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Duty to notify agency of unavailability of proposed Key Personnel?

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3 hours ago, Vern Edwards said:

What do you mean by "proposal/offer"? Did the offeror promise to provide Mercedes, clearly and unequivocally?

The solicitation stated that a proposal/ offer consisted of, inter alia, prices and an identification/ description of the vehicles to be used to meet the requirements set forth in the Section C/ SOW. The solicitation includes the SF 1449 which the contractor signed and which the contracting officer will sign to create a contract after signing in block 31a and after checking block 29 and entering info relevant to the proposal/ offer. 

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2 hours ago, ji20874 said:

My practice:  Whenever I conduct a trade-off, and the winner is selected because of some feature or aspect of its offer or proposal (yes, these are different), I want to incorporate that feature or aspect into the resulting contract. 

How do you incorporate it into the contract?

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I usually include text in my solicitation Section L that any aspect or feature of the offeror's proposal may be incorporated into any resulting contract.

You write contract text saying that the particular aspect or feature is incorporated into the contract.  Using your example, where the requirement was for an automobile that goes at least 65mph and has trunk capacity of at least 1 cubic yard and seats five comfortably and so forth, and the best value offer was a Mercedes Model Z, you include text that the contractor will provide a Mercedes Model Z.  If the reason for the selection was an offeror's superior approach to nickel-cadmium plating using a specific subcontractor, you include text that the contractor's approach to nickel-cadmium plating using that named subcontractor, as described in pages 14-16 of its technical proposal, is incorporated into the contract.  NOTE:  This is not incorporating the entirety of the offeror's technical proposal into the contract -- generally, I do not like doing that -- and this is not incorporating pages 14-16, either.  Anyway, I might also include a statement that this incorporation of the feature or aspect of the proposal into the contract does not waive, relax, or alter any other requirement of the contract -- the Mercedes Model Z still has to meet all of the performance requirements and/or design criteria in the statement of work (the contractor offered the Model Z to meet exactly those requirements).

Normally, I would call this contract text a clause -- but there is some sensitivity in this forum about contracting officers and home-made clauses, so I haven't used the term.  But I am all in favor of home-made clauses when appropriate -- I think drafting clauses for use in contracts is a crucial skill for contracting officers to have -- a contracting officer who cannot do it is to worth his or her pay.  Agency and local rules that prohibit contracting officers from writing home-made clauses are stupid rules.  NOTE:  I am talking about clauses drafted by the contracting officer that are not deviations -- also I am not talking about clauses promulgated by the agency head.

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3 hours ago, ji20874 said:

I usually include text in my solicitation Section L that any aspect or feature of the offeror's proposal may be incorporated into any resulting contract.

So, after source selection, you draft, and both parties sign, a contract containing a clause with the pertinent Section L material. Correct?

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The Section L blurb is already in the solicitation, saying that any aspect or feature of the proposal may be incorporated into the resulting contract:

  • L-6. Incorporation into Contract
    The Government may incorporate any aspect or feature of the offeror's proposal into the resulting contract.

Then, in the awarded contract, you include text such as in Section H (Special Contract Requirements):

  • H-19. Incorporation into Contract
    The automobile provided by the contractor shall be a Mercedes Model Z.  This requirement does not waive, relax, or alter any other requirement of this contract.

or

  • H-19. Incorporation into Contract
    The Contractor shall use the approach to nickel-cadmium plating with Acme Platers described on pages 14-16 of the offeror's proposal.  This requirement does not waive, relax, or alter any other requirement of this contract.

These are simplified examples.  In real life, there would be a few more words.

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8 hours ago, ji20874 said:

Then, in the awarded contract, you include text such as in Section H (Special Contract Requirements):

Do you do this unilaterally by accepting the contractor's offer or bilaterally by drafting a new contract for signature by both parties?

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Bilateral:  by including the new text in Section H proper.

Unilateral:  by including the new text in the award document.

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48 minutes ago, ji20874 said:

Unilateral:  by including the new text in the award document.

How do you add new text unilaterally?

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On 10/17/2017 at 2:51 PM, govt2310 said:

I remember seeing somewhere, maybe in a GAO decision now lost, that the FAR requires an offeror to notify the agency of the unavailability of a proposed key personnel, even after submission of proposals.  But I can't find this in the FAR (I was mainly looking through FAR Part 15 and FAR 52.215-___).  Can anyone tell me where it says this in the FAR?

As ji20874 pointed out, there is nothing in the FAR about this. (Maybe in an agency supplement--I did not check.)

Here is the "rule" as stated by the GAO earlier this year in General Revenue Corp., B-414220.2, 2017 CPD ¶ 106:

Quote

Our Office has explained that offerors are obligated to advise agencies of changes in proposed staffing and resources, even after submission of proposals. Pioneering Evolution, LLC, B–412016, B–412016.2, Dec. 8, 2015, 2015 CPD ¶385 at 9; Greenleaf Constr. Co., Inc., B–293105.18, B–293105.19, Jan. 17, 2006, 2006 CPD ¶19 at 10; Dual, Inc., B–280719, Nov. 12, 1998, 98–2 CPD ¶133 at 3–6. When the agency is notified of the withdrawal of a key person, it has two options: either evaluate the proposal as submitted, where the proposal would be rejected as technically unacceptable for failing to meet a material requirement, or open discussions to permit the offeror to amend its proposal. Pioneering Enters., LLC, supra.

Note that the GAO's rule does not take into consideration whether the names of key personnel are part of an offer (promise) that will become binding upon acceptance or just information for evaluation. There is no consideration of why or how the agency is going to evaluate key personnel, whether on a pass/fail or variable value basis. There is no consideration of whether the names of key personnel will be included in the resultant contract and whether there will be a key personnel clause providing for substitutions during performance with CO approval. The GAO looks at the matter strictly from the standpoint of fairness in proposal evaluation.

The simple facts of biology (illness, injury, incapacitation due to various causes, and death) and the realities of business life (people quit or must be fired) make it hard or unreasonable to require contractors to employ and use specific persons throughout contract performance. A substitution process is essential. The GAO's rule is unfair, because it requires offerors to tell agencies when a substitution must be made, but does not guarantee them a process of substitution. 

In the protest, the agency issued the RFP in December 2015. It announced awards a year later, in December 2016. A year is a long time. It's not surprising that some key personnel might move on in that period. So what if an offeror identified someone as a key person and then, after the proposal submission, that person moved on? According to the GAO, the offeror would have to notify the CO. However, for the CO to entertain any revision, even the notice that a key person's name has to be removed because the person has become unavailable, would constitute discussions. For an offeror to notify the CO that a key person was no longer available, even if it had not promised that particular person, even though it would have to opportunity to make a substitution if the change had happened after award, would expose it to the risk that the CO would refuse to conduct discussions in order to allow it to submit a substitute. Absurd.

I don't know whether this is a significant problem, but it has been a problem of sorts in some cases. So what's the solution?

In light of the GAO's "rule," I propose that agencies include language such as the following in RFP Section L when they intend to require offerors to identify key personnel as merely indicative of offeror qualifications, but do not intend to require them to promise to employ those persons during contract performance:

SUBSTITUTION OF PROPOSED KEY PERSONNEL

(a) If, after submission of proposals, but before contract award, an offeror learns that any of its proposed key personnel are no longer available for contract performance, the contracting officer will permit the offeror to substitute another person, provided, however, that: (1) the Government finds that the person proposed would have been acceptable in accordance with the evaluation factors and (2) the person proposed is no longer available to the offeror for contract performance.

(b) Depending on the substitute’s resume, he or she will receive either the same evaluation as the person proposed or a lower evaluation, as appropriate in accordance with the evaluation factors for award. However, under no circumstances will the substitute receive a better evaluation than the person proposed. An offeror will not be permitted to improve the evaluation of its proposal through key personnel substitution.

(c) An offeror seeking to make such a substitution before award must notify the contracting officer in writing by submitting the substitute’s resume in accordance with Section L of this solicitation.

(d) Substitutions made before contract award shall not be considered proposal revisions. Approval of any such substitution by the Government shall not constitute discussions as described in FAR 15.306(d) and FAR 52.215-1(a) and shall not require the Contracting Officer to make a competitive range determination. Such substitutions shall not be considered late proposal submissions, as described in FAR 52.215-1(c). After contract award, key personnel substitutions shall be processed in accordance with the contract Key Personnel clause.

Would that be a FAR deviation? Some will think so. I will not debate it. If you think so, then don't use it, or seek approval for a FAR deviation. Innovators should do as they think best.

There is another possibility. If the successful offeror must make a substitution before award, and if the proposed substitute is better than the one originally proposed, a CO might allow a late proposal modification in accordance with FAR 15.208(b)(2) and 52.215-1(c)(3)(ii)(B).

Quote

However, a late modification of an otherwise successful proposal, that makes its terms more favorable to the Government, will be considered at any time it is received and may be accepted.

Note that, as I posted previously, if proposed key personnel are part of an offer (promise), then an offeror must notify the CO and withdraw the offer in order to avoid the possibility of breach of contract.

Those of you who believe in the Section 809 Panel might tell suggest to them that the current procedures in FAR 15.306, which are largely the product of GAO case law, are simply too stupid to keep in the regulation.

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Vern, I would appreciate your views on whether the GAO rule, as you describe it, is something that is within the protest jurisdiction of the GAO.  31 U.S.C. 3554(b) says " With respect to a solicitation for a contract, or a proposed award or the award of a contract, protested under this subchapter, the Comptroller General may determine whether the solicitation, proposed award, or award complies with statute and regulation. If the Comptroller General determines that the solicitation, proposed award, or award does not comply with a statute or regulation, the Comptroller General shall recommend that the" agency take one or more of the actions listed in the statute.  Thus, the basis for sustaining a protest is that government action did not comply with law or regulation.  The GAO rule is predicated on contractor action, but does not mention any law or regulation that requires the contractor to do what the GAO thinks should be done.

Moreover, the GAO rule is establishing a procurement rule that is within the power of the FAR Councils to write.  I see nothing that gives the GAO the power to establish procurement rules that contractors must follow.

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I think that GAO is engaging in rulemaking in this case in the guise of deciding protests.

I agree that GAO is imposing a duty on offerors that is not imposed by statute or regulation (as far as I know) by requiring that offerors disclose post-submission changes in the status of persons and other resources described in a proposal. Moreover, ironically, a CO should ignore such a disclosure, since it would constitute a proposal revision, and acceptance of that revision would constitute discussions. I also agree that GAO has no business sustaining a protest because of an omission by an offeror, rather than an act or omission by an agency. 

I won't say whether I think that GAO has jurisdiction, because GAO determines its own jurisdiction, and since GAO is not part of the court system agencies cannot appeal to a court if it thinks GAO exceeded its authority by going beyond its jurisdiction. (At least, I don't think they can appeal to a court.) What agencies can do is tell GAO that they won't follow GAO's recommendations. If GAO recommends that an agency make a new award decision based on an omission by the successful offeror, and if the agency decides to comply with the GAO's recommendation, the successful offeror could protest the agency's decision at the Court of Federal Claims.

And this is where proposal information vs. offer comes in.

If an agency wants information about "proposed" key personnel, they should be clear about why they want it. If they want information about an offeror's personnel as merely indicative of the kinds of persons that the offeror would employ, but not as a promise that particular individuals will perform, then they should make that clear. On the other hand, if they want to bind the successful offeror to ensuring the performance of specific individuals, then they should make that clear by demanding promises about key personnel and writing the resultant contract accordingly. (I don't think that would be wise in most cases, but that's a topic for another thread.)

If an RFP requires information about key personnel as merely indicative of the kinds of persons that offerors would employ, but not as promises about the performance of particular persons, then the agency should evaluate key personnel accordingly, without counting on getting particular persons. If the successful offeror failed to notify the CO of a change in the status of its personnel, then the agency's award decision should stand. Agencies should know that the status of people and resources often change within companies in the course of a lengthy source selection. In such a case the unavailability of a particular individual need not change the judgment about the kinds of persons the offeror would employ.

But if the RFP required an offer, a promise, about the performance of particular persons, and if an offeror learns after submission that it can no longer keep its promise in that regard, then the offeror must notify the agency and may have to withdraw its proposal. If (a) the successful offeror did not notify the agency or withdraw, and if (b) the agency relied on the offeror's promise of particular key personnel in evaluating and choosing that offeror for award, and if (c) the agency unknowingly accepted a nonconforming offer, then the contractor is in breach, and the award should not stand. The agency should T for D and make a new award decision.

The key to all this, in my opinion, is for "contracting" officers to think in terms of the law of contract formation (offer and acceptance) and think clearly about proposal information vs. offers.

By the way, if you, as an offeror, learn that a "proposed" key person is no longer available, notify the CO by sending the resume of the substitute and let it go at that. If the CO acknowledges the notification that revises the proposal to remove the person who is no longer available, you can argue that the CO has engaged in discussions and must consider the substitute. If the CO refuses to consider the substitute, and if the procurement is worth the cost, protest--not to the GAO, but to the Court of Federal Claims, where I speculate you'd have a real chance to win.

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napolik,

I have done it by including a statement in the award document that I sign.  For example, an awarded contract might contain (a) the acceptance -- a few pages with the contracting officer's signature on the contract SF-1447; and (b) the offer -- the underlying solicitation A-J with the offeror's signature on the solicitation SF-1447 and fill-ins in Sec. B.  The acceptance (a) and the offer (b) combine to form the contract.  The incorporation statement goes in (a).

 

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