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I would like to see James Paris's data in support of his claim: "The government almost ALWAYS gets better value and product through a competitive procument process." The competitive negotiation process under FAR Part 15 is very costly and time-consuming, and what it produces is competitive essays, not value.

Vern Edwards  | Thursday, August 23, 2007 |  06:43 PM

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My comment was based only on my experience and it expresses what I have seen through many years of being involved in the contracting experience as an engineer. No theory, no rationalization, just experience. It was just based on getting what was necessary to complete a project the best way for the Government at the best value. If someone else has experienced as a customer that is fine. I can just rely on my experience and that is that I almost always get a better product at a lower price with a negotiated, no-bid type of contract. I have seen situations where the contracting officer would override desires of the engineer and those situations almost always turned out worse for the Government.

David Schow  | Thursday, August 23, 2007 |  11:25 AM

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A thought: perhaps it's time for a re-rationalization of contracting and bidding. Perhaps the best aspects of no-bids could be brought to the open bid process. There is no valid reason why the Government shouldn't be "able to negotiate exactly what will be best and take advantage of the contractor's ideas as to how to do the job best" in an auction. Over time, as the no-bid contract becomes the way to do business, there is no incentive for a contractor who is "in" to maintain a low margin. That's basic economics, it's basic human nature, and it's what any rational person faced with the same situation would do. If you provide "unique" services, you would eventually demand to be paid as if they were unique.

Last thought: just because the system was not worked properly in the past doesn't mean it cannot work splendidly in the future. It just means it wasn't worked properly.

rational economist  | Thursday, August 23, 2007 |  08:00 AM

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The no-bid contract isn't the problem. It's the procurement specifications to big with. No-bid contracts save a lot of time and money, especially when purchasing small quantities of repair parts.

The real culprits are the OEMs (original equipment manufacturers) who deliberately provide vague technical documents for end items and the agencies who buy these end items without adequate specs. How are you suppose to get competitive bids on the right item if you can't describe it and how do go back on a contractor if you didn't tell them exactly what you wanted in the first place?

That also is the downfall of no-bids. The government may spend many times what a part is worth because it can't identify what a part really is.

Robert M.  | Thursday, August 23, 2007 |  07:25 AM

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1. The government almost ALWAYS gets better value and product through a competitive procument process. Sealed "BID" type contracts are rarely used now (for the reasons cited by Mr Schow), but the competitive NEGOTIATION process (FAR PART 15) allows the government to negotiate exactly what it needs and take advantage of private sector innovation and creative problem-solving.
2. Contrary to Mr. Shoop's implication, Acquisition Reform did not repeal the Competition in Contracting Act; rather it compelled use of more creative and useful competitive processes that considered the entire range of "best value" to the government, while moving away from simply awarding to the low price offeror.
3. The main problem today is the non-competitive placement of delivery orders against indefinite quantity service contracts with broadly defined statements of work. While the underlying contract is competitively awarded, the orders are not and often these contracts are used to order work that really lies beyond the scope of the contract (i.e. ordering interrogator and translator services for Aby Graib through a Dept of Interior contract for "Information Technology services").
4. The issue that is the real elephant in the room is the decay of the Acquistion Workforce. Whether measured in terms of raw numbers, average experience or degree of training, the civil servants charged with acquisition duties are stretched thin. The use of broadly defined, indefinite quantity contracts is one of the main ways in which the acquistion community has coped with supporting GWOT with declining resources.
5. For reasons of cost-efficiency, ethics, transperancy and public confidence, the federal government must adopt policies that honor both the SPIRIT as well as the LETTER of the Competition in Contracting Act.

James Paris (corrected)  | Thursday, August 23, 2007 |  05:03 AM

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In the procurement of complex services, there is no evidence that competitive bidding saves money or yields better work. Competitive bidding for complex services determines who has produced what the agency thinks is the best proposal. It is an essay-writing contest. Statements of work and contractor proposals for complex services are unavoidably vague, and likely do not describe what an agency will actually need and receive. Even under fixed-price contracts, costs and quality are determined over the course of performance in response to emergent needs and conditions.

Competitive bidding costs money, takes time, inhibits communication during contract formation, and does not determine the actual quality received or price paid. David Schow is correct that sole-source procurement permits the parties to reach a clearer understanding of the work to be done and a better understanding of costs. While I would not say that sole-source procurement necessarily produces better quality and lower prices than competitive bidding, I think that in the hands of competent and honest people it is likely to do so. The problem is how to choose contractors honesly and without undue favoritism.

Vern Edwards  | Thursday, August 23, 2007 |  03:52 AM

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David,

I believe you're exactly backwards on this issue. Years ago before open contracts we heard the exact same argument only against sole source contracts. The problem is that there is a disconnect between contracting personnel and the end customer. Contracting personnel rarely if ever know exactly what is needed by the end customer so the wording of the contracts becomes vague or outdated and the language of the contract ends up being muddled with the end result of costing more. With no bid contracts the customer tells the contracting officer what company to go with and what product he wants from that company with the result being a clear definition of what the customer wants.
The same can be achieved with open bid contracts but the contracting official needs to be more involved with what the customer wants and involve the customer at every decision point.

Also I really don't see how you could spend "billions of dollars" on open bid contracts it does not cost that much to make a contract. Perhaps you ment billions of dollars of full and open competitions.

Robert L Sowders  | Thursday, August 23, 2007 |  01:01 AM

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My experience with working with both bid and no-bid type contracts is that generally the Government gets better value for their money with a no-bid type contract. The Government is able to negotiate exactly what will be best and take advantage of the contractor's ideas as to how to do the job best and for the lowest price. There is also less up-front work and fewer modifications to no-bid contracts. The competitive bid contract is generally where the Government get inferior products for high prices.

David Schow  | Wednesday, August 22, 2007 |  04:01 PM

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