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What is the definition of "Minimum requirements of the Government"


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#1 Boof

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Posted 06 July 2010 - 02:36 AM

I thought I could find some kind of definition of what the "minimum requirements of the Government" was in either the FAR or the Redbook but after an hour of computer searching I have not found anything. Google has not given me anything of value either. Now I come to you wise experts for advice.

I am refering to the old addage I heard 35 years ago that you should not buy a Cadillac when a Chevy will do the job. I am looking for something that I can hang my hat on when denying clients who want a $1400 refrigerator with bells and whistles when we have $700 plain Jane unit in stock, or fancy drapes that cost $700 per panel versus a normal $200 per panel.

I have flat out refused to buy a few things in the past but had no real regulation or rule to back me up. My usual response to the person yelling at me on the other end of the phone is to tell them they need to call my supervisor who always supports me. However, it would sure be nice if there was a few words somewhere that I could point to as the reason for my denying the request.

Any known passages you could point me at???

#2 dwgerard

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Posted 06 July 2010 - 07:06 AM

I have had similar problems in the past when customers requested $3,000 binoculars when I could find $700 binoculars that had exactly the same specifications.

You won't find any definitions to back you up, but what I did was send a message to the customer requiring them to define exactly what specifications they required. If their specifications did not match the gold plated item, or could be satisified with the stainless steel version, I informed them of my findings and gave them a chance to either cancel the request or improve their requirement package to justify the gold plating.

I never received a justification for the gold plating in the dozen or so times I had that problem, but in half of the cases they cancelled the requisition. They likely shopped it around to someone who never questioned their requirement, but at least it wasn't my fault that the government wasted money on a Cadilac when all they needed was a Chevy.

#3 policyguy

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Posted 06 July 2010 - 08:14 AM

I would recommend reviewing the Purpose Law contained in 31 U.S.C. 1301(a) and the four criteria that must be satisfied:

(1) Necessary (incidental)
(2) Logically connected to the appropration
(3) Not prohibited by other law or policy
(4) Not otherwise provided for (as in another appropriation).

I have referred to this as the "necessary expense" rule and have asked requiring activites to answer the question: Is this a necessary expense to satisfying the Mission? There are numerous GAO cases that refer to this necessary expense that you may want to review as well. For example, purchasing bottled water B-318588, 9/29/09.

When in doubt on whether something is a necesaary expense I have gathered the facts and requested an opinion from the Comptroller and General Counsel.

This may not be the perfect answer but I hope it helps.

#4 Vern Edwards

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Posted 06 July 2010 - 08:33 AM

I thought I could find some kind of definition of what the "minimum requirements of the Government" was in either the FAR or the Redbook but after an hour of computer searching I have not found anything. Google has not given me anything of value either. Now I come to you wise experts for advice.

I am refering to the old addage I heard 35 years ago that you should not buy a Cadillac when a Chevy will do the job. I am looking for something that I can hang my hat on when denying clients who want a $1400 refrigerator with bells and whistles when we have $700 plain Jane unit in stock, or fancy drapes that cost $700 per panel versus a normal $200 per panel.

I have flat out refused to buy a few things in the past but had no real regulation or rule to back me up. My usual response to the person yelling at me on the other end of the phone is to tell them they need to call my supervisor who always supports me. However, it would sure be nice if there was a few words somewhere that I could point to as the reason for my denying the request.

Any known passages you could point me at???

The term "minimum requirements" appears only four times in FAR, and only 12 times in the entire FAR system, and nowhere in the FAR system is it said that the government may buy only its minimum requirements. A similar term is "minimum needs." That term appears 15 times in the FAR system, and nowhere in the FAR system is it said that the government may buy only its minimum needs.

What the FAR does say is that an agency cannot write a specification that is more restrictive of competition than is necessary. See FAR 11.002(a)(1)(ii). Thus, it might be said that an agency cannot specify more than its minimum needs, but that it may buy more than the minimum if it can show that the extra is useful.

The Chevy versus Cadillac myth can be traced to a 1936 decision of the GAO, addressed to the Secretary of the Interior, 15 Comp. Gen. 974 (May 9, 1936), in which the Comptroller General said that the agency could not specify a Ford "de luxe" automobile if a Chevrolet would do the job:

IT APPEARS FURTHER FROM THE LETTER THAT THE DE LUXE MODEL WAS SPECIFIED FOR THE AVOWED PURPOSE OF EXCLUDING FROM COMPETITION THE STANDARD MODEL OF CHEVROLET AUTOMOBILE, A CAR ADMITTEDLY IN THE COMPETITIVE CLASS REQUIRED, FOR THE SOLE REASON THAT IT HAD ONLY 109-INCH WHEEL BASE, IT BEING STATED THAT ?THE ROADS ARE ROUGH IN MANY PLACES AND WE DESIRED AS LONG A WHEEL BASE AS POSSIBLE.? AS POINTED OUT, SUPRA, THE NEEDS OF THE GOVERNMENT ARE THE CRITERION AND THE DESIRES OF THE EMPLOYEES ARE NOT FOR CONSIDERATION. IT HAS BEEN HELD REPEATEDLY BY THIS OFFICE THAT THE WHEEL BASE OF AN AUTOMOBILE DOES NOT NECESSARILY DETERMINE EITHER ITS STURDINESS OF CONSTRUCTION OR ITS ABILITY TO PERFORM THE SERVICE REQUIRED, AND THAT THE SPECIFICATION OF AN ABSOLUTE MINIMUM OF WHEEL BASE IS NOT PERMISSIBLE (14 COMP. GEN. 368; A-60763, DEC. 10, 1935; AND A-70183, FEB. 18, 1936.)

IT MAY BE TRUE THAT THE COST OF A FORD DE LUXE MODEL IS ONLY SLIGHTLY ABOVE THAT OF THE STANDARD MODEL WHEN COST OF NONESSENTIAL ACCESSORIES IS ADDED TO THE COST OF THE STANDARD MODEL, OR ONLY SLIGHTLY IN EXCESS OF THE COST OF THE STANDARD MODELS OF OTHER MAKES. IT MAY BE TRUE THAT IN THE OPINION AND BELIEF OF THE PARK SUPERINTENDENT, THE NONESSENTIAL ACCESSORIES, THE BUILT-IN TRUNK, AND THE EXTRA WHEEL BASE WERE WORTH THE DIFFERENCE IN COST AND THE DE LUXE MODEL WAS ?A BETTER BUY.? SUCH MATTERS ARE NOT FOR CONSIDERATION. THE SOLE QUESTION IS THE ACTUAL NEEDS OF THE SERVICE TO BE PERFORMED. THE LEAST EXPENSIVE CAR WHICH WILL MEET THESE NEEDS IS FOR PURCHASING, AND IN DRAWING SPECIFICATIONS NO RESTRICTIVE PROVISIONS MAY BE INCORPORATED WHICH EXCLUDE FROM COMPETITION ANY CAR WITHIN THE RECOGNIZED COMPETITIVE CLASS IN WHICH PURCHASE IS TO BE MADE. IT MAY BE OBSERVED IN THIS CONNECTION THAT THE STATUTES LIMITING THE PRICE OF PASSENGER-CARRYING VEHICLES PRESCRIBE A MAXIMUM AND NOT A MINIMUM PRICE. THEY DO NOT ABROGATE THE PROVISIONS OF SECTION 3709, REVISED STATUTES, WHICH REQUIRE THAT THE NEEDS OF THE GOVERNMENT ARE TO BE SERVED IN THE PURCHASE OF ARTICLES AND MATERIALS. THAT IS TO SAY, IF THE ACTUAL NEEDS OF THE GOVERNMENT REQUIRE AN AUTOMOBILE OF A MAXIMUM PRICE OF $750, ITS PURCHASE IS PERMISSIBLE. IF AN AUTOMOBILE OF A MATERIALLY LOWER PRICE WILL SERVE THE NEEDS OF THE GOVERNMENT ITS PURCHASE IS REQUIRED.


Capitalization in original. However, in a later decision, the GAO explained as follows:

We have held that the determination of what will satisfy the Government's needs is primarily within the discretion of procuring officials. We will not interpose our judgment for that of the contracting agency unless the protester shows that the agency's judgment is in error and that a contract awarded on the basis of such specifications would be a violation of law by unduly restricting competition. Essex Electro Engineers, Inc., B-191116, October 2, 1978, 78-2 CPD 247. In this instance, Chrysler is essentially proposing that subcompacts possess attributes which Chrysler believes are best suited to GSA's needs--most particularly alleged economy of acquisition and operation. Chrysler argues that the case is similar to that in 15 Comp. Gen 974 (1936), in which our Office held that specification of a 'deluxe model' automobile impermissibly exceeded agency needs. However, the analogy is inapposite. In that case, we found that the agency had improperly restricted competition to deluxe model vehicles where it conceded that it did not need all of the features associated with such a model, but argued that since it needed some of the features, the deluxe model represented good value to the Government. In this instance, GSA has not required any allegedly frivolous options. Rather, it has determined that its needs could better be served by the larger compact models because these models can better accommodate more passengers and luggage, thus making them more versatile and hence more suited for motor pool use where the need for capacity of five passengers and significant amounts of luggage occurs. We find that Chrysler has not shown this argument to be erroneous and that GSA had a reasonable basis to elect to cancel the subcompact vehicles rather than the compact vehicles, once it determined that cancellation of some of the vehicles was warranted.


Here is what the FAR councils said in the Federal Register in 1996:

?Minimum needs? has inaccurately been considered to require that the Government describe its needs in terms of the lowest level of technical capabilities or features that will address the requirement. However, the Government actually has substantial latitude to describe its needs in the manner that reflects an optimum acquisition strategy, e.g., considering which item(s) represent the best value in terms of quality, expected life of item, vendor past performance; making use of capabilities in the marketplace, such as those for ensuring reliability and distributing products; requiring offerors to have a ?track record? of previous production for a length of time appropriate to the item being acquired, when such a requirement can be shown to reasonably relate to helping ensure that the agency will acquire an item that meets its need.

61 FR 47384 (Sept. 6, 1996).

Since the specification of any requirement (feature, quality, or characteristic) is restrictive to the extent that anyone who cannot provide it is excluded from the competition, the question is whether a particular requirement is unduly restrictive. If the user asserts that some feature of binoculars would facilitate its performance of its job, then the burden is on a challenger to show that it won't, or that some other feature will accomplish the same end. The test is one of "logical scrutiny." See the discussion of unduly restrictive specifications in Cibinic and Nash, Formation of Government Contracts 3d, 358-361. So if you want to challenge a user's specification, you must show that some feature or set of features is not necessary to the fulfillment of the user's job as the user sees it.

#5 dwgerard

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Posted 06 July 2010 - 02:09 PM

Vern,

In my case, the specifications were provided by the customer, who requested and funded a particular brand and model along with their purchase request. In my market research I found very good quality binoculars that had even better specifications for a much lower price. In this case, the customer wanted the Lamborgini when I found a BMW that actually fit the stated purpose better than the Lamborgini. What I did not factor in was the customer was competing with another office that DID buy the most expensive binoculars, and did not want to be seen with "lesser" equipment.

I, acting as the Contracting Officer, decided to not support their purchase and recommended acceptance of the better and less expensive binoculars, and they decided to withdraw their request for the purchase. In this case the requested binoculars cost more than $1,400 each, the recommended binoculars cost about $250 each, and the lowest price for binoculars of similar specifications cost about $65 each.

In my situation I challenged the customers choice of product, not their specification. I found a product with better specifications than they requested at a lower price which I suggested to them. They were also given an opportunity to justify the more that 5 times greater cost by identifying what the higher cost would provide to their use. They were unable to provide that information, and refused to even address my request for that information.

#6 Don Mansfield

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Posted 06 July 2010 - 03:20 PM

The statements of the FAR Councils cited by Vern accompanied a proposed rule that, among other things, would replace "minimum needs" with "needs". Here's a complete description of the proposed change:

Replacing references to ``minimum needs'' with ``needs.'' (The term ``minimum'' has historically been misinterpreted, and its removal is consistent with 10 U.S.C. 2305(a)(1)(B), which states, ``Each solicitation * * * shall include specifications which include restrictive provisions or conditions only to the extent necessary to satisfy the needs of the agency or as authorized by law.'' "Minimum needs'' has inaccurately been considered to require that the Government describe its needs in terms of the lowest level of technical capabilities or features that will address the requirement. However, the Government actually has substantial latitude to describe its needs in the manner that reflects an optimum acquisition strategy, e.g., considering which item(s) represent the best value in terms of quality, expected life of item, vendor past performance; making use of capabilities in the marketplace, such as those for ensuring reliability and distributing products; requiring offerors to have a ``track record'' of previous production for a length of time appropriate to the item being acquired, when such a requirement can be shown to reasonably relate to helping ensure that the agency will acquire an item that meets its need.)


61 FR 47384 (Sept. 6, 1996).

These statements were met with opposition by the ABA's Section of Public Contract Law, which submitted the following comments:

Elimination of Minimum Needs Requirement

The proposal would replace references to "minimum needs" with "needs" on the basis that the term "minimum" historically has been misinterpreted. The proposed rule offers no support or explanation for the position that "minimum" has been misinterpreted. Moreover, this change would apply to all acquisitions, not just to acquisitions of commercial items. Such an across-the-board change is not appropriate in the context of proposed regulations that are suppose to be limited to the acquisition of commercial items up to the $5 million threshold. There is no reason for such a change.

The minimum needs doctrine has been followed for over 100 years and relates to the Government's authority to enter into contracts. When the authority to contract is derived from an appropriation of money, it cannot be implied that Congress intended to confer authority to contract for more than the Government's minimum needs. Thus, it has long been held that appropriated funds "are available only for uses reasonably and clearly necessary to the accomplishment of the thing authorized by the appropriation to be done." 10 Comp. Gen. 294, 300 (1931).

The statement in the background to the proposed regulation is incorrect to the extent that it implies that the minimum needs doctrine requires the Government to "describe its needs in terms of the lowest level of technical capabilities or features that will address the requirement." It is clearly established that contracting agencies have broad discretion in determining their minimum needs and the appropriate method for accommodating them. Clarke Industries, Inc., Comp. Gen. B-261693, 95-2 CPD ? 183. The contracting agencies' determination of their minimum needs and the best way to satisfy them will not be questioned so long as they have a reasonable basis. FRC International, Inc., Comp. Gen. B-255956.2, 94-1 CPD ? 387; Isatrex, Inc., Comp. Gen. B-253691, 93-2 CPD ? 221. Agencies have the discretion to set their minimum needs to the highest possible standards where there is a reasonable basis for such requirements, such as human safety or national defense. World-Wide Security Service, Inc., Comp. Gen. B-228718, 87-2 CPD ? 490. These well-established principles do not detract from the goal of simplified acquisition procedures. Indeed, if contracting agencies cannot provide a reasonable basis for their requirements, simplifying such purchases is a vice and not a virtue.

The minimum needs doctrine is an expression of the concept that the Government should be buying only what it needs, not what it wants or desires. 32 Comp. Gen. 384, 387 (1953). To proceed otherwise may not be in the Government's best interests. For example, the program manager for the B-2 program had a motto, "Better is worse than good enough," which emphasized that the cost of a design feature that exceeded the requirement could mean that funds would not be available for other needed design features. Similarly, when the requirements for one contract exceed an agency's minimum needs, other legitimate requirements of the agency may not be filled for lack of funds. Therefore, the Section urges that the minimum needs language should be maintained for both legal and policy reasons as a reminder to contracting officers that they must be able to provide reasonable justifications for their purchases.


See http://www.abanet.or...ercial_001.html.

The final rule did not contain a response to the Section's comments, nor did the FAR Councils adopt the Section's recommendations.

#7 Vern Edwards

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Posted 06 July 2010 - 04:10 PM

Vern,

In my case, the specifications were provided by the customer, who requested and funded a particular brand and model along with their purchase request. In my market research I found very good quality binoculars that had even better specifications for a much lower price. In this case, the customer wanted the Lamborgini when I found a BMW that actually fit the stated purpose better than the Lamborgini. What I did not factor in was the customer was competing with another office that DID buy the most expensive binoculars, and did not want to be seen with "lesser" equipment.

I, acting as the Contracting Officer, decided to not support their purchase and recommended acceptance of the better and less expensive binoculars, and they decided to withdraw their request for the purchase. In this case the requested binoculars cost more than $1,400 each, the recommended binoculars cost about $250 each, and the lowest price for binoculars of similar specifications cost about $65 each.

In my situation I challenged the customers choice of product, not their specification. I found a product with better specifications than they requested at a lower price which I suggested to them. They were also given an opportunity to justify the more that 5 times greater cost by identifying what the higher cost would provide to their use. They were unable to provide that information, and refused to even address my request for that information.

So you rejected a request for a brand name product. Good job.

By the way, it's Lamborghini, not Lamborgini. http://www.lamborghini.com/

#8 napolik

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Posted 07 July 2010 - 06:56 AM

So you rejected a request for a brand name product. Good job.

By the way, it's Lamborghini, not Lamborgini. http://www.lamborghini.com/


Bravissimo!

#9 dwgerard

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Posted 07 July 2010 - 07:03 AM

So you rejected a request for a brand name product. Good job.

By the way, it's Lamborghini, not Lamborgini. http://www.lamborghini.com/


Thanks for the spelling correction Vern, my bad for not checking on that before hitting the Add Reply button.

#10 Boof

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Posted 08 July 2010 - 09:06 AM

I thank everyone for their input and Vern for pointing out the source of the Cadillac vs Chevy saying.

I guess I just have to negotiate with my clients over what should be their needs versus what I think is a want. I usually try to use the Washington Post test with them. How would they like to see thier justification on the front page behind their name. It works most of the time.

It seems like the issue always surfaces in orders for vehicles and household/office equipment. I have actually been told that they "needed" a BMW because they "had" to travel at 200KM an hour on the autobahn and thier safety would be in question in a lesser car. No, they were not law enforcement. Meanwhile I drive a Chevy Cavilier on the Autobahn just fine every day.




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