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Freyr

What Qualifies as Responsibility?

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Seems like a really basic question but none of my colleagues have been able to give me a straight answer on this. The topic arose when it was mentioned that SB subcontracting plans can be negotiated without opening discussions because it's a matter of responsibility, according to DynCorp vs United States it seems that exchanges on responsibility matters really don't constitute discussions.

When looking at different elements of a proposal it doesn't always seem clear cut on what would be considered a matter of responsibility and what wouldn't. FAR 9.104-1 talks about several aspects of responsibility and FAR 19.601 talks about responsibility including but not being limited to "capability, competency, capacity, credit, integrity, perseverance, tenacity, and limitations on subcontracting" but I guess I'm looking for some examples. Like if we put in FAR 52.222-46 into the RFP but aren't going to provide a rating other than pass/fail would that be considered a responsibility assessment? If so, would that change if we evaluated it in a manner other than pass/fail?

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The provision at FAR 52.222-46, Evaluation of Compensation for Professional Employees, relates to the manner in which the an offeror intends to perform.  The provision includes both instructions to offerors on what an offeror needs to include in its proposal, as well as a discussion of how the Government is going to use that information.  If the Government has a question for a particular offeror related to this provision that relates to whether or not the offeror passes or fails (is awardable or not awardable), it seems to me the offeror would be revising its proposal in response to that question, which would constitute discussions.

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The GAO and Court of Federal Claims have told us that exchanges regarding acceptability of a subcontracting plan are not discussions (as that term is understood in a FAR subpart 15.3 context) because the apparent winner has already been selected subject to acceptability of the subcontracting plan.  If the negotiations on the plan's acceptability are favorable, then contract award is made -- if not, then the offeror is ineligible for award of the contract.

For the subcontracting plan, please note that reviewing and negotiating the acceptability of the plan (the words used by the FAR) is very different from evaluating proposed small business subcontracting participation as an evaluation factor.  The first is a matter of responsibility -- the second is a matter of proposal evaluation and part of the best value selection decision. 

Similarly, we understand that exchanges regarding an OCI matter are not discussions (as that term is understood in a FAR subpart 15.3 context).

In both of these circumstances, the award selection decision is made based on other factors identified in the solicitation. 

Simply using a pass/fail approach for an evaluation factor does not turn it into a responsibility matter. 

 

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Paragraph (a) of the provision at FAR 52.222-46 notes, "The Government will evaluate the plan to assure that it reflects a sound management approach and understanding of the contract requirements."  Paragraph (b) of the provision notes, "The compensation levels proposed should reflect a clear understanding of work to be performed and should indicate the capability of the proposed compensation structure to obtain and keep suitably qualified personnel to meet mission objectives." (emphasis added).  In my opinion, these considerations are not traditional responsibility matters.  Nothing in the provision suggests the evaluation is limited to the apparent successful offeror.

If the solicitation includes the provision, then the GAO decisions like CSE Constr., B-291268.2, Dec. 16, 2002, 2002 CPD ¶ 207 and Possehn Consulting, B-278759, Jan. 9, 1998, 98-1 CPD ¶ 10, don't apply. See International Outsourcing Services, LLC, B-295959, May 25, 2005, 2006 CPD ¶ 6.

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6 hours ago, Freyr said:

When looking at different elements of a proposal it doesn't always seem clear cut on what would be considered a matter of responsibility and what wouldn't.

True enough.  What is a matter or responsibility in one solicitation may be a matter of technical acceptability in another.  See generally FAR 9.104-2 and http://www.wifcon.com/pd91042.htm.  It isn't entirely obvious that compensation of professional employees can be easily turned into a definitive responsibility criterion, as FAR 22.1103 provides in part, "Plans indicating unrealistically low professional employee compensation may be assessed adversely as one of the factors considered in making an award." (emphasis added).

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5 hours ago, C Culham said:

????????

Right -- it is a true statement that simply using a pass/fail approach for an evaluation factor does not turn it into a responsibility matter.

I said "an evaluation factor" -- I did not say "a responsibility-type evaluation factor." 

The case you cited deals with responsibility-type evaluation factors, and is inapposite to my statement which deals will evaluation factors generally, not responsibility-type factors specifically.  As Jacques has pointed out rather well, it is not conclusive that professional employee compensation (as contemplated by FAR 52.222-46) is a responsibility-type evaluation factor.  Thus, simply using a pass/fail approach for that evaluation factor does not turn it in to a responsibility matter.  However, and in contrast for the sake of comparison, past performance is a responsibility-type evaluation factor, and if evaluated pass/fail instead of comparatively, does become a responsibility matter.

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16 hours ago, Ibn Battuta said:

Question: What qualifies as [a matter of] responsibility?

Answer: Any exchange of information between the government and an offeror that pertains to whether the offeror satisfies any of the responsibility standards listed in FAR 9.104 can be treated as a matter of responsibility as long as the information is not to be considered in connection with an evaluation factor on which the offerors will be compared to one another. It is risky to treat an exchange of any other information as being related to responsibility. You might get away with it, but you might not.

Do you have any support for this answer?  Doesn't the language of the solicitation matter?  Do you consider your answer to be a complete statement of all relevant rules?  Is your answer limited to FAR Part 15 procedures, or do you believe it applies with equal force for a IFB under Part 14?

As a test, use the provision we've been talking about as an example.  Imagine a scenario where the language at FAR 22.1103 is unequivocal.  It provides in part, "Plans indicating unrealistically low professional employee compensation may be assessed adversely as one of the factors considered in making the award."  What if it said the evaluation had to be considered under the trade?  Wouldn't you need a deviation from FAR 22.1103 to turn the evaluation of professional compensation into a definitive responsibility criterion under FAR 9.104-2?  I think even your statement of the "rule" would acknowledge there may be circumstances where the FAR requires a criterion be used in the context of comparing offers (and not just pass/fail). Adjustments to evaluated price for cost realism under CR contracts might be an example.

Sorry if I'm overreacting to the format of your post.  It reads like you're making a final pronouncement on the thread.

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FAR 9.104-2 is also discussed in Nash & Cibinic, Formation of Government Contracts (3d Ed.) at 422-428 (or chap. 4, section I.A.1.b. if you're using a more recent edition). 

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I must have read differently -- I thought Ibn Battuta (pbuh) made a pretty good general statement, and didn't read his comment as trying to turn the evaluation of professional compensation into a definitive responsibility criterion.

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From the perspective of a Government contracting officer preparing an RFP (or, worse still, evaluating proposals), if you're trying to figure out whether there are limits on what sorts of evaluation criteria can be treated as a definitive responsibility criterion, I didn't find @Ibn Battuta's post particularly helpful.  Consider Nash & Cibinic:

Quote

Definitive responsibility criteria must also be distinguished from specification requirements.  See Power Testing Inc., Comp. Gen. Dec. B-197190, 80-2 CPD ¶ 72, where a statement in the solicitation requiring the contractor to use a foreperson with at least five years' experience was treated as a statement of how the work was to be performed rather than an aspect of responsibility that had to be satisfied at time of award.  Specification statements rather than definitive responsibility were also found in Markhurd Aerial Surveys, Inc., Comp. Gen. Dec. B-210108, 83-1 CPD ¶ 51, where a solicitation requirement stated that the contractor was required to use personnel with minimum crew experience; Data Gen. Corp., Comp. Gen. Dec. B-252239, 93-1 CPD ¶ 457, where the solicitation stated that "all personnel performing under the resulting contract must have a minimum of one year experience" in similar work; and Satellite Servs., Inc., Comp. Gen. Dec. B-219679, 85-2 CPD ¶ 224, where the solicitation stated that all personnel must be fully qualified to perform.

Nash & Cibinic, Formation of Government Contracts (3d Ed. 1998), at 425.  I'm probably being too focused on trying to find the line and what crosses the line, rather than general principles.  I see this thread is in the "For Beginners Only" forum, so I'm probably way too deep in the weeds.  Regrets.

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32 minutes ago, Ibn Battuta said:

Comment: "From the perspective of a Government contracting officer preparing an RFP (or, worse still, evaluating proposals), if you're trying to figure out whether there are limits on what sorts of evaluation criteria can be treated as a definitive responsibility criterion, I didn't find @Ibn Battuta's post particularly helpful."

Response: It shouldn't have been helpful, because I did not address that issue.

I would like to point out that the phrase "definitive responsibility criterion" does not appear anywhere in the FAR System that I could find. The phrase was first used by the GAO in 1975, without definition or explanation, and has been used since then in more than 1,000 GAO decisions. GAO explained what it means by that phrase in ARI Phoenix, Inc. GAO B-416878, October 24, 2018:

Are professional employee compensation plans incorporated into contracts?

Notwithstanding GAO's reference to FAR 9.104-2, the phrase "definitive responsibility criterion" or "criteria" does not appear there.

I just wanted to provide my answer to the question. Please take it or leave it. I do not want to engage in speculation and back-and-forth about whether a criterion other than a traditional responsibility criterion can be turned into a matter of responsibility so that information about it can be exchanged without conducting discussions. I frankly dislike the back and forth that goes on in this forum. Now that I have become the target of someone's ire, I think it best to withdraw from further participation.

Just because you encounter a difficult patch you don't need to end your travels. Keep travelling and keep writing

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Sorry to offend.  I appreciate your participation, and I think the thread is better as a result of it.

The provision at FAR 52.222-46 begins, "Recompetition of service contracts may in some cases result in lowering the compensation (salaries and fringe benefits) paid or furnished professional employees.  This lowering can be detrimental in obtaining the quality of professional services needed for adequate contract performance."  Elsewhere, it states, "The Government will evaluate the plan to assure that it reflects a sound management approach and understanding of the contract requirements."  To me, this involves an offeror's (or potential contractor's) "performance obligations under the contract" more than its "eligibility for award," so the evaluation of professional compensation does not seem to me to be particularly well-suited to be treated as a definitive responsibility criterion.  (I'm probably not articulating well why that is--maybe it is because compensation on a particular contract seems to be more related to a specific approach to meeting a specific requirement rather than an attribute that is less subject to variation.)  This is true even if the compensation plan is not made contractual.  I'm not trying to rule out the possibility that there might be a way to do it, it just seems like a stretch.

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I appreciate your responses on this Ibn, taken together with Jacques thoughts gives me a lot to think about. Would it be safe to say that depending on how you're evaluating something such as a compensation plan that it may be used either as a responsibility type assessment or a technical evaluation? 

 

Jacques, I'm not sure I follow what you just stated. I'm having trouble seeing the evaluation of "a sound management approach and understanding of the contract requirements" as creating a performance obligation. It seems like it's more like the offeror saying "this is how I think I can attract employees and retain them for what I understand your requirement to be" rather than an assurance that it can and will take that approach once performance beings. After performance begins, assuming their compensation plan is not incorporated into the contract, they may find that they can change their compensation packages and still meet other performance obligations in the contract right? It feels like it's more related to the ability to obtain the resources (say personnel) needed to perform. Don't we just want to know that they understand what we're asking them to do and can hire people to do that?

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If I evaluate professional employee compensation as contemplated by the provision at FAR 52.222-46, I generally treat it as one of the comparative evaluation factors rather than as a matter of responsibility.  I recommend that approach to others.

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2 minutes ago, Freyr said:

Jacques, I'm not sure I follow what you just stated. I'm having trouble seeing the evaluation of "a sound management approach and understanding of the contract requirements" as creating a performance obligation.

The contract has whatever specific requirements it has, and we evaluate compensation ultimately because we are concerned about its impact on "adequate contract performance."  I appreciate that ultimately any definitive responsibility criterion is established because the Government believes, in the absence of that criterion, the likelihood of successful contract performance becomes unacceptably low.  However, the word, "qualifications," which seems to me to be an important component of a definitive responsibility criterion, seem more inherent to the contractor, and less fluid, less specific to an offeror's approach to meeting the requirements of a specific contract.  Sorry if this isn't helpful.

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2 hours ago, Ibn Battuta said:

Those who forget history...

Interestingly FAR 52.222-46 has been around since 1983 and has been the subject of GAO protests in and of itself.  Now I have not studied each and everyone of the decisions but it makes me think the history related to the specific provision in question in this thread might also be of help.  Going out a on limb here  based on limited look see at the decisions but could -46 be more of a matter of price/cost realism than technical? 

To the OP - a search of the GAO website of "52.222-46" might provide additional insight with regard to this overall discussion.

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2 hours ago, Ibn Battuta said:

Why go back to treating such factors as responsibility factors just so you can avoid the need to conduct discussions in order to exchange information about them?

I agree.  Clarifications (even robust clarifications) or communications in the context of a comparative technical evaluation seem far better to me for evaluating professional compensation than the blunt instrument of responsibility -- and choosing the blunt instrument of responsibility just so the government can talk with an offeror doesn't make sense, either.  I understand that professional employee compensation might possibly perhaps abstractly could be seen as a matter of responsibility, but I'm trying to stay practical.

Jacques,  In your own practice, do you generally treat professional employee compensation as contemplated by the provision at FAR 52.222-46 as (1) one of the comparative evaluation factors; (2) a matter of responsibility; or (3) a matter of pass/fail price realism?  I understand that you believe it could be done as (2), but do you really do it that way?

Carl,  I haven't studied all the cases, either, but you make a good point.  I think if there was no technical evaluation factor for professional employee compensation, then the -46 provision could be used as the basis for a cost realism analysis where a probable cost is developed (for a cost-reimbursement contract) or for a price realism analysis resulting in a pass/fail (for a fixed-price contract) -- I remember a GAO bid protest decision a while back that said realism could be evaluated in a fixed-price acquisition even if the solicitation Sec. L or M did not mention price realism but did include the -46 provision, because the provision specifically calls for an evaluation of professional employee compensation and specifically mentions realism.  However, still, I think choosing to treat professional employee compensation as one of the comparative technical evaluation factors can make a lot of sense.

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For something like GSA's upcoming ASTRO solicitation, I'm guessing they'll probably need that clause in it but it seems like it could be a good place for a non-comparative assessment of a compensation plan. It looks like they're choosing a route similar to the other GSA IDIQs but in those contexts, where they don't know how many employees or the types of employees, it seems like they would just be looking at general information regarding each contractor's approach right? Maybe I'm getting too far into a tangent with this now.... 

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1 hour ago, ji20874 said:

Jacques,  In your own practice, do you generally treat professional employee compensation as contemplated by the provision at FAR 52.222-46 as (1) one of the comparative evaluation factors; (2) a matter of responsibility; or (3) a matter of pass/fail price realism?  I understand that you believe it could be done as (2), but do you really do it that way?

In earlier posts, I simply didn't want to overstate my position.

I can imagine there might be circumstances where only having to evaluate the apparent successful offeror might be a good thing, or at least considered by some to be a good thing.  However, it seems that a strategy based on only evaluating the apparent successful offeror on something like the compensation plan is based on a "strategy of hope" that all the stars will align.  It seems too likely to me that if I sent the apparent successful offeror an evaluation notice asking about its compensation plan, that offeror would change its price.  If my source selection includes trading price against something else, in no time, the apparent successful offeror is no longer the apparent successful offeror, and I haven't saved any time at all.

While every source selection is different, if the source selection involves a technical trade, I encourage folks to identify an evaluation factor where all the considerations under FAR 52.222-46 will be captured.  If the source selection is more of an LPTA or Performance-Price Tradeoff (do they still call them that?), I encourage folks to include in Section M of the solicitation more insight into what would result in an unacceptable compensation plan.  The provision permits substantial room for the exercise of discretion, and if offerors have more insight into how compensation is ACTUALLY going to be evaluated, they are less likely to be surprised later.

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On 1/9/2020 at 3:56 PM, Ibn Battuta said:

I searched the GAO decisions and found 104 in which compensation and professional employees appeared as a phrase. That does not mean that it was an issue in all those decisions. I have not read them all, but I scanned them and found that the earliest that dealt with professional compensation as an issue was dated 1979, Joule Technical Corp., 58 Comp. Gen. 550, B-192125, May 21, 1979. It is available via Google. The case was based on a policy document that had been published by the OFPP in the Federal Register on May 21, 1978. The GAO decided that the policy letter did not apply to the acquisition in question because the RFP was issued before it was published. However, the policy letter relates the origin of the policy.

"THE OFFICE OF FEDERAL PROCUREMENT POLICY (OFPP) HAS SOUGHT TO PRECLUDE WAGE BUSTING FOR PROFESSIONAL EMPLOYEES, A CLASS OF PEOPLE NOT NORMALLY COVERED BY UNION AGREEMENTS, BY PROVIDING FOR AGENCIES TO CONSIDER LOWERED PROFESSIONAL EMPLOYEE COMPENSATION AS INDICATING A LACK OF SOUND MANAGEMENT. 43 FED.REG. 18805, MAY 2, 1978." (Caps in original.) 

The OFPP Federal Register policy document cited in Joule said that compensation was to be evaluated on the basis of the following instructions to "bidders":

Thus, it appears that in 1978 proposed professional employee compensation encompassed two criteria, the first relating to the offeror's understanding and ability and the second relating to the offeror's proposed contract terms. Since it pertained to proposed contract terms, it could not have been a definitive responsibility criterion.

Today, FAR 52.222-46 appears to be focused entirely on the offeror's ability to perform given what it's willing pay its professionals. There is no requirement for the plan to be incorporated into the awardee's contract.

Ibn, is the "proposed contract terms" you're referring to the Cost Factor described in the instructions? If, hypothetically, there was no evaluation of the actual compensation data and only an evaluation of the general methodology of developing compensation as it relates to the offeror's ability to understand the requirement and obtain the resources/experience necessary to perform the contract would this then potentially open the door to it being a responsibility matter (in your opinion)? 

 

My office has been chattering lately about unpriced IDIQs/schedules and it made me think of this thread and how this provision could potentially apply to them if the number/type/location of professional employees is unknown when soliciting. 

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