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Why all the "Award without discussions" talk?

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Vern asked an interesting during this discussion:

This is the question:

On ‎5‎/‎8‎/‎2018 at 11:38 AM, Guest Vern Edwards said:

See FAR 15.209(a)(1). Now ask yourself: Why is the government's default position that competitively "negotiated" contracts will be awarded without discussions? Isn't that odd in light of FAR 6.401(b)(2)? What do you think is the reason?

I thought it was a good enough question to deserve its own thread- it was discussed mostly in the context of protest risk aversion in the other thread, but there may be more to the story. 

My notion was that the Government does not want fake prices in initial proposals, we want hard offers that we can use as a basis for excluding proposers from the competitive range if applicable.  Awarding without discussions is a threat that we will hold the slippery proposer it its initial prices.

I don't know if my notion is true, though.  Even if true, there are likely other reasons I don't know about.

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Deleted by author. 

Re-inserted by Author after reading some of the comments hereinafter 

There are several reasons from my observations why government personnel are averse to conducting discussions with Offeror. 

Some prefer to cut corners to save time, preparation efforts, and simply award a contract,  if the money is available. It may be that the schedule has slipped, it may be that the KO or whoever is conducting the discussions doesn’t  know what to discuss. This is particularly true where the primary problem is high prices. KO’s and some PM’s on construction contracts are often not subject matter experts. Those personnel don’t know what or how to find the root cause of high prices, or price anomalies or possible disconnects in understanding requirements or bad specs,  dumb specs or specs that cause subs and primes to put risk and contingencies in their prices, etc. I’ve seen PM’s just go back for more money to award than figure out how to bargain or mutually fix problems. 

KO’s have told me that their District policy is that if a proposal meets the minimum requirements, they aren’t allowed to discuss objectionable features, weak aspects of proposals, can’t try to bargain down high prices, bargain for better performance, etc. 

Some of that thinking goes back to the pre-1996 FAR 15 re-write. Many of the old-timers didn’t “get it” and, being the seniors or in charge,  passed the old ways down to newcomers of defensive methods to avoid saying much in fear of a protest.   The old FAR 15 did not encourage bargaining. Instead it focused on avoiding “technical leveling” and other more proactive discussion techniques. I have seen much of that.

Compound all that with a generation that tends to avoid oral communications (face to face, telephonic) in favor of computer generated text, emails, etc. 

A Korean co-worker once exclaimed to me “You Americans are so gullible. You are willing to accept anything at face value and pay proposed prices without negotiating. We Koreans don’t even buy a loaf of bread without negotiating! “

Contractors have told me that it is stupid not to conduct discussions because they seldom get the best pricing initially, due to time constraints, sub’s that have questions or need clarifications, etc., etc., etc.

As a reminder, Shay Assad has pushed policy that conducting discussions should be the default approach. Guess what - he was on the contractor side of the house and knows.

uggh! 

 

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FAR 6.401(b)(2) reads,

(2) Because of differences in areas such as law, regulations, and business practices, it is generally necessary to conduct discussions with offerors relative to proposed contracts to be made and performed outside the United States (emphasis added) and its outlying areas. Competitive proposals will therefore be used for these contracts unless discussions are not required and the use of sealed bids is otherwise appropriate.

If your proposed contract is made and performed outside the US, makes sense to enter into discussions.  Domestic when the laws, regulations and practices are the same, not requiring discussions makes sense.  But there is a push (seeing in my Agency) to plan on entering discussions.

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16 minutes ago, Weno2 said:

FAR 6.401(b)(2) reads,

(2) Because of differences in areas such as law, regulations, and business practices, it is generally necessary to conduct discussions with offerors relative to proposed contracts to be made and performed outside the United States (emphasis added) and its outlying areas. Competitive proposals will therefore be used for these contracts unless discussions are not required and the use of sealed bids is otherwise appropriate.

If your proposed contract is made and performed outside the US, makes sense to enter into discussions.  Domestic when the laws, regulations and practices are the same, not requiring discussions makes sense.  But there is a push (seeing in my Agency) to plan on entering discussions.

Why, specifically, does “not requiring discussions make[] sense”?

Are you saying “not requiring”  or “not conducting” discussions?  I don’t have a huge problem with leaving the possibility open to award on initial offers.  My problem is with avoidance of discussions and assuming that, because there is competition, youre getting good proposals,  good pricing, clear mutual understandings, etc. 

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Hi Joel,

Thank you- I think all those reasons make sense!  But those can't be the reasons the FAR default to award without discussions, right?  Those are all very local, case-specific decisions, so they couldn't explain the system-wide default position.

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apsofacto,

How about this?  The FAR had to default one way or the other.  They wrote FAR 52.215-1 to default to allowing for (but not mandating) award without discussions (with Alt I mandating discussions) -- the contracting officer picks the clause with or without the alternate.  Maybe they flipped a coin.  If they had written it the other way, your question today might be the reverse.

There is an error in the question.  Here is the question--

  • Why is the government's default position that competitively "negotiated" contracts will be awarded without discussions?

That is not the default position.  Here is a better phrasing of the question--

  • Why is the government's default position that competitively "negotiated" contracts will may be awarded without discussions?

Since we're in the beginner's area, let's teach correct principles:  the default (no alternate) is to allow for award without discussions. 

To me, it makes sense to allow for award without discussions as the default.

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18 hours ago, ji20874 said:

apsofacto,

How about this?  The FAR had to default one way or the other.  They wrote FAR 52.215-1 to default to allowing for (but not mandating) award without discussions (with Alt I mandating discussions) -- the contracting officer picks the clause with or without the alternate.  Maybe they flipped a coin.  If they had written it the other way, your question today might be the reverse.

There is an error in the question.  Here is the question--

  • Why is the government's default position that competitively "negotiated" contracts will be awarded without discussions?

That is not the default position.  Here is a better phrasing of the question--

  • Why is the government's default position that competitively "negotiated" contracts will may be awarded without discussions?

Since we're in the beginner's area, let's teach correct principles:  the default (no alternate) is to allow for award without discussions. 

To me, it makes sense to allow for award without discussions as the default.

I agree.  

Sorry, I overlooked the Beginner’s category and was releasing some frustration with widespread  practice. Its not local to my organization. The tone and flavor of some posts and threads in the WIFCON Forum over the years also reveals some of the problems that I referred to. 

 

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On 12/1/2018 at 5:35 AM, ji20874 said:

There is an error in the question.  Here is the question--

  • Why is the government's default position that competitively "negotiated" contracts will be awarded without discussions?

That is not the default position.  Here is a better phrasing of the question--

  • Why is the government's default position that competitively "negotiated" contracts will may be awarded without discussions?

Since we're in the beginner's area, let's teach correct principles:  the default (no alternate) is to allow for award without discussions. 

To me, it makes sense to allow for award without discussions as the default.

I may have missed or misunderstood something but, if there is a quasi-default based on FAR part 15 requirements, it would be 'award with discussions':

FAR 15.306(a)(3):

Award may be made without discussions if the solicitation states that the Government intends to evaluate proposals and make award without discussions.

FAR 15.209(a) states:

The contracting officer shall insert the provision at 52.215-1, Instructions to Offerors -- Competitive Acquisition, in all competitive solicitations where the Government intends to award a contract without discussions.

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"Why is the government's default position that competitively "negotiated" contracts will be awarded without discussions?"

I believe the answer to the question would only be found in the discussions that lead to the development of the Federal Acquisition Regulations however I believe it as has been noted, but in my words, it provides for the option rather than the absolute of there will be discussions.

 

In understanding this is a beginners forum my above answer is based on the following references that may be of interest.

 

The FAR in 1983 carried the allowance for award without discussion  (FAR 15.610) and based on some quick limited research the principles now stated in  FAR 15.306 have evolved to its current wording based in part on providing for more interaction with industry and most likely GAO case law while retaining the option rather than the absolute of discussions must occur.  In September of 1997 the rewrite of FAR part 15 took place. Reference -https://www.gpo.gov/fdsys/pkg/FR-1997-09-30/pdf/97-25666.pdf

 

Of note in the evolution GAO case law indicates even in the context of the statement now in 52.215-1 and with a setting of competitive range, and of course the specifics of the situation, award without discussions can occur.

 

Here are a few references that form the basis for my response –

 

 

1983 FAR at FAR 15.601 (6) where the requirement for written or oral discussions need not  be applied -  In which adequate competition or accurate prior cost experience with- the product or service clearly demonstrates that acceptance of the most favorable initial proposal without discussion would result in a fair and reasonable price; provided, that (i) The solicitation notified all offerors of the possibility that award might be made without discussion; and (ii) The award is in fact made without any written or oral discussion with any offeror. (b) Except as provided in paragraph (a) above, the contracting officer shall conduct written or oral discussion with all responsible offerors who submit proposals within the competitive range.”

 

GAO Protest Decisions -

https://www.gao.gov/products/405366#mt=e-report

“That is, where the solicitation notified offerors that the agency reserved the right to make award without discussions, see FAR Sec. 15.306(a)(3), and the agency established a competitive range but proceeded to make award without holding discussions with any offeror, we would not entertain a protest by a competitive range offeror complaining that no discussions had been held.”

https://www.gao.gov/products/D18455#mt=e-report  (Found language found in this decision in many more decisions.

“Further, the solicitation expressly advised that the agency contemplated making award without discussions.  RFP at 168 ("The Government intends to award without discussions, but reserve the right to hold discussions if it is in the Governments best interest..."

https://www.gao.gov/products/466172#mt=e-report (No specific quote from this decision is provided but my quick research indicates that this decision has had lasting impact with regard to the interpretation of the matter of award without discussions.   This decision was pre the 1997 FAR part 15 rewrite. 

 

 

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For my staff, they hope that (don't laugh) that the PWS/SOW and solicitation are written well enough that the offerors can submit proposals that will meet the government need without having to conduct discussions.  Discussions take time that often the requiring activity doesn't have (poor planning upfront leads to a "must have now" scenario more times than not) so the goal is to release a solicitation that is clear enough that discussions aren't necessary.

Also, the more interactions you have with offerors, the more likely you are that there will be a protest (personal opinion that I'm sure many here will not agree with).  The same is true with debriefings, which is why the trend now is to do debriefings in writing and eliminate the inevitable back-and-forth where offerors conduct a fishing expedition to try to find a reason to protest.

So, the theory is that if you write a clear solicitation, discussions won't be necessary and will save time upfront and reduce the probability of a protest.  Remember, I did say it is a "theory".

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5 hours ago, Desparado said:

For my staff, they hope that (don't laugh) that the PWS/SOW and solicitation are written well enough that the offerors can submit proposals that will meet the government need without having to conduct discussions.  Discussions take time that often the requiring activity doesn't have (poor planning upfront leads to a "must have now" scenario more times than not) so the goal is to release a solicitation that is clear enough that discussions aren't necessary.

Also, the more interactions you have with offerors, the more likely you are that there will be a protest (personal opinion that I'm sure many here will not agree with).  The same is true with debriefings, which is why the trend now is to do debriefings in writing and eliminate the inevitable back-and-forth where offerors conduct a fishing expedition to try to find a reason to protest.

So, the theory is that if you write a clear solicitation, discussions won't be necessary and will save time upfront and reduce the probability of a protest.  Remember, I did say it is a "theory".

A debatable theory, which also is Predicated on the Proposition that “competition”, by definition in a regulation,  will Probably assure best value technical and Pricing with initial Proposals.

P. Poor Prior Planning, not Providing Plenty of time Period to Prepare  Proposals in resPonse to a rushed rfP, will Provide Puffed up Prices and Probably less than Premier Performance.

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Good points all around. PepeTheFrog's opinion is:

 

less work

less protest risk

fear of screwing it up

 

Also, @Jamaal Valentine has it right. You reserve the right to award without discussions so that you keep your options open and to signal to the offerors that you will keep your options open. Theoretically, that can place offerors on notice to provide their best offer, knowing that they might not get a chance to revise it. 

 

If there is no need to negotiate, you can simply award on the basis of the proposal (no discussions). Or, you can enter into negotiations (discussions).

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As a larger issue, the existence of this thread and the fear or reluctance to negotiate is a clear signal that the system is broken.

The idea of a company or individual shopping around for competitive offers for a million dollar investment in services or non-commercial/fungible supplies, and then not discussing any terms or negotiating with anyone, especially the best two or three, is insane. 

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6 hours ago, PepeTheFrog said:

As a larger issue, the existence of this thread and the fear or reluctance to negotiate is a clear signal that the system is broken.

The idea of a company or individual shopping around for competitive offers for a million dollar investment in services or non-commercial/fungible supplies, and then not discussing any terms or negotiating with anyone, especially the best two or three, is insane. 

Or construction...

Agreed. 

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16 hours ago, PepeTheFrog said:

As a larger issue, the existence of this thread and the fear or reluctance to negotiate is a clear signal that the system is broken.

The idea of a company or individual shopping around for competitive offers for a million dollar investment in services or non-commercial/fungible supplies, and then not discussing any terms or negotiating with anyone, especially the best two or three, is insane. 

Considering that this is a beginners forum my question is rhetorical in that continued discussion will take this thread down the rabbit hole even further but your statement suggests to me that you would do away with the FAR imperative regarding sealed bidding and possibly even the FAR permissive use of LTPA?

I pose the question in light of the appearance, or even the fact, that even today a procurement cloaked in a FAR part 15 process is awarded on the basis of price.  The system is not broke the system is not utilized under the intentions it was created.

6.401 -- Sealed Bidding and Competitive Proposals.

Sealed bidding and competitive proposals, as described in Parts 14 and 15, are both acceptable procedures for use under Subparts 6.1, 6.2; and, when appropriate, under Subpart 6.3.

(a) Sealed bids. (See Part 14 for procedures.) Contracting officers shall solicit sealed bids if --

(1) Time permits the solicitation, submission, and evaluation of sealed bids;

(2) The award will be made on the basis of price and other price-related factors;

(3) It is not necessary to conduct discussions with the responding offerors about their bids; and

(4) There is a reasonable expectation of receiving more than one sealed bid.

(b) Competitive proposals. (See Part 15 for procedures.)

(1) Contracting officers may request competitive proposals if sealed bids are not appropriate under paragraph (a) above.

(2) Because of differences in areas such as law, regulations, and business practices, it is generally necessary to conduct discussions with offerors relative to proposed contracts to be made and performed outside the United States and its outlying areas. Competitive proposals will therefore be used for these contracts unless discussions are not required and the use of sealed bids is otherwise appropriate.

 

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Hard bids with public bid opening strongly encourages sharpening the pencil.  And once bids are opened,  everyone knows everyone else’s price. 

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50 minutes ago, C Culham said:

your statement suggests to me that you would do away with the FAR imperative regarding sealed bidding and possibly even the FAR permissive use of LTPA?

C Culham, PepeTheFrog wouldn't get rid of LPTA. When PepeTheFrog said "non-commercial/fungible supplies," PepeTheFrog meant that commercial items and requirements that can be definitively specified do not (generally) need negotiations. I.e. computer laptops, gallons of oil, precisely defined widgets. Those requirements are ripe for the use of LPTA with no negotiations on anything other than price. 

 

As far as doing away with the current dichotomy of sealed bidding or competitive: absolutely get rid of it and reform it. It's stupid and outdated. 

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On 12/4/2018 at 9:41 AM, Desparado said:

The same is true with debriefings, which is why the trend now is to do debriefings in writing and eliminate the inevitable back-and-forth where offerors conduct a fishing expedition to try to find a reason to protest.

I have always liked debriefings for 2 reasons.

First, the pain-in-the-ass contractors spend a lot of time and effort preparing essays and submitting offers for the Gov't's benefit. They're entitled to know why they lost.

Second, it gives contracting officers the opportunity to demonstrate that they know the procurement inside out and to explain clearly and directly why one contractor won and the other contractors lost. This debriefing deters a protest.

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53 minutes ago, napolik said:

They're entitled to know why they lost.

Or why they won.   I always appreciated the rare contractor that won that asked for a debriefing!

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6 hours ago, C Culham said:

you would do away with the FAR imperative regarding ... the FAR permissive use of LTPA?

 

Have you seen DoD's proposed rule?

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On 12/5/2018 at 9:45 AM, napolik said:

I have always liked debriefings for 2 reasons.

First, the pain-in-the-ass contractors spend a lot of time and effort preparing essays and submitting offers for the Gov't's benefit. They're entitled to know why they lost.

Second, it gives contracting officers the opportunity to demonstrate that they know the procurement inside out and to explain clearly and directly why one contractor won and the other contractors lost. This debriefing deters a protest.

If those were the true reasons, I would agree.  However in practice it has been my experience (and all other 1102s that I have spoken with) that the unsuccessful offerors use debriefings as a way to try to find a loophole so they can submit a protest (which statistics show they will more than likely lose anyway).  Written debriefings is the only way to go, imho.

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9 hours ago, Desparado said:

If those were the true reasons, I would agree.  However in practice it has been my experience (and all other 1102s that I have spoken with) that the unsuccessful offerors use debriefings as a way to try to find a loophole so they can submit a protest (which statistics show they will more than likely lose anyway).  Written debriefings is the only way to go, imho.

Not my experience. If the CO knows what he or she did and why, and if he or she can clearly demonstrate this knowledge, the contractors will be deterred. If the CO cannot/ will not provide the info, the contractor can obtain it only via a protest.

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