Special Bidding Techniques

There are two new bidding techniques that the government is using that the small business needs to be aware of:

• Auction -- A government buying technique where the bidding continues until no competitor is willing to submit a better (i.e., lower) bid. The technique is often referred to as "reverse auction" because the government is looking for the lowest price, not the highest price.
• Bundling -- A technique where the government consolidates two or more requirements that were normally bought separately into a single contract. The support contracts of many military bases, which require a variety of work disciplines to keep the base operating, are being bid this way.

Both can present potential problems for small businesses.

If you decide to compete for a bid using the auction method, you need to spend time and effort researching and preparing so that you are sure that you can do what is required at the price you offer. You also need to protect yourself from the auction mentality that can take over. This is a fast-pace environment, and it is easy to get caught up in the moment. In an effort to win, you could end up bidding too low, receiving the contract, and not being able to cover your costs.

In bundling, there may be requirements included in the solicitation that cover areas that a small business cannot perform or manage. If you are considering making a bid, make sure you carefully read every provision of the bid to make sure you have the capability to perform all that is required, including project management.

A word to the wise: Be very cautious if you choose to participate in these bidding techniques.