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I thought we might try something different this Friday and if it works perhaps turn it into a regular feature here. The news often tells the story of spend management efforts gone awry … or worse yet … a total lack of spend management! Thus is the case with the Air Force’s attempt to award a bid for new aerial refueling tankers.
The facts:
- Auditors blocked a previous award due to protest over unclear, non-numeric scoring of bids
- This is the 3rd attempt to award this business
- The Air Force allegedly gave one of the bidders access to some of its competitor’s cost data in a previous round
- They also allegedly subsidized the other main competitor (although it appears to be for an unrelated project)
- Requirements for the aircraft still do not appear to be finalized (although in their defense, this may enable the bidders to use their creativity to innovate and reduce costs)
I have little doubt that all of you reading this would go about this process differently. And although Capital Hill politics play heavily into the debate, let’s pretend for a minute that we don’t have to worry about key players bringing home the bacon.
So, you have a complex project with two main competitors trying to earn the business. What do you think the Air Force did wrong? And what would you do differently?
Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.
2 responses so far ↓
1 T Volpel // Oct 30, 2009 at 7:58 am
Frankly I would have awarded the contract to both Competitors based on actual need of the final user. This is a large enough spend that “winner take all” seems to be a risky strategy. Sole sourcing has huge consequences (787 issues) and awarding to both suppliers will foster an invisible competitive atmosphere between each to see who can deliver the fastest and with the best performance. I am sure the 767 can be used in many applications and the Airbus product would have its own advantages in certain mission parameters. We buy different brands of fighter planes, why not tankers?
2 Gerald Richerson // Oct 31, 2009 at 1:23 pm
A well thought out and documented business requirements and specifications document is essential as well as clear guidelines for fair and equitable vendor selection scoring. The auditors were correct in blocking the second round awards, the vendor selection process should be transparent and for this particular commodity numeric scoring would render the most compelling results. Open Records requests must be adhered to but in this case it appears that no such request was made and the sharing of competitive bids to only one of the respondents seems to be inappropriate, share with one share with all but only if compelled through the regulatory process not voluntarily. All such bid packages should stand on their own, current relationships with any respondent should not come into play. Decisions as to an award or awards should be based on the facts and results of unbiased proposal scoring, price, delivery, vendor management capabilities, and continunity of service.
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