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Did GAO get this right or wrong?


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1 hour ago, Vern Edwards said:

The definition of "ineligible" in FAR 2.101 merely says what the word means when found in the FAR. It does not dictate other uses in other contexts.

Right, and we're discussing the use of the word in the FAR.

Maybe pay attention to the discussion before lecturing me?

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1 hour ago, ji20874 said:

You incorrectly characterize my premise.  Please engage honestly.

@ji20874 wrote:

On 6/8/2021 at 3:23 PM, ji20874 said:

But if the bid is the low offer and the apparently successful offer, consider its bid as responsive and the apparently successful bid -- then, later the same day, ask for the registration and declare the low bidder non-responsible if it does not deliver -- the bidder is not "qualified and eligible to receive an award."  FAR 9.104-1(g).  You see, the bid is responsive but the bidder is non-responsible.

and

On 6/8/2021 at 3:23 PM, ji20874 said:

You do not need to delay award to allow the bidder time to obtain the registration.  If you need to award tomorrow, ask for the SAM registration today -- if you don't get it, declare the bidder non-responsible and move on to the next low bidder.  You don't need a Certificate of Competency referral in case of a small business.  FAR 19.602-1(a)(2)(i).  Just do it.

If you interpret @ji20874 as meaning that failure to register in SAM meant a bidder was "unqualified or ineligible" as used in FAR 19.602-1(a)(2)(i), then you are dishonest.

Is there someone honest out there who can interpret what @ji20874 meant?

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Don,

I have asserted that an agency need not delay a needed award to allow an otherwise successful bidder to do a SAM registration, but may declare the bidder non-responsible (FAR 9.104-1(g)) and award to the next-low bidder without a COC process (FAR 19.602-1(a)(2)(i)).  You seem to disagree.  Let's leave it at that.

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On 6/2/2021 at 10:52 AM, dsmith101abn said:

See https://www.gao.gov/products/b-419111 and https://www.gao.gov/products/b-419515

 

I have a sealed bid solicitation that was set-aside for small businesses and opened bids yesterday. The low bidder was not registered in SAM.gov at the time their submitted their bid; they actually were not aware they were supposed to register in SAM (apparently they generally perform work at a State and County level). The IFB included FAR Provisions 52.204-7 System for Award Management (Oct 2018). 

 

On the surface my initial reaction was the low bidder should be non-responsive. After reading the two GAO cases above, apparently GAO looks at SAM registration as a matter of responsibility. I can't see how a provision requiring registration in SAM prior to offer is responsibility. I suppose 9.104-1(g) leaves room for being eligible for award. 

 

52.204-7 changed in 2018. It used to say offers had to be registered in SAM prior to award and now is at time of offer and with these two decisions it's basically unenforceable. What am i to do, refer the matter to the SBA for a certificate of competency? What I'll do is just tell the low bidder to register and be done with it, but I think these two decisions, together with the FAR provision 52.204-7 is ridiculous. 

 

So is GAO right or wrong in their decisions? either way i think they should be wrong or they should revert 52.204-7 to a similar pre-2018 change. 

 

The decision doesn't explain why SAM registration is necessarily a matter of responsibility, so I can't determine whether they are right or wrong. I didn't read any of the cited cases to support their position, though. I think the explanation that it's not a matter of responsiveness and should be viewed as a minor informality or irregularity makes sense. I don't know why they didn't leave it at that.

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@ji20874

11 hours ago, ji20874 said:

Don,

I have asserted that an agency need not delay a needed award to allow an otherwise successful bidder to do a SAM registration, but may declare the bidder non-responsible (FAR 9.104-1(g)) and award to the next-low bidder without a COC process (FAR 19.602-1(a)(2)(i)).  You seem to disagree.  Let's leave it at that.

See Jade Excavation, Inc., B-419515, March 18, 2021:

Quote

As we recently explained in Master Pavement Line Corp., when conducting a procurement pursuant to FAR part 14, an agency must afford a bidder an opportunity to cure matters that do not concern material obligations of the bidder, i.e., if they do not affect the price, quantity, quality, or delivery terms of the bid. Master Pavement Line Corp., B–419111, Dec. 16, 2020, 2020 CPD ¶404 at 3. In this decision, we explained that the requirement for a bidder to be registered in SAM prior to bid submission is not material to the bid itself because it does not impact the material obligations of the bidder; rather, it is a matter concerning the bidder's responsibility. Id. at 5. On that basis, we sustained the protest because the agency did not afford the protester an opportunity to cure this immaterial defect. Id. at 4. Thus, contrary to Jade's arguments that FHWA acted improperly when it allowed York to cure the SAM registration deficiency, the dictates of FAR section 14.405 compelled FHWA to allow York to cure this deficiency, which York did in a timely manner.

Emphasis added.

I read that as saying that the agency must delay the award for a reasonable period of time to allow the bidder to do a SAM registration.

Am I reading anything wrongly?

P.S. SAM is mentioned in 35 GAO decisions. Most of the mentions are mere references. I am still reading the decisions that involve lack of SAM registration and defective SAM registrations. What I have seen so far has been confusing.

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I posted a GAO Decision to this thread about a day ago that is from 1987.  The reasonable period matter has been around for a long time.  Reaching back to experience that includes the decision I posted the reasonable standard has many elements that reaches to many considerations.   In the case of the decision I posted there was discussion at length about why waiting was not reasonable that was not carried to the GAO Decision document.  Most importantly the immediate need to determine health risks to  individuals was key.  Reasonable is determined with regard to the facts of the instant procurement. 

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2 hours ago, Vern Edwards said:

Am I reading anything wrongly?

I think you may not have observed my effort to consistently and carefully communicate--

  • "...if you need to award tomorrow..."
  • "...if the agency needs to make the award today..."
  • "...if the procurement had some urgency..."
  • "...an agency need not delay a needed award..."

It is unfair (dishonest was the word I used with Don) to remove the assertion that I made from the context that I consistently and carefully provided, and then criticize the assertion.

My assertion in this thread has consistently been in this context.  In this context, it is a correct principle that an agency need not delay a needed award to allow the otherwise low bidder an opportunity to think about doing a SAM registration, but rather, may declare the offeror non-responsible and award to the next low-bidder.

In the case of the original poster, he or she was willing to allow the otherwise successful bidder some time to do the SAM registration, and I agreed that was within his or her discretion.  But I disagree with any notion that an agency must delay a needed award to do a SAM registration -- I disagree with any notion that would allow a bidder to hold the agency hostage for a needed award.

The Master Pavement Line Corp. case is not analogous to our discussion.  There, the agency erred by declaring the bid non-responsive.  And there was no urgency for the agency to make award -- the agency declared the low bidder non-responsive weeks after bid opening and before award was made.  There was plenty of time for the agency to allow for the SAM registration in that case.  And, that solicitation expressly allowed for SAM registration to occur before award, and in fact the bidder did complete its SAM registration before award was made.  That was a December 2020 decision.  I agree with the Master Pavement Line Corp. decision in light of its context--

  • no urgency to award;
  • agency error in declaring the bid non-responsive for what is really a matter of responsibility;
  • solicitation text allowing for SAM registration before contract award;
  • agency still rejecting bid even after SAM registration occurred; and
  • agency making award to another bidder after the low bidder corrected the deficiency.  

But this is not the context I have been speaking to.  I do not believe Master Pavement Line Corp. creates or enforces a rule that an agency must delay a needed award to accommodate the low bidder's deficiency -- if the low bidder can get it done before award will occur, that is fine.  If the facts in Master Pavement Line Corp. were (1) the agency needed to make the award, (2) the agency gave the bidder an opportunity the same day as bid opening to correct the deficiency but the bidder did not, (3) the agency treated it as a matter of responsibility rather than responsiveness, and (4) the agency made award to the next low bidder the next day because the award was needed sooner rather than later, I think the GAO's decision would have been different.  I do not think the GAO would have required the agency to delay the award of a needed contract.  The Master Pavement Line Corp. decision fit the facts of the case.

I think it would be a shame if our readers walked away thinking that an agency must delay a needed contract award to allow the low bidder to get around to successfully completing a SAM registration; or, in other words, that a bidder can hold the agency hostage and force a delay in contract award while it gets around to doing a SAM registration. 

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@ji20874

6 hours ago, ji20874 said:

It is unfair (dishonest was the word I used with Don) to remove the assertion that I made from the context that I consistently and carefully provided, and then criticize the assertion.

Easy does it, ji. I didn't say you are wrong about anything. I quoted directly from the GAO, which says "must," and I asked if I was interpreting what it said wrongly. That's all. I am not trying to trip you up.

6 hours ago, ji20874 said:

I think it would be a shame if our readers walked away thinking that an agency must delay a needed contract award to allow the low bidder to get around to successfully completing a SAM registration; or, in other words, that a bidder can hold the agency hostage and force a delay in contract award while it gets around to doing a SAM registration.

Well, the problem is that the GAO said "must." You say not must. I'm just reporting the fact. You're shooting at the courier.

Every contract is "needed." How can we get to the bottom of this and help readers understand the rule, if there is a rule?

 

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18 hours ago, Vern Edwards said:

help readers understand the rule, if there is a rule?

Maybe not a rule but.....Ref. https://www.gao.gov/products/b-200506.2

WE HAVE REPEATEDLY HELD THAT SOLICITATION REQUIREMENTS FOR SECURITY CLEARANCES IN THE PERFORMANCE OF CONTRACTS RELATE NOT TO BID RESPONSIVENESS BUT TO BIDDER RESPONSIBILITY. SEE, FOR EXAMPLE, ENSEC SERVICE CORPORATION, 55 COMP.GEN.494 (1975), 75-2 CPD 341. OUR OFFICE HAS ALSO HELD THAT AN AGENCY MAY ALLOW A BIDDER A REASONABLE PERIOD WITHIN WHICH TO "CURE A PROBLEM RELATED TO ITS RESPONSIBILITY" SINCE THE CRITICAL TIME FOR RESPONSIBILITY IS NOT BID OPENING BUT THE TIME THE SERVICES ARE ACTUALLY NEEDED. VER-VAL ENTERPRISES, INC., B-198076, MARCH 25, 1980, 80-1 CPD 223; B-178043, JULY 27, 1973 (WHERE THE ARMY DELAYED AWARD TO PERMIT A BIDDER TO OBTAIN OPERATING AUTHORITY FROM A REGULATORY AGENCY).

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Yeah, I also saw the "must" in the decision -- and I agree with the decision based on the facts of that case.  The "must" relates to giving the low bidder an opportunity to correct the deficiency, but my fear is over-extending that to mean that an agency must delay a needed contract award to provide such an opportunity, including every contract award for urgent mission-critical and time-sensitive needs.  For procurements where the facts are different from the protest case, it would be a shame if that one word in that non-analogous decision creates such a new rule.  I am resisting reading that one word "must" as creating such a rule.  I do not think it is the GAO's intent to create such a rule.  In my own practice, I will not be constrained by such a rule.  Maybe I see the GAO's wording as inartful, but I accept it as precedential for other procurements with similar facts.

By the way, in my examples in this thread, I did show allowing the low bidder an opportunity to correct the deficiency -- maybe only a few hours or a day if that is all that can be allowed, but that is something, and maybe my practice conforms to the GAO decision?  I think it does.  I am okay with allowing the offeror an opportunity -- I start to resist when that bleeds over to forcing me to delay a needed award that will adversely impact my agency.

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@C Culham The problem is that GAO has issued confusing decisions. See this quote from Jade Excavation:

Quote

As we recently explained in Master Pavement Line Corp., when conducting a procurement pursuant to FAR part 14, an agency must afford a bidder an opportunity to cure matters that do not concern material obligations of the bidder, i.e., if they do not affect the price, quantity, quality, or delivery terms of the bid. Master Pavement Line Corp., B–419111, Dec. 16, 2020, 2020 CPD ¶404 at 3. In this decision, we explained that the requirement for a bidder to be registered in SAM prior to bid submission is not material to the bid itself because it does not impact the material obligations of the bidder; rather, it is a matter concerning the bidder's responsibility. Id. at 5. On that basis, we sustained the protest because the agency did not afford the protester an opportunity to cure this immaterial defect. Id. at 4. Thus, contrary to Jade's arguments that FHWA acted improperly when it allowed York to cure the SAM registration deficiency, the dictates of FAR section 14.405 compelled FHWA to allow York to cure this deficiency, which York did in a timely manner.

Emphasis added.

Note that GAO first mentions bidder responsibility, then refers to FAR 14.405, Minor informalities and irregularities in bids. So which is it when a company that has not registered in SAM as required by FAR 4.1102(a) and 52.204-7(b)(1)—a matter of responsibility or a minor informality or irregularity?

If it's a matter of responsibility, and if the bidder is a small business, must the agency then refer the bidder to the SBA for consideration of a certificate of competency? That might delay award. ji20874 pointed out the COC referral exception at FAR 19.602-1(a)(2)(i) with respect to "unqualified and ineligible" bidders. (Note the "and.") Don Mansfield then pointed to the official definition of "ineligible" at FAR 2.101, which suggests that the "unqualified and ineligible" exception at FAR 19.602-1(a)(2)(i) would not apply, because failure to register in SAM would not make the bidder "ineligible" as that term is defined in FAR 2.101.

If it's a matter of minor informality or irregularity, then FAR 14.405 says: "The contracting officer either shall give the bidder an opportunity to cure any deficiency resulting from a minor informality or irregularity in a bid or waive the deficiency, whichever is to the advantage of the Government. "

In light of FAR 4.1102(a), would waiving the failure to be registered in SAM constitute an unauthorized FAR deviation? Maybe not. In C.L.R. Development Group, GAO B-409398, April 11, 2014, a negotiated procurement, which I believe to have been the first case about this matter, GAO said that the VA waived the requirement, and said: "We find no prejudicial error associated with the agency's waiver of the requirement for offerors to be registered in the SAM database at the time proposals were due."

See also Jade Excavation and Master Pavement, both cited elsewhere in this thread. But what would waiving it mean? Waive it with respect to what? As a prerequisite to bid submission, but not not as a prerequisite to contract award? See the clause at FAR 52.204-13, paragraph (b).

This matter seems to be a problem that occurs mainly in sealed bidding. In a negotiated procurement there should be no reason to reject an offer out of hand because the offeror was not registered in SAM when it submitted its proposal. If the agency is planning to award without discussions the CO could treat it as a minor or clerical mistake and clear it up in accordance with FAR 15.306(a)(2). And see FAR 52.204-13(b).

In sealed bidding I would treat failure to register as a minor informality and give the bidder time to register or simply waive it.

Confusing FAR coverage seems to be the ultimate source of the issues, but the FAR councils won't fix that problem.

GAO has either not developed a clear stance or has failed to explain itself. It's time for GAO to sort things out.

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1 hour ago, ji20874 said:

Yeah, I also saw the "must" in the decision -- and I agree with the decision based on the facts of that case.  The "must" relates to giving the low bidder an opportunity to correct the deficiency, but my fear is over-extending that to mean that an agency must delay a needed contract award to provide such an opportunity, including every contract award for urgent mission-critical and time-sensitive needs.  For procurements where the facts are different from the protest case, it would be a shame if that one word in that non-analogous decision creates such a new rule.  I am resisting reading that one word "must" as creating such a rule.  I do not think it is the GAO's intent to create such a rule.  In my own practice, I will not be constrained by such a rule.  Maybe I see the GAO's wording as inartful, but I accept it as precedential for other procurements with similar facts.

Both of us know what the word "must" means, but I don't know what is GAO's intent in that regard. I know what I would do in the case of an urgent procurement, but I don't know if it would be right. And I don't like the idea of acting on the basis of unclear and unsettled precedents. I think GAO should sort things out. (I know better than to hope that the FAR councils would spend time on this.)

To me, the key is not to speculate about GAO's intent, but to develop clear thoughts of my own as bases for a rationale in support of a course of action grounded in the regulations. GAO has specified some options, and there may be others. But the GAO has not been as clear as they ought to have been, and they may never be entirely clear. (They like to handle things ad hoc.) One thing I know is that we cannot count on the FAR councils to clear things up and provide guidance.

We work in a howling wilderness of rules and protest litigation. If I were writing an IFB or an RFP, I would develop and include a statement about the SAM registration requirement explaining how I would handle bids or proposals submitted by an unregistered competitor. Prospective bidders would have until bid opening to protest.

"He found him in a desert land, and in the waste howling wilderness; he led him about, he instructed him, he kept him as the apple of his eye."

KJB, Deuteronomy 32:10.

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2 hours ago, Vern Edwards said:

See also Jade Excavation and Master Pavement, both cited elsewhere in this thread. But what would waiving it mean? Waive it with respect to what? As a prerequisite to bid submission, but not not as a prerequisite to contract award? See the clause at FAR 52.204-13, paragraph (b).

 

That's a good question.

I don't want to take away from the discussion, but as a non-management working level CO if you will, administratively, I'd have a hard time with a contractor not registered in SAM at time of award, or shortly thereafter. Some offices are probably more setup for some of the SAM exceptions at 4.1102, but at least in my agency, our contract writing system searches for contractors with active SAM registrations and it will not allow a user to manually enter certain contractor information. Sure i don't necessarily need a contract writing system for contract formation, but when you click that award button, it reports information to FPDS, USASPENDING, eSRS, CPARS (thru FPDS), agency accounting software (e.g. A/P), agency scheduling and construction administration IT systems, etc.

Though I've never tried and I'm not saying it can't be done, I think it would be several helpdesk tickets given the user access I have and how everything is interconnected with different agencies managing different IT systems.   

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3 hours ago, dsmith101abn said:

Though I've never tried and I'm not saying it can't be done, I think it would be several helpdesk tickets given the user access I have and how everything is interconnected with different agencies managing different IT systems.   

@dsmith101abn

In the science fiction film "Forbidden Planet" (1956), humans discover an alien world on which the extinct inhabitants, called the Krell, had developed an IT system that enabled them to create things merely by imagining them, "without instrumentalities," i.e., without tools. When they went to bed at the end of the day on which they turned the system on, their subconscious minds created monsters that killed them all in a single night—"monsters from the Id."

To paraphrase a poet: we're not there yet, but we're headed that way.

 

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4 hours ago, Vern Edwards said:

To me, the key is not to speculate about GAO's intent, but to develop clear thoughts of my own as bases for a rationale in support of a course of action grounded in the regulations. GAO has specified some options, and there may be others. But the GAO has not been as clear as they ought to have been, and they may never be entirely clear. (They like to handle things ad hoc.) One thing I know is that we cannot count on the FAR councils to clear things up and provide guidance.

I agree.  That's why I shared my thoughts.  We need contracting officers who understand correct principles and who will act accordingly.  

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22 hours ago, Vern Edwards said:

 The problem is that GAO has issued confusing decisions.

Most confusing to me is the following whereby the GAO has allowed a FAR guiding principle to be "read into" the contract.   The GAO provides that the agency created conflicting language, HA, the GAO has created a conflicting standard on responsibility that could be applied beyond SAM registration.  Mandatory? Really?  Where in a solicitation pursuant to FAR Part 14, does it say that a agency,  must cure or waive a matter of responsibility when the solicitation says (52.204-7) that the matter of responsibility must be at time of offer/quote and not at time of award?

I agree GAO is conflicted.

"[5] Our decision in this case is distinguishable from our recent decision in Acon Traders, LLC, B-417558, June 26, 2019, 2019 CPD ¶ 226 where we denied a protest challenging the agency’s rejection of a quotation when the firm submitting the quotation was not registered in SAM at the time it submitted its quotation as required by FAR provision 52.204-7.  Unlike the case here, in Acon, the procurement was conducted using the simplified acquisition procedures of FAR part 13, which do not have the same mandatory cure or waiver provisions as set forth in FAR 14.405, and the protester was otherwise ineligible for award because it was technically unacceptable."   

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  • 4 weeks later...

I think folks are reading the FAR language too broadly for the citation and in context of COFC/GAO case law/guidance. 19.602-1(a)(2)(i) uses "certain elements of responsibility such as, but not limited to..." which means that it is not "...determines the offer is not responsible period..." (or it would say it meant to cover any non-responsibility determination rathan "certain matters"). But even if we agree that SAM registration is one of those "certain matters," 19.602-1(a)(2)(i) says specifically they can be bounced with concurrence of the COCO as an exception to an SBA referral, which seems to be overlooked in the analyses in the thread. Case law/guidance clearly supports this given the citations smattered throughout the thread here.  So, the plain language reading of 9.104(g) and 19.602-1(a)(2)(i) says they can be bounced for any non-responsibility determination with the concurrence of the COCO - and a good argument can be made that the language in 19.602-1(a)(2)(i) is not inclusive of failure to register and, combined with case law/GAO citation, need not even be concurred. I don't believe GAO has created any confusion at all. They've simply adjudicated the fact patterns before them, which haven't matched this exact fact pattern. 

As noted above, what other administrative elements of performance are going to be a nightmare if the "oh, we didn't know that was required by a contract we didn't read/understand" excuse is allowed to survive award? I believe the totality of FAR language and case law agrees this is a fair question and gives a PCO a way to avoid the risk. Administrative performance is a real thing which is too often overlooked for the sake of technical performance. That said, there is a reason a determination analysis is required as well. No need to be cutthroat if the situation doesn't require it. For a small, low risk, FFP effort then probably no reason not to help them out and be reasonable. A high risk, time-sensitive, high-priority, high-dollar contract lasting 5 years is a very different matter. This is why I don't believe anyone can properly say that a PCO shall/must in any non-responsibility matter...the facts and analysis are placed into a determination which, if agreed to by the COCO, is the end of story absent them being irrational/unreasonable. I have yet to run across a COCO (or even a PCO honestly) who would bother to do that determination in order to be punitive; they would only do it if the circumstances required it (such as an urgent levee or runway repair or LHS - life, health, safety - matter). It isn't reasonable to read through any lens which removes clearly granted Congressional authority from the contracting shop based on an imprecise GAO analogy. 

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@BG51I found your post hard to understand. I've read it several times, but I'm not sure what you're saying.

What do you mean by "bounced"? Do you mean determined to be nonresponsible? Are you saying (1) you believe that a firm that was not registered in SAM when it submitted its bid or proposal can be determined to be nonresponsible and (2) that in such a case the offeror need not be referred to the SBA for a certificate of competency?

 

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  • 7 months later...
On 6/11/2021 at 5:49 PM, Vern Edwards said:

If I were writing an IFB or an RFP, I would develop and include a statement about the SAM registration requirement explaining how I would handle bids or proposals submitted by an unregistered competitor.

Looks like the Agency did exactly that in B-420497 CGS-ASP Security JV LLC.

---

 

"In addition the RFP included another provision that provided as follows:

Offerors, including any offeror organized as a joint venture, must have an active SAM registration at the time of proposal submission and throughout the procurement process.  Any offeror whose registration is not active in SAM at the time of proposal submission will be excluded from the process and their proposals will not be evaluated.

RFP at 89.  (bold in original, italics supplied)"

(...)

"Here, the RFP was explicit that an active SAM registration at the time of proposal submission was required as a precondition of proposal evaluation."

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