Biased Ground Rules Under FAR 9.505-2

[Jacques]

I thought I would use the occasion of my 200th post to pose a question of no practical significance,* in keeping with most of my other posts.

FAR 9.505-2(a) & ( seem to create two different rules. Under (a), if a contractor prepares complete specifications, there are circumstances where it may not be allowed to furnish the items either as a prime or a sub. Under (, if a contractor "provides material leading directly, predictably, and without delay" to a work statement for a system or services, there are circumstances where it may not be allowed to "supply the system, major components of the system, or the services."

I understand that FAR 9.505-2 combines Rule 2 and Rule 3 from DAR Appendix G. But why the different treatment? More importantly, what is the distinction?

Is there ever a time where an offeror would be excluded under (a) but would not be excluded under (? If not, why have (a)?

I trust the distinction is not between a "specification" and a "work statement" (or what the DAR called a "statement of work"). I couldn't find other examples where the FAR distinguishes one requirement document from another. If that is the distinction, what purpose does it serve?

Is the distinction that (a) covers nondevelopmental items (NDIs) (as the parties in Lucent seemed to assume), while ( covers everything (else)?

Thoughts?

* I suspect the question is largely academic. Rather than looking at FAR 9.505-2 as a set of elements required to establish a biased ground rules organizational conflict of interest, one should probably treat the subsection as examples where an offeror may be excluded (and provides some rationale on when exclusion may not be appropriate). Consider FAR 9.505 and Lucent Technologies World Services, Inc., B-295462, 2005 CPD ? 55, 47 GC ? 190.

Edit: Given that advance restrictions are not required under the FAR, and the "examples" in FAR 9.505-2 seem to suggest that there may be some safe harbors for a contractor, is it essentially incumbent upon a contractor who is being asked to provide information that is intended to be used in the preparation of a requirement document to assume it won't be eligible to compete (if the government decides to compete the requirement)? Is this an appropriate allocation of risk?

[Guest Vern Edwards]

Jacques:

In another thread you remarked that no one had responded to your inquiry in this thread, so I decided to take a look. The reason you didn't get a response is probably is that the inquiry is so darned complex. I had to read it several times in order to understand what you wanted by way of response. I'm not sure that I understand now. Moreover, you needlessly threw in DAR Appendix G (32 CFR Appendix G, 1984), which most people do not have, have not seen, and cannot get. What was the point? I think you made it too hard.

You asked:

FAR 9.505-2(a) & ( seem to create two different rules. Under (a), if a contractor prepares complete specifications, there are circumstances where it may not be allowed to furnish the items either as a prime or a sub. Under (, if a contractor "provides material leading directly, predictably, and without delay" to a work statement for a system or services, there are circumstances where it may not be allowed to "supply the system, major components of the system, or the services."

I understand that FAR 9.505-2 combines Rule 2 and Rule 3 from DAR Appendix G. But why the different treatment? More importantly, what is the distinction?

Emphasis added.

The obvious difference between 9.505-2(a) and 9.505-2( is that (a) applies to "nondevelopmental items" (defined in FAR 2.101) and ( applies to the acquisition of "a system or services." In other words, (a) applies to specifications for existing items of supply (not services) that are used only by the federal and state and local governments, while ( applies to services for system development or modification and other services.

You say:

I trust the distinction is not between a "specification" and a "work statement" (or what the DAR called a "statement of work"). I couldn't find other examples where the FAR distinguishes one requirement document from another. If that is the distinction, what purpose does it serve?

That is one aspect of the distinction. In DOD and some other agencies, requirements for supplies are stated in specifications (or "technical requirements documents") and requirements for services are stated in statements of work. See MIL-HDBK-245D, Handbook for Preparation of Statement of Work (April 1996), para. 3.2, which reads as follows:

3.2 Relationship between Statement Of Work and Specification. The SOW defines (either directly or by reference to other documents) all work (non-specification) performance requirements for contractor effort. Qualitative and quantitative design and performance requirements are contained in specifications developed according to MIL-STD-961. Such specifications are typically referenced in the SOW, but the specific qualitative or quantitative technical requirements should not be spelled out in the SOW. For example, the referenced specification may cite reliability and maintainability requirements in terms of quantifiable mean-time-between failures (MTBF) and mean-time-to-repair (MTTR); the SOW should task the contractor to establish, implement and control a reliability and maintainability program.

See too the definition of "specification" in MIL-STD-961E, Defense and Program-Unique Specification Format and Content, para. 3.43:

3.43 Specification. A document prepared to support acquisition that describes essential technical requirements for materiel and the criteria for determining whether those requirements are met.

Emphasis on "for materiel" added. (Note that the word is materiel, not material.)

Given that the source for FAR 9.505-2 was DOD, specification refers to hardware and statement of work refers to services. (Other agencies use the terms interchangeably, which is sloppy. I posted a lengthy discussion of the terms at Wifcon on March 8, 2002.)

These matters are not "largely academic."

Does this answer your question?

[Jacques]

Vern, thanks for your thoughts. If I'm understanding you, you believe that the coverage of ( does not overlap (a), because ( is limited to "work statements," which would not typically be used in an acquisition that was solely for the delivery of a supply.

I still struggle with why a contractor preparing part of a specification would not implicate OCI concerns. Maybe the rule just reflects a compromise of competing interests.

I'm also curious why you don't believe this is "academic." FAR 9.505 states, "Conflicts may arise in situations not expressly covered in this section 9.505." If a CO believed that preparing part of a specification would present an OCI and proposed to restrict the successful offeror of the specification work from competing for the supply for some period of time, do you believe the GAO would sustain a protest by an offeror finding fault with any restriction? Is the result different if the contractor's effort remains identical, but a later work statement references portions of the specification prepared by the contractor?

[Guest Vern Edwards]

Jacques:

You wrote: "I still struggle with why a contractor preparing part of a specification would not implicate OCI concerns."

Do you think "complete specification" refers to the complete specification for the deliverable end item? Do you think it does not refer to the complete specification for a component of the end item, which would be only a part of the end item spec?