So far so I have no experience in court defending our choices.
zie 6y ago
And those of us that spend govt money generally do this, it's totally fine to not pick the cheapest, you just have to have a sound reason to do so. I.e. if you aren't willing to stand up in court and talk about why Tootie is better than Tito, despite Tito being 10% cheaper, you better be selecting Tito or looking for another job.
- garmaine 6y ago
  Thanks for offering your experience. That matches with my own as well, albeit from the other side. I worked for a large government contractor on our bid, and we knew we weren't going to have the cheapest option but rather banked on the value-add. And most of the time it worked.
stripline 6y ago
The government doesn't have to select the lowest bidder, that is a misconception. If they think the bid is too low, they can "risk up" the cost, adding in the cost of the additional risk not accounted for. The FAR specifies that they select for best value. https://blog.theodorewatson.com/understanding-the-federal-government-best-value-procurement-system-under-far-part-15/ https://blog.theodorewatson.com/understanding-the-federal-go...
- garmaine 6y ago
  I know! I used to be a government contractor. I was rather pointing out that the failure mode in question only arises when budget is the deciding issue between proposals. A proper procurement process decides based on delivered value, however.

bumby 6y ago

“Best value” can be very hard to get approved when lower bids exist. Circling back to the incentive theme, I have a feeling contracting officers are graded, in part, by how much they “save”. (In quotes because you can often pay much more in the long run by selecting the lowest bidder). I’ve found people are very risk adverse in this regard and would prefer to select the lowest bid instead of potentially defending their decision during a protest.

zie 6y ago
I think it all depends on your local purchasing department(every govt agency/department gets their own, pretty much). Our department's attitude can be summed up(by me) as: select the best solution to meet your needs, mostly irregardless of cost, but be sure you can articulate why you are buying from A. I.e. You can pick whatever vendor you want, provided you are happy to stand up, under oath, in court and talk about WHY you selected vendor A over vendors B, C and D. So far so I have no experience in court defending our choices.

zie 6y ago

And those of us that spend govt money generally do this, it's totally fine to not pick the cheapest, you just have to have a sound reason to do so. I.e. if you aren't willing to stand up in court and talk about why Tootie is better than Tito, despite Tito being 10% cheaper, you better be selecting Tito or looking for another job.

garmaine 6y ago
Thanks for offering your experience. That matches with my own as well, albeit from the other side. I worked for a large government contractor on our bid, and we knew we weren't going to have the cheapest option but rather banked on the value-add. And most of the time it worked.

stripline 6y ago

The government doesn't have to select the lowest bidder, that is a misconception. If they think the bid is too low, they can "risk up" the cost, adding in the cost of the additional risk not accounted for. The FAR specifies that they select for best value. https://blog.theodorewatson.com/understanding-the-federal-government-best-value-procurement-system-under-far-part-15/ https://blog.theodorewatson.com/understanding-the-federal-go...

garmaine 6y ago
I know! I used to be a government contractor. I was rather pointing out that the failure mode in question only arises when budget is the deciding issue between proposals. A proper procurement process decides based on delivered value, however.