Proposal Analysis of Sole Source Cost Proposals on Existing CPIF/CPAF Contract

[DingoesAteMyBaby]

I will just be direct with this one. I am witnessing an oddly organized technical analysis function and am trying to make sense of it.

The contract in question is an established cost type contract which includes an FPRA. Work is added to the contract generally by way of specification formation for a number of work items which make up a base work package, request for cost proposal, negotiated agreement, and finally a bilateral contract modification.

The process that occurs between cost proposal and negotiation position formation is the technical analysis function.

The cost proposal is at the per work item level (a work item may be a particular alteration of an existing system, an inspection of a piece of major equipment, the complete replacement of some structure, etc.). The cost proposal is detailed across each major cost element of direct labor, subcontracts, materials, and ODCs. The proposal at the work item level is rolled up into a proposal pricing summary which provides a summary of the number of direct labor hours factored against the labor rate, materials, and subcontracts which arrives at the total proposed cost inclusive of labor overhead, G&A, FCCOM, incentive fees, and award fee. The culmination of work items comprises the base work package.

The technical analysis of the contractor's cost proposal is very intensive and uses a variety of techniques including price analysis, cost analysis, cost realism analysis, and technical analysis across each major cost element (direct labor including straight time and overtime, subcontracts, materials, and ODCs). The intent of this analysis is to recommend negotiation positions to the KO and as appropriate recommend acceptance of proposed costs and state the basis for establishing price fair and reasonable.

So this is a really comprehensive proposal and really comprehensive analysis.

So the question is two-fold:

1) Is it customary or acceptable in Federal contracting for the technical experts conducting the technical analysis at FAR 15.404-1 ( e ) to be outside of the project team actually managing the project? And is customary or acceptable for these technical experts to report to the chief of the contracting activity rather than to the program manager?

2) Is it customary or acceptable in Federal contracting that the technical experts and the project team will routinely disagree on the technical position which will be provided to the Contracting Officer and for the Contracting Officer to be discouraged and prohibited from requiring the technical experts and project team to reach consensus prior to forming the negotiating position?

[Guest Vern Edwards]

"Customary" in what context and in what organizations? "Acceptable" to whom within those organizations? In many cases it is hard to say what is customary and acceptable "in Federal contracting".

Answers to Question 1): In my experience it has not been unusual to have persons from outside the project team participate in the evaluation. In some programs, it has been the norm in my experience. So it is not certainly not unheard of. I know of no statute or regulation that requires that the persons conducting a technical analysis of a proposal be members of the government's managing project team. Offhand, I cannot recall any cases in my experience in which the evaluation has been done entirely by persons outside the project team, but I know of nothing that prohibits it. It might be a good idea in some cases.

As for reporting to the "chief of the contracting activity", who is that? FAR refers to a "chief of the contracting office" (see e.g., FAR 1.602-3( b )(3)) and a head of the contracting activity" (see FAR 2.101). I know of only one reference in the entire FAR system to "chief of the contracting activity", which occurs in the Department of State FAR supplement at 622.406(a). If you meant "head of the contracting activity", then, yes, it is customary in my experience to have the "technical experts" report to the HCA, which in my experience has been a general officer in the military or a very senior civilian manage to whom everybody reports -- for example, the Commander of the Air Force Materiel Command (a 4-star) or the Commander of the Air Force Space and Missile Systems Center (a 3-star). If you meant "chief of the contracting office", that has been much less common in my experience, but not unheard of.

Answers to Question 2): I would not say that widespread disagreement among evaluators is either customary or acceptable, but it is not forbidden or unheard of. Disagreements among evaluators on one issue or another have been common in my experience. Disagreements on the summary findings have been much less common, but not unheard of. Disagreements are acceptable if they are understandable and reasonable.

As for discouraging or prohibiting the CO from encouraging consensus, I have never experienced that or even heard of it, but I would not be surprised if it happens now and then. I would not say it is forbidden.

[DingoesAteMyBaby]

Thank you Vern for your reply.

I misspoke when I stated "chief of the contracting activity", I did intend to state "chief of the contracting office".

My real struggle here is that there is not a statute or regulation that requires the organizational arrangement of the acquisition team. It just strikes me as very odd that a Contracting Officer would be handed a technical assessment report that is prepared without the input of the technical experts who are on the project team. Instead, the technical assessment report is prepared by technical experts who are owned by the contracting function within the organization. It also strikes me as odd that the KO is not afforded an opportunity to push the technical assessment report writers to amend their report to address discrepancies or gaps that the project team identifies with the report. It falls on the KO to sort out the details and make technical judgments on matters that quite frankly they are not technically qualified to make without technical backing.

In essence, rather than the KO facilitating a consensus between technical stakeholders, which is what I am accustomed to doing on a number of highly-complex Part 15 best value continuum - tradeoff process procurements, the KO instead finds himself / herself continually having to mish-mash the technical report with often times conflicting data in order to form the negotiation position. This data, for example, is typically associated with return costs for previous work which was similar in size, scope, and complexity to the instant work item; upon conducting research and finding this data, the KO discovers that it wasn't considered in the report, and the technical assessment report writers typically refuse to revise the report on the basis that the report is done, and that's that. Often times differing and more specific technical details for what leads to the complexity of the effort which can only come from the project team come out after the technical assessment report is delivered, and when these facts are presented to the technical assessment report writers, again no revision comes because the report is done, and that's that. So you see, it puts it on the KO to make judgments based on the data and really doesn't give the KO a safety net if they accept a price as fair and reasonable and they made the wrong technical judgment.

The entire process lacks finesse, puts the mission/organizatin/KO at risk, and I find it distasteful and truncated. I'm struggling to find a way to accept that this is acceptable.

[Don Mansfield]

Has this conversation started?

KO to Supervisor: "The technical assessment reports I'm receiving are garbage. I've tried to remedy the situation, but they are not being cooperative."

Supervisor to KO: "Thank you for letting me know. I'll see what I can do."

[time passes]

KO's Supervisor to technical advisor's supervisor: "My KO told me that the reports she is getting are garbage and that your folks aren't being cooperative. There's probably more to the story that I don't know, but, in any case, I think we have a problem that we need to fix."

Technical advisor's supervisor to KO's supervisor: "I'm sorry to hear that. My folks are always complaining about KO's making unreasonable demands, so I agree that we have a problem. Let's work together to fix it."

[Guest Vern Edwards]

Dingoes:

The entire process lacks finesse, puts the mission/organizatin/KO at risk, and I find it distasteful and truncated. I'm struggling to find a way to accept that this is acceptable.

Okay. Interesting opinion. What more is there to say? What are you looking for from us?

[DingoesAteMyBaby]

Has this conversation started?

KO to Supervisor: "The technical assessment reports I'm receiving are garbage. I've tried to remedy the situation, but they are not being cooperative."

Supervisor to KO: "Thank you for letting me know. I'll see what I can do."

[time passes]

KO's Supervisor to technical advisor's supervisor: "My KO told me that the reports she is getting are garbage and that your folks aren't being cooperative. There's probably more to the story that I don't know, but, in any case, I think we have a problem that we need to fix."

Technical advisor's supervisor to KO's supervisor: "I'm sorry to hear that. My folks are always complaining about KO's making unreasonable demands, so I agree that we have a problem. Let's work together to fix it."

So yes, Don, exactly those conversations have taken place. It just so happens that the KO Supervisor and the Technical Adivosry Supervisor both report to the chief of contracts through the deputy chief.

So elevating the issue within the organization only leads to a conflicted response.

[DingoesAteMyBaby]

Dingoes:

Okay. Interesting opinion. What more is there to say? What are you looking for from us?

Vern,

What I am specifically seeking is an idea, based on experiences greater than my own, as to how I could recommend some change to the process. Maybe others here on WIFCON have dealt with similar issues, how were those issues resolved. For example, create an organizational framework that binds the technical analysis group together with a dedicated 1102 negotiator so that the function is forced to create a timely and usable technical assessment product. There are some big brains on here with a lot of experience, and I am very appreciative of that knowledge and experience.

I'm not content in just concluding that the process is unsatisfactory, I'm looking for ideas of how to make it work.

I thought maybe if there was an OMB decision, IG report, or something that discussed seperation of technical and contractual authority responsibilities that maybe I am not aware of, that could nudge me in a particular direction.

Thank you,

[Don Mansfield]

So yes, Don, exactly those conversations have taken place. It just so happens that the KO Supervisor and the Technical Adivosry Supervisor both report to the chief of contracts through the deputy chief.

So elevating the issue within the organization only leads to a conflicted response.

So how does that prevent the two supervisors from solving the problem?

[DingoesAteMyBaby]

So how does that prevent the two supervisors from solving the problem?

Well, because the technical advisory supervisor flatly refuses to provide a technical assessment that the KO can use, the issue is elevated by the KO supervisor. The KO supervisor is told to live with the technical assessment and the technical advisory supervisor is told never to provide a revised technical assessment. So the problem of having an inadequte technical assessment routinely occurs.

[Don Mansfield]

And the Chief of the Contracting Office knows but doesn't care?

[DingoesAteMyBaby]

Just to be clear, when I say inadequate technical assessment, it could be arguable that it is somewhat useful and at times rather useful. But rarely entirely adequate for the intended purpose.

[joel hoffman]

This appears to simply be an internal matter of lack of job performance or incompetence. And it appears to start at the technical supervision level in the organization

[here_2_help]

Not a government employee so I may be speaking out of turn, but has anybody tried to provide training to the tech evaluators regarding what the contracting officer is looking for in an evaluation? Why certain aspects are required, or critical, or nice-to-have?

In my experience it's tough to hold people accountable until you've explained to them the expectations ... and why they need to meet them.

Hope this helps.