Magnitude of Procurement

[baierle]

Is it authorized to disclose the magnitude of an upcoming procurement for a SERVICE contract?

I understand it is quite common practice when preparing for and announcing an upcoming CONSTRUCTION project.

Any education on this matter you could provide will be appreciated.

[Don Mansfield]

Authorized in the sense that it is not prohibited, yes.

[baierle]

I asked this question because I did not see the "magnitude" language info in FAR 37 as I do in FAR 36.

Thank you. I will presume that it's authorized because it is not prohibited, correct?

Do I give the same dollar value ranges as given for construction?

[formerfed]

Yes, often you need to provide some magnitude of an acquisition for services. One common way is for the government to provide their estimate of the level of effort and mix of personnel needed (number of hours/days per each labor category). Another less common way is providing a monetary estimate or budget. This is sometimes done when a Statement of Objectives approach is used describing the governments need. Offeror responding to a SOO need to know whether the government wants a $1 million proposed approach or a $10 million one.

[woops85]

Our office routinely publishes a range in Section L - instructions to Offerors. Range can be either dollars or hours but not both. As part of the cost proposal, we ask vendors who are outside the range to explain why - maybe the are proposing efficiencies in out years or they see some level of risk that we don't. We've found the range helps us eliminate the folks trying to lowball their way in and the explanation helps us figure out if we've missed something (a risk or an opportunity for savings).

Some of the COs use the IGCE figures as low end of range while others put it in the middle or at high end. That's their individual call as is whether hours or dollars make the most sense.

[joel hoffman]

I asked this question because I did not see the "magnitude" language info in FAR 37 as I do in FAR 36.

Thank you. I will presume that it's authorized because it is not prohibited, correct?

Do I give the same dollar value ranges as given for construction?

Why would you use the same ranges as construction? Labor is only a share of a construction contract price. Examine why you feel that it would be beneficial to provide such a range and why you are doing it, first.

[napolik]

Yes, often you need to provide some magnitude of an acquisition for services. One common way is for the government to provide their estimate of the level of effort and mix of personnel needed (number of hours/days per each labor category). Another less common way is providing a monetary estimate or budget. This is sometimes done when a Statement of Objectives approach is used describing the governments need. Offeror responding to a SOO need to know whether the government wants a $1 million proposed approach or a $10 million one.

During the 90s - the era of Acquisition reform, the term / policy Cost as An Independent Variable (CAIV) appeared. The purpose is to assure that systems acquired via contract fall within budget limits set for the system. The CAIV approach has been used successfully in service contracts as well. There is no reason why you cannot announce in a solicitation the maximum cost or price you are willing to pay for a product or service. You invite the competitors to provide proposals within the maximum cost or price while providing them the latitude to propose changes to your SOW or terms and conditions, if necessary to stay within the dollar limit you announce.

This approach should not be used routinely, but there are times when your budget circumstance demands its use.