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Vendor Offers More Than Requested


Freyr

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Hi all, this got brought up during an office meeting this week and I've been mulling over what I thought. We had a commercial SAP requirement for an Off-Road Vehicle with a maintenance agreement each year for 2 years. The CLIN structure we solicited was a single CLIN for the vehicle with a second CLIN for 1 year maintenance and a third CLIN that's optional for the second year of maintenance. The issue is that we had two vendors submit offers, the first vendor (Offeror A) conformed to what we submitted but the second one (Offeror B ) provided a quote for the vehicle plus 5 years of maintenance. If we only evaluated 2 years of maintenance on Offeror B it would be lower than Offeror A. Offeror B didn't show any options on their offer or any language saying they're open to offering just two years of maintenance. 

My thought is that Offeror B didn't submit an offer that's in accordance with the solicitation and therefore shouldn't be considered. Some others thought that we could just send the award to Offeror B for the vehicle and two years of maintenance and see if they accept. Ultimately the CO decided along the same lines as me and just awarded to Offeror A but it made me think, am I being too strict in my thinking? Was there an option to have Offeror B "clarify" their offer without prejudicing Offeror A?

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You said it was an SAP. Did your solicitation mention possible communications after submission?  If you sought quotations, I believe that the government could make an offer back to B.

You mentioned “offers”, so what are the terms of the solicitation for offer and selection/acceptance? 

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1 hour ago, joel hoffman said:

You said it was an SAP. Did your solicitation mention possible communications after submission?  If you sought quotations, I believe that the government could make an offer back to B.

You mentioned “offers”, so what are the terms of the solicitation for offer and selection/acceptance? 

FAR 52.212-1 was included but there was nothing mentioned about possible communications after submission. The terms for offer and selection/acceptance are pretty standard in the office for all commercial SAP buys, it really just says that offerors shall propose prices in accordance with the CLIN structure provided and that award will be made on best value in terms of price. 

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@FreyrYou should be careful about communicating with the offerors (quoters?). I have attached an article by Prof. Nash from this month's issue of The Nash & Cibinic Report, in which he discusses the GAO's handling of protests of simplified acquisitions. He discusses issues that have arisen about government communications with quoters. I think the article is on point with your situation.

If you decide to talk to Offeror B, you should think about how to be fair to Offeror A.

SIMPLIFIED ACQUISITION Keep It Simple.pdf

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29 minutes ago, Vern Edwards said:

@FreyrYou should be careful about communicating with the offerors (quoters?). I have attached an article by Prof. Nash from this month's issue of The Nash & Cibinic Report, in which he discusses the GAO's handling of protests of simplified acquisitions. He discusses issues that have arisen about government communications with quoters. I think the article is on point with your situation.

If you decide to talk to Offeror B, you should think about how to be fair to Offeror A.

SIMPLIFIED ACQUISITION Keep It Simple.pdf 169.81 kB · 3 downloads

Thank you Vern, this is very on point with the situation at hand. I'll probably read through this another 3 times and then see if our Chief is open to revising the standard language we use to be more clear and more flexible. The CO already awarded this to Offeror A without communicating with either of them after receiving the offers, since it's such a low dollar procurement I doubt Offeror B will look to protest anything or even ask for any kind of debrief but you never know.

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The last sentence of the article states:

Quote

Is there any way to actually simplify simplified acquisition? We would like to see a CO write an RFQ provision that clearly states that the agency intends not to follow the clarification/discussion rule of FAR Part 15, but rather reserves the right to communicate with any one or more quoters that submit promising information in their quotations that does not fully comply with the RFQ. Such a provision would carry out the intent of Congress, but would it survive GAO scrutiny? Some CO should give it a whirl.

Back in 2015 I wrote a blog post soliciting feedback on a tailored version of FAR 52.212-1 for SAP that included such a provision. The Wifcon community provided great critical feedback which resulted in this. I just searched beta.sam.gov and the provision is in use at the VA, pretty much verbatim. From the VA solicitation:

Quote

Issuance of purchase order. Quotations should contain the quoter’s best technical and price terms. The Contracting Officer may reject any or all quotations. The Contracting Officer may issue a purchase order or contract to other than the quoter with the lowest priced quotation. After the evaluation of quotations, the Contracting Officer may negotiate final terms with one or more quoters of the Government’s choice before issuing any purchase order or contract. The Contracting Officer will not negotiate with any quoters other than those of the Government’s choice and will not use the formal source selection procedures described in FAR part 15.

I think Vern proposed the last two sentences.

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8 hours ago, Freyr said:

Do you think this language and approach could be used for FAR 16.505 procurements as well?

You could play with the language, but the tailored ordering procedures under a the particular IDC would have to be considered first.

20 hours ago, Freyr said:

My thought is that Offeror B didn't submit an offer that's in accordance with the solicitation and therefore shouldn't be considered.

Maybe this is the standard commercial practice of "Quoter" B. They provide you with a product that breaks more often, but that they are willing to fix for longer - Ex Kia.

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22 hours ago, Freyr said:

The terms for offer and selection/acceptance are pretty standard in the office for all commercial SAP buys, it really just says that offerors shall propose prices in accordance with the CLIN structure provided and that award will be made on best value in terms of price.

Thanks to the others for the links to the Protests cited above.

1. Can you clarify if you requested quotes or offers?

2. Assuming “offers”, the higher priced offer didn’t use the CLIN structure provided (you said “shall propose...”), so technically was unacceptable.

3. What do you mean by “best value in terms of price”? My understanding is that “best value” considers more than simply “price”. There has to be something else to consider in addition to the price to determine the “best value”. I guess here, you were considering the product price and two alternative warranty periods. Okay, I can see that.  But what would it mean if your solicitation doesn’t allow alternatives? 

4. What does “terms of price” mean without any other description?  I googled terms of price. Here was one source: https://marginhound.com/pricing-terminology/

52.212-1 (g) :”Contract award (not applicable to Invitation for Bids). The Government intends to evaluate offers and award a contract without discussions with offerors. Therefore, the offeror's initial offer should contain the offeror's best terms from a price and technical standpoint. However, the Government reserves the right to conduct discussions if later determined by the Contracting Officer to be necessary. The Government may reject any or all offers if such action is in the public interest; accept other than the lowest offer; and waive informalities and minor irregularities in offers received.”

5. Deleted. 

6. I don’t think that you could simply counter offer award at a lower price with revised terms to an “offer” submitted, especially where another firm submitted an acceptable lower priced offer.

EDIT: 7. You could have conducted some type of discussions but I think, from the decisions cited, you should not unfairly allow just the higher priced “offeror” to revise its price terms and ask it to lower its price. Would it be hard to make two short phone calls or send short emails to the two firms to get their best prices for one or two years warranty? 

Edited by joel hoffman
Eliminated references to “warranty period”
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It seems to me tha the government wants to buy or lease standard commercial items using simplified methods similar to how companies or customers would buy or lease stuff but recognizing that there are certain government unique restraints, especially fairness.

Then, the government ought to act like a customer would if they are interested in a product or service, as long as they treat the competitive firms fairly.

And they should seek quotes, which can be used as a basis to negotiate and to respond to with a government offer. I wanted to say “counter offer” but that’s technically wrong.

Here, 1) if quotes were requested and 2) if I thought that correcting a proposal from five years to a one or two year Maintnence period might make that the lowest price between the two firms, 3) to be fair,  I’d contact both quoters and ask for their best prices on a common maintenance period basis.

I think that I could do that under the terms described in the thread.

EDIT: One could also conduct simple negotiations based on “offers”, too. I think that “quotes” might allow more simplicity/flexibility...

Edited by joel hoffman
Corrected to discuss Maintenance periods not warrant periods
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21 hours ago, Freyr said:

FAR 52.212-1 was included but there was nothing mentioned about possible communications after submission. The terms for offer and selection/acceptance are pretty standard in the office for all commercial SAP buys, it really just says that offerors shall propose prices in accordance with the CLIN structure provided and that award will be made on best value in terms of price. 

Not so. The provision specifically mentions allowing discussions .

I also questioned above using the term “best value” , if there is only one price without alternative pricing terms to compare or to consider.

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Sorry folks. I reread the OP and it said “maintenance periods”, not “warranty periods”.  I corrected portions of my responses. 

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26 minutes ago, Vern Edwards said:

Cancel the procurement, start over, and find someone who knows what they're doing to conduct it.

Well they ended up awarding the lower priced offer. They just didn’t find out if the other offer would have been lower for two years.

Now that I realize that the alternatives were for “maintenance periods” not “warranty periods”, EDIT: they should have negotiated and get the best price for two years, if that is the organizations requirement. 

Edited by joel hoffman
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