The bid proposal evaluations for the engineering and the gas turbine-generator contracts have been completed by the responsible project group for the Badger Power Company (BPC). The Carter Engineering Company (CEC) is the clear choice for the engineering contract.CEC was rated the highest among the bidders in terms of technical capability and proposed technical approach. CEC intends to use a recently completed design from a different power plant as a reference design for BPC plant. The management team proposed by CEC is well known to BPC personnel having worked on previous projects for the Company. Although the wage rates proposed by CEC in its initial bud proposal were higher than those of the other bidders, subsequent negotiations with CEC resulted in a reduction of the wage rates to a level that is similar to the proposed wage rates of the other bidders. Cost Plus type contracts.

Technical evaluation of the bid proposals for the gas turbine-generator contract recommended the Universal Electric Company (UEC). UEC provided the Gas turbine- generators for the existing power plant for BPC.Although the technical evaluation team was impressed by the technical features proposed by International Power Company (IPC), the European bidder for the contract, they were not familiar with certain aspects of the design of the equipment. The evacuation of the fixed price bids for the contract indicated that the bid from IPC is one million dollars (five percent of the total price) lower than the bid from UEC. The utility in Minnesota that contracted with IPC for the gas turbine-generators for the recently completed power plant is well satisfied with the performance of the gas turbine-generator although they had some communications problems with the foreign supplier. Janet White was impressed with the capabilities of the proposed management with IPC.

9. What is it necessary to define suppliers schedule and progress reporting requirements in the gas turbine-generator contract?

10. Will the schedule milestones that are used to measure the achievements of the incentive fee in the engineering contract be established in the contract or after the contract is awarded? Explain your answer.