4. In January 2014, Buckeye Engineering had grown to a company with $25-million in sales. The business base consisted of two contracts with the US Department of Energy (DOE), one for $15-million and one for $8-million. The remaining $2-million consisted of a variety of smaller jobs for $15,000 to $50,000 each. The larger contract with DOE was a five-year contract for $15-million per year. The contract was awarded in 2009 and was up for renewal in 2014. DOE had made it clear that although they were very pleased with the technical performance of Buckeye, the follow-up contract must go through competitive bidding by law. Marketing intelligence indicated that DOE intended to spend $10-million per year for five years. On the follow-up contract with a tentative award date of October 2014. On June 21, 2014, the solicitation for proposal was received by Buckeye. Technical requirements of the proposal request were not considered to be a problem for Buckeye. There was no doubt in anyone's mind that on technical merit alone, Buckeye would win the contract. The more serious problem was that DOE required a separate section in the proposal on how Buckeye would manage the S10-million/year project as well as a complete description of how the project management system at Buckeye functioned. When Buckeye won the original bid in 2009, there was no project management requirement. All projects at Buckeye were accomplished through the traditional organizational structure. Line managers acted as project leaders. In July 2014, Buckeye hired a consultant to train the entire organization in project management. The consultant also worked closely with the proposal team in responding to the DOE project management requirements. The proposal was submitted to DOE during the 2"nd week in August. In September 2014, DOE provided Buckeye with a list of questions concerning its proposal. More than 95% of the questions involved project management. Buckeye responded to all questions. In December 2014, Buckeye received notification that they would not be granted the contract. DOE stated that they had no “faith" in the Buckeye project management system. Buckeye Engineering is no longer in business a. What was the reason for the loss of the contract? b. Could it have been averted? c. Does it seem realistic that proposal evaluation committees could consider project management expertise to be as important as technical ability?

4. In January 2014, Buckeye Engineering had grown to a company with $25-million in sales. The business base consisted of two contracts with the US Department of Energy (DOE), one for $15-million and one for $8-million. The remaining $2-million consisted of a variety of smaller jobs for $15,000 to $50,000 each. The larger contract with DOE was a five-year contract for $15-million per year. The contract was awarded in 2009 and was up for renewal in 2014. DOE had made it clear that although they were very pleased with the technical performance of Buckeye, the follow-up contract must go through competitive bidding by law. Marketing intelligence indicated that DOE intended to spend $10-million per year for five years. On the follow-up contract with a tentative award date of October 2014. On June 21, 2014, the solicitation for proposal was received by Buckeye. Technical requirements of the proposal request were not considered to be a problem for Buckeye. There was no doubt in anyone's mind that on technical merit alone, Buckeye would win the contract. The more serious problem was that DOE required a separate section in the proposal on how Buckeye would manage the S10-million/year project as well as a complete description of how the project management system at Buckeye functioned. When Buckeye won the original bid in 2009, there was no project management requirement. All projects at Buckeye were accomplished through the traditional organizational structure. Line managers acted as project leaders. In July 2014, Buckeye hired a consultant to train the entire organization in project management. The consultant also worked closely with the proposal team in responding to the DOE project management requirements. The proposal was submitted to DOE during the 2"nd week in August. In September 2014, DOE provided Buckeye with a list of questions concerning its proposal. More than 95% of the questions involved project management. Buckeye responded to all questions. In December 2014, Buckeye received notification that they would not be granted the contract. DOE stated that they had no “faith" in the Buckeye project management system. Buckeye Engineering is no longer in business a. What was the reason for the loss of the contract? b. Could it have been averted? c. Does it seem realistic that proposal evaluation committees could consider project management expertise to be as important as technical ability?

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

ChapterC: Cases

Section: Chapter Questions

Problem 1.10A

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