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RFP states a proposed solution


bob7947

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I am posting this for a new member--Cman--who added it as a blog entry. Please respond.

If an offer in response to an RFP states a proposed solution, and there is no clause that explicitly incorporates the solution into the contract (E.g., 5352.215-9005 Incorporation of Contractor's Technical Proposal. 5352.215-9006 Intent to Incorporate Contractor's Technical Proposal), is the contractor required to follow the proposed solution? In effect, does the solution become legally binding once an award is made? If not, other than keeping the customer happy, what is to keep the contractor from straying completely from the proposed solution and simply executing a different solution that still meets the requirements of the SOW?

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No, the contractor is not required to follow the proposed solution. The contractor is required to comply with the SOW.

The purpose of the technical evaluation is to allow the Government to evaluate those matters that might make a difference in the selection of the contractor who will provide the best value to the Government -- that's all.

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I do not know what you stated in your solicitation's Section L or its commercial item equivalent, but, assuming the solution is technically acceptable, and absent an express statement barring the incorporation of the solution, I see no reason why you cannot accept the solution and incorporate it into the contract.

If the solicitation is ambiguous with regard to its acceptance and incorporation, prepare a 2 party contract incorporating the proposed solution and ask the contractor to sign it

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Notwithstanding the pros and cons of incorporating a proposal into the resulting contract, a lesson learned here is that if you intend to do that, put it into the solicitation, also into the part that will be included in the a Contract language. Some of the standard forms also provide for documenting that it is part of the contract. Also delineate the order of precedence between the solicitation minimum requirements and the offer/proposal, etc , including anything offered that both meets and exceeds the minimum solicitation requirement.

Of course, one shouldn't knowingly accept a materially non-conforming offer...

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Guest Vern Edwards
If an offer in response to an RFP states a proposed solution, and there is no clause that explicitly incorporates the solution into the contract... does the solution become legally binding once an award is made?

Government contracts must be in writing. See the definition in FAR 2.101:

“Contract” means a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing.

See also and compare: Standard Form 26, blocks 17 and 18; Standard Form 33; Standard Form 1442, blocks 28 and 29; Standard Form 1447, blocks 25 and 26; and Standard Form 1449, blocks 28 and 29.

What's binding is what is in writing. If the "solution" (I hate that term) is not in writing in the contract, either in the text or incorporated in whole or in part by reference, then it's not binding (unless the Government's attorney is a genius).

Although dated by changes in forms and form prescriptions, see Nash, "The Status of Technical, Management, and Cost Proposals: Are They Part of a Negotiated Contract," The Nash & Cibinic Report (July 1993). The author quoted me as follows:

I have long maintained that what we call technical, management, and cost “proposals” should be called “dissertations” or “presentations” and that the government should make it clear that they will use the information contained in those documents only to determine which offeror should receive the contract, but not as terms and conditions of the contract, unless they are expressly incorporated into the contract document for that purpose. I usually suggest to government students that the [request for proposals (RFP)] should make it clear that the “offer” consists of (1) the completed “Offer” section of SF 33 (blocks 12 through 18); (2) the schedule of costs or prices in Uniform Contract Format Section B; (3) the certifications and representations in Section K; and (4) any other blanks in the model contract that the government specifically asks the offerors to complete. I also tell government students never to incorporate the entire technical, management, or cost volumes, but only those parts that they specifically would like to make contractually binding, and to do that by integrating the language in the “dissertation” or “presentation” with the language in the RFP, rather than making the dissertation an attachment or exhibit.

Prof. Nash called that "excellent advice."

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I worked at an Army location where all awards had to result from contracts prepared from scratch. Contracts couldn't be a simple unilateral acceptance of offers and everything was done via SF26 signed by both parties.

If a solution resulted in a contractor selection, the pertinent parts of the proposal along with the essential parts of the SOW were put into the contract. Then the contractor was called in and the CO went over all the language as well as all the clauses with the contractor. The contractor and the CO essentially agreed to everything the contractor is required to do in clear terms.

A lot of work but well worth it in most instances.

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This discussion reminds me of a situation I ran into a few years ago that demonstrates some pitfalls that can occur when incorporating proposals by reference. The agency issues an RFP for a security system. The contract was intended to be a performance based contract. Award was made to the contractor who started to perform to achieve the outcomes described in the RFP. After several units of the security system had been accepted, the government asserted the system did not meet contract specifications, suspended progress payments, demanded a refund of amounts already paid (without revoking acceptance) and threatened to refer the contractor for submitting false claims in the form of requests for payment of non-conforming systems. When the government finally agreed to a meeting to discuss the matter, the government started listing all the performance deficiencies of the contractor. Of course the contractor countered that none of the requirements identified by the government were in the SOW. The government responded that while they were not in the SOW they were in the contractor's proposal which had been incorporated into the contract by reference. A quick check of the contractor's version of the contract indicated that its proposal had not been incorporated into the contract. However, when the government's version was examined, it had been. Thus, there were two versions of the contract. When this was pointed out to the government, the head of the contracting office who was in attendance at the meeting said this was of no consequence because the government's version of the contract was the "official" version and the contractor had to comply with it although the contractor did not know of the terms of the government version.

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Guest Vern Edwards

The all-time classic case of witless incorporation of a proposal by reference is F & F Laboratories, Inc., ASBCA 33007, 89-1 BCA ¶ 21207 (Sept. 14, 1988). The procurement was for candy bars. The opening paragraphs read as follows:

1. Mr. Steven Bollendorf has been employed at Defense Personnel Support Center (DPSC) in Philadelphia since 7 November 1983 as a purchasing agent. In the 3 and 1/2–years prior to his deposition on 12 May 1987, Mr. Bollendorf's main function had been procuring food for rations, the majority of which were the “meal, ready-to-eat” which is the combat ration. (Bollendorf dep. at 11, 12, 14, 25). He also recalls buying other ration items, including toilet paper, candy bars, and matches (ibid. at 14). Sometime in June 1985, Mr. Bollendorf received a requisition to purchase all of the items used in the “abandon ship ration.” (Ibid. at 47) One of the items to be purchased was the “starch jelly bar” and as the candy buyer for the rations program, that item was delegated to Mr. Bollendorf for procurement (ibid. at 29, 47). The last purchase of the abandon ship ration by DPSC was in 1982. (ibid. at 36)

2. Mr. Bollendorf noted from the item history card for the jelly bar that only one firm had submitted an offer on the last procurement in 1982 (ibid. at 36). The firm submitting that offer, Nabisco, Chuckles Division, had received the contract in 1982. However, when contacted by Mr. Bollendorf before the issuance of the new solicitation, Nabisco indicated that it was not interested and did not want to submit an offer. (Ibid. at 43, 44)

3. One day in early October, 1985, while on a break from work, Mr. Bollendorf noticed a starch jelly bar in the vending machine in the breakroom (ibid. at 41, 43). He bought one of the bars and saw that it was manufactured by appellant, F & F Laboratories. He took down the name and address and called F & F. In that initial phone call he spoke to Mr. David Barnett, Marketing Director for F & F and to Mr. Bernard Stern, Assistant Technical Director for F & F. Mr. Bollendorf told them about the purchase of jelly bars, how many were being purchased [1,316,044] and asked if F & F would be interested in submitting an offer. Mr. Barnett said he was interested. (Ibid. at 41, 42, 70, 71)

The Government awarded a contract for 1,316,016 candy bars. What happened next is very amusing, though not for Mr. Bollendorf.

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I believe that the F & F Laboratories decision makes clear the need to state unambiguously to what line items, prices, specs, SOW, delivery or performance schedule and clauses the 2 parties are agreeing. While I understand Professor Nash’s admonition in Vern’s post 5, I am not sure that any definition of an “offer” contained in a solicitation provision could prevent in every case the kind of ambiguity seen in the candy bar contract. I believe one should always draft a 2 party contract containing the words defining the content of the agreement rather than referring to correspondence exchanged during the offer/ acceptance process.

Years ago, I commenced my career using formally advertised solicitations containing requirements for the submission of descriptive literature demonstrating compliance with the solicitation’s specifications. I was taught via OJT to read carefully the full contents of the document containing the descriptive literature so that one did not accept an offer and create a contract that not only failed to meet the customer’s specs, but also failed to comply with solicitation clauses (e.g. T for D, delivery schedules, Buy American).

Later, I learned to read very carefully cover letters accompanying bids and proposals to assure that there were not words buried in them that modified the content of “technical proposals” and of solicitation Ts and Cs.

Unfortunately, today, too few 1102s are taught the principles of contract formation during their OJT. Instead, they are taught how to use automated procurement systems and to make FPDS entries. They are taught to “accept” blindly the contractor’s submissions and to incorporate them into the offer acceptance document. For these reasons, I favor the creation of a 2 party contract instead of “acceptance” of an offer and any of its modifications made during discussions.

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The all-time classic case of witless incorporation of a proposal by reference is F & F Laboratories, Inc., ASBCA 33007, 89-1 BCA ¶ 21207 (Sept. 14, 1988). The procurement was for candy bars. The opening paragraphs read as follows:

The Government awarded a contract for 1,316,016 candy bars. What happened next is very amusing, though not for Mr. Bollendorf.

So what you're saying is that incorporation of proposals by reference can get you into a real jam.

Sorry, couldn't resist.

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Guest Vern Edwards

I was invited to speak at a conference at DLA/DPSC in Philadelphia many years ago, and I told the story of F & F, which got a lot of laughs. At the end of my presentation people came up to say hi and ask questions, and eventually one guy came up to me and said, "Hi, I'm Steve Bollendorf, and until today I never knew the outcome of that board case."

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napolik "Later, I learned to read very carefully cover letters accompanying bids and proposals to assure there were not words buried in them that modified the content of 'technical' proposals' and of solicitation Ts and Cs."

For this reason (among others), I like to tell contractors not to include any information that is not part of their actual proposal. I don't care about your cover letters, your business-development history, how awesome you are, or how fancy your colored charts are.

In addition to wasting the Government's time, contractors are hurting themselves because they take up 10-20 pages of the page limit of their proposal. If it's not directly pertinent to meeting the terms of the RFP, don't include it.

They hardly ever listen though.

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What I found interesting about the case was that the attorney representing the agency was from the Defense Industrial Supply Center while the contract was awarded by the Defense Personnel Supply Center. DPSC had several attorneys who represented it in many ASBCA actions. There may be an untold story here as to why someone from DISC represented DPSC in this appeal.

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Having worked for DLA Hq from 1986-88 and knowing about how DPSC operated, I would not have been surprised by what happened here. DPSC caused more problems than any other Supply Center and was almost impossible to manage because of its size and diversity. DPSC was responsible for acquiring subsistence items, medical items (on a shared basis with the VA and Indian Health Service) and clothing and textile items. At the time this occurred, the more interesting issue was the bribery trial of the DPSC head of contracting for taking bribes from clothing manufacturers which resulted in his conviction and the debarment of most military clothing manufacturers as well as the Freedom New York MRE fiasco with its congressional interest. Thus, what is interesting here depends on your perspective.

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But he had a sweet time til he was caught. It's also interesting how it took a blind person to discover that the candy wouldn't fit in the ration packages

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