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Is A Proposal An Offer?


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See STG International, Inc. v. U.S., COFC Nos. 23-47C; 23-175C, May 24, 2023.

I have long argued that there is a distinction between offers and proposals. Offers are sets of promises to act or refrain from acting in a specified way, so made as to communicate a willingness to enter into a bargain. Proposals, despite the stupid definition in FAR 2.101, are packages that presumably contain (1) offers and (2) mere information.

The COFC protest decision demonstrates that fundamental idea in a dramatic way.

A link to that decision was posted on the home page today.

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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.

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Me, too. 

I was thinking through some of the implications of this decision, which I think the COFC got right.

proposal revision would only include changes to the part of a solicitation response that was binding (i.e., the proposal).

If that's true, then changes made to the part of a solicitation response that was not binding (i.e., information) could be made without discussions. 

I don't recall the GAO ever making this distinction in clarifications v. discussions cases. Do you?

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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. 

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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.

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12 hours ago, Don Mansfield said:

proposal revision would only include changes to the part of a solicitation response that was binding (i.e., the proposal).

If that's true, then changes made to the part of a solicitation response that was not binding (i.e., information) could be made without discussions. 

I don't recall the GAO ever making this distinction in clarifications v. discussions cases. Do you?

This distinction is fairly common when using the advisory multi step process from FAR 15.202.  Agencies routinely seek information from industry as an initial step.  Often they ask for further elaboration and explanation of the information.  None of that is considered discussions and agencies often make that clear in the solicitation instructions.  What’s surprising though is after all this time, the issue surfaced in this court case.

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The confusion about proposal/offer  is the product of how the concept of "negotiated procurement" developed in government contracting after World War II and the Korean War emergency. I'll describe it one day for a Wifcon article.  There were two factors. First, no one knew what "negotiated procurement" meant in practical terms other than that it was any kind of procurement other than "formal advertising" (now "sealed bidding"). Second, was the concept of "proposal" which emerged from weapon design competitions. It's an interesting story, but too hard for me to write now due to my eye problems.

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44 minutes ago, Vern Edwards said:

The confusion about proposal/offer  is the product of how the concept of "negotiated procurement" developed in government contracting after World War II and the Korean War emergency. I'll describe it one day for a Wifcon article.  There were two factors. First, no one knew what "negotiated procurement" meant in practical terms other than that it was any kind of procurement other than "formal advertising" (now "sealed bidding"). Second, was the concept of "proposal" which emerged from weapon design competitions. It's an interesting story, but too hard for me to write now due to my eye problems.

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. 

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On 5/26/2023 at 6:05 AM, formerfed said:

This distinction is fairly common when using the advisory multi step process from FAR 15.202.  Agencies routinely seek information from industry as an initial step.  Often they ask for further elaboration and explanation of the information.  None of that is considered discussions and agencies often make that clear in the solicitation instructions.  What’s surprising though is after all this time, the issue surfaced in this court case.

What you are referring to involves two responses. I'm talking about one response to a solicitation.

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On 5/26/2023 at 8:05 AM, formerfed said:

 What’s surprising though is after all this time, the issue surfaced in this court case.

The issue surfaced in the cited case because, upon a re-evaluation of phase 1 proposals due to a pre-award protest, the government disqualified a firm from qualifying for the phase 2 award competition because it hadn’t registered in the System for Award Management SAM before submitting “an offer” in Phase 1.

The 2 phase acquisition method for other than Design-Build Construction acquisitions  was, I think, not very common until recently. The 2 Phase D-B process was not even in the FAR until 1997 and wasn’t widely used until several years later.

In addition, it may be fairly rare for a firm that qualifies for any phase 2 competition not to be registered in SAM.

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2 hours ago, Don Mansfield said:

What you are referring to involves two responses. I'm talking about one response to a solicitation.

I understand.  But what I’m referring to is similar to this case - one solicitation with an initial phase being the advisory part and the second phase submission of the balance.

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46 minutes ago, joel hoffman said:

The issue surfaced in the cited case because, upon a re-evaluation of phase 1 proposals due to a pre-award protest, the government disqualified a firm from qualifying for the phase 2 award competition because it hadn’t registered in the System for Award Management SAM before submitting “an offer” in Phase 1.

The 2 phase acquisition method for other than Design-Build Construction acquisitions  was, I think, not very common until recently. The 2 Phase D-B process was not even in the FAR until 1997 and wasn’t widely used until several years later.

In addition, it may be fairly rare for a firm that qualifies for any phase 2 competition not to be registered in SAM.

That’s not what I’m bringing up.  It’s about offers versus proposals and whether communications about information constitutes discussions as contained in the protest

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