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On June 23, 2016, the General Services Administration (GSA) amended the General Services Administration Acquisition Regulation (GSAR) to include clauses that require vendors to report transactional data from orders placed against certain Federal Supply Schedule (FSS) contracts, Governmentwide Acquisition Contracts (GWACs), and Governmentwide Indefinite-Delivery, Indefinite-Quantity (IDIQ) contracts.
What does this mean and what do you need to know?
First, it’s important to clarify what Transactional Data is. Transactional data refers to the information generated when the Government purchases goods or services from a vendor. It includes specific details such as descriptions, part numbers, quantities, and prices paid for the items purchased.
With this final rule, key points to note are:
- The TDR clause is being implemented under the GSA Schedules program on a pilot basis. TDR implementation for several Schedules and Special Item Numbers (SINs) will begin in August 2016 and extend through Q1 FY2017.
- Currently, GSA plans for a 3-year pilot affecting specific SINS at which point the pilot will be reassessed. The following Schedules/SINs are impacted by the pilot:
- 58 I
- Professional Services Schedule (only for the Engineering SINs)
- 70 (only for the following SINs: 132 8, 132 32, 132 33, 132 34, 132 54, and 132 55)
- The new TDR requirements will be mandatory only for new Schedule contracts awarded after the Schedule becomes subject to the pilot and at the time to extend the term of the Schedule contract. Please note that vendors holding existing contracts under pilot Schedules will be encouraged to accept the new clause via a bilateral contract modification. Once accepted, vendors will not need to comply with the Commercial Sales Practices (CSP) and Price Reductions Clause (PRC).
- Contractors in the pilot program will have ninety (90) days to accept the Mass Mod incorporating TDR.
- TDR data is reported monthly, and there is a 30-day window to report after the end of the month.
- GSA is amending its pricing instructions in the General Services Administration Acquisition Manual (GSAM) to place greater emphasis on price analysis when negotiating prices with Schedule vendors.
- IFF must still be paid quarterly. However, Contractors may choose to remit IFF on a monthly basis when they report their sales, but they must do so through the TDR system.
The impact of this new rule remains to be seen, so Centre Law and Consulting will continue to report on TDR news as it develops.
About the Author
Executive Director of Contracts & Consulting
Maureen Jamieson has more than twenty-five years of experience managing federal contracts. She is highly experienced in solving client pricing problems and implementing effective pricing strategies for placing products and services on GSA Schedule contracts. Maureen also frequently works with clients on effective selling and marketing strategies in the federal market space.
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An agency’s solicitation was not unreasonably vague where the solicitation defined “relevant” past performance to include projects of “a similar dollar value and contract type.”
In a recent bid protest decision, the U.S. Court of Federal Claims rejected a protester’s assertion that the solicitation was required to identify a specific dollar value associated with relevant past performance, finding that the solicitation’s phrasing was sufficient to allow offerors to compete intelligently.
The Court’s decision in WorldWide Language Resources, LLC v. United States, No. 16-424 C (2016) involved an Army solicitation for the Department of Defense Language Interpretation and Translation Enterprise IID (DLITE II) contract, a multiple-award IDIQ contract for linguist services supporting military operations internationally. The solicitation called for a best value evaluation considering four factors: Technical, Small Business Participation, Past Performance, and Price.
Under the Past Performance factor, the solicitation required offerors submit up to three “relevant and recent” contracts of a “similar size, scope and nature to the scope of the work” identified in the solicitation. The solicitation originally defined relevant contracts as those “of comparable magnitude and complexity” to those described in the solicitation. Amendment 7 to the solicitation defined relevant as contracts that are “of a similar dollar value and contract type, and include a similar degree of subcontract/teaming.”
WorldWide Language Resources, LLC filed a pre-award bid protest challenging the terms of the solicitation. WorldWide argued, in part, that the past performance factor was unreasonably vague because the solicitation did not specify a dollar value for relevant past performance. WorldWide contended that “it would be impossible to know whether past performance is relevant without a dollar value to which it could be compared.”
The Court wrote that a solicitation must provide “sufficient information to allow offerors to bid intelligently and to allow the agency to meaningfully evaluate competing proposals.” With respect to past performance, “the FAR entrusts the critical determination of what does or does not constitute relevant past performance to [the agency’s] considered discretion.” An agency’s determination of relevance is especially worthy of deference because it is “among the minutiae of the procurement process which this court will not second guess.”
In this case, the Court held, the solicitation “has adequately described the method by which past performance will be evaluated.” The information provided in the solicitation was “sufficient for offerors to bid intelligently,” and “[t]he Agency is not required to define relevant past performance with a dollar value.” The Court denied WorldWide’s protest.
Government solicitations often define relevant past performance in broad terms like those used in the WorldWide Language Resources case. Although some offerors might prefer a more specific definition, there is no requirement that an agency define relevance by reference to a dollar value.
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In January 1944, the Office of Strategic Services, a wartime intelligence agency and predecessor to the modern Central Intelligence Agency (CIA), issued Strategic Services Field Manual No.3 (Simple Sabotage Field Manual) to its agents to aid the Allied war effort in Europe. The purpose of the classified document was to explain the technique of simple sabotage, outline its possible effects, and present suggestions for inciting and executing it. It introduced the concept of simple sabotage as follows:Quote
Sabotage varies from highly technical coup de main acts that require detailed planning and the use of specially trained operatives, to innumerable simple acts which the ordinary individual citizen-saboteur can perform. This paper is primarily concerned with the latter type. Simple sabotage does not require specially prepared tools or equipment; it is executed by an ordinary citizen who may or may not act individually and without the necessity for active connection with an organized group; and it is carried out in such a way as to involve minimum danger of injury, detection, and reprisal.
The manual goes on to describe two types of simple sabotage: destructive and nondestructive. Regarding the latter type, the manual explains that—Quote
“It is based on universal opportunities to make faulty decisions, to adopt a non-cooperative attitude, and to induce others to follow suit. Making a faulty decision may be simply a matter of placing tools in one spot instead of another. A non-cooperative attitude may involve nothing more than creating an unpleasant situation among one’s fellow workers, engaging in bickerings, or displaying surliness and stupidity.
This type of activity, sometimes referred to as the ‘human element,’ is frequently responsible for accidents, delays, and general obstruction even under normal conditions. The potential saboteur should discover what types of faulty decisions and non-cooperation are normally found in his kind of work and should then devise his sabotage so as to enlarge that ‘margin for error.’”
The manual has a section titled “Specific Suggestions for Simple Sabotage” that provides suggestions for how to execute simple sabotage for different targets. There are suggestions on how to innocently start fires in buildings, set off automatic sprinklers to ruin warehouse stock, change sign posts at intersections and forks, dilute gasoline with water, wine, or urine so it won’t combust, and other Dennis the Menace type hijinks. What seemed most familiar were the suggestions under “General Interference with Organizations and Production.” Here are a few:Quote
(a) Organizations and Conferences
(1) Insist on doing everything through “channels.” Never permit short-cuts to be taken in order to expedite decisions.
(2) Make “speeches.” Talk as frequently as possible and at great length. Illustrate your “points” by long anecdotes and accounts of personal experiences. Never hesitate to make a few appropriate “patriotic” comments.
(3) When possible, refer all matters to committees, for “further study and consideration.” Attempt to make committees as large as possible—never less than five.
(4) Bring up irrelevant issues as frequently as possible.
(5) Haggle over precise wordings of communications, minutes, resolutions.
(6) Refer back to matters decided upon at the last meeting and attempt to re-open the question of the advisability of that decision.
(7) Advocate “caution.” Be “reasonable” and urge your fellow conferees to be “reasonable” and avoid haste which might result in embarrassments or difficulties later on.
(8) Be worried about the propriety of any decision—raise the question of whether such action as is contemplated lies within the jurisdiction of the group or whether it might conflict with the policy of some higher echelon.
(b) Managers and Supervisors
(9) When training new workers, give incomplete or misleading instructions.
(10) To lower morale and with it, production, be pleasant to inefficient workers; give them undeserved promotions. Discriminate against efficient workers; complain unjustly about their work.
(11) Hold conferences when there is more critical work to be done.
(12) Multiply paper work in plausible ways. Start duplicate files.
(13) Multiply the procedures and clearances involved in issuing instructions, pay checks, and so on. See that three people have to approve everything where one would do.
(14) Apply regulations to the last letter.
(c) Office Workers
(7) Spread disturbing rumors that sound like inside dope
(4) Pretend that instructions are hard to understand, and ask to have them repeated more than once. Or pretend that you are particularly anxious about your work, and pester the foreman with unnecessary questions.”
The manual was declassified in 2008, but I suspect it fell in to enemy hands long before that. The question is, though, why is the enemy targeting Federal contracting offices?
"A question. Since before your sun burned hot in space and before your race was born, I have awaited a question."
Star Trek, the Guardian in “The City on the Edge of Forever.”
Early on in college I realized that questions were the gateway to learning. I didn’t put questions to my professors very often. I asked them mainly of myself, then learned by looking for answers. It took time, which was murder under the quarter system of the University of California. (I swear, I don’t think they were trying to teach us anything, just move us through the process.)
I learned that I had to ask good questions. Dumb questions (and there is such a thing as a dumb question) were the gateway to nowhere.
But what’s a good question?
I have long believed that the ability to ask good questions is one of the most important skills that a contract specialist must master. The ability to ask good questions is essential to learning the various facets of the work and to doing the work well.
Suppose you are planning to negotiate a sole source contract price and you have received a price proposal and certified cost or pricing data. You’ve conducted a preliminary cost analysis and developed a list of questions. The time has come for face-to-face fact-finding.
Your philosophy is that cost analysis is just reverse cost estimating. In order to develop a pre-negotiation objective you intend to disassemble the contractor’s cost estimate and profit objective, understand them, assess their reasonableness, put them back together and see what you get, then develop your negotiation plan.
You’re sitting in the contractor’s facility, across from their lead negotiator and the other members of its team. They are waiting for you. The intend to be honest. They will answer you truthfully, but they are not going to help you ask and they are not going to be forthcoming. If you want information, you are going to have to ask for precisely what you want.
So, what’s your first question?
* * *
Wifcon Forum long ago transitioned from a true discussion forum into a Q&A website, and much like someone passing through Elizabeth Kubler Ross’s stages of grief at the prospect of death, I have transitioned from shock, through anger and annoyance, to disappointment and depression, and finally to acceptance of what seem to me to be a lot of poor quality questions. I'm not the only one who thinks so. Some of us discuss the problem often, but behind the scenes.
What do I mean by “poor quality”? The best way to answer that is to show you some examples, all asked by persons who posted anonymously, without any user name, more than a decade ago. Here’s one from early 2003:Quote
We had a FP purchase order for support services that ended 9/30/02. We did not use all of the funds on the PO. We sent a final invoice to the gov't for the remaining money not spent.
I don't have experience with a FP Purchase Order so I hope you can clarify this for me.
The invoice references FAR Part 16.202-1 which states:
A firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the contractor's cost experience in performing the contract. This contract type places upon the contractor maximum risk and full responsibility for all costs and resulting profit or loss. It provides maximum incentive for the contractor to control costs and perform effectively and imposes a minimum administrative burden upon the contracting parties.
Is there another FAR part that allows for us to bill for the remaining funds? Thanks. I appreciate your help[.]
Here is another, from December, 2000:Quote
What is the standard to apply when calculating an equitable adjustment for a deductive change?
We have a situation where a change was made to a construction contract that reduced the quantity of an estimated quantity CLIN by approximately 50%. The contractor submitted a REA for the change. The REA was for a share of the cost savings that resulted from the deleted work. Essentially, the contractor is saying that he is entitled to share in the cost savings because he found a way to do the work more efficiently than originally planned.
I've never seen an approach to a deductive change like this. Is it proper?
Here is another, also from 2000:Quote
What paragraphs of FAR 52.212-4 can be used for modification authority in block C of the SF 30 when modifying a delivery order written against a commercial contract? If the Government does not accept nonconforming services, why would it not be appropriate for the CO to use 52.212-4(a), Inspection/Acceptance, to deobligate what now are excess funds. Second part to this question. When can the modification authority for a delivery order ride on the modification authority used for the basic contract when the revisions to a contract have to be carried over to the delivery order.
All punctuation as in originals.
I wish I could say that those are rare examples, but they are all too common. I could have used a few from last week, but I didn’t want to hurt anyone’s feelings.
I’m sure that those questions made perfectly good sense to those who asked them. They might make good sense to some of you who are reading this blog post. But not to me.
Okay, so what makes a question “good”? As it turns out, that is not as easy a question to answer as you might think.
I wanted to write a well-reasoned answer to my own question, which itself might be a dumb question, so over the course of the past several months I have read extensively and sometimes deeply in the theory of questions. (The theory has a name: erotetics) and the practice of questioning. It is an important part of logic, science, rhetoric, law, and semantics, and works range from the highly technical, such as Belnap, The Logic of Questions and Answers (Yale, 1976) and Harrah, “A Logic of Questions and Answers,” Philosophy of Science, Vol. 28 (1961) pp. 267-273, to those that are more readily accessible to nonspecialists, such as the entry, “Questions,” at the Stanford Encyclopedia of Philosophy, http://plato.stanford.edu., the entry “Questions,” in The Encyclopedia of Philosophy, Vol. 7 – 8, and in The Theory of Questions: Erotetics through the Prism of its Philosophical Background and Practical Applications, by Anna Brożek (Rodopi, 2011).
A search of the internet led me to a lot of advice about how to ask a good question. You can find an example of such advice (a pretty decent one) at this site:
You can find another example here:
The advice strikes me as sound, though not entirely satisfying.
Recently, however, I came across something that stopped me in my tracks -- a short article by Wendell Johnson (1906 – 65), “How to Ask a Question,” published in Journal of General Education in April, 1947, republished in ETC: A Review of General Semantics (Winter 1948), and published again in a retrospective in ETC: A Review of General Semantics (Fall 1983). You can find it here: http://www.jstor.org/stable/42576616?seq=1#page_scan_tab_contents, but you need a subscription or access through a university or public library.
It’s very short, only five pages, but dense. The author packed a lot of thinking into those pages. You have to read deeply. I have added it to my list of essential reading for contracting practitioners.
Because it may not be readily accessible by all, here are a few quotes to give you the flavor of the thing:Quote
Even among college upper classmen and graduate students one finds in varying degrees a naive belief that there are knowers -- that the way to get the answer to a question is simply to ask the man who knows it.
* * *
[T]he techniques of fruitful inquiry necessarily involve certain ways of using language, particularly in the framing of questions. Just any old string of words, arranged grammatically and with an interrogation mark at the end, won't do.
* * *
[A]n answerable question is one that implies the observations, or reliably reported observations, needed to answer it. Any question that does not meet this test -- any question, that is, for which no specifications are supplied as to the particular observational procedures to be used in answering it -- is to be classified as meaningless for purposes of fruitful inquiry, as nonsense from an investigative point of view. From a psychiatric point of view it may be richly meaningful, of course. This is to say that anyone who can analyze and interpret such a question in a way that clarifies the confusion of the one who asks it qualifies, to this extent, as a psychiatrist . Anyone who unhesitatingly answers the question, without recognizing its meaningless character, qualifies as surely as a fool . One may, with benefit, regard this as one of the more important items in that vast category known as useful but seldom used information.
* * *
The fundamental skill to be taught is that of specifying the procedures to be used in making the observations needed to answer any questions one asks -- and in specifying the terms in which the observations are to be reported . Except as the questioner provides these specifications, he can hardly expect anyone else to divine what he is asking, nor can he be depended upon to recognize the answer himself if by some odd chance it should appear.
But my favorite quote in the piece, and one of my all-time favorite quotes, is this:Quote
It is known almost as widely as it is disregarded that a fool is one who knows the answers to the questions that only a fool would ask. It follows that effective insurance against becoming a fool oneself lies in knowing what sorts of questions and answers these might be. It would appear reasonable to assume, on this basis, that a major responsibility of our schools and colleges is that of providing adequate instruction in the techniques of fruitful inquiry.
Yep, my question, "What is a good question?", was a fool’s question. So I’m going to refine it. That might take me a while. In the meantime, give Wendell Johnson's article a read. It will be well worth your time and thought.
Had you ever speculated on why April Fools’ Day seems to be such an important day for federal acquisition? After all, consider some of the regulatory and policy issuances on that day:
The Federal Acquisition Regulation (FAR) became effective on April Fools’ Day (1984).
The Federal Aviation Administration became exempt from the FAR on April Fools’ Day (1996).
The Office of Federal Procurement Policy (OFPP) memorandum on “Protests, Claims, and Alternative Dispute Resolution (ADR) as Factors in Past Performance and Source Selection Decisions” was issued on April Fools’ Day (2002).
Army Federal Acquisition Regulation Supplement (AFARS) Revision #25 was issued on April Fools’ Day (2010).
FAR Case 2010-015 on the Women-Owned Small Business (WOSB) Program was published in the Federal Register on April Fools’ Day (2011).
No doubt a little research would provide a number of additional examples.
Frankly, if it were me, April Fools’ Day would probably be the last day that I would pick for issuing important regulations or policy statements. That is one day that I would avoid like the plague. [Note: The last statement is not technically correct, I would go to greater extremes to avoid the plague than to publish an acquisition policy or procedure on April Fools’ Day.] Why not just wait a day, and avoid all the innuendo and snickering? After all, consider, April has 29 other days that are perfectly suitable for issuing regulations, policies, procedures, guidance and information.
Comparison of Major Contract Types
For example, on Monday, April 25, 2016, the Defense Acquisition University/Defense Systems Management College updated the Acquisition Community Connection with a revised version of its Comparison of Major Contract Types (i.e., Comparison of Major Contract Types - April 2016). [For those who would like a direct link: https://acc.dau.mil/CommunityBrowser.aspx?id=214513.] The new version better aligns with the terminology in the Contract Pricing Reference Guides, updates the charts on the reverse, and adds a chart on “Achieving a Reasonably Challenging but Achievable (RCA) Target Cost,” one of topics discussed extensively in the new Guidance on Using Incentive and Other Contract Types.
Over the years, various versions of the “Comparison” have been fairly popular (i.e., 94,863 Page Views and 80,840 Attachments Downloaded. Although, given the number of personnel in the Defense Statutory Acquisition Workforce Contracting Career Field, 29,690 as of the 2nd quarter of 2015, those Lifetime Activity numbers may not be all that high, relatively speaking.
The April Fools’ Day Announcements for 2016
So, it can be done. However, this April Fools’ Day (2016) Defense Procurement and Acquisition Policy (DPAP) elected to issue two important pieces of procedures/guidance to the Defense Statutory Acquisition Workforce:
Guidance on Using Incentive and Other Contract Types (April 1, 1016).
Department of Defense Source Selection Procedures (SSP) (April 1, 1016).
Both documents have their warts. For instance, the Guidance incorrectly identifies one of the two statutory references for limitations on negotiation of price or fee. The good news is that thee one applicable to the DoD was identified correctly. Running the Spelling and Grammar checker one last time would not have been amiss.
Warts aside, the results of this Better Buying Power (BBP) are somewhat disappointing. The Specific Action in the USD(AT&L) memorandum “Implementation Directive for Better Buying Power 2.0 - Achieving Greater Efficiency and Productivity in Defense Spending” was, “Director, DP will provide a draft policy guidance document on the use of incentives in contracting to the BSIG for review by July 1, 2013. The starting point for this document will be the DoD and NASA Guide, “Incentive Training (sic) Guide,” originally published in 1969.”
For those of you unfamiliar with the Incentive Contracting Guide, it was the last of a number of such guides published in the 1960s. That particular version of the Guide was 252 pages. By comparison, the new Guidance is 41 pages. About 40 % of the Guidance is devoted to negotiation of fixed-price incentive (firm target) (FPIF) contracts in a sole-source environment a discussion of Reasonably Challenging but Achievable Target Cost (RCA), which go hand-in-hand. The coverage for Time and Materials/Labor Hour (T&M/LH) Contracts amounts to a paltry nine (9) lines. Ask yourself these two questions, “How many sole-source FPIF contracts does the Department award? If ‘T&M is the least preferable contract type,’ where should the emphasis have been placed?”
For those of you who need guidance on structuring multiple incentive contracts the DOD and NASA Guide: Incentive Contracting Guide 1969 may be a better bet than the new Guidance. The good news is that it is still available on the Defense Acquisition University’s Acquisition Community Connection. [For those who would like a direct link: https://acc.dau.mil/CommunityBrowser.aspx?id=189615.]
The updated Source Selection Procedures are more than 505 longer than the previous version. The Procedures would have benefited from fact checking, copy editing and proof reading. Another warts issue.
Warts aside, for those of you who will be involved in DoD source selections that meet the thresholds in the Procedures, you will want to give it a thorough read. Among other things, you will see some new descriptions of adjectival ratings and a new source selection procedure in APPENDIX B, “TRADEOFF SOURCE SELECTION PROCESS: SUBJECTIVE TRADEOFF AND VALUE ADJUSTED TOTAL EVALUATED PRICE (VATEP) TRADEOFF.” The latter came about as the result of USD(AT&L) memorandum “Implementation Directive for Better Buying Power 2.0 - Achieving Greater Efficiency and Productivity in Defense Spending.” Under the heading of Better define value in “best value” competitions there was a Specific Action, “Director, DP will review the ‘Process Manual’ developed by the joint Service team led by the Air Force and present a recommendation for adoption with any recommended changes to the BSIG by July 1, 2013.” You need to read the entire section to understand the direction. No doubt you will see a good deal of discussion about VATEP percolating up.
Understand that although the Guidance and Procedures were issued on April Fools’ Day, they are no joke. Read them carefully, and implement them wisely.
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All of us can probably agree that each year seems to go by faster than the year before. The older we become, the rate at which we age seems to increase. So now, with 2016 upon us, (and without providing a comprehensive listing of new contracting laws, statutes, regulations, personnel changes, or best practices during 2015), perhaps it’s best to simply summarize and reflect on what 2015 might signify regarding acquisition success. Let’s also not use the “R” word even though talking about acquisition reform keeps us blog writers and consultants busy.
Some initiatives that began with great fanfare are no longer around. The government almost “closed” again, although the list of program exceptions to shutdowns is now so large that many don’t notice. Those programs with greater lobbying power are essential, while many very worthy programs are used as pawns. Probably the greatest damage to government contracting, dwarfing any new legislative improvement, is the indecisive nature and short-term environment under which government programs must operate.
GSA launched initiatives in category management, including its acquisition gateway, eBuy Open and other initiatives intended to improve contracting officer market knowledge and vehicles available to meet specific needs and better leverage government buying power.
The Department of Defense says it’s at a 35-year best in controlling costs for major acquisition programs and bestowed a variety of 15 individual and five organization awards for the past year. Heidi Shyu stepped down as the Army’s acquisition executive and off of the acquisition “bus,” where she coined the analogy that all acquisition program “passengers” have a brake and steering wheel, but no gas pedal.
Legislation intended to improve the current process within information technology is underway and new legislation within DoD was passed. It will be sometime before it is clear how well these latest changes have performed.
Discussion with today’s acquisition leaders reveals a determination to do the right thing as best as possible despite the peripheral (beyond acquisition) system challenges at each step. This past year may best be remembered for cyber security breaches; new and enhanced multiple-crises emanating from the Middle East; successful space probes and retrieval; cyclones, earthquakes, and changing climates; gun violence from Tunis to California; and a never-ending political campaign.
For contracting managers, the faster nature of societal change and news cycles may mask the great strides being made to respond more effectively to ever-changing government requirements and outsourcing needs. Ineffective conference, education, and industry communication restrictions appear to be abating. However, lengthy debate over government salary, bonuses, or predetermined solutions to unresearched acquisition problems continues.
From a contracting standpoint, 2015 may not be momentous in terms of single legislation or headlines. However, the complexities and challenges of successfully navigating today’s acquisition environment—from reduced spending to cyber security to Federal Reserve policy to the sheer complicated nature of the business enterprise itself—continues to grow. The requirements are harder, and the solutions harder still. Contractors supporting the government (and indeed the government itself) have a more difficult time understanding how to prepare, respond, and execute to these ever-evolving challenges. From workforce to technology, uncertainty is increasing and proven solutions decreasing. A new workforce is growing up in an environment of more employment uncertainty, from challenges to the education they’ve received to the manner of training and on-the-job experience they need.
However, we should all be impressed by the professionals working within this environment and what they accomplish. They don’t have time to publicly write or promote their efforts, but they are there and are noble. The year 2016 promises to be no easier than 2015. Our contracting leaders and managers are up to the challenge, but let’s understand for ourselves the causes and concerns, offer our advice and support, and be part of the solution.
Michael P. Fischetti
National Contract Management Association
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The Competition in Contracting Act of 1984 requires the Government Accountability Office (GA0) to report to the U. S. Congress annually when government agencies fail to fully implement its bid protest recommendations. GAO has posted these reports on its website since fiscal year (FY) 1995. Initially, these reports provided little information but by FY 2004, GAO published its "Bid Protest Statistics" covering FY 2004 through 2001. I have added every one of these reports to the fiscal year numbers at the top of the bid protest statistics.
Beginning in its report for FY 2013, GAO began listing its "most prevalent reasons for sustaining protests" during the FY. This has continued for FY 2014 and FY 2015. Although the information provided does not include cases where an agency took corrective action before a formal sustained decision was reached, it does provided information on 227 sustained decisions. In that sense, it may provide some help whether you are trying to prevent a protest or whether you may protest a procurement.
Below is my ranking of the most prevalent reasons for sustained protests listed by GAO for FY 2015 through FY 2013:
- failure to follow the evaluation criteria (listed 3rd in FY 2015 and 1st in FYs 2014 and 2013).
- unreasonable cost or price evaluation (listed 1st in FY 2015 and 4th in FY 2013) and
- inadequate documentation of the record (listed 4th in FY 2015 and 2nd in FY 2013)
- unequal treatment of offerors (listed 4th in FY 2014 and 3rd in FY 2013)
- unreasonable technical evaluation (listed 5th in FY 2015 and 3rd in FY 2014)
This ranking also requires a caveat because the number of sustained protests varied significantly for FY 2015 (68), FY 2014 (72), and FY 2013 (87).
Other reasons for sustained protests GAO listed include
- unreasonable past performance evaluation (listed 2nd in FY 2015)
- flawed selection decision (listed 2nd in FY 2014)
In addition to listing the most prevalent reasons, GAO also gives 1 example decision for each of the most prevalent reasons it lists in a FY. For example, under unreasonable cost or price evaluation which GAO placed first in FY 2015, GAO lists Computer Sciences Corp.; HP Enterprise Servs., LLC; Harris IT Servs. Corp.; Booz Allen Hamilton, Inc., B-408694.7 et al., Nov. 3, 2014, 2014 CPD ¶ 331.
My listing of each decision that GAO provided as a most prevalent reason with a link to the decision is here.
To me, the most striking reason for GAO sustaining a protest is inadequate documentation. That can be prevented by a thorough review of what documents are provided in the evaluation and selection decision. If there is something missing, identify it and correct it. You can get more information on the documentation issue by looking at the Wifcon.com protest page FAR 15.305 (a)(3): Technical Evaluation - Documentation.
Another striking reason for sustained protests is the first that I list--failure to follow the evaluation criteria. One time a friend of mine was sitting on an evaluation panel for a GAO procurement that I had no involvement in at all. He had something extra he wanted to include in his evaluation of proposals and he asked me about it. Although I was stunned at the question, I simply told him that he must follow the evaluation criteria in the solicitation and if he had any questions he should ask the contracting officer--not me.
Before ending this entry, I will once again remind you that the information provided by GAO only includes sustained protests. These are decisions in which the agency digs in its heels and fights the protest to a final decision. As GAO explains, "agencies need not, and do not, report any of the myriad reasons they decide to take voluntary corrective action." What you see here may be the tip of the iceberg.
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The long-standing principle that the federal government had the same implied duty of good faith and fair dealing as any commercial buyer was put in jeopardy by a 2010 decision of the U.S. Court of Appeals for the Federal Circuit, Precision Pine & Timber, Inc. v. U.S., 596 F.3d 817 (Fed. Cir. 2010). There a panel of the court adopted a narrow rule seemingly limiting application of the principle to situations where a government action was “specifically targeted” at the contractor or had the effect of taking away one of the benefits that had been promised to the contractor. Although the decision concerned a timber sales contract not a procurement contract, when I wrote it up in the May 2010 Nash & Cibinic Report (24 N&CR ¶ 22), I expressed the fear that the reasoning would be subsequently applied to procurement contracts.
My fear was realized in a construction contract case, Metcalf Construction Co. v. U. S., 102 Fed. Cl. 334 (2011). In that decision, the judge described eggregious conduct on the part of the government officials that would have been held to be a breach of the implied duty of good faith and fair dealing under many earlier cases. However, the judge held that under the Precision Pine standard, the contractor had not proved that the actions were specifically targeted at the contractor. In the February 2012 Nash & Cibinic Report (26 N&CR ¶ 9), I criticized this decision but stated that I believed that even if the decision was affirmed on appeal, most contracting officers would not take this as a signal that the proper way to administer contracts was to abuse the contractor.
Fortunately, a panel of the Federal Circuit has reversed the decision, Metcalf Construction Co. v. U. S., 2014 WL 519596, 2014 U.S. App. LEXIS 2515 (Fed. Cir. Feb. 11, 2014). The court held that the lower court had read Precision Pine too narrowly and that “specific targeting” was only one example of the type of conduct that could constitute a breach of the implied duty of good faith and fair dealing. Importantly, the court also rejected the government’s argument that this “implied duty” only could be found when it was footed in some express provision of the contract. The court concluded that the correct rule was only that the express provisions of a contract had to be examined to ensure that they had not dealt with the conduct of the government; for if they had, they would override the implied duty.
This leaves us in a tenuous position with regard to the views of the Federal Circuit. We have one panel in Precision Pine stating a narrow rule, another panel in Metcalf Construction stating the traditional rule, and a third panel in Bell/Heery A Joint Venture v. U.S., 739 F.3d 1324 (Fed. Cir. 2014), ruling in favor of the government because the contractor had not alleged facts showing that the government had “engaged in conduct that reappropriated benefits promised under the contract” (which is part of the Precision Pine reasoning). Thus, it is difficult to state where the judges of the Federal Circuit stand. Hopefully, the court will agree to take either Metcalf Construction or Bell/Heery to the full court for an en banc review of the issue.
I’ve never been sure why the Department of Justice has so vigorously argued that the government should not be held to the same standards of conduct as a commercial buyer. Of course, persuading the courts and boards that a narrower standard should be applied to the government is a way to win litigated cases. But, in my view, encouraging abusive or non-cooperative conduct hurts the government as much as it hurts its contractors. I have taught for many years that in the long run the government benefits from actions that show industry that it is a fair contracting partner. A line of published judicial decisions that demonstrates that the government is not such a partner is one more of the many messages that tell companies they should sell to the government only when they can find no other customer. Surely, this is not the message that government agencies in need of products and services on the commercial marketplace want to convey to companies that can provide those products and services.
Many years ago when I came to Washington to work in the field of government contracting, I concluded that there was one major advantage to being on the government side of the negotiating table. That advantage was that I was under no pressure to extract money from the contractor by unfair bargaining or unfair contract administration. To me fairness was an integral part of the job of a government employee. I still believe it and teach it. Thus, no matter what the outcome of the good faith and fair dealing litigation, I will continue to urge government employees that fair treatment of contractors is the only way to go.
Ralph C. Nash
When I get older, losing my hair
Many years from now . . . .
When I'm Sixty-Four
John Lennon, Paul McCartney
Shortly after we celebrate our country's independence on July 4, 2013, Wifcon.com will end its 15th year on the internet. With much help from the Wifcon.com community, I've raised a growing teenager. When I started, I was 49 and my hair was so thick that I often shouted ouch or some obscenity when I combed it. Wifcon.com has existed in 3 decades and parts of 2 centuries. During that period, I've updated this site for every work day--except for the week or so when I called it quits. I remember the feeling of relief. I thought it was over. However, many of you convinced me to bring it back. Yes, just when I thought I was out, many of you pulled me back in.
As I mentioned in an earlier post, someone once told me that Wifcon.com was my legacy. I once had great hopes for a legacy. Perhaps, a great saxophone player belting out a solo in front of thousands of fans and seeing them enjoying themselves. Instead, here I sit in my solitude looking for news, decisions, etc., to post to the home page. For many years, my dog Ambrose kept me company. Now, my dogs Blue Jay and Lily stare at me and look for attention. With my sights now set realistically, I accept that Wifcon.com is my legacy. It's the best I could do.
Every now and then, I receive an e-mail from someone thanking me for Wifcon.com. They tell me how it helped their careers. These e-mails keep me and Wifcon.com going.
Send me a postcard, drop me a line,
Stating point of view
Indicate precisely what you mean to say
Yours sincerely, wasting away
Give me your answer, fill in a form
When I'm Sixty-Four
John Lennon, Paul McCartney
The thoughts in these e-mails won't let me quit. I still search each night for something to add to the site in hopes that it will increase your knowledge. If I find something new, I still get excited. Often, it feels like a self-imposed weight around my neck. What started as a release for my imagination has evolved into a continuing and daily addition to the contracting community. In the evenings, it is as if I'm Maillardet's automaton. I head over to my office, sit before the computer, and update. Then I send the updated pages to Virginia where it is accessed from around the world. Maybe I'm addicted to Wifcon.com; maybe I was born with the Wifcon.com gene.
If you haven't added the numbers, I'm 64 now. Wifcon.com and I are showing our age. I can comb the top of my head with my fingers. The ouches and other obscenities caused by my once thick hair are gone. A recent upgrade to the discussion forum requires that I turn the "compatibility mode" off on my browser. In that mode, I realized that Wifcon.com is ugly. I have current software for the needed future redo of this site.
I am Wifcon.com; Wifcon.com is me. It is my legacy and my albatross. As always, thank you for your support.
You'll be older too,
And if you say the word,
I could stay with you.
When I'm Sixty-Four
John Lennon, Paul McCartney