When is it appropriate NOT to have discussions?

[AlwaysLearning]

Recent policy emphasizes the desire to conduct discussions during the source selection process (DFARS 215.300 Scope of subpart. Contracting officers shall follow the principles and procedures in Director, Defense Procurement and Acquisition Policy memorandum dated March 4, 2011, Department of Defense Source Selection Procedures, when conducting negotiated, competitive acquisitions utilizing FAR part 15 procedures.)

The DoD Source Selection Procedures, Chapter 3, paragraph 3.3.1 states in part "The SSA may choose, in rare circumstances, to award a contract on the basis of the initial proposals received without conducting discussions..."

FAR 15.306 addresses exchanges with offerors after receipt of proposals, DFARS 215.306 indicates for procurements over $100M the KO should conduct discussions. NMCARS provides no amplifying information on discussions.

Current policy is based on the assumption that through discussions, the Government will receive more efficient competition and better pricing. In most circumstances I would agree, however….

Consider a large (over $500M) Cost Reimbursable, Multiple Award IDIQ contract, where cost is established utilizing a cost model. The model provides a set number of hours per labor category, fixed subcontract amount, fixed ODC amount etc…the offeror need only provide ceiling labor and indirect rates (and the basis of the establishment of these rates). The cost analysis/realism consists of validation of the rates used in the model and realism adjustments where needed. The labor and indirect rates are the cost drivers for the contract, typically substantiated by FPRA’s or audits etc. Capped rates have been mandated to reduce risk to the Government. In the event evaluations clearly established no weakness/deficiency with the requisite number of low cost proposers, why would the Gov’t have discussions? Discussions should be meaningful - if there is nothing to discuss, why go through a competitive range determination and open up potential pre award protest issues? I understand we all have to drink a little policy kool-aide – but we also need to be mindful of our taxpayer dollars and limited resources! Upper management is not inclined to move ahead without discussions, no matter the argument. I’d appreciate any comments!

[Don Mansfield]

The short answer is that you shouldn't have discussions if the cost outweighs the benefit. Remember that the objective of source selection is to select the proposal that represents the best value. FAR 15.302. Sometimes you can achieve this objective on the basis of initial proposals, sometimes you can't. If you can achieve this objective based on initial proposals, then award without discussions would be appropriate.

The DoD policy is the result of a study of sustained protests on high-dollar DoD acquisitions. The conclusion was that, in many cases, things would have turned out better had the SSA conducted discussions. Note that the policy is not a mandate to conduct discussions (see definition of "should" at FAR 2.101). However, to those that are averse to thinking for themselves and using judgment, it is interpreted as a mandate.

[Guest Vern Edwards]

The DOD policy is gibberish, but they are fundamentally right to say that COs should conduct discussions. I do not accept Don's "cost outweighs benefit" thinking, mainly because I am not sure what he means by "cost outweighs benefit." What cost? What benefit?

Source selection has at least three objectives: (1) to select a good company to be the contractor, (2) to reach a common understanding of the terms of the prospective contract -- a meeting of the minds, and (3) to strike the most competitively advantageous bargain. Combined, those objectives are the essence of "best value" (which is a vague ideal). None of those objectives stands alone. Achieving (1) and (2) are essential to the achievement of (3). You should conduct discussions whenever they will enable you to accomplish those three things.

It is not clear to me what DOD means by "efficient competition". Efficiency is a rate concept -- ratio of input to output, with output being a fixed measure. In any case of production there are usually multiple measures of efficiency. How does "efficiency" apply to competition, other than metaphorically? What is the input? What is the fixed measure of output? Policy makers resort to metaphorical expressions and adopt them as slogans when they haven't thought things through.

If you think of each proposal as a unit of input and a source selection decision or a contract award as the output measure, then the way to get "efficient competition" is to eliminate the requirement for full and open competition, which is the most inefficient way imaginable to conduct a source selection. Soliciting and evaluating proposals from all comers is a sure way to be inefficient. By mandating full and open competition, Congress has told us that in contracting operations they value other things more than "efficiency.”

What a lot of people mean when they say "efficient competition" is that they want to reduce the amount of paperwork that they must do when conducting a source selection. If that's the goal, then don’t skip discussions. Instead, reduce the number of evaluation factors, the size and complexity of proposals, the number of evaluators, and the number of staff reviews. (Good luck with that.) The work required to establish a competitive range and to conduct discussions is usually small relative to what an agency will have already done in preparing an excessively complex RFP, evaluating needlessly large and complex proposals with excessively large evaluation teams, and going through multiple reviews of the paperwork.

I can make a pretty good argument that you should never award a multi-million dollar contract without discussions. When it comes to the three elements of "best value," achieving a common understanding of the terms of the contract is the most important. A U.S. government RFP is one of the most complicated business documents in the world. Neither the people who write them nor the people who respond to them fully understand them, and due to the stilted nature of the communication process during source selection (despite multiple draft RFPs, pre-proposal conferences, and Q&A amendments), a true meeting of the minds at the moment of contract award is unlikely. A day or three going through the thing page-by-page and sorting it out with a very limited number of offerors (no more than three, preferably two) by eliminating ambiguity and vagueness and filling important gaps, followed by responsive proposal revisions, might be the best investment an agency can make in a complex acquisition.

Very few successful businesspersons would award an important contract without face-to-face discussions. Government people too often think like bureaucrats instead of businesspeople and want to award without discussions in order to cut their paperwork, speed things up, minimize the chances that they'll do a bad job with the discussions, and reduce the risk of a protest.

One thought underlies all of the foregoing: You must have a competent CO and Source Selection Authority. Lack either of those things and you may be doomed, discussions or no discussions.

[Don Mansfield]

A day or three going through the thing page-by-page and sorting it out with a very limited number of offerors (no more than three, preferably two) by eliminating ambiguity and vagueness and filling important gaps, followed by responsive proposal revisions, might be the best investment an agency can make in a complex acquisition.

Assuming that no more than three offers were expected to compete, why couldn't this be done prior to the receipt of initial proposals? (Replace "proposal revisions" with "proposals" in your assertion). Why must the Government have an offer in hand in order to have such a meeting?

[Guest Vern Edwards]

You could have such a meeting before receipt of proposals, and it has been done. I did it that way with Lockheed and Rockwell more than 30 years ago in a space system acquisition, and others did it before me. It's a good thing to do when you know you will receive only a limited number of proposals.

But doing it after proposals have been received and evaluated provides a context that is otherwise absent. Then you are talking in the context of the offerors' promises in response to the RFP, which is the crucial point, because you are trying to reach a meeting of the minds over the prospective contract, not just the terms of the solicitation. The contract is based on the proposal accepted, not necessarily the RFP that was issued. The proposals (presumably) reflect the RFP, but might contain details absent from the RFP, unless you are conducting an LPTA source selection.

[wakefield99]

Vern:

I appreciate your feedback on the topic and like the idea you presented previously (specifically highlighted by Don in response #4 above). However, I was hoping you can elaborate. After receipt of proposals and determining the Competitive Range (C.R.), I would welcome going through the small details with each offeror - page-by-page, filling in gaps, etc, and receiving a revised proposal based on those very detailed discussions. I hesitate though because I would be worried an offeror not selected in the C.R. would cry foul because they were not given the same chance (so Question 1 to you (or anyone) is: How can that be avoided to where the those outside the C.R. don't feel slighted).

My next hesitation would be that during the process of going through everything page by page and getting rid of the ambiguity, it *might* change how the government is evaluating. If discussions turn to areas in which are not even being evaluated in Section M, how then can the GOV use that information to make a trade-off analysis (assuming it's not LTPA) between those in the C.R. (say 2-3 that you mentioned above).

Also, how do you avoid "leveling" during such a detailed discussion?

Thanks for any feedback. I really like the idea, I just want to see if I can gather additional information so I can plan to implement it.

[Guest Vern Edwards]

The general plan and process of discussion should be the same for every offeror in the competitive range. A review of the solicitation and a pointed discussion about deficiencies and weaknesses. The content of the discussion should reflect the content of each proposal. Any topic in any session that pertains to other offerors should be discussed with the other offerors.

The RFP should describe the general plan and process of discussion and assure offerors than any topic that comes up with any offeror and that is pertinent to other offerors will be discussed with the other offerors to whom it is pertinent.

If discussion leads to changes in the solicitation or the evaluation process, so be it, if the change can improve the outcome. If the change is great enough you may have to reconsider the competitive range or maybe even cancel the solicitation and start over. But if the change is appropriate, so what? There is entirely too much emphasis on getting through the process as quickly as possible, rather than producing a good choice and a good contract. The ironic result is that strict orthodoxy makes the process more time consuming.

In the past I have suggested "full disclosure" discussions, during which each offeror is given a copy of its evaluation and the opportunity to discuss it with the government. That's what I would do today, but the level of fear among COs and among some Wifconers makes me doubt that many others have or will adopt my suggestion.

Leveling is not an issue. "Technical leveling" (sometimes referred to as "coaching," although the two were really different) used to be prohibited by the GAO and by FAR. The prohibition was eliminated in 1997, in the FAR Part 15 Rewrite. You are okay as long as you do not reveal the contents of any offeror's proposal to others. You can tell an offeror what you want from it.

I realize that many practitioners will disagree with what I'm saying: Award without discussions. If you have to have discussions, do what you have to do and nothing more. "Full disclosure" discussions? Never! Will open the door to a protest.

The source selection process has not changed much since 1960, except to become ever more bureaucratic. The same old grind, the same old wasted effort, the same mediocre (at best) product. That's why I won't teach it anymore. The workforce is impervious to education on the topic. It's pointless. I can show anyone how to do a source selection well and with minimum waste of time and no chance of a sustained protest, but tribal loyalties and paranoia among the various participants makes streamlining and improvement literally impossible. The same old myths about evaluation factors, evaluating, scoring, ranking, competitive range, discussions, final proposals, debriefings. I've been hired to help agencies improve their process, only to have old shamans ask question after question and express doubt after doubt. Everyone is so damned scared. After a while you get so tired of it you want to say, "You know what? Do it the old way. Goodbye." I refuse to consult on it anymore.

Sorry, this has become a rant. I should not have written anything in this thread. This subject just sets me off.

Good luck to you. I recommend strict orthodoxy for the sake of your professional well-being and sanity. Just get through the damned thing.

[wakefield99]

Vern:

I agree with you wholeheartedly. I am fairly new (4YRS) to acquisition and I already see the stagnant processes and ideas. As much as I can, I'm trying to get the process more innovative. Agencies should (I know, not likely) promote "proving grounds" to be innovative in the process.

I read you loud in clear in your response that you no longer teach the subject nor desire to provide further feedback, and I respect that. However, I would love to hear more of your ideas on the topic in the future.

Either way, appreciate the feedback and considerations.

[joel hoffman]

The general plan and process of discussion should be the same for every offeror in the competitive range. A review of the solicitation and a pointed discussion about deficiencies and weaknesses. The content of the discussion should reflect the content of each proposal. Any topic in any session that pertains to other offerors should be discussed with the other offerors.

The RFP should describe the general plan and process of discussion and assure offerors than any topic that comes up with any offeror and that is pertinent to other offerors will be discussed with the other offerors to whom it is pertinent.

If discussion leads to changes in the solicitation or the evaluation process, so be it, if the change can improve the outcome. If the change is great enough you may have to reconsider the competitive range or maybe even cancel the solicitation and start over. But if the change is appropriate, so what? There is entirely too much emphasis on getting through the process as quickly as possible, rather than producing a good choice and a good contract. The ironic result is that strict orthodoxy makes the process more time consuming.

In the past I have suggested "full disclosure" discussions, during which each offeror is given a copy of its evaluation and the opportunity to discuss it with the government. That's what I would do today, but the level of fear among COs and among some Wifconers makes me doubt that many others have or will adopt my suggestion.

Leveling is not an issue. "Technical leveling" (sometimes referred to as "coaching," although the two were really different) used to be prohibited by the GAO and by FAR. The prohibition was eliminated in 1997, in the FAR Part 15 Rewrite. You are okay as long as you do not reveal the contents of any offeror's proposal to others. You can tell an offeror what you want from it.

I realize that many practitioners will disagree with what I'm saying: Award without discussions. If you have to have discussions, do what you have to do and nothing more. "Full disclosure" discussions? Never! Will open the door to a protest.

The source selection process has not changed much since 1960, except to become ever more bureaucratic. The same old grind, the same old wasted effort, the same mediocre (at best) product. That's why I won't teach it anymore. The workforce is impervious to education on the topic. It's pointless. I can show anyone how to do a source selection well and with minimum waste of time and no chance of a sustained protest, but tribal loyalties and paranoia among the various participants makes streamlining and improvement literally impossible. The same old myths about evaluation factors, evaluating, scoring, ranking, competitive range, discussions, final proposals, debriefings. I've been hired to help agencies improve their process, only to have old shamans ask question after question and express doubt after doubt. Everyone is so damned scared. After a while you get so tired of it you want to say, "You know what? Do it the old way. Goodbye." I refuse to consult on it anymore.

Sorry, this has become a rant. I should not have written anything in this thread. This subject just sets me off.

Good luck to you. I recommend strict orthodoxy for the sake of your professional well-being and sanity. Just get through the damned thing.

Vern, I agree with you, wholeheartedly. I quoted your entire "rant" to keep it more visible today as people post to Contract Award topic area. Wheneveer I hear the term "technical levelling" mentioned, I know that the person either has little knowledge of the background of the FAR 15 re-write (FAC 97-02, 30 Sep 1997) or they have apparently been trained by a dinosaur who was familiar with the old cautions and prohibitions on discussions and who never bothered to understand the re-write..

Just 2 weeks ago, I was on a team teaching performance specifying for design-build for one of our sister services, in California. Another instructor was teaching about the value of discussions in a session on "High Performance Source Selection". A student, who is an 1102, asked something to the effect of "what about avoiding technical levelling?" In actuality. the question related to the prohibited practice of what is known as "technical transfusiion". As you explained, that concept involves "reveal(ing) the contents of any offeror's proposal to others". Old FAR 15.610 (e ) (1) defined technical transfusion as "Government disclosure of technical information pertaining to a proposal that results in improvement of a competing proposal". New FAR 15.306 (d ) (2) prohibits conduct that "Reveals an offeror's technical solution, including unique technology, innovative and unique uses of commercial items, or any information that would compromise an offeror's intellectual property to another offeror".

Technical leveling - on the other hand and as mentioned in this thread - was described in old FAR 15.610 (d) as "helping an offeror to bring its proposal up to the level of other proposals through successive rounds of discussion, such as by pointing out weaknesses from the offeror's lack of diligence, comptence, or inventiveness preparing the proposal." Was Wakefield 99 referring to "levelling" or "transfusion"?

The emphasis on 'technical levelling' infused great caution to many - including me - on discussing weaknesses or other objectionable aspects of a proposal which may have "met" or "minimally met" the solicitation requirements but were mediocre or less than desirable at best. In fact, tghe old language concerning discussions was mostly cautions and "do nots".

This pre-eminant limitation on meaningful bargaining was further emphasized in old FAR 15.611 by referring to the next step after one round of discussions as the request for "Best and Final Offers". Thus, "...(a)fter receipt of best and final offers, the contracting officer sgould not reopen discussions unless it is clearly in the Government's interest to do so (e.g., it is clear that information available at the time is inadequate to reasonably justify contractor selection...based upon the best and final offers received)." We used to have to get permission and document why we had to go out for "BARFO's" (Best and REALLY Final Offers) or worse yet - the dreaded "BARRFO".

Thank God that Crap language regarding technical levelling and BAFO's was dropped or heavily modified in the FAR re-write. I could not find in old FAR 15.6 mention of discussions being conducted to "maximize the Government's ability to obtain best value" (see new FAR 15.306 (d ) (2)). New FAR 15.306 (d) also emphasizes the ability for discussions to include bargaining for better performance - "Bargaining includes persuasion, alterations of assumptions and opinions, give and take, and may apply to price, schedule, technical requirements, type of contract, or other teerms of a proposed contract." New FAR 15.306 (d ) (3) goes on to emphasize other techniques for encouraging enhanced performance as well as better pricing.

Old FAR 15.609 (a ) further facilitated mediocrity by encouraging the KO to include more firms in the competitive range - "...shall include all proposals that have a resonable chance of being selected for award. When there is doubt as to whether the proposal is in the competitive range, the proposal should be included" This has been replaced by a competitive range "comprised of all the most highly rated proposals", which can further be reduced for purposes of efficiency. This is a HUGE difference. The old policy encouraged maximizing the competitive range then limiting discussions. In effect, "let's maximize price competition via numbers of firms in the competituive range and minimize emphasis on enhancing quality through effective discussions."

Well, the instructor in California (a fellow retiree - not from my agency) also confused the concepts of technical levelling and technical transfusion in his answer... Very sad. I often hear questions like this and confused answers, which show that the old line thinking is still alive and UN-well. Too many KO's have been taught to tread lightly in technical or PRICE discussions.

I know that we have some subordinate commands in my former agency which actually practice and promote policies discouraging conducting discussions or that prohibit discussing technical aspects of proposals that minimally meet the solicitation requirements, even if mediocre or undesirable. And - oh my God - will certain of them encourage discussing high, low or seemingly unexplainable pricing differences????? Nope...

I'm really discouraged at the widespread lack of awareness or skills concerning technical and price discussions, bargaining and persuation in the acquisition workforce. And that concern isn't limited to Ko's and other 1102's. Inn my opinion, a lot of it traces back to the legacy of the old FAR Part 15, transmitted down to today's acquisition workforce. (edited 12/13/2012 - corrected "infusion" to "transfusion")

[joel hoffman]

Sorry about my even lengthier "rant" above. If anyone can get hold of ESI/George Washington University's "FAR Update: The Comparator" (covering FACs 97-01 through 97-02), copyrighted in 1997 by ESI International, it provides an excellent side by side comparison of "old" and (then) "new" FAR Part 15.

[wakefield99]

Joel:

Great feedback. Full disclosure, and please don't hold this against me, is that I am fairly new to the Acquisition and GOV world as I pointed out previously. I am obviously aware that there have always been updates and changes to the FAR, however, the specific differences, as you pointed out, I have not viewed. For clarity sake, I was referring to leveling as the old FAR defined it (which you pointed out).

I agree with both of you though, it's an up-hill battle to convince the Acq. team to take the time to have more meaningful discussions.

I hope Joel and Vern, and others, continue this post. It's a very important topic indeed.

[Guest Vern Edwards]

Technical point: FAR referred to "technical transfusion."

The problem with source selection is too much OJT. That's how people learn poor practices and processes. People are not taught enough about fundamental concepts, such as evaluation factors, evaluation, and rating (scoring). When I say concepts, I don't mean what FAR says about those things, but what they are. What is an evaluation factor? What is rating, what is its function, and how is it related to evaluation? They are not taught that "source selection" is really "contractor selection and contract formation." They are taught discussions based on GAO decisions, instead of what is the proper function and process of communication between buyer and seller in a competitive negotiation process. You cannot learn how to conduct a source selection properly by reading the FAR, your agency FAR supplement, all of the various handbooks, manuals, and policy issuances, and protest decisions. It is necessary to know those things, but not sufficient for sound practice.

What most experienced people know, and what they teach to trainees, is policy and how the process is carried out in their organization, which is not same as being able to explain what is an evaluation factor and what is the function of rating (scoring), etc. They tend to emphasize getting through the process with minimum risk of protest, rather than how to choose the best contractor and how to properly form a contract under competitive circumstances.

It's all very frustrating, but the good news for me is that except for occasional rants like mine and Joel's in this thread, I'm done with it. I won't teach source selection again or write about it professionally. I have written thousands and thousands of words, all to no avail. As I told my friend, Prof. Nash, all of our efforts to streamline, simplify, and improve the source selection process, his, mine, and John Cibinic's, over many years, have gone for naught. I know when I'm whipped.

[Don Mansfield]

As I told my friend, Prof. Nash, all of our efforts to streamline, simplify, and improve the source selection process, his, mine, and John Cibinic's, over many years, have gone for naught.

That's not true. Max Planck once said:

A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it. In a sense, you teach that new generation the truth from the beginning.

In my very first source selection, we used LOCAR. The contracting officer who's idea it was to implement LOCAR won a Meritorious Civilian Service award for streamlining the source selection process. When I moved on to my next position, I implemented my own version of LOCAR and that command is still using that process to award their contracts.

The seeds have been sown by Nash, Cibinic, and yourself. Your ideas make perfect sense to folks who have not been polluted by tradition. I can understand your frustration and you're not wanting to teach/write about source selection any more (most people would have probably given up sooner). However, don't think it was all for naught.

[Guest Vern Edwards]

Thanks, Don. Having you been getting my trip reports?

[joel hoffman]

Technical point: FAR referred to "technical transfusion."

Yes, of course you are correct, Vern. I was trying to read through the lined "strikeout" in a hard copy of the FAR Comparator this morning. I was sure from memory that it was "transfusion, not "infusion" when I was previewing the post. I forgot to verify and correct it after I looked up at the clock and suddenly realized that I had missed my chiropractor's appointment - I jumped up, posted and hobbled out to the car.

I feel your pain and share your frustration. However, I think you have made a meaningful difference in Federal Acquisition.

Thanks for the clarification, Wakefield. Since you are fairly new to federal contracting, it is apparent to me that someone taught you incorrectly that there is a prohibition against "leveling". I'm glad that you are now up to speed. Technical leveling isnt necessarily prohibited and it's not the same as "technical transfusion", which is still prohibited. Vern and I explained that the 1997 FAR 15 re-write eliminated that prohibition in response to changes in the law.

[Don Mansfield]

Thanks, Don. Having you been getting my trip reports?

Yes. Great reading. If you give up on acquisition, you've got a career in travel writing. Looking forward to the chapter on Angkor Wat.