Wednesday, January 22, 2014

Reality Vs. Fantasy: 

How a Poorly Written Bid Led to a Bidders' Subterfuge

Now that the print media and even TV has really started to publicize this case, one thing keeps coming up over and over again in the articles that A.P.E. disagrees with on principle: the statement that Signal 26 was the low bidder.  Here is why.

We have mentioned before that the way this bid was constructed left the opportunity for (what the New Orleans Inspector General's office termed when it reviewed the bid) "unbalanced bidding."  In an unbalanced bid, a bidder gains an unfair advantage by bidding low on products it does not expect to sell much (or any) of, while raising the price on other products it expects to sell in bulk.  Therefore, if the bid is awarded on a lump sum basis, an unbalanced bid can appear to be low while actually costing the agency MORE than other bids would have.

At the time the bids were opened, not all manufacturers who had line items on the bid were represented by all of the bidders.  Letters were sent to the purchasing department about this issue and it was brought up at the pre-bid conference where problems were to be addressed.  As you might expect, the City did nothing about it and just let the bid go out.  As such, bidders had two choices on how to bid all of the items listed.  A bidder could bid all of the items competitively and realistically in case it was later forced to sell those items it did not represent.  Or, a bidder could submit an unbalanced bid that lowers some items to below what you could even call "loss-leader" level.  That is exactly what eventually happened with the NOPD uniform bids and contract.  

As we have pointed out before on this blog, the Signal 26 bid lowered the prices on products it never intended to sell to ridiculously-low, below cost prices, raised the prices on the products of manufacturers it did represent and intended to sell, and then- like magic- came out with a low bid.  As far as we can tell, this was done after the bid opened, to boot!  

At A.P.E. we decided to be an honest bidder and offer all of the items, no tricks.  And if you look only at the lump sums of this poorly written bid, A.P.E. does in fact come out with an apparently higher sum.  However, below is an item by item comparison.  You tell us who is really the low bidder.  Keep in mind that A.P.E. prices are for COMPLETE items (patches included in shirt price, stripe included in trouser price, alterations included, etc.) while Signal 26 charges $3.50 per arm emblem on its voucher invoices. 

...and once Signal 26 adds the price of all of the patches for the Task Force Shirt (items 9-12) to its voucher invoices,
it is more expensive than our bid price, which was bid complete.

Here you can see how Signal 26 bid unrealistically low the things it never intended to sell (in red) because it did not represent that manufacturer at the time of the bid.  Also, in order to make its numbers match up across the numerous pricing documents it submitted, Signal 26 had to "accidentally" leave item 19 off its price sheets.
Here A.P.E. does come out more expensive, but good luck with your $18.50 combat boot.

"Did you get your $43.32 Taylor's Brand Commanders Overcoat on your voucher yet?  It is a beautiful jacket, and at that price you can get 11 and have some money left over!"
Unbalanced bidding at its finest again!
FYI item 100 is left off of the Signal 26 price list (even though they bid it and it is still made)
but item 99 is included even though it is discontinued!  We can sell something for $14.50 when
we don't actually have to sell it, too.

Here Signal 26 claimed item 112 was discontinued in an effort to make all of its BS numbers "work".  Just call Peerless and ask them if those cuffs are still sold!

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