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The most eye-opening and potentially important protest decision in decades:

Sevatec, Inc.; InfoReliance Corporation; Enterprise Information Services, Inc.; Buchanan & Edwards, Inc. B-413559.3, B-413559.4, B-413559.6, B-413559.7: Jan 11, 2017.

The GAO has applied FAR 15.101 in a way that gives new meaning to FAR 15.304(c)(1) and 15.305(a)(1) and opens the door to labor and time-saving source selection methods. It would be difficult to over-emphasize the decision's potential importance and impact.

Read, think, innovate.

Congratulations to GSA and the Alliant team.

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I posted it because GAO said:

Quote

Our Office has not previously considered the question of whether an agency may properly structure a solicitation using a “highest technically rated [ ] with a fair and reasonable price” evaluation scheme. Based on the arguments presented by protesters and our review of the relevant statutes and regulations we find that the protesters have not established that GSA’s source selection process, as defined by this solicitation, is improper.

You can view the excerpt here and download the entire protest at the end pf the excerpt.

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In order to fully understand the importance of the decision, read Nash and Edwards, "Highest Technically Rated Offerors with Fair and Reasonable Pricing," The Nash & Cibinic Report, May 2016. If you want to read it and cannot get it, write to me through Wifcon and I will see that you get a copy. Read the entire Sevatec decision, not just an excerpt.

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See also  a Court of Federal Claims decision that included issues concerning the similar source selection scheme for multiple award GSA contracts as in the Sevatec GAO Protest. GAO acknowledged that Protest on page 5 of the Sevatec Decision.

Quote

We recognize that a challenge to the award decision in a similar procurement was made and that a similar evaluation scheme has been discussed at the Court of Federal Claims.   See e.g. Octo Consulting Group, Inc. v. United States, 117 Fed. Cl. 334 (2014).


OCTO CONSULTING GROUP, INC. Protestor, v. UNITED STATES, Defendant.

United States Court of Federal Claims.

No. 14-234C, August 13, 2014.

http://www.leagle.com/decision/In FDCO 20140815L40.xml/OCTO CONSULTING GROUP, INC. v. U.S.

In addition, Section 825 of the 2017 NDAA has added an exception under Title 10 USC to the requirement to include cost or price to the Government as a factor in the evaluation of proposals for award of certain MATOC or MADOC contracts, but price shall be considered in the task or delivery order awards. That doesn't necessarily limit such consideration to LPTA or a trade-off process, either. I didn't see where Title 41 was included here (for non DoD).

GSA pushes the envelope.  Here  and in the GAO protest, it seems like a reasonable approach for those GSA multiple award contracts. 

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The "highest technically rated [ ] with a fair and reasonable price" methodology makes a lot of sense for this situation and others like it where there will be further competition at the task order level.

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Joel is being helpful, but the Octo decision is 37 pages of legalese, was decided on a slightly different basis and, in my opinion, does not have the same impact. It's historically interesting. Read it if you want to, but the important decision is Sevatec.

Matthew:

The highest technically rated with a fair and reasonable price method makes good sense even when there will not be further competition for task orders. It potentially permits nonprice proposal ranking based on tradeoffs among technical factors without consideration of price and then selection based on fairness and reasonableness of price without direct price comparisons among competitors. Think about it.

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4 minutes ago, Vern Edwards said:

Matthew:

The highest technically rated with a fair and reasonable price method makes good sense even when there will not be further competition for task orders.

Agreed.

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18 minutes ago, Vern Edwards said:

Matthew:

The highest technically rated with a fair and reasonable price method makes good sense even when there will not be further competition for task orders. It potentially permits nonprice proposal ranking based on tradeoffs among technical factors without consideration of price and then selection based on fairness and reasonableness of price without direct price comparisons among competitors. Think about it.

Yes, but the context of both the GAO and CFC Protests included discussion about how GSA intended for follow-on task order competitions to include some type of consideration of prices as part of their development and perhaps as part of their justification and reasoning for the "new" methodology. Of course, I'm not a lawyer but it seemed that GSA was explaining how price would supposedly be reasonably evaluated in subsequent order competitions.  I will reread and "think about it" further. :rolleyes:

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Joel:

Two things.

First, the COFC's Octo decision is irrelevant to the GAO's decision, which is all I care about. The GAO mentions Octo only in a footnote and only to acknowledge that the decision was about a "similar" evaluation scheme. It does not cite Octo precedentially.

Second, the GAO's holding does not rest on the expectation of future task order competitions. The holding is about what is potentially possible under CICA when an agency is not conducting a tradeoff competition.

The key part of the decision is in pages 6 -9 under the heading "Consideration of Price." Please read it carefully. I will not debate or discuss your speculations about context or what GAO was thinking when it rendered its decision. I will rely only on the language of the decision itself.

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Bravo, GSA-- making contracting great again! This officially makes up for the fallout from the GSA Hot Tub Man Scandal! It's a new year, with new beginnings.

Within FAR Part 15, GSA decided they did not want to conduct the source selection using LPTA...and then decided they did not want to conduct a tradeoff, either. 

A bright mind at GSA read and thought about FAR 15.100: "This subpart describes some of the acquisition processes and techniques that may be used to design competitive acquisition strategies suitable for the specific circumstances of the acquisition" (emphasis added).

 

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I wonder if there has to be some ceiling or cut off on awarding to the highest technically rated. What if the highest technically rated proposal far exceeds the government's bona fide needs? The solicitation would have to create some sort of boundaries that would pre vent this.  

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5 hours ago, Vern Edwards said:

In order to fully understand the importance of the decision, read Nash and Edwards, "Highest Technically Rated Offerors with Fair and Reasonable Pricing," The Nash & Cibinic Report, May 2016. If you want to read it and cannot get it, write to me through Wifcon and I will see that you get a copy. Read the entire Sevatec decision, not just an excerpt.

Vern, the decision states

Quote

Our Office has not previously considered the question of whether an agency may properly structure a solicitation using a “highest technically rated [ ] with a fair and reasonable price” evaluation scheme.

Are you buying that? Your article discusses a number of decisions where the GAO did consider that question and said that such a technique was not compliant with CICA. How is this decision consistent with those?

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It seems that at the end of the day, you cannot buy more than you need and/or at more than you can afford- regardless if it is has the highest technical rating and is offered at a fair and reasonable price.

Without the follow on task order competitions you have no way to control this.

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2 hours ago, Don Mansfield said:

Are you buying that? Your article discusses a number of decisions where the GAO did consider that question and said that such a technique was not compliant with CICA. How is this decision consistent with those?

Hi Don,

Yes, I buy it. I cannot find a case or a decision in which an agency has previously tried such an approach to source selection. GSA and the GAO did a good job of distinguishing highest technically rated with fair and reasonable price (HTRRP) from the other methods on which they have ruled.

The credit for that approach and for arguing persuasively at the GAO goes to Todd Richards, the OASIS Project Manager, and his team at GSA. They were participants in the December Nash & Cibinic Roundtable and were as impressive a group of young professionals as I have ever met, and Todd is an Air Force contracting alumnus. It took courage for them to try this and excellence in execution to make it work.

I just spent an hour discussing this with Ralph Nash, and we think the approach and the decision are positively revolutionary. They key now is for people at the working level to conduct source selection to understand the key features of the HTRRP method and the principles that underlie the decision. Then the innovators at various agencies need to go to work to develop acquisition-specific variations and refinements.

Vern

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This material from The Nash & Cibinic Report has been reproduced with the permission of the publisher, Thomson Reuters. Further use without the permission of the publisher is prohibited. For additional information or to subscribe, call 1-800-344-5009 or visit http://legalsolutions.thomsonreuters.com. The Nash & Cibinic Report is now available on Westlaw. Visit westlaw.com.

On January 11, 2017, the GAO published its decision in the matter of Sevatec, Inc.; InfoReliance Corporation; Enterprise Information Services, Inc.; Buchanan & Edwards, Inc., B-413559.3; B-413559.4; B-413559.6; B-413559.7, January 11, 2017. The attached article by Ralph Nash and Vern Edwards from the May 2016 issue of The Nash & Cibinic Report lays out the issues and the stakes. This is a decision of great potential significance, which offers ample opportunity for beneficial innovation in source selection. The article and the decision merit close attention by all professionals engaged in the conduct of source selections under the Competition in Contracting Act and FAR Part 15.

Vern Edwards will soon post a blog entry to explain the decision's significance and potential.

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I'm surprised that this was the first time these procedures were used (or used and challenged) because, from an academic standpoint, Lowest Price Technically Acceptable (LPTA) and Highest Rated Technical Offer (HRTO) are the two, opposite ends of the best value continuum with Tradeoff occupying the space in between.  Nevertheless, after looking through educational materials currently available from DAU and other department sources, I see why: the Source Selection process that we're teaching the contracting community doesn't discuss HRTO (though I've yet to look at the CLCs).  See for example:

https://dap.dau.mil/acquipedia/Lists/Acquipedia Article/Attachments/3384/Best Value Continuum and Source Selection - June 30 2015.pdf

https://dap.dau.mil/acquipedia/Pages/ArticleDetails.aspx?aid=5201f734-3bce-4c5f-a5a3-47551df77ea5

I think it would be valuable for the FAR Council to update FAR 15.101 "Best Value Continuum" which currently only contains sub-sections for the Tradeoff Process (15.101-1) and LPTA (15.101-2) with a HRTO section (presumably 15.101-3) so that protests/challenges to the approach are less likely and so that acquisition professionals are more aware of the approach's existence and permissibility.  Thoughts?

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44 minutes ago, Matthew Fleharty said:

Lowest Price Technically Acceptable (LPTA) and Highest Rated Technical Offer (HRTO) are the two, opposite ends of the best value continuum with Tradeoff occupying the space in between. 

Exactly!!!! Brilliant observation.

44 minutes ago, Matthew Fleharty said:

I think it would be valuable for the FAR Council to update FAR 15.101 "Best Value Continuum" which currently only contains sub-sections for the Tradeoff Process (15.101-1) and LPTA (15.101-2) with a HRTO section (presumably 15.101-3) so that protests/challenges to the approach are less likely and so that acquisition professionals are more aware of the approach's existence and permissibility.  Thoughts?

Disagree. Disagree with extreme prejudice! The FAR councils should leave well enough alone. We've got too much regulation as it is. Professionals should read the decision and think. There is much more to be done. What was the method described in the Alliant 2 solicitation? What are the underlying principles of the GAO's decision? What adaptations and variations of HRRP (Highest Rated with Realistic Price) are legally permissible and practically appropriate for different source selections? We need more thought and experimentation.

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56 minutes ago, Matthew Fleharty said:

I'm surprised that this was the first time these procedures were used (or used and challenged) because, from an academic standpoint, Lowest Price Technically Acceptable (LPTA) and Highest Rated Technical Offer (HRTO) are the two, opposite ends of the best value continuum with Tradeoff occupying the space in between. 

That's right, but based on prior GAO decisions, it seemed as though GAO would find that HRTO wouldn't be compliant with CICA. Now we know that's not what those decisions meant.

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30 minutes ago, Vern Edwards said:

There is much more to be done. What was the method described in the Alliant 2 solicitation? What are the underlying principles of the GAO's decision? What adaptations and variations of HRRP (Highest Rated with Realistic Price) are legally permissible and practically appropriate for different source selections? We need more thought and experimentation.

Let me add...can this be done IAW the Mandatory DoD Source Selection Procedures?

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Don:

I don't know. You're the DAU professor. What do you think?

Every CO is going to have to decide what he or she can or cannot do under their agency's regulations and policies. I'm not providing any kind of consulting service in that regard.

The GAO has opened the door to a new and, in my opinion, better way to conduct some kinds of source selections. It's up to the people at the working level to take advantage. Or not. If anyone works for an agency that has policies that prohibit the use of HRRP, and if they think that method would work to their agency's advantage, then they should take a page from the Alliant team's playbook and get those policies changed.

Vern

P.S. The name of GSA's procedure was not "highest rated technical offer" (HRTO). It was "highest technically rated [offerors] with a fair and reasonable price." The award was not based on the technical rating alone. Price was a consideration.

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Quote

can this be done IAW the Mandatory DoD Source Selection Procedures?

Don,

In my view, DoD must modify the procedures to conform to the Section 825 of the 2017 NDAA and to the GAO Sevatec decision. But, we have a new Prez and SecDef en route. At least the Prez elect thinks we are paying too much for DoD supplies and services. 

We will see what we will see.

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DOD's source selection procedures are what happens when regulation writers lose their minds. Instead of modifying the procedures, DOD should throw them out. That's why I told Matthew that we don't need the FAR councils to change FAR 15.101.

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Won't happen unless the new Prez slashes the DoD workforce including DPAP. Even then, the SS procedures will probably stay.

Apart from the change in administrations, it is my assessment that the majority of contracting offices are incapable of writing and applying procedures that are legal, effective and efficient.

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1 hour ago, Vern Edwards said:

Disagree. Disagree with extreme prejudice! The FAR councils should leave well enough alone. We've got too much regulation as it is. Professionals should read the decision and think. There is much more to be done. What was the method described in the Alliant 2 solicitation? What are the underlying principles of the GAO's decision? What adaptations and variations of HRRP (Highest Rated with Realistic Price) are legally permissible and practically appropriate for different source selections? We need more thought and experimentation.

Would you at least agree that some clarification of the Best Value Continuum is warranted (regardless of whether or not my proposed clarification was the right way to go about it or not)?

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14 minutes ago, Matthew Fleharty said:

Would you at least agree that some clarification of the Best Value Continuum is warranted (regardless of whether or not my proposed clarification was the right way to go about it or not)?

If by "some clarification" you mean something like an explanatory article for Contract Management, then my answer is yes. If you mean yet another official issuance, then my answer is no.

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