Competitive Bidding and Sealed Proposals Essay Sample
Sealed command and competitory proposals are the two methods used to get competitory monetary values from bidders. Sealed command is “a procedure by which authorities demands are made known by a solicitation called and Invitation for Bids. The authorities will utilize certain command when ( 1 ) it feels confident that award can be made to the lowest monetary value offerer who is antiphonal and responsible and ( 2 ) the government’s demand is moderately good defined in the signifier of drawings and specifications” ( Murphy. 2009 ) . Once the commands are opened. the monetary values become public cognition. This could be a disadvantage to contractors because their monetary values will be made known for all to see. When certain command is used. the lowest bidder that is found to responsive and responsible will be awarded the contract. “Sealed command ever leads to a firm-fixed-price contract or fixed-price with economic accommodation contract” ( Murphy. 2009 ) . This would be another disadvantage to the contractor.
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because all the hazard is on the contractor in fixed-priced contracts. “Competitive acquisitions rely on market forces to obtain the best value to the government” ( Murphy. 2009 ) .
This procedure differs from sealed command because offerers can alter their proposals and negotiate. Unlike certain command. competitory acquisitions may non present the contract to the lowest bidder. “This procedure licenses tradeoffs among cost or monetary value and noncost factors and allows the authorities to accept other than the lowest priced proposal. The sensed benefits of the higher priced proposal shall deserve the extra cost. and the principle for trade-offs must be documented in the file” ( Murphy. 2009 ) . Bing awarded cost-reimbursement contract would be best for a contractor because most. if non all. of the hazard falls on the authorities. Because of the differences in these two methods. the competitory acquisition method can be more advantageous to contractors. Contractors who do non hold the lowest proposed monetary value can still be awarded a contract. and/or can negociate with the authorities and alter their proposals. These two things entirely give contractors a better chance to be awarded a contract. instead than merely seeking to hold the lowest command. Besides. as I stated supra. a cost-reimbursement contract carries no hazard for the contractor. This type of contract can non be awarded when the certain command procedure is used.
Murphy. J. E. ( 2009 ) . Guide to contract pricing: Cost and monetary value analysis for contractors. subcontractors. and authorities bureaus. Vienna. VA: Management Concepts