Matthew Fleharty

32 minutes ago, MileHighAcq said:

here's what I wanted to say above:

To clarify,  you're saying it's acceptable for a buyer  to get competitive bids, and in an LPTA environment, simply order the bids by price, start with the lowest price and award to the first technically acceptable offer they come across without looking at the other bids at all? From a technical standpoint, this could ensure that the buyer gets a technically acceptable product, but from a price perspective, how could the buyer be sure that the price is the lowest price without having received at least one other technically acceptable bid?

The point of my "inapt" analogy is that the process you describe could ensure that you get a technically acceptable product, but not that you got it at the lowest price. 

Short of engaging in discussions/negotiations (which is a completely different topic) how would assessing higher priced proposals for their technical acceptability result in awarding a contract for a lower price than the Lowest Priced Technically Acceptable offer?

21 minutes ago, MileHighAcq said:

I haven't read every single response on this topic, but going back to the original inquiry, if you were buying a car, would you simply go to the first dealership and if you found a car that met your requirements, buy it right then and there at the sticker price? Even if there were several dealerships in that area that sold the car you wanted, would you simply assume that the pricing was competitive, or would you shop around?

That analogy is not even close to the situation at hand...

13 minutes ago, Retreadfed said:

This discussion has focused on techniques for determining if a price is fair and reasonable.  My question is if you cannot define what fair and reasonable is, how do you know that you have it regardless of the techniques you apply?  Is this something like Justice Stewart's explanation of pornography in that "I can't define it but I know it when I see it"?

You can find a more pertinent example in the oral arguments for Kingdomware Technologies, Inc. v. United States, No. 14-916 (2016) where Chief Justice Roberts says:

Quote

These terms imply a lot of discretion: What's fair? What's reasonable? What's best value?  The idea that that's going to operate as a significant restraint on the requirement that the VA locate veteran businesses seems a real stretch to me.

I think very little (if any) of the disagreement on this forum dealt with "what is a fair and reasonable price?" - the objections came from "can you properly prove it IAW the FAR"

For those without a Briefing Papers subscription, Google is your friend on this one (it took me a few clicks through various sites, but I eventually found it).

Thanks for sharing Vern!

12 hours ago, Jamaal Valentine said:

What is unclear is what you mean by market based because you also seemed to rely on the other prices (with unknown merits of comparability) as evidence of an effective competition. 'By virtue of competing against the market'? That is overly simplistic and doesn't consider several basic considerations such as a mistakes and defective, vague, or ambiguous solicitations or otherwise ineffective competitions.

Jamaal, apologies if what I wrote was unclear, but I thought my answer to your question:

On 9/17/2018 at 5:35 PM, Jamaal Valentine said:

What is your reasonable argument? Does it involve or rely on comparison of proposed prices?

With:

22 hours ago, Matthew Fleharty said:

Not one bit...

Was as clear as possible; however,  you're fixated on the concept of comparison of proposed prices while I was stating another way of analysis to determine the price fair and reasonable separate from relying on comparison of proposed prices (technically evaluated or not).  If you'd like to discuss it, you know how to get in touch with me, but an answer to your questions here would only result in repeating myself.

Jamaal,

There is a difference between can and does...I caveated my statement for that very reason, don’t try to put my position in a box I didn’t build. I also didn’t say that you don’t need any analysis...it’s just a different kind of analysis (market based rather than comparison based).

47 minutes ago, Don Mansfield said:

Shouldn't you determine whether what you are comparing to the lowest priced offer is comparable? Or do you just assume that it is?

Does one have to perform complete technical evaluations in order to know whether or not other offers (or pieces of information) are comparable?

15 hours ago, Jamaal Valentine said:

What is your reasonable argument? Does it involve or rely on comparison of proposed prices?

Not one bit - it relies on an understanding of the competitive markets and the concept of fair and reasonable prices.  For one, the approach doesn't use technically unacceptable offers; that's important because you're presuming those offers are unacceptable...I believe, for these purposes, they're presumed "innocent until proven guilty."  After all, that's how the contractors approach the situation.  If they don't offer a solution that is technically acceptable and the lowest price they're going to lose business to someone who does.  If a determination of fair and reasonable pricing is concerned with too high of a price, I think, generally (because there are exceptions to every rule) it is perfectly reasonable and sound business judgment to consider the LPTA offeror of a competition as not too high (and, therefore, fair and reasonable) by virtue of having competed against the market for the contract.  The fact that you have X number of unevaluated proposals simply serves as evidence of the competitiveness of that market for the requirement.

As for all this talk about "adequate price competition normally establishing a fair and reasonable price," whether it is misplaced or not, compare the second standard  to the situation at hand:

• Adequate price competition (15.403-(c)(1)(ii): an expectation that two or more responsible offerors, competing independently, would submit priced offers even though only one offer is received...
• This situation: numerous offers are received, though only one offer is evaluated IAW the solicitation's procedures because it is the LPTA

If some are willing to hang their hat on "adequate price competition = a fair and reasonable price" why wouldn't they be equally okay doing so in a situation where one receives more than one offer, but only evaluates one?  I think the second situation is far more defensible than the first, regardless of how the FAR defines "adequate price competition" (frankly, it's too narrow...).

14 minutes ago, ji20874 said:

FAR 15.404-1(b)(2)(i) says comparison of prices received in response to the solicitation is a valid method of price analysis.  It doesn't say comparison of "technically acceptable" prices received in response to the solicitation.  

Moreover the list isn't exhaustive nor does the FAR contain a restriction to only use the listed techniques.

What does FAR 1.102-4(e) say again about sound business judgment?

Let's not forget that the FAR is not a "how to" guide and it isn't definitive or exhaustive on how one determines prices fair and reasonable (emphasis added):

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(2) The Government may use various price analysis techniques and procedures to ensure a fair and reasonable price. Examples of such techniques include, but are not limited to the following:

Is it possible to make a reasonable argument that a LPTA proposal's price is fair and reasonable without knowing whether the other proposals are technically acceptable?  I think so, despite what the FAR may or may not say.

Next up in "how can we make more non-value added work for ourselves", someone is going to explain to all of us that to meet the standard of adequate price competition the Government must perform contractor responsibility determinations on the unsuccessful offerors in addition to the technical evaluations...

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(1) Adequate price competition. A price is based on adequate price competition if --

• (i) Two or more responsible offerors, competing independently, submit priced offers that satisfy the Government’s expressed requirement and if --

4 minutes ago, Vern Edwards said:

Why concerned? Agencies have done that for decades when using sealed bidding, in which there is no nonprice technical evaluation at all. There is no reason to be concerned unless someone describes a method for determining fairness and reasonableness that is patently irrational.

Bingo.

This thread might interest you:

8 minutes ago, Jamaal Valentine said:

Is there meaningful competition under CICA if an agency does not compare competing offerors' proposed prices in a certain meaningful way? 

Jamaal,

All other things being equal, do you think that offerors would propose different prices under the two LPTA frameworks?

• Framework 1: Rank all offers by price; evaluate all proposals for technical acceptability; award to the LPTA
• Framework 2: Rank all offers by price; starting with the lowest priced proposal, evaluate proposals from lowest to highest until one is technically acceptable; award to the LPTA

27 minutes ago, brent said:

First, let me say I believe that you award to the LPTA because you have competitive pricing, someone disagreed.

Matthew, I would award to them if I can reasonably conclude that the offer was submitted with the expectation of competition.

Brent,

Could you finish that line of thought?  Maybe the reason you're running into disagreement is because you're not adequately/fully explaining your position/argument...

Food for thought: Is "competitive pricing" the only way to determine whether or not a price is fair and reasonable?

1 hour ago, brent said:

Awarding a competitive task order.  RFP stated that TO would go to LPTA and that only the lowest priced offer would be evaluated for TA (continuing until there is a TA offer, then stop).

Can the lowest price be considered fair and reasonable when you do not know if the other offers are technically acceptable?

Brent,

Let's think this through for a moment - imagine all your circumstances were identical except you only received on offer in response to you RFP...what would you do in that situation?  Would it be possible for you to determine whether or not that single offer has a fair and reasonable price? 

Bob - this question should go in the Beginners Forum. 

Vern,

I think dak9204 is referring to FAR 12.301(d)(3) which reads:

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Insert the clause at 52.204-21, Basic Safeguarding of Covered Contractor Information Systems, in solicitations and contracts (except for acquisition of COTS items), as prescribed in 4.1903.

dak9204 should have provided that reference when he/she made the statement.

What prohibits a PCO from rescinding RFPs in sole source environments?

3 hours ago, Hilarity_Follows said:

I'm asking what the best approach would be to use with a contracting office who just says "We just don't do that anymore on CPFF Contracts."

Negotiate or find a new contracting office to do business with.

Maybe you should ask that agency why they use that business practice.  Anything anyone tells you here is nothing more than a guess (unless someone from that office decides to respond here on WIFCON).

1 hour ago, Hilarity_Follows said:

Fee should be a completely independent point of negotiation - right? 

No, not at all.  See FAR 16.103 for starters:

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(a) Selecting the contract type is generally a matter for negotiation and requires the exercise of sound judgment. Negotiating the contract type and negotiating prices are closely related and should be considered together. The objective is to negotiate a contract type and price (or estimated cost and fee) that will result in reasonable contractor risk and provide the contractor with the greatest incentive for efficient and economical performance.

Also see FAR 15.405:

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(b) The contracting officer’s primary concern is the overall price the Government will actually pay. The contracting officer’s objective is to negotiate a contract of a type and with a price providing the contractor the greatest incentive for efficient and economical performance. The negotiation of a contract type and a price are related and should be considered together with the issues of risk and uncertainty to the contractor and the Government. Therefore, the contracting officer should not become preoccupied with any single element and should balance the contract type, cost, and profit or fee negotiated to achieve a total result -- a price that is fair and reasonable to both the Government and the contractor.

(c) The Government’s cost objective and proposed pricing arrangement directly affect the profit or fee objective. Because profit or fee is only one of several interrelated variables, the contracting officer shall not agree on profit or fee without concurrent agreement on cost and type of contract.

If you're guessing at what they may want, it's definitely too soon to laugh at their expense...

For anyone who is still curious, they dropped paragraph 4 from the NDAA's revised definition of commercial items: 

http://www.wifcon.com/dodauth19/dod19_836.htm

Maybe someone in Congress actually reads WIFCON! 😁

24 minutes ago, Hilarity_Follows said:

Hello, 

Can someone direct me to the FAR provision that spells out the requirement for Contractors to provide consideration to the Govt. in exchange for granting  no cost extension requests? (Specifically, the requests I am primarily involved in are NOT due to any Govt. cause) 

Since this is the beginner's forum I just wanted to point out how frequently the above highlighted text is misused (whether it is in this case or not, I cannot say for certain because I do not have enough facts about the situation, but based on my experiences I'd bet it is wrong).  I'm sure the phrase is used either to make extensions more palatable or out of a lack of understanding, but it's incorrect nevertheless.  Unless the contractor is no longer charging costs to the contract during the extension period, it is not a "no cost extension."  Absent some additional term, that extended work period will still cost the Government money.

11 minutes ago, NavyBuyer said:

I wish I worked for more KO's like you, Vern.

Be a part of the solution and strive to be a Vern-like KO.

1 hour ago, REA'n Maker said:

Outcomes matter in this business more than production metrics.

Amen to that!