Our company is often involved in bidding government purchases. As stated, the process is ridiculous.
We went after a large procurement just a few miles from our offices. It was a big contract, and we pulled in some outside talent because the project was bigger than we could do alone. Just adding up the manpower and resources spent on the bid, I figured the total cost for our company to respond was about $250,000. And we were told after the fact that we had the best proposal.
But the bid went to another company. The bid was a small business set-aside, and the company that won isn't/wasn't a small business. Their consultant bluntly told my partner that it did not matter what was in our bid, he golfed the contract to his client.
So about 5-6 companies put in an effort similar to ours, spending probably a total of over $1,000,000 in proposals.
In the end, the company that got the contract nearly went broke because they staffed up, but the government only issued about 1% of the indicated Task Orders against the contract.
Now everyone involved has to charge more on their next venture, to make up for what they lost on that one.
And that, folks, is how you get $600 hammers. That's what our US Federal Acquisition Rules force. It's the cost of bidding and compliance with the regulatory overhead that runs up the cost. If they'd come in the front door, pick from the commercial off the shelf offerings, and pay net 30, they'd pay the same for a hammer as anyone else.
