Aug 4, 2010

Myth #1: More specific specifications are always better.

Fact: All suppliers get the same exact requirements in the RFP. The government is not looking for irrelevant information or minutia, so just stick to the facts.

Myth #2: Total Cost of Ownership (TCO) analysis is always the best method on which to base a supplier selection.

Fact: TCO is useful but Value Management (VM) may be more appropriate. VM has emerged as the leading financial analysis for the US Government. VM is especially popular witht he DoD and at one point was mandated.

Myth #3: Privately-held suppliers will never share their financial statements.

Fact: Privately-held suppliers are not required to disclose financial statements and are less visible than publicly-held suppliers. If disclosure of financial statements is a requirement or condition then accommodations must be made between the agency and supplier; this can include a confidentiality agreement or limited access to the statements.

Myth #4: Long-term contracts should always begin immediately after a sourcing process.

Fact: It is normal for a long-term contract to be awarded and for business to start quickly but this may not be the best way to do business. Just like most warranties and guarantees a 30-90 day trial period should be negotiated to make sure the agency and supplier is a good match.

Add Comment