Common Sense
A Walk on the Other Side
The frustrations of contracting with government
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With over 25 years as a public procurement professional in federal, state, and local government under my belt, I retired from public service in 1996 and established my own business providing government entities with consulting services. I understood the public procurement system and mentality. That had to give me an advantage, right? Wrong! I had never experienced the public procurement system as a contractor.
With over 25 years as a public procurement professional in federal, state, and local government under my belt, I retired from public service in 1996 and established my own business providing government entities with consulting services. I understood the public procurement system and mentality. That had to give me an advantage, right? Wrong! I had never experienced the public procurement system as a contractor.
After seven years of doing business with government, I’d like to share a few of my observations from the “other side” of government procurement.
For starters, public procurement folks have a real problem with the concept of “profit.” For example, when entities bid their projects, they tie all overhead costs into the same per diem (travel and lodging limits that apply to their governmental employees). As a public contract officer, I often included this requirement in an attempt to “nail down” all costs related to the project. But that unfairly puts contractors in the same category as government employees, who only work for one entity. Additionally, contractors don’t qualify for the special hotel rates given to public employees.
As a contractor, I’ve found that this prohibits me from bidding a lower price. I’d prefer to bid a competitive lump sum price, minimize my administrative and over-head costs to the extent possible, and make a reasonable profit without having to pad my bid to compensate for being “nickel and dimed” by an unrealistic pricing structure. If I get the contract, I’m still responsible for providing the service at the competitively bid price, even though travel and lodging costs are going to vary over the period of the contract.
Then there’s government contract administration. The more empowered and professionally certified the contract officer is, the more smoothly the contract proceeds, from implementation to closure and timely payment.
Unfortunately, however, contracts are often administered by untrained field personnel, administrators, and project managers who make demands of the contractor that are not authorized in the contract. There may be excessive post-award reviews and sign-offs by elected officials. All of this places the contractor in an untenable position.
Many procurement folks think that their job is done when the contract is awarded, leaving the contractor with no one to turn to in the event of a dispute. The only choices a contractor has are to build protective pricing into the contract bid, process excessive change orders, or choose not to bid.
The end result is higher costs for government. That isn’t what any of us want.
Editor’s Note: Beau Grant, CPPO, is a master instructor for the National Institute of Governmental Purchasing (NIGP) and president of Beau-Geste Enterprises. Readers can reach Grant by e-mail at: [email protected]