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Another office disagreement/debate we've had recently is regarding whether or not a responsibility issue can be fixed via exchanges if the vendor failed to provide any documentation regarding it. 

Our example: Using FAR Part 15 procedures. Solicitation says vendors must provide financial statements, accounting system audits, and subcontracting plans. Solicitation also says that the Government will review each proposal for compliance with the solicitation and will remove vendors who do not comply with the requirements of the solicitation. Vendor 1 provides only financial statements and accounting system audits but failed to provide any subcontracting plan. Vendors 2 and 3 provide all of the documentation required. 

Is the subcontracting something that we can request Vendor 1 to submit their subcontracting plan after their initial submission without engaging in discussions? We've looked at some cases (like this and this) where vendors failed to provide certain financial statements or accounting system audits and the Agency removed them for non-compliance with the solicitation. The GAO seemed to think in those cases that it didn't need to go to the SBA for a CoC because it wasn't a non-responsibility determination but rather a non-compliance issue. The COFC has of course held that if even if the exchanges had produced changes in a vendor's proposal it would not constitute discussions under FAR 15.306(d) because the exchanges only concerned responsibility. I haven't seen any GAO/COFC cases where an Agency allowed a fully omitted responsibility item to be submitted after the initial submission (maybe I'm just asking a dumb question and it's clearly something that no one would protest or no CO would allow?).

 

Bottom line Question: Can we cure a material omission in the name of responsibility or should the vendor be kicked out during the compliance check?

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Is the Vendor a small business concern?  If so, would it be required to have a small business subcontracting plan (FAR 19.702(b)? 

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Joel asks the right question.

If the answer is YES (meaning the offeror is a small business concern), then a subcontracting plan is not required, period.

If the answer is NO (meaning the offeror is not a small business concern), shouldn't you do what you said you would do in the solicitation?  Throw the bum out.  And next time, be more careful in what you write in your solicitation.

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For the sake of this question the vendor would be a large business under the solicitation. I definitely get that a key principle of contracting is "say what you're going to do and do it" however,  just to play devil's advocate, let's say Vendor 1 did go through a tech eval and received the highest marks with the lowest price while Vendors 2 and 3 just barely passed and had significantly higher prices and it's pretty clear from their proposals that discussions won't make them more competitive. Is it really in the best interest of the Government to remove Vendor 1 as "bum" for failing to include a responsibility item? 

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33 minutes ago, Freyr said:

For the sake of this question the vendor would be a large business under the solicitation. I definitely get that a key principle of contracting is "say what you're going to do and do it" however,  just to play devil's advocate, let's say Vendor 1 did go through a tech eval and received the highest marks with the lowest price while Vendors 2 and 3 just barely passed and had significantly higher prices and it's pretty clear from their proposals that discussions won't make them more competitive. Is it really in the best interest of the Government to remove Vendor 1 as "bum" for failing to include a responsibility item? 

Whether the small business plan is purely a "responsibility item" depends on the language of your solicitation.  It sounds like your solicitation isn't treating it purely as a responsibility matter, but obviously that depends on the language of the solicitation when read as a whole.

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Since this is a hypothetical, you have an opportunity to revise your evaluation criteria. In your example, you established the pro forma review as a floor for remaining in the competition. 

17 hours ago, Freyr said:

Is the subcontracting something that we can request Vendor 1 to submit their subcontracting plan after their initial submission without engaging in discussions?

If a subcontracting plan is an evaluation factor for a trade-off, then not providing the information is technically a deficiency.  You can’t cure such a deficiency through clarifications without conducting discussions. However, your pro forma criteria indicated that the government “will remove vendors who do not comply with the solicitation requirements”.

I don’t know if the protest forums have waived pro forma restrictions. But generally, the GAO looks to see if the government has followed its stated evaluation criteria. And the forums have consistently stated that the government can’t use communications to allow a firm to cure a clear deficiency without conducting discussions.

EDIT: if the basis of award is an LPTA, there may be exceptions that might allow the government to obtain a satisfactory subcontracting plan, if it is a responsibility criterion, before award - but your stated absolute pro forma requirement would theoretically trump that possibility. 

Edited by joel hoffman
Distinguish between LPTA and comparative evaluation criteria
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47 minutes ago, Freyr said:

Is it really in the best interest of the Government to remove Vendor 1 as "bum" for failing to include a responsibility item? 

Yes.  Maintaining the integrity of the process is important.  But isn't it a little disingenuous to describe this as merely a responsibility item?

Let me re-cast what you wrote:  Vendor 1 is the incumbent and is the favored offeror, and we cannot imagine working with any other contractor -- risk to the work and all that -- let's skew our rules to favor our favored offeror since this is who is going to win anyway.  Isn't it in the Government's interest to select the contractor that we favor the most?

I saw this a while back -- the solicitation required a certain education level and experience and so forth for the project lead -- the incumbent proposed its very successful incumbent project lead, who did not have the education -- so the Government team wanted to overlook the deficiency because the incumbent is the one they wanted to win anyway, and thought it was in the Government's interest to select the incumbent because otherwise it got the highest ratings and so forth.

But you can salvage the situation.  Maybe you need to cancel the solicitation and start over.  Or maybe you need to issue a solicitation amendment for some small thing and send it only to those who submitted offers -- invite updated proposals based on the invitation and then re-do whatever portion of the technical evaluation needs to be re-done.  Hopefully, Vendor 1 will follow instructions this time and you can select Vendor 1 as the winner (that seems like the desired end result anyway).

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27 minutes ago, ji20874 said:

Yes.  Maintaining the integrity of the process is important.  But isn't it a little disingenuous to describe this as merely a responsibility item?

Let me re-cast what you wrote:  Vendor 1 is the incumbent and is the favored offeror, and we cannot imagine working with any other contractor -- risk to the work and all that -- let's skew our rules to favor our favored offeror since this is who is going to win anyway.  Isn't it in the Government's interest to select the contractor that we favor the most?

I saw this a while back -- the solicitation required a certain education level and experience and so forth for the project lead -- the incumbent proposed its very successful incumbent project lead, who did not have the education -- so the Government team wanted to overlook the deficiency because the incumbent is the one they wanted to win anyway, and thought it was in the Government's interest to select the incumbent because otherwise it got the highest ratings and so forth.

But you can salvage the situation.  Maybe you need to cancel the solicitation and start over.  Or maybe you need to issue a solicitation amendment for some small thing and send it only to those who submitted offers -- invite updated proposals based on the invitation and then re-do whatever portion of the technical evaluation needs to be re-done.  Hopefully, Vendor 1 will follow instructions this time and you can select Vendor 1 as the winner (that seems like the desired end result anyway).

ji, I think you are saying that vendor 1 would still have to comply with the Part 15 solicitation/RFP/etc. requirements. Important point.

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Greatly appreciate the answers which all clearly point in the same direction. That said, for a FAR Part 15 procurement, what's really the purpose of what Joel called a "Pro Forma" review other than to kick out vendors who didn't submit all of the requirements? Say for instance that the subcontracting plan is not used as part of any technical evaluation and we didn't include that compliance language. If a vendor failed to submit any required technical documents and we clearly can't evaluate their technical acceptability that's one thing but if we don't have that language and can evaluate everything except that subcontracting plan (which was omitted), then are we still in the same position as if we had that language and still cannot request the plan without going into discussions? I guess my question now boils down to: is that language on it's own what would be removing the vendor if no other deficiencies exist?

I recall reading this case about an Agency not having that language and getting in trouble for performing a compliance review. 

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My first suggestion would be to replace the word “will” with “may”.

And - for comparative factors, once getting beyond the pro forma review, I think that failure to submit a required subcontracting plan would still be a deficiency that would require discussions. For LPTA, it might be waiveable, as long as the government obtains an acceptable plan prior to award.

https://protoraelaw.com/think-you-know-everything-about-subcontracting-plans-think-again/

Edited by joel hoffman
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16 minutes ago, Freyr said:

Greatly appreciate the answers which all clearly point in the same direction. That said, for a FAR Part 15 procurement, what's really the purpose of what Joel called a "Pro Forma" review other than to kick out vendors who didn't submit all of the requirements? Say for instance that the subcontracting plan is not used as part of any technical evaluation and we didn't include that compliance language. If a vendor failed to submit any required technical documents and we clearly can't evaluate their technical acceptability that's one thing but if we don't have that language and can evaluate everything except that subcontracting plan (which was omitted), then are we still in the same position as if we had that language and still cannot request the plan without going into discussions? I guess my question now boils down to: is that language on it's own what would be removing the vendor if no other deficiencies exist?

I recall reading this case about an Agency not having that language and getting in trouble for performing a compliance review. 

If the subcontracting plan is not an evaluation criterion, then it apparently would be part of the pre-award Responsibility determination or other pre-award requirement. Don’t know if your currently stated pro forma review criteria would require removal before evaluating. 

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26 minutes ago, joel hoffman said:

My first suggestion would be to replace the word “will” with “may”.

And - for comparative factors, once getting beyond the pro forma review, I think that failure to submit a required subcontracting plan would still be a deficiency that would require discussions. For LPTA, it might be waiveable, as long as the government obtains an acceptable plan prior to award.

https://protoraelaw.com/think-you-know-everything-about-subcontracting-plans-think-again/

Thanks for the article, super helpful! It states in there "If it is a responsibility criterion, the exchange will still be considered a “clarification” even if the offeror submits a revised subcontracting plan." Do you feel there's a difference between allowing a revised plan and allowing a plan to be submitted in general? 

You also brought up a word our lawyers seem to hate, "waiveable." What conditions do you see need to be met in order to waive something? Outside of FAR 52.215-1(f)(3) that is, unless you consider it to be that minor in the context of the solicitation.

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Lots of advice so far.  I’ll add if vendor 1 is much better, why would you toss them out when holding discussion will rectify?  Too often government agencies spend an extraordinary efforts to avoid discussions.  Often that means not achieving the most favorable offer.  It’s like buying a car with asking for the best price.  Also discussions allow you to bargain on lots of no price issues.  You can hold fissions and get revised offers generally in a few days.

Another thing with subcontracting plans, don’t take things for granted.  An offeror could have an approved master plan or commercial plan in place.  Companies are not required to submit additional plans once a commercial plan is approved by a CO.  My advice is carefully read through the proposal and be certain a plan isn’t mentioned somewhere.  You could find yourself in a mess if you disqualify an offer in error.

The bottom line is competition is there to get the best deal.  Sure, integrity of the process has to be maintained too.  But like the old saying goes, “don’t throw out the baby with the bath water.”

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When I said, “For LPTA, it might be waiveable, as long as the government obtains an acceptable plan prior to award”, I was referring to:

https://protoraelaw.com/think-you-know-everything-about-su...

1 hour ago, Freyr said:

You also brought up a word our lawyers seem to hate, "waiveable." What conditions do you see need to be met in order to waive something? Outside of FAR 52.215-1(f)(3) that is, unless you consider it to be that minor in the context of the solicitation.

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But the initial problem is being able to include the firm’s proposal in the evaluation when the RFP specifically says that the government WILL review EACH proposal for compliance with the solicitation AND WILL REMOVE vendors who do not comply with the solicitation requirements. 

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49 minutes ago, formerfed said:

The bottom line is competition is there to get the best deal.  Sure, integrity of the process has to be maintained too.  But like the old saying goes, “don’t throw out the baby with the bath water.”

 

9 minutes ago, joel hoffman said:

But the initial problem is being able to include the firm’s proposal in the evaluation when the RFP specifically says that the government WILL review EACH proposal for compliance with the solicitation AND WILL REMOVE vendors who do not comply with the solicitation requirements.

If the firm isn’t required to submit a small business subcontracting plan, then it may very well not be a problem.

 

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In this thread, we still don't know WHY the favored offeror didn't submit a subcontracting plan.  The contracting officer could ask the offeror to clarify WHY it did not submit one with its proposal.  Shooting in daylight is better than shooting in darkness.

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This discussion illustrates why many contractors believe the competition process is rigged. One offeror failed to comply and the awarding agency is considering bending the rules for the noncompliant vendor. I get the rationale for doing so, but when the government does this, offerors just get a little more cynical about the process.

If you want fewer protests, be better evaluators.

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Why would the government require submittal of a subcontracting plan with the proposal for an LPTA basis of award or as a go/no-go factor other than for expediency?

If that is the reason, then you should provide some wiggle room and state that it has to be acceptable prior to award.

If the subcontracting plan is important enough to be a comparative factor, it is supposed to be a DISCRIMINATOR between competing firms. It is then necessary for it to be included in a trade-off comparison. 
Example: https://www.gao.gov/mobile/products/B-418403?utm_campaign=usgao_email&utm_content=gcdecisions&utm_medium=email&utm_source=govdelivery#mt=e-report

Not saying that the above example is or isn’t a good one, just that the small business participation was a comparative factor and that it was mentioned in the protest. 

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2 minutes ago, ji20874 said:

In this thread, we still don't know WHY the favored offeror didn't submit a subcontracting plan.  The contracting officer could ask the offeror to clarify WHY it did not submit one with its proposal.  Shooting in daylight is better than shooting in darkness.

Agreed 

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11 minutes ago, here_2_help said:

This discussion illustrates why many contractors believe the competition process is rigged. One offeror failed to comply and the awarding agency is considering bending the rules for the noncompliant vendor. I get the rationale for doing so, but when the government does this, offerors just get a little more cynical about the process.

If you want fewer protests, be better evaluators.

Agreed - and write better requirements. Don’t box yourself in, unnecessarily. 

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12 minutes ago, ji20874 said:

In this thread, we still don't know WHY the favored offeror didn't submit a subcontracting plan.  The contracting officer could ask the offeror to clarify WHY it did not submit one with its proposal.  Shooting in daylight is better than shooting in darkness.

It's all a hypothetical still but does the reason matter? Is there a difference between an offeror who thought they uploaded it vs one who glazed over the requirement and didn't think they needed to? 

I'm taking from a lot of the responses here that the Government can tend to be a little too strict in their solicitation requirements, leaving little room for Contracting Officers to make judgement calls and use their discretion without appearing to bend the rules too far and appear to favor one vendor over others. Thankfully these forums exist to help educate those like me who are still learning the ins and outs of Federal Acquisition.  

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1 hour ago, formerfed said:

Too often government agencies spend an extraordinary efforts to avoid discussions.  Often that means not achieving the most favorable offer.  It’s like buying a car with asking for the best price.  Also discussions allow you to bargain on lots of no price issues.  You can hold fissions and get revised offers generally in a few days.

TOTALLY agree!   Here Here!

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Joel gave good advice earlier -- for example, do not write in the solicitation, "and will remove vendors who do not comply."  How about either (1) writing "and may remove vendors who do not comply;" or (2) remaining silent on the matter in the solicitation?  But if you promise that you will remove someone, then why not throw the bum out as you promised?  Don't make a promise unless you are prepared to keep it.

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38 minutes ago, Freyr said:

It's all a hypothetical still but does the reason matter? Is there a difference between an offeror who thought they uploaded it vs one who glazed over the requirement and didn't think they needed to? 

I'm taking from a lot of the responses here that the Government can tend to be a little too strict in their solicitation requirements, leaving little room for Contracting Officers to make judgement calls and use their discretion without appearing to bend the rules too far and appear to favor one vendor over others. Thankfully these forums exist to help educate those like me who are still learning the ins and outs of Federal Acquisition.  

As you can see here,  don’t box yourself in with an overly restrictive pro forma procedure.

Also, carefully determine how and why you would need to or want to evaluate small business subcontracting participation. That is one facet that is inherently written in the FAR with latitude on how and when the Government  can decide to achieve an acceptable plan  prior to award. It is intended to be able to be negotiated with an otherwise successful offeror.

Out of the 90 or so source selections that I participated in and in the Model RFP that we developed and that Our USACE Districts used on billions of dollars worth of design-build construction projects for the Army Transformation Program within the past fifteen years,  I don’t think any of them included a comparative evaluation of small business participation as an important DISCRIMINATOR, although some Districts may have modified the Model RFP for specific projects. 

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