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LPTA: Misplaced Controversy?

NCMAExecutiveDirector

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Lately there has been considerable concern regarding the government’s greater reliance on a minimum acceptable technical standard for performance, thus leaving the remaining selection criteria to low price. The fear is that this is squeezing contractor margins concurrent with a “race to the bottom” in the quality in performance of government programs. While none of us wants the “low-bidder” surgeon performing open-heart surgery on us, is this really the issue?

If that standard is defined well enough, the lowest price within that standard will result in a good value for the both parties. If that standard is not well defined, you might end up with the cheapest part and the old adage, you get what you pay for becomes reality for government managers.

Today we see the salaries of many professionals being cut, in order that their firm is better able to win the government’s solicitation. Some of this is part of any business strategy. On the other hand, a price point will be reached where quality and a proper minimum technical standard won’t be reached and something has to give.

Therefore, the problem may not be the source selection strategy selected to determine who gets the contract, but how well the requirement is defined and how well the buyers understand their market and its capabilities.

Historically, if you ask contracting officers what is number one on their wish list (along with supportive management), they most likely will request a solid statement of work (or statement of objectives, performance work statement, or other similar requirements definition) along with a good grasp of what is happening in the marketplace to determine how best to satisfy the government’s needs.

If requirements are very well defined and widely understood, the quality of what is acceptable is not an issue. Government officials must clearly articulate and not accept anything less than the standard of acceptability proper for their needs. If they do so, price comparison is simpler and best value is achieved.

Michael P. Fischetti, Executive Director

National Contract Management Association




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