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Still seeking the holy grail: source selection simplification

Posted by Vern Edwards, 19 January 2009 · 2,515 views

The Director of Defense Procurement has launched an initiative to simplify DOD's source selection process. Here is how he explained the intitiative in a recent PowerPoint presentation:
Problem/Process/End Game

Problem Statement: Source selections are getting increasingly more complex, requiring volumes of documentation to justify each selection decision, and yet the number of successful protests is on the rise.

Process: The Department must thoroughly analyze the source selection process, collect lessons learned, best practices and examine each Service and Agency selection process to understand this trend and identify the key elements of the SS process that will lead to success.

End Game: The research and analysis will provide the baseline to establish a joint source selection policy guide for successful source selections to ensure the best solutions for the warfighter, while also withstanding the legal scrutiny these source selections undergo.

Mission: The mission of the source selection Joint Analysis Team (JAT) is to thoroughly examine the current source selection process, identify the key elements of successful source selections and produce joint source selection guidance to improve the effectiveness, efficiency, and certainty of the source selection process and selection decisions.

The Director's objective is to issue joint guidance in July of this year. That's the good news. The bad news is that the Director is pursuing a rather bureaucratic course of action. He has assembled a large and high ranking "Joint Analysis Team" to "research" the problem, staffed with members of the Senior Executive Service and complete with a "secretariat" and an "executive steering committee." To see the organization chart, click on the following link:

Source Selection Joint Action Team Organization ChartDPAP JAT Organization Chart

One would think that he's planning to invade a foreign country, instead of develop guidance about how to simplify source selection.

Of course, this is not the first time someone has tried to simplify source selection. In December 1995, a previous Director of Defense Procurement launched an even more ambitious effort, which became known as the "FAR Part 15 Rewrite." Here is the announcement of the project in the December 8, 1995 issue of the Federal Register:
The Director of Defense Procurement, in concert with the Federal Acquisition Regulations Council, is sponsoring an initiative to rewrite the Federal Acquisition Regulation (FAR) Part 15, Contracting by Negotiation. The intent is to make Part 15 easier to understand and to eliminate policies, procedures, or requirements that impose unnecessary burdens on contractors or contracting officers. Regulatory requirements that are not required by statute, required to ensure adequately standardized government business practices, or required to protect the public interest will be considered for elimination. Innovative means of simplifying the procurement process and enhancing its efficiency will be considered for incorporation into the regulation. The rewrite team will use a number of fora to facilitate the exchange of ideas and information. Comments are solicited from both government and industry personnel, and notices of public meetings will be published in the Federal Register. To initiate the rewrite effort, interested parties are invited to present statements or provide suggestions on how to improve FAR Part 15 at a public meeting.

That project took almost two years. It was completed on September 30, 1997, with the publication of Federal Acquisition Circular 97-02. Here is how the Federal Register of September 30, 1997, announced the product of nearly two years of work:
This final rule modifies concepts and processes in the current FAR Part 15, introduces new policies, and incorporates changes in pricing and unsolicited proposal policy. In addition, the sequence in which the information is presented has been revised to facilitate use of the regulation. The final rule does not alter the full and open competition provisions of FAR Part 6. The goals of this rewrite are to infuse innovative techniques into the source selection process, simplify the process, and facilitate the acquisition of best value. The rewrite emphasizes the need for contracting officers to use effective and efficient acquisition methods, and eliminates regulations that impose unnecessary burdens on industry and on Government contracting officers.

Although accompanied by much ballyhoo at the time, I doubt that many working level people in acquisition remember the Rewrite or what it did. Agencies did not achieve much simplification. The now notorious process that the Air Force used to try to select a contractor to produce its new tanker was very much like the process it used in 1961-62 to choose the contractor to build the Tactical Fighter Experimental, TFX, which became the FB-111. A good place to start for the SESs in the Director's JAT would be to read the transcripts of the U.S. Senate's year-long, 1963 "TFX Contract Investigation," especially Part 1, in which over the course of five days Colonel Charles A. Gayle, the head of the Air Force's source selection team, described the evaluation process to the senators. Only the names have changed.

The Director shouldn't need a big team of high ranking people to suggest ways in which to simplify source selection, but he probably needs them to get buy-in from the services and defense agencies. Perhaps I can save them some time and effort. Here are just a few things that can be done:
1. The main way to simplify source selection is to keep the number of evaluation factors to a minimum. The more evaluation factors there are the more information the agency must ask for. The more information it asks for the more information it must digest and process. The more information it must digest and process the more people and/or time it will need to digest and process it.

2. Reducing the number of evaluation factors should eliminate the need for ratings or scores (adjectives, colors, and numbers). Ratings and scores are used to simplify more complex information about evaluation results. But assigning ratings or scores has become a problematical task, which has caused considerable confusion and trouble without being especially helpful. Eliminating it would simplify the source selection process. I can't go into this at length here, but see my article in the January 2009 edition of THE NASH & CIBINIC REPORT, Postscript II: Scoring or Rating In Source Selection.

3. One way to reduce the number of evaluation factors is to accept that in many cases there will not be a dime's worth of difference among the offerors in terms of significant nonprice considerations. Stop trying to drum up ever more particulate "discriminators," and accept the possibility that the decision might turn on price. In fact, seriously consider conducting more lowest-price, technically acceptable source selections. And this suggestion may shock you, but think about using (gasp) sealed bidding for low risk firm-fixed-price buys.

4. Another way to reduce the number of evaluation factors is to stop treating source selection as a systems engineering problem or a product or process design competition (The offeror shall describe its proposed approach? , etc., etc.), unless you're choosing an existent product. Instead, treat it as a process for choosing a business partner for what may be a long-term, complicated, and risky endeavor. Think of it as a kind of competitive due diligence preparatory to a merger or acquisition. But in order to do that you are going to have to convince program and technical personnel that those technical and management proposals are often just a waste of time, which is something that you should have done years ago. In order to do that you are going to have to explain it to your contracting officers, who should know it, but commonly don't.

5. In order to convince program and technical personnel that technical and management proposals are often a waste of time, explain that "proposals" are not the same as offers. Offers are specific promises, which, if accepted, will bind the promisor to do or refrain from doing some specific act. Proposals contain offers, but they also contain a lot of other stuff that is often little more than imaginative literature or a management class term paper. Many source selections are just voluminous blue book exams graded by a lot of people. Replace at least some of that written hoorah with oral presentations. Better yet, eliminate it entirely.

6. Stop with all the draft RFPs. That idea took hold in DOD in the 1970s, especially in the Air Force, rapidly spread to the civilian agencies after passage of the Competition in Contracting Act in 1984, and has since gotten entirely out of hand. A draft RFP can add a lot of work and time to the source selection process, only to be followed by a series of amendments to the final RFP, which the draft should have prevented. Draft RFPs should be rare.

7. And what's with all the solicitation amendments? Some acquisitions have produced 20 and more.Last year a defense agency released a draft RFP for support services on July 1, 2008, followed by the final RFP on August 28. Twenty days later it issued a significant amendment that was 72 pages long. About 19 days after that it issued a 260 page amendment. It appears that the award has yet to be made. A major step forward in process simplification would be to get control over the RFP preparation process. The first step in that direction is teach people to know what they're doing.

8. Do some simple, practical things. For instance, do not evaluate experience or past performance when the offerors are well known and none is a real stinker. Say in the RFP that you plan to evaluate experience and past performance, but that you reserve the right not to do so after receipt of proposals if all of the offerors are sufficiently well known to the government to make the evaluation unnecessary. That will save some paperwork and time. Consider reserving the right to treat experience and past performance as either comparative evaluation factors or as pass/fail responsibility factors, to be determined after receipt of proposals. (Intrigued? You ought to be.)

9.When you expect to receive a large number of proposals, use phased evaluation to narrow the field before conducting an evaluation in depth. Start with price, then consider experience and price, then consider experience, past performance, and price. In each phase, eliminate any firm that is not competitive enough to have a real chance of prevailing over the remaining competitors. Say in the RFP that if you receive what you consider to be a large number of proposals you will apply your criteria in phases. If you don't receive a large number, then forego the phased process and get on with the evaluation.

10. Finally, keep source selection authority close to the program, or at least as close as possible. When you assign source selection authority to a general or flag officer or a presidential appointee, you'll get all the bureaucratic apparatus that comes with the rank, complete with multiple drafts of memos, briefings, and staff summary sheets. It did not save the Air Force's tanker source selection. Let the program manager choose the contractor and explain to her boss whom she chose and why as informally as possible. I know that is not appealing to the bureaucratic mind, but if you really want to simplify source selection, then simplify the "tell the boss" protocol as well.
Those are not the only things that can be done, but if you recommend those, and if agencies follow your recommendations, you will have accomplished a lot. Of course, you're not going to get real change as long as acquisition personnel learn source selection through OJT and cut-and-paste instruction. In the words of George Eliot, "We cannot reform our forefathers." Simplification won't come until we teach acquisition personnel the underlying concepts and theory of source selection, and the rules, so that they can throw off the costly and time-consuming methods developed by DOD during the late 1950s for weapons acquisition and develop more efficient methods of their own that work today.

Please feel free to print this out and pass it around. The worst it can do is add to the other stuff I've written about source selection simplification that nobody reads. No harm in that. Trust me⎯within six months to a year after you publish your July 09 guidance you are going to know exactly how I feel.

Some very good "common sense" ideas here and yes I will share with folks. Thanks
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Vern - You mentioned the Nash and Cibinic Report. Where can I locate this or subscribe? It sounds like something I should be reading.
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The Nash & Cibinic Report is a monthly publication of Thomson Reuters/West. It is written by Professor Ralph C. Nash, Jr. I am a monthly contributor. Prominent guests (like Wifcon's Don Acquisition) contribute from time to time. The Report is frequently cited by the Federal courts and the boards of contract appeals. It is also cited in law reviews and other publications. You can obtain subscription information at http://west.thomson.com.
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