FAR 13.106-1: can the basis of award be "price only"?

[govt2310]

FAR 13.106-1(a)(2) states, in part:

When soliciting quotations or offers, the contracting officer shall notify potential quoters or offerors of the basis on which award will be made (price alone or price and other factors, e.g., past performance and quality) . . .

MY QUESTION:

Is it truly possible for an agency to put in a solicitation using FAR Part 13, Simplified Acquisition Procedures, that the basis of award will be "price alone"?

I thought CICA required the use of sealed bidding if price and price-related factors were the only basis of award.

[Retreadfed]

Yes, you can have a negotiated procurement where price is the only evaluation factor. In fact, the GAO has held that if an RFP fails to identify evaluation factors, it will be presumed that price was the only factor.

As for when sealed bidding is required, see FAR 6.401. Nothing there prevents an RFP or RFQ from having price be the only evaluation factor.

[joel hoffman]

CICA doesn't apply to the use of simplified acquisition procedures. See FAR 6.001(a).

[illzoni]

CICA doesn't apply to the use of simplified acquisition procedures. See FAR 6.001(a).

I would rephrase...

Part 6 doesn't apply to SAP/Part 13 per 6.001(a).

CICA is applied differently within Part 13.

The direction in Part 6 requiring sealed bidding doesn't apply in Part 13.

[joel hoffman]

I would rephrase...

Part 6 doesn't apply to SAP/Part 13 per 6.001(a).

CICA is applied differently within Part 13.

The direction in Part 6 requiring sealed bidding doesn't apply in Part 13.

OK, Part 6.4 doesn't apply to competitive solicitations under Part 13

[govt2310]

Where in CICA, 41 USC 3301 et al. (for civilian agencies), does it say that CICA does not apply to SAP?

Where does it say that FAR Subpart 6.4 does not apply to FAR Part 13 Simplified Acquisitions (competitive)?

[joel hoffman]

OK, Part 6.4 doesn't apply to competitive solicitations under Part 13

govt2310, on 06 Jan 2015 - 2:51 PM, said: Where does it say that FAR Subpart 6.4 does not apply to FAR Part 13 Simplified Acquisitions (competitive)?

6.001 -- Applicability.

This part applies to all acquisitions except --

(a) Contracts awarded using the simplified acquisition procedures of Part 13 (but see 13.501 for requirements pertaining to sole source acquisitions of commercial items under Subpart 13.5);

[joel hoffman]

Where in CICA, 41 USC 3301 et al. (for civilian agencies), does it say that CICA does not apply to SAP?

41 USC 3301 (a) In General.— Except as provided in sections 3303, 3304 (a), and 3305 of this title and except in the case of procurement procedures otherwise expressly authorized by statute, an executive agency in conducting a procurement for property or services shall—

(1) obtain full and open competition through the use of competitive procedures in accordance with the requirements of this division and the Federal Acquisition Regulation; and

(2) use the competitive procedure or combination of competitive procedures that is best suited under the circumstances of the procurement.

See 3305:

"41 U.S. Code § 3305 - Simplified procedures for small purchases"

Paragraph (e) of that section refers to "41 U.S. Code § 1901 - Simplified acquisition procedures"

[Retreadfed]

govt2310, see 41 U.S.C. 3305 and 1901. Those sections require the FAR to include special procedures for purchases below the SAT.

[joel hoffman]

I would rephrase...

.

CICA is applied differently within Part 13.

illzoni, please explain. Are you referring to 13.501 -- Special Documentation Requirements for sole source acquisitions using the "Test Program", which is now apparently a permanent test program until renamed (made permanent under Section 815 of the 2015 National Defense Authorization Act)?

If so, see 13.501 (emphasis added):

"( a ) Sole source (including brand name) acquisitions.

(1) Acquisitions conducted under simplified acquisition procedures are exempt from the requirements in Part 6. However, contracting officers must --

(i) Conduct sole source acquisitions, as defined in 2.101, (including brand name) under this subpart only if the need to do so is justified in writing and approved at the levels specified in paragraph (a)(2) of this section;

(ii) Prepare sole source (including brand name) justifications using the format at 6.303-2, modified to reflect an acquisition under the authority of the test program for commercial items at 41 U.S.C. 1901 or the authority of 41 U.S.C. 1903.

(iii) Make publicly available the justifications (excluding brand name) required by 6.305(a) within 14 days after contract award or in the case of unusual and compelling urgency within 30 days after contract award, in accordance with 6.305 procedures at paragraphs ( b ) (d), (e), and (f); and

(iv) Make publicly available brand name justifications with the solicitation, in accordance with 5.102(a)(6).

(2) Justifications and approvals are required under this subpart only for sole source (including brand-name) acquisitions or portions of an acquisition requiring a brand-name. If the justification is to cover only the portion of the acquisition which is brand-name, then it should so state; the approval level requirements will then only apply to that portion."

[joel hoffman]

Yes, you can have a negotiated procurement where price is the only evaluation factor. In fact, the GAO has held that if an RFP fails to identify evaluation factors, it will be presumed that price was the only factor.

As for when sealed bidding is required, see FAR 6.401. Nothing there prevents an RFP or RFQ from having price be the only evaluation factor.

Since we seem to be rephrasing responses here, I would qualify the above quote to apply to Part 13 acquisitions, because that is the FAR citation in the title of this thread.

Just wanted to clarify for the benefit of govt2310 - especially - and for others that the quote isn't correct for Part 15 acquisitions.

I highlighted the last sentence above. Although not the subject of this thread, competitively negotiated acquisitions covered under Part 15 require that quality factors be evaluated, including at least (with possible exceptions) past performance. As for the highlighted sentence above in the quote, FAR 6.401 refers to Part 15 procedures for competitive proposals under Part 15.

FAR 6.401 ( b ):.

6.401 -- Sealed Bidding and Competitive Proposals.

...( b ) Competitive proposals. (See Part 15 for procedures.)

(1) Contracting officers may request competitive proposals if sealed bids are not appropriate under paragraph (a) above.

(2) Because of differences in areas such as law, regulations, and business practices, it is generally necessary to conduct discussions with offerors relative to proposed contracts to be made and performed outside the United States and its outlying areas. Competitive proposals will therefore be used for these contracts unless discussions are not required and the use of sealed bids is otherwise appropriate.

Paragraph ( b ) refers to Part 15 for procedeures, which may lead one to the conclusion that quality factors are necessary for competitively negotiated proposals - at least the consideration of past performance, unless otherwise inapplicable by exception.

See 15.304 ( c ):

15.304 -- Evaluation Factors and Significant Subfactors.

...© The evaluation factors and significant subfactors that apply to an acquisition and their relative importance are within the broad discretion of agency acquisition officials, subject to the following requirements:

...(2) The quality of the product or service shall be addressed in every source selection through consideration of one or more non-cost evaluation factors such as past performance, compliance with solicitation requirements, technical excellence, management capability, personnel qualifications, and prior experience (10 U.S.C. 2305(a)(3)(A)(i) and 3306©(1)(A).

(3)

(i) Except as set forth in paragraph ©(3)(iii) of this section, past performance shall be evaluated in all source selections for negotiated competitive acquisitions expected to exceed the simplified acquisition threshold.

(ii) For solicitations involving bundling that offer a significant opportunity for subcontracting, the contracting officer must include a factor to evaluate past performance indicating the extent to which the offeror attained applicable goals for small business participation under contracts that required subcontracting plans (15 U.S.C. 637(d)(4)(G)(ii)).

(iii) Past performance need not be evaluated if the contracting officer documents the reason past performance is not an appropriate evaluation factor for the acquisition.

Once upon a time (at least through 1996), the Corps of Engineers used competitively negotiated RFP's for construction (and probably also for services) with price only factors in Central and South America. I can't find the source of that deviation from FAR 15.304 and formerly in FAR 15.605( b )(1)(iii), as of 1996. I believe that multiple Divisions of the Corps also used price only RFP's in Europe and in the Middle East. I don't know if the Corps is still using price only RFP's outside the U.S.

FAR 6.401 ( b ) (2) quoted above indicates that "it is generally necessary to conduct discussions with offerors relative to proposed contracts to be made and performed outside the United States and its outlying areas" and states that "Competitive proposals will therefore be used for these contracts unless discussions are not required and the use of sealed bids is otherwise appropriate." OK - that leads us to using RFP's outside the U.S. But - paragraph ( b ) refers back to Part 15 - which requires quality factor(s) in addition to price and did in the old FAR 15 prior to the re-write.

I perused the Third Edition (1998) of Nash and Cibinic's Formation of Government Contracts. There was some discussion of competitive negotiation in Chapter 3, under "III Selection of Contracting Technique", "B Competitive Negotiations", "3. Need to Conduct Discussions", The discussion concerns the use of competitive negotiations, as an exception to competive bidding when discussions were considered to be necessary and where price only is to be considered. But it doesn't explain how that is allowable, considering the requirement in 15.304 for quality factors to be included. At least one Comp Gen case held that technical proposals are necessary but subsequent cases where negotiation has been permitted without obtaining technical proposals.

[joel hoffman]

Retreadfed, I edited the above post while you were reviewing the thread - sorry...

[Retreadfed]

Joel, I will not quibble with your analysis. As for a GAO decision approving an RFQ using price as the sole basis for award, see Midwest Tube Fabricators, Inc., B-407166; B-407167 November 20, 2012.

[joel hoffman]

Joel, I will not quibble with your analysis. As for a GAO decision approving an RFQ using price as the sole basis for award, see Midwest Tube Fabricators, Inc., B-407166; B-407167 November 20, 2012.

To be clear, that case appears to involve a simplied acquisition for a commercial item(s), probably under FAR 13.5, right?

Sorry, I cant copy and paste the link.

[Retreadfed]

The decision does not identify the supplies as a commercial item. Footnote 2 states "The RFQs described the item as bent, seamless, stainless steel tube with certain dimensions and conforming to United States Army Tank Automotive Command drawing No. 12338581. The item apparently serves as a fuel line on the high mobility multipurpose wheeled vehicle."

[joel hoffman]

The decision does not identify the supplies as a commercial item. Footnote 2 states "The RFQs described the item as bent, seamless, stainless steel tube with certain dimensions and conforming to United States Army Tank Automotive Command drawing No. 12338581. The item apparently serves as a fuel line on the high mobility multipurpose wheeled vehicle."

Ok, it is a supply acquisition. But it did mention simplified acquisition method using a purchase order.

[Retreadfed]

Joel, yes it did involve a purchase order under the SAP, which is what the OP asked about. This decision seems to answer the question posed by the OP.

[joel hoffman]

Joel, yes it did involve a purchase order under the SAP, which is what the OP asked about. This decision seems to answer the question posed by the OP.

Right, thanks.

[illzoni]

CICA doesn't apply to the use of simplified acquisition procedures. See FAR 6.001(a).

I would rephrase...

Part 6 doesn't apply to SAP/Part 13 per 6.001(a).

CICA is applied differently within Part 13.

The direction in Part 6 requiring sealed bidding doesn't apply in Part 13.

illzoni, please explain. Are you referring to 13.501 -- Special Documentation Requirements for sole source acquisitions using the "Test Program", which is now apparently a permanent test program until renamed (made permanent under Section 815 of the 2015 National Defense Authorization Act)?

If so, see 13.501 (emphasis added):

Joel incorrectly equated CICA and Part 6. The two are not synonymous.

"6.001 -- Applicability.

This part applies to all acquisitions except --

(a) Contracts awarded using the simplified acquisition procedures of Part 13 (but see 13.501 for requirements pertaining to sole source acquisitions of commercial items under Subpart 13.5);"

His reply implies competition is not required in Part 13.

CICA is addressed in both Parts 6 & 13. There are many ways CICA is approached differently in Part 13, usually in a more simple manner.

- Sealed bids are not mentioned at all in Part 13;

- Part 13 provides for oral solicitation;

- 6.304 requires justification (e.g. J&A) whereas 13.106-1( b ) requires the CO determination (D&F).

Those are just a few.

Edited January 8, 2015 by illzoni

[joel hoffman]

EDITED on 10 JAN 2014:

Joel incorrectly equated CICA and Part 13. The two are not synonymous.

?????? Nope, they aren't and I didn't equate them.

EDIT: illzoni later corrected himself.

Joel incorrectly equated CICA and Part 6. The two are not synonymous.

I will admit that I may have equated them.

Then he said:

His reply implies competition is not required in Part 13.

I don't think that I implied that but it wasn't what I meant. See my next post below (post 23). Part 6 requires 'full and open competition' unless there is an exemption. The policy in Part 13 is to 'promote maximum competition to the extent practicable'. FAR 13.501 explains what has to be done before one 'makes' a sole source or brand name commercial acquisition under 13.5.

[illzoni]

My apologies...I mistyped. I've corrected it.

[govt2310]

Thanks everyone!

[joel hoffman]

Thanks everyone!

It might be technically correct (I'm not a lawyer) to say that CICA "applies" to Simplified Acquisitions under Part 13. However, CICA doesnt require "full and open competition" under SAP and CICA does authorize the use of simplified acquisition procedures

See this post #5 by jwomack at http://www.wifcon.com/discussion/index.php?/topic/2350-possible-cica-violation/

#5 Possible CICA Violation???: post #5 jwomack

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Posted 13 January 2014 - 09:42 AM

Don Acquisition, on 10 Jan 2014 - 5:02 PM, said: "CICA doesn't apply to the use of simplified acquisition procedures. See FAR 6.001(a)."

Please elaborate.

FAR 6.001 only states (implies) that FAR Part 13 acquisitions are not subject to full and open competition. It does not state that FAR Part 13 is exempt from CICA.

Also, see Congressional Research Service's Competition in Federal Contracting: An Overview of the Legal Requirements where they address SAP and how CICA applies to it. Page 15 reads, "CICA authorizes the use of 'special simplified procedures' when agencies make 'small purchases.' CICAs drafters included this provision because they recognized that the costs of conducting competitions can exceed the savings resulting from competition when agencies procure items with low prices...Moreover, since 1996, under an amendment to CICA, agencies have also had authority to use simplified acquisition procedures in purchasing commercial items whose expected value exceeds the simplified acquisition threshold but is below $6.5 million..."

This refers to the exception in 41 USC 3305 that was mentioned earlier in my post #8 and the 1996 amendment covers the Test Program at FAR 13.5:

41 USC 3301 (a) In General.— Except as provided in sections 3303, 3304 (a), and 3305 of this title and except in the case of procurement procedures otherwise expressly authorized by statute, an executive agency in conducting a procurement for property or services shall—

(1) obtain full and open competition through the use of competitive procedures in accordance with the requirements of this division and the Federal Acquisition Regulation; and

(2) use the competitive procedure or combination of competitive procedures that is best suited under the circumstances of the procurement.

See 3305:

"41 U.S. Code § 3305 - Simplified procedures for small purchases"

Paragraph (e) of section 3305 refers to "41 U.S. Code § 1901 - Simplified acquisition procedures"

Whether CICA "applies" due to mention of the exception or doesn't apply due to the exception doesn't affect the bottom line. The law authorizes an agency to solicit using FAR Part 13, Simplified Acquisition Procedures, and the basis of award can be "price alone", as stated in FAR 13.106-1(a)(2). Rather than a requirement for "full and open competition" as stated in Part 6, the policy at 13.003 (h) ( 1 ) for SAP is to "promote competition to the maximum extent practicable":

(h) In addition to other considerations, contracting officers shall—

(1) Promote competition to the maximum extent practicable (see 13.104);

13.104 Promoting Competition.

The contracting officer must promote competition to the maximum extent practicable to obtain supplies and services from the source whose offer is the most advantageous to the Government, considering the administrative cost of the purchase...

Here is a link to the Congressional Research Service Report, entitled "Competition in Federal Contracting: An Overview of the Legal Requirements" by Kate M. Manuel Legislative Attorney dated June 30, 2011. This is what jwomack was referring to in the post above. http://fas.org/sgp/crs/misc/R40516.pdf

[joel hoffman]

DELETED. My edit to post 20 somehow ended up here.