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Just for clarity's sake - CICA does not require price to be a significant factor, just a consideration (41 U.S. Code § 3306):

Quote

(c) Evaluation Factors.—

(1)In general.—In prescribing the evaluation factors to be included in each solicitation for competitive proposals, an executive agency shall—

(A) establish clearly the relative importance assigned to the evaluation factors and sub-factors, including the quality of the product or services to be provided (including technical capability, management capability, prior experience, and past performance of the offeror);

(B) include cost or price to the Federal Government as an evaluation factor that must be considered in the evaluation of proposals; and

(C) disclose to offerors whether all evaluation factors other than cost or price, when combined, are—

(i) significantly more important than cost or price;

(ii) approximately equal in importance to cost or price; or

(iii) significantly less important than cost or price.

Additionally, based on paragraph (c)(i), if other factors are significantly more important than cost or price, then wouldn't it follow that cost or price is not a significant factor in those circumstances?

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16 minutes ago, Matthew Fleharty said:

Additionally, based on paragraph (c)(i), if other factors are significantly more important than cost or price, then wouldn't it follow that cost or price is not a significant factor in those circumstances?

No. It's just that the other factors are more important. Relative importance and the significance of a factor are two independent concepts.

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25 minutes ago, Matthew Fleharty said:

Just for clarity's sake - CICA does not require price to be a significant factor, just a consideration (41 U.S. Code § 3306):

Correct. The notion that price be a "significant" factor is the GAO's historical interpretation of the statute.

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19 minutes ago, Gordon Shumway said:

No. It's just that the other factors are more important. Relative importance and the significance of a factor are two independent concepts.

I can agree with that as a permissible argument, but I don't think my previous argument is wholly without merit.  The definitions of significant (from The American Heritage Dictionary) are:

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1.
a. Having or expressing a meaning: Are the markings on the stone significant?
b. Having or expressing a covert or nonverbal meaning; suggestive: a significant glance.
2. Having or likely to have a major effect; important: a significant change in the tax laws.
3. Fairly large in amount or quantity: significant casualties; no significant opposition.
4. Statistics Of or relating to observations or occurrences that are too closely correlated to be attributed to chance and therefore indicate a systematic relationship.

For definition #2, could one fashion evaluation factors whose relative importance resulted in cost or price not "having or likely to have a major effect" on the selection decision?  For definition #3, I think "amount of quantity" could speak directly to the relative importance of the various evaluation factors.

I will grant, however, that I need to go do some more reading on the cases where the GAO used the "significant factor" rule to fully understand their position on the issue.

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20 hours ago, Matthew Fleharty said:

Just for clarity's sake - CICA does not require price to be a significant factor, just a consideration.

 

20 hours ago, Don Mansfield said:

Correct. The notion that price be a "significant" factor is the GAO's historical interpretation of the statute.

Wrong. You must interpret a statute as a whole and not seize upon isolated words and sentences. When read as a whole, 10 USC 2305 and 41 USC 3306 clearly indicate that price must be significant. You appear to have an unfortunate tendency, Matthew, to land on a single word and set up house.

First, significant means only that price must be important enough to make a difference. It would make no sense to say that price has to be a consideration and then conclude that it need not be significant.

Second, for an interpretation of CICA, see SERCO INC.; CGI Federal Inc.; STG, Inc.; Artel, Inc.; Advanced Technology Systems Inc.; Apptis Inc.; Nortel Government Solutions, Inc.; and The Centech Group, Inc. v. United States, 81 Fed. Cl. 463 (March 8, 2008) at 491:

Quote

Long ago, Congress rejected the notion of giving contracting officers the authority to ignore price considerations in negotiated procurements. See Schoenbrod v. United States, 187 Ct.Cl. 627, 410 F.2d 400, 402–03 (1969); see also Paul v. United States, 371 U.S. 245, 252–53, 83 S.Ct. 426, 9 L.Ed.2d 292 (1963). Any final question in this regard were put to rest by the Competition in Contracting Act of 1984, Pub.L. No. 98–369, 98 Stat. 1175, which unambiguously requires:

"In prescribing the evaluation factors to be included in each solicitation for competitive proposals, [the agency] ... shall include cost or price to the Federal Government as an evaluation factor that must be considered in the evaluation of proposals."

41 U.S.C. § 253a(c)(1)(B). The legislative history of CICA indicates that this provision, as well as others designed to promote competition, were designed not only to allow the Federal government to obtain the “best products,” but to do so at the “best prices”—to avoid paying “$436 for an ordinary claw hammer ... where it can be bought for $7.” H.R. Rep. 98–1157, at 18 (1984); see also S. Rep. 98–50, at 32 (1983) (noting that “price” should have a “significant bearing on the selection for award”). “Congress intended for competition to affect the amount of money that the Government pays for goods and services,” two well-known commentators have stated, and “any competitive process that does not require firms to compete on the basis of the amount of money that they want, and, in which differences in the amount of money sought cannot affect the outcome of the competition, is not consistent with that intention.” Vernon J. Edwards and Ralph C. Nash, “Price as a ‘Significant’ Evaluation Factor: Has the GAO Misinterpreted CICA?,” 20 No. 8 Nash & Cibinic Rep. ¶ 40 (hereinafter “Price as a Significant Evaluation Factor”).

Giving effect to the statute and its legislative history, the FAR ordains that “[p]rice or cost to the Government shall be evaluated in every source selection.” FAR § 15.304(c)(1); see also Northrup Grumman Info. Tech., Inc., 2005 C.P.D. ¶ 45, 2005 WL 735939, at *9 (2005). Following this lead, GAO has repeatedly held that price must be a “significan tevaluation factor;” that it must be given “meaningful consideration.” See, e.g., MIL Corp., 2005 C.P.D. ¶ 29, 2004 WL 3190217, at *7 (2004); Eurest Support Servs., 2003 C.P.D. ¶ 139, 2001 WL 34118414, at *6 (2001); RTF/TCI/EAI Joint Venture, 98–2 C.P.D. ¶ 162, 1998 WL 911892, at *8 (1998); H.J. Group Ventures, Inc., 92–1 C.P.D. ¶ 203, 1992 WL 48487, at *3 (1992); see also Price as a Significant Evaluation Factor, supra (surveying cases). It follows, a fortiori, that price can neither be a nominal evaluation factor nor relegated to the role of being a mere consideration in determining whether a proposal is eligible for award. See Lockheed Missiles & Space Co., Inc. v. Bentsen, 4 F.3d 955, 959–60 (Fed.Cir.1993); MIL Corp., 2004 WL 3190217, at *7; Electronic Design, Inc., 98–2 C.P.D. 69, 1998 WL 600991, at *5–6 (1998). These are not minor distinctions—an evaluation that fails to give price its due consideration is inconsistent with CICA and cannot serve as a reasonable basis for an award. See MIL Corp., 2004 WL 3190217, at *7; Boeing, Sikorsky Aircraft Support, 97–2 C.P.D. ¶ 91, 1997 WL 611539, at * 10 (1997). 

Edited by Vern Edwards
To remove unjust criticism.

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2 minutes ago, Matthew Fleharty said:

For definition #3, I think "amount of quantity" could speak directly to the relative importance of the various evaluation factors.

You might want to walk that one back a bit.

3 minutes ago, Matthew Fleharty said:

For definition #2, could one fashion evaluation factors whose relative importance resulted in cost or price not "having or likely to have a major effect" on the selection decision?

Itt sounds like you're sliding back into a tradeoff mentality. Also, this one hypothetical example you switched to is significantly different from your earlier point:

56 minutes ago, Matthew Fleharty said:

if other factors are significantly more important than cost or price, then wouldn't it follow that cost or price is not a significant factor in those circumstances?

 

5 minutes ago, Vern Edwards said:

Now all can see why innovation is so hard.

 

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How Things Can Remain the Same

Inaction. Stagnation. When you discover a "green light" or opening for a new, efficient, common-sense form of contracting, think of reasons not to use it, especially in the mindset of the traditional methods not in question. Use your creative powers to get to "No!"

How Things Can Change

Upon discovering a "green light" or opening for a new, efficient, common-sense form of contracting, think of ways to repeat, extend, and spread its use:

On 1/13/2017 at 0:43 PM, Vern Edwards said:

am thinking about an adaptation that I call “best qualified offeror with a fair and reasonable price.” This would be a form of qualifications-based selection, but with consideration of price as required by CICA and FAR 15.304(c)(1).

Field implementation: Sell your new methods to your Federal leadership, with an emphasis on resources and time saved, and risks avoided:

11 hours ago, Gordon Shumway said:

clearly articulate a business case to those who hold the decision making authority within a contracting shop. Going to battle against those who default to "we've always done it this way (tradeoff/LPTA)" will be one of the biggest challenges to advancing this new approach.

Professional reinforcement: Write and publish articles about the new methods, advocate their benefits, and socialize the new methods so the contracting profession no longer considers it "controversial" or "new." Get the ideas in the right frogs' heads. Did anyone notice that the article Vern Edwards wrote in the Nash & Cibinic Report (about price) was quoted by a Federal judge in the SERCO decision? That wasn't the first time, nor will it be the last time.

Proselytizing and advocacy: After the ideas are in the right frogs' heads, these frogs will start talking about it at NCMA, NDIA, and other organizations. Nobody wants to be "behind the times."

Legal and policy entrenchment: GAO and Federal courts will test and hopefully uphold the new methods. Eventually, your Federal attorneys will roll over and realize it's here to stay. The policy wonks will either stop fighting it, or maybe formally recognize it in guidance memos or other policy. Vern is totally against a FAR revision, but as a reality, not an ideal, that's not out of the question later on. Eventually, Congress might meddle and try to take credit for the new methods, but will at least provide rock-solid statutory protection, albeit unnecessary. 

Eventually, the new method will be routine (in appropriate source selections), and you will be embarrassed if you have not heard about it.

 

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17 minutes ago, PepeTheFrog said:

Professional reinforcement: Write and publish articles about the new methods, advocate their benefits, and socialize the new methods so the contracting profession no longer considers it "controversial" or "new." Get the ideas in the right frogs' heads.

YES!

We have enough staffers and lawyers telling us that we can't do this or that. It distresses me when first rate field people and professors spend their time nitpicking commentary instead of coming up with and promoting adaptations and improvisations.

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Appreciate the feedback and the references Vern.  I don't intend to parse words here or inhibit the usage of the HTRFRP process, I'm quite excited by its prospects; however, I'm curious: should some consideration be given to the fact that those prior decisions were made in an environment where the Best Value Continuum was thought to consist of LPTA through Tradeoff? I think so, which is why I'm trying to understand the potential difference (if any) between something being a "significant factor" and something being "meaningfully considered."

I'm not trying to hit the brakes here and not embrace HTRFRP or other acquisition improvements...but I know others will so I'd like to discuss the issues surrounding developments like these as much as possible so I'm prepared with credible arguments to move us forward.  Apologies in advance if my relative youth or lack of experience is inhibiting the process.

EDIT (adding context):  I think I'm getting hung up by the following two paragraphs from the Sevatec decision (emphasis added):

Quote

Based on the facts before us, we find nothing improper about the agency’s price evaluation. As explained by the agency, this procurement does not involve a tradeoff and the agency’s price evaluation will consist of determining the fairness and reasonableness of multiple aspects of the highest rated offerors’ proposed rates. Those decisions cited by the protesters where our Office has found that considering only the reasonableness of an offeror’s price proposal is an insufficient consideration of price, involved post-award protests under solicitations that used tradeoff source selection processes, not present here.10 See e.g. Kathpal Techs., Inc.; Computer & Hi-Tech Mgmt., Inc., supra.

In a tradeoff source selection process, the agency cannot so minimize the impact of price as to make it merely a “nominal evaluation factor” because the essence of the tradeoff process is an evaluation of price in relation to the perceived benefits of an offeror’s proposal. FAR § 15.101-1(c). The solicitation here expressly states that there will be no tradeoffs in the source selection. RFP at 250. Source selection will be made based solely on a “highest technically rated [ ] with a fair and reasonable price” evaluation scheme, with no comparison of an offeror’s price relative to the benefits of the proposal. Id. The relatively low importance of price in an evaluation scheme that does not contemplate tradeoffs, as is the case here, is unobjectionable.

 

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2 hours ago, PepeTheFrog said:

You might want to walk that one back a bit.

Why?  In a point scoring system where the amounts are transparent (assuming that is the technique used), wouldn't the difference/significance be readily apparent?

I'd like to hear your thoughts on the issue, but humans can't read frogs' minds so I'll need your assistance to understand your point.

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"Significant,""meaningful," and "substantial" all mean the same to me, and the meaning is not complex. They mean that proposed prices must be evaluated in a way that makes offerors think that they will increase their chances of winning by sharpening their pencils and by not charging "too much."

Whatever method of price evaluation an agency chooses must do two things: (1) conform to the terms of the solicitation and (2) convince offerors that they must sharpen their pencils so as to not ask for what the buyer will think is "too much." In a negotiated procurement that does not mean lowest price or lowest evaluated price, but a price that a reasonable buyer would think is fair for what is being offered.

Price cannot be evaluated in a way that will not affect offeror thinking and proposal preparation. Any such method would be price evaluation in name only. That is, it would make price a nominal consideration.

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28 minutes ago, Matthew Fleharty said:

Why?  In a point scoring system where the amounts are transparent (assuming that is the technique used), wouldn't the difference/significance be readily apparent?

The point scoring system was applied to the technical ratings, not price. Dissecting the differences in the allotted amounts wont help you address your concerns about the 'significance' of price.

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23 minutes ago, Vern Edwards said:

Price cannot be evaluated in a way that will not affect offeror thinking and proposal preparation. Any such method would be price evaluation in name only. That is, it would make price a nominal consideration.

Winner winner chicken dinner!

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2 hours ago, Matthew Fleharty said:

For definition #3, I think "amount of quantity" could speak directly to the relative importance of the various evaluation factors.

 

29 minutes ago, Matthew Fleharty said:
2 hours ago, PepeTheFrog said:

You might want to walk that one back a bit.

Why?  In a point scoring system where the amounts are transparent (assuming that is the technique used), wouldn't the difference/significance be readily apparent?

First, the reason PepeTheFrog said to walk it back a bit is because you relied on "Fairly large in amount or quantity" as the contextual definition of "significant," after you already identified "Having or likely to have a major effect; important" as the appropriate choice. Why consider the numerical meaning of "significant" in this context?

Second, why consider the numerical meaning when you're discussing the relative importance of evaluation factors?

Third, you didn't say anything about a "point scoring system where the amounts are transparent" in your earlier statement. This assumption appeared later. This is called "moving the goalposts." Make an assertion. Once refuted, reform your assertion and act as if the refutation was therefore invalid. In a posh accent (Upper Received Pronunciation), "Bad show, old boy!"

There is another Wifcon poster who was rightfully spanked (several times) for doing that repeatedly, and PepeTheFrog does not want you to follow suit. It irritates old frogs.

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4 hours ago, Vern Edwards said:

Now all can see why innovation is so hard. Here we have two of the smartest people on the board, Matthew and Don, wasting their time trying to do... what, exactly? Here we have an important and useful development, and the two of them devote their energies to sniping. They are are both wasting your time with such posts, but if that's their idea of having fun and making a contribution, so be it. If you want to quibble with Serco, please call Judge Allegra.

Vern,

Check your blog entry titled "Innovation: How Not To Go Down In Flames". Specifically,

Quote

In my experience, many, maybe most, working level proposals for innovation fail, because the initiators didn’t know what they were in for, didn’t understand the need for intelligence and tactical planning, and made a poor presentation. They wanted to beneficially change their agency’s behavior, but they didn’t know how to go about it in the right way. 

Anyone attempting to try this new approach needs to have answers to the types of questions that Matthew is asking--they need to know what they are in for. Your accusations of sniping and wasting people's time are unwarranted. 

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5 hours ago, Matthew Fleharty said:

Additionally, based on paragraph (c)(i), if other factors are significantly more important than cost or price, then wouldn't it follow that cost or price is not a significant factor in those circumstances?

For clarity -- All evaluation factors other than cost or price, when combined, are (significantly more important than; approximately equal in importance to; or significantly less important than) cost or price.

Personally, I think price could still be significant in your scenario. (Just not significantly more important than the other factors combined)

I think you raise valid questions those in the field are likely to face.

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15 hours ago, Don Mansfield said:

Anyone attempting to try this new approach needs to have answers to the types of questions that Matthew is asking--they need to know what they are in for. Your accusations of sniping and wasting people's time are unwarranted.

Don;

What do I gotta do? What DO I gotta do?

First, what everyone should know is that I spent an hour on the phone this afternoon with you and another hour with Matthew and we've discussed the questions that you both have asked. I think Matthew is satisfied. I don't know about you.

Second, I have already explained the meaning of "significant factor" in this thread. Moreover, I arranged for Bob to provide a link to the article that Nash and I wrote and that the GAO consulted, and there is the article that we wrote cited in Serco. What more can I do? Did you read what we've written? Where and how does it fall short? The GAO understood us. Judge Allegra understood us. Pepe understands. Gordon Shumway understands.

Third, the GAO decision strikes me as pretty clear, and I simply cannot understand the difficulty that you're having in understanding how the GSA's procedure made price a significant factor.

I don't think it's too much for me to ask that people go off somewhere by themselves and do some thinking.

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Don:

I have edited two posts to remove my unjust criticisms of you and Matthew. They were the product of frustration. Sorry.

Now, have you thought up any procedural adaptations that people might use? Do you have any critique of the one that I suggested?

 

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For those of you who have not seen the Alliant 2 solicitation, the contracting officer is John Cavadias of GSA, formerly of the Marine Corps. In developing the RFP John tailored the approach developed by Todd Richards, who conducted the OASIS GWAC acquisition discussed in the Court of Federal Claims decision in Octo Consulting Group, Inc., 117 Fed. Cl. 334 (2014), the case discussed in the article written by Prof. Nash and myself to which Bob provided a link early in this thread.

Both Todd and John had to battle skeptics in their agency in order to try something new. We owe them a debt of gratitude for their persistence. They have shown the kind of professional creative drive that we need more of. Much more. And they have given us something new using a tool already at our disposal, FAR 15.101, and without writing regulations and policy letters.

If you have followed this thread you have seen how hard it is to overcome embedded thinking and how persistent skepticism and the tendency to find restrictions in regulations and case law can be both frustrating and discouraging.

By the way, for the curious, the Alliant 2 solicitation is still available online. For potential innovators, Sections L and M are worthy of close study.

https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=a5b0c3c435e4a0450b9f169a2be362f2&_cview=1

Better hurry. I don't know how much longer it will be there.

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Thanks, Vern. 

I haven't thought up any adaptations of my own. As far as the one you suggested, I don't see how the GAO could find fault in it and stay consistent with Sevatec.

15 minutes ago, Vern Edwards said:

If you have followed this thread you have seen how hard it is to overcome embedded thinking and how persistent skepticism and the tendency to find restrictions in regulations and case law can be both frustrating and discouraging.

I've re-read the thread and I haven't found a single post saying that your proposed adaptation is prohibited by statute or regulation, makes bad business sense, or is otherwise improper. When you proposed your adaptation, you wrote:

Quote

We want adequate price competition so we won’t have to require submission of certified cost or pricing data.

Both Matthew and FrankJon gave you feedback on your assumption that adequate price competition could exist in your scenario, but not whether your proposed technique could be used. 

I understand that you are excited by this and want to spread the word, but you are overstating the amount of resistance you are getting in this thread.

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47 minutes ago, Don Mansfield said:

I understand that you are excited by this and want to spread the word, but you are overstating the amount of resistance you are getting in this thread.

No, I'm not. Measures of intellectual resistance are subjective. One type of resistance is the inability to stay on point. Another type is questioning a decision before reading and thinking deeply.

Some of the discussion here has been along the lines of

Salviati: "Do you think that's a beautiful mule?"

Simplicio: "Which is a mule's mother, the donkey or the horse? Or can it be either? Is a donkey the same as a burro?"

But thanks, Don, for your concern for my sanity.

Vern

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I have read the discussion and beyond regarding the subject of this thread only wish that I was still in a CO chair to give this idea and its proposed variant  Vern Edwards has mentioned in this discussion a try.   The full dialog that occurred was very helpful in helping how one would approach in using.  Very valuable to the counsel I have the occasional opportunity to provide to those that do sit in a CO chair today.

In my career I handled procurements that bordered or eclipsed the $50 million mark but by and large they were much smaller and from my view the application of the approach (and as tweaked) have great opportunity for even the smaller procurement.  It may be karma but when a post appeared on this thread today -  http://www.wifcon.com/discussion/index.php?/topic/3529-spspd2/&page=2 – I thought to myself finally the missing link has been found to the idea I posted back in June of 2016.  I do not claim ownership to the idea as it has been discussed by many but now there is a way to actually make it work!

A perfect way to start 2017…………………………………

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I heard from shall7 privately this morning and congratulate him for doing the hard work of writing an article and getting it published in a prestigious magazine. I look forward to reading his piece.

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