In Government Contracting, Does Cost Trump Results?

Home Forums Acquisitions In Government Contracting, Does Cost Trump Results?

This topic contains 2 replies, has 2 voices, and was last updated by  Jaime Gracia 9 years ago.

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  • #171152

    Below is a scenario that we received by email from someone who is struggling as a contractor and a new environment where costs trumps all:

    I have been a government contractor for years. It has been challenging, thought-provoking, and constantly changing work. I have never competed on costs, just results. I am noticing that many Federal agencies are selecting contractors based upon costs and it is disheartening. I realizes that life ebbs and flows and hopefully this is an ebb period.

    Should cost trump results? Does it?

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  • #171156

    Jaime Gracia

    The missing component here is the lack of leadership and accountability for successful outcomes. The government should not settle for mediocracy, and certainly industry providers do not set out to provide average services. However, the LPTA environment normally drives prices below the levels of what the innovative solutions demand. Because price reasonableness evaluations are poorly or rarely done, low price is king at the cost of performance, exacerbated with improper management, waste, and poor governance and oversight. Businesses can differentiate themselves by educating their customers on their innovative and affordable solutions, and pointing out that low price does not mean poor performance. Settling means waste, and lose-lose scenarios for the taxpayer. We have enough of that already.

  • #171154

    End the Practice of Awarding Business on Price Tag Alone

    In these economic times, all companies push to save dollars. Purchasing managers find cheaper goods and switch to the vendor that provides the cheapest material. If this is a critical material, then this practice will actually increase total cost. Dr. Deming states “Price has no meaning without a measure of the quality being produce.”

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