Experts: Value beats price to avoid fake IT
- By Matthew Weigelt
- Dec 12, 2008
As government regulators consider tougher ways to block counterfeit
information technology products from entering the federal marketplace,
they’re restarting an old debate about whether to award contracts based
on the lowest bid or the best value.
At a meeting Dec. 11 regarding newly proposed rules
on counterfeit IT, Laura Auletta, a procurement policy analyst at the
Office of Federal Procurement Policy, said she was surprised to hear
that contracting officers believe they should award a contract to the
lowest bidder to save money instead of finding the best value.
officers and acquisition officials often interpret the Federal
Acquisition Regulation to mean that the lowest bid should get the
award, said James Bockman, a former NASA official who worked closely
with the agency’s procurement employees.
“They see that as saving the government money,” said Bockman, who is now a special projects engineer at Aerospace Corp.
FAR gives civilian agencies broad discretion in making decisions based
on price or other best-value parameters, such as the company’s
experience and management capabilities. But government and industry
experts say acquisition workers are concerned about making a mistake
and paying for it with a career-ending embarrassment. With today’s
emphasis on curbing waste and abuse, they say contracting officers
often choose the vendor with the lowest price.
officials agree that the government should strive for quality and
ensure that agencies don’t buy products that are tainted with malware
or poorly made.
The prevalence of counterfeit IT and electronic
parts has exploded in the past five years after roughly 20 years of
level numbers, officials say.
“The whole supply chain is
infected with counterfeit parts,” said Brian Hughitt, manager of
quality assurance at NASA’s Safety and Assurance Requirements Division.
sudden increase has led regulators to add tougher checks to the FAR.
Counterfeit IT products lead to financial losses for government
agencies and companies, and they pose a threat to national security,
the Civilian Agency Acquisition Council and the Defense Acquisition
Regulations Council wrote in a Nov. 18 Federal Register notice
new rules’ draft language would require agencies to buy all IT products
from original equipment manufacturers, software developers, or
authorized distributors or resellers. In addition, agencies would have
to require companies to offer proof in contract proposals that their
products are authentic.
Edward Chambers, a procurement analyst
at the General Services Administration who is leading the regulatory
proposal, tried to allay initial concerns from industry and government
officials by saying the language is preliminary.
At the meeting,
government officials disagreed about who’s to blame if an agency buys
fake IT or electronic parts. Hughitt said a federal employee should
take no blame if an agency buys a phony product because the contractor
should know what it’s selling to the government.
government does not use rigorous scrutiny when evaluating products,
said Brad Botwin, director of industrial studies at the Commerce
“The sloppiest processes are on this side of the
house,” he said, referring to the government, particularly the Defense
Logistics Agency. The liability for counterfeit parts rests on
contractors and the government.
As the debate continues,
officials say they need to find a way to increase scrutiny without
putting companies out of business. But the checks are necessary because
counterfeit products will continue to be a problem, Botwin said.