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Should you run a solicitation and selection process
based on a Request for Proposal (RFP) for the first time, you may
find useful, and helpful, having handy a tutorial presenting the standard, formal
procedures to follow or comply with, like:
You may be required, depending on your organization's purchasing policy, to use a formal solicitation and selection process for an acquisition which amount exceeds a certain threshold defined in your procurement policy.
An invitation to bid (ITB) is relevant when you want to pay the lowest price for the same value.
In other words, what is the difference between bid and proposal?
ITB are used when you know exactly what you want and, because there is no or insignificant difference in term of value between the different providers' offerings, you want to pay as less as possible for the acquisition of these goods, product, or services. It's the method of the "lowest price technically acceptable". The ITB-based selection process is the cornerstone of the best price procurement.
A solicitation and selection process based on
a Request for Proposal (RFP) is relevant when you want to
pay the lowest price for the best value.
Given that the value of the different proposals differ, the RFP-based
selection
process seeks a tradeoff between selecting the best of proposed solutions and
minimizing the budget you are willing to spend in order to maximize
expected benefits. Does it remind you the saying "As you sow,
so shall you reap"?
To
achieve the goal of computing such a benefits/costs ratio, a mathematical method called
Analytical
Hierarchy Process (AHP) is commonly used. This method relies
on building a
decision matrix by using the
S.T.A.R.S.
formula:
Specify your needs, them prioritize them;
Translate them into a decision model under the form of a set of criteria organized within a decision hierarchy, then assign them a weight based on their relative importance in the final decision;
Analyze, compare, and challenge alternatives with mathematical models (rate, score, and sort; sensitivity analysis, robustness, etc.);
Rank alternatives based on their ratio of adequacy to the decision model
Select the alternative offering the best value at the lowest cost.
The RFP-based selection process is the cornerstone of the best value procurement.
The purpose of a formal solicitation and selection process is to get the best value at the best price by having providers competing against each others, and to avoid, as a by-product, favoritism, or any other bias, by using formal procedures ensuring an accurate, relevant, well-documented, thus auditable final decision. Before entering the solicitation and selection cycle, you have no choice but getting approval from your upper management, and requesting for legal and financial counsels, whether internal or external.
Here is an outline of the procedures inherent to a formal solicitation and selection process:
WANT TEMPLATES AND
SAMPLES
FOR PROFESSIONAL RFP LETTERS?
Learn tips on how to write a professional, very impressive, and bullet-proof RFP letters in our FREE
RFP Letters Toolkit, 2011 Edition.
You will find in it lots of templates and samples of professional RFP letters.
It's FREE!
"No doubt that these letters save time"
- Pascal PERRY
by Project on Government Oversight (POGO)
Podcast: How Bad Performance Can Be Good for Business in Government Contracting
POGO's Scott Amey dishes out a post-mortem on a recent Commission on Wartime Contracting hearing--at which he testified--on contractor accountability..
POGO Provides Post-hearing Supplemental Materials to the Commission on Wartime Contracting
Pursuant to the Commission on Wartime Contracting's (Commission) request that the record for the hearing held on February 28, 2011, "Ensuring contractor accountability: Past performance and suspensions and debarments," be supplemented within thirty days, the Project On Government Oversight (POGO) provides the following information. Specifically, POGO believes the Commission should recommend that the Federal Awardee Performance and Integrity Information System (FAPIIS) be expanded in scope and that the Department of Defense's (DoD) revolving door database of senior level acquisition officials be made publicly available.[2].
Solution: How the Government Can Stop Doing Business With Risky Contractors
It is very hard for the federal government to have a successful criminal or civil prosecution of their contractors and it is the hardest to do with the Department of Defense (DoD). In January, the DoD created a stir when it released its Report to Congress on Contracting Fraud, which examined the extent to which the Pentagon awarded contracts to companies that defrauded the government. The report found that, from Fiscal Year 2007 to Fiscal Year (FY) 2009, the DoD awarded almost $270 billion in contracts to 91 contractors found liable in civil fraud cases, and $682 million to 30 contractors convicted of criminal fraud. .
U.S.Government Rarely Suspends or Debars Those Responsible for Billions in Tax Dollars Lost to Fraud, Waste, Abuse in War Zones
Tens of billions of dollars are being lost to waste and fraud in Iraq and Afghanistan because of a toothless U.S. contracting system so reliant on a handful of major contractors that it rarely suspends or desbars them, even when those companies have committed serious offenses, according to the Project On Government Oversight's (POGO) testimony today before a independent, federal commission..
Commercial Item Exceptions Must be Eliminated From New Suspension and Debarment Rule
The Project On Government Oversight (POGO) provides the following public comment to FAR Case 2009-036, "Federal Acquisition Regulation; Uniform Suspension and Debarment Requirement" (75 Fed. Reg. 77739, December 13, 2010). The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) issued an interim rule amending the Federal Acquisition Regulation (FAR) to implement section 815 of the National Defense Authorization Act for Fiscal Year 2010 (P.L. 111-84), which extends the restriction on contracting to subcontractors at any tier that have been suspended or debarred, with certain exceptions for commercial item and commercially available off-the-shelf (COTS) item acquisition contracts..
Should Debarred Contractors Be Allowed to Build Military Aircraft?
Today, POGO submitted a public comment about a new rule limiting the ability of suspended or debarred contractors to do business with the federal government. The rule prohibits prime contractors from subcontracting with any entity that has been suspended, debarred, or proposed for debarment..
Pentagon Cuts Back Contract Audits, Opens Door for Contractor Overpayments
Under the guise of eliminating overlap, the Pentagon last month sharply reduced oversight of defense contracts, according to memos obtained by the Project On Government Oversight (POGO). The changes, which give some of the duties of the Defense Contract Audit Agency (DCAA) to the less aggressive Defense Contract Management Agency (DCMA), were outlined in a January memo signed by Shay Assad, the director of Defense Procurement and Acquisition Policy. DCAA staff were informed of the changes in a Jan. 31 memo from DCAA Director Patrick Fitzgerald..
Testimony of POGO's Nick Schwellenbach on "Improving Federal Contract Auditing"
We believe that there should be an independent Federal Contract Audit Agency (FCAA), as long as it is done right. This isn't a new idea: it is an idea that has been batted around since at least the 1980s, when DCAA whistleblower George Spanton exposed serious problems at DCAA. .
Federal Government Needs Strong, Independent Auditor to Oversee Billions in Contract Spending, POGO Tells Senate Panel
The responsibility of auditing the hundreds of billions of dollars spent each year on defense and civilian contracts should fall to a single, independent agency that is outside of the Pentagon's chain of command, the Project On Government Oversight (POGO) told a U.S. Senate panel today..
Last Modified: Tuesday, March 22, 2011 1:05:58 PM
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