The Truth in Negotiations Act

PURPOSE. This document provides historical information regarding the Davis-Bacon Act and present day implications of the Act. Davis-Bacon, established in 1931, sets a wage requirement for all construction contracts over $2,000 that are either partially or fully supported with government funds. While the Act has been controversial for many years, efforts to repeal the Act completely or to increase the dollar-value threshold have failed. Some argue that the Act increases cost to Government construction contracts and may reduce competition or eliminate it completely for small businesses (CBO, 1983). Regardless, under FAR 22.404, we are responsible for ensuring that the requirements of the Davis-Bacon Act are enforced and incorporated into our solicitations and contracts.

This paper will explore how Sealed Bidding and Competitive proposals compare against each other. In order to compare them one must understand how, when and why each topic is used. The primary source of federal procurement information and guidance is the Federal Acquisition Regulation, which consists of Parts 1-53 of Title 48 of the Code of Federal Regulations (CFR). FAR parts 14 and 15 explains in full detail Sealed Bidding and Competitive Proposals. This paper like the federal government will rely heavily on the FAR as a source document to help explain the details of this topic.

Part 15 of the Federal Acquisition Regulations (FAR) “prescribes [the] policies and procedures governing competitive and noncompetitive negotiated acquisitions.” One component of negotiated acquisitions that occurs early in the acquisition process is the solicitation of proposals. FAR 15.201, titled, “Exchanges with Industry before Receipt of Proposals,” regulates the type and manner of communications, also sometimes referred to as exchanges, which can – and cannot – take place between the Government and potential suppliers prior to the receipt of a potential supplier’s proposal and the subsequent award of a contract.

Once I have a clear Statement of work and the previous vendors are interested in bidding; I will compete this procurement to the best practices of government procurement are achieves.

There was no formal bidding process. In addition, it appeared that not all bidders were treated equally. This can be seen when the bidding process was opened back up after the contractors were narrowed down to

The only segment of the opinion, written by Justice McClanahan that I would have preferred to see more written about was where she wrote that the VPPA clearly established that sealed competitive bidding was the sole method of procurement that had to be used, by SBC, for this contract. I believe that Justice McClanahan was not looking at all procurements of non-professional services but only at the solicitation issued by SBSC. Therefore, I believe what Justice McClanahan should have written was that competitive sealed bidding was the sole option for SBSC based on their actions. If Justice McClanahan meant to say that it was the only option for any procurement of non-professional services, then I believe she was incorrect. Both Thomas Folk and William Mauck Jr. published legal articles that analyzed this case. They both wrote that competitive negotiations was an option for the procurement of non-professional services at the time that SBSC issued their solicitation. § 2.2-4300 section C stated that “upon a determination made in advance by the public body and set forth in writing that competitive sealed bidding is either not practicable or not fiscally advantageous to the public, goods, services, or insurance may be procured by competitive negotiations. The writing shall document the basis for this determination.” (VPPA, 2006) Based on the VPPA, had SBSC made that written determination, they could have then issued a Request for Proposal (RFP) instead of their “Best Value”

Global business environment has become more unstable, supplier negotiations have taken important new role on helping improve corporate competitiveness. The goal of most supplier negotiations today is no longer just to get the lowest price. It is also to find new and innovative ways to meet a wide variety of business challenges, often by tapping into the knowledge and expertise of the supplier community and a good relationship.

Procurement intends to explore supply market opportunities and to implement resourcing strategies that deliver the best possible supply outcome to the organization, its stakeholders and clients (Kidd, 2005). Therefore, construction procurement exists to purchase a construction project as requirement of firms or organizational entities to achieve its goals. However, the choice to use external resources is the part of firms’ decision-making

b) Another alternative should be using the negotiation method in order to develop a “win-win” situation. A negotiating party would have to be applied, “When a long period of time is required to produce the items purchased” (p 375). In these circumstances, suitable economic price adjustment clauses must be negotiated. Opportunities for various improvements may develop, such as the new manufacturing methods, new packaging possibilities, substitute materials, new plant layouts, and new tools. Negotiation permits an examination and evaluation of all these potential improvements. Competitive bidding does not. The advantage would be assurance of a long-term business with the Company along with reasonable profit for the supplier and reasonable cost for the buyer.

Strict adherence to formal procedures characterizes sealed bidding which attempts to provide a “level playing field” or as a multitude of references point out equal footing to all bidders who compete for a contract. Competitive negotiation is a more flexible process that enables the agency to conduct discussions, evaluate offers, and award the contract using price and other factors. The Federal Acquisition Regulation (FAR), whose origins can be traced back to the ASPA of 1947 was codified at Title 48 of the Code of Federal Regulations and became effective 1 April 1984. The FAR contains the uniform policies and procedures for acquisitions by all federal agencies to date. It addresses nearly every procurement related statute or executive policy; and subsequently encompasses every stage of the acquisition process. In a nutshell, FAR appears to have modernized and thus enveloped the aforementioned three acts.

In its defense, NNS claimed that DCAA may subpoena materials that it is used only for determining contract costs or data that is utilized for allocating costs to specific Government contracts. However, these documents provide DCAA with factual data that is used to verify actual cost both direct and indirect (i.e. G&A overhead cost.) The court rejected NNS’s argument that proposes that DCAA can only review cost or pricing data used to calculate costs charged to the Government.

In general, when a call for sealed bids is put forth, an agency is looking for the lowest price to procure a particular (high-cost item) item "with easily definable characteristics" (Sealed bids vs. proposals: How they compare, 2012,

The need for timely and accurate technical and cost or price evaluations and determinations of price reasonableness of multi-billion dollars bids is a critical part of the public sector procurement process. To determine what is involved, this paper provides a review of the relevant literature concerning the need for technical evaluations and factors to be used in determining the competitive range. An outline of the final evaluation report is followed by a discussion concerning which factors should be used when evaluating price reasonableness. Finally, an examination of different methods of price analysis and a determination of which price analysis method would be best suited for this project is followed by a summary of the research and important findings concerning these issues in the conclusion.

OJEU Regulations provide four choices of procurement procedure: open, restricted, competitive dialogue and negotiated; following this, public authorities have an option to choose between the open and restricted procedures (OGC, 2008[6]). WHG has a pre-qualification requirement for contractors with experience in working with housing associations and building affordable housing units. In

Negotiation is the process by which parties attempt to reach accord that specifies the method they will act towards one another. However, a pre-negotiation process is part of the important process that a company should undertake to win a government contract. To obtain the best terms from the negotiation table, it is critical do a pre-negotiation planning process. There are four phases in the pre-negotiation planning process and they are as follows: