Evaluating Professional Employee Compensation when Cost or Price is not an evaluation factor

[joel hoffman]

You are making a quality based selection. I don’t know if you can limit the number of awards based upon higher ratings when you are using the authority to use QBS based upon awarding to all  “qualifying proposals”, if the criteria for qualifying proposals is that they meet the technical requirements and you assume that they can be awarded task orders at fair and reasonable prices.

Edit: Remember that the definition in FAR part 2 specifically applies to the 15.304 exception to evaluating prices. There is no provision to favor most highly rated proposals in the award of the base ID/IQ in that definition.  

 

[ji20874]

I think using Alt I and then limiting the competitive range for efficiency is an elegant way to cap the number of awardees.

[joel hoffman]

8 minutes ago, ji20874 said:

I think using Alt I and then limiting the competitive range for efficiency is an elegant way to cap the number of awardees.

How do you justify an exception to price evaluation based upon awarding to All qualified proposals and then limit it to just three most highest rated  proposals? 

[Vern Edwards]

2 minutes ago, joel hoffman said:

How do you justify an exception to price evaluation based upon awarding to All and then limited to just three?

Very good question.

[Don Mansfield]

21 minutes ago, joel hoffman said:

How do you justify an exception to price evaluation based upon awarding to All qualified proposals and then limit it to just three most highest rated  proposals?

I would justify it on the basis of efficiency. As long as the RFP advised offerors that a CO had the right to exclude them from the competitive range for purposes of efficiency, which FAR 52.215-1 does, then the CO could exercise that right. 

I also think that a protest by an interested party that was eliminated this way would be untimely. It would have to be a protest of the solicitation.

[joel hoffman]

“3” = “efficiency”? Highly doubtful;  “10” or  “20” maybe; “30” perhaps; “40”, probably.

But limiting consideration of award  to “3” offerors doesn’t even resemble the statutory based exception- especially when you change the method of evaluation from the definition in FAR 2.101 of qualifying offeror* to the three most highly rated offerors, using comparative rating methods and then comparing proposals. 

This is NOT a “best value” selection in the truest sense where industry defines best value as considering both price and quality and FAR 2.101 defines it as “Best value means the expected outcome of an acquisition that, in the Government's estimation, “provides the greatest overall benefit” in response to the requirement.” A qualifications based selection procedure is not within  the “Best Value Spectrum”  in 15.101. 

*”Qualifying offeror, as used in 13.106-1and 15.304, means an offeror that is determined to be a responsible source, submits a technically acceptable proposal that conforms to the requirements of the solicitation, and the contracting officer has no reason to believe would be likely to offer other than fair and reasonable pricing (10 U.S.C. 2305(a)(3)(D)).”

I don’t disagree with Don that someone can get away with it. Most contractors wouldn’t have a clue what is legal or authorized and what isn’t. 

[Don Mansfield]

5 hours ago, joel hoffman said:

But limiting consideration of award  to “3” offerors doesn’t even resemble the statutory based exception- especially when you change the method of evaluation from the definition in FAR 2.101 of qualifying offeror* to the three most highly rated offerors, using comparative rating methods and then comparing proposals. 

I didn't propose that. I just proposed eliminating offerors for purposes of efficiency.

[joel hoffman]

On 8/19/2021 at 11:08 PM, Don Mansfield said:

Hi, Dave,

I have not seen that and I don't think it would fly. 

Having said that, let's say an RFP for a MAC said that award would be made to all qualifying offerors, price or cost was not an evaluation factor, and the Government intended to conduct discussions (by using FAR 52.215-1, Alt. I). Could the contracting officer establish a competitive range and eliminate all but three offerors for purposes of efficiency? 

Don - Ok. What efficiency are you expecting to gain? Please explain what efficiency you will gain by limiting to three. Awarding to only three? Not having to fully evaluate each proposal?

I’m assuming that you will evaluate at least some aspect of all proposals- correct?

If you intend to award without discussions, you can do that anyway, regardless of whether you intend to only award to three. You can evaluate past performance, for instance and eliminate all who don’t meet your acceptability criteria. Then you can evaluate another aspect and eliminate those who don’t meet the acceptability criteria - and so forth, whittling away all who aren’t “qualifying offers”. 

When and how , after receipt of technical/past performance proposals, would you establish a competitive range and eliminate all but three offerors? Seems like you will have to have a way to compare them, then rank them. If not the three most highly rated offers, how would you limit to three awards? 

Going from award to “all qualifying” offerors to the “three most highly rated” offerors appears to me to bear little resemblance to the available authority in 15.304 not to evaluate price.

 

[joel hoffman]

Don, it just occurred to me that, by using 52.215-1, alternate 1, paragraph (f) (4) indicates that you intend to conduct discussions. Why did you suggest using alternate 1 if you are just proposing eliminating offerors for efficiency? Seems like you would be adding more complexity by advocating conducting discussions.

8 hours ago, Don Mansfield said:

I didn't propose that. I just proposed eliminating offerors for purposes of efficiency.

 

Paragraph (f)(4) in the basic clause says that you intend to award without discussions but reserve the right to conduct discussions.

Both versions allow the government to establish a competitive range and limit those in the competitive range for purposes of efficiency.

My guess is that you don’t want to award to more than three. If so, it would be necessary to rate proposals using comparative evaluation criteria, compare proposals and rank them. If you are going to conduct discussions, what is the purpose of the discussions?

I don’t understand how that would be more efficient, other than only having to award three contracts

Limiting award to 3 firms isn’t compliant or consistent  with the intent or the wording of the exception to evaluating prices for ID/IQ award. 

[joel hoffman]

Establishing a competitive range and limiting it to three offerors means that you are going to conduct discussions with three offerors after evaluating all offers.

Paragraph (f)(4) says that you can limit the competitive range for purposes of efficiency in the competition. If you limit the competitive range to three offerors, it means you are going to conduct competition for award among the three offerors. If you intend to make three awards (it’s a MAC), what are the three firms competing for???

And why is “three firms” the greatest number in the competitive range that will permit competition(??) among them for three awards? 
 

See FAR 15.304 (c):

  “  (c) Competitive range.

 (1) Agencies shall evaluate all proposals in accordance with 15.305(a), and, if discussions are to be conducted, establish the competitive range. Based on the ratings of each proposal against all evaluation criteria, the contracting officer shall establish a competitive range comprised of all of the most highly rated proposals, unless the range is further reduced for purposes of efficiency pursuant to paragraph (c)(2) of this section.

            (2) After evaluating all proposals in accordance with 15.305(a) and paragraph (c)(1) of this section, the contracting officer may determine that the number of most highly rated proposals that might otherwise be included in the competitive range exceeds the number at which an efficient competition can be conducted. Provided the solicitation notifies offerors that the competitive range can be limited for purposes of efficiency (see 52.215-1(f)(4)), the contracting officer may limit the number of proposals in the competitive range to the greatest number that will permit an efficient competition among the most highly rated proposals (10 U.S.C.2305(b)(4) and 41 U.S.C.3703).”

I don’t understand how your proposed method to promote “efficiency” for competition during discussions among the greatest number of offerors (“three”) for three MAC awards makes sense.  

[Vern Edwards]

On 8/22/2021 at 5:30 AM, joel hoffman said:

I don’t understand how your proposed method to promote “efficiency” for competition during discussions among the greatest number of offerors (“three”) for three MAC awards makes sense.  

@joel hoffman@Don Mansfield

It doesn't.

See FAR 15.306(c)(2):

Quote

After evaluating all proposals in accordance with 15.305(a) and paragraph (c)(1) of this section, the contracting officer may determine that the number of most highly rated proposals that might otherwise be included in the competitive range exceeds the number at which an efficient competition can be conducted. Provided the solicitation notifies offerors that the competitive range can be limited for purposes of efficiency (see 52.215-1(f)(4)), the contracting officer may limit the number of proposals in the competitive range to the greatest number that will permit an efficient competition among the most highly rated proposals (10 U.S.C.2305(b)(4) and 41 U.S.C.3703). [Emphasis added.]

Now see FAR 15.304(c)(1)(ii):

Quote

(ii) In accordance with 10 U.S.C. 2305(a)(3), for DoD, NASA, and the Coast Guard—

                     (A) The contracting officer may choose not to include price or cost as an evaluation factor for award when a solicitation—

                          (1) Has an estimated value above the simplified acquisition threshold;

                          (2) Will result in multiple-award contracts (see subpart 16.5) that are for the same or similar services; and

                          (3) States that the Government intends to make an award to each and all qualifying offerors (see 2.101). [Emphasis added.]

Now think about it. If a CO chooses to invoke FAR 15.304(c)(1)(ii), then there is no competition. The only purpose of the "source selection" would be to invite companies to quality for an award, which, according to FAR, must be made to "each and all" qualifying offerors. Anyone using that method is not seeking efficient competition. In fact, they are not seeking competition of any kind. To invoke FAR 15.306(c)(2) in such an acquisition makes no sense to me. Indeed, one can argue that the very idea of a "competitive range" in a 15.304(c)(1)(ii) "competition" is paradoxical.

What Don has shown is that when the FAR councils added 15.304(c)(1)(ii) to the FAR they either did not see or or chose not to address the apparent disconnect between that new rule and FAR 15.306(c)(2). I just checked both the proposed rule, 83 FR 48271, Sept. 24, 2018, and the final rule, 85 FR 40068, July 2, 2020, and found no mention of the fact that a 15.304(c)(1)(ii) acquisition is not competitive.

Not only did the FAR councils miss the  disconnect between FAR 15.304(c)(1)(ii) and 15.306(c)(2), but they apparently missed the disconnect between 15.304(c)(1)(ii) and FAR 6.101. A FAR 15.304(c)(1)(ii) acquisition cannot result in full and open or any other degree of competition unless the agency announces its intention to limit the number of awards. There is no mention of "each and all" in the FAR 2.101 definition of full and open competition, and I don't think there is any provision for it in FAR Part 6, yet it is clearly permitted.

So if I wanted to apply 15.304(c)(1)(ii) and limit the number of awards I would say so in the RFP and say that a limit is necessary in order to obtain full and open competition as required by CICA and FAR 6.101. Arguably, you would be integrating and reconciling the requirement to award "to each and all" and the requirement to seek full and open competition. Prospective offerors would have to protest before the solicitation closing date or risk having a protest filed afterward ruled untimely. (It would be an interesting protest.)

Just brainstorming. Do I misunderstand FAR 15.304(c)(1(ii)? Have I missed something? 

[Don Mansfield]

3 hours ago, Vern Edwards said:

Now think about it. If a CO chooses to invoke FAR 15.304(c)(1)(ii), then there is no competition. The only purpose of the "source selection" would be to invite companies to quality for an award, which, according to FAR, must be made to "each and all" qualifying offerors.

As I understand it, solicitations for Federal Supply Schedules similarly invite companies to qualify for award. Would you also say that is not a competitive procedure?

[Vern Edwards]

@Don MansfieldThe FSS program is expressly authorized by law as an "other competitive procedure," even though offerors don't really compete with one another. See FAR 6.102(d) and 41 USC 152(3). Same for broad agency announcements. Those procedures were grandfathered in when CICA was passed.

[Don Mansfield]

45 minutes ago, Vern Edwards said:

@Don MansfieldThe FSS program is expressly authorized by law as an "other competitive procedure," even though offerors don't really compete with one another. See FAR 6.102(d) and 41 USC 152(3). Same for broad agency announcements. Those procedures were grandfathered in when CICA was passed.

So, if that's a competitive procedure why wouldn't using the authority at FAR 15.304(c)(1)(ii) be a competitive procedure?

[joel hoffman]

7 hours ago, Don Mansfield said:

So, if that's a competitive procedure why wouldn't using the authority at FAR 15.304(c)(1)(ii) be a competitive procedure?

It’s a specifically authorized qualifications based selection procedure for the basic MAC award. It provides for award to ALL qualifying offerors. How is that a competitive procedure? Competition is conducted for orders.  

[Vern Edwards]

6 hours ago, Don Mansfield said:

So, if that's a competitive procedure why wouldn't using the authority at FAR 15.304(c)(1)(ii) be a competitive procedure?

@Don MansfieldBah! Get your head out of the FAR, which is a sinkhole!

If offerors are not contending against one another for a prize that they cannot all win, then what kind of "competition" is there? And what kind of "competitive range" would you have? And why limit the competitive range for competitive  efficiency if there is no real competition?

You get it or you don't.

 

[Don Mansfield]

1 hour ago, Vern Edwards said:

@Don MansfieldBah! Get your head out of the FAR, which is a sinkhole!

If offerors are not contending against one another for a prize that they cannot all win, then what kind of "competition" is there? And what kind of "competitive range" would you have? And why limit the competitive range for competitive  efficiency?

You get it or you don't.

 

I think there's a disconnect between your concept of competition and what passes as "full and open competition" under the FAR. The Federal Supply Schedules solicitation process does not require offerors to contend against one another for a prize that they cannot all win, yet that procedure is considered competitive under the rules. Your argument that use of FAR 15.304(c)(1)(ii) would not constitute "full and open competition" needs to account for this fact. 

[Vern Edwards]

7 minutes ago, Don Mansfield said:

I think there's a disconnect between your concept of competition and what passes as "full and open competition" under the FAR. The Federal Supply Schedules solicitation process does not require offerors to contend against one another for a prize that they cannot all win, yet that procedure is considered competitive under the rules.

The FSS solicitation process is considered a "competitive procedure," but it does not provide for full and open competition as defined in FAR. 

See: "The Competition in Contracting Act" at https://interact.gsa.gov/blog/competition-contracting-act-cica

 

[Don Mansfield]

10 minutes ago, Vern Edwards said:

The FSS solicitation process is considered a "competitive procedure," but it does not provide for full and open competition as defined in FAR. 

See: "The Competition in Contracting Act" at https://interact.gsa.gov/blog/competition-contracting-act-cica

 

I don't think the blog entry supports that, but that's ok.

If the FSS solicitation process is considered a competitive procedure, then why wouldn't the use of FAR 15.304(c)(1)(ii) be considered a competitive procedure?

[Vern Edwards]

35 minutes ago, Don Mansfield said:

If the FSS solicitation process is considered a competitive procedure, then why wouldn't the use of FAR 15.304(c)(1)(ii) be considered a competitive procedure?

It would be if the FAR councils had added it to the list in FAR 6.102. But they didn't, which I think was a case of oversight.

But forget about that. Do you agree that the procedure described in FAR 15.304(c)(1)(ii) does not involve "competition" as defined pursuant to FAR 1.108(a)? (See the definitions of "compete" and "competition" in The American Heritage Dictionary, 5th ed.)

If you do not agree, why not?

If you do agree, then do you understand my point about the illogic of establishing a "competitive range" in an acquisition that does not involve competition?

And if "full and open competition" is about allowing all responsible offerors a chance to "compete," how does a FAR 15.304(c)(1)(ii) acquisition do that?

[joel hoffman]

6 hours ago, Don Mansfield said:

If the FSS solicitation process is considered a competitive procedure, then why wouldn't the use of FAR 15.304(c)(1)(ii) be considered a competitive procedure?

There is no initial pricing. It’s not the same as the FSS solicitation process. It is a qualifications based selection (QBS) process.

EDIT: All qualifying offerors would be offered an award under the 15.304 exception to evaluating prices.

The reason I say “would be offered an award” is only because generally the KO sends the award document to the awardee to sign first and return. Per FAR 4.1. The awardee can decline, as far as I know. 

[ji20874]

I appreciate the discussion.  Here's something to throw into the mix:  FAR subpart 15.3 is only for competitive source selections, so for me, everything done under FAR subpart 15.3 is competitive.  Nothing in FAR subpart 15.3, not a single word, pertains to non-competitive actions.

[Vern Edwards]

1 hour ago, ji20874 said:

I appreciate the discussion.  Here's something to throw into the mix:  FAR subpart 15.3 is only for competitive source selections, so for me, everything done under FAR subpart 15.3 is competitive.  Nothing in FAR subpart 15.3, not a single word, pertains to non-competitive actions.

Yes, I agree, such acquisitions are legally categorized as "competitive."

Legally, an acquisition is categorized as "competitive" when the government solicits proposals and gives all responsible companies a chance to submit a proposal, which is considered "competing." This legality can give rise to a paradox—a "competitive" acquisition in which there is no competition in the ordinary sense of that word.  That was the paradox that underlay Shay Assad's November 24, 2010 and April 27, 2011 memos, "Improving Competition in Defense Procurements," https://www.acq.osd.mil/dpap/policy/policyvault/USA002080-11-DPAP.pdf, in which he told COs not to use the adequate price competition standard when they receive only one offer.

Sometimes, what is legally true is a "legal fiction," which Black's Law Dictionary, 11th ed., defines as: "a device by which a legal rule or institution is diverted from its original purpose to accomplish indirectly some other object."

Offerors in a FAR 15.304(c)(1)(ii) acquisition do not compete against each other. Thus, I have argued that Don's proposed scheme for getting around the requirement to make an award to "each and all qualifying offerors" by limiting the competitive range to three offerors for purposes of "competitive efficiency" fails a logical (and maybe a legal) sniff test, and thus might not pass muster in a protest to the GAO and the COFC.

If offerors are not competing, and if awards are to be made "to each and all" qualifying offerors, why would a CO establish a competitive range other than for the purpose of conducting discussions to allow a non-qualifying offeror become qualified? In what sense are some of the offerors "most highly" rated? What does "most highly" rated even mean in such an acquisition? Would non-qualifying offerors be among the most highly rated? In response to Joel's  inquiry and my argument, Don and ji20874 respond with a legality. Fair enough, but would it pass muster in a protest? I don't know. It strikes me as a transparent work-around, a kind of legal fiction/ It's the kind of work-around that if used too often eventually results in more rules.

(Exceptions to rules seem to prompt work-arounds to expand their application, which often result in more rules.)

I think Don has showed us another instance in which the FAR does not always make sense. In this case, FAR 15.304(c)(1)(ii)(A)(3) and FAR 15.306(c)(2) do not seem compatible. Should FAR address that issue, or should the councils wait for the protests to address it, if ever? The FAR councils implemented a statute simply by inserting it into the FAR without thinking things through, which is their job.

It's already started. Here is the question which started this part of this thread:

Quote

FAR 15.304(c)(1)(ii)(A)(3) "States that the Government intends to make an award to each and all qualifying offerors (see 2.101)."  When looking at 2.101 we find  "Qualifying offeror, as used in 13.106-1 and 15.304, means an offeror that is determined to be a responsible source, submits a technically acceptable proposal that conforms to the requirements of the solicitation, and the contracting officer has no reason to believe would be likely to offer other than fair and reasonable pricing (10 U.S.C. 2305(a)(3)(D))."  In other words, could a solicitation state something like "Only the the top three highest technically rated proposals will be considered as a qualified offeror"?

 

[Vern Edwards]

1 hour ago, ji20874 said:

I appreciate the discussion.

I'm glad, because for me it's the only kind of discussion worth having here.

[joel hoffman]

I just discovered this while trying to research the background for Section 825 of the FY 2017 National Defense Authorization Act.

Open FAR Cases as of August 23, 2021 Synopsis
Status
08/22/2018 DARC Director tasked Acquisition Strategy Team to draft proposed FAR rule. Report due 10/17/2018. Case transferred to FAR Acquisition Environmental and Contract Management Team. Report due date extended to 09/01/2021.
     2018-014
8, 13, 15, 38
(S) Increasing Task-order Level Competition
Implements section 876 of the NDAA for FY 2019 (Pub. L. 115-232). Section 876 amends 41 U.S.C. 3306(c) by providing an exception to the requirement to consider price as an evaluation factor for the award of certain indefinite-delivery, indefinite-quantity contracts and Federal Supply Schedule contracts.”

Sorry about the Formatting in my iPhone.