Trouble with competitive bidding on complex utility systems

Journal Article · Thu Jan 06 04:00:00 EST 1977 · Public Util. Fortn.; (United States)

OSTI ID:7317935

Swidler, J C

Competitive bidding may be appropriate for items of standard hardware, but complex utility systems require a more flexible system that takes into account high technology equipment, expanding regulatory controls, and the inhibiting factor of high front-end costs for technological improvements. Provisos in the Tennessee Valley Authority Authorization Act which allow specific exemptions from competitive bidding have worked well and could be incorporated into regulations for other complex systems. Competitive bidding prevents favoritism in the awarding of contracts and allows pure price competition, but current realities call for a broader mechanism to allow low-cost procurement. New technology, for example, may preclude meaningful competitive bidding, which could be broadened by adding negotiation and single-source procurement when appropriate. These techniques have worked in the defense and space programs. Disclosure requirements of the Federal Power Commission should minimize any financial and accounting irregularities. Limiting competition to price encourages bidders to cut corners on performance, a practice that is no longer tenable with today's reliability requirements. There is evidence that non-public negotiations can lead to better discounts than inflexible public bidding in certain situations. (DCK)

• OSTI ID: 7317935
• Journal Information: Public Util. Fortn.; (United States), Journal Name: Public Util. Fortn.; (United States) Vol. 99:1; ISSN PUFNA
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
293000* -- Energy Planning & Policy-- Policy
Legislation
& Regulation
ACCOUNTING
CHARGES
CONTRACTS
CONTROL
COST
ECONOMICS
GOVERNMENT POLICIES
MANAGEMENT
MARKET
PROCUREMENT
PUBLIC UTILITIES
REGULATIONS