Geographical Preference
Started by buddyandme · Mar 10, 2011 · 3 replies
- bOriginal post
buddyandme
Mar 10, 2011 · 15y ago
Over the years I noticed what I would call a Geographical Preference for contractors located in the Washington Beltway area, especially Virginia and Maryland. Recently I came upon a Congressional study that spoke to this topic. see below:
Excerpt from the study titled - Location-Based Preferences in Federal and Federally Funded Contracting: An Overview of the Law, dated Oct 2010
http://assets.opencrs.com/rpts/R41115_20101001.pdf
"The recession that began in December 2007 has prompted increased interest among some Members of Congress and their constituents in legal authorities that could require or allow federal agencies to prefer contractors in one state or locality over those in other states or localities. Federal spending on procurement contracts has remained high, totaling $523.9 billion in FY2009, at a time when many other businesses have scaled back their purchases of goods and services. However, this spending has historically been localized in three to five states, which receive nearly half of all federal procurement dollars, prompting concerns about whether other states receive their ?fair share.?
I did some research on this as well and looked at two recent contract requirements by the Army (ITS-SB) and DHS (EAGLE II).
For ITS-SB, the Army announced awards to 16 contractors and 15 are from either Virgina or Maryland.
For EAGLE II, although it is out for bid, the original EAGLE awarded 58 contracts with 56 located on east coast and 48 of the 56 in Virgina alone.
I'm doing additional research on this topic and so wanted to open this topic up for discussion.
Why is congress looking into this topic?
Why these five states?
What types of industry are receiving these dollars?
What can be done by the contracting workforce to level the playing field?
Comments are appreciated.
- j
ji20874
Mar 11, 2011 · 15y ago
The playing field is level. There is no such thing as "fair share". The beltway bandits get so much because they play the game -- they have chosen to be physically close to their customers, and they benefit from that closeness. If physical proximity is a competitive advantage, it is a "fair" rather than an "unfair" competitive advantage. A good seller cultivates a good relationship with a rich buyer.
The contracting workforce should do nothing to level the playing field, if that phrase means to make awards to contractors in other than the five states. Well, I suppose contracting officers can always do more robust market research, but such would be for the purpose of better defining the requirement and getting a better price, not awarding to a contractor in a state other than the five.
The CRS document points out that geographic preferences in source selections are not allowed except with statutory authority, and it listed some of the common authorities. There are others. For example, in the Forest Service we have an authority to include a preference for local contractors in acquisitions for stewardship contracts and restoration contracts -- just a preference to be considered among other evaluation factors, not an iron-clad guarantee -- but if all else was equal, we could choose to pay $100 to Offeror A instead of $95 to Offeror B, solely because of Offeror A's greater contribution to the local economy.
- f
formerfed
Mar 11, 2011 · 15y ago
Both ITS-SB and Eagle are IDIQ contracts that require performance nationwide. I believe ITS may also require worldwide performance. So there's no RFP requirement or preference for metropolitan DC location.
I think ji20874 is exactly right - the companies that win the majority of those types of contracts chose to be located near their customers. As a result, they benefit. THis comment is right on the mark
If physical proximity is a competitive advantage, it is a "fair" rather than an "unfair" competitive advantage. A good seller cultivates a good relationship with a rich buyer
A company can't get to know their buyer and what they need by reading FedBizOpps.
- F
FAR Fetched
Mar 11, 2011 · 15y ago
It's proportionate to the amount of Federal agencies in the Beltway area. The area also draws and keeps a lot of personnel/resources that other States can't. The Companies around the Beltway have more resources to work harder at getting the contracting work. Example, do a search on Monster for Contract Administration jobs - there's 1 in the entire state of Kansas; there's 107 in the state of VA - almost all in the Northern part of VA for Government Contractors. There's a reason why Vern does his classes in Crystal City instead of Montpelier Vermont.
Most of the agencies are in or around the beltway; when someone retires from an agency and wants to do consulting work, they're most likely going to choose a company that doesn't require them to relocate which again keeps the resources local.
The only way to even out the Federal spending to companies per state is to spread out the agencies throughout the states.