Procurement Ponderable
The goal of Go Pro is to stimulate thought and discussion on significant issues in the profession, to foster collaboration and community, and to encourage creative solutions to common challenges. In that spirit, this issue will present a hypothetical scenario describing a challenge that procurement professionals might face in the course of their careers. If you feel moved to respond — and we hope that you do — we’ll publish your comments in an upcoming issue of Go Pro.
You are the director of procurement for a large city. The mayor has made it very clear to you in a personal conversation that you need to increase the level of participation by woman-owned and minority-owned businesses (WMBEs) in city contracts, and that you need to do it immediately.
Without having much time to do research and analysis, you quickly decide to include in your construction Invitations for Bids (IFBs) an incentive to large prime contractors to commit in their bids to subcontract a specific dollar value of the work to WMBEs. The prime that is bidding on a construction contract will have to identify in its bid the specific dollar value of the work that it will commit to subcontract to one or more named WMBE firms. Further, the bidder will have to state precisely what work each such WMBE subcontractor will do and when, as part of the overall team, and the proposed subcontractor will do the work. If a bidder commits to use one or more such firms and it is awarded the resultant contract, the bidder will have to use each named subcontractor in the manner that it committed in its bid to do.
Shortly after your agency has adopted this new approach to awarding construction contracts, your agency issues an IFB for the repaving of a historically significant street in the downtown business area. The project is a controversial one, because each mayoral administration within the past 25 years has changed how the street is paved at the beginning of its term. If the street is paved with asphalt when a new mayor assumes office, the new mayor has the asphalt removed and puts down pavers. If the street is paved with brick pavers, the new mayor replaces the brick pavers with asphalt. The IFB that your office has issued calls for asphalt to be replaced with brick pavers.
You award the contract for this project to Acme Construction Company because its evaluated bid price was lower than the evaluated bid price of the firm that offered the lowest actual bid price. Evaluated bid price, rather than actual bid price, was the basis for awarding the contract stated in the IFB. Acme’s committed level of WMBE participation made the difference.
Work on the project is well under way, and the work appears to be going very well. On the way to lunch one day, you and your contracting officer for the project walk past the work. You notice that the trucks and the equipment being used by the principal subcontractor bear a remarkable resemblance to the trucks and equipment of the prime contractor, which are also present on the site. Your curiosity peaked, the two of you walk over to one of the subcontractor’s trucks, and you notice that the subcontractor’s name is affixed to the truck on a magnetized sign. When you peel back the sign, you see the name of the prime contractor painted on the truck. Your curiosity heightened, the two of you do some more research when you get back to the office. You learn that the principal subcontractor is not an independent firm; that its listed address is the same address as that of the prime contractor; that its president is the wife of the prime contractor; and that the subcontractor has no assets in its own name.
What should you have done? What can you do now? What can you do to prevent what happened in this case from happening again?
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