Why would the federal government select a public bid as the closing procedure of choice given the horrendous lead time and cost involved? Federal contracting officers do their very best to avoid them. Although it is true that public bids are the method of last resort, a project is often so large and publicly visible that a public procurement is the only acceptable procedure as far as vendors, the taxpayer and the press are concerned. In rare instances, a public bid is issued when a vendor has sold an opportunity but doesn't have an appropriate closing procedure. Putting a contract out for public bid may be the only option when a desired vendor doesn't have a closing mechanism.
Purchases in excess of $25,000 can also be made through companies holding multi-vendor contracts (such as GSA Schedule contracts). Multi-vendor contracts allow the government to purchase from pre-qualified vendors using pre-negotiated prices. Bids are usually solicited from three or more vendors holding such a contract and the successful vendor is selected from that list. Purchases made through multi-vendor contracts are quick and cost effective for the government. From the vendor's perspective, competition is minimized and a deal can be closed quickly.
Companies holding multi-vendor contracts minimize the amount of competition they face since a public bid isn't necessary. Vendors who don't hold a multi-vendor contract may have to start out as a subcontractor to an existing federal contractor, commonly called a "prime contractor," in order to close a sale.
GSA Schedule contracts are the best closing mechanisms for small and medium-sized businesses that cannot afford to hold several multi-vendor contracts. Under a GSA Schedule contract, the federal government and the vendor agree to pre-approved prices for the vendor's products and services. More importantly, such contracts are quick and easy for any federal agency to use.
This article is an excerpt form the new book "Rolling the Dice in DC". The book is written for managers and sales people and describes the day-to-day dogfight of competing and winning in the federal market. Read this book if you want to know the good, bad, and the ugly of the federal market, what it takes to enter the market, and the potential returns.
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