Does anyone remember Four-Step Source Selection?

[Vern Edwards]

Just curious—do you remember the Four-Step source selection procedure?

I'm not asking if you know about by Googling it, and I'm not asking for a description of it. I know what it was.

If you remember it, did you ever use it?

If you remember it, do you know what happened to it?

[formerfed]

I remember it mostly from seeing what NASA did.  I also watched the boldest CO I ever knew do it at a civilian agency (Secret Service) without having the process authorized or even publicized outside NASA and DoD. He carefully detailed the process on a cover letter to the RFP as well as in sections of the solicitation.  He made the award without any issues or protests.

[bob7947]

Vern:

When I was in GAO's Preocurement and Systems Acquisition Division (General Procurement Group) in the 1970s, I was told to do research on the 4-Step procedure in DoD.  The Navy keeps entering my mind and a blue transmittal page possibly covering a DoD report on the subject is what I was looking at.  I know that it is not much but I am not aware that the General Procurement Group--the group who would have done something--did anything on the subject after that.  I seem to remember that someone mentioned the 4-step was similar to NASA.

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OK, I wondered what happened to it.  So, I just checked and found a 1980 article in the American Bar Journal.  Apparently, DoD adopted it.

[Vern Edwards]

12 hours ago, bob7947 said:

OK, I wondered what happened to it.  So, I just checked and found a 1980 article in the American Bar Journal.  Apparently, DoD adopted it.

I cited that article earlier today in a response to a post Joel made in another thread. Why he posted on this topic in that thread I cannot say.

NASA began using Four Step in the early 1970s. DOD formally adopted it in 1979. It remained in the Defense Acquisition Regulation (DAR) until 1984, when the FAR took effect and the coverage was moved to DFARS 215.613. DOD removed the coverage from the DFARS in 1998, after the FAR Part 15 Rewrite, explaining as follows in the Federal Register, 53 Fed. Reg. 55040-01, Oct. 14, 1998:

Quote

Guidance on the four-step source selection process and the alternate source selection process have been removed, as the new guidance at FAR 15.101, Best value continuum, clearly allows such source selection processes. [Emphasis added.]

So many of you know little or nothing of the origins and development of the rules that govern your profession. How can you "innovate" your way out of such ignorance? It's like trying to plot a course when you don't know where you are or how you got here.

[joel hoffman]

11 hours ago, Vern Edwards said:

I cited that article earlier today in a response to a post Joel made in another thread. Why he posted on this topic in that thread I cannot say.

I posted it in the other thread for two reasons.

I referenced the 1978 Mitre Corporation report in response to Vern’s interest in one on one discussions. It doesn’t necessarily coincide with my views but expressed an alternative viewpoint from an influential Organization at that time. Apparently not persuasive at the time, though. 

Secondly, Vern seemingly didn’t want a discussion based upon Googling about the procedure. He specifically asked if we remembered it and, if so, did we ever use it and do we remember what happened to it.

On 6/15/2021 at 8:54 AM, Vern Edwards said:

Just curious—do you remember the Four-Step source selection procedure?

I'm not asking if you know about by Googling it, and I'm not asking for a description of it. I know what it was.

If you remember it, did you ever use it?

If you remember it, do you know what happened to it?

I didn’t want to be criticized here for referencing that Googled report, which didn’t respond to his questions. Why would I post it here?

Yes, I vaguely remember it.

No, I didn’t use it.

I assumed that it was OBE at some point after the FAR was issued.

It was a pre-FAR procedure, apparently developed in response prevalent problems of those times, some of which were addressed in the later, original FAR 15 coverage. It was interesting to read some contextual coverage of those problems at those times in the MITRE report. Also, the idea of  trading off better performance at a higher price than what amounted to the “LPTA” approach was rare in a legacy low bid environment, per the report. It refreshed my memory.

And sometimes, what goes around comes around. The 1997 FAR 15 rewrite eliminated the specific prohibition against “technical leveling”.

[formerfed]

14 hours ago, Vern Edwards said:

So many of you know little or nothing of the origins and development of the rules that govern your profession. How can you "innovate" your way out of such ignorance? It's like trying to plot a course when you don't know where you are or how you got here.

I stopped short of responding to all your questions.  I never used it because I saw no benefits.  I did mention someone I knew that successfully used it because he was very concerned about technical transfusion.  His project had a very high degree of visibility and needed a prompt award.  So he used the process and arrived at specific contract language with the selected source on a one-on-one basis.

I used to follow NASA very close back then.  They tried a number of innovative, streamlined concepts. The Four-Step really didn’t do anything along the lines of streamlining, so I lost interest.  But I did know DoD picked it up and saw the end as already mentioned.  From a self-centered perspective, if it wasn’t helpful to my office, I moved on. 

The one really innovative thing NASA did that never caught on much was their MidRange Procurement Procedure.  It was designed as a streamlined method for actions above the SAT up to mid-size valued contracts ($2 million with $10 million with Options).  The part that really interested me is use of value characteristics instead of traditional evaluation factors and formal source selection plans.  The entire acquisition was usually done by a two person team - CO and PM.  Proposal responses were brief.  The evaluation consisted of documenting how each offeror met each value characteristic. The general rule was a paragraph and no more than a half page for each value attribute.  The selection process documentation should be no more than one page.  The evaluation referred back to the offerors response as much as possible so the reason for the evaluation and selection should evident from reading pertinent parts of offeror responses.

We used it once for a major project and several times for lessor valued actions. The reason it wasn’t used more is our headquarters was very conservative and disliked anything out of the ordinary.  They claimed the major one slipped by and that wouldn’t happen again.

[Vern Edwards]

@joel hoffman

3 hours ago, joel hoffman said:

I didn’t want to be criticized here for referencing that Googled report, and which didn’t respond to his question. Why would I post it here?

I didn't want anyone to look it up and then regurgitate it to me.

Four-step was adopted by DOD in the late 1970s following on NASA's lead. It was designed to eliminate concerns about "technical leveling" and "technical transfusion" during discussions in R&D acquisitions. Industry complained bitterly about those practices.

FAR 15.610(d) defined technical leveling and technical transfusion as follows:

Quote

Technical leveling (i.e., helping an offeror to bring its proposal up to the level of other proposals through successive rounds of discussion, such as by pointing out weaknesses resulting from the offeror's lack of diligence, competence, or inventiveness in preparing the proposal); Technical transfusion (i.e., Government disclosure of technical information pertaining to a proposal that results in improvement of a competing proposal)[.]

Concern about those practices go hand-in-hand with the notion of "competitive negotiation."

Originally, Four Step was mandatory for R&D. Later, it was made optional. Even later, its use was authorized for other kinds of acquisitions.

Even though the prospect of one-on-one negotiations with the selectee before award was attractive to many COs and PMs, Four Step never caught on, because it still required discussions with offerors in a competitive range prior to the selection. There were too many steps, which made it more complicated and time-consuming than standard source selection procedures.

Here is the description of the Four Step process from the 1997 DFARS 215.613:

Quote

 

(f) Step one-evaluation of technical proposals. (1) The sequence of step one-

(i) Evaluate all technical proposals;

(ii) Conduct limited discussions with all offerors; and

(iii) Ask for any necessary clarifications and additional supporting data when necessary (normally, ask that this be submitted with the cost proposal).

(2) In conducting step one-

(i) Limit discussions to only what is necessary to ensure that both parties understand each other;

(ii) Do not tell offerors about deficiencies in their proposals; and

(iii) Provide written clarification to all offerors when it appears the Government's requirements have been misinterpreted.

(g) Step two-evaluation of cost proposals. (1) The sequence of step two-

(i) Request cost proposals;

(ii) Evaluate all cost proposals;

(iii) Establish the competitive range;

(iv) Eliminate those proposals outside the range and advise those offerors;

(v) Conduct limited discussions with remaining offerors; and

(vi) Eliminate proposals which cannot be made acceptable and advise the offerors.

(2) In conducting step two-

(i) Limit discussions to-

(A) Clarifying inconsistencies or correcting mathematical errors;

(B) Correlating cost elements with technical effort in order to assess cost realism; and

(C) Ensuring a complete understanding of the Government's requirements, the offeror's offer, and other contract terms;

(ii) Do not tell an offeror that any of its cost elements are either too high or too low; and

(iii) Follow the guidelines in paragraph (f) of this subsection if further discussions of technical proposals or clarifications are required.

(h) Step three--common cut-off and selection of an offeror for final contract negotiations. (1) The sequence of step three-

(i) Notify offerors of the common cut-off date for receipt of best and final offers (technical and cost);

(ii) Evaluate the offers; 215.704

(iii) Select the best offeror (see para graph (h)(2)(iv) of this subsection for multiple sources);

(iv) Tell the selected source that th decision is conditional based on negotiation of a definitive contract within the time period prescribed by th source selection authority; and

(v) Advise the other offerors of th source selected.

(2) In conducting step three-

(i) Remind offerors, when notifying them of the common cut-off date, that any changes incorporated in the final proposal must be fully documented;

(ii) Do not accept lump sum reductions in final cost proposals without supporting data;

(iii) Do not request additional best and final offers without the approval required by 215.611(c); and

(iv) Do not select two or more offerors, rather than a single source, for final contract negotiations, unless the HCA makes a written determination that final selection of a single source should not be made until the prospective contracts have been tentatively negotiated.

(i) Step four-final negotiations an contract award. (1) The sequence of step four (single selectee)-

(i) Negotiate the final contract price, terms, and conditions; and

(ii) Award the contract.

(2) The sequence of step four (multiple selectees)-

(i) Negotiate tentative final contract terms and conditions;

(ii) Select the best source; and

(iii) Award.

(3) In conducting step four-

(i) Complete negotiations and award the contract within the time prescribed by the source selection authority;

(ii) Terminate negotiations and make a new source selection decision if the condition in paragraph (i)(3)(i) cannot be met;

(iii) Do not permit changes in the Government's requirements or the offeror's proposal which would affect the source selection decision; and

(iv) Follow the procedures in FAR 15.606 if changes in the Government's requirements are necessary.

Now, if  FAR 15.101, Best value continuum "clearly permits" such processes, and you like the idea of one-on-one negotiation with the selectee prior to award, why not redesign Four Step by cutting a couple of steps?