What is your opinion on these statements based on the idea of what audit steps would you perform to evaluate the contract bidding process?

Statement 1: Ives and Hancox recommended that auditor should determine whether the contract bidding procedures used in the soliciting bids or proposals maximized competition and resulted in making awards to the lowest responsible and responsive bidder or to the best proposer. An auditor should also determine whether the entity took advantage of techniques intended to reduce item costs and administrative costs. To evaluate the contract bidding process an auditor should check if the entitys purchasing unit consulted adequately with the entitys using unit to ensure that the users needs were adequately conveyed to potential contractors. Ensure whether an agency is generating adequate competition, while soliciting bids, by advertising in publications that are read by those interested in bidding. An auditor should also ask an agency to maintain and keep bidder lists up-to-date and allow sufficient time for contractors to prepare bids, consider complexity, and the size of the contract. Check if agency time and date-stamp bids as they receive it and keep them in secure location pending bid opening. All bids must be open formally and recorded. Randomly select few contracts to check on the number of bids received and in what amounts. And if the contract re-bid due to insufficient bidders or the bid significantly exceeded cost estimate. In addition, an auditor should check if the complaints of non-bidders were followed up and adequate justification was provided if awards were made to a bidder other than the low one.

Statement 2: The auditor should evaluate the contract bidding process by determining whether the procedures used in soliciting bids or proposals maximizes competition and results in making the award to the lowest responsible and responsive bidder or the best proposer. The auditor should start with evaluating if the entity has clearly defined the service requirements to ensure that the needs were conveyed clearly to potential contractors. Next the auditor should ensure that there is adequate competition in the bid solicitation process. This includes keeping updated bidder lists and giving the contractor enough time to get their bid together. Another step is having security over bids such as opening them formally and recording them. Also need to keep pending bids in secure location. The last step the auditor should take to evaluate the bidding process is the adequacy and effect of competition. This includes randomly selecting a few contracts and looking at the bidding activity. The bidding activity is if the number of bids are sufficient and if the amounts are in line with the estimate.

Statement 3: I based the following audit steps. Determine whether the entity complied with security requirements over the receipt of bids. Determine whether the entity properly evaluated bids. Determine whether the bids received comply with criteria regarding adequate competition. Determine the number and dollar amount of purchases made without adequate competition. For the Federal Government this would be less than three bids. Determine whether the entity complied with publication requirements that typically would have provided adequate competition. Determine whether the entity documented the justification for sole source contracts resulting from when it only received one bid. The audit steps would depend on the criteria for the particular entity. Being a Federal Government auditor, I am used to generating steps based on requirements in the Federal Acquisition Regulation. I based the following steps (bullets) and reasons (sub-bullets) on FAR Part 14 which deals with Sealed Bidding. http://farsite.hill.af.mil/reghtml/Regs/far2afmcfars/fardfars/Far/14.htm?zoom_highlight=bidding

Determine whether the invitation for bids describe the requirements clearly, accurately, and completely without being overly restrictive. Overly restrictive specifications could reduce competition, increase cost, and cause the government to miss out on a better solution than the one defined in the invitation. Determine whether the entity publicized the invitation using appropriate methods and a sufficient time in advance. Improper publication would reduce competition and possibly increase cost. Determine whether bids were publicly opened at the time and place stated; evaluated without discussions; and an award was promptly made. These requirements must be met to ensure actions weren't taken to disqualify legitimate bidders to steer the award to a certain entity.