Bidding on a Contract With the Navy

Week 6 Assignment – Bidding on a Contract With the Navy
Introduction
Based on the same scenario as in your Week 3 assignment, Small-Business Opportunities With the Navy, imagine that you have received a request for proposal (RFP #123456789), dated 07/14/2014. You also find out through a reliable source that a local competitor has also received an RFP for a similar type of product and service. Because of this, you will be required to negotiate the contract and will need to consider the contract specifics.
Instructions
Write a 3–4 page paper in which you do the following:
Suggest three ways in which the basic concepts of the Federal Acquisition Regulation (FAR) policy would mutually benefit your small business and the Navy. https://www.gsa.gov/policy-regulations/regulations/federal-acquisition-regulation-far
Determine the method that you will use for solicitation of a bid. Next, explain why the Navy is likely to choose your company in the sealed-bidding process.
Go to the Strayer University Online Library to locate at least three quality references. Note: Wikipedia and other related websites do not qualify as academic resources.
This course requires the use of Strayer Writing Standards. For assistance and information, please refer to the Strayer Writing Standards link in the left-hand menu of your course. Check with your professor for any additional instructions.
The specific course learning outcome associated with this assignment is:
Determine the impact of the FAR policy on a given business including solicitation methods.

ANSWER

Bidding on a contract with the Navy

First, the FAR can help both the firm and the Navy avoid legal issues. The FAR outlines standardized procedures and policies for organizations or agencies to follow in a procurement process. This standardized information can prevent legal issues because both the contractor and company will be using the same guiding principles for the contracting process. The Navy will use it to prepare the acquisition strategy and requirements, while the firm will use to write a proposal. For example, section FAR 9.505-1 states that the contracting officer should not award a contract to a government employee or a business controlled or owned by a government employee (Federal Acquisition Regulation (FAR), 1). The following is an example of the provided illustrative as stipulated by FAR 9.508:

“Before an acquisition for information technology is conducted, Company A is awarded a contract to prepare data system specifications and equipment performance criteria to be used as the basis for the equipment competition. Since the specifications are the basis for the selection of commercial hardware, a potential conflict of interest exists. Company A should be excluded from the initial follow-on hardware acquisition” (FAR, 9.508, 1).

An unsuspecting company wouldn’t see any problem awarding the contract to company A. However, companies can identify such conflicting interests and adjust their decisions as appropriate, thanks to the FAR. If the Navy and the firm both comply with this regulation, they will avoid the legal issues associated with favoritism and discriminatory practices.

Second, using FAR means both companies will achieve the best value from the procurement process. The acquisition procedure of the Navy is governed by FAR because it is a government entity. If the firm cannot solicit information, it can still use FAR information to understand how to best meet the Navy’s requirements. The information outlined by FAR are best practice. Therefore, if both companies use them as their guiding principles, they can acquire value from the business process.

Third, the FAR will provide both companies with training and technical insights into the contracting and procurement process. The case study indicates that the firm has four employees: two production employees, an office assistant, and me. The team may lack the necessary expertise to prepare a proposal to meet the Navy and FAR requirements. The FAR can bridge this gap by serving as a training body. It performs this role by disseminating regulatory information to contracting officers, and managers can access information on any topic of interest in real-time. Although the document is long, its language is simple, and the format is easy to follow. The online document also has tools for automatically searching and retrieving information on FAR requirements. The firm can deploy these tools to develop its technical capacity for writing a comprehensive proposal that will meet the Navy’s and FAR’s requirements. Both organizations will save money that would otherwise go into hiring a contracting expert.

Determine the method that you will use for Solicitation of a Bid

The demand-supply forces typically dictate the outcomes of the bidding process. According to Tan, these market forces dictate money considerations for both the buyer (Navy) and the seller (Navy) (2). Apart from price, Tan indicates that the bidding selection process also considers factors such as reputation and competition (2). Finding an appropriate competition strategy is, therefore, crucial for a successful bid solicitation. According to Tan, contractors must think of ways to deliver the additional benefits when a client has multiple requirements (2). The authors imply that a contractor must offer unique value to the client to increase their chances of successful bidding. My strategies would include:

1. The social responsibility and accountability strategy involves communicating to the client that the firm’s central goal is to conduct business in a way that will also benefit society, the community, and stakeholders. According to Tan, this strategy can build the contractor’s reputation to the client. It might also demonstrate to the client that the firm shares its vision, goals, or values, possibly leading to a competitive advantage (2).
2. Claim Strategy is effective when there are expectations for potential changes in the project’s design. In this case, the firm can explain why or how it can meet these future expectations or requirements to the Navy.
3. Unique architectural design- The bidding process entails submitting a bid or proposal to the Navy. Usually, the Navy will solicit bids by sending out bidding invitations. After the bid invite has been sent out, the firm can research the project’s scope and requirements and ensure they integrate them into the bid proposal.Offering a unique architectural design requires the firm to communicate that it has a clear understanding of what the firm needs.

Explain Why the Navy is likely to choose your Company in the Sealed-Bidding Process

Clients will award contracts when a contractor meets the following requirements (Laryea, 3):

• They can deliver the project at a reasonable price
• They can provide the project at an appropriate time
• The contractor can provide quality and the required scope of work.

The competitor might also meet these requirements; therefore, the firm will need a differentiation strategy to earn an advantage (Mcgee, 4). Differentiation is a business strategy that gives clients something unique and different from competitors. Different differentiation strategies include broad differentiation, focused differentiation, and low-cost differentiation. The firm can gain the upper hand against its competitors through product differentiation, which entails offering top-notch quality, unique design, performance, or reliability (Mcgee, 4). Product quality implies innovation, e.g., reflecting customer factors in the product’s design process. According to Mcgee, this strategy will give the firm an upper hand over its rival, increasing its selection chances (4).

Differentiation improves an organization’s competitive advantage, but it also comes with costs. Producing this high-quality product may hike the production costs, which may also increase the product’s price. Empirical evidence shows that customers may be willing to pay a higher price for value acquisitions, but this is not always the case (Baumert, 5). Setting prices way above the market price might reduce the Company’s attractiveness. On the other end of the spectrum, low prices do not guarantee selection. Therefore, it is in the firm’s best interests that it offers a reasonable price while minimizing the risks and liabilities of the potential contract.

Griffis developed a price bidding strategy to increase the firm’s chances of winning in competitive bidding (6). The model is evidence-based and involves studying the behaviors of key competitors through a probability density function. The firm can use this model to determine the best market price. Once it establishes the cost strategy, it will combine it with bidding and differentiation strategies. These strategies will significantly improve its chances of being selected for the contract.

References

Federal Acquisition Regulation (FAR). No date. Federal Acquisition Regulation (FAR). https://www.acquisition.gov/sites/default/files/current/far/pdf/FAR.pdf.

Yangtao Tan. March 18, 2010. Contractors’ Competition Strategies in Bidding: Hong Kong Study. https://www.acquisition.gov/sites/default/files/current/far/pdf/FAR.pdf.

Samuel Laryea. March 15, 2022. Chapter 17: Economic principles of bidding for construction projects. https://www.academia.edu/download/67689445/Economic_principles_of_bidding_for_construction_projects.pdf.

John Mcgee. February 2014. Differentiation Strategies. https://www.researchgate.net/profile/John-Mcgee-3/publication/280246508_differentiation_strategies/links/55af737808ae6aa568b3ab22/differentiation-strategies.pdf?origin=publication_detail.

Thomas Baumert. February 2021. Brand antiquity and value perception: Are customers willing to pay higher prices for older brands. https://www.nebrija.com/medios/actualidadnebrija/wp-content/uploads/sites/2/2021/02/Journal-of-Business-Research-2.pdf.

Bud Griffis. No date. Bidding Strategy: Winning over Key Competitors. https://ascelibrary.org/doi/epdf/10.1061/%28ASCE%290733-9364%281992%29118%3A1%28151%29.

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