Announces Transition to “Best Value” Award Methodology
By Frederic G. Antoun, Jr., Esq.
On September 4, 2002, Raymond (Tom Sullivan, Superintendent, Term Contracts Division of the U.S. Government Printing Office) announced that he would begin transitioning annual Term Contracts his department procures to a best value type award basis. This transition follows the Government Printing Office’s (GPO) adoption of best value on its Simplified Purchase Agreements (SPA), which have been very popular with both the agencies and printers.
Following the Term Contracts transition, the one-time jobs or jackets are expected to transition to best value. Clearly, the time spent on a best value analysis on the very small jobs cannot equal the effort spent analyzing bids and bidders on larger jobs. GPO is considering some type of automated system which would review its extensive quality performance and on-time delivery records, factor that in with the price, and suggest an award.
What will “best value” mean at the GPO? The term best value has come to signify a wide variety of purchasing options whose goal it is to get the best overall deal for the buyer. At GPO, the current concept is that instead of awarding jobs to the lowest priced vendor meeting minimal qualifications, the award would be made to the vendor with the best combination of price, quality, on-time delivery, customer service, and any other important factors that are added to the specs on larger or complex jobs.
The change was made to provide better service to GPO’s agency customers, and to comply with directives from the Office of Management and Budget (OMB) requiring agencies to buy printing after considering not only price, but also quality, quality, timely delivery, service. This change should stop the many agency complaints that hey got a mediocre or poor vendor for $10,000, while an excellent vendor bid $10,050, but did not receive the award simply because price was the only factor considered.
No one expects that GPO will abandon its longstanding desire to get the best price. The expectation is that price will still be the most important factor in the analysis. However, ion many very time-sensitive jobs, the vendors on-time delivery record could have a significant weight; while on high-quality jobs, quality problems with past jobs would certainly have a significant weight.
No surprisingly, GPO’s good vendors welcome the system. They see it as a way to be rewarded for their excellent quality, on-time delivery, and customer service. They also welcome the opportunity to finally have a true “customer relationship” with GPO and its government customers. On the other hand, there are certainly some printers that acquire GPO volume simply by underbidding everyone else, no matter what it takes to bring in that low number.
Although there have been problems with best value procurements elsewhere in the federal government, these difficulties have been related primarily to the fact that there is no open competition under the FAR system for most jobs, especially those under $100,000. A common misconception about the GSA schedule is that it somehow involves competition among the vendors on the schedule. Until recently, with GSA’s adoption of a system allowing buyers to get multiple quotes on a particular commodity or service, that was not the case. Instead, the agency simply chose someone off the list, and decided “they were the best value.” At GPO, on the other hand, there has always been – and will continue to be – publication of all job opportunities, even the smallest ones. After the bids close, GPO also publishes the bidders, their price, and the results. As a result, the GPO system itself has built in protection against any possible abuses of the best value system. If someone begins to award job regularly to a specific vendor who has a higher price, the system and vendors will know about it. Likewise, because there will be open competition, the higher prices sometimes associated with best value purchases in the rest of the federal government simply will not happen.
You can expect to see the first Term Contract with language notifying potential bidders that the award will be made on the basis of price, quality, on-time delivery, and customer service within the nest month.
Agency customers are already contacting GPO to discuss best value language in their important jackets or one time bids.
As part of its transition process, GPO is also working on a online order placement system for its agency customers.
What does this mean to printers? So the GPO and its agency customers are elate about the change to a type of best value print buying. Are the printers as happy? Most of the printers I have spoken to are please with the change. That is probably because they either have or perceive that they have good quality, on-time delivery, and good to excellent customer service. If that is the case, they will definitely have success on the new system. However, for those printers whose perception is not reality, and for those who admittedly have problems in the areas of quality, timely delivery, or customer service, the new system will simply force them to become better printers. Although price will still be king, GPO will be able to evaluate and weigh quality problems, a poor delivery record, a the quality of the customer service or contract administration provided by the printer. While we do not expect minor differences between printers to result in displacing a low bidder, difference that are significant will result in award to the printer that does not have the lowest price. So if your quality, on-time delivery, or customer service are not up to par, now is the time to start making improvements.
The OMB Memo Implementation: New FAR Rules. Government printers have been following the implementation of OMB Memo M-02-07 that came out in May of this year. The Memo basically instructed agencies to buy printing only after making sure they got the best value, price, quality, on-time delivery, and other factors considered. The Memo went on, however, to suggest that agencies should be able to choose to buy their own printing (not go through GPO) if they chose to do so. Federal Acquisition Regulations (FAR) necessary to implement the Memo and allow Agencies to buy print directly from the private sector have been published for comment. Click here to read the proposed Regulations.
FGA's GPO Best Value Fact Sheet
Copyright 2002 Frederic G. Antoun Jr. Re-distribution permitted only in this form.