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I am working on a new A-E IDIQ award with a base year and 4 one-year option periods with a not to exceed amount over the TINA threshold of $750,000. The process has been on-going for over two years primarily because the Pre Price Negotiation Memorandum (PPNM) has not passed business clearance even though it has been rewritten and submitted several times. The #1 most highly qualified firm is a large business and even though the cost and pricing data was submitted, this contracting office (with several Level II certified specialists) does not have on-the-job experience with what to do with it (online courses and in-resident classes taken years ago do not equate to real knowledge) and how to extrapolate the information needed. The people reviewing the Business clearance have not approved the PPNM written for the 1st firm and have recommended we proceed to the 2nd most highly qualified firm ‘since the first choice refuses to negotiate.’ The chief of the contracting office has instructed us to follow that recommendation. I pointed out that 1) the 1st firm very much wants to negotiate and is in constant communication asking if any other information is required from them; 2) that if the government terminates efforts with the 1st firm they will very likely file a protest and 3) furthermore we will run into the same difficulties in trying to get the PPNM for the 2nd firm approved through the business clearance process since no real knowledge has been gained through this 2 year process in the evaluation of cost and pricing data. FAR 36.606 (A-E Negotiations) (a) says negotiations are conducted in accordance with FAR Part 15 beginning with the most preferred firm and paragraph (f) says “if a mutually satisfactory contract cannot be negotiated, the contracting officer shall obtain a written final proposal revision from the firm, and notify the firm that negotiations have been terminated.” My question is - can the government terminate efforts with the #1 firm if actual, come-to-the-table negotiations have not be attempted? If not, what do I tell the chief and if so, what do I tell the contractor?