Selecting contractors is one of the most important tasks for the public agencies charged with administering the TANF contracts. Public agencies administering contracts have three main objectives for the procurement: (1) to attract qualified, competitive bidders, (2) to award contracts to the most capable providers, and (3) to protect the integrity of the selection process. While all three goals are affected by the way the procurement process is conducted, an agencys ability to attract qualified, competitive bidders also depends on the size, scope, and structure of contracts.
This chapter describes the variation across study sites in the competitiveness of the procurements and the steps involved in the procurement process. Section A discusses promoting competition a key element in both selecting the best contractor and ensuring that contractors are motivated to perform at their best. Section B describes the "nuts and bolts" of the procurement process and the actions public agencies can take to ensure that the procurement process is fair and effective.
Many of privatizations perceived benefits derive from competition among contractors. Proponents of privatization believe that competition drives contractors to be more flexible and innovative, leading to better services and more efficient service provision. Some analysts even argue that it is the degree of competition that is most important, rather than whether the provider is a public or private sector organization (Kettl 1993; Donahue 1989; Osborne and Gaebler 1992; Nightingale and Pindus 1997).
Ensuring a Fair and Effective Procurement Process
A well-designed procurement process provides sufficient information to encourage qualified providers to bid, gives public agencies a clear picture of potential contractors capabilities, and includes safeguards to ensure that the agency is and is seen as unbiased in its selection. Most procurements include three basic steps: developing a request for proposals (RFP), soliciting potential bidders, and evaluating proposals to make awards. Agencies often are subject to outside regulations governing the way they conduct procurements. In addition to adhering to these rules, administrators in several study sites have tailored the process to address specific concerns such as improving the quality of proposals and increase the likelihood that the selection will proceed fairly and yield effective providers.