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1 hour ago, joel hoffman said:

Jamaal, just to clarify, the LPTA method is outlined in 10 USC 2305 (a)(4)(B). There is no relative importance of factors assigned in this method. It is described in FAR 15.101-2

The  relative importance of factors including price and non-priced is required for the Trade-off process. See 15.101-1 for that specific requirement. 

Joel:

Do you read your citations as exceptions to 10 U.S.C. 2305(a)(2), FAR 15.203, 15.304, etc.?

Logically, we weigh the relative importance when using the tradeoff process … in LPTA there aren't any significant differentiators in technical so price is the final discriminator ceteris paribus. However, LPTA factors are of equal weight when combined - this does not mean that individual factors or subfactors are equal. (See Chenega Federal Systems, LLC., B-414478, June 26, 2017)

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2 hours ago, Jamaal Valentine said:

Joel:

Do you read your citations as exceptions to 10 U.S.C. 2305(a)(2), FAR 15.203, 15.304, etc.

Logically, we weigh the relative importance when using the tradeoff process … in LPTA there aren't any significant differentiators in technical so price is the final discriminator ceteris paribus. However, LPTA factors are of equal weight when combined - this does not mean that individual factors or subfactors are equal. (See Chenega Federal Systems, LLC., B-414478, June 26, 2017)

Jamaal,, if every non-price factor in an LPTA acquisition must be rated “acceptable” for a technically acceptable rating,  then each technical factor is equally important.  Yes, indeed - see Chenega Federal Systems LLC. 

They are not individually “weighted”. By weighted, I mean either numerically or percentage weighted or differentiated using statements of relative importance. 

Where does Far 15.101-2 discuss any comparison between factors.? 

Yes, I think that the LPTA acquisition method is an exception to the statutory rule that if not otherwise stated, the relative importance between cost and other than cost factors when combined are equal. That is under FAR 15.101-1 for  trade-off competitions.  

FAR 15.101-2 says, instead, that “Solicitations shall specify that award will be made on the basis of the lowest evaluated price of proposals meeting or exceeding the acceptability standards for non-cost factors.”

It is not possible for technical acceptability to be equally important as price in a competitive selection of the successful proposer with LPTA, when more than proposer is rated technically acceptable (or exceeding acceptable standards) .  The discriminator for selection between technically acceptable offers is price . I don’t know how to make it any clearer than that. 

Lowest evaluated price wins. Industry knows it. Again, read Chenega, for example.  

Actually, I suppose they can only be equal if all technically acceptable propiosals are equally priced. Then, I don’t know what would be the final discriminator.  Even when we provided a ceiling price in construction or design-build construction competitions when using LPTA, the competitors would usually propose some number that was lower or nominally lower than the ceiling price.

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Guest Vern Edwards
12 hours ago, Retreadfed said:

If that is what a fair and reasonable price is, what is all this arguing about?  It seems as if folks here are looking for a "magic formula" to tell them what price is fair and reasonable., i.e., what they would be willing and able to pay for what they are buying.  Also, nobody other than Vern has defined what it is that they are talking about.  Is there a common understanding of what this term means in the FAR or are folks here making up their own definition as they go along without sharing that information?

Above all, the question of the "fairness and reasonableness" of prices is about whether the price is too high for the taxpayers to pay. The earliest official use of the phrase "fair and reasonable price" that I have been able to find through quick research is in a decision of the U.S. Court of Claims, Parish v. U.S., 1 Ct. Cl. 57, Oct. 1, 1865, concerning the price paid for cavalry horses. I quote the entire decision here for your amusement:

Quote

Mr. A. L. MERRIMAN for claimant.

Mr. J. J. WEED, Assistant Solicitor, for the government.

Opinion

PECK, J., delivered the opinion of the Court.

The petitioner represents that in the month of September, 1861, he received an order from one McKinstry, chief quartermaster at the city of St. Louis, in the State of Missouri, as follows: “You are authorized to purchase for a regiment of cavalry, to be called the McKinstry Guard, to be raised in Central Illinois, eleven hundred and fifty-eight horses, at prices not to exceed $110 each. They must be rigidly inspected by a board appointed by the colonel of the regiment previous to being received. To be delivered at Peoria, Illinois.”

That he purchased the horses at the price named, and they were delivered to and accepted by the proper officers, for which he received from the quartermaster of the regiment vouchers amounting in all to the sum of $127,380. That these vouchers were afterwards submitted to a commission held at St. Louis, appointed by the then commander of that military district, and presided over by the then Captain (now Major General) Philip Sheridan, which commission approved the vouchers, as did also the chief quartermaster of the military department at the time, who was General R. Allen.

The prices charged for the horses, it is alleged, were reasonable, and were not above their general market value. These vouchers were transferred by petitioner to Messrs. Sturgis & Son, of Chicago, for collection, who presented them for payment at the office of the Quartermaster General, at Washington, and received thereon $105 per horse, making the sum of $121,590. That a deduction was made from the face of the vouchers without any just cause, pretence of fraud, or authority. By reason of which, petitioner claims that he has a right to recover the sum of $5,790, the amount deducted and withheld.

The allegations of the petition are sustained by the evidence. The case, as presented, shows that the horses were purchased and accepted by the government. It is also shown that they were equal to the required standard.

On the 13th of March, 1862, the Quartermaster General (M. C. Meigs) addressed the following letter to the Third Auditor: “The account of Joseph W. Parish (five enclosures) for 1,158 horses furnished the McKinstry Guard, and amounting to $114,180, having been examined and recommended for payment by the military commission at St. Louis, is respectfully referred to you for settlement in certificates of indebtedness.” On the 22d of the same month General Meigs also wrote to the same officer as follows: “I respectfully transmit herewith five accounts, in duplicate, in favor of J. W. Parish for 1,158 horses furnished the McKinstry Guard, (11th Illinois cavalry,) at $110 each. The accounts are approved, and payment in certificates of indebtedness is recommended.” On the 5th of April following, Quartermaster General Meigs again wrote to the Third Auditor as follows:

“In transmitting, on the 22d of March last, with my approval, the five accounts in favor of Joseph W. Parish for 1,038 horses for the McKinstry Guards, at $110, I was governed by the action of a military commission approving those accounts, the authority under which the purchases were made, and the apparently reasonable price charged for the horses.

“Since then, however, I have received the final report made by the Commission on War Claims, at St. Louis, a printed copy of which is herewith enclosed; wherein, on page 28, a special reference is made to Parish's claim. On account of the developments made by this commission, I now desire to withdraw my approval of Parish's account so far as the price charged is concerned, and recommend that said account be allowed to the extent of one hundred and five dollars for each horse, that being the price allowed in other cases by the Commission on Claims in the western department for cavalry horses, subject, however, to a reclamation of five dollars on each horse (120) charged for at $110 in the account referred to and paid by Major Miller.”

The latter communication caused the Auditor to withhold from claimant the sum he now seeks to recover. Do the facts stated justify the retaining of the five dollars on each horse? We think they do not. Parish had already submitted his claim and vouchers to one commission, which had given an approval. By it the price paid for the horses had not been pronounced unreasonable, nor was any exception taken as to their quality.

The subsequent report by another commission, (before which neither Parish nor his accounts appeared,) stating that $105 was a fair allowance for horses, does not authorize the government to deduct from the price it had agreed to pay Parish, since it nowhere appears that he had conducted himself in bad faith, or that the price he demanded was unreasonable. The special reference made to this claim by the second commission is not in this record, and we are not advised as to what it is.

There is abundant proof to show that the horses were purchased by Parish in the expectation that he would receive the sum of $110 for them from the government, and that this was a fair and reasonable price.

The refusal to pay the full price agreed upon is unauthorized, and does not seem to have any reason, but only caprice, for its foundation. Why the action of the second commission or its opinion is better or more to be trusted than that of the first, is not explained. The claimant submitted his vouchers to the commission presided over by General Sheridan, and they received its approval. It is not shown how or why they were considered by a second commission; nor was the claimant required by any law or reason that we know of to submit his vouchers to the gauntlet of all the commissions that might be devised for that or any other purpose; but, apart from all commissions of investigation, he may rely upon the rectitude of his conduct and his contract, exacting as much compliance as he gave, or upon the actual value of the property sold and delivered.

There is no imputation upon the fairness of the conduct of the claimant, and he should recover.

We direct a judgment in his favor for the sum of $5,790.

Emphases added.

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Guest Vern Edwards

I found this reference to fair and reasonable price in an opinion of the U.S. Attorney General dated April 9, 1937, entitled, "Right of Douglas Aircraft Co. To Contract Price For Airplanes Furnished Army", 39 Op. U.S. Atty Gen. 23:

Quote

Section 10 of the Air Corps Act, however, provides a different method for the procurement of aircraft from that provided by the general procurement statutes. The provisions of that section here pertinent are as follows:

SEC. 10. (a) That in order to encourage the development of aviation and improve the efficiency of the Army and Navy aeronautical matériel the Secretary of War or the Secretary of the Navy, prior to the procurement of new designs of aircraft or aircraft parts or aeronautical accessories, shall, by advertisement for a period of thirty days in at least three of the leading aeronautical journals and in such other manner as he may deem advisable, invite the submission in competition, by sealed communications, of such designs of aircraft, aircraft parts, and aeronautical accessories, together with a statement of the price for which such designs in whole or in part will be sold to the Government.

‘(b) The aforesaid advertisement shall specify a sufficient time, not less than sixty days from the expiration of the advertising period, within which all such communications containing designs and prices therefor must be submitted, and all such communications received shall be carefully kept sealed in the War Department or the Navy Department, as the case may be, until the expiration of said specified time, and no designs mailed after that time shall be received or considered. Said advertisement shall state in general terms the kind of aircraft, parts, or accessories to be developed and the approximate number or quantity required, and the department concerned shall furnish to each applicant identical specific detailed information as to the conditions and requirements of the competition and as to the various features and characteristics to be developed, listing specifically the respective measures of merit, expressed in rates per centum, that shall be applied in determining the merits of the designs, and said measures of merit shall be adhered to throughout such competition. All designs received up to the time specified for submitting them shall then be referred to a board appointed for that purpose by the Secretary of the department concerned and shall be appraised by it as soon as practicable and report made to the Secretary as to the winner or winners of such competition. When said Secretary shall have approved the report of said board, he shall then fix a time and place for a public announcement of the results and notify each competitor thereof; but if said report shall be disapproved by said Secretary, the papers shall be returned to the board for revision or the competition be decided by the Secretary, in his discretion, and in any case the decision of the Secretary shall be final and conclusive. Such announcement shall include the percentages awarded to each of the several features or characteristics of the designs submitted by each competitor and the prices named by the competitors for their designs and the several features thereof if separable.

‘(c) Thereupon the said Secretary is authorized to contract with the winner or winners in such competition on such terms and conditions as he may deem most advantageous to the Government for furnishing or constructing all of each of the items, or all of any one or more of the several items of the aircraft, or parts, or accessories indicated in the advertisement, as the said Secretary shall find that in his judgment a winner is, or can within a reasonable time become, able and equipped to furnish or construct satisfactorily all or part, provided said Secretary and the winner shall be able to agree on a reasonable price. If the Secretary shall decide that a winner can not reasonably carry out and perform a contract for all or part of such aircraft, parts, or accessories, as above provided, then he is authorized to purchase the winning designs or any separable parts thereof if a fair and reasonable price can be agreed on with the winner, but not in excess of the price submitted with the designs.'

Emphasis added. By the way, what we might see in that is the origin, or one of them, of the modern FAR Part 15 source selection process.

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Guest Vern Edwards

Okay, one more. The first mention of "fair and reasonable price" by the Comptroller General was in a 1923 decision, 2 Comp. Gen. 503, Feb. 14, 1923. Capitalization as in original.

Quote

WHERE THE MINDS OF THE CONTRACTING PARTIES DO NOT MEET, THE ONE INTENDING THE PRICE STATED TO BE THE PRICE PER HUNDRED WHILE THE OTHER TREATS IT AS THE PRICE FOR THE ENTIRE LOT CONSISTING OF SEVERAL HUNDRED, NO CONTRACT RESULTS, BUT IF THE SUPPLIES ARE FURNISHED AND ACCEPTED, PAYMENT MAY BE MADE ON A QUANTUM VALEBAT BASIS, THE LOWEST BID SUBMITTED BEING PROPER FOR CONSIDERATION FOR THE PURPOSE. 26 COMP. DEC., 286, AFFIRMED.

PHILADELPHIA ELECTRIC AND MANUFACTURING CO. APPLIED OCTOBER 13, 1922, FOR A REVIEW OF SETTLEMENT W-NO. 572,317 OF SEPTEMBER 21, 1922, WHEREIN ONLY $195.45 WAS ALLOWED ON ITS CLAIM FOR $514.65 ON ACCOUNT OF CROSSARMS FURNISHED FOR THE SIGNAL CORPS, UNITED STATES ARMY, UNDER PURCHASE ORDER NO. 101801, DATED APRIL 14, 1922, AN ERROR IN ITS PRICE AS BID BEING ALLEGED BY CLAIMANT.

* .    * .    *

BIDS HAD BEEN SOLICITED ON TWO ITEMS DESIGNATED AS ITEMS 10 AND 11. ITEM 10 WAS FOR 200 CROSSARMS 3 1/4 INCH BY 4 1/4 INCH BY 4 FEET LONG, AND ITEM 11 WAS FOR 500 LIKE CROSSARMS, 6 FEET LONG. OF THE 4-FOOT CROSSARMS 100 WERE TO BE DELIVERED AT SOUTH BROOKLYN, N.Y., AND 100 AT SAN FRANCISCO, CALIF. OF THE 6-FOOT CROSSARMS 200 WERE TO BE DELIVERED AT SOUTH BROOKLYN AND 300 AT SAN FRANCISCO.

* .    * .    *

THE GOVERNMENT RECEIVED 499 OF THE 500 CROSSARMS ORDERED AND, THERE BEING NO BINDING CONTRACT COVERING THE TRANSACTION, SHOULD PAY A FAIR AND REASONABLE PRICE THEREFOR. THE LOWEST BID SUBMITTED ON THIS LOT WAS 72 CENTS EACH OR $360 FOR THE ENTIRE LOT. THIS MAY BE ACCEPTED AS A FAIR AND REASONABLE PRICE. ACCORDINGLY CLAIMANT WAS ENTITLED TO $359.28 FOR THE 499 CROSSARMS DELIVERED.

UPON A REVIEW OF THE MATTER A DIFFERENCE OF $163.83 IS CERTIFIED DUE CLAIMANT.

Emphasis added.

If being the lowest was good enough for the U.S. Comptroller General, despite the lack of any "technical evaluation"...

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18 hours ago, joel hoffman said:

Jamaal,, if every non-price factor in an LPTA acquisition must be rated “acceptable” for a technically acceptable rating,  then each technical factor is equally important.  Yes, indeed - see Chenega Federal Systems LLC. 

They are not individually “weighted”. By weighted, I mean either numerically or percentage weighted or differentiated using statements of relative importance.

Such a statement may limit someone else's creativity or discretion. I'd rather just go with the plain reading of the statute and regulation and let individuals make up their own mind (the primary step regarding canons of interpretation). Priced and nonprice factors being approximately equal when combined shouldn't cause any issues with doing business as usual.

I forgot what my original line of thinking was when this started, but now I am thinking of an LPTA RFP that has a technical factor and subfactors. For example, picture a situation where a contractor must satisfy some combination of (but not all) subfactors in order to be determined acceptable (No tradeoffs required or allowed). Technical is not limited to product or service function, performance, or design. Technical is a threshold of values (min or max). Technical applies to any attributes one can think up that relate to an offeror or their offer. (Why anyone would craft an RFP this way, I don't know, but who am I to limit people's thinking?)

I understand that this place can be hostile towards so-called 'dumb ideas', but I think it's a great place to test thoughts: one's we believe and some we don't ...

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6 hours ago, Jamaal Valentine said:

Such a statement may limit someone else's creativity or discretion. I'd rather just go with the plain reading of the statute and regulation and let individuals make up their own mind (the primary step regarding canons of interpretation). Priced and nonprice factors being approximately equal when combined shouldn't cause any issues with doing business as usual.

I forgot what my original line of thinking was when this started, but now I am thinking of an LPTA RFP that has a technical factor and subfactors. For example, picture a situation where a contractor must satisfy some combination of (but not all) subfactors in order to be determined acceptable. Technical is not limited to product or service function, performance, or design. Technical is a threshold of values (min or max). Technical applies to any attributes one can think up that relate to an offeror or their offer. (Why anyone would craft an RFP this way, I don't know, but who am I to limit people's thinking?)

I understand that this place can be hostile towards so-called 'dumb ideas', but I think it's a great place to test thoughts: one's we believe and some we don't ...

Hey, Jamaal. I was wondering myself whether there may be a situation where not every individual factor or sub factor had to pass some acceptability minimum criteria for overall acceptable rating. 

For your hypothetical situation,  perhaps one could use a trade-off with price as substantially more important than technical. They can state that they intend to award  on the basis of initial offers without discussions but reserve the right conduct discussions if necessary. 

 How all this relates to discussion of what fair and reasonable” ,  I don’t know.

The point that I originally tried to make was that what a buyer is willing to pay depends upon their priorities.

I said that , when using the LPTA method, price is more important than providing any more value than minimally required for acceptability, if it will cost more than just meeting the governments requirements. 

Thats the way the design and construction industry understands it.

If there is sufficient interest in the project, product or service, then the competitors  should be sharpening their pens. 

Hopefully, the buyer has some idea how much the requirements might be purchased for. If they don’t have any independent clue, they will probably rely on  the prices received. 

Depending upon the technical complexity of the project, product or service and the number, dollar spread and distribution of offers, when the lowest priced offer is acceptable, it may be a good idea to at least read or review a higher priced offer to validate that you are comparing apples to apples.

If the first technically acceptable offer isn’t the lowest priced, you will already have some comparables for cost and technical. You might be able to correlate what price effect the deficiencies had on the price of those offers for comparison with your ffirst technically acceptable offer. There would likely be no need to examine any higher priced technical proposal. 

Then, depending upon how much flexibility you allowed yourself in the stated evaluation criteria and basis of award and other factors such as time available and offered prices vs. your budget, you could decide whether it would be advantageous to develop a competitive range and conduct discussions. If you are satisfied with the price of your first technically acceptable  offer, you would likely just award. But If some or all of the lower priced but deficient proposals might be susceptible to being corrected without significantly upward affecting their price, it might be worth conducting discussions. 

Of course, then you might well have to consider whether it is necessary and/or advantageous to include any higher priced offerors in the competitive range.  

For construction projects with LPTA,  I hesitated to recommend opening discussions when it would involve including higher priced initial offers.  Conducting discussions in an LPTA could signal to the industry that they might be able to not submit their best price initially in hopes of getting a second bite of the apple. Some firms expressed their surprise in feedback.  

Awarding without discussions let them know that the government was serious about sharpening their initial prices. 

The only times we conducted discussions in LPTA was when’re didn’t get affordable pricing or when it was deemed advantageous to allow lower priced offeror(s) to cure their deficiencies.

Vern alluded to the IFB method for relying on competition to sssure substantiate or validate fair and reasonable pricing without any regard to technical evaluation. 

I would agree -  with the caveat that in IFB, it isn’t deemed necessary to examine or assure the government that the lowest bidder  will likely meet the solicitation’s technical or other requirements, other than a routine responsibility determination. Competitors are competing strictly on lowest price basis. 

If there isn’t any need to do that, then it should not be necessary or appropriate to use LPTA. Use IFB. 

My LPTA perspective is based primarily on construction contracting. The nature of buying supplies and materials and routine services based upon pricing is a different animal when it comes to pricing plus it is often possible to research the web for prices. 

I found that acquiring more complex services is just that - more complex . 

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Guest Vern Edwards

@ Jamaal and Joel:

7 hours ago, Jamaal Valentine said:

I am thinking of an LPTA RFP that has a technical factor and subfactors. For example, picture a situation where a contractor must satisfy some combination of (but not all) subfactors in order to be determined acceptable. Technical is not limited to product or service function, performance, or design. Technical is a threshold of values (min or max). Technical applies to any attributes one can think up that relate to an offeror or their offer. (Why anyone would craft an RFP this way, I don't know, but who am I to limit people's thinking?)

I understand that this place can be hostile towards so-called 'dumb ideas', but I think it's a great place to test thoughts: one's we believe and some we don't ...

The relative importance rule is designed to guide offerors when they may have to make tradeoffs among factors when preparing their proposals. It's relative importance. The concept is meaningful when offerors have reached a point in their proposal development at which they cannot give the government more of all that it wants, e.g., higher quality and lower price. They have reached a point at which they can give more of X or more of Y but not more of both. The classic quality/price conundrum. If the government has conflicting objectives---high quality and low price---then telling offerors that quality is more important than price is the same as saying, If you have to make a choice between giving us higher quality or lower price, then we prefer higher quality. (Telling them that quality and price are equally important is saying that the government will not or cannot provide guidance, perhaps because it's indifferent about the choice.)

See: "The Relative Importance of Source Selection Evaluation Factors: Analysis of a Misunderstood Rule," The Nash & Cibinic Report (July 1996).

Does the concept of relative importance apply in LPTA? Off the bat, it seems to me that the answer is no. The government will not make technical/price tradeoffs. Technical acceptability is a qualifying criterion. Price is the ultimate source selection decision criterion. There are no nonprice/price tradeoffs, so no need for guidance in that regard.

Procedurally, LPTA is really a just a variation of two-step sealed bidding, the main distinction being that it's done in a single step. Take a look at FAR 14.503-1(a), which describes the contents of requests for "technical proposals." There is a requirement to disclose the evaluation factors, but no requirement to disclose their relative importance. 

It seems to me that technical acceptability is really a compilation of individual requirements that does not entail tradeoffs. I don't understand Jamaal's idea that the "contractor must satisfy some combination of (but not all) subfactors in order to be determined acceptable." I don't see how having to satisfy some but not all subfactors would necessitate tradeoffs. Tradeoffs are required, and relative importance becomes important, when it's necessary to put together a winning combination of conflicting factors.

Is it possible that multiple criteria for technical acceptability could be intertwined in such a way that an offeror might have to make tradeoffs when determining how to be technically acceptable? I won't say no. But it seems to me that if technical acceptability is adequately defined, then the definition should be all the guidance that the offeror needs. Any combination of factors that will yield defined technical acceptability will work and the government will evaluate at the bottom line, so to speak. If it does not specify how to add things up, then any sum that reaches the specified bottom line is technically acceptable. If technical acceptability is not adequately defined, then you have a faulty solicitation.

Think of a column of ten numbers, the sum of which must equal 100 in order to be acceptable, as long as each number has a value of at least five. No single number is more important than the others. A lot of combinations are possible. Which combination should an offeror choose? Who cares, as long as their sum is 100 and each is worth at least five? If the government considers one number or some numbers among the ten to be more important than the others, then the government should specify some specific, minimum, or maximum values to them as conditions of acceptability, and the offerors are free to do whatever they like with the rest. A statement of relative importance is embedded in the definition of technical acceptability.

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54 minutes ago, Vern Edwards said:

@ Jamaal and Joel:

The relative importance rule is designed to guide offerors when they may have to make tradeoffs among factors when preparing their proposals. It's relative importance. The concept is meaningful when offerors have reached a point in their proposal development at which they cannot give the government more of all that it wants, e.g., higher quality and lower price. They have reached a point at which they can give more of X or more of Y but not more of both. The classic quality/price conundrum. If the government has conflicting objectives---high quality and low price---then telling offerors that quality is more important than price is the same as saying, If you have to make a choice between giving us higher quality or lower price, then we prefer higher quality. (Telling them that quality and price are equally important is saying that the government will not or cannot provide guidance, perhaps because it's indifferent about the choice.)

See: "The Relative Importance of Source Selection Evaluation Factors: Analysis of a Misunderstood Rule," The Nash & Cibinic Report (July 1996).

Does the concept of relative importance apply in LPTA? Off the bat, it seems to me that the answer is no. The government will not make technical/price tradeoffs. Technical acceptability is a qualifying criterion. Price is the ultimate source selection decision criterion. There are no nonprice/price tradeoffs, so no need for guidance in that regard.

Procedurally, LPTA is really a just a variation of two-step sealed bidding, the main distinction being that it's done in a single step. Take a look at FAR 14.503-1(a), which describes the contents of requests for "technical proposals." There is a requirement to disclose the evaluation factors, but no requirement to disclose their relative importance. 

It seems to me that technical acceptability is really a compilation of individual requirements that does not entail tradeoffs. I don't understand Jamaal's idea that the "contractor must satisfy some combination of (but not all) subfactors in order to be determined acceptable." I don't see how having to satisfy some but not all subfactors would necessitate tradeoffs. Tradeoffs are required, and relative importance becomes important, when it's necessary to put together a winning combination of conflicting factors.

Is it possible that multiple criteria for technical acceptability could be intertwined in such a way that an offeror might have to make tradeoffs when determining how to be technically acceptable? I won't say no. But it seems to me that if technical acceptability is adequately defined, then the definition should be all the guidance that the offeror needs. Any combination of factors that will yield defined technical acceptability will work and the government will evaluate at the bottom line, so to speak. If it does not specify how to add things up, then any sum that reaches the specified bottom line is technically acceptable. If technical acceptability is not adequately defined, then you have a faulty solicitation.

Think of a column of ten numbers, the sum of which must equal 100 in order to be acceptable, as long as each number has a value of at least five. No single number is more important than the others. A lot of combinations are possible. Which combination should an offeror choose? Who cares, as long as their sum is 100 and each is worth at least five? If the government considers one number or some numbers among the ten to be more important than the others, then the government should specify some specific, minimum, or maximum values to them as conditions of acceptability, and the offerors are free to do whatever they like with the rest. A statement of relative importance is embedded in the definition of technical acceptability.

Agree. 

 Vern, I forgot about the two-step sealed bid in method. In fact, my very first design build project was in 1971 with the Air Force at Castle Air Force Base California. The Air Force use the two-step sealed bid method for design and construction of a military family housing project. The first step allowed Air Force to evaluate the acceptability of the various proposed designs. I think that they did conduct some kind of discussions and allowed the firms to correct their design proposals. The contract was awarded to the lowest bidder in step two.

All units were back to back duplexes with carports. The exterior architecture of the 250 homes reflected the low bid mentality of this acquisition method (T-111 plywood and batten siding, no eaves or roof overhangs). It was the only allowed way to acquire design build construction at that time. 

Still, it was ahead of its time and the interiors were at least as good quality as most of the military’s then latest design-bid-build housing stock. 

The Navy used two-step sealed bidding extensively for design-build construction up through at least the late 1990’s.

 

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Guest Vern Edwards

If I were preparing an LPTA RFP, in order to comply with FAR 15.304(d) and (e) I would say:

All technical acceptability factors are equally important, because all must be satisfied in order for an offeror to be eligible for award. Price will be the determining factor when selecting the awardee.

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2 minutes ago, Vern Edwards said:

If I were preparing an LPTA RFP, in order to comply with FAR 15.304(d) and (e) I would say:

All technical acceptability factors are equally important, because all must be satisfied in order for an offeror to be eligible for award. Price will be the determining factor when selecting the awardee.

Clear and concise for both government and industry. 

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8 hours ago, Vern Edwards said:

Is it possible that multiple criteria for technical acceptability could be intertwined in such a way that an offeror might have to make tradeoffs when determining how to be technically acceptable? I won't say no. But it seems to me that if technical acceptability is adequately defined, then the definition should be all the guidance that the offeror needs. Any combination of factors that will yield defined technical acceptability will work and the government will evaluate at the bottom line, so to speak. If it does not specify how to add things up, then any sum that reaches the specified bottom line is technically acceptable. If technical acceptability is not adequately defined, then you have a faulty solicitation.

Think of a column of ten numbers, the sum of which must equal 100 in order to be acceptable, as long as each number has a value of at least five. No single number is more important than the others. A lot of combinations are possible. Which combination should an offeror choose? Who cares, as long as their sum is 100 and each is worth at least five? If the government considers one number or some numbers among the ten to be more important than the others, then the government should specify some specific, minimum, or maximum values to them as conditions of acceptability, and the offerors are free to do whatever they like with the rest. A statement of relative importance is embedded in the definition of technical acceptability.

This is what I wanted to convey. (I'm working on my writing)

7 hours ago, Vern Edwards said:

If I were preparing an LPTA RFP, in order to comply with FAR 15.304(d) and (e) I would say:

All technical acceptability factors are equally important, because all must be satisfied in order for an offeror to be eligible for award. Price will be the determining factor when selecting the awardee.

Satisfies the requirement and doesn't change how we do business. This is LPTA in a nutshell.

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I haven't read every single response on this topic, but going back to the original inquiry, if you were buying a car, would you simply go to the first dealership and if you found a car that met your requirements, buy it right then and there at the sticker price? Even if there were several dealerships in that area that sold the car you wanted, would you simply assume that the pricing was competitive, or would you shop around?

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On 9/20/2018 at 7:46 AM, Vern Edwards said:

If I were preparing an LPTA RFP, in order to comply with FAR 15.304(d) and (e) I would say:

All technical acceptability factors are equally important, because all must be satisfied in order for an offeror to be eligible for award. Price will be the determining factor when selecting the awardee.

Out of curiosity, if all technical factors need to be satisfied, what does it add to say that they are of equal importance? Isn't it implied in the LPTA process already that the factors are of equal importance, since you cannot trade off one factor vs. another?

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21 minutes ago, MileHighAcq said:

I haven't read every single response on this topic, but going back to the original inquiry, if you were buying a car, would you simply go to the first dealership and if you found a car that met your requirements, buy it right then and there at the sticker price? Even if there were several dealerships in that area that sold the car you wanted, would you simply assume that the pricing was competitive, or would you shop around?

That analogy is not even close to the situation at hand...

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1 hour ago, MileHighAcq said:

Out of curiosity, if all technical factors need to be satisfied, what does it add to say that they are of equal importance? Isn't it implied in the LPTA process already that the factors are of equal importance, since you cannot trade off one factor vs. another?

Milehigh, I agree with you. However, it apparently isn’t that clear to everyone else. Some people live and die by step-by-step, .literal instructions.And I am not referring to Vern.

Edited to add: At any rate, this is a side issue. What fair and reasonable means and how one can determine that a price is fair and reasonable are the most important aspects of this thread - in my opinion. 

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Right on. Just making sure I wasn't missing anything. 

Point I was trying to make with my other imperfect analogy is that in real life, you never just settle for the first option or offer that comes along without shopping around an doing your due diligence. Even if the first offer satisfies your technical requirements, you don't know if the price is any good (i.e. fair and reasonable) without comparing it to the other offers to make sure that they're for the same thing (or at least meet your minimum requirements). 

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2 hours ago, MileHighAcq said:

if you were buying a car, would you simply go to the first dealership and if you found a car that met your requirements, buy it right then and there at the sticker price? Even if there were several dealerships in that area that sold the car you wanted, would you simply assume that the pricing was competitive, or would you shop around?

The use of LPTA presumes that the buyer has done thorough market research and built that research into criteria for technical acceptability before soliciting competitive offers. The buyer knows what she wants and knows that she does not want anything more. She then solicits offers, states her criteria for acceptability, verifies offer acceptability, and selects the one that offers the lowest price. This is a variation of the competitive bidding process that is still widely used in government and the private sector for some kinds of buys.

Your "imperfect" analogy does not envision the buyer doing advance market research before going out to buy. Nor does it envision the buyer soliciting competitive bids. Instead, it envisions the buyer going shopping and then posits that the buyer would be foolish to purchase the first thing she sees. If the offer is acceptable, you don't want more, and the price is lowest, what more do you want?

Your analogy is not imperfect. It's inapt.

 

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here's what I wanted to say above:

To clarify,  you're saying it's acceptable for a buyer  to get competitive bids, and in an LPTA environment, simply order the bids by price, start with the lowest price and award to the first technically acceptable offer they come across without looking at the other bids at all? From a technical standpoint, this could ensure that the buyer gets a technically acceptable product, but from a price perspective, how could the buyer be sure that the price is the lowest price without having received at least one other technically acceptable bid?

The point of my "inapt" analogy is that the process you describe could ensure that you get a technically acceptable product, but not that you got it at the lowest price. 

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32 minutes ago, MileHighAcq said:

here's what I wanted to say above:

To clarify,  you're saying it's acceptable for a buyer  to get competitive bids, and in an LPTA environment, simply order the bids by price, start with the lowest price and award to the first technically acceptable offer they come across without looking at the other bids at all? From a technical standpoint, this could ensure that the buyer gets a technically acceptable product, but from a price perspective, how could the buyer be sure that the price is the lowest price without having received at least one other technically acceptable bid?

The point of my "inapt" analogy is that the process you describe could ensure that you get a technically acceptable product, but not that you got it at the lowest price. 

Short of engaging in discussions/negotiations (which is a completely different topic) how would assessing higher priced proposals for their technical acceptability result in awarding a contract for a lower price than the Lowest Priced Technically Acceptable offer?

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Upon further review, reflection, and self-doubt, I think I see the error of my ways.

In my car buying scenario, I didn't consider that in a Federal contracting LPTA scenario, the buyer would already have prices, so he/she would not just be randomly going to the first dealership around the corner and blindly accepting their price if they met the technical specs, but can go to the lowest priced dealership first, thereby ensuring that he/she gets the lowest priced, technically acceptable car. That's the part that was missing in my example. Sometimes just have to think through things.

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1 hour ago, Matthew Fleharty said:

Short of engaging in discussions/negotiations (which is a completely different topic) how would assessing higher priced proposals for their technical acceptability result in awarding a contract for a lower price than the Lowest Priced Technically Acceptable offer?

For some reason, I was hung up on "what if none of the other offers are acceptable". But I think I see now that it wouldn't matter for the purposes of source selection.

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