Government procurement: why best value contracts still go to the lowest bidder

Key points: Government procurement best value

• Lowest bidder is formally lowest technically acceptable: the winner does meet every line of the spec sheet and every delivery date, just at bare minimum, and it turns up mostly on bulk, well-established orders where nothing new is being developed.
• Best value is supposed to allow trade-offs, paying more for a contractor that delivers four months sooner or exceeds a stated accuracy requirement, but Boondock's experience is that unless the bids sit within a penny of each other the award still goes to the cheapest.
• A source selection team is typically about five people drawn from different technical areas working a grading rubric, and he has watched a team recommend one contractor only to have legal and contracting award it to another.
• Loosely written solicitations are the reason: if a priority was never spelled out in the RFP, a losing vendor can protest that it was never given the chance to offer that feature, so legal avoids nuanced technical calls.
• Proposals must be judged on paper alone, so knowing a vendor is months behind on three active contracts, or that a machine it needs has an eight-month lead time and was ordered last week, is knowledge an evaluator is not allowed to weigh.
• Past performance checks mostly confirm a vendor has held government contracts before rather than that it delivered on time, and he describes asking to get out of a contract with a vendor that bad and being told no.
• Vertical integration can decide an award outright: a parent company that sole-sources a required component can supply its own subsidiary months early while quoting rivals long lead times in their letters of commitment, with site visits and commitment letters the only inconsistent checks against it.

About this Drama and Gripe video

Government procurement and DoD source selection from the inside: Boondock Ballistician, who has sat on the technical teams that grade contract proposals, explains why lowest bidder is the least of the problem. Covers lowest technically acceptable versus best value awards, why best value trade-offs collapse back into price, how deliberate underbidding clears a market, why evaluators cannot use what they know about a vendor's late contracts, and how a sole-source parent company hands its own subsidiary an unbeatable delivery schedule.

Transcript: Government procurement best