Sunday, June 30, 2013

IRS Credit Card Abuses

The U.S. Treasury Department has released a report showing improper purchases by IRS employees using  federal credit cards. 

Improper purchases:  Included in the list of abuses were purchases for the following:
  • Wine for an expensive luncheon
  • Romance novels, diet pills, steaks, and baby related items ($2,655 by one employee)
  • Renting a popcorn machine ($3,152)
  • Kazoos and bathtub toys for managers meetings ($418)
  • Nerf footballs never used ($119)
The statistics:  
  •  In 2010 and 2011, the IRS spent nearly $108 million on more than 273,000 purchases with credit cards.  
  • There were 327 cases where employees divided purchases to avoid the $3,000 per transaction limit.
  • A total of just 94 employees were responsible for the abuses and none of the employees were disciplined.
More information:  Click here to read more information about the Inspector General's report.

Internal controls:  Agencies with government issued credit cards should have clear internal controls and monitoring to prevent abuses.  Click here to read some of the other blogs I've written on the subject.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Thursday, June 27, 2013

Job Opening: Contract Administrator - Construction

Port of Seattle
  • Position:  Contract Administrator - Construction
  • Location:  Seattle, Washington
  • Closing Date:  Monday, July 8, 2013 at midnight, Pacific Time
  • Salary:  Minimum $62,420 to Midpoint $78,020
  • Job Summary:  Manage the procurement contract process for routine construction contracts at the Port of Seattle Central Procurement Office.  Lead procurement planning, establishing and managing milestones and related procurement schedule.  Advise on procurement objectives and assist in preparation of the technical specifications, division 0 and 1.  Develop procurement objectives in terms of completion, price and construct contract vehicles including pricing arrangements, special conditions, and appropriate evaluation of responsibility criteria.  Prepare solicitation documents, perform detailed analyses of all elements of cost in the bids/proposals, make competitive range determinations, evaluate bid irregularities, and make selection decision.  Conduct pre-proposal and pre-bid conferences with prospective contractors to arrive at clear understanding of what is required.  Award contracts.  Plan and conduct post-award debriefings.   
  • For More Information and to Apply:  Click here.
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Wednesday, June 26, 2013

Keys to Developing Successful Proposals by Businesses


I've seen a lot of proposals submitted by businesses during my career as a contracting manager and now as a consultant.  Some were very effective and communicated a clear message that directly responded to the Request for Proposals (RFP).  They were easy to read and inspired confidence.  Other proposals wandered across the landscape – a hapless collection of paper that read more like a corporate policy manual divorced from the project at hand. 

Suggestions for businesses:  I'd like to offer some suggestions for businesses responding to RFPs on how to craft an effective proposal that gets attention. 


Develop the strategy:  When an RFP is issued, some businesses are tempted to jump right into the process of producing the proposal.  The deadline is looming, so they start writing the proposal immediately without really knowing what they want to say.  Or perhaps more commonly, they don’t do much writing at all.  Instead, they merely collect and collate pages from previous proposals, policy and procedure manuals, mission statements, forms, and websites – and top it off with a nice cover page and a binder – ready (or not ready!) to submit to the public agency.  This approach results in a hodgepodge proposal without a strategic focus.


Good proposal development is not a random, trial-and-error process of slapping words onto paper.  It should be strategic, deliberate, and laser-focused.



Before the first words of a new proposal are written, it is critical for a company to pause, take a deep breath, and step back the immediacy of the proposal deadline.  Here are three strategic actions business should take once an RFP has been advertised.



  1. Read the RFP:  It seems like an obvious first step, but from some of the proposals I’ve read, I’m not sure those companies have looked at the RFP – or if they did, that they actually paid attention to what was asked for.  RFPs reflect the values and objectives of public agencies, so reading the RFP carefully provides insights into what the agency cares about and their expectations.  Pay close attention to the specific words used in the RFP – especially for the scope of work and evaluation criteria.  These sections will give you a good sense of how closely your company’s experiences match with what services the agency is seeking and how it will evaluate proposals.

  1. Assess your chance of success:  Responding to an RFP will cost your company time, money, and focus.  Be deliberate in assessing whether you actually have some chance of being awarded the contract.  Gather your key management and project team to think strategically about the RFP before you decide whether to respond to it.  Here are some questions that should be part of your decision making process:

    1. Project Fit: 

    • Does your company have experience performing this scope of work?
    • Is the scope of work a good fit for your company?
    • Is the work part of your core business?
    • Have you performed projects of this size and complexity before?

    1. Agency Fit:  

    • Have you worked for this agency or type of agency before?
    • If you haven’t worked for the agency, do their decision makers know your company  through contacts you’ve made with them or by reputation?
    • Are you prepared to deal with the administrative requirements of the agency?

    1. Staffing:

    • What personnel would you assign to the project?
    • Does your staff have the right experience for this kind of work?
    • Are they available to work on the project within the project’s schedule?

    1. Competition:

    • Who are your likely competitors?
    • What are your company’s strengths and weaknesses compared to your competitors?
    • What strategies can you use to compensate for your weaknesses?
    • Do any of your competitors have contracts or established relationships with the agency?

    1. Preparation Time:

    • How much time and effort will be involved in developing the proposal?
    • Do you have appropriate staff available to develop the proposal?

  1. Develop your message:  After you’ve decided to propose, but before you begin writing, think conceptually about the big picture.  What unique message do you want to convey throughout your proposal about why your company is the right company for the project?  This is an opportunity for you to not just mechanically respond to evaluation criteria in the RFP, but to proactively influence the evaluators.
Prepare Your Proposal:  Even if you’ve developed an effective strategy, a poorly executed proposal will reduce your chances of success. There are four areas where proposals often fall short: content, structure, writing, and layout. Let’s look at some of the common mistakes in these areas and how you can make your proposal more effective.



1. Tailored Content:  One of the most common weaknesses of proposals I review is they are generic, and very boring to read.  They have the same content the company used in the last proposal – and will use in the next proposal.  Agencies who read such proposals are not convinced that the proposer understands the scope of work, or has even read the RFP.  Though it takes additional effort, companies that research a project and tailor the proposed solutions to the agency’s specific needs generally score higher. 



The same customized approach applies to the cover letter.  A generic cover letter fails demonstrate that you know anything about or care about the agency’s needs.  Even if the agency’s evaluators read nothing but your cover letter, they should still come away with a clear understanding of your strengths, your core message, and why you should be selected.  That core message that you developed in your strategy sessions should then be embedded throughout your proposal.



Though you may be confident that you can perform the work of the project, you must actually demonstrate the relevance of your experience in your proposal.  This requires you to take your experiences and translate them into language that makes sense for the scope of work required.



2. Methodical Structure:  When agency evaluators review proposals, they usually have both the RFP evaluation criteria and your proposal opened up on their desk. You can make this review easier by responding in the same order as the evaluation criteria, repeating the evaluation criteria in your proposal, and making sure you address all of the specifics outlined in each criterion.  This methodical approach will help evaluators see that you are addressing what was requested – and will make sure you don’t forget anything.  If evaluators have to hunt through your proposal to find where you’ve addressed a topic, you may loose points.



RFPs often have many administrative requirements related to proposals.  Pay attention to these details – things like not exceeding a certain number of pages in your proposal and making sure all forms have been completed and submitted.



3. Clear Writing:  A poorly written proposal is ponderous to read, while a well-written proposal is a joy to peruse.  Language should be crisp, clear, and concise – not corporate and unwieldy.  Avoid long and complex sentences that are hard to keep track of, as well as wordy and dense paragraphs that are hard for the eye to follow.  Use an active voice – it’s more direct and easier to read.  In other words, to say it in the non-preferred passive voice: “Active voice should be used, and passive voice should be avoided.”  Don’t repeat your content in multiple places or say the same thing over and over in your proposals – or for that matter, don’t be redundant!  Check your spelling and grammar, and if you don’t have a good technical writer on staff, hire one as an employee or on a contract basis.



4.  Pleasing Layout:  You should make it easy for the agency's evaluators to read your proposal and quickly understand your message. Photos, charts, and graphs can be used effectively to break up text and communicate information.  Well described paragraph headings help readers follow the flow of your proposal.  Use a well-organized table of contents and tabs (with the name of the section on the tab) to help readers maneuver the proposal.  Color, shading, boxes, and other graphic design tools can further enhance the readability of your proposal.  If you don’t have a graphic designer on staff, consider hiring one as an employee or on a contract basis.



Summary:  What makes some proposals stand out while others fall to the bottom of the pile?  Development of your overall strategy and message is just as important as careful production of the content, structure, writing, and layout of a proposal.  Though there are no guarantees, these keys can make your proposals more competitive and increase your company’s chances of being awarded a contract.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Tuesday, June 25, 2013

Is it Bid Shopping if a Contractor Substitutes for a Higher Priced Subcontractor?

Bid shopping occurs when a contractor bidding a construction project takes a subcontract bid price, and attempts to get another subcontractor to lower their bid price below the original price received by the contractor.

Anti-bid shopping law:  The purpose of Washington state law (RCW 39.30.60) is to discourage bid shopping by requiring the listing with the bid of subcontractors for HVAC, plumbing, and electrical work on projects estimated to cost $1 million or more. 

When is substitution not bid shopping?  There was recently an interesting court case in which a subcontractor (ETCO Services, LLC) named with the bid was later substituted by the contractor (Killian Construction Company).  ETCO as the substituted subcontractor filed a lawsuit seeking $1 million in damages against the Killian as the contractor.  But because ETCO had made an error in their bid by not bidding all the work, Killian eventually used a higher priced subcontractor whose price included all the work.  The court ruled that using a higher price for a new subcontractor did not constitute bid shopping.

Paul Cressman, Jr.
More details:  Seattle construction attorney Paul Cressman, Jr., from the law firm of Ahlers Cressman PLLC, recently wrote an excellent summary of this court case on the firm's blog.   
  • Click here to read Mr. Cressman's comments with additional details about this case.   
  • Click here to read the court decision from the 9th Circuit Court of Appeals.
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Monday, June 24, 2013

What Happens if a Contractor Can't Provide Evidence of Insurance?

Public works construction bid documents include a variety of provisions, some technically describing the work to be performed and some addressing administrative issues.  One of the administrative requirements relates to requiring the successful bidder to provide evidence of insurance as described in the bid documents.

When should insurance documentation be provided?  Evidence of insurance should be provided by the successful bidder after award, but prior to contract execution (signing of the contract by the agency after the contractor has signed it).  As soon as the contractor and public agency execute or sign the contract, the public agency picks up potential liability, and thus it is important to have the evidence of insurance prior to contract execution.

What is acceptable evidence of insurance?  Bid documents must be specific about the type and amounts of insurance required, as well as what constitutes acceptable evidence of insurance.  Bidders can then factor in the cost of providing the appropriate insurance into their bid price.  Acceptable evidence of insurance consists of a certificate of insurance listing the type and amounts of insurance required, and an additional insured endorsement.  The additional insured endorsement is critical in order to protect the public agency.  In the event of a claim, without an additional insured endorsement, the public agency would not have any protection under the contractor's insurance policy.

When a bidder can't provide insurance documentation:  What happens if the bidder that has been awarded the contract is unable to provide acceptable evidence of insurance for the types and in the amounts required in the bidding documents?  One of the conditions for contract execution should be submission of appropriate insurance documentation.  If the awarded contractor is unable to provide the insurance documentation, which should be described as a requirement for contract execution, the public agency could collect from the bidder's bid guaranty.  The bid guaranty ensures that the bidder, if awarded a contract, will enter into a contract with the agency and provide the insurance and bonds required.

A practice to avoid:  I'm aware that there are some public agencies that require all bidders to submit with their bid a form signed by the bidders' insurance broker stating that the broker has read the bid documents, and that if awarded a contract, the contractor would be able to comply with the insurance requirements.  This practice is not necessary, is not a good practice, and may unnecessarily result in non-responsive bids.  If a bidder fails to provide this form with the bid, the bid would be declared non-responsive, resulting in a higher bid price to award to the second low bidder.  By signing the bid form, the bidder should be agreeing to language stating that they have read and understood the bid documents and have incorporated into their bid price all necessary costs, including the cost of the required insurance premiums.  Failure to provide the insurance documentation would result in the public agency collecting from the bidder's bid guaranty.

Limit submissions with the bid:  It is a best practice to limit submissions required with the bid.  Refer to my earlier blog posting on this subject. 

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Thursday, June 20, 2013

Job Opening: Spec Writer

City of Seattle (Seattle Public Utilities)
  • Position:  Senior Civil Engineer - Spec Writer
  • Location:  Seattle, Washington
  • Closing Date:  July 2, 2013 at 4:00 p.m. Pacific Time
  • Salary:  $43.54 - $50.69 hourly
  • Job Summary:  The individual in this position will prepare contract documents for bidding on the construction of municipal infrastructure, including utilities (water, wastewater and drainage), roads and facilities using both traditional Design-Bid-Build and Alternative Public Works Contracting methods.  Job responsibilities include, but are not limited to, developing construction cost estimates, identifying bid items for contractor payment, and creating bid proposals for competitive bidding.   
  • For More Information and to Apply:  Click here.
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Wednesday, June 19, 2013

Increased Use of Building Information Technology (BIM)

Technology is clearly changing how we live and work.  One of the significant trends involves the use of Building Information Modeling (BIM), which is 3-D modeling software used in the design of construction projects.

More and more contractors and designers are increasing their use of BIM.
 
Benefits of BIM:  Here are some of the benefits of BIM:
  • Clash detection:  Identification of clashes in design before conflicts become costly issues during construction
  • Jobs:  Creation of new jobs
  • Faster construction:  Speeding up the time it takes to construct projects
  • Productivity:  Increased productivity
  • Cost savings:  Saving money as documents get filed electronically and are accessed in the field with the use of iPads 
More information:  Click here to read more from a May 30, 2013 Bloomberg.com article on "iPads Supplanting Blueprints Boosts Builder Productivity."
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com