Accounting

Contracting Method and Award

The United States General Accounting Office (2003) provides that the method used to bid is the Invitation For Bid (IFB) which includes the product description or description of service required, conditions of purchase, payment, packaging, delivery, the deadline for bid submission, as well as the contractual clauses. The bids are opened at the purchasing office at a time predetermined in the invitation for bid and recorded. The lowest bidder who can meet the requirements of the government gets the contract. It is noteworthy that sealed bidding puts primary consideration on the bid price. Whereas contracting by negotiation allows flexibility in the award of the contract and does not place a lot of emphasis on price but puts into consideration other factors such as past performance, managerial experience or technical approach. The government offers a Request For proposal (RFP) in which the government requests a service or product it requires and solicits proposals from the prospective contractors and how these contractors intend to execute the requests and the price attached. Unlike the other contract methods, these proposals are subject to negotiations after submissions. Best uses for the contract methods. The government uses contracting by negotiation where the contract exceeds $ 100,000 and that the product or service required necessitates a high level of technicality. This procedure is employed when the best value of the service or goods are expected from the selection of officially acceptable proposals in regard to the lowest evaluated price. In essence, this implies that the cost of the contract does not play a pivotal role in the evaluation process. The simplified acquisition procedure best suits situations where the government aims to reduce administrative cost associated with the contracting process. This method promotes economy and efficiency in the contracting process. Additionally the simplified procedure puts into consideration the provision of opportunities to small, disadvantaged, veteran owned and women owned businesses with an aim of providing a fair proportion of government contracts to these businesses. According to Kenneth Philip (2006) sealed bidding becomes useful in a situation where the government expects competition from various contractors and it has provided an adequate description of the contract. The procedure requires time to issue invitations for bids as well as to receive these bids. therefore, it implies that the procedure can only be used where the government has time for this. It is also noteworthy that this procedure does not require contemplation of price and only the lowest bidder wins the contract. In this regard, the procedure best suits situations where the government aims for the lowest price. If the government uses the improper contracting method, the cost incurred in the contracting process may unnecessarily increase this is so especially, where the simplified acquisition procedure is disregarded. In situations where the requirements are technical, and the negotiated procedure is not used this may result in substandard contract outcomes. Steps in choosing proper contracting methods. In order to determine the best procedure to use in the contracting process by the government, it is critical to put into consideration some factors. Key among these factors is the requirements of the service

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