Why Our Business Would Qualify Under the Basic Concepts of The HUBZone Set-Aside Procedures?
The HUBZone Set-Aside procedures are friendly for small businesses and provide them equal opportunities for the acquisition of the contract. The HUBZone set-aside procedures protect the interest of the contractor and the contracting company. For example, its system regulates the expectations of the client before the start of the contract. The HUBZone set-aside procedure is suitable for our business because it is small and the Navy will not expect much from it. The HUBZone set-aside system requires that the Navy award the contract fairly using the market prices for the goods. The HUBZone set-aside procedure makes all the bidders legible because the set prices and expectations of the clients on the contract are reasonable.
The HUBZone set-aside procedure allows the businesses that are within the acquisition threshold and those that are billow to bid for a contract. The companies that anticipate dollar values within the range of $3,500 and $150,000 are equally legible for the award of a contract. Our company is small and thus does not have the financial strength to give incentives to the Navy. However, our business fall in the category of the monetary threshold of $3,500- $150,000. Additionally, our business qualifies because the available resource determines the expectations of the contracting company as started in the HUBZ one set-aside. Besides, the basis of the competition on the contract is open and full. The goals of our business are clear and our business gives priority to providing equal services to the clients. We are hopeful that our business goals will appeal to the client and thus our proposal will compete favorably with those of our competitors.
Primary Ways in Which a Multiyear Contract Would Benefit Both the Navy and Our Business
The multi-year contract is advantageous to both Navy and our business in different ways. The first advantage is that it is convenient for our business because there is no straining while searching for new vendors. Ideally, new vendors will consider many aspects to establish trust with the new contractors. However, a multi-year contract will save both the Navy and our business from the strains involved when seeking to develop confidence. Second, the multi-year contract guarantees budget stability to our business and the Navy (Kunreuther, & Michel-Kerjan 2015). Establishing a long-term relationship with the Navy reduces the possible budget strains that result when searching for the contractor and writing agreements that will bind the contract. Ideally, it is costly and tedious to look for a trusted contractor, and thus a multi-year deal is beneficial because of our business and the Navy because it saves on time for looking for a contractor and negotiating got the prices of the contract. Sometimes, the vendor has many contracts, and thus it is convenient for the vendor to offer an extended contract to the contractor at a regular price.
The multi-year contract is subject to the effects of inflation. However, a long-term relationship between our business and the Navy permits a negotiation and adjustment of the contract prices in response to the inflations. It will be easy for the Navy to adjust the price of the contract depending on the levels of inflations in the subsequent years. Our business will benefit from the multi-year contract because the Navy will be willing to scale the value of the contract with changes in the economy. It is easier for the Navy to evaluate the performance of our business and determine the number of rewards for the quality of service that our company offered. Our business will benefit from the multi-year contract because the Navy may consider increasing the price of the contract depending on the growth in the quality of service.
Why Use Cost-Reimbursement Contracts Are Better?
Our bid proposal is based on cost reimbursement. The cost-reimbursement contract is beneficial for our business because the Navy will pay for all the expenses and extra allowance to permit the business to earn profits. The pricing strategy is advantageous because it will allow our business and the company to establish a healthy relationship because the approach ensures financial security for both parties. The government offers most of its contracts on a cost-reimbursement basis, and thus it is wise to use the type of contract that is convenient to the government. The cost-reimbursement allows the vendors to set the highest level of the price it will not exceed in the process of the contract. Our business will benefit from the price system because it will not exceed the predetermined expenses in the course of the contract.
The multi-year contract is suitable though it is hard to predict the changes in the economy due to inflation. Inflation may set in during the contract, which may affect the cost of goods and services. The contractor and client have to benefit from the contract, and thus cost-reimbursement is beneficial to both the Navy and our business. It is possible that multi-year contracts will not be profitable if it will adopt the fixed price pricing strategy. This fixed pricing strategy is not profitable for small businesses because errors may occur, leading to unbearable loss during the contract period.
Category of Incentives That We Are Willing to Offer
The aims of our business are to provide quality services to the client at a profit. One way that our business can remain competitive when bidding for contracts is by setting prices that the customers are willing to pay for the contract. It is prudent to consider the fact that other companies are bidding for the same contract and have hopes of winning. As a result, our pricing strategy should not be too high to scare the client and not too low to makes losses. In this case, our business will bid for the contract with the Navy with reasonable prices of the contract and commit to providing quality service. Our business will build a reputation with the Navy for winning multi-year contracts. Our business will provide quality service to the Navy to win more contracts in the future. The cost reimbursement strategy that our business will adopt during the contract is friendly to the Navy. It is prudent to deliver quality service to motivate the officials to pay joyfully for the cost of inputs. Ideally, most clients choose the contractor because of the performance and the cost of the service. For this reason, our business is optimistic to win more contracts with the Navy, and thus our business is committed to high-quality services and reasonable prices for the contract.
Why Our Bid Proposal Should Be a Cost Proposal?
Our bid proposal will be a cost proposal. Essentially, clients are interested in the picture of the entire project. The parts of the proposal that capture the attention of the clients include time for the completion of the project, the design of the project, the order of activities during the establishment of the project, and essential personnel who are answerable to major issues within the contracting period (Brown et al. 2015). The knowledge of the needs of various clients calls our business to focus on cost proposals because it is comprehensive and appealing to most clients. The aim of our business is to establish a lasting relationship with the Navy. The business is determined to offer quality service to the Navy to win the trust and subsequent contracts from the government. The proposal is appealing to most clients if it has the design and the scheduling of different activities of the business upon the award of the contract. A technical proposal has explanations about the various approaches to use in the contract. The clients are interested in the plan that the contractor intends to use to address the task. For this reason, our business prefers a technical business proposal because it is comprehensive and attractive to most clients. Another advantage of a technical proposal is that it identifies all technological requirements for the contract and a clear means to achieve the plan. The technical proposal provides a road map to the attainment of the goals of the business.
Risk Factors That We Will Need to Consider if Our Company Is Awarded the Contract
The Navy is one of the government contracts, and thus its contracts are risky. There are many procedures to follow before the government reimburses the contractors for the cost of the contract. The government may neglect other costs that the business incurs in the process of contract and thus may pose a financial risk to the business. The government representative has a predetermined level of the cost they approve, and any amount that goes beyond the set limit is not legible (Witesman, & Fernandez 2013). The government contracts follow strict rules that are tedious and costly for small businesses. It possesses financial risks to our business to bid for government contracts because of the lengthy procedures.
The government has powers and thus can hold a business liable if the quality of services is substandard (Witesman, & Fernandez 2013). Small business biding government projects may lose all their investments if they deliver poor work. Additionally, the government can either terminate or change the scope of the contract and cause inconveniences to the contractor. Government officials run the Navy contracts and thus the shortages of fun may lead to the terminations of the project. It is risky to deal with government employees because the following protocol is crucial to the officials. In some instances, some contracts are canceled because of suspicions. In the past, government contracts have cost bidders their lifetime investment because of the suspicions of bribery.
Brown, T. L., Potoski, M., & Van Slyke, D. (2015). Managing complex contracts: A theoretical approach. Journal of Public Administration Research and Theory, muv004.
Kunreuther, H., & Michel-Kerjan, E. (2015). Demand for fixed-price multi-year contracts: Experimental evidence from insurance decisions. Journal of Risk and Uncertainty, 51(2), 171-194.
Witesman, E. M., & Fernandez, S. (2013). Government contracts with private organizations: Are their differences between nonprofits and for-profits?. Nonprofit and Voluntary Sector Quarterly, 42(4), 689-715.
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