The manner in which a federal purchase is completed depends on the size of the transaction. Credit card buys under $2,500 can be single sourced by the end user and can be transacted without the contracting officer's involvement. More liberal credit card limits apply in emergency and national security situations.

For purchases in the $2,500 to $25,000 range, the federal purchaser must obtain quotes from three vendors to meet the "best value determination" required under procurement rules.

Purchases exceeding $25,000 are made either through a public bid process or through a multiple vendor contract. Public bids are open to everyone and the process is lengthy--the average time from posting a bid to contract award is more than two hundred days. From the government's perspective, a public bid is an expensive process requiring considerable, and often unavailable, staff resources. Hurricane Katrina demonstrated how inefficient the government's public bid process can be. Vital services that were needed in response to the emergency could not be procured quickly and efficiently.

Why would the government select a public bid as the closing procedure of choice given the horrendous lead time and cost? Contracting officers do their very best to avoid them. Although it is true that public bids are the method of last resort, a project is often so large and publicly visible that a public procurement is the only acceptable procedure as far as vendors, the taxpayer and the press are concerned. In rare instances, a public bid is issued when a vendor has sold an opportunity but doesn't have an appropriate closing procedure. Unfortunately, putting a contract out for bid may be the only option when a desired vendor doesn't have a closing mechanism.

Purchases in excess of $25,000 can also be made through companies holding multi-vendor contracts (such as GSA Schedule contracts). Multi-vendor contracts allow the government to purchase from pre-qualified vendors using pre-negotiated prices. Bids are usually solicited from three or more vendors holding such a contract and the successful vendor is selected from that list. Purchases made through multi-vendor contracts are quick and cost effective for the government. From the vendor's perspective, competition is minimized and a deal can be closed quickly.