joel hoffman

Yes, thank you for your insights and connections with acquisition history I’m sorry about your eyesight limitations, Vern. You are a National treasure. Certainly, it’s not hard for me to see that the FAR is a patchwork of diverse yet interrelated acquisition methods and procedures. It’s very hard to fully integrate new and updated ideas or processes with legacy policy, guidance, processes and procedures. Yet there seems to be a big hole when it comes to “commercial products and services” or even non-commercial simplified acquisition procedures. The subject of RFQ’s and how to use them once you get quotes stands out to me. Our City purchasing agent, who I worked next to as City Engineer, was fun to listen to as he negotiated with everyone. To him a quote was just a suggestion. And - oh my - he USED the telephone of all things. He’d call up and make an offer and negotiate with vendors. Then send out a finalized city purchase order. So, if government acquisition personnel are supposed to make offers in response to quotes, why not teach them how to negotiate by phone or email or text or whatever, then send the purchase order clearly written as the offer to the vendor for acceptance. The FAR’s whole approach to “negotiated acquisition” is very weak on actual negotiation techniques and emphasis. If they want the government to adopt commercial business buying processes, then provide the right policy and procedures. The damned forms aren’t even clear.

The legal distinctions between informational/non-binding proposals, offers and quotations this past week has been interesting. The Court of Federal Claims rightly defined the distinction between offers and non-binding proposals for applying the requirements for certain registrations and certifications in phased procurements. The FAR is definitely inconsistent and contradictory in its coverage and in distinguishing between these different terms and procedures. The Standard Forms for RFP, RFQ, offers, acceptance, purchase orders, etc. are particularly confusing, misleading and inadequate. If a quotation isn’t an “offer” and the government’s response to a quote is supposed to be an “offer” that can be accepted or rejected or counter offered by either party, the forms and instructions for those processes are seriously lacking. To add to the confusion, in the commercial design-build industry, the Design-Build Institute of America is the flag bearer for promoting and standardizing D-B processes and procedures. The DBIA has adopted the widely used term “Request for Qualifications”, abbreviated as “RFQ” for Phase I of the Two Phase D-B acquisition process. ————————————————— As an aside, around 1990, I adopted the term “Performance Capability” for the category of evaluation factors/evaluation criteria that concerned “Organization, Management, Experience” and other non-technical criteria like past performance, key personnel, schedules, small business participation, etc. We had separate volumes for Technical, Performance Capability and Price proposals to provide to the separate evaluation teams. I didn’t see that term used before I adopted it. Now it seems to be commonly used.

Not all proposals in response to requests for proposals are offers, which seemingly conflicts with the definition of offer in FAR 2.2. There is no separate, direct definition of “proposals” in 2.2. Examples are Phase 1 Design-Bbuild Proposals as discussed in FAR 36.3 FAR 36.3 Two-Phase Design-Build Selection Procedures 36.303 Procedures. “One solicitation may be issued covering both phases, or two solicitations may be issued in sequence. Proposals will be evaluated in Phase One to determine which offerors will submit proposals for Phase Two. One contract will be awarded using competitive negotiation.” “36.303-1 Phase One. “…(b) After evaluating phase-one proposals, the c cting officer shall select the most highly qualified offerors (not to exceed the maximum number specified in the solicitation in accordance with 36.303-1(a)(4)) and request that only those offerors submit phase-two proposals.” Phase One primarily involves performance capability information but not technically oriented design information or preliminary design, etc., nor does it include pricing. The Phase Two proposals include pricing and the design-technical information. Phase 2 often includes other information concerning contract requirements, approaches, means and methods, etc.

Correct. Sorry that I read too much into your OP.

Prohibits what? Please see my above response to Retreadfed. If the prime contract is truly FFP - that is the amount billed to and paid by the government is independent of the amount reimbursed to the sub - the prime isn’t necessarily prohibited from issuing a cost reimbursement subcontract. I wasn’t sure but probably should have read the original post in that context. The OP discussed T&M and Labor Hour subcontract pricing arrangements, which I assume would be reflected in the prime contract price, since it is allowable. But then the OP discussed cost reimbursement as an alternative subcontract pricing arrangement to T&M or Labor Hour. Here is the prohibition concerning prime contract types. “12.207 Contract Types a) Except as provided in paragraph (b) of this section, agencies shall use firm-fixed-price contracts or fixed-price contracts with economic price adjustment for the acquisition of commercial products or commercial services. …(e) Use of any [prime] contract type other than those authorized by this subpart to acquire commercial products or commercial services is prohibited.”

No. It’s not clear to me if the prime contract amount or payment can vary based upon the actual reimbursed subcontract costs. if the cost reimbursement pricing arrangement is strictly between the prime and its sub, independent of a FFP prime contract amount, it might be acceptable

If a subcontract is billed to the government as cost reimbursement, that makes the prime contract partially cost reimbursement. Thus, I don’t think that it would be allowable for a contract for commercial services. However, if the cost reimbursement arrangement is strictly between the prime and sub and the price to the government is fixed, then it would seem to be acceptable.——————————————-

How convenient for the prime and sub… If all the work being done by the sub and all all the sub’s costs are billed as cost reimbursement to the government through the prime looks like a combination of of FP and CR prime contract type to me. EDIT: Or - is the prime going to bill the work by the sub at a fixed price under its prime contract to the government?

Is this the scenario of the original post or is it another situation?

Sam, so the “system” doesn’t allow any edits to a Scope of Work SOW, which is an attachment to an OF347? Did you finalize the Purchase Order so that it can’t be modified or simply edited? Other than the attachment what is necessary to edit on the OF347?

To compound the confusion, if one googles quotes and Requests for Quotations, the commercial coverage also includes “bids” and other language and practices that differ from the FAR discussion of RFQ’s. By the way, in commercial practices, an RFQ can also be a “request for qualifications”. It’s common in the Design-Build industry. Shay Assad is right on when he indicates that the government and taxpayers are paying too much and are often being fleeced.

Oh brother!!! FAR 13.004 Legal effect of quotations. “(a) A quotation is not an offer and, consequently, cannot be accepted by the Government to form a binding contract. Therefore, issuance by the Government of an order in response to a supplier’s quotation does not establish a contract. The order is an offer by the Government to the supplier to buy certain supplies or services upon specified terms and conditions. A contract is established when the supplier accepts the offer. (b) When appropriate, the contracting officer may ask the supplier to indicate acceptance of an order by notification to the Government, preferably in writing, as defined at 2.101. In other circumstances, the supplier mayindicate acceptance by furnishing the supplies or services ordered or by proceeding with the work to the point where substantial performance has occurred. (c) If the Government issues an order resulting from a quotation, the Government may (by written notice to the supplier, at any time before acceptance occurs) withdraw, amend, or cancel its offer. (See 13.302-4 for procedures on termination or cancellation of purchase orders.)” A quote isn’t an offer and an offer isn’t a contract until formally accepted or else accepted by performance. Unless there is more coverage concerning procedures for responding to Quotations, the FAR is lacking coverage of making offers that differ from the quotation, how to negotiate if the quoter makes a counter offer or simply won’t accept your offer, how to ensure funds are available and obligating them if the quoter simply performs the order without notifying acceptance, etc. Maybe I missed it. Of course, while trying to encourage adoption of commercial practices to the extent legal and practical, the FAR is weak on routine negotiating like most commercial buyers would do in the ordinary course of business. My impression is that many government acquisition personnel are loathe or reluctant or fairly ignorant how to negotiate or bargain. Perhaps the recent proliferation of “no haggle” car pricing reflects the trend of reluctance to bargain or reluctance to actually orally converse by today’s general US population…?

I watched it and agree with Shay Assad. My former attitude, based upon my experience with him when he worked for Raytheon on the Chemical Weapons Demilitarization Program has considerably softened. As a former industry insider, he knows what he is talking about and is now representing the interests of the Taxpayers, even when he also has to fight the Federal Goverment/Congressional political establishment. Reminds me of Wisconsin Senator William Proxmire and his monthly Golden Fleece Awards.

Regarding your concerns expressed here and to me, see: “15.403-2 Other circumstances where certified cost or pricing data are not required. …(b) Certified cost or pricing data are not required for proposals used solely for overrun funding or interim billing price adjustments.”

I like the possibility of that Avenue, too.