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Commercial Item - Simplified Procedures - Postaward Notice

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When an Army CO says that she will not release the award price on a Part 13 acquisition for grounds maintenance services,

and cites FAR 24.202 as her authority, saying that the award price is proprietary, since it was part of the winning proposal,

how is this different from her saying that her office could benefit from an IG visit, or a protest ?

.

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Before protesting, you may want to read Canadian Commercial Corp. v. Department of the Air Force, No. 06-5310, 2008 WL 220638 (D.C.Cir. Jan. 29, 2008). Here's the holding:

Background: Contractors filed ?reverse? Freedom of Information Act (FOIA) action, seeking to enjoin Department of Air Force from releasing trade secrets to competitor, consisting of line-item pricing and hourly labor rates information in contract to provide turbojet engine repair, overhaul, and maintenance services. The United States District Court for the District of Columbia, Bates, J., 442 F.Supp.2d 15, granted in part and denied in part cross-motions for summary judgment. Air Force appealed.

Holdings: The Court of Appeals, Ginsburg, Chief Judge, held that:

(1) constituent or line-item pricing falls within FOIA exemption, and

(2) contractors' pricing information was within FOIA exemption.

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I'd fax her the 21 January 2009 Memorandum For The Heads of Executive Departments and Agencies regarding Freedom of Information Act signed by the President. Para three,

All agencies should adopt a presumption in favor of disclosure, in order to renew their commitment to the principles embodied in FOIA, and to usher in a new era of open Government.

The court may have held that opinon in 2008 but in 2009 that attitude is not going to fly in my opinion. I cannot see the justification.

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Guest carl r culham

And if Commercial Item Acquisition Procedures were used the FAR 52.212-1 regarding Debriefing should be considered -

"l) Debriefing. If a post-award debriefing is given to requesting offerors, the Government shall disclose the following information, if applicable:

(1) The agency?s evaluation of the significant weak or deficient factors in the debriefed offeror?s offer.

(2) The overall evaluated cost or price and technical rating of the successful and the debriefed offeror and past performance information on the debriefed offeror.

(3) The overall ranking of all offerors, when any ranking was developed by the agency during source selection.

(4) A summary of the rationale for award;

(5) For acquisitions of commercial items, the make and model of the item to be delivered by the successful offeror.

(6) Reasonable responses to relevant questions posed by the debriefed offeror as to whether source-selection procedures set forth in the solicitation, applicable regulations, and other applicable authorities were followed by the agency. "

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Brian's situation, unless he misstated it, is that the CO won't release the award price on a Part 13 acquisition. How did this discussion evolve into line item pricing? The award price (maybe not line item pricing, but we can't decide that by the information provided) must be disclosed and I think Brian should certainly pursue this obvious misunderstanding.

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I read the initial post as though the overall price is a secret. The questioner didn't mention unit prices. Brian are you clear about what you want and are you sure that both you and the KO are talking about the same information? What info do you want to know?

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.

I used the "fast reply" function, and nothing showed up. Guess its time for me to read the instructions.

Thanks everyone for commenting. It's a little humbling to go from contracts to provide foreign policy advice to purchase orders for grounds maintenance, but I was too proud to begin with.

There is only one CLIN per year, base + 2 options.

I am asking for the award price for the entire contract (in the Base Year,) but that's effectively the same as line item pricing. I don't see how there could be any misunderstanding about what I want, but I may be too close to see the bigger picture. I am also asking to know who won. I'd like to know if its someone with the same last name as the CO, for example.

I didn't ever inspect the job site, and suspect my price was either way high or way low, compared to the government estimate and/ or other bids. I would expect the CO to be anxious to tell me if I was way high, so I assume the agency thought I was too low and unreasonably so. I assume they expect me to make a fuss if the award price was significantly higher than mine, or even just barely higher than mine, and thus the secrecy.

But that's just a guess.

In my opinion, the first defense against contracting irregularities is for interested parties to be able to see if they were treated fairly in competitions. Without openness, how can there be accountability ?

.

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Brian's situation, unless he misstated it, is that the CO won't release the award price on a Part 13 acquisition. How did this discussion evolve into line item pricing? The award price (maybe not line item pricing, but we can't decide that by the information provided) must be disclosed and I think Brian should certainly pursue this obvious misunderstanding.

Because Brian was talking about protesting, and before doing so he should know that line-item pricing falls under a FOIA exemption, in case that is what he was seeking. Turns out that is what he was seeking. I'll bet he's glad he knows that now.

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Well, it still look like he just wants to know who won and what the overall price is (one CLIN). He has the right to know that, as would we (unless this is a classified contract).

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Guest Vern Edwards
Well, it still look like he just wants to know who won and what the overall price is (one CLIN). He has the right to know that, as would we (unless this is a classified contract).

Don is right, Joel. The DC Circuit's decision precludes the release of "constituent" or "line item" prices. It views those prices as trade secrets. A line item price includes a unit, quantity, unit price, and total amount. Generally, all offerors will know the unit and the quantity, thus by releasing the total amount the government is giving competitors the info they need to calculate the unit price, which is the trade secret to be protected. Thus, if a PO has only one line item, release of the PO total price will disclose the protected trade secret.

I don't like this, but that's the way it is. The DC Circuit has affirmed its position three times, and the court's most recent decision showed some impatience with the Air Force's insistence.

All of you should remember that improper disclosure of a trade secret is a federal crime.

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I do find this to be an interesting discussion. FAR 5.301 requires synopsis of awards in excess of $25K. There is no exception related to trade secrets/FOIA.

Clearly this is an area in which the regulations need to be updated and clarified, particularly if a KO is commiting a federal crime because he/she complied with a statutory requirement to publicize a contract award.

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Guest carl r culham

I question applying the referenced case in such a broad brushed way to Brian?s scenario. First, the referenced case is with regard to FAR Part 15 matters in conjunction with FOIA. I would offer that the conclusion might be different depending on the changed circumstances provided for in the scenario. For example if, as I raised before, FAR 52.212-1 was in the solicitation it provides a different standard and rules for release than the FAR Part 15. More importantly it appears from the facts presented in Brian?s matter that the Government has applied exemption 4 without following due process. Specifically it appears that the CO has been arbitrary in determining that the allowed exemption applies without first entertaining the request for the information as a specific FOIA request, then inquiring of the contractor whose information is being requested to see if he/she/they wants to exercise their right under allowed exemption 4.

Rather than a protest I would suggest a little different approach. I would submit a formal request for the contract pricing under FAR Part 12 and FOIA and see where it goes. If denied, and if Brian has really deep pockets, then appeal the non-release and let the courts decide on a different set of facts and circumstances.

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Guest Vern Edwards
f, as I raised before, FAR 52.212-1 was in the solicitation it provides a different standard and rules for release than the FAR Part 15.

Carl,

How so? What's the difference? FAR 52.215-1(f)(11) requires release of the same information. What am I missing?

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Guest carl r culham

Vern - My comments regarding FAR Part 15 were with regard to this part of the decision found on page 9 -

"See Bartholdi Cable, 114 F.3d at 281. As the district court pointed out, however, ? 15.506(e)(1) of the FAR states ?the debriefing shall not reveal any information ...

exempt from release under the Freedom of Information Act including ... [t]rade secrets?; therefore, the provisions cited by the Air Force do not independently remove any information from coverage under Exemption 4. The Air Force attempts to explain away this limitation on the ground that it ?logically applies only to information other than the information specifically delineated as required to be disclosed.? This statement is just illogical; the very purpose of ? 15.506(e)(1) is to protect from disclosure information that the FAR would otherwise require the Air Force to disclose."

Noting this part of the decision I believe one could make the argument pursuant to FAR Part 12.102© that procurements under FAR Part 12 are viewed in a different light. While exemption 4 might still be applicable the standard regarding trade secrets may be much higher as the commercial item acquisition in the general view is to be performed following commercial market place practices. If market research shows that the market place does release info on past procurements then I would argue that the data could (and should?) be released.

Expanding on my general comments in my first post, every outcome on a conflict heard by a court or Board related to a contract is based on the specific facts of the matter and I believe that Brian's facts are enough different that trying to apply the decision noted specifically and directly is too much of a generalization.

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Guest Vern Edwards
Vern - My comments regarding FAR Part 15 were with regard to this part of the decision found on page 9 -

"See Bartholdi Cable, 114 F.3d at 281. As the district court pointed out, however, ? 15.506(e)(1) of the FAR states "the debriefing shall not reveal any information ...

exempt from release under the Freedom of Information Act including ... [t]rade secrets"; therefore, the provisions cited by the Air Force do not independently remove any information from coverage under Exemption 4. The Air Force attempts to explain away this limitation on the ground that it "logically applies only to information other than the information specifically delineated as required to be disclosed." This statement is just illogical; the very purpose of ? 15.506(e)(1) is to protect from disclosure information that the FAR would otherwise require the Air Force to disclose."

Noting this part of the decision I believe one could make the argument pursuant to FAR Part 12.102? that procurements under FAR Part 12 are viewed in a different light. While exemption 4 might still be applicable the standard regarding trade secrets may be much higher as the commercial item acquisition in the general view is to be performed following commercial market place practices. If market research shows that the market place does release info on past procurements then I would argue that the data could (and should?) be released.

Carl,

Sorry, but that dog won't hunt. FAR Part 12 and FAR Part 15 are not in conflict with respect to debriefings. In fact, the word "debriefing" does not appear in Part 12. Thus, FAR 12.102(B) applies, and FAR 15.506(e) is applicable to commercial item procurements. FAR 52.212-1 and 52.215-1 are the same on the topic of debriefings. So far, you have not established any ground for the assertion that procurements of commercial items should be "viewed in a different light" when it comes to reverse-FOIA objections to the release of purchase order price. Arguably, there are more grounds to object to the release of commercial prices than for noncommercial prices, especially if the commercial prices are discounted. I do not read the FOIA decisions of the DC Circuit as applicable only to procurements of noncommercial items.

But I agree with you that brian should file a FOIA request if he wants to see the prices and the CO refuses. I presume that the agency will deny the request as a matter of course, unless the contractor voices no objections.

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.

Earlier, in my post #9 above, on 13 March, I suggested that the first defense against contracting irregularities is for interested parties to be able to see if they were treated fairly in competitions. Do you agree ?

While it is fitting for GAO to weigh each case before them with a presumption that government officials are acting in good faith, unless there is a showing otherwise,

we recognize that government officials sometimes do not act that way.

There are several GAO decisions where bad faith on the part of a CO affected the outcome; one particular case [Tecom, Inc.] involved serial bad faith by a former supervisor of mine.

If the Government can conceal the award price in an acquisition where evaluation is based on price alone, and can conceal the name of the awardee, that violates one of the four foundations of Government contracting: openness (which is essential for accountability.)

That in turn can conceal violations of the three remaining foundations: competition, socio-economic programs, and fair and reasonable pricing.

Clearly, most CO's act in good faith all of the time, and of those who don't, they only abuse their authority selectively. Assume for the sake of discussion that only one tenth of 1% of all Government acquisitions involve abuse and bad faith. Should we just let those slide, since they are so few in number ?

.

I am familiar with a GAO decision that denied an unsuccessful offeror's request to know who won, and at what price. The acquisition was for services to be provided in Iraq and Afghanistan, but it was not classified.

"We dismiss the protest because an agency's failure to provide a debriefing is not a matter that we will consider. This is because the scheduling of a debriefing is a procedural matter that does not involve the validity of an award.
The Ideal Solution, LLC
. B-298300, July 10, 2006 CPD [para] 101 at 3 n.2; Canadian Commercial Corp., B-222515, July 16, 1986, 86-2 CPD [para] 73 at 5."

But this action didn't protest a failure to offer or schedule a debriefing; it protested the concealment of who won, and at what price. Even though the award would have exceeded $5.5 Million, it was not even posted on the DoD contract awards page.

.

I have some auditing in my background.

A basic principle for internal controls is to require several people to sign off on each requirement: a requiring official who signs the Purchase Request/ funding document; a CO who signs the contract; and a receiving official who certifies the goods and services were acceptable. Underlying this principle is the understanding that one person, acting alone, may be tempted to use their official position for personal gain, because they are not likely to be found out. But if they have to coordinate that misconduct with another person, the chances of being found out go way up; and if a 3rd person is required, it is more likely than not that one of the three is going to feel slighted by the other two, which greatly expands the possibility that the conspiracy will come to light.

Now, the for-profit business community should not be allowed to know all of the Government's business, but when I take the time to prepare an offer, and put my name and resources on the line, I think that I am entitled to know that I lost fair and square.

Secrecy in contracting is needed to an extent, but it becomes a cancer when left unchecked.

.

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Guest carl r culham

Vern - Noting Brian's most recent bone ("evaluation is based on price alone") my dog is not only going to hunt but I am thinking I would limit. You and Don have brought a Lab, but while it might be quacking like a duck it isn't walkin like one! I mean come on we are talking about "grounds maintenance" where the exception 4 on any basis is a long shot. This is more like shooting gallery at the carnival!

I say sic 'em Brian with both barrels, protest as well as a formal FOIA, with the latter delivered to the agency's FOIA office rather than the CO.

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Guest Vern Edwards
Vern - Noting Brian's most recent bone ("evaluation is based on price alone") my dog is not only going to hunt but I am thinking I would limit. You and Don have brought a Lab, but while it might be quacking like a duck it isn't walkin like one! I mean come on we are talking about "grounds maintenance" where the exception 4 on any basis is a long shot. This is more like shooting gallery at the carnival!

I say sic 'em Brian with both barrels, protest as well as a formal FOIA, with the latter delivered to the agency's FOIA office rather than the CO.

Carl,

Up to now your argument has been that FAR Part 12 and FAR Part 15 are different in terms of disclosure rules. You've been wrong about that since Day One. Now you are reduced to mixing your metaphors and pleading "come on," which plea I take to be an appeal to common sense. I suppose that the common sense implication is that prices for something as commonplace as grounds maintenance cannot be trade secrets. I see no reason to rely on your opinion in that regard.

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Vern - Noting Brian's most recent bone ("evaluation is based on price alone") my dog is not only going to hunt but I am thinking I would limit. You and Don have brought a Lab, but while it might be quacking like a duck it isn't walkin like one! I mean come on we are talking about "grounds maintenance" where the exception 4 on any basis is a long shot. This is more like shooting gallery at the carnival!

I say sic 'em Brian with both barrels, protest as well as a formal FOIA, with the latter delivered to the agency's FOIA office rather than the CO.

I have to take some exception to Don's assertions regarding line item pricing. The court has never held that such pricing is automatically exempt from disclosure. Instead, its position is summarized in this extract from the CCC decision

We reaffirm today what we have held twice before:

Constituent or line-item pricing information in a Government

contract falls within Exemption 4 of the FOIA if its disclosure

would ?impair the government?s ability to obtain necessary

information in the future? or ?cause substantial harm to the

competitive position of the person from whom the information

was obtained.?

Thus, before line item pricing can be withheld, the government must determine that one of these two results will occur. Similarly, in a reverse FOIA action, the party seeking to enjoin release has the burden of proof in regard to making one of these showings.

As for Carl's idea about a protest, what is to be protested? Look at the GAO protest regs to determine what can be protested. I don't see where a contracting officer's failure to disclose this information is protestable to the GAO.

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As for Carl's idea about a protest, what is to be protested? Look at the GAO protest regs to determine what can be protested. I don't see where a contracting officer's failure to disclose this information is protestable to the GAO.

Brain did not receive the order and does not know the basis of why he lost. As he said earlier, his price could be higher or lower than the source selected.

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Guest carl r culham

Vern -Whether anyone wants to rely on my opinion is clearly up to them. This said, my opinion does differ from yours in that I believe debriefing disclosure rules are different for FAR Part 12 procurement actions. As you have noted there is no discussion in FAR Part 12 regarding debriefing, rather FAR Part 12 requires a specific provision to be placed in a solicitation that addresses the debriefing process. I contend that in doing so the post award debriefing requirement becomes a stipulated condition of the solicitation, the rules of playing the game, where the Government is required to do something when and if requested by an offeror who is in the game. This is clearly different from the requirements of a FAR Part 15 where pre award and post award debriefing is not stipulated condition of participating in the solicitation but dictated by the specific regulation of FAR Part 15 and as referenced by FAR Part 15, FAR Part 24. As I implied in a previous post it is clear that the bar in a commercial item acquisition regarding a reverse FOIA under Exemption 4 would therefore be higher than it is for a FAR Part 15 acquisition.

Retread ? Basis for protest is the failure of the Government to adhere to the exact requirements of the solicitation with regard to post award debriefing. While not an perfect comparison it is like the Government failing to follow the evaluation process dictated in the solicitation.

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Guest Vern Edwards

Carl,

You said:

Vern - I believe debriefing disclosure rules are different for FAR Part 12 procurement actions. As you have noted there is no discussion in FAR Part 12 regarding debriefing, rather FAR Part 12 requires a specific provision to be placed in a solicitation that addresses the debriefing process. I contend that in doing so the post award debriefing requirement becomes a stipulated condition of the solicitation, the rules of playing the game, where the Government is required to do something when and if requested by an offeror who is in the game. This is clearly different from the requirements of a FAR Part 15 where pre award and post award debriefing is not stipulated condition of participating in the solicitation but dictated by the specific regulation of FAR Part 15 and as referenced by FAR Part 15, FAR Part 24. As I implied in a previous post it is clear that the bar in a commercial item acquisition regarding a reverse FOIA under Exemption 4 would therefore be higher than it is for a FAR Part 15 acquisition.

I believe that you are wrong. Here is FAR 52.212-1, Instructions to Offerors -- Commercial Items, with respect to debriefing:

(l) Debriefing. If a post-award debriefing is given to requesting offerors, the Government shall disclose the following information, if applicable:

(1) The agency's evaluation of the significant weak or deficient factors in the debriefed offeror's offer.

(2) The overall evaluated cost or price and technical rating of the successful and the debriefed offeror and past performance information on the debriefed offeror.

(3) The overall ranking of all offerors, when any ranking was developed by the agency during source selection.

(4) A summary of the rationale for award;

(5) For acquisitions of commercial items, the make and model of the item to be delivered by the successful offeror.

(6) Reasonable responses to relevant questions posed by the debriefed offeror as to whether source-selection procedures set forth in the solicitation, applicable regulations, and other applicable authorities were followed by the agency.

Here is FAR 52.215-1, Instructions to Offerors--Competitive Acquisitions, with respect to debriefing:

(f)(11) If a post-award debriefing is given to requesting offerors, the Government shall disclose the following information, if applicable: (i) The agency's evaluation of the significant weak or deficient factors in the debriefed offeror's offer.

(ii) The overall evaluated cost or price and technical rating of the successful and the debriefed offeror and past performance information on the debriefed offeror.

(iii) The overall ranking of all offerors, when any ranking was developed by the agency during source selection.

(iv) A summary of the rationale for award.

(v) For acquisitions of commercial items, the make and model of the item to be delivered by the successful offeror.

(vi) Reasonable responses to relevant questions posed by the debriefed offeror as to whether source-selection procedures set forth in the solicitation, applicable regulations, and other applicable authorities were followed by the agency.

How, exactly, are those different? Both quote FAR 15.506(d). What did you mean when you said:

FAR Part 12 requires a specific provision to be placed in a solicitation that addresses the debriefing process. I contend that in doing so the post award debriefing requirement becomes a stipulated condition of the solicitation, the rules of playing the game, where the Government is required to do something when and if requested by an offeror who is in the game. This is clearly different from the requirements of a FAR Part 15 where pre award and post award debriefing is not stipulated condition of participating in the solicitation[.]

Not stipulated? What do you think FAR 52.215(f)(11) is saying?

In any case, you don't seem to understand that FAR Subpart 15.5 applies to commercial item acquisitions, per FAR 12.102(B) and ?, which read as follows:

(B) Contracting officers shall use the policies in this part in conjunction with the policies and procedures for solicitation, evaluation and award prescribed in Part 13, Simplified Acquisition Procedures; Part 14, Sealed Bidding; or Part 15, Contracting by Negotiation, as appropriate for the particular acquisition. ? Contracts for the acquisition of commercial items are subject to the policies in other parts of this chapter. When a policy in another part of this chapter is inconsistent with a policy in this part, this Part 12 shall take precedence for the acquisition of commercial items.

Where, exactly, are the inconsistencies between FAR Part 12 and FAR Part 15 when it comes to debriefings? Now here is FAR 15.506(e):

(e) The debriefing shall not include point-by-point comparisons of the debriefed offeror's proposal with those of other offerors. Moreover, the debriefing shall not reveal any information prohibited from disclosure by 24.202 or exempt from release under the Freedom of Information Act (5 U.S.C. 552) including— (1) Trade secrets;

(2) Privileged or confidential manufacturing processes and techniques;

(3) Commercial and financial information that is privileged or confidential, including cost breakdowns, profit, indirect cost rates, and similar information; and

(4) The names of individuals providing reference information about an offeror's past performance.

Do you say that 15.506(e) does not apply to acquisitions of commercial items? If so, on the basis of what FAR text? Do you think that contracting officers must release trade secrets or confidential manufacturing processes and techniques when giving debriefings in commercial item acquisitions? Do you think that they must release the names of individuals providing reference information about an offeror's past performance during a debriefing in a commercial items acquisition?

See FAR 24.202(a). Do you think that 10 U.S.C. 2305(g) and 41 U.S.C. 254b(d)(2)? do not apply to commercial item acquisitions? So far, all you have done is assert, assert, assert. You have not once proven any of your assertions by reference to specific regulations. You have, in fact, been consistently wrong on the text. Now, I am prepared to acknowledge an error if you can show me the textual basis for your assertions.

P.S. The GAO will not consider protests about an agency's failure to give a debriefing or to give an adequate debriefing. That is a long-standing (circa 1986) position of the GAO. See The Ideal Solution, LLC, Comp. Gen. Dec. B-298300, 2006 CPD ? 101, footnote 2:

Whether or not an agency provides a debriefing and the adequacy of a debriefing are not issues that our Office will consider, because the scheduling and conduct of a debriefing is a procedural matter that does not involve the validity of an award. See Symplicity Corp., B-297060, Nov. 8, 2005, 2005 CPD para. 203 at 4 n.4; Canadian Commercial Corp., B-222515, July 16, 1986, 86-2 CPD para. 73 at 5.

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