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Conducting a PPIRS Confidence Assessment Prior to Issuing the RFP

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Given the requirement in accordance with FAR 19.203(d)(1) that market research be used to "determine if there are socioeconomic firms capable of satisfying the agency's requirements, in addition to meeting the "reasonable expectation that offers will be obtained from at least two responsible small business concerns" prior to making a set-aside determination; is there utility in conducting a past performance level of confidence assessment during the market research stage; to make the reasonable expectation determination, that potential bidders can satisfy agency requirements, and in so doing confidently make a set-aside decision?

I found reference to an Air Force Material Command (AFMC) practice: http://www.acq.osd.mil/dpap/ccap/cc/jcchb/Files/Topical/Past_Performance/training/past_performance_eval_jul_07_afmc.pptx

Here the AFMC identifies four distinct activities that involve some degree of past performance assessment, to include obtaining it (1) during the "early phase" of the acquisition, (2) prior to issuance of RFP, (3) prior to proposal receipt, and (4) after receipt of proposals. Not disregarding the fact that there are strict rules around access and handling past performance evaluations (i.e. source selection information), however I don't find an expressed prohibition against using past performance during market research, albeit there are strong opinions that opine such a prohibition does exist.

Does anyone have any experience using past performance evaluations during market research for informing acquisition strategy decisions (i.e. to set-aside or not set-aside). The operating assumption here being that only individuals authorized and qualified to access and properly handle such information would be participating in this activity. My main question I guess would be, is there any reason to conclude that past performance information should only be considered after receipt of proposals; and to do so at any point prior to this is either prohibited or is of no value to the Government?

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Carl,

That's a great case -- it could be used to teach a class on how to do meaningful market research.  I especially liked this extract--

  • "In determining the availability of responsible small business concerns for set-aside purposes, the contracting agency’s investigation goes not only to the existence of the businesses, but also to their capability to perform the contract. The fact that multiple small business responses are received in the course of market research is not necessarily determinative."

Amen!

Troy,

You don't need to do non-responsibility determinations on prospective offerors.  However, in establishing whether there is a reasonable expectation of receiving offers at reasonable prices from  two or more responsible small business sources, absolutely and certainly you can consider whatever past performance information is available.  Your colleagues err.

 

 

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13 hours ago, ji20874 said:

You don't need to do non-responsibility determinations on prospective offerors.  However, in establishing whether there is a reasonable expectation of receiving offers at reasonable prices from  two or more responsible small business sources, absolutely and certainly you can consider whatever past performance information is available.

 I agree.  And just to add a little bit more, GAO has held that a contracting officer need only make an “informed judgment” that two qualified small business concerns will compete.  A contracting agency need not make a full responsibility determination before deciding whether to set aside a procurement (Olympus Corp., Comp. Gen. Dec. B-225875), but it may make such a determination.  (Commercial Energies, Inc., Comp. Gen. Dec. B-243402.) 

See for example: Belleville Shoe Manufacturing Company; Altama Delta Corporation; Wellco Enterprises, Inc., B- 287237, B- 287237.2 (May 17, 2001):

In determining the availability of responsible small business concerns for set-aside purposes, the contracting agency's investigation goes not only to the existence of the businesses, but also to their capability to perform the contract. Information Ventures, Inc., supra. The record supports the agency's finding that Altama had never produced boots of the type required here in the large quantities required, and it was this consideration that led to the agency's conclusion. We see nothing unreasonable in the agency's being concerned that a contractor lacking this experience, even though generally responsible and capable in the field, would encounter a learning curve that would potentially result in substantial delays and administrative burdens for the agency.

The only caveat is that a contracting officer’s decision not to set aside a procurement for small business is reviewable by the SBA.  FAR 19.501(d).  And, in my experience, the SBA is often more generous to contractors in its responsibility determinations than many agencies.  Depending on the likelihood of SBA involvement, you may want to coordinate with the SBA representative on any set-aside nonresponsibility determinations.

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Troy,

Just to be sure, you’re talking about a set-aside on an open market acquisition, right?  The rule-of-two from FAR part 19 does not reach to, or is inapplicable to, orders (or BPAs) against Schedule contracts (or BPAs) and orders against multiple-award IDIQ contracts.

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Great discussion all around. The GAO decision http://www.wifcon.com/cgen/407113.pdf is a good read, which establishes some principles to follow for conducting sophisticated market research.

To your question ji20874, regarding set-aside applicability, the passage of the Small Business Jobs Act of 2010 (i.e. section 1331) makes the set-aside of task orders on Schedule permissible to those programs listed at FAR 19.000(3) https://www.govinfo.gov/content/pkg/FR-2012-01-12/pdf/2012-455.pdf. Albeit, for the purpose of this discuss I was more concerned with the principle behind conducting market research in general and the notion that reviewing past performance information at the market research stage is deemed an unacceptable practice with regard to aiding in the determination to set-aside or not set-aside. Ultimately the level of confidence that market research provides in decision making is predicated on how thoroughly it was performed. I struggled to see the logic in denying yourself access a useful repository of information (i.e. past performance) based solely on a wrong interpretation of FAR 42.1503(d).

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Troy, Right -- I'm aware of the statute you reference -- that's why I wrote what I did:   The rule-of-two from FAR part 19 does not reach to, or is inapplicable to, orders (or BPAs) against Schedule contracts (or BPAs) and orders against multiple-award IDIQ contracts.  If a contracting officer decides (at his or her sole discretion) to do a set-side in an ordering situation, it will be for reasons other than mandatory application of the rule-of-two.

So, since your original posting invoked the rule-of-two, it makes sense to make sure that you are in an open market situation where the rule-of-two applies, rather than in an ordering situation where the rule-of-two does not apply.

Here's a very recent GAO bid protest decision that reinforces this principle for schedule orders: American Relocation Connections, LLC; B-416035; May 18, 2018:  "...we conclude that the contracting officer here has discretionary authority to set-aside an order against the FSS, but is not required to do so..."  For another opinion, see also http://smallgovcon.com/gaobidprotests/small-business-rule-of-two-doesnt-apply-to-gsa-schedule/ (citing Walker Development & Trading Group; B-411357; July 8, 2015).

For orders against multiple-award IDIQ contracts, the GAO's opinion in Edmond Scientific Company; B-410179; November 12, 2014, explains why the rule-of-two does not apply to acquisitions for orders against multiple-award IDIQ contracts, and explains that the statutory grant of discretion to the contracting officer supplants the rule-of-two.

But on your original point, there seems to be unanimous agreement here that a contracting officer may use any available past performance information in making decisions involving the rule-of-two.

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Acknowledged, the GAO decision on Walker Development... cites their own Kingdomware decision from 2011. However, since the Supreme Court heard the case in 2016 and provided a judgment (https://www.supremecourt.gov/opinions/15pdf/14-916_6j37.pdf), the VA immediately changed it's internal rules significantly (effective June 16, 2016), namely establishing that VA contracting officer's in complying with 38 USC 8127 must satisfy rule of two requirements for set-asides; specifically when ordering on Schedule. However, to not take this discussion too far off topic, the principles behind what is allowable due diligence in market research for making any well informed acquisition strategy decisions is really the central debate I have been faced with.

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Troy,

You're right, if you're VA.  I'm not VA, so the rule-of-two does not apply to me or my colleagues when we do orders.

I hope you're successful in being able to use any information available in making your decisions.

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