~ Representing Manufacturers of Analytical Technology ~
 
Low Bid vs Best Value

Included below is a list of helpful hints/discussion points for government employees to consider when working with a purchasing department to acquire new technology products for their laboratory or other technical department. Most purchasing departments focus on "low bid" unless the requester can show justification otherwise. Some technical scientist have developed good working arrangements with purchasing personnel and are able to specify or otherwise justify the exact technologies and exact vendors that offer the best technical solution and/or the overall "best value" for the taxpayers dollar. Others seem to have difficulties getting the systems that are best for them due to "low bid" policies or failure to effectively communicate the need, specifications or other key issues with purchasing. In order to enhance the relationship with purchasing, consider a strategic review of the procurement process with key purchasing managers as described below. 

Low bid can be a valid government strategy for buying most products. There is however, a very good argument to be made that low bid is not necessarily the best approach for purchasing high-tech equipment or instrumentation. Low bid in the high-tech world will often get you the lowest quality. This is basically a short-term approach. Higher quality vendors may have a higher up-front price, but will generally offer an overall lower cost when you take into consideration the full useful life of a system. This lower long-term cost may include such variables as superior service/support, greater reliability and uptime, better accuracy and precision of results, more efficient user interface/ease of use/automation, longer useful life, and higher resale/salvage value as the systems approaches the end of it's useful life. Unfortunately all of these key differentiators are "subjective" and may only be known through user experience and industry "common" knowledge. Writing specifications to include these cost saving benefits is nearly impossible. For these reasons, the scientist requesting a new system needs to have a face to face discussion with the purchasing agent to identify a technique for buying the "best value" system. Such a meeting and discussion should occur long before the purchasing process begins or specifications are written. A review of mechanisms for making a "best value" acquisition will likely include some key issues regarding purchasing procedures and limitations. There are however, a few basic agreements or processes that must exist to accomplish a "best value" award.

The technical end user or technical manager must have the latitude to write exact specifications that clearly define features and/or capabilities. The same requester must also have the authority to reject any and all bids that do not meet those specifications. This would include "interpretation" of vendor responses and the freedom to use any means of confirming specification compliance, such as discussions with existing users of a particular vendor's system. Purchasing must defer to the technical end user regarding the need or requirement for each specification listed. 

An additional tool to aid in this process is "yes" or "no" boxes next to each key specification on the bid document. This is one of the most overlooked techniques available to greatly simplify the bidding process. This requires each vendor to make a binding commitment of compliance for those key capabilities. Specific penalties should be stated in the bid for vendors who provide misleading or false statements regarding specification compliance. Every bid should also include a section for vendors to discuss or explain their position regarding any specification with which they do not comply. 

Utilization of an RFP (Request for Proposal) rather than an RFQ (Request for Quotation) can provide more latitude in selecting a vendor. In fact, many RFPs will incorporate language that describes how the decision will be made, and typically states that low cost will not be the only criteria to determine which proposal best meets the total short-term and long-term need of that particular government entity. Allowing some subjective end user input is a key step to achieving a "best value" award. The RFP is one mechanism to effect a more subjective analysis of vendor bids. However, any statement or reference in the bid that grants the government agency flexibility for awarding on some basis other than just "low bid", is a step in the right direction! 

The low bid concept attempts to achieve equality and low cost in the government procurement arena. In the case of high-tech systems, the low bid approach tends to exclude many critical factors that effect the total long-term cost. As stewards of taxpayer dollars, a "best value" award benefits everyone. By developing a solid working relationship with purchasing, we can accomplish both the low cost mandate of the purchasing department and the need for high quality technology products in the laboratory. With cooperation and communication you can make "BEST VALUE" the procurement model of the future!