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Thursday, March 18, 2010

Another reason for competition

Encouraging competition amongst supply and service providers is at the core of most procurement regimes around the world. The usual justification for that is to assist the government to get the lowest price it can. It is a cornerstone of traditional economics that open competition tends to bring prices down for the consumer towards the level of cost of production.

Many of the strictures of procurement regimes, including fair procurement processes, are intended to encourage competition, apart from any notions of due process rights, because businesses tend to be deterred from competing in rigged contests.

The US Department of Defense recently issued an Interim Rule which notes an additional reason to insist on competition: it tends to encourage best performance by the contractors.

The new rule is made to implement the Weapon Systems Acquisition Reform Act of 2009, Section 202, Acquisition Strategies to Ensure Competition throughout the Lifecycle of Major Defense Acquisition Programs.

Its DFARS Case 2009-D014 states the rule is being adopted in part,
to ensure that the acquisition strategy for each MDAP includes: (1) Measures to
ensure competition at both the prime contract and subcontract level of
the MDAP throughout its life cycle as a means to improve contractor performance

The Interim Rule goes beyond that, specifying other requirements and measures intended to enhance competition amongst bidders for DOD weapons systems work.

More on that here: Interim Rule to Increase Competition in Major Defense Acquisition Programs and Impact DoD Acquisition Strategies for Technical Data Packages


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