Contract and procurement fraud
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- Sole-Source Contracting
| Competitive Negotiation
Competitive negotiation permits bargaining between the procuring entity and prospective contractors before the contract is awarded. This process is used when cost is not the most important factor of evaluation, and typically when: Sealed bids are not appropriate. The procuring entity needs to conduct discussion with potential providers because of differences in laws, regulations, or business practices. The acquisition is complex or vague. The procuring entity cannot accurately determine the risks. There is a relatively long, drawn-out production time. The procuring entity is contracting for a production effort (and not a specific item for delivery). In general, when engaging in competitive negotiation, procuring entities issue a document to solicit proposals from prospective contractors on how they intend to address the procuring entity’s needs and price quotes for implementing their proposed solutions. After the procuring entity receives the proposals, the procuring entity negotiates with prospective contractors, and typically, this method allows the potential contractors to revise their offers before the contract is awarded. Competitive negotiation allows for more flexibility in awarding bids than competitive bidding, but it is time consuming. Sole-Source Contracting Although most procurement transactions are conducted in a manner that provides open and free competition, there are exceptions, and one of the exceptions is sole-source contracting. Sole-source contracting is a non-competitive procurement process accomplished through the solicitation of only one source. Sole-source contracting does not require a bid or quotes, and a sole source purchase does not involve competition among prospective contractors. Therefore, this method does not provide for full and open competition. Also, in sole-source procurement, the purchasing entity can negotiate by having back-and forth discussions with the vendor to agree upon technical approach and price. Additionally, because sole-source contracting does not provide for full and open competition, organisations that use this form of procurement typically require justification for its use. For example, in the United States, the Federal Acquisition Regulation, the system of regulations that govern the government’s procurement of goods and services, provides the following seven reasons that can be invoked to justify procurement through sole-source contracting: Only one responsible source and no other supplies or services will satisfy agency requirements Unusual and compelling urgency Industrial mobilisation; engineering, developmental, or research capability; or expert services International agreement Authorised or required by statute National security Public interest Download 0.62 Mb. Share with your friends:
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