The procurement question of the day: Why not an auction?
Before reading this article, make sure that no one is looking over your shoulder. No
expense has been spared in sending King Oxnard, procurement detective, on an impossible
mission to uncover the latest in federal buying gossip.
You are about to read some of the most sought-after information ever to be generated by
the Office of Commercial Regulatory Action Policy, more commonly known as OCRAP. It's
supposed to be a secret.
But that intrepid investigator Oxnard risked life, limb and part of his lunch hour to
ferret out this amazing story about how the government is reforming its bid process for
commercial systems buys. The following is his report:
I called my friend at OCRAP and asked if there was any Top-Secret information he would
like to share. He said, "Hey, we just got an internal,
not-for-public-release-on-pain-of-death memo from the associate general counsel for
procurement ideas that says it's cool to auction off government contracts to the lowest
bidder and that technical leveling is a good way to make up for sloppy market research.
Does this sound like something you can use?"
"Sounds darned exciting," I said. "Send it over."
The memo and draft regulations say that auctions for the purchase of commercial items
are not mentioned in the Bible, Koran or the Code of Hammurabi; therefore, how bad could
they be? No lesser figure than the comptroller general has opined that auctions are not
evil per se.
I, for one, think they are swell. The opportunities for excitement, if not mischief,
abound. Instead of paying a fair-and-reasonable price, the contracting officer's job will
be to pay the lowest price possible.
The contracting officer will disclose the lowest price offered and have the other
bidders try to guess at how much the low bidder will further reduce its offer to maintain
its initial competitive advantage.
These auctions have lots of possible variations:
What all this boils down to is pricing based on game-playing and the assumption by all
the players that the system has no integrity and encourages collusive bidding.
The draft regulations also allow for a brand of technical transfusion mislabeled as
"technical leveling." Here the idea is to wait and see what offerors propose,
then select certain features in one or more proposals that the solicitation neglected to
mention. This solves the problem of sloppy market research and failing to identify the
need to be met.
Then the I-got-it-independently rule is invoked. That's the one where the agency says
it did not discover the new feature it deems important in the submitted proposals but in
public literature that just happens to contain references to the newly required feature.
Regulatory encouragement of technical transfusion confirms the intentional denigration of
the system's integrity.
It is my opinion that trashing the present system is basically a good idea. I hate when
buyers deal in good faith and competition is on a common basis. It puts guys like me outta
Bob Little, an attorney who has worked for the General Accounting Office and a
Washington law firm, now teaches federal contract law.