BUS 315 011VA016-1126-001 Cost And Price Analysis
July 22, 2012
Whether it is a set of computers, a group of buildings, or database management services, chances are it was acquired through a government contract. The government often uses contracts to acquire needed products or services. Every government purchase uses public funds. Contracting officials are tasked with ensuring that government purchases use public funds responsibly. When awarding contracts, contracting officials must be sure to use the best method possible to acquire goods and service at the best price possible. Two ways in which contracting officials do this is by using sealed bids and competitive proposals. Each form of awarding contracts has its own specific benefits and pitfalls while sharing some characteristics with the other. Sealed bids are a form of awarding contracts that uses competitive bids and public opening of the sealed bids which leads to the final award of the contract. In order to award a contract through sealed bids, a few things must occur. First a solicitation for bids must be drafted. The solicitation must include the government’s requirements in a detailed enough fashion to avoid misunderstandings from potential bidders. Sealed bidding and competitive proposals are both approved methods for awarding contracts according to federal regulation. When deciding whether or not to use sealed bidding, contracting officers should consider the time that will be required for bids to be solicited, submitted, and evaluated. The evaluation process for sealed bids may be lengthy especially if bidders are not prescreened to reduce the pool to only qualified firms. When all bids are received from qualified firms, sealed bidding can make an award decision quite simple. The lowest bidder is awarded the contract.. Unfortunately, sealed bidding depends on competitive pricing. Competitive pricing cannot be insured unless more...