He tells us that until the early 1800's the Americans ran their procurement system like a business. It hired some of the country's most successful and honorable merchants to look after its fiscal needs on essentially a cost-plus agency or contract basis. And it led to favoritism, collusion, over pricing, shoddy contracting and self dealing.
All of which is mere irrelevant backdrop for the following article in today's Guam Pacific Daily News.
Airport chair challenges bid process
Price should be one of the factors in determining who wins a government contract, according to airport board Chairman Michael Ysrael, who yesterday expressed concerns about the way the airport is selecting a company to operate its pay parking lot.
Ysrael expressed concerns as the airport board gave Torres permission to begin negotiating with the highest-rated company for the airport parking lot job -- Pacair Ltd., which already is operating the airport lot, but whose contract is up. Ysrael said in the private sector, if you find two companies interested in working for you, you let them fight it out in order to get the best price.
That's the way the government procurement process works, Executive Manager Mary Torres told airport board members during their meeting yesterday morning.
According to local procurement law, companies that submit proposals for government contracts are rated according to their ability to do the job, and price is negotiated only with the top-rated company. Only if they fail to agree on a price does the government negotiate with the next highest-rated company.
"It is what it is," Torres told the board. She noted there have been times when the airport didn't give a contract to the highest-rated company.
That is about half right.
Under Guam's RFP (request for proposal) procedure, offerors are first ranked qualitatively in descending order from most to least qualified to offer the services sought. Ranking is not based on any consideration of price, qualities of offeror being singularly paramount at that juncture.
But ranking does not determine who wins the contract. Once ranked, negotiations begin with the most qualified offeror to come to agreement on a "fair and reasonable" price. Here other many factors come into play to value the fairness and, separately, reasonableness of the price. General market prices and the offeror's costs and many other factors are considered. Only if the best qualified offeror agrees to the government's assessment of fair and reasonable price does the best qualified get the contract. If that agreement is not reached, then the government goes to the next offeror and starts again.
The part of this story that I find troublesome is that the RFP process is being used to obtain services for the operation of a car park. Guam's RFP process is only meant to be used to obtain "professional" services, which should generally be limited to licensed, traditional professional services.
The Guam Supreme Court has held that the RFP is the wrong method of source selection to use to acquire services for the operations, management and maintenance of a bus mass transit system. The Guam Public Auditor has determined that the RFP process is the wrong way to solicit debt collection services.
If asked, I'd have to say that the services sought here, based only on the information available to me in the news article, should be solicited by competitive sealed bid. But, of course, it is not for me to say.
Guam's RFP process is extensively discussed in the Guam Procurement Process Primer, Article VIII, available free online as mentioned in the top of the side bar in the right column of this blawg.
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