Introduction
The company Williams Midgette Inc. is planning to engage in cooperation with the Navy. This indention demands making a specific contract needed to outline all peculiarities of partnership and ensure that both benefit from their collaboration. The company qualifies under the HUBZone Act (FAR 19.5), meaning that specific regulations should be considered. Furthermore, the initial estimates will exceed $150,000, meaning that there is a need for using certain legislation and approaches. Discussing the offering, it is vital to outline why the business would act under the HUBZone regulations and other factors affecting the contract and the further cooperation between parties. At the same time, the potential risk factors are also included to avoid failures or wrong decision-making.
Qualifying Under the HUBZone
There are different reasons why the business would qualify under the central concepts of the HUBZone set-aside procedures. First, the contracting officer believes that the firm and direct competitors will tender the proposal for the contract (Tyms, 2017). The identified type of business can be characterized as the small one, meaning that it can benefit from this status and has a higher chance of being qualified (Tyms, 2017). It will result in the emergence of a more solid position and a certain advantage. Another reason for qualifying under the basic concepts of the HUBZone set-aside problems is the fact that the award can be made at a fair market price (“HUBZone program,” n.d.). Moreover, it will be limited to fair competition regarding small businesses (“Subpart 19.5,” n.d.). This factor will lead to increased investment and better growth rates. Under these conditions, these two reasons explain the importance of HUBZone procedures for my business.
Multiyear Contract
Another important factor is the benefit that is linked to the multi-year contract. Both the Navy and the firm will enjoy a more attractive proposal because of several factors. First, this type of agreement helps to save costs and creates the opportunity for better management of contractors’ resources (Tyms, 2017). The reduction in spending is achieved through the increased effectiveness of purchasing of materials and needed products, better production process, and minimal alterations in the outlined design (Tyms, 2017). Following the model, it is also possible to avoid extra administration and management issues because of the decreased paperwork and the absence of the necessity to file new forms during specific periods (“Subpart 19.5,” n.d.). Finally, both the company and the Navy will acquire the chance to focus on long-term projects and cooperation, meaning that their relations will be continuously improved and benefit from the stable partnership (Tyms, 2017). Under these conditions, these points outline the beneficial nature of a multi-year contract.
Fixed-Price
The company is expected to have a fixed-price type of contract which can be explained by several factors. First, this type of agreement offers a contractor a fixed cost and includes a target and ceiling price vital for further cooperation (“Subpart 19.5,” n.d.). It means that the reconsideration of these sums can be performed only following the circumstances outlined in the agreement (Tyms, 2017). The fixed-price type of contract also helps small firms or businesses to save costs and generate additional profits through the minimization of the time need to attain the current goals and ensure all parties are satisfied (“HUBZone program,” n.d.). Under these conditions, the following reasons prove that the company will acquire multiple advantages using the fixes-price type of agreement and following its basic rules. The risks will be minimized, and the chance for fair cooperation will increase.
Category of Incentives
Contractors can offer various types of incentives regarding the goals they want to achieve and plans. Speaking about the case, it is possible to suggest cost incentives which can be viewed as one of the most common types of incentives (Tyms, 2017). In general, they provide parties with an opportunity to determine the target fee or expected profit when the contracts start to function (Tyms, 2017). The vital advantage of this incentive is that it motivates and encourages a contractor to increase the effectiveness of cost management and distribution and minimize spending to get extra benefits (Tyms, 2017). Additionally, it guarantees increased flexibility for both parties as prices can be altered regarding the current situation or demand. The contractor can offer high-quality services and enjoy the reduced cost, which is one of the central advantages of the selected model.
Bid Proposal
The contractors can offer different bid proposals, such as technical, management, or cost ones. As for the case, a technical proposal seems the most applicable option as it helps to increase the chances of getting a contract. This type includes the price and focuses on other vital aspects of a deal to ensure that there are no untouched issues that can result in deteriorated outcomes (Tyms, 2017). The detailed and in-depth proposal will help to attract the contracting officer and persuade him/her (Tyms, 2017). Furthermore, the inclusion of such aspects as proficiency, demanded resources, workforce, and a detailed explanation of management issues will contribute to the increased attractiveness of the proposal. At the same time, the technical proposal shows the detailed plan that should be followed to achieve the desired goal and create long-term cooperation (Tyms, 2017). Under these conditions, it seems the most appropriate choice regarding the current scenario.
Five Potential Risks
Nevertheless, it is also critical to consider the potential risk factors that can affect the company if the contract is awarded to avoid failures and select the most effective strategies for their management. The first potential risk factor includes some possible complications linked to cost. It can precondition the increase in spending with the corresponding decrease in profit, which is an undesired outcome that should be avoided. Another factor is the time-related risk that can promote multiple delays or the inability to observe the existing schedule (Tyms, 2017). Third, safety risks are vital as they might lead to traumas caused by low professionalism, awareness, or poor safety skills among the staff (Tyms, 2017). The quality-related risks might presuppose the deterioration in the quality of provided services under the influence of various reasons (Tyms, 2017). Finally, environmental risks are also essential when planning such contracts as they include different types of pollution (Tyms, 2017). These five risks are vital for entering into an agreement and guaranteeing that if the contract is awarded, the firm can function under new conditions and expect stable benefits.
Conclusion
Altogether, the cooperation between contractors presupposes multiple elements and aspects that should be considered. These include the type of the contract, various proposals, current legislation, and risk factors that should be considered. For this reason, before making a deal, it is fundamental to ensure that both contractors select the most appropriate and beneficial options, and their solutions will contribute to the establishment of a long-term and effective cooperation helping to acquire multiple benefits.
References
HUBZone program. (n.d.). SBA. Web.
Subpart 19.5 – Small business total set-asides, partial set-asides, and reserves. (n.d.). Acquisition.gov. Web.
Tyms, D. A. (2017). Strategies of small business owners to acquire federal government contracts [Doctoral dissertation, Walden University]. ScholarWorks.