October 15, 2007

EDITOR'S NOTES

In a government source selection, the selection committee typically has a list of questions it asks about each proposal. Whether the list is written or mental, the answers help determine which contractor is best suited for the job. According to one source selection evaluator, that list may include some of the following general questions:

* Did the bidder follow the directions of the RFP?
* Is the proposal easy to follow or painful to read?
* Does the bidder have a grasp on what the project requires?
* Does the bidder know what is most important to the agency and does the bid reflect that? This could be cost, schedule, past performance, etc.
* What is the bidder’s past performance on related jobs?
*Is past performance comparable to the proposed project?
*Does the agency have confidence in the listed subcontractors?
*What are the inherent risks, if any, of each subcontractor?
*Does the proposal quantify the parameters that the agency considers more important than cost, such as risk, schedule, past performance, experience, etc.?
*Does the contract incentive structure reward what is most important to the agency?
*Is the bidder unrealistically optimistic in regards to cost, schedule and/or performance?

The list continues, obviously, and the source selection process can be a drawn-out process for both the selection committee and the bidders. This week’s first case deals with the requirements of bidders on a request for proposals (RFP). When it comes to analyzing past performance, the GAO determines that unless the RFP specifically enumerates cost requirements to compare the proposed project with similar past projects, bidders do not need to meet specific cost thresholds.

The U.S. Army developed a guide in 2001 to help source selection committees understand the process of reviewing proposals and awarding contracts. We have included it as a PDF file in this week’s issue as an insight into the process.

Also this week, we consider a subcontractor that signed a contract without reading the fine print; specifically, the contract’s general conditions. Is the sub liable for on-the-job damage? If the signature is on the contract, yes. It does not matter if the sub failed to read the contract details.

And finally, a subcontractor proved its case against a material supplier that reneged on a price agreement. However, the sub must have another legal go-around to determine lost profits associated with losing a contract because of the rate hike. It failed to prove its losses, ruled the appeals court.

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