Competitive RFP for FFP - Split Award

What is your question?

My question is, is it still competitive award for both suppliers or is it competitive award to the winner and non-competitive award for the non-winner.

Just now, DawnS said:

Two suppliers were sent a competitive solicitation for an FFP Best Value criteria award. One was the best value winner. Program is asking to split the award at 75% to best value winner and 25% to the other supplier to add depth to the supplier pool. Since these are not IDIQ or Requirements Contracts and will be discreet purchase orders, instinct says that one PO is deemed competitive and the other PO is deemed non-competitive since they didn't "win". Program is asking for "where in FAR does it say I can't". I don't believe that exists in such blatant terms but looking for back up on why CCoPD should/would be requested of the non-winner. Or back up on where such a split award can count 2 of 2 suppliers as both competitive awards.

Was the competition conducted pursuant to FAR Part 15? If not, what procedure was used??

In addition why is this posted under the Subcontracts and subcontract management discussion area?? It belongs under “contract award” or some other similar discussion area.

Vern Edwards said:

Was the competition conducted pursuant to FAR Part 15? If not, what procedure was used??

I will echo Vern’s question. 

Some more context is necessary.

DawnS said:

Two suppliers were sent a competitive solicitation for an FFP Best Value criteria award. One was the best value winner…

…My question is, is it still competitive award for both suppliers or is it competitive award to the winner and non-competitive award for the non-winner.

DawnS said:

Program is asking for "where in FAR does it say I can't “ I don't believe that exists in such blatant terms but looking for back up on why CCoPD should/would be requested of the non-winner. Or back up on where such a split award can count 2 of 2 suppliers as both competitive awards.

Whether or not you can even make a split award or a partial award to one of the vendors without further interaction with both firms would seem to be dependent upon what the “competitive solicitation” described as the basis of award.

That would seem to me to be applicable regardless of the type or size of the solicitation.

For instance, if the solicitation says something like “Award will be be to the [firm[ [offeror] [vendor] which provides the best value…”, to make a split award or a partial award of the scope is a modification of the initial basis of the solicitation initially sent to the two firms.

It would be a change to the ground rules of the competition

If so, then, as a minimum,  I’d think that you will  need to amend the solicitation to allow and describe a split or even a partial award.

It appears to me, based upon the limited information provided and your question, that what the program office is requesting is a modification to the scope and quantity of possible business that the initial solicitation described and/or was based upon.

Maybe one or both firms would not be interested in a partial, shared award for a smaller scope/amount/nature of business than you initially solicited. Or maybe their prices would be different (higher?/lower?).

[EDIT: Where does the original poster mention subcontractors in this thread]?

I posted under Subcontracts as we are a prime contractor placing a subcontract and my Sourcing brain always defaults to Subcontracts. I apologize if this is the wrong place. The RFP was FAR 15 compliant and stated Best Value with schedule, past performance and price as the criteria. The subcontract administrator did state the possibility of split awards in the RFP and also requested range pricing from 1 each up to our actual needed qty each. The solicitation did not say what any anticipated split would be (i.e 75/25).   Supplier A had the best scores in all categories as well as best overall score. Supplier B wasn't too far behind in scores but wasn't the winner. Using the Program desired split would have Supplier B (non-winner) receiving an award over the CCoPD threshold. The competition exemption of CCoPD for the winner is clear. The competition exemption of CCoPD for the non-winner but receiving award is less clear (to me).

Well, this appears to be a completely different scenario than initially described. However, your solicitation mentioned the possibility of split awards. Prices were competitively obtained. I don’t see why there is a need for certified cost or pricing data from either firm. They would both be competitively obtained awards.

Dawn, you seem to be focusing on whether you would need to get certified cost or pricing data from vendor B.  While there are several other issues with what you have written,  two questions immediately come to mind.  First, were you as the prime required to submit CCPD in regard to your contract under which this buy will be made?  Second, if you were, have you considered how FAR 15.403-1 impacts your situation?

DawnS said:

Two suppliers were sent a competitive solicitation for an FFP Best Value criteria award. One was the best value winner. Program is asking to split the award at 75% to best value winner and 25% to the other supplier to add depth to the supplier pool.

Maybe I'm cynical, or maybe I'm just experienced. Either way, before doing anything I would thoroughly explore the ownership of the "losing" firm to see if there are any ties to the program personnel requesting the split.

Just now, here_2_help said:

Maybe I'm cynical, or maybe I'm just experienced. Either way, before doing anything I would thoroughly explore the ownership of the "losing" firm to see if there are any ties to the program personnel requesting the split.

That sounds like the voice of experience.

here_2_help said:

Maybe I'm cynical, or maybe I'm just experienced. Either way, before doing anything I would thoroughly explore the ownership of the "losing" firm to see if there are any ties to the program personnel requesting the split.

Or just strong favoritism.  Maybe surprised that the liked vendor didn’t win.  Regardless something seems amiss.

Just now, formerfed said:

Regardless something seems amiss.

Maybe, but it could be that they saw something in the loser's proposal that sparked their interest and want to pursue it. I've seen that happen.

We were required to submit CCoPD at the prime. Program is trying to get away from too many typically sole source awards so opened this up to the incumbent and a competitor. Incumbent won the best value. Program wants to split the award to build depth into the sourcing options for future efforts so asked for a 75/25 split award.

DawnS said:

I posted under Subcontracts as we are a prime contractor placing a subcontract and my Sourcing brain always defaults to Subcontracts. I apologize if this is the wrong place. The RFP was FAR 15 compliant and stated Best Value with schedule, past performance and price as the criteria. The subcontract administrator did state the possibility of split awards in the RFP...

DawnS,

Is your question about a government prime contract opportunity being split at award?  Or a subcontract opportunity being split at award?

This is a subcontract opportunity. USG contract is to us - we are placing subcontract to supplier.

So, you are a prime contractor, and you did a competition for a subcontract opportunity, and you want that competition to result in two awards?  If the prices are similar, I think I would call both awards competitive and the prices reasonable based on adequate competition.

On 6/5/2024 at 8:10 AM, DawnS said:

Using the Program desired split would have Supplier B (non-winner) receiving an award over the CCoPD threshold. The competition exemption of CCoPD for the winner is clear. The competition exemption of CCoPD for the non-winner but receiving award is less clear (to me).

The competition exemption from CCOPD can certainly apply to multiple awardees. The second firm is still “successful” in obtaining an award, just “not as successful” as the first one

However, if you (and/or the Gov’t. Program Office) aren’t satisfied with the second awardee’s prices, you could bargain with them for better pricing.

Since you weren’t sure whether or not CCOPD was required, you obviously would have the right under your issued solicitation to negotiate with one or both vendors, correct?.

And If you aren’t satisfied with the non-price portion of the second firm, could you also bargain for better performance under the terms of the subcontract solicitation? 

The CCOPD exemption under 15.403-1(b)(1) would still apply due to adequate competition.

Thank you!

DawnS said:

Thank you!

Sorry for my edits but please see my last edited reply…

It seems that this discussion has gone off the rails. The question was whether there was adequate price competition, presumably for determining whether the exception to COPD was met (although this did not come out until much later). This could have been answered from the very first sentence from the OP: "

On 6/4/2024 at 1:36 PM, DawnS said:

Two suppliers were sent a competitive solicitation for an FFP Best Value criteria award.

Both suppliers submitted proposals. Therefore the standards for the 'adequate price competition' exception were met: two or more responsible offerors submitted offers, and award will be made on a best value basis where price was a substantial factor. Whether there was one award or a split award does not change this; the exception is based on the existence of price competition, not the award decision. 

Side note: calling one PO "non-competitive" because it didn't win makes no sense. Of course there was competition. Just because you lost doesn't mean you didn't compete.

Dawn, I think Joel and Fara have answered your question concerning CCPD.  However, based on your original post, I wonder if you believe that the FAR governs the way you award subcontracts?

Fara Fasat said:

It seems that this discussion has gone off the rails. The question was whether there was adequate price competition, presumably for determining whether the exception to COPD was met (although this did not come out until much later).

The initial post seemed to indicate to me that the program office wanted to make a split award and wanted to know why it couldn’t be done. And it appeared that the Original Post was referring to split awards at the prime contract level.

We asked for more context.

DawnS then revealed that the solicitation was at the subcontract level and that the solicitation mentioned the possibility of split awards. This was the first mention of subcontracts…

The mention of certified cost or pricing data indicates that there would likely be negotiation involved with respect to the second vendor.

Why would one ask for CCOPD to determine whether a competitively submitted price is fair, reasonable and acceptable? 

Why would one ask for CCOPD unless they intend to negotiate a proposal?

Why would one ask for CCOPD to bargain/negotiate a competitively submitted price?

The bottom line is that there is an exemption to otherwise applicable CCOPD if you are negotiating competitively submitted prices with one or more firms for awards to those firms.

True, we did have to do much reading between the lines and interpreting. Ultimately though DawnS was asking why they shouldn't have to get COPD from the "non-winner", which she deemed a "non-competitive award." This entirely missed the point, as the competition had already occurred; the type of award did not change that.

Yes FAR does influence and determine how we award subcontracts as the clauses in our prime are enforced upon us and many are required flowdowns. Our CPSRs are always referencing our primes for which clauses were included. 52.215-12 is in the prime and therefore without a valid exemption then CCoPD would be required. What was unclear to me was within a competition with only two competitors that awarding to the one that was not the evaluated winner would negate the exemption or not.

Once again, competition occurred when two competitors submitted proposals, as long as price was a substantial factor in the evaluation. See 15.403-1(c)(1)) for the standards for adequate price competition.

On 6/4/2024 at 1:36 PM, DawnS said:

Two suppliers were sent a competitive solicitation for an FFP Best Value criteria award.

Did I miss it or did some ask, and it was answered - Is this a commercial product?   I am wondering because  "supplier".

DawnS said:

What was unclear to me was within a competition with only two competitors that awarding to the one that was not the evaluated winner would negate the exemption or not.

The exemption from submission of cost or pricing data doesn’t mean that the prime doesn’t have ensure that the subcontract prices are fair and reasonable, especially if the second firm’s prices are significantly higher than “the winner’s” prices for the same effort or products. Of course differences in non-price (e.g., technical approach)  could affect prices…

The exemption is only applicable to certified cost or pricing data, not “data other than certified cost or pricing”.

C Culham said:

Did I miss it or did some ask, and it was answered - Is this a commercial product?   I am wondering because  "supplier".

Ah, good catch, Carl. I missed it and nobody asked.

Even if the subcontract is for a commercial product or commercial service, my previous comment is applicable and the prime isn’t bound to simply accept the second “supplier’s” prices because they were based upon competition.

I would be concerned with the previous comment regarding negotiating with either of the suppliers because negotiated procurements  can be viewed as not exempt from cost or pricing data.

Neil Roberts said:

I would be concerned with the previous comment regarding negotiating with either of the suppliers because negotiated procurements  can be viewed as not exempt from cost or pricing data.

Competitively negotiated procurements with adequate price competition (or commercial products or services) - as discussed here- would generally qualify for an exemption from submission of certified cost or pricing data. I often conducted price discussions in competitive acquisitions. At the most I might occasionally ask for some “data other than certified cost or pricing data”.

Carl - why would negotiations negate the exemption for either commercial items or adequate price competition?

Fara Fasat said:

Carl - why would negotiations negate the exemption for either commercial items or adequate price competition?

Fara, Carl didn’t suggest that…

Sorry, I meant Neil. My apologies to Carl.

Fara Fasat said:

why would negotiations negate the exemption for either commercial items or adequate price competition?

 @Fara Fasat, my statement was made regarding an earlier comment in this thread by Joel that was not specific to commercial items, and neither was my comment. With respect to a prime contractor awarding a "negotiated contract" after solicitation responses resulted in adequate price competition, I find that to be a slippery slope. Negotiated contracts are subject to cost of pricing requirements per FAR 15-403-4...if your award changed specific solicitation requirements, it may be viewed that adequate competition was adversely affected and, been unfair to other bidder(s). As a prime contractor, even using the terms "negotiated contract" for an award over the cost or pricing data threshold tends to invite Government scrutiny and questions where you are not complying with cost or pricing data requirements.

Neil Roberts said:

@Fara Fasat, my statement was made regarding an earlier comment in this thread by Joel that was not specific to commercial items, and neither was my comment. With respect to a prime contractor awarding a "negotiated contract" after solicitation responses resulted in adequate price competition, I find that to be a slippery slope. Negotiated contracts are subject to cost of pricing requirements per FAR 15-403-4...if your award changed specific solicitation requirements, it may be viewed that adequate competition was adversely affected and, been unfair to other bidder(s). As a prime contractor, even using the terms "negotiated contract" for an award over the cost or pricing data threshold tends to invite Government scrutiny and questions where you are not complying with cost or pricing data requirements.

In this case there is no stated change to the terms of the solicitation.

The prime contractor can negotiate or bargain for better price and/or performance with one or both of the proposed subs if that is company practice. If there is adequate price competition or the equipment is determined to be a commercial product it would generally be exempt from the requirements to submit cost or pricing data and to certify it.

Beyond that I don’t see any need here  for CCOPD.

If the government wants to increase its supplier base and if there is a wide variance in prices and/or differences in proposed quality of performance, it would unwise* to simply offer an award without bargaining for improved prices and/or performance

*poor business practice - AKA stupid business decision.

Since the original poster asked about the need for certified cost or pricing data, I suspect that they may have been thinking of negotiating or bargaining for better terms or performance or price for the alternate supplier. At least I hope so.

joel hoffman said:

If the government wants to increase its supplier base and the is a wide variance in prices and/or differences in proposed quality of performance, it would unwise* to simply offer an award without bargaining for improved prices and/or performance

*poor business practice - AKA stupid business decision.

The poster did not seem to say anything about the price of the other bidder having a wide variance, or quality or performance deficiencies. Did I miss something?

Neil Roberts said:

The poster did not seem to say anything about the price of the other bidder having a wide variance, or quality or performance deficiencies. Did I miss something?

I said “if”. More than once…

Why is the original poster asking about a need for certified cost or pricing data?

What would be the purpose of obtaining cost or pricing data if it was necessary?

For this best value competition the prime should have and did already evaluate both non-price and price factors (“categories”).

The declared “winner” had the “best scores” in all categories (schedules, past performance and price).

The “program” wanted to also award a subcontract to the “non-winner” for a 25% share of purchases.

The non-winner’s prices, schedule and past performance werent good enough to “win” the competition but the program wanted to give the firm 25% of the sales. Wouldn’t the program office want to get a better deal than was initially offered - if there were significant differences in non-price and/or price categories?  

It would be apparent to me that cost or pricing data would supposedly have been used for negotiating prices, if it had been required for that purpose.

The prime wouldn’t need cost or pricing data to bargain with the firm or either firm for that matter.

By the way, I didn’t mention or hint that the second firm had “performance deficiencies.”