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Statements of Objectives and Revelation of Budget...and a little more.


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There was a lively and productive conversation on the revelation of the government's budget (to industry and/or to technical evaluators) on wifcon about a year ago available for your review here: 

That discussion and its tangents did not contemplate a scenario where the government has a fixed budget and wants to procure the best service that it can get within its budget. Since that discussion is closed, I have started this new thread to ask what the group's thoughts are regarding the issuance of a Statement of Objectives (SOO) which allows each offeror to write their own PWS describing the work that they will perform for the government, within the government's fixed budget, in which the winning offeror's written PWS will become a part of the contract that gets issued as a result of the responses received from that SOO and the resultant discussions between the offerors and the government? 

The above only contemplates the government's purchase of services; what might you do if you had a fixed budget and needed supplies? This might become useful if one either thinks or knows that one's available funding is not sufficient to cover the government's full need. 

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19 minutes ago, ContractJockey said:

I have started this new thread to ask what the group's thoughts are regarding the issuance of a Statement of Objectives (SOO) which allows each offeror to write their own PWS describing the work that they will perform for the government, within the government's fixed budget, in which the winning offeror's written PWS will become a part of the contract that gets issued as a result of the responses received from that SOO and the resultant discussions between the offerors and the government?

Emphasis added.

My thought is that it's not against the law and might work out well if you know what you're doing.

Do you know what you're doing?

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Many years ago, I did a competitive procurement for a log cabin kit as a recreational facility at a remote site.  The foundation would be done by a military unit, but the log cabin kit would be a commercial item delivered and installed -- and then, the military would do the electrical and plumbing connections.  In the solicitation, we declared the maximum price we were willing to pay, and we listed our minimum requirements as well as a long list of desirements (things that are desired, but not absolutely required).  We allowed offers to submit multiple proposals.  We did not specify a floor plan or building shape, but we did describe the size of the location that was available.  We said we would select, on a best value basis, the offer than subjectively gave us as much functionality and flexibility as possible for the intended purpose of the facility.

It worked.  We got multiple offers, and we made a selection, and the project was completed during the next summer.

We did a lot of market research upfront to make sure we could get something approximating what we wanted in that remote location, and to satisfy ourselves that we would have choices.  We got a little pushback about buying a log cabin kit as a commercial item (instead of as construction), but this was the late 1990s and we wanted a real test case for a commercial item procurement -- so we easily overcame that pushback.  I had enough persuasive power to make it happen.

This can work for both supplies or services -- think a little, and adapt as needed.  If you needed cable TV services for a dormitory, how easy would it be to say our ceiling is $100 per month and we want as much variety and flexibility as possible for a fixed price not exceeding that ceiling?  The approach might not work for all service possibilities, but it could work for some.  For fixed-price contracts for environmental impact statements, for example, it is common to establish the ceiling in the solicitation, because offerors otherwise cannot tell if the agency wants a bronze, silver, or gold approach to the EIS, for example.  

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4 hours ago, ContractJockey said:

Well, I haven't done it before so...no, not really. I do think that I could figure it out along the way and it seems like it could be a useful technique. Have you ever seen it used before?

It’s been used a lot especially with performance based acquisition.  Look at the SOO format in (c) https://www.acquisition.gov/far/37.602.  Under operating constraints, include a statement with your budgetary ceiling.  It’s important to provide offerors as much background information as practical.  One means of doing that is an electronic reading room or a pre proposal conference.  You may also want to consider one-on-one due diligence or discovery sessions with offerors after release of the solicitation so they may ask pertinent questions about their planned approaches.

Don’t get hung up on performance metrics and measurements in reading about PBA unless that’s important.  But spend time on evaluation criteria.  Make sure your team knows how to distinguish among responses.  

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@ContractJockey  you allow offerors to meet with your team to seek additional information about their unique proposed approach.  They ask questions which helps them gain insight on implementing their solution.  Because the Q&As potentially involve offerors proprietary information, the discussions aren’t shared with competitors if they involve disclosure of trade secrets or competitive sensitive information.

 

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On 6/3/2022 at 9:55 AM, ContractJockey said:

Well, I haven't done it before so...no, not really. I do think that I could figure it out along the way and it seems like it could be a useful technique. Have you ever seen it used before?

@ContractJockeyAs far as I have been able to determine, the SOO-instead-of-SOW technique was developed by the Air Force in the mid-1990s for use in the Joint Defense Attack Munition (JDAM) program. See Tactical aircraft programs : hearing before the Military Research and Development Subcommittee, joint with Military Procurement Subcommittee, of the Committee on National Security, House of Representatives, One Hundred Fourth Congress, second session, hearing held June 27, 1996, Statement of the Undersecretary of Defense for Acquisition and Technology, p. 136:

Quote

In 1993, the JDAM request for proposal contained a 137-page work statement and 87 military specifications. Last year, with our implementation of acquisition reform initiatives, we streamlined the statement of objectives to a 2-page performance specification-indicating what we wanted the system to do; not how the contractor should go about doing it. And this time, we had no requirement for any military unique specifications or standards.

DOD proclaimed use of the SOO technique to be a success, and formally adopted it by inclusion in Military Handbook (MIL-HDBK) 245, Preparation of Statement of Work, Revision D, dated 3 April 1996, Section 1.3:

https://quicksearch.dla.mil/Transient/8FA55F5E6AEF43D6A50955BA228ECA46.pdf

Quote

1.3 Introduction of Statement of Objectives (SOO). This document introduces a new concept called the SOO which shifts the responsibility for preparing the SOW from the government to the solicitation respondents. Following recent DoD direction to lower Government costs by encouraging innovative contract options and flexible design solutions, the SOO captures the top level objectives of a solicitation and allows the offerors complete freedom in the structure and definition of SOW tasks as they apply to the proposed approach. However, the requirement, content and purpose of the SOW in the contract remain unchanged. The SOO concept is explained in detail in Section 5.

Section 5 is slightly longer than 3 pages in length. An excerpt:

Quote

5.2 SOO Content. The Government may include a SOO as part of the RFP, listed in Section J, attached at the end of the RFP, or referenced in Section L and/or M, defining the top level program objectives. Alternatively, the SOO may be placed in Section L of the RFP (e.g., as an annex). Figure 8 provides a notional SOO format. It is developed to be compatible with the mission need statement (MNS); operational requirements document (ORD), technical requirements from the system requirements document (SRD)/systems specification; and the draft work breakdown structure (WBS)/dictionary. The SOO should address product oriented goals rather than performance requirements. SOOs are normally in the 2-4 page range. The SOO is not a one for one replacement of the SOW. Sections L and M should logically follow with instructions to the offerors asking for proposal information supporting the objectives and evaluation criteria that clearly identify how the offerors’ responses will be evaluated. Each portion of the RFP must support one another. The key is to keep the SOO clear and concise and to provide potential offerors with enough information and detail to structure a sound program, designed to be executable and satisfy government objectives. The SOO is used, along with other information and instructions in the RFP, by offerors, to develop the contract work breakdown structure, statement of work, and other documents supporting and defining the offerors proposed effort. SOO content depends both on the type of program and on the program phase. It is possible that a ‘mature’ program, such as one which has been fielded for some time, could require slightly more detail in the SOO to properly integrate with other, ongoing parts of the program. The SOO is replaced at contract award in the contract by the proposed SOW.

More guidance was published in the following months.

The basic idea is that you write a SOO describing the kind of service you want to buy and your acquisition objectives, and you then instruct the prospective offeror(s) to write a contract SOW in which they state the tasks they will perform to achieve your objectives. You then negotiate the final text of the SOW as necessary and appropriate for contracting.

OFPP, which in the mid-1990s was campaigning for the use of "performance-based service contracting," picked up on the idea and promoted it, even to the point of adding brief coverage to FAR. They resorted to the SOO idea when they realized that the average agency acquisition team could not figure out how to write a performance work statement. It seemed easier to assign that task to competing offerors as part of the typical source selection "essay-writing contest." As is often the case, PWACs in contracting screwed it up. I have seen 100+ page SOOs in RFPs.

The SOO technique reflects a commercial practice in contract formation, one in which buyers select sellers and then negotiate detailed contract terms instead of writing detailed in-house SOWs and then asking competing offerors to describe their "technical" approaches to doing what the SOW says they must do.

Successful use of the SOO technique requires knowledge, experience, skill, and sophistication in both sole source negotiations and source selection "discussions." The CO and contract specialist must:

  1. understand that SOWs are not strictly technical documents, but legal documents with technical content,
  2. have at least an educated layperson's understanding of the technical requirements,
  3. be supported by a knowledgable technical team;
  4. know something about legal writing and possess good legal-writing reference materials, and
  5. have counsel and assistance from a competent government contracts attorney.

Any idiot can use the SOO technique, but successful use demands knowledge, experience, and sophistication. It should not be used by the average GS-12 or GS-13 contract specialist or contracting officer. You want someone in charge of your team who knows what's what.

Has it "worked"? Who knows? The government does not track such things, and most agency "success stories" are exaggerations if not outright lies. It has likely succeeded in some cases and failed in others.

But it can work in the hands of the right people. Of that I have no doubt.

Curious and savvy people can make almost anything work. You're curious. Are you savvy?

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Vern,

I'll refrain from any hubris on the level of my savviness unless and until I have a need to employ the strategy and find success with it. I appreciate the background information that you provided. It is interesting that "SOOs are normally in the 2-4 page range" but that you have seen 100+ pagers. Something seems more than a bit off there. Perhaps a CO or program office with control issues? Interesting to me as well is that the documentation that you provided above references SOWs rather than PWSs. As I think about it a bit more, it seems like using the SOO et al to have a contractor develop an SOW would make more sense than a performance based PWS. Was that on purpose or just a function of the documentation/history that you provided? I can't remember where, whether in person or on this forum, but I recall you mentioning your thoughts on performance based PWS and the resultant contracts being, paraphrasing here, "a bunch of hooey". 

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I try to use the term work statement instead of SOW or SOO and so forth.  The label SOW or SOO really has no meaning anymore, as some SOOs are really SOWs and vice versa.  Those labels only have meaning if there is discipline in the process.

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2 hours ago, ContractJockey said:

I can't remember where, whether in person or on this forum, but I recall you mentioning your thoughts on performance based PWS and the resultant contracts being, paraphrasing here, "a bunch of hooey". 

Performance-based contracting (performance-based acquisition), PBC or PBA, and its accessory idea, the performance work statement (PWS), are failed OFPP initiatives of the early 1990s. They grew out of an Air Force concept from the late 1970s that the Air Force ultimately abandoned. But those ideas were pushed by clueless people without hands-on experience who did not think critically. Unfortunately, they sold the ideas to Congress, a hopeless entity if ever there was one. Now many offices write what they call "performance work statements," which, in reality, are nothing of the sort. Pointless. I've written thousands of words about it, and many among the enlightened know that what I have said is true.

The SOO concept, as originally conceived, had nothing to do with PBC/PBA. It was developed for major systems acquisition. But it was seized upon by OFPP in the mid-to-late 1990s when they finally realized that government folks could not write real PWSs. They thought that contractors could do it. So they seized upon the SOO idea as a source of salvation. But contractors couldn't write PWSs either.

The SOO is a good idea, but it cannot solve the PWS problem, and requires some know-how.

When old timers like me have passed on, this kind of history will be lost, and people will relive it, thinking it's new. 

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  • 1 month later...

A bit late to the party, but a few years back I issued an RFQ for advertising services a bit like this and sounds like similar to ji20874's example. Telling industry we needed commercials, pamphlets, targeted interactions with certain groups, etc. could yield solutions from tens to hundreds of millions and quite frankly - that's not what our budget looked like. So we essentially said we want the most bang for our buck for a recruitment-based advertising strategy with these priorities and given a budget estimate of X dollars. A little push-back from reviewers on how it was going to work but ultimately were approved and were able to successfully award an order using this method.

Depending on what part of the FAR you're in - definitely use whatever flexibilities you can. I don't see why something like this couldn't work for the right requirement/with the right team. 

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