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Evaluating Professional Employee Compensation when Cost or Price is not an evaluation factor


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Here is Section 876 of the NDAA for FY 2019 (Pub. L. 115-232):

“EC. 876. INCREASING COMPETITION AT THE TASK ORDER LEVEL.
Section 3306(c) of title 41, United States Code, is amended— (1) in paragraph (1), by inserting ‘‘except as provided in paragraph (3),’’ in subparagraphs (B) and (C) after the subpara-
graph designation; and
(2) by adding at the end the following new paragraphs: ‘‘(3) EXCEPTIONS FOR CERTAIN INDEFINITE DELIVERY, INDEFI-
NITE QUANTITY MULTIPLE-AWARD CONTRACTS AND CERTAIN FED- ERAL SUPPLY SCHEDULE CONTRACTS FOR SERVICES ACQUIRED ON AN HOURLY RATE.—If an executive agency issues a solicitation for one or more contracts for services to be acquired on an hourly rate basis under the authority of sections 4103 and 4106 of this title or section 152(3) of this title and section 501(b) of title 40 and the executive agency intends to make a contract award to each qualifying offeror and the contract or contracts will feature individually competed task or delivery orders based on hourly rates—
‘‘(A) the contracting officer need not consider price as an evaluation factor for contract award; and
‘‘(B) if, pursuant to subparagraph (A), price is not considered as an evaluation factor for contract award, cost or price to the Federal Government shall be considered in conjunction with the issuance pursuant to sections 4106(c) and 152(3) of this title of any task or delivery order under any contract resulting from the solicitation. ‘‘(4) DEFINITION.—In paragraph (3), the term ‘qualifying
offeror’ means an offeror that—
‘‘(A) is determined to be a responsible source;
‘‘(B) submits a proposal that conforms to the require-
ments of the solicitation;
‘‘(C) meets all technical requirements; and ‘‘(D) is otherwise eligible for award.”

But it concerns Title 41…no mention of Title 10. The existing FAR coverage implemented Section 825 of the FY 2017 National Defense Authorization Act in Title 10. 

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On 8/23/2021 at 9:32 PM, Vern Edwards said:

But forget about that. Do you agree that the procedure described in FAR 15.304(c)(1)(ii) does not involve "competition" as defined pursuant to FAR 1.108(a)? (See the definitions of "compete" and "competition" in The American Heritage Dictionary, 5th ed.)

Yes.

On 8/23/2021 at 9:32 PM, Vern Edwards said:

If you do agree, then do you understand my point about the illogic of establishing a "competitive range" in an acquisition that does not involve competition?

Yes.

On 8/23/2021 at 9:32 PM, Vern Edwards said:

And if "full and open competition" is about allowing all responsible offerors a chance to "compete," how does a FAR 15.304(c)(1)(ii) acquisition do that?

It doesn't.

Yet, despite the application of logic, I think the implication in the FAR is that use of FAR 15.304(c)(1)(ii) would still be a competitive procedure. Wouldn't you agree?

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21 minutes ago, Don Mansfield said:

Yet, despite the application of logic, I think the implication in the FAR is that use of FAR 15.304(c)(1)(ii) would still be a competitive procedure. Wouldn't you agree?

@Don MansfieldYes, as a matter of law, I agree, despite the fact that there really wouldn't be any competition among offerors.

So, what, if any, are the possible implications with respect to FAR 15.306(c), especially 15.306(c)(2)?

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@Don Mansfield  @Vern Edwards

As this thread progresses I wanted to provide a thought.   If I read correctly subtly your discussion is related to a procurement done under the guiding principles of FAR Part 15.  As such all should pay attention to this fact in following the continuing discussion.

I say this as when it comes to a procurement conducted pursuant to FAR Part 13, where no guiding principles of FAR Part 15 are incorporated, or in other words specifically FAR Part 13 is used is there not a different track of thinking that would have to be applied as to whether there is an "out" on the Government intentions to make an award to each and all qualifying offerors?  Or in other words such things as competitive range does not apply.

My question is raised considering the threshold for commercial item acquisition is significant where SAP can be used.

 

  

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8 hours ago, Vern Edwards said:

So, what, if any, are the possible implications with respect to FAR 15.306(c), especially 15.306(c)(2)?

That's the question I raised to @Dave Murree, stated differently. 

If an agency used the authority at FAR 15.304(c)(1)(ii) and the solicitation included FAR 52.215-1, I think offerors are on notice that they could be eliminated for purposes of efficiency notwithstanding the solicitation stating that award would be made to all qualifying offerors. I think you would have to interpret the solicitation in a way that gives meaning to all terms and conditions. 

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12 hours ago, Don Mansfield said:

That's the question I raised to @Dave Murree, stated differently. 

If an agency used the authority at FAR 15.304(c)(1)(ii) and the solicitation included FAR 52.215-1, I think offerors are on notice that they could be eliminated for purposes of efficiency notwithstanding the solicitation stating that award would be made to all qualifying offerors. I think you would have to interpret the solicitation in a way that gives meaning to all terms and conditions. 

The basis of award is the basis of award. You can’t legitimately eliminate a qualifying offeror. Of course we are talking about what is legitimate here. The law dictates the procedures in order to use the exception to evaluating price for selection of awardees for an ID/IQ. Instead compete price at the order level. The law is implemented in FAR 15.304 and 2.101 (defines a qualifying offeror). 

You say ok, but if someone doesn’t protest the conflicting terms of a solicitation prior to receipt of proposals, the government is free and clear to get away with it.

So why do we even discuss and debate the principles of acquisition in the WIFCON Forum?

It’s clear what the law and FAR intended in order not to evaluate (compete) price for an award of the initial ID/IQ. You have to modify or edit conflicting language. For instance there should be no mention of price - it’s clearly mentioned in 52.215-1. Likewise, there is no “competitive range, comprised of the most highly rated offerors”. Edit it out! There is no provision for a pre-determined number of awardees.

Why advocate or pick and choose what laws and FAR portions you want to comply with? Just advocate what you want to and hope nobody (timely) protests (and knows enough in order to timely protest)?

To me that is wrong and it is contrary to the purpose of the WIFCON Forum.

EDIT: We should not suggest to readers that the government can and/or should issue solicitations with patent ambiguities, knowingly conflicting, deviating or otherwise incorrect terms/language/procedures, then hope that nobody knows enough to timely protest the solicitation. I’m not necessarily referring to Vern’s last post above.

 

Edited by joel hoffman
Added last paragraph.
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By the way, I haven’t been successful in researching the background for the legislation in the FY 2017 Defense Authorization Act that enacted the exception to evaluating price for initial award and why award must be made to “all qualifying offerors” rather than the most qualified offerors (assuming that you have no reason to believe they would be likely to offer other than fair and reasonable pricing during task order competitions).

From my source selection experience, the “most qualified” offerors were sometimes way too expensive to be affordable or within the available funding. I would be hesitant to use a true Qualifications Based Selection process limited to the most highly rated or most highly qualified offerors without regard to price. Perhaps that’s why the legislation required award to “all qualifying offerors”, instead of the most highly rated, qualified offerors. 

Edited by joel hoffman
Revised wording concerning the KO’s view of an offeror’s ability and willingness to offer F&R task order prices
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@Vern Edwards@Don MansfieldAfter reading the thread to this point here is how I think awarding to 3 contractors might work.

A CO would need to via the acquisition planning process make a determination that preference for multiple award applies.  In making that determination the CO would also determine, based on FAR 16.504(c)(ii)(A), how many contracts are to be awarded.

Moving to the solicitation phase competition then occurs because the exception of FAR 15.304 is simply to the fact that the competition is not on cost or price but a competition on qualifying offeror standards/factors.  I say this having read this GAO decision (https://www.gao.gov/products/b-418720.11 )  where 86 offers were received yet only 46 awards were made which to me suggests that there was competition – winners and losers.

Further with reference to the aforementioned GAO decision, with qualifying offeror evaluation factors stated in a solicitation some could or would be pass/fail and acceptable/not acceptable however included would be a qualitative factor (such as past performance).   It would then be consistent with the ideal of establishing a competitive range that the X number of most highly qualified firms could be comprised of those with the best qualitative ratings (again best past performance).  

With the competitive range established and pursuant to acquisition planning and the statement in the solicitation that only 3 contracts will be awarded the CO would then award to 3 contractors, those out of the competitive range that had the highest qualitative rating (past performance).

How is this any different than picking only 3 contractors for award out a competitive range when price/cost is also considered?

@joel hoffman As to the mention of cost or price in 52.215-1 I do not read the clause as stating that it establishes a competition based on cost/price but only that cost/price is to be provided.   The solicitation otherwise will state whether the evaluation of cost/price will or will not occur.

 

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1 hour ago, C Culham said:

With the competitive range established and pursuant to acquisition planning and the statement in the solicitation that only 3 contracts will be awarded the CO would then award to 3 contractors, those out of the competitive range that had the highest qualitative rating (past performance).

So the solicitation would say that award would be made to all qualifying offerors and that only 3 contracts would be awarded?

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12 hours ago, joel hoffman said:

By the way, I haven’t been successful in researching the background for the legislation in the FY 2017 Defense Authorization Act that enacted the exception to evaluating price for initial award and why award must be made to “all qualifying offerors” rather than the most qualified offerors (assuming that you have no reason to believe they would be likely to offer other than fair and reasonable pricing during task order competitions).

Actually, the statute, Pub. L. 114-328, Sec. 825, says, "each qualifying offeror." It does not say "all." The FAR councils added the "all" to FAR 15.304(c)(1)(ii). Not that that makes a difference.

Sec. 825 originated in the Senate.

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I have reviewed both the proposed rule, 83 FR 48271, Sept. 24, 2018, and the final rule that changed FAR 15.304 to implement the statute, 85 FR 40068, July 2, 2020, FAC 2020-07. In both cases the FAR councils quote the statute, which says "each qualifying offeror" and then state the text of the proposed and final rules as saying, "each and all qualifying offerors." I say the addition of "all" was deliberate.

The final rule responses to comments on the proposed rule make no mention of comments about the "all."

I think the intention is clear. All means all. Based on what I have read, I do not believe that a CO may use FAR 15.306(c) to make a competitive range determination that would preclude any "qualifying offeror" from receiving a contract. I actually hope I'm wrong, because I think "each and all" is bad law and policy. But I don't think I am wrong. I think they meant it. All means all.

As for timely protests, see 4 CFR 21.2(a)(1):

Quote

 

(1) Protests based upon alleged improprieties in a solicitation which are apparent prior to bid opening or the time set for receipt of initial proposals shall be filed prior to bid opening or the time set for receipt of initial proposals. In procurements where proposals are requested, alleged improprieties which do not exist in the initial solicitation but which are subsequently incorporated into the solicitation must be protested not later than the next closing time for receipt of proposals following the incorporation. If no closing time has been established, or if no further submissions are anticipated, any alleged solicitation improprieties must be protested within 10 days of when the alleged impropriety was known or should have been known.

 

Now see 4 CFR 21.2(c):

Quote

(c) GAO, for good cause shown, or where it determines that a protest raises issues significant to the procurement system, may consider an untimely protest.

This is not a guiding principles matter. See FAR 1.102(d):

Quote

The role of each member of the Acquisition Team is to exercise personal initiative and sound business judgment in providing the best value product or service to meet the customer’s needs. In exercising initiative, Government members of the Acquisition Team may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR, nor prohibited by law (statute or case law), Executive order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority.

Emphasis added. See also FAR 1.102-4(e):

Quote

 (e) The FAR outlines procurement policies and procedures that are used by members of the Acquisition Team. If a policy or procedure, or a particular strategy or practice, is in the best interest of the Government and is not specifically addressed in the FAR, nor prohibited by law (statute or case law), Executive order or other regulation, Government members of the Team should not assume it is prohibited. Rather, absence of direction should be interpreted as permitting the Team to innovate and use sound business judgment that is otherwise consistent with law and within the limits of their authority. Contracting officers should take the lead in encouraging business process innovations and ensuring that business decisions are sound.

Emphasis added.

There is no "absence of direction." If there is any question about the use of competitive range decisions to eliminate qualifying offerors, it is a matter for proper statutory and regulatory interpretation, not acquisition team discretion.

I blame the FAR councils for not completely integrating and reconciling the statute with FAR Subpart 15.3, and addressing the competitive range issue, which leaves the question open to manipulation by wily finaglers. Milo Minderbender lives.

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BTW, according to Garner's Dictionary of Legal Usage, 3d ed., "each" means "every one of the several or many things (or persons) comprised in a group." He includes "each and all" in his long list of "doublets" on pages 295-296, which are "amplification by synonym." He says that one of the explanations for doublets is "fondness that lawyers have for this stylistic quirk."

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6 minutes ago, ji20874 said:

Somehow, the Air Force justified 40 awardees.  It would be interesting to read the legal review, if anything was put in writing.

 

@ji20874There's not enough information in that post to enable us to understand its implication for this thread.

Are you saying the Air Force conducted a 15.304(c)(1(ii) procurement and limited the number of qualifying offerors to 44? If so, did they announce their intention in the RFP? If so, did they get a protest? Was the procurement described in an earlier post. (This thread has gotten pretty long, so I might have missed it.)

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We're talking about whether the number of awards under the cited authority can be limited to three as an example, and whether a competitive range approach can achieve that end.  But in real life, the Air Force already did a procurement using the cited authority and limited the number of awards upfront in the solicitation.  I mentioned the procurement and a protest (one of several) in my first posting under this thread.

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8 minutes ago, ji20874 said:

We're talking about whether the number of awards under the cited authority can be limited to three as an example, and whether a competitive range approach can achieve that end.  But in real life, the Air Force already did a procurement using the cited authority and limited the number of awards upfront in the solicitation.  I mentioned the procurement and a protest (one of several) in my first posting under this thread.

Yes and I believe we discussed that the protester didn’t raise the issue in the protest, so that may be why GAO didn’t address it. They have enough to without adding to their workload.

Of course a way to limit the number of awards can be to set high minimum requirements, e.g., “substantial confidence” for past performance. That can be legitimate. Didn’t the government do that in one of your two cited protests?

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There have been several suggestions or hints to just try it and see if there is a (timely) protest prior to the time established for initial proposal receipt.

The discussion also indicated that the industry may be ignorant of the law or the FAR conditions for not evaluating price for initial ID/IQ awards.

So now we’re cherry picking which acquisition laws and regulations that we want to fall on our swords over and which ones to flaunt, ignore or break. The justification is that if one doesn’t like it, they can try and they might get away with ignoring or changing it. Industry may not be aware of it or might not recognize non-compliance until after proposal submission and government evaluation.

 

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43 minutes ago, ji20874 said:

We're talking about whether the number of awards under the cited authority can be limited to three as an example, and whether a competitive range approach can achieve that end.  But in real life, the Air Force already did a procurement using the cited authority and limited the number of awards upfront in the solicitation.  I mentioned the procurement and a protest (one of several) in my first posting under this thread.

Assuming you are referring to Strategic Services and Solutions, JV, the solicitation didn't say that award would be made to all qualifying offerors. According to the decision:

Quote

Proposals were to be evaluated based on technical experience and past performance factors. The past performance factor was comprised of the following three subfactors in descending order of importance: life-cycle software services, cybersecurity, and information technology business analysis. Award was to be made on a past performance tradeoff basis among technically acceptable offerors, using the three past performance subfactors.

That doesn't seem to comply with the statute permitting award without considering cost/price, but that's what they did.

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13 minutes ago, joel hoffman said:

There have been several suggestions or hints to just try it and see if there is a (timely) protest prior to the time established for initial proposal receipt.

The discussion also indicated that the industry may be ignorant of the law or the FAR conditions for not evaluating price for initial ID/IQ awards.

So now we’re cherry picking which acquisition laws and regulations that we want to fall on our swords over and which ones to flaunt, ignore or break. The justification is that one can try and might get away with it, i.e., industry might not be aware of it or might not recognize non-compliance until after proposal submission and government evaluation.

 

Dalai Lama quote: Know the rules well, so you can break them effectively.

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4 hours ago, C Culham said:

@joel hoffman As to the mention of cost or price in 52.215-1 I do not read the clause as stating that it establishes a competition based on cost/price but only that cost/price is to be provided.   The solicitation otherwise will state whether the evaluation of cost/price will or will not occur.

There is no cost/price submission (e.g., paragraph (f)(4)) in a qualifications based selection for MAC awards pursuant to the exception in 15.304. Pricing is established in the ordering process.

It’s also not a best value competition as described in paragraph (f)(1) and alluded to in (f)(4). 

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@Don MansfieldYeah, well, the Dalai Lama is in exile.

@ji20874I have found 20 GAO protest decisions of acquisitions conducted pursuant to PL 114-328, Sec. 825, including the ones that you mentioned. All of the decisions concerned solicitations that were issued before FAC 2020-07, which changed FAR 15.304 and which took effect on August 3, 2020. Eighteen of the 20 decisions were published before FAC 2020-07 took effect.

A preliminary Westlaw search indicates that none of the decisions mention "qualifying offeror" in the digest and none mention competitive range determinations or the conduct of discussions. Seventeen expressly state that award was made without discussions.

I am still reading the decisions, but so far I see nothing indicating that any of them will shed any light on the permissibility of eliminating "qualifying offerors" by means of exclusion from the competitive range, which, I think, is what we are talking about.

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2 hours ago, ji20874 said:

We're talking about whether the number of awards under the cited authority can be limited to three as an example, and whether a competitive range approach can achieve that end.  But in real life, the Air Force already did a procurement using the cited authority and limited the number of awards upfront in the solicitation.  I mentioned the procurement and a protest (one of several) in my first posting under this thread.

@ji20874I went through the thread and found that you mentioned only two protests (unless I missed something again😞 ), Patriot Defense Group, LLC, B-418720.3, August 5, 2020, and Strategic Services and Solutions, JV, B-215716.38, December 4, 2019. Both were about acquisitions conducted before FAC 2020-07 took effect. Neither involved a protest based on violation of FAR 15.304(c)(1)(ii) or PL 114-328, Sec. 825.

I have found and downloaded the RFPs for both and scanned them. Both state that they were being conducted pursuant to P.L. 114-328, Sec. 825. (I wonder how many offerors looked that up to see what it said.)

The Patriot case RFP mentions "qualifying offerors," but Strategic does not.

The Patriot case RFP makes no mention of a limit on the number of awards.

While the GAO says that the Strategic case RFP "contemplated the award of 40 multiple-award, indefinite-deliver indefinite-quantity (IDIQ) contracts," what the RFP actually said was this:

Quote

The Government intends to award forty(40) IDIQ contracts; however, the Government reserves the right to award more, less, or no contracts at all.

That statement is not inconsistent with the statute. Neither RFP included 52.215-1 with either of its alternates.

My conclusion is that neither of those acquisitions shed any light on the question of whether a CO could properly eliminate a "qualifying offeror" by excluding it from the competition range. I am still looking at the other decisions. ("Still collating," said Ash.)

However, as I believe you have suggested, both decisions may shed some light on the agencies' evaluation methods and on certificate of competency issues. I have focused on Don's notion of avoiding awards to "each and all" via competitive range decisions. I have looked at those other matters only in passing.

I still believe that you cannot eliminate a "qualifying offeror" by means of a competitive range determination. I also believe that a CO cannot "cap" the number of awards.

Vern

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5 hours ago, Don Mansfield said:

So the solicitation would say that award would be made to all qualifying offerors and that only 3 contracts would be awarded?

I get your point.  But I might say yes as there is a conflict with FAR 16.504(c)(ii)(A) in that for multiple award IDIQs(not supplemented by the DFARS it appears) that a CO is to determine an appropriate amount of contracts to award.   Can a CO have it both ways - All qualifying offers based on a FAR part 16 determination that "all" is 3 or some number?    

2 hours ago, joel hoffman said:

There is no cost/price submission (e.g., paragraph (f)(4)) in a qualifications based selection for MAC awards pursuant to the exception in 15.304. Pricing is established in the ordering process.

FAR 15.304 does not say there should be no price submission just that you do not evaluate cost/price for selection.  I would suggest that you need cost/price to ascertain that  a qualifying offer likely has fair and reasonable pricing.   I will say that if the GAO were to hold to your suggestion they would be an advocate for awarding multiple award IDIQ's with no pricing in them.  Counter in my view with the intent of IDIQ's originally in my book.  Overall a moot point I guess...read my full response here.

 

1 hour ago, Vern Edwards said:

I still believe that you cannot eliminate a "qualifying offeror" by means of a competitive range determination. I also believe that a CO cannot "cap" the number of awards.

I tried some thoughts where one might and failed at doing so.   As I wrangle the whole thing in my head the one truth that seems evident, and has already been said in various ways, the FAR fails at helping make sense out of if all.   

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