2. Procurement Rules and Practices

Reform construction project low-bid, and LPTA awards

The FAR should reflect best practices in the private sector and many state construction (15 or so) programs by requiring prime contractors to list/name primary subcontractors in low-price award procedures (like proposed in HR 1942).


Since the 1984 Competition in Contracting Act, federal agencies have run away from construction project low-bid prime contract award procedures because of the claims and disputes that were rampant in that system that permits post-award sub bid shopping/peddling/chiseling by the successful low bidder - allowing the prime contractor to pad it's profits while putting the success of the project in jeopardy - with no corresponding benefit to the agency or the taxpayers..


For 20 years before 1983, GSA required prime contract bidders to name/list their primary subs in their low-bid submission and to award to the named/listed subs in the absence of good cause for a post-award substitution. Top performing subs enter markets where pre-award competition is robust an post award ethical practices are respected - they exit markets where unethical post-award bid shopping prevails, as it does in the current Federal low-bid market. GSA removed the sub bid listing regs in a politically charged rule making with a skimpy procurement rationale at best - it's past time to go back and pick up the highly regarded method to promote transparent, ethical, and sound sub bid listing that promotes successful project completion, robust pre-award price competition by high quality ethical firms offering their best price pre-award in an ethical procurement system. Agencies too can exercise their sub qualification assessment better with a sub listing system. Just as the FAR now requires the prime to make timely payment to its subs, where it didn't before - it's just as appropriate to control unethical sub bidding procedures to benefit the project.


If the FAR were reformed to require sub bid listing (as proposed in HR 1942), agencies might be inclined to shift back to more use of low bid awards and gain some savings and administrative efficiency in contract award and project administration workload too - as low bid is a less personnel intensive procedure as compared with Part 15 negotiated awards, and the claims and disputes inherent in the low-bid/ sub bid shopping environment are removed if there are restraints on post-award sub bid chiseling environment now permitted in Part 14 awards.


Subcontractor bid listing as proposed in HR 1942 is as meritorious and more so than similarly constructive proposals to ban construction prime contract internet reverse auctions on low-bid awards (HR 2751), limiting design-build negotiated selections to short lists of no moree than 5 firms (HR 2751). Moreover, the FAR should be amended administratively to allow agencies to also use a prevalent construction project best practices that would permit agencies to use separate prime contracts for construction projects in conjunction with agency construction manager agency agreements.. Many state and private owners use this contracting process on projects of appropriate scope - this option too should be made available in the FAR - as it isn't now.



5 votes
Idea No. 108