10 Common Government Bid Problems

Posted by Administrator on August 31st, 2007

Risk Management in a Government Bid

As you are writing your government bid, it may be tempting to bid your most optimistic figures for schedule and budget. However, even in the best of circumstances, problems occasionally crop up. A typical government bid package should contain contract clauses related to the kinds of problems that specific contract type tends to encounter. For example, service contracts may contain stipulations about delays, while small-products contracts are more likely to have contract language regarding delivery of the wrong product. While writing your government bid, pay special attention to these risk management clauses – you’ll need to have your contract plan in place should any of them arise.

It’s also a good idea to have a plan outlined with your contract team should other problems arise that aren’t discussed in the government bid package. You won’t necessarily need to include these plans in your government bid, but having them in place will help you perform better on the contract.

The National Institute of Governmental Purchasing (NIGP) has compiled a list of 10 problems that tend to arise during contract administration. Having a plan in place in your government bid for these common problems falls under the “better safe than sorry” category – but that’s what Government Contracting Best Practices are all about.

The 10 Problems that Could Affect Your Government Bid

Wrong product – If a wrong or defective product is delivered, how quickly would you be able to get the right one? How much would it cost? What quality assurance procedures are in place to protect against this?
Delays – Do you have a strategy for getting back on track if you fall behind? Most contracts where delay is a possibility will have clauses addressing delay. Make sure to read them carefully. What is the cost of delay to your company? To the agency?
Definition of completion – Does the project have a clear completion point? What inspection and acceptance procedures will be used by the agency? If the language regarding this is unclear, try to resolve it during bid negotiation; better to settle it at the beginning of the project than at the end.
Change orders – How detailed are the bid specifications? What changes are allowed by the contract, and what is the change request process? Under what circumstances might you have to change the order?
Personality conflicts – Are key personnel on either side of the project abrasive, poor communicators or hard to work with? If a personality conflict arises, is there a third party who could serve as an intermediary?
Replacement sources – If your usual sources of supplies, labor, etc. fall through, do you have a back-up? How much time would it take to get what you need from the replacement source? What would be the cost to your company? To the agency?
Poor performance – Try not to let this one happen.
Risk of failure - What are the criteria for terminating the contract? How will you avoid this?
Subcontractors – As the prime contractor, you are responsible for the contract completion. What quality assurance procedures are in place to oversee your subcontractors? How much control do you need? Do you have a strategy for what to do if your subcontractor isn’t performing on key deliverables?
High cost – What are potential places for the project to go over budget? How will this affect your being paid for the contract? Try to avoid going over budget if at all possible; it could affect your ability to score a contract renewal.