Strategic Alliances in Federal Government Procurement - Research Paper Example

This research paper investigates whether or not strategic alliances provide a viable solution to the problems involved in competitive bidding can be resolved by strategic alliances. Bajari and Tad Elis’s theory of competitive building is used to analyze analyzes of the research.  In conclusion strategic alliances can improve the bidding process, reduce cost, prevent delays, and in doing so it is consistent with the federal government’s objectives of promoting competition and maximizing taxpayers’ returns.
  Competitive bidding refers to the process of inviting multiple parties bipartite a specific contract for the delivery of services and/or goods or a particular product. Competitive bidding is therefore different from sole sole-source acting which a preferred contractor is selected outright. Competitive bidding is based on the belief that by inviting independent and multiple proposals, the government can select the most cost-efficient contract that will enable them to achieve their objective. 

The Competition in Contracting Act (CICA) as amended, requires that in general, government contracts are subject to “full and open” competitive bidding (Section 253(a)).  The purpose of the CICA is to ensure that public purchasers and private vendors do not collude.  However, competition regarding federal government procurement has attracted significant attention largely because of suspected malfeasance and an increase in non-competitive contracting.  There are some issues surrounding exceptions to the competitive contracting requirements of the CICA. For example, the Homeland Security Act 2002, specifically allows the Department of Homeland Security (DHS) to escape the requirements for security reasons. However, only one year after its establishment, the DHS issued US$655 million in government contracts on a non-competitive basis. In 2005, the value of non-competitive contracts awarded by the DHS increased by 739% representing US$5.5 billion.  The result has been widespread was aster, fraud, and abuse.

Many of the problems experienced in the government procurement process are related to are the fragmentation of the project or contract.  Strategic alliances can improve upon the competitive bidding process and procurement outcomes by fostering collaboration for more efficiency and coordination of risks and rewards.  A strategic alliance is an arrangement through which the owner (government) teams with a supplier or contractor or suppliers or contractors for the delivery of services and/or goods over some time.