Federal Procurement Process Highly Publicized Incidents Such Essay

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Federal Procurement Process

Highly publicized incidents such as the federal government purchasing at $500 hammer or $2,500 toilet seat continue to capture headlines as examples of a federal procurement process gone awry, but these notorious examples have become few and far between in recent years, due in large part to significant reforms such as the Federal Acquisition Streamlining Act of 1994 that minimized some of these problems. Despite these substantive reforms, the federal government continues to receive criticisms concerning the manner in which it administers the procurement process. In order to gain new insights in this area, this paper provides a review of the relevant literature to describe the legal and administrative framework and socio-economic considerations of the federal procurement process. A summary of the research and important findings are presented in the conclusion.

Review and Discussion

Legal Framework

At present, federal procurement contracts are governed by a number of statutory and regulatory requirements, including the Federal Acquisition Regulation (FAR) (Nou, 2009). The FAR sets forth detailed procedures concerning virtually all aspects of the federal procurement process including notice and competition as well as awards and contract management (Nou, 2009). In addition, the Competition in Contracting Act of 1984 mandates that federal government agencies use one of two defined methods for their competitive bid procedures: (a) sealed bidding and (b) competitive proposals (Nou, 2009).

There are a number of other legal issues involved in the manner in which the federal procurement process targets eligible vendors for its needs using the sealed bidding or request for proposal approach. For instance, according to Nou, "The sealed bidding process essentially entails formally advertising specific procurement needs and then awarding the contract based on the lowest bid. Using price as the sole criterion for government contracts can be an attractive metric because it removes discretion from public officials, while also saving taxpayer money" (2009, p. 744). By sharp contrast, Nou (2009) reports that the procurement by competitive proposals involves the publication of a request for proposals (RFP) that provides companies with information concerning what is needed by the federal government -- for what reason or purpose.

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On the one hand, the RFP approach appears to favor well-entrenched vendors because it is typically based on prior performance and proven capabilities, particularly with respect to federal contracts. A lack of such experience, though, is not necessarily a disqualifying factor but it is clear that companies familiar with the process and that have established contacts in the federal procurement network enjoy a competitive advantage over those that do not. On the other hand, though, the RFP approach can also be used to target minority- or veteran-owned enterprises by affording them a preference, again depending on the precise needs of the federal agency or agencies that are involved (Nou, 2009). For example, Nou notes that, "Unlike sealed bidding, competitive proposals are intended to allow greater discretion and the recognition of criteria other than price alone. At the same time, this discretion is still constrained through further regulations that restrict the specific rules, criteria, and information that can be used to award the final contract" (p. 745). While the RFP approach is not the only mechanism whereby disadvantaged contractors can gain a foothold in the federal procurement network, it does represent an extension of other federal policies that are intended to promote federal business dealings with this sector. In this regard, Nou reports that a stated purpose of the Federal Acquisition Regulation is to promote "business [conducted] with integrity, fairness, and openness"; consequently, federal agencies are required to set out detailed evaluation criteria and follow these criteria when awarding a contract. Most major government purchases of information technology are acquired through competitive proposals" (2009, p. 745).

Socioeconomic Considerations

Clearly, as the largest purchaser in the world, the United States federal government exerts tremendous socioeconomic influence domestically and abroad (Sparks & Wichmann, 2007). Pursuant to the provisions of federal policies for minority and/or economically disadvantaged businesses, companies can receive special 8(a) designation from the Small Business Administration that provides them with a competitive advantage in the federal procurement process. According to Sparks….....

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