Contract and Pricing
Glen Mar Construction, Inc. files a protest with reference to the award of contract that the U.S. Department of Veterans Affairs awards to the Facility Defense Consultant under the bids invitation "(IFB) No. VA260-14-B-0412" issued for the construction of medical centers building. The Glen Mar protests on the ground that the agency's price evaluation is unfair and unreasonable because the bid results in the "awards to other than the lowest-priced bidder." (GAO 2015 p 1). The bidders are required to submit unit prices for the procurement of 10 line items for the construction of a clinic and 9 additive options. The agency sustained the protest.
Objective of this paper is to evaluate whether agency's awards to Hanke Constructors is just and fair.
Reason the Procurement was considered Fair and Reasonable based on a Sole-sourced or Competitive competition
A government procurement is the process that the United States government employs to acquire goods and services. However, the U.S. government heavily regulates a federal contract using the United States code. In the case of the Hanke award, the procurement is competitive making the procurement process to be reasonable and fair because 6 bidders submit the competitive bidding for the award. In other words, the procurement issued by the VA (Department of Veterans Affairs) is a competitive procurement. Manuel, (2009) defines a competitive procurement as any contract that has gone through a procurement procedure, which is expressly authorized, by the federal government statute and subject by the CICA ("Competition in Contracting Act"). On the other hand, any procurement that is not subject to Competition in Contracting Act is referred as sole sourced procurement. The CICA mandates a procurement to go through competitive procedures. However, sole source procurement can be applied if sole firm can only offer the service or supply the required goods to the federal government.
However, Department of Veterans Affairs procurement is a competitive procurement opened to firms interested in submitting the bid. The agency received timely bids from 6 firms, which include Hanke and Gle Mar. Since the Hanke was not the sole source bidder of the contract, the bidding was competitive. Competitive bidding occurs when multiple bidders submit a bid to a contract. The benefit of competitive bidding is that it will allow an agency submitting the solicitation to select the best bidder that can complete high quality contract at a reasonable price. Moreover, the competitive bidding allows an agency to have a value for its money because a bidder knows that it is facing a competition and offering a higher price for the contract will result in a rejection of its bids. In the case of the procurement of the contract issued by the VA (Department of Veterans Affairs), the agency offers the contact to one of the lowest bidder out of the six bidders, which will make the agency to enjoy cost reduction for the procurement. The competitive procurement is superior to sole-sourced procurement because the sole sourced procurement may make the agency to pay higher price for a procurement, which could have been procured at a reasonable lower price if the procurement is competitive. Moreover, the competitive procurement will allow the agency to save the taxpayer money and avoid procuring a high priced contract.
Reason they are able to offer an award to the company based on the information received from the government program office
The agency awards the contract to the Hanke Constructors following the information in the solicitation and the government program office. The agency received the bids from six firms and the Hanke price of additive option and based bid was lower than the price submitted by Glen Mar for the same work. The agency issued an IFB (invitation for bids) for the procurement of medical items for the VA Medical Center in Vancouver. Based on the "IFB amend. No A00002" (GAO 2015 p 4), the agency had determined that it would award the contract to only the base bidder. From the IFB amend, the "Hanke submitted the lowest bid of $9,036,214" (GAO 2015 p 4). However, the Gle Mar submitted a bid of $9,039,186 slightly higher that the Hankel bid price. However, the base bid submitted by the Gle Mar was $7,962,932. On the other hand, the Hanke base bid price was $8,004,923 slightly higher than the Glen Mar base bid for the same work. However, the agency awards the contract to the Hanke because the price for the additive option and based...
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