Best Value

We've covered a lot in the previous 40 installments of this series, "Doing Business with Government." Yet, despite all the topics, there's one theme that we've emphasized over and over:

Selling to government successfully is about building relationships.

Indeed, selling to government successfully is not about rules and regulations as much as it's about people. If you are good at sales, have a quality product or service, and are persistent and patient, you will do well.

Federal buyers (and state and local, too, for that matter) today have great power and flexibility to make their own buying decisions. If you earn a government customer's trust in today's environment, that customer will likely find a way to buy what you sell.

One primary reason: "best value."

We've touched on best value in prior installments, but the subject is so critical that we thought it'd be a good idea to take a closer look.

Best Value Factors

Even if your price isn't the lowest, the buyer has the discretion to buy your products or services under a subjective best value analysis.

As one government Web site describes it, the best value process "allows flexibility in selection through tradeoffs . . . between . . . cost and non-cost evaluation factors with the intent of awarding to the contractor that will give the government the greatest or best value for its money."

Which best value analysis considerations the buyer follows depends on the particular acquisition process at hand. A buyer, for example, applies FAR Subpart 15.1, Source Selection Processes and Techniques and FAR Subpart 15.3, Source Selection, when conducting a negotiated procurement.

When purchasing off of a GSA Federal Supply Schedule contract, a buyer looks to the factors set forth in Federal Acquisition Regulation 8.404(b)(2). These are:

  • Special features
  • Trade-in considerations
  • System life
  • Warranty
  • Maintenance availability
  • Past performance
  • Environmental and energy efficiency

Let's take a closer look at the best value standard under FAR 8.404(b)(2).

Broad Discretion

The buyer has two basic options under FAR 8.404(b)(2). In either case, his discretion in selecting the winning vendor is very broad.

Option 1:

To satisfy the best value standard, the buyer need only review information at the GSA Advantage Web site or review at least three schedule contractor price lists. If a buyer elects to choose other than the lowest priced vendor, there need only be some "reasonable basis" in determining that the winning vendor best meets the agency's particular needs. Design Contempo, Inc., B-270483, March 12, 1996, 96-1 CPD.

When an agency chooses to review GSA Advantage or vendor price lists, there is no requirement that vendors receive advance notice about the agency's needs or the selection criteria. COMARK Fed. Sys., B-278343, B-278343.2, Jan. 20, 1998, 98-1 CPD.

Option 2:

An agency may choose, however, to issue a solicitation (often in the form of an RFQ) that calls on vendors to select possible combinations and/or configurations of the items on their schedules and submit quotes based on the selections. (This is not mentioned in FAR 8.404(b)(2), but it's a common procedure, especially in the case of complex IT schedule procurements.) When an agency conducts such a competition, its actions must be reasonable and consistent with the terms of the solicitation. Id.

In either case -- option 1 or option 2 -- the standard is one of reasonableness.

Get to Know the Customer

Given these subjective standards, it is easy to see the importance of getting to know buyers, and especially end-users, to understand the unique needs of the particular agency. Once you understand the agency's needs and show that your products or services meet those needs, you've essentially won the battle.

If you truly understand the agency's needs, and show that your products or services match up, the buyer will often opt for the first option. In other words, after reviewing GSA Advantage and/or vendor price lists, the buyer will place his order with your company. Clean and simple.

(An important caveat: if the order amount would exceed the maximum order threshold, the agency is expected to seek a price reduction from your schedule price. Such a price reduction is considered one-time only; you're not held to that price on future orders.)

If the buyer is not quite convinced or is confused about his options, or if the order is very complex, he may choose the second option, forcing you to respond to an RFQ. In that case, the vendor who knows the buyer and end-users best has the advantage.

Bottom line in both cases: he who best knows the needs of buyers and end-users, and has the products or services to meet those needs, wins.


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