Vendors universally agree that formal competitive bidding is a pain. Secretly, many working in government (outside of procurement) will also concur. Formal solicitations take time, effort and cost money. Sometimes the result of the solicitation may also produce a different winner to that desired by the originating department.
But a formal competitive bidding process is not always needed. Here are 5 circumstances where they can be avoided:
- Contract value falls below a certain threshold: Every government agency will have a monetary threshold over which it is required to put a contract out for formal bid. Below that threshold only an informal process will be required. As this is the most common way to avoid a formal bidding process, I’ll explore it in more detail in a later post
- Trial use: A small limited term contract where an agency trials the use of a good or service can be a useful way for a vendor to get its foot in the door, build trust and show where it can add value. Ultimately it may be required to go through a formal solicitation process but the vendor will then be in a position of strength
- Sole source purchase: Most agencies acknowledge that certain goods and services can only reasonably be provided by one vendor. These are known as sole source purchases but what amounts to one can be a source of debate. Ultimately, a vendor will need to persuade the agency that it is the only responsible source and no other supplies or services will satisfy agency requirements. The software and computer industries rely heavily on this particularly when they have products that are patented
- Another agency is a user: Many agencies will waive the requirement to formal bidding if the service or commodity is already supplied to another government agency that has undertaken a recent formal bid process
- Emergency purchases: If there is a situation necessitating immediate or quick action where there is not adequate time to utilize competitive bidding a formal process can be waived. This is most commonly used when a state of emergency is declared for things like natural disasters
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There is another:
If the customer has a contractor they are using for procurement (e.g., a T&M service contract), they might be able to purchase through that vehicle. This is true for services, equipment, and other procurements. I have overseen $900k test equipment purchases through my contract. So, it pays to cultivate relationships with the prime contractors, too.