Question

Competition for Purchases

You must, to the maximum extent possible, ensure open and free competition in your purchasing. The company will generally not allow the costs for sole source procurement contracts (contracts procured without a competitive bidding process) for professional services that are readily available in the commercial marketplace. Common examples of commercial marketplaces include environmental consulting, information technology development, architectural and engineering, legal services, or training curriculum design. Sole source contracts with firms that hold copyrights or exclusive licenses to vital technology or data may be justified. Similarly, the company generally will not allow sole source procurement for purchase of equipment other than for patented devices. Recipients may be able to demonstrate that it is impractical to procure general office supplies competitively but still must ensure that they are paying market rates for such goods.

Some situations that are indicators of unnecessarily restricted competition include:

Imposing unreasonable requirements on firms in order for them to compete for your business.

Requiring unnecessary experience and excessive bonding.

Allowing noncompetitive pricing practices between firms or between affiliated companies.

Making noncompetitive awards to consultants that are on retainer contracts.

Permitting organizational conflicts of interest.

Specifying only a "brand name" product instead of allowing "an equal" product to be offered and describing the performance of other relevant requirements of the procurement.

Taking arbitrary actions which favor one firm over others.

Recipients may enter into competitively awarded long term (not to exceed 5 years) contracts for professional services or equipment purchases. Long term contracts that were not competitively awarded may not meet our company's minimum requirements for compliance with the Procurement Standards. These contracts will be terminated and a competitive bidding process will be initiated.

Use the information presented above to answer questions 39 through 40.

39. According to the passage, all of the following are considered "restricted completion"EXCEPT:

A. noncompetitive awards to companies that hold a copyright on a necessary technology.

B. noncompetitive awards to consultants on retainer.

C. unreasonable requirements on firms to allow them to compete in the bidding process.

D. limiting purchases to brand name products.

Mark to review later...

40. According to the passage, which of the following statements is true?

A. Sole source contracts are always forbidden.

B. Competitively awarded contracts can last for up to 10 years.

C. The company thinks unnecessary experience requirements restrict competition.

D. Contracts awarded without a competitive process will be honored.