Defining success & choosing a contracting mechanism

What the government is optimizing for:

• Price: Get the solution for the best price
• Quality: Quality can mean lots of things, but typically involves some combination of:
  • Getting a solution that fully meet their needs
  • Getting an innovative solution
  • Getting a “tried and true” solution
  • Getting the quantity needed
  • Getting it when they need it
  • Getting it where they need it
• Speed: Minimize the total acquisition process time
• Administrative Risk: Reducing the chances that there will be compliance issues such as:
  • Not meeting government accounting standards
  • Not meeting security clearances
  • A losing bidder protesting the award
  • Government cost over runs

Depending on what the government is optimizing for the acquisitions team will make different choices

• The contractual mechanism: The government has about 12 different ways to buy and each one has pros and cons for the Price, Quality, Speed and Risk. The acquisitions team will tend to choose mechanisms that align with their goals. For more on the different mechanisms see our course on Contract Types
• The level of competition: The government can limit the pool of companies that can bid on a given contract. Generally restricting the pool increases speed since there are fewer proposals received but may sacrifice quality and price. For more on the different levels of competition see our course on Limiting Competition
• The evaluation: There are two principle ways that the government chooses winners:
  • Low price technically acceptable (LPTA): Under LPTA price is the dominant evaluation factor, so this evaluation tends to drive down price at the expense or quality, and risk
  • Best Value (BV): Under BV the government considers a basket of factors (including price) when choosing winners so this evaluation tends to improve quality quality and risk at the expense of price (and for reasons we will discuss later this evaluation can hurt speed)
• The pricing: There are two principle ways contracts are priced:
  • Firm fixed price (FFP): Under FFP the bidder names a price, and that price doesn’t change, so if there are cost overruns the contractor covers them, and conversely if the contractor can cut corners and save money they keep that as profit. So this pricing tends to protect government from cost overrun risk at the expense of quality
  • Cost: There are many types of cost contracts but what they all have in common is that the government agrees to cover the cost to do the work. So the government takes on cost risk, but if should improve quality.
• Limitations on competition: There are many ways to reduce competition for a contract (Sole source awards, set-asides, Micro-purchases, etc) but in each of those cases the government is sacrificing price (less competition to drive the price down) but could get improved quality or a faster process depending on the competition mechanism they choose.
• Past performance and other bidder requirements: The government likes to put in requirements that bidders have already done similar work, or that they have certain certifications. These requirements tend to increase quality and decrease risk but hurt price (fewer people can bid) and may hurt the government if they want a novel solution.

Your goal in all this

• Engage the government decision makers and make the case for how you think they should execute this acquisition
• Avoid disqualifiers: If the government wants to use a contractual mechanism you can’t access, use a set-aside you don’t have, or use an evaluation approach that plays to your company’s weaknesses make the case that the government shouldn’t do those things.
• Encourage choices that play to your strengths: This is the opposite, if you have extremely strong past performance or can deliver a very cheap solution make the case to the government that they should structure the acquisition in ways that favor you.

How Fedscout can help you

Rants and Reflections

My unscripted thoughts after coaching hundreds of small government contractors over the last 10 years

---

Other resources

List of further reading