Say the Solicitation is to award a Single-Award IDIQ.  There is no task order included in this Solicitation.  There is no Sample Task Order.  The Solicitation stated that the maximum ceiling price/amount for this IDIQ was $148 million.  For some unknown reason, the Solicitation included CLINs, even though this is a IDIQ.  The Solicitation instructed offerors to fill out a pricing spreadsheet, and it required pricing each CLIN for each option year (base year plus 4 option years).  There were 5 timely offerors/proposals.  4 of them are technically unacceptable or otherwise ineligible for award.  So there was a competition range of one.  Discussions were already held.  No one pointed out to the offeror that its total price of $172 million exceeded the maximum ceiling set by the Solicitation.  The final revised proposal has been received, and the price remains unchanged.  Could the agency just make award to this offeror, and when the $148 million ceiling is hit (say in option year 2), just not exercise the options for years 3 and 4?  Or is the agency required to revise the Solicitation and allow for revised proposals from all 5 offerors?

1 hour ago, govt2310 said:

There were 5 timely offerors/proposals.  4 of them are technically unacceptable or otherwise ineligible for award.  So there was a competition range of one.

Did you know that you can include technically unacceptable offerors in the competitive range? You might be able to include ineligible offerors in the competitive range also, depending on why they are ineligible.

Assume that the 4 technically unacceptable offerors were so "technically unacceptable and not capable of being made technically acceptable without a complete rewrite."  Assume that the program office desires to move forward with awarding to the offeror proposing $172 million, that they do not want to amend the solicitation, redo the competitive range and do discussions, and so forth.  They just want to make award now.  If the contract type is an IDIQ, is it possible to make award to an offeror whose proposal exceeded the "ceiling" in the Solicitation, or is that offeror non-compliant/non-conforming/ineligible for award? 

By "ceiling" do you mean the "maximum quantity," as mentioned in FAR 16.504(a)(1) and (a)(4)(ii)?

7 hours ago, govt2310 said:

Assume that the 4 technically unacceptable offerors were so "technically unacceptable and not capable of being made technically acceptable without a complete rewrite."  Assume that the program office desires to move forward with awarding to the offeror proposing $172 million, that they do not want to amend the solicitation, redo the competitive range and do discussions, and so forth.  They just want to make award now.  If the contract type is an IDIQ, is it possible to make award to an offeror whose proposal exceeded the "ceiling" in the Solicitation, or is that offeror non-compliant/non-conforming/ineligible for award? 

FAR 2.101, Definitions, defines best value -   Best value means the expected outcome of an acquisition that, in the Government's estimation, provides the greatest overall benefit in response to the requirement.

How can you justify the government is getting "best value" awarding to a technically unacceptable contractor?

7 hours ago, govt2310 said:

Assume that the 4 technically unacceptable offerors were so "technically unacceptable and not capable of being made technically acceptable without a complete rewrite."  Assume that the program office desires to move forward with awarding to the offeror proposing $172 million, that they do not want to amend the solicitation, redo the competitive range and do discussions, and so forth.  They just want to make award now.  If the contract type is an IDIQ, is it possible to make award to an offeror whose proposal exceeded the "ceiling" in the Solicitation, or is that offeror non-compliant/non-conforming/ineligible for award? 

If after the discussion in this thread regarding competition and unacceptable proposals you conclude that you will only be dealing with the one contractor that offered CLIN pricing that exceeds the ceiling here are some thoughts.

So what is the amount to be obligated?   Should it not be the minimum guarantee not the ceiling?  If so cannot the the ceiling be adjusted based on negotiation?   

Here is a GAO Redbook quote that may help....

"...unlike a contract covered by FASA, an IDIQ contract does not obligate the government beyond its initial year. Rather, it obligates the government only to order a minimum amount of supplies or services. The cost of that minimum amount is recorded as an obligation against the appropriation current when the contract is entered into."

The quote is based on "Analysis" found in this decision https://www.gao.gov/products/b-302358

1 hour ago, Vern Edwards said:

By "ceiling" do you mean the "maximum quantity," as mentioned in FAR 16.504(a)(1) and (a)(4)(ii)?

Yes.

55 minutes ago, Weno2 said:

FAR 2.101, Definitions, defines best value -   Best value means the expected outcome of an acquisition that, in the Government's estimation, provides the greatest overall benefit in response to the requirement.

How can you justify the government is getting "best value" awarding to a technically unacceptable contractor?

There are 5 offerors.  4 are technically unacceptable to such an extent that they are not capable of being made acceptable without a complete rewrite.  These 4 did not make it into the competitive range.  There was only 1 technically acceptable offeror, however, their price was way higher than the "ceiling" of the IDIQ.

46 minutes ago, C Culham said:

If after the discussion in this thread regarding competition and unacceptable proposals you conclude that you will only be dealing with the one contractor that offered CLIN pricing that exceeds the ceiling here are some thoughts.

So what is the amount to be obligated?   Should it not be the minimum guarantee not the ceiling?  If so cannot the the ceiling be adjusted based on negotiation?   

Here is a GAO Redbook quote that may help....

"...unlike a contract covered by FASA, an IDIQ contract does not obligate the government beyond its initial year. Rather, it obligates the government only to order a minimum amount of supplies or services. The cost of that minimum amount is recorded as an obligation against the appropriation current when the contract is entered into."

The quote is based on "Analysis" found in this decision https://www.gao.gov/products/b-302358

 

My concern is, since the Solicitation informed offerors that the agency would evaluate their total price for the IDIQ, and the Solicitation set forth a "ceiling" for the IDIQ, maybe offerors relied upon that "ceiling" in figuring out their total price.  If they had known that the agency would raise the ceiling after award, maybe they would have bid differently.  It is an issue of fairness and even playing field.

8 hours ago, govt2310 said:

Assume that the program office desires to move forward with awarding to the offeror proposing $172 million, that they do not want to amend the solicitation, redo the competitive range and do discussions, and so forth.  They just want to make award now.  If the contract type is an IDIQ, is it possible to make award to an offeror whose proposal exceeded the "ceiling" in the Solicitation, or is that offeror non-compliant/non-conforming/ineligible for award? 

Both the GAO and the Court of Federal Claims have decided, on many occasions, that the government may not award a contract based on a proposal that does not conform to all material terms of a solicitation. A material term is one that affects price, quantity, quality, or delivery. A maximum quantity is a mandatory term of an IDIQ contract.

If we assume that the maximum quantity is a material term, as defined by the GAO and the COFC, then award based on a proposal that exceeds the maximum quantity would be prohibited, and if one of the unsuccessful offerors were to protest the award on that basis, the protest would likely be sustained.

But if you have a competitive range of only one, then discussions in the form of a phone call followed by an email final proposal revision could fix the problem in less than 24 hours.

@govt2310

I am frankly astounded that you came here with that question.

 

Due to the circumstances, if the agency were to do a second round of discussions with the one offeror in the competitive range of one, it is impossible for that offeror to bring its total price under the "ceiling" and still remain technically acceptable.  

I did find this GAO decision, but it involved a IFB not a RFP, see https://www.gao.gov/assets/b-295533.2%2Cb-295533.3.pdf.  This is SOS International from 2005.

"Where solicitation provided for award of contract on indefinite quantity basis, bid that offered larger quantity than maximum specified in solicitation is responsive, where bid did not limit government’s right to purchase only up to the maximum quantity specified in the solicitation or otherwise condition the firm’s pricing or performance on the government’s buying the larger quantity."

"OVERSTATED MAXIMUM QUANTITY"

"SOS argues that McNeil’s bid was nonresponsive because it was based on an incorrect maximum number of hours for CLIN 0003. However, a bid based on a larger quantity than is required by the solicitation is nevertheless responsive, so long as it is not conditioned on the government’s award of a quantity larger than that called for under the solicitation, and the solicitation does not preclude award of a quantity smaller than the maximum quantity specified. Charles V. Clark Co., Inc, B-196712, Mar. 12, 1980, 80-1 CPD ¶ 194 at 2-3. Here, as noted, this is an IDIQ contract under which the government is obligated to order only the minimum guaranteed quantities, but may order additional quantities, up to the maximum specified in the solicitation. Thus, the agency is obligated to purchase the 1,000 hour minimum quantity under CLIN 0003, but may elect to purchase a larger quantity up to the specified maximum of 50,000 hours. As McNeil’s bid did not condition its obligation to perform on the government’s ordering the erroneous maximum quantity (66,000 hours), it follows that the agency could order any quantity up to the correct lower maximum of 50,000 hours without changing McNeil’s performance obligation, and would not be obligated to order the additional 16,000 hours specified in McNeil’s bid. McNeil’s bid’s inclusion of the incorrect maximum quantity for CLIN 0003 therefore was immaterial and did not render the bid nonresponsive."

Thoughts?

The maximum quantity of an IDIQ contract does not commit the government. It limits the contractor's obligation to perform. That being the case, there is a good argument that the maximum quantity is not a material term, and the case you have cited could be used in support of that argument. (I did not read the case.)

1 hour ago, govt2310 said:

Due to the circumstances, if the agency were to do a second round of discussions with the one offeror in the competitive range of one, it is impossible for that offeror to bring its total price under the "ceiling" and still remain technically acceptable. 

There you go again using the word "ceiling" instead of the contractual term "maximum quantity." Why do you do that? Did you use that term in your solicitation?

1 hour ago, govt2310 said:

Due to the circumstances, if the agency were to do a second round of discussions with the one offeror in the competitive range of one, it is impossible for that offeror to bring its total price under the "ceiling" and still remain technically acceptable.  

Why would that be the case?

I do not understand your reluctance to call the offeror and ask it to revise its proposal to conform to the maximum stated in the solicitation.

Thanks, Vern.  This is helpful.  

Now that the original question was answered, I’ll add some personal commentary.

I’m always skeptical when I see something like this.  Only one acceptable response out of 5 and none of the four unacceptable could be made acceptable without a complete rewrite!  Often a program office only wants one source and writes a restrictive requirement and/or is overly critical in their evaluation. So it’s in essence a masked noncompetitive action. I wonder if that’s what happened here.

 For a $148 million single award IDIQ contract, I assume market research (examining the market in detail, conducting interviews with sources, issuing an RFI, sending out draft SOWs, etc.) should have been conducted and some issues surfaced.  Most solid marketplace sources are careful with BD money.  They don’t bother to propose unless they feel they will be competitive - 1 out of 3 or maybe 1 out of 4 chances of winning.  Hard to imagine 4 companies see enough in a solicitation to propose and yet all don’t make the cut. 

On 4/13/2022 at 6:45 PM, govt2310 said:

Discussions were already held. 

Can this be a true statement?  If discussions were already held, surely they would have included price discussions to conform the proposal to the solicitation mandates, right?

If not, then discussions have not been concluded -- or so it seems to me.  

If you are willing to raise the contract maximum (what you style as the ceiling) for this one offeror, I assume you are willing to do it for all offerors.  As a previous commenter noted, maybe one or more of those other four offerors are unacceptable because they honorably complied with your solicitation's mandated maximum -- but the one you kept did not honorably comply.  Are you sure your competitive range decision is sound?

1 hour ago, ji20874 said:

Are you sure your competitive range decision is sound?

Without details I find this part of the discussion to be interesting and based on a view that is absent a lot of facts from the OP.   

I just wanted to note in the light of the repeated position of GAO  that the determination of competitive range is a primarily a matter of the agency's administrative discretion which is not usually questioned unless there is a clear showing of arbitrary abuse of discretion. 

I hope the OP's agency acquisition team is referring to case law to develop their position on arriving at the competitive range, holding of discussions, and final award determination including the consideration of adjustment to the "ceiling".

 

From my general recollection, the GAO is more apt to scrutinize limiting the competitive range to one firm, especially if the agency didn’t include price in the limited discussions.

I had to go out of town for 2 months suddenly, but I'm back now.  Thanks to all who responded.  ji20874's observation that discussions cannot have been concluded/done properly because the price issue was not pointed out to the offeror makes sense to me.