Winning Government Business/Contracts

Introduction

Every year, the government procures two items that are worth billions of dollars. Those two items are the products and services where the government attracts hundreds of organizations that compete through a process offering their resources in order to win the business from the Federal Government. This is done through a competitive process where bidders submit a proposal that offers the budget needed and details of the products or services to be procured. The public agency that wins the bidding process and earn the government procurement ends up more or less working the proposed plan for the government by offering its products or services in return of profitable monetary outcome.

      Description

Winning the business of the government is certainly helpful for a variety of reasons. The purchasing activity of the government is substantial and therefore, there are always new projects and new bidding competitions. So, the public agency that receives the work would have more opportunities to be involved in other projects and have a number of long term profitable ventures. The US Federal Government is considered the largest purchaser in the world. Thus, there is a tremendous market for small businesses to take advantage of.  In addition, small businesses could benefit a lot from the guidance and Federal sales experience provided that they worked with the government on a project as well as endorsement of the products sold to the government. Those products will obtain immense promotions. Once products are placed on the inventory programs, the small business does not need to do any further marketing.

Besides that, the government is the most reliable component of the economy. Not only will the benefits come from monetary means, but also gains will be from an enhancement of reputation. Finally, the public sector has fewer tendencies to be subjected to fluctuations in the market. Thus, their pay is prompt and their mode of conduct is always professional. For all the above reasons, a large number of business operators rely on catering only to government needs.

A price analysis is used through the process found in competitive situations where items are procured to the general public. After agencies place their offers, the price analysis stage serves to analyze the offers and compare them in order to choose the best option offered by vendors. On the other hand, cost analysis is a substitute for the price analysis. It comprises of the evaluation of the cost components from one end and the potential profit that could come out from the agency’s offer. Therefore, the cost analysis is more like what the contract ought to cost taking into consideration other variables as opposed to the price analysis that compares multiple offers on the financial and offering bases.

The solicitation is Spokene Arena Tap Room – Construction Services

Cost Analysis

 

Operating Expenditures                                     FY 2009       FY2010        FY2011         FY2012        FY2014

Personnel Expense                                              $2,428,000 $2,499,000 $2,574,000 $2,652,000 $2,732,000

Unreimbursed Contract Services                           350,000 360,000 371,000 383,000 394,000

Repairs & Maintenance                                           197,000 203,000 239,000 246,000 253,000

General & Administrative                                        338,000 348,000 358,000 369,000 380,000

Advertising & Marketing                                          225,000 232,000 239,000 246,000 253,000

Utilities                                                                      1,013,000 1,043,000 1,075,000 1,107,000 1,140,000

Insurance                                                                      113,000 116,000 119,000 123,000 127,000

Other                                                                              73,000 75,000 78,000 80,000 82,000

Total Operating Expenditures                            $4,737,000  $4,876,000 $5,053,000 $5,206,000 $5,361,000

Management Fee                                                     $450,000 $464,000 $478,000 $492,000 $507,000

Reserve for Replacement Fund                                259,000 267,000 277,000 285,000 294,000

Total Expenditures                                               $5,446,000 $5,607,000 $5,808,000 $5,983,000 $6,162,000

 

 

Objectives of Contract Negotiations

  1. I will choose ImpliedContracts because implied contracts are directed in law and has a mutual promise and agreement. It has a arising compliment promise the obligation is also arising it has been expressed in words. It is misleading to label contracts, more accurate designation in law.   Very easy contract depends on substance for its existence; therefore, for an implied contract to arise, there must be some act or conduct of aparty, in order for them to be
  2. Ice cream 1000 = ((Ceiling Price – Target Price)/buyer’s Share Ratio) + Target Cost

 

For example, assume:

Ice cream: 1,000
Target Profit: 3,000
Target Price: 202,000
Ceiling Price: 2,000
 

Share Ratio:

80% buyer–20% seller for overruns, 50%–50% for under runs
  1. Utilities = ((2,000 – 2,202)/ 0.80) + 3, 000= 312,500.
  2. If for a moment, Utilities is given and you are trying to calculate the ceiling price for the buyer (maximum amount that the buyer will have to spend)

Suppose prices for a single the same good in two locations, there are no transport costs and no economic barriers between it together the locations. The analyzing can now be performing to both supply and the command site; all sellers have a motivation to sell their goods in the higher-priced location, forceful up supply in that location and reducing supply in the lower-priced location. If demand remains even, the upper supply will force prices to reduce in the higher-priced location, while the lowered supply in the substitute location will drive up prices there. equally, if all consumers move to the lower-priced location in order to buy the good at the lower price, demand will increase in the lower-priced location and  assuming constant supply in both locations prices will increase, whereas the decreased demand in the higher-priced location leads the prices to decrease there. The assumption for the pricing is depend of the demand of the product which of the cost transport with the barriers, it also need a strategy for dealing and selling. Usually, if the goods are satisfactory to the costumer it has a higher demand for the producer.

 

Conclusion

Through a successful planning and execution of a bid and proposal, the organization will have a clear understanding of their market position, reputation, available resources, timeframe and budget. Using price analysis and cost analysis are crucial for both the government and vendors to achieve a fair competition that would grant the better option to the biggest buyer (the government).