Contracting By Negotiation Process With the Federal Government

How Does Contracting By Negotiation With the Federal Government Impact Your Company?When the federal government uses contracting by negotiation to procure its products or services, it uses various source selection processes and techniques to get its result. As a matter of practice, contracting agencies uses different competitive acquisition strategies  and federal contract negotiation techniques for certain types of acquisitions. Companies still have to apply the difference between FAR part 15 vs. FAR part 12.

If businesses submit weak proposals, there is usually no room to negotiate. Alternatively, if companies submit strong technical proposals or proposals that provide better value to the government, the impact of contracting by negotiation puts your company in a better position to negotiate terms with the agency.

When using FAR 15 negotiation methods, federal contracting agencies solicit proposals from the public. After receipt of bids, the negotiation process allows for discussions, clarifications, revision of proposals and allows for the government also to negotiate pricing and other critical aspects that may lead to better value.

Best Value Source Selections

Under FAR 15.101 government contracting agencies seek to get the best value when contracting by negotiation. Depending on the type of acquisition, a bidder’s price could have a varying weight of relative importance. Each solicitation must have the requisite amount of importance so that offerors can write the proposal responses accordingly. An example of a contract by negotiation is where price is very important would be buying office furniture or supplies.

FAR 15 Varying Approaches and Federal Contract Negotiation Techniques

Sole Source Contracting:  Most government contractors are familiar with sole source contracting as one of the federal contract negotiation techniques .  When using this level of negotiated contracting techniques, the agency should strive to eliminate unnecessary technical hurdles typically seen in competitive acquisitions. There is less of a requirement for competition.  Under FAR 15.002, when contracting in a sole source environment, the request for proposals (RFP) / solicitation is usually adjusted to get rid of unnecessary information and requirements;  there are a simple evaluation criterion and less proposal preparation instructions. The government and the contractor focus more on getting specific values.

Government Contract Negotiation Process – Competitive Bidding: When contracting in a competitive environment, the  bidding procedures are supposed to minimize the complexity of the bid, the evaluation, and the source selection decision, while maintaining a process designed to foster an impartial and comprehensive evaluation of offerors’ proposals, leading to selection of the proposal representing the best value to the Government. In opposition to sole source contracts, contracting by negotiation can be more frequently seen in competitive proposals. During the proposal evaluation process, your company may be allowed to present best and final offers (BAFO). This is but another way the the government contract negotiation process works.

Here the government focuses on emphasizing more stringent evaluation criteria and finding best value through the negotiated contracting process. Agencies rely on their source selection teams to apply the proper contract negotiation thresholds as stated in the solicitation.

Having a Better Grasp of Contracting by Negotiation Processes Allows for Better Bids: As a particle matter, most government contractors understand the basics of contract negotiation. However, successful companies that are doing business with the federal government have taken a more detailed step to understanding the process intimately

This allows them to develop better bidding strategies that lead to contract negotiation techniques by the government. It also helps companies to develop better technical proposal where the best value to the government is obvious. The only thing left is to negotiate more favorable terms with the agency.

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