Should Sealed Bidding Be Abolished?

[bob7947]

Citations

United States Code

• 41 USC 3301(b) (1) (A)
• 10 USC 2304 (b) (1) (A)
• FAR Part 6.401(a)
• FAR Part 14

Protests

• FAR 6.401

Discussions

• Should Sealed Bidding be terminated for the convenience of the government?

----------------------------------------------------------------------------------------------------------------------------------------

The above citations are for your consideration.  This discussion area includes a poll.  In the poll, you can vote Yes or No anonymously.  The first 10 votes for yes or no decides whether Sealed Bidding should be abolished or not.  Pros and Cons for Sealed Bidding can be discussed in replies to this original post but the poll will decide the fate of Sealed Bidding.  If we cannot get 10 votes for either yes or no by May 4, 2018, this will be considered in Wifcon.com's fate.

I will not participate in this poll.

[Jamaal Valentine]

Abolishing sealed bidding, without changing anything else, would channel many of those requirements to the DoD Source Selection Procedures. No thanks.

*If DFARS is a thing

[joel hoffman]

No. 

Result will mean MORE source selections and less flexibility to fit appropriate projects.

Sealed bidding based upon price only is a common method for non-federal governmental and commercial procurements for construction projects. 

Lower cost for industry to compete.

Often (generally perhaps) faster acquisition method than negotiated methods. 

Simpler method than negotiated acquisitions.  

Public bid openings are more transparent and allow more visibility into what projects cost  

Nothing inherantly wrong with sealed bidding when used for appropropriate projects.  

There are some disadvantages, too but they don’t warrant eliminating this method. 

I’d venture a guess that a majority of protests involve rejected late bids these days, when using electronic submission of bids. . 

 

[bob7947]

Joel:

Could you vote in the poll so we can end this.  Thanks to you and Jamaal for explaining your position.

[Guest Vern Edwards]

1 hour ago, joel hoffman said:

Sealed bidding based upon price only is a common method for non-federal governmental and commercial procurements for construction projects. 

Lower cost for industry to compete.

Often (generally perhaps) faster acquisition method than negotiated methods. 

Simpler method than negotiated acquisitions.  

Public bid openings are more transparent and allow more visibility into what projects cost  

Nothing inherantly wrong with sealed bidding when used for appropropriate projects.  

There are some disadvantages, too but they don’t warrant eliminating this method. 

Emphasis added. One of those disadvantages is a high rate of litigation.

 

[joel hoffman]

9 hours ago, Vern Edwards said:

Emphasis added. One of those disadvantages is a high rate of litigation.

 

Before or after award? Are you referring to protests or claims?  What is the rate of litigation and is it higher than RFP’s where award is made without discussions? Are claims rates higher than RFP’s awarded based upon LPTA? 

[Guest Vern Edwards]

 

After. Claims. But when sealed bidding (formal advertising) was mandated, there were quite a few protests. Sealed bidding involves a number of technicalities and is not as easy as is often thought. I counted over 3,000 GAO bid protests about the responsiveness of bids.

[joel hoffman]

Sorry Vern. I edited my respons to add two questions. 

What is the rate of litigation and is it higher than RFP’s where award is made without discussions? Are claims rates higher than RFP’s awarded based upon LPTA? 

[Guest Vern Edwards]

5 minutes ago, joel hoffman said:

What is the rate of litigation and is it higher than RFP’s where award is made without discussions? Are claims rates higher than RFP’s awarded based upon LPTA? 

What kind of "litigation"? Litigation about what? During what period of time? What kind of rate?

[joel hoffman]

18 minutes ago, Vern Edwards said:

What kind of "litigation"? Litigation about what? During what period of time? What kind of rate?

After award. Claims. A disadvantage of the IFB process is that it doesn’t include discussions that could resolve uncertainties or errors in either the RFP or the proposals. 

However, when the government doesn’t take advantage of the value of effective discussions (e.g., time constraints, reluctance to negotiate or truly discuss with proposers), how does the rate of claims or claims litigation compare to the claims rate for IFB’s? 

My personal experience on other than major defense projects or high visibility projects has been that many KO’s and project managers were reluctant to conduct discussions and when they did, they often were not in depth.  Their performance was primarily  measured on making awards, not the quality of the award. 

[joel hoffman]

Vern, you asked “What kind of rate?”

I was asking you what is “a high rate of litigation” for IFB’s that you referred to earlier.  

[Guest Vern Edwards]

 

51 minutes ago, joel hoffman said:

Vern, you asked “What kind of rate?”

I was asking you what is “a high rate of litigation” for IFB’s that you referred to earlier.

I can't give you a precise number for the percentage of contracts awarded by sealed bidding that resulted in litigation. However, we do know some facts that are indicative of a higher rate for sealed bid procurements than negotiated procurements.

• We know that, in the past (prior to 1984), the overwhelming majority of new contract awards in excess of the simplified acquisition (formerly, "small purchase") threshold were made by sealed bidding. That was because the law mandated the use of sealed bidding unless a statutory exception applied.
• We know that the annual number of contract awards has increased since 1984, due to the expansion of government, wars, homeland security concerns, and other factors.
• We also know that, annually, there was more claims litigation in the past. (That is easily verifiable.) The amount of such litigation has decreased so much that the government consolidated the number of boards of contract appeals. (Some of that reduction is the result of the use of alternative dispute resolution (ADR).) Fewer awards, more litigation, thus a higher rate of litigation. 
• We know that, annually, there were more protests in the past. (That, too, is easily verifiable.) The GAO has decided more than 3,000 protests dealing with the responsiveness of bids.
• We know that for many years in the past, construction contracting, which was almost always conducted through sealed bidding, produced about +/- 30 percent of annual dispute litigation, which was disproportionate to the number of dollars spent on construction.
• There is a considerable literature related to state and local and private sector construction contracting---which is commonly done through some form of competitive price bidding---which indicates high rates of litigation in that industry.

All in all, and without spending a lot of time collecting data for you, which I'm not going to do, I think it's fair of me to say that there is a high rate of claims litigation pertaining to contracts awarded by sealed bidding (and other forms of competitive price bidding)---rates on the order of 30 percent or higher, and that are higher than for competitively negotiated contracts, orders, etc. By rate, I mean number of lawsuits/number of contracts. To the extent that the rates are lower today than in the past, I would attribute much of the reduction to ADR.

My overall point is that while there are some advantages to sealed bidding, as you said, there are also some disadvantages, one of them being a higher rate of litigation than in other methods of contracting. By the way, that, alone, is not a reason to abolish sealed bidding.

I've had my say, and I'm not going to argue with you about this. Please have the last word.

[here_2_help]

I voted NO because I don't see a compelling need to remove tools from the government COs' toolbox. The problem that needs to be solved is how to teach the COs to better use their tools to get the outcomes desired.

[bob7947]

Quote

The problem that needs to be solved is how to teach the COs to better use their tools to get the outcomes desired.

How is that possible?  Advertising/Formal Advertising/Sealed Bidding has been around for nearly 2 centuries in this country.

[Guest Vern Edwards]

I don't think the problem is sealed bidding, per se. The problem is not procurement method. If you like sealed bidding you can do a sealed bidding procedure under FAR Part 15, using LPTA with only one "technical" factor---conformity to the terms of the RFP, which is essentially the same as "responsiveness" in sealed bidding. The benefit of Part 15 is the option of being able to seek clarification or conduct discussions and get revised proposals, which you cannot do under Part 14.

The problem is not procurement method, it's the FAR. It is huge, 1,917 pages, and getting bigger each year. Part 14 is redundant. Getting rid of it takes nothing away and will save paper. Looking at my little CCH FAR, we can get rid of 30 pages of text by eliminating Part 14, slightly fewer pages from the pdf version of the FAR. That's not a lot of pages, but it's a start.

[here_2_help]

4 hours ago, bob7947 said:

How is that possible?  Advertising/Formal Advertising/Sealed Bidding has been around for nearly 2 centuries in this country.

How long has DAU and FAI been around?

My point is, it doesn't matter how long a procurement method has been around if training is problematic, or (hi Pepe!) if the personnel are not qualified to apply the training they receive.

[here_2_help]

3 hours ago, Vern Edwards said:

The problem is not procurement method, it's the FAR. It is huge, 1,917 pages, and getting bigger each year. Part 14 is redundant. Getting rid of it takes nothing away and will save paper. Looking at my little CCH FAR, we can get rid of 30 pages of text by eliminating Part 14, slightly fewer pages from the pdf version of the FAR. That's not a lot of pages, but it's a start.

Page counts don't matter so much if people know how to do effective searches. Digitizing content helps in that regard.

[joel hoffman]

You would eliminate 30 pages out of 1917?  You don’t have to delete content to accomplish a 30 page reduction.  I once edited a Model RFP that was mandatory for USACE military design-build contracts. I rewrote every section in the active voice, deleted redundant language and eliminated terms such as, “The Contractor shall”,  “shall be performed by the Contractor”, etc. wherever possible.

It was obvious who the subject was, with the exception of where the content also referred to “the Government” and/or another, separate entity.

I dropped 25 or more pages off the page count. The entire RFP was several hundred pages in length,  including about 150 pages of 100% full-text provisions and clauses, which I couldn’t re-write or simply reference.

Perhaps 20% of the RFP language was necessary due to the non-traditional roles, responsibilities and unique processes associated with D-B versus the traditional design-bid build process. And the statement of work was primarily performance based with relatively little prescriptive design criteria.

[Guest Vern Edwards]

7 hours ago, joel hoffman said:

You would eliminate 30 pages out of 1917?

In one fell swoop.

You wouldn't?

[bob7947]

We have a winner and you have voted in a landslide.  Sealed Bidding should not be abolished.

[Guest Vern Edwards]

I wonder how many people who voted "No" have conducted a sealed bid procurement or read FAR Part 14? I wonder how many realize you can perform essentially the same procedure under FAR Part 15, but with greater flexibility.

Just wondering. I didn't cast a vote.

[joel hoffman]

1 hour ago, Vern Edwards said:

I wonder how many people who voted "No" have conducted a sealed bid procurement or read FAR Part 14? I wonder how many realize you can perform essentially the same procedure under FAR Part 15, but with greater flexibility.

Just wondering. I didn't cast a vote.

Yes, I have, both inside and outside of the federal government. They are not that much different, conceptually.

Yes, I have read Part 14.

I like public bid openings. They are more transparent than the sometimes unnecessarily secretive RFP process, plus the abstracts of bids are useful for pricing and other price related purposes.  

I also like negotiated acquisitions and Source selections.  I led, supervised those leading or have participated in well over 100 source selections. 

Both have their place,  at least for construction and construction related acquisitions.

I haven’t seen in-depth, currently relative statistics or comparisons between post award litigation for RFP’s based upon trade-off conducted without discussions or those based upon LPTA award criteria and IFB’s to justify why the IFB process should be eliminated. Yes, Part 14 was written before electronic commerce and could perhaps be updated. 

By the way, this thread was represented as a poll. 

Others who voted no and I don’t have to justify why we voted in a poll.

Nobody should have to justify to themselves or anybody else why they voted one way or another - anywhere.  

[Guest PepeTheFrog]

20 hours ago, here_2_help said:

My point is, it doesn't matter how long a procurement method has been around if training is problematic, or (hi Pepe!) if the personnel are not qualified to apply the training they receive.

If you give PepeTheFrog an idiot, PepeTheFrog will feed that idiot nothing but grass-fed steak, spinach smoothies, and nutrient-dense food. That idiot will get the best socialization possible. That idiot will go to Stanford, and PepeTheFrog will bribe the professors (and the grade school teachers) to pass the idiot through all the best classes. That idiot will read two thousand of the greatest books of Western Civilization. That idiot will also eat those brain pills or brain juices from Alex Jones (famous water filter salesman).

That idiot will be the healthiest, best-educated, and most erudite idiot you've ever met. Unfortunately, that idiot will still be an idiot and will struggle to operate a cash register. 

Educators, trainers, professors, teachers (members of "the education industry") have an incentive to lie about the environmental impact on intelligence and the ability of education to affect intelligence. You can meet your potential but you will never exceed your potential. You cannot fix stupid in one generation. 

 

[Guest Vern Edwards]

58 minutes ago, joel hoffman said:

Others who voted no and I don’t have to justify why we voted in a poll.

Nobody should have to justify to themselves or anybody else why they voted one way or another - anywhere. 

No need to get huffy, Hoffman. I didn't ask anyone to justify their vote. I don't care about justifications, but like with all polls, I would like to know how much the respondents know. It's one thing if 11 experienced and competent journeymen voted No, its another entirely if the voters were clueless.

What are we supposed to learn from these dumb polls, anyway? Were 14 votes even a valid sample of the Discussions Forum population? Bob wrote a crummy question to vote on. It's not clear whether "Should sealed bidding be abolished?" meant should its use be prohibited or should FAR Part 14 be deleted. I said I would delete FAR Part 14 and conduct a sealed bid type procedure under Part 15.

And for all those who think that doing a sealed bid type procedure under Part 15 would be complicated and onerous, that can only be because you haven't conducted enough sealed bid procurements or read Part 14. If you think Part 15 is more complex than Part 14, it's because you're clueless. Part 14 is much, much more complex. Talks about pitfalls!!! 

 

 

[bob7947]

Vern:

Quote

I wonder how many realize you can perform essentially the same procedure under FAR Part 15, but with greater flexibility.

So much for the low-hanging fruit.  I thought sealed-bidding would be an easy kill.  Maybe I should have started with two-step sealed-bidding. 

Look at it this way, simple negotiation that mirrors sealed bidding has been used succesfully for years.  I cannot prove that the use of simple negotiation instead of sealed-bidding reduces protests but it does allow the flexibility you mentioned.