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Do you agree with this AAP advice? Assume that it is being conducted pursuant to FAR 14.5 "Two-Step Sealed Bidding" Procedures.

QUESTION:

"What is the process for going from a competitive requirement (three vendors) to a sole source requirement (one vendor remaining)?

Posted to Contracting on 10/23/2009 12:00:00 AM

The Scenario?

We are in the middle of a 2-Step Acquisition process. Step I, vendors provided bid samples for evaluation and testing. If vendors pass Step I they will proceed to Step II where an IFB is issued only to those vendors who particiapted and passed Step I. Only two vendors are in Step I, one of the vendors failed the testing and therefore will not proceed to Step II.

The Question?

Based upon the above information, do we continue with the process and issue the IFB to the remaining vendor? Or, do switch from this competitive requirement and award as a sole source to the remaining vendor?"

ANSWER:

"For clarification purposes -- your Subject line mentions three vendors while the Background information states that only two vendors participated in Step 1 of the bidding process. It doesn't really matter for purposes of this response, but I wanted to point that out in case there was some other issue you meant to pass along.

Now to the main issue: The competitive process depends not only on actual competition (i.e., two or more offerors actually offering on a requirement), but also on apparent competition. For example, FAR 15.403-1©(1)(ii) states that there is adequate price competition if there ...was a reasonable expectation, based on market research or other assessment, that two or more responsible offerors, competing independently, would submit priced offers in response to the solicitation's expressed requirement, even though only one offer is received from a responsible offeror... Although that is from FAR Part 15 rather than Part 14, it is still relevant to this discussion.

In addition, the FAR 6.301 policy on full and open competition revolves around whether the contracting officer provides for full and open competition. In your situation, there is no indication that full and open competition was not provided for. Thus, it remains a competitive requirement. As long as your procurement met the conditions required for use of two-step sealed bidding at FAR 14.502 (also see FAR 6.102(:lol:), you should be able to issue the IFB to the remaining vendor without treating it as a sole source procurement."

Do you think that the advice to continue with an "IFB" conforms to FAR 14.5 or to common sense?

See 14.503 (f) (1) "The contracting officer may proceed directly with step two if there are sufficient acceptable proposals to ensure adequate price competition under step two, and if further time, effort and delay to make additional proposals acceptable and thereby increase competition would not be in the Government?s interest. If this is not the case, the contracting officer shall request bidders whose proposals may be made acceptable to submit additional clarifying or supplementing information. The contracting office shall identify the nature of the deficiencies in the proposal or the nature of the additional information required. The contracting officer may also arrange discussions for this purpose. No proposal shall be discussed with any offeror other than the submitter."

See also 14.503 (i) "If it is necessary to discontinue two-step sealed bidding, the contracting officer shall include a statement of the facts and circumstances in the contract file. Each offeror shall be notified in writing. When step one results in no acceptable technical proposal or only one acceptable technical proposal, the acquisition may be continued by negotiation. "

I don't necessarily disagree with the advice to continue the acquisition but why would one continue with an "IFB", considering the above procedures called out in 14.503?

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