Doke Testimony

Started by PM63A4 · Feb 26, 2010 · 42 replies

  1. P

    PM63A4

    Feb 26, 2010 · 16y ago

    Original post

    Did anyone else read the STATEMENT OF MARSHALL J. DOKE, JR. (PARTNER, GARDERE WYNNE SEWELL LLP DALLAS, TEXAS) BEFORE THE SUBCOMMITTEE ON CONTRACTING OVERSIGHT COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS, UNITED STATES SENATE, FEBRUARY 25, 2010?

    There's a link to his testimony under the "News" header on the top right of the WIFCON homepage that you can use if the following link doesn't work:

    http://hsgac.senate.gov/public/index.cfm?F...33-adffe3ccfa18

    Mr. Doke is clearly a respected member of the procurement and legal community. However, with all due respect to Mr. Doke, I offer the following commentary of his testimony:

    In his testimony, Mr. Doke placed significant emphasis on the ?minimum needs? doctrine. Mr. Doke?s testimony seemed to indicate that best-value source selections and trade-offs are completely inconsistent with the ?minimum needs? doctrine, and therefore such practices should be curtailed or abandoned entirely. His testimony included such remarks as:

    ?When a contract is awarded to a competitor whose price is higher than the price offered in an otherwise acceptable proposal, the difference between the lowest price and the contract award price is the price premium being paid for the other, non-price, evaluation factors. In other words, the price premium reflects how much more the Government is paying for evaluation factors such as additional years of experience, better reputation, more intrinsic value, etc. That price premium must be documented in the contract file, but there is no requirement, anywhere, that these price premiums be reported above the contracting officer level.?

    He then goes on to say:

    "Why should the Government pay a price premium for a contractor to perform more than satisfactorily? If the Government needs performance that is more than satisfactory, that must be because the Government has not properly defined what ?satisfactory? means in the specifications or statement of work."

    He then concludes with this recommendation:

    ?I respectfully submit to this Subcommittee that no more important service to government contracting could be provided, right now, than merely IMPOSING A STATUTORY REQUIREMENT THAT PRICE PREMIUMS PAID FOR EVERY CONTRACT BE REPORTED ?UP-THE-CHAIN? TO THE DEPARTMENT LEVEL and aggregated at each level.?

    Mr. Doke seems to be suggesting that ?Lowest Price Technically Acceptable? is the only type of procurement that we in the government ought to pursue (IAW the ?minimum needs? doctrine) unless we want to report our contract awards to our department heads so they can report to Congress.

    So, let?s walk through a very simple scenario. Let?s say we have a requirement for widgets, and we in the government want to make sure we get reasonably reliable widgets. So we decide the reliability requirement is a Mean Time Between Failure of One Year. That is, we need them to work, on average, a year (minimum) before they fail. Mr. Doke appears to be suggesting?in all cases, best I can tell?that, given that we have documented the need for an MTBF of one year, we should procure the least expensive widgets that have an MTBF of at least one year, even if we can get widgets with an MTBF of two years for an additional $1.79 (the ?price premium?). To be fair, really what he?s saying is we can pay the extra ?price premium? for the superior product, but then we are required to report this through the chain so our Department Head can report it to Congress. To which I say, what good could possibly come of this? My guess is we?d probably need several DVDs for this list of contracts, and that?s just for DoD. So we capture all of this info (using already scarce resources) to meet this reporting requirement and then?POOF?it becomes official that there are, in fact, ?a bunch? of such contracts. Then what? A ?Lowest Price Technically Acceptable? mandate? I seriously doubt it. So what, then, do we hope to accomplish?

    So, I?ve decided I?m filing the transcript of Mr. Doke?s testimony under ?Let?s make another rule to lessen the need for sound judgment, and see how that works.?

    Does anyone feel the same as I do? Does anyone disagree? I have to be honest, I?m a bit miffed that Mr. Doke was invited to testify on this topic. What kind of procurement professional would ask rhetorically: ?Why should the Government pay a price premium for a contractor to perform more than satisfactorily?? Furthermore, the fact that someone of significant standing in the community honestly believes that ?no more important service to government contracting could be provided, right now? is completely demoralizing to me.

    The good news is that there were three other panel members, and each of them offered cogent testimony. I personally found the testimony of Mr. Ralph C. Nash and Mr. Joshua I. Schwartz to be remarkably astute (and ?talk-about-it-over-beers? accurate), and I found the testimony of Mr. Steven L. Schooner to be a solid summary of some major issues (albeit slightly less hard-hitting than the testimony of Mr. Nash or Mr. Schwartz). So, if you only have time to read two of these transcripts, read Mr. Doke?s testimony, get angry, and then read Mr. Nash?s testimony.

    Then tell the rest of us what you think.

  2. G

    Guest Vern Edwards

    Feb 27, 2010 · 16y ago

    Mr. Doke wrote at greater length on the subject of his testimony in a July 17, 1995 special supplement to Federal Contracts Report. See Competition in Public Contracting: The Myth of Full and Open Competition . His article prompted much comment at that time. You can find it at:

    https://www.acquisition.gov/comp/aap/docume...Competition.pdf.

    When I read Mr. Doke?s longer article at the time of its publication, I pooh-poohed it. I no longer do. ?Best value? source selection -- the tradeoff process approach discussed at FAR 15.101-1 -- has become a major problem in government contracting and its use should be curtailed. It too often needlessly results in the payment of higher prices, costs, and fees and makes the contract formation process slower and more costly than it needs to be. I have practiced, studied, taught, and written about source selection for more than 30 years. I believe that most government acquisition personnel⎯COs and others⎯are not qualified by knowledge and skill to conduct ?best value? source selections effectively and efficiently in the taxpayer?s best interests.

    PM63A4 asks what good could come of the Mr. Doke?s recommendation that Congress require decisions to pay a price premium to higher levels of agency management. He asks what we could we hope to accomplish.

    Mr. Doke raises a serious issue: Why should the Government pay for more than satisfactory? Referring to PM63A4?s scenario, if we need a widget that will work for one year, why should a country that is deeply in debt and unable to maintain and repair its own infrastructure without borrowing money from China pay a premium in order to buy an additional year that it says it does not need? Think about it: In many if not most cases, in the most expensive service procurements, we do not get substantive and verifiable premium value when we decide to pay a higher price. No. What we get is crafty proposals -- essays and sales pitches -- and jabbering about risk by people who can't define it, explain how it's measured, or explain the difference between risk and uncertainty. Mr. Doke's "professional wrestling" analogy is apt. There is a place for "best value," but it is being used much too often and with too little to show for it.

    As for Professor Professor Nash?s testimony, I see nothing in it that contradicts Mr. Doke.

    As for Professor Josh Schwartz?s testimony, read it carefully. He said:

    [T]he deregulatory procurement reformers of the 1990s correctly emphasized that excessively tight regulation had hamstrung capable and devoted procurement and program managers in their efforts to secure good value for the government and federal taxpayers.

    And then he said:

    y the middle of the last decade, the single greatest problem facing the federal government acquisition system was the mismatch between the human resources needed to effectively use the acquisition tools that had been made available, and the actual size, experience level, and expertise of the existing acquisition workforce. This mismatch is an ironic fact, given that the deregulatory reformers of the 1990s had emphasized the need for empowerment of this very workforce.

    In short, we've handed .44 magnums to people who are not skilled in the use of a revolver and asked them to put six rounds in the bullseye at 25 yards. Most of them can't hit the target, much less the bullseye. We shouldn't be surprised that they cannot handle a big tool like "best value" effectively.

    Our country is broke and people are out of work, yet we give an overwhelmingly under-qualified group of people the discretion to pay premium prices for what is often intangible and unverifiable ?value.? At present, source selection decisions must meet only a legal standard of judgment, which is not as demanding as a business standard. I doubt if one-hundred out of one-thousand decisions to pay a price premium would meet the value standard of a prudent businessperson. I, too, think that there are too many reporting requirements, but I think that the one recommended by Mr. Doke would be a good one. It might force agency managers to think twice about their decisions.

    I would go Mr. Doke one better. Not only would I require reporting of decisions to pay a price premium, I would require that every decision memorandum describe what, exactly, the government will receive for the margin of price difference that it will pay, and explain why that premium is worth it. Any decision to pay a premium for something intangible, like ?lower risk,? or ?better experience? or ?better past performance? would have to be approved in writing by an official at a management level above the SSA and bear that official's signature. I would go even further. I would also require a D&F to support the use of anything other than LPTA (see FAR 15.101-2) in any acquisition valued in excess of the simplified acquisition threshold as defined in FAR 2.101. That D&F requirement would include procurements conducted under FAR Subpart 13.5. Finally, I would provide by statute that only specially-trained and specially-appointed acquisition personnel be permitted to conduct ?best value?-style procurements valued in excess of $5 million.

    I fully understand the reaction that this post will provoke among many if not most 1102s. I anticipate all of the objections based on workload and ?professional? standing. But I know the acquisition workforce well. It is a workforce that does not know its own rules, is incapable of conducting its operations efficiently, lacks essential skills, and is not effectively training its new hires. The time has come either to improve the quality of that workforce and its management or limit their discretion to obligate us financially and deepen our indebtedness. Read Mr. Doke?s testimony and his article. But don?t get angry. Think, instead.

    PM63A4: Mr. Doke is, indeed, a highly distinguished and respected member of the acquisition community. So it is ridiculous for you to be ?miffed? that he was invited to testify. Why should you be miffed? Because you disagree with him? Mr. Doke has forgotten more procurement than most of us will ever know. His remarks should prompt deep thinking about ideas taken all too much for granted.

  3. P

    PM63A4

    Mar 1, 2010 · 16y ago

    Mr. Doke wrote at greater length on the subject of his testimony in a July 17, 1995 special supplement to Federal Contracts Report. See Competition in Public Contracting: The Myth of Full and Open Competition . His article prompted much comment at that time. You can find it at:

    https://www.acquisition.gov/comp/aap/docume...Competition.pdf.

    When I read Mr. Doke?s longer article at the time of its publication, I pooh-poohed it. I no longer do. ?Best value? source selection -- the tradeoff process approach discussed at FAR 15.101-1 -- has become a major problem in government contracting and its use should be curtailed. It too often needlessly results in the payment of higher prices, costs, and fees and makes the contract formation process slower and more costly than it needs to be. I have practiced, studied, taught, and written about source selection for more than 30 years. I believe that most government acquisition personnel⎯COs and others⎯are not qualified by knowledge and skill to conduct ?best value? source selections effectively and efficiently in the taxpayer?s best interests.

    PM63A4 asks what good could come of the Mr. Doke?s recommendation that Congress require decisions to pay a price premium to higher levels of agency management. He asks what we could we hope to accomplish.

    Mr. Doke raises a serious issue: Why should the Government pay for more than satisfactory? Referring to PM63A4?s scenario, if we need a widget that will work for one year, why should a country that is deeply in debt and unable to maintain and repair its own infrastructure without borrowing money from China pay a premium in order to buy an additional year that it says it does not need? Think about it: In many if not most cases, in the most expensive service procurements, we do not get substantive and verifiable premium value when we decide to pay a higher price. No. What we get is crafty proposals -- essays and sales pitches -- and jabbering about risk by people who can't define it, explain how it's measured, or explain the difference between risk and uncertainty. Mr. Doke's "professional wrestling" analogy is apt. There is a place for "best value," but it is being used much too often and with too little to show for it.

    As for Professor Professor Nash?s testimony, I see nothing in it that contradicts Mr. Doke.

    As for Professor Josh Schwartz?s testimony, read it carefully. He said:

    And then he said:

    In short, we've handed .44 magnums to people who are not skilled in the use of a revolver and asked them to put six rounds in the bullseye at 25 yards. Most of them can't hit the target, much less the bullseye. We shouldn't be surprised that they cannot handle a big tool like "best value" effectively.

    Our country is broke and people are out of work, yet we give an overwhelmingly under-qualified group of people the discretion to pay premium prices for what is often intangible and unverifiable ?value.? At present, source selection decisions must meet only a legal standard of judgment, which is not as demanding as a business standard. I doubt if one-hundred out of one-thousand decisions to pay a price premium would meet the value standard of a prudent businessperson. I, too, think that there are too many reporting requirements, but I think that the one recommended by Mr. Doke would be a good one. It might force agency managers to think twice about their decisions.

    I would go Mr. Doke one better. Not only would I require reporting of decisions to pay a price premium, I would require that every decision memorandum describe what, exactly, the government will receive for the margin of price difference that it will pay, and explain why that premium is worth it. Any decision to pay a premium for something intangible, like ?lower risk,? or ?better experience? or ?better past performance? would have to be approved in writing by an official at a management level above the SSA and bear that official's signature. I would go even further. I would also require a D&F to support the use of anything other than LPTA (see FAR 15.101-2) in any acquisition valued in excess of the simplified acquisition threshold as defined in FAR 2.101. That D&F requirement would include procurements conducted under FAR Subpart 13.5. Finally, I would provide by statute that only specially-trained and specially-appointed acquisition personnel be permitted to conduct ?best value?-style procurements valued in excess of $5 million.

    I fully understand the reaction that this post will provoke among many if not most 1102s. I anticipate all of the objections based on workload and ?professional? standing. But I know the acquisition workforce well. It is a workforce that does not know its own rules, is incapable of conducting its operations efficiently, lacks essential skills, and is not effectively training its new hires. The time has come either to improve the quality of that workforce and its management or limit their discretion to obligate us financially and deepen our indebtedness. Read Mr. Doke?s testimony and his article. But don?t get angry. Think, instead.

    PM63A4: Mr. Doke is, indeed, a highly distinguished and respected member of the acquisition community. So it is ridiculous for you to be ?miffed? that he was invited to testify. Why should you be miffed? Because you disagree with him? Mr. Doke has forgotten more procurement than most of us will ever know. His remarks should prompt deep thinking about ideas taken all too much for granted.

  4. f

    formerfed

    Mar 1, 2010 · 16y ago

    I've got a couple reactions. First, I'm not so sure that establishing "satisfactory" or defining minimums will save the government money. Before "best value" was used only with major systems and R&D, the government defined requirements in terms of minimum needs. Often those minimum needs were "gold plated" to ensure not getting junk. Now programs not need to worry about that as much.

    The second reaction is I agree that "best value" is used way to much. I saw a solicitation recently for help desk services. The evaluation factors included such things as technical approach, corporate experience, qualifications of key presonnel, and management plan. I would say that all they need to pick a source is price and past performance. I wouldn't leave out past performance because I think it's important to consider how well a source has performed.

  5. P

    PM63A4

    Mar 1, 2010 · 16y ago

    Vern-

    I didn?t mean to offend anyone with my previous post. Perhaps I wrongly attacked the messenger (in lieu of attacking his message).

    One of my analysis teachers used to encouraging us by saying ?Think. Write it down. Repeat as necessary.? I?ve always thought you two were cut from the same bolt of cloth, and I want you to know that I did think before I wrote my initial post. And (I think) I get it, and what you?re suggesting may be right--I may be missing some (or all) of the subtleties of Mr. Doke?s argument.

    I won?t comment on your remark about our country?s unemployment problems and/or our ability to compete with emerging nations like China, but I feel like I owe you and other readers an explanation of what I was thinking when I made my initial post. My gut feel was that Mr. Doke?s ?Minimum Needs" testimony was an attempt to establish a legal foothold to legally mandate an end to (or at least a curtailing of) what I?ll call ?requirements creep.? Is that about right? If so, I would humbly submit that this isn?t the way to solve that problem (and again, that there are other problems that need to be solved first anyway).

    So, perhaps I?m stubborn, but I still disagree with the fundamental premise that ?no more important service to government contracting could be provided, right now? than to implement a change to stricter adherence to the Minimum Needs Doctrine.

    What?s more important, you ask? The establishment, administering, and use of contracts with overlapping (or perhaps even, for all intents and purposes, identical) scope, for one. This, as you know, was one of the main points Mr. Nash and Mr. Schwartz highlighted in their testimony. As I alluded to in my earlier post, I believe this spawns much larger problems within federal procurement circles. So right or wrong, I would have rather had this subcommittee hear about this problem three times (i.e., once from Mr. Nash, once from Mr. Schwartz, and once from Mr. Doke, instead of hearing about it only twice, along with a problem associated with Minimum Needs). Just my opinion. Fair enough?

    And yes, I'll read the article you included as a link in your post, probably later this week. I assume this is the work Mr. Doke mentioned in his testimony (or at least is representative of it), yes? And I?ll grant you that I should have at least scanned this article or one similar before posting. That being said, I don?t know that reading it will change my mind.

  6. G

    Guest Vern Edwards

    Mar 2, 2010 · 16y ago

    My gut feel was that Mr. Doke?s ?Minimum Needs" testimony was an attempt to establish a legal foothold to legally mandate an end to (or at least a curtailing of) what I?ll call ?requirements creep.? Is that about right?

    No. I don't think Marshall Doke was talking about requirements creep. I think he was talking about a system in which uinderqualified people are making decisions to pay more than necessary for the government to get its job done.

    I still disagree with the fundamental premise that ?no more important service to government contracting could be provided, right now? than to implement a change to stricter adherence to the Minimum Needs Doctrine.

    I don't agree with Marshall that a return to the minimum needs doctrine is the most important service to government contracting that could be provided right now.

    What?s more important, you ask? The establishment, administering, and use of contracts with overlapping (or perhaps even, for all intents and purposes, identical) scope, for one. This, as you know, was one of the main points Mr. Nash and Mr. Schwartz highlighted in their testimony. As I alluded to in my earlier post, I believe this spawns much larger problems within federal procurement circles.

    I don't agree with you, either. The proliferation and misuse of interagency contracts is a symptom of a larger problem--incompetence.

    The most important service to be provided to government contracting right now is the proper training and development of the new generation of contracting practitioners. We need first rate practitioners, who will know when to use LPTA and when and how to use "best value" effectively and efficiently. I don't believe that Congress can fix what is wrong with government contracting by enacting more procedural legislation. You can't make incompetent people competent by writing more rules. What we need more than anything else is strong, uncompromising leadership within the executive branch.

    Think about it this way: Last fiscal year contracting personnel obligated about $530 billion. If they could have reduced that amount by only 10 percent they would have saved us $53 billion. I wonder just what we got for the premium prices we paid through all that "best value."

  7. P

    PM63A4

    Mar 2, 2010 · 16y ago

    Thanks Vern. As always, I appreciate your thoughts.

    Max Planck (1858-1947) once said ?A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it. In a sense, you teach that new generation the truth from the beginning.?

    Unfortunately, I think what you say below about training our next generation of PCOs and buyers follows along the same train of thought. The problem with this, as I see it, is that this takes time and does not pay immediate dividends (i.e., workers must first be trained and get experience before they can become more efficient/productive). The training/expertise problem is compounded by the fact that a significant portion of government contracting expertise has disappeared in the last few years, largely due to retirements.

    So, at the risk of sounding myopic, what, if anything, do you think we can do in the near-term while we wait for training to pay dividends? Is it worth trying to address one or more symptoms while we wait for the cure to take hold?

  8. j

    joel hoffman

    Mar 2, 2010 · 16y ago

    I don't necessarily agree that the trade-off process doesn't provide a real benefit to the government that would justify the additional expense, at least in construction and design-build construction when higher quality systems, materials and finishes can be shown to have a lower life cycle cost and better contractors often will complete the project faster and with lower incidences of requests for equitable adjustments and less claims than during the IFB years. Those are real savings in collateral costs to the taxpayers.

    Stressing best quality within the budget over stressing price on the Army MILCON program last year produced a significant overall increase in award of full scope within the budget compared with Legacy methods. We had the best record in years for scope and price, which effectively reduced costs by almost 16% overall.

    However, I fully agree that many Contracting, Program and Technical personnel have little understanding of the complexities of the trade-off process. Since the leadership doesn't know much if any more than newbies, it will continue to present a great challenge to effectively "train the next generation" in the nuances of the trade-off process.

    I also agree with Vern that the country is broke and we can't afford to purchase goods and services at Cadillac prices.

  9. G

    Guest Vern Edwards

    Mar 3, 2010 · 16y ago

    Joel and PM63A4:

    I don't necessarily agree that the trade-off process doesn't provide a real benefit to the government that would justify the additional expense, at least in construction and design-build construction when higher quality systems, materials and finishes can be shown to have a lower life cycle cost and better contractors often will complete the project faster and with lower incidences of requests for equitable adjustments and less claims than during the IFB years. Those are real savings in collateral costs to the taxpayers.

    Let me address Joel's remarks first. I did not say that the tradeoff process cannot result in better value for the government. In the right hands, used for the right kinds of procurements, I believe that it can. Better construction materials and finishes are tangible things, which makes it relatively easy to determine if verifiably better product attributes are worth premium prices. I also agree that better construction contractors are worth more money, and the nature of the construction market and business makes it relatively easy to verify superior contractor capability.

    Unfortunately, construction is a very small part of annual contract obligations. Much bigger is the amount spent on various "support" services, for which there are few if any verifiable tangible benefits to be found in "technical" proposals. It is very hard at the time of source selection to verify that received value will be worth premium prices.

    Stressing best quality within the budget over stressing price on the Army MILCON program last year produced a significant overall increase in award of full scope within the budget compared with Legacy methods. We had the best record in years for scope and price, which effectively reduced costs by almost 16% overall.

    I'll take your word about the success that you claim. But how do you know that you could not have had the same success using lowest-price technically-acceptable? I presume that you believe that you could not have, but how do you know? LPTA is not sealed bidding.

    Now, PM63A4, your question:

    [W]hat, if anything, do you think we can do in the near-term while we wait for training to pay dividends? Is it worth trying to address one or more symptoms while we wait for the cure to take hold?

    All "we" can do is set the highest possible standards for ourselves and our colleagues and then strive to meet those standards and help our colleagues to meet them. Each and every one of you who works in a contracting office must do better and then keep raising the bar. "We" must be honest with ourselves and with each other about the level of our knowledge and skill and the state of our "profession", and then work to improve ourselves. "We" cannot expect much from trainees if we do not expect much from ourselves. "We" must make a commitment to ourselves and each other that if we ever become managers we will be better than the ones who now run the system. Some of us will do that. Most of us won't.

    As for the current leadership: I don't expect much if anything. I don't believe speeches and announcements. I believe action and results. We have a new OFPP administrator. We'll see.

  10. j

    joel hoffman

    Mar 3, 2010 · 16y ago

    I'll take your word about the success that you claim. But how do you know that you could not have had the same success using lowest-price technically-acceptable? I presume that you believe that you could not have, but how do you know? LPTA is not sealed bidding.

    Vern, we could probably have saved money using LPTA. However, I think we would have accomplished it at the expense of the aforementioned higher than "minimum acceptable" material and systems quality, faster completion times and quality of contractors. We didn't have the resources that would have been necessary to develop the designs for each project to the extent necessary to fully prescribe high quality within the budget and we would not have been able to.have the benefit of industry being able to provide appropriate design solutions to fit local market conditions within the budget.

    Programmatically, we stressed performance specifications, time and quality and allowed the proposers as much flexibility as we felt we could to meet or exceed the requirements within the budget. We would give the budget with price as the least important factor- as long as prices were within budget and competition tended to reign in prices.

    Our legacy processes typically resulted in less than 100% scope at full budget. Programmatically, we were awarding somewhere around 85% on average of scope at 100% budget, which correspnds to exceedimg the budgeted cost per square foot by about 16% while obtaining less than full scope.

    By awarding most projects for full scope within the budget, we saved close to 16% on on average per project on a program that was somewhere around 5-6 times larger than it was prior to the initiative

    I can't prove that the state of the construction economy didn't also play a major role in meeting our goals (standardized design criteria and facility operational and functional requirements, 30% shorter acquisition cycle to turnover, 15% cost reduction, acheive full scope within budget, maintain or improve "quality", increase sustainability and environmental protection, use industry standards and performance requirements wherever possible instead of prescribing one design solution, etc.). I think that both the economy and the programmatic acquisition approach with a lot of dedication from hard-working project delivery teams accomplished essentially all those goals.

    Could we have done the same thing in this economy with prescribed solutions, LPTA and other legacy processes? We had not been able to do it as well for many years before on a program about one sixth this size so I don't know.

    I agree with your argument concerning the probable dubious value achieved using the tradeoff method for many typical service contracts. The pumped up proposals don't appear to be contractually binding anyway.

  11. G

    Guest Vern Edwards

    Mar 3, 2010 · 16y ago

    Joel:

    Vern, we could probably have saved money using LPTA. However, I think we would have accomplished it at the expense of the aforementioned higher than "minimum acceptable" material and systems quality, faster completion times and quality of contractors.

    LPTA does not require that the Government accept what is "minimum acceptable." It requires that the Government accept what is specified acceptable and that it pay no more in order to buy more than that. The Government gets to specify the quality that it wants, whatever that is. Nothing in FAR says that the Government may specify only its minimum requirements. FAR 11.002, which states the policy for specifying requirements, says only that the Government must(1) specify its needs in a manner that will promote full and open competition and not include needless restrictions; (2) state its requirements in terms of functions, performance, and/or essential physical characteristics; and (3) specify requirements in a way that will promote the use of commercial items.

    The issue before us in not what the Government may specify. The issue is: Once having specified its requirements, why should the Government pay a premium in order to buy something that exceeds its requirements. That's a good question, and any CO who decides to pay a premium ought to be able to say why he or she did it and what the Government will get for the money.

    We didn't have the resources that would have been necessary to develop the designs for each project to the extent necessary to fully prescribe high quality within the budget and we would not have been able to.have the benefit of industry being able to provide appropriate design solutions to fit local market conditions within the budget.

    Were these design-build procurements? If so, the "best value" probably made sense.

    Programmatically, we stressed performance specifications, time and quality and allowed the proposers as much flexibility as we felt we could to meet or exceed the requirements within the budget. We would give the budget with price as the least important factor- as long as prices were within budget and competition tended to reign in prices.

    Here is where you get yourself in trouble. Pretend I'm a cost-conscious senator. Why did you want something that would "exceed"s your requirements? Do you think it's okay to buy more than you need just because you have enough money? You don't believe in saving money? Would you be willing to say that before a congressional panel? I'm happy to buy more than I need with other people's money. What did you mean by what you said?

    Our legacy processes typically resulted in less than 100% scope at full budget.

    "Legacy processes" is nice bureaucratic jargon. what the heck processes are you talking about?

    Programmatically, we were awarding somewhere around 85% on average of scope at 100% budget, which correspnds to exceedimg the budgeted cost per square foot by about 16% while obtaining less than full scope.

    Are you saying that when using sealed bidding or LPTA you were able to buy only 85 percent of what you wanted for the money you had? Are you asserting that best value enabled you to buy 100 percent of what you wanted and more (stuff that exceeded the requirement) for the money you had, even though price was the least important evaluation factor and you didn't always award to the lowest-priced offeror? If that is what you are saying, then you have a credibility problem. You're going to have to explain that.

    By awarding most projects for full scope within the budget, we saved close to 16% on on average per project on a program that was somewhere around 5-6 times larger than it was prior to the initiative.

    I don't understand what that means. Please explain. What do you mean by "saved" and "5-6 times larger"? Saved from what? Larger than what?

    I can't prove that the state of the construction economy didn't also play a major role in meeting our goals (standardized design criteria and facility operational and functional requirements, 30% shorter acquisition cycle to turnover, 15% cost reduction, acheive full scope within budget, maintain or improve "quality", increase sustainability and environmental protection, use industry standards and performance requirements wherever possible instead of prescribing one design solution, etc.). I think that both the economy and the programmatic acquisition approach with a lot of dedication from hard-working project delivery teams accomplished essentially all those goals. Could we have done the same thing in this economy with prescribed solutions, LPTA and other legacy processes? We had not been able to do it as well for many years before on a program about one sixth this size so I don't know.

    In other words, you can't prove that the "best value" approach to source selection was the cause of your success. Maybe you didn't do as well in the past because the construction industry was booming for about 20 years and your staff wasn't as good, not because you used LPTA.

    If COs are going to use best value, make price the least important factor, and pay higher prices than we could otherwise get, they should be required to explain their decision to use the process and their decision to choose other than the lowest-price technically-acceptable offeror. That's all I ask. I could do it if I made such decisions, and I'm no genius, so others ought to be able to do it. I don't think it's too much to ask.

    I'm not saying that "best value" was a bad choice in your case. I know you and know that you can do the job, and I know that you have sound judgment. Unfortunately, there are a lot of contracting officers who are not qualified to use the "best value" approach.

  12. j

    joel hoffman

    Mar 3, 2010 · 16y ago

    To fully explain the MILCON Transformation program to you would take hours and a major article length narrative. We have several courses to explain the MT program and the design-build process and a web-site that contains the outline, Army goals and objectives.guidance, sample tools, policies, etc. I've been part of the team that developed our Programatic procdures and processes

    Over the past 5 years to meet the Challenge.

    How do we know that it works. The GAO is reviewing the program and results now to see how well it works.

    The ARmy program last year was about $12 billion in comparison with traditional $2 billion with better results..Overall Corps programs were somewhere in the $22 billion range, not to quote - that is my recollection from the Chief's end of year report.

  13. P

    PM63A4

    Mar 4, 2010 · 16y ago

    In the 1995 article that Vern included in his previous post, Mr. Doke made the following recommendation:

    ?If Congress wants to reduce acquisition costs, attention should be directed toward improving competition.?

    And

    ? Training should be provided for?those who define Government's needs in specifications?and for government technical personnel who evaluate proposals.?

    Like you, Vern, I violently agree with this.

    Mr. Doke then writes (consistent with his recent testimony):

    ?Congress should require all agencies to report each year all ?competitive? awards that were not-made to the offeror in the competitive range with the lowest price, and the amount of the difference.?

    Mr. Doke doesn?t say what Congress should do with that information and/or what changes would ideally result from collecting this information, so I?ll conclude (after reading his article and his testimony and taking in Vern's hints) that he?s generally a proponent of 1) documenting exactly what we in the government need, and 2) using an LPTA approach to procure it. In essence, he?s trying to drive behavior away from ?best value? by adding reporting requirements for it, and anticipating that the average federal employee will respond by doing something other than "best value" (i.e., LPTA).

    Now, I agree that we do needlessly ?complexify? things at times, and that ?best value? awards are sometimes accomplished when LPTA would suffice (and therefore be preferable). I also acknowledge that Mr. Doke?s recommendation would likely drive acquisition decisionmakers to an LPTA approach in these ?borderline? cases. But some things are truly complex, and in these cases, I would submit that ?best value? is often the preferred approach. Like it nor not, we in the government can?t be omniscient about every aspect of such procurements, so ?best value? clearly has utility in these cases. Requiring additional reporting for using this particular approach (and then getting other than what I?ll call ?the LPTA result?) seems arbitrary and not sensible. Furthermore, the reporting requirements levied on generally more complex, more costly programs that (correctly) use ?best value? will outstrip any value realized by driving (generally smaller) programs from ?best value? to an LPTA approach.

    Bottom line: I still don?t see what major problem Mr. Doke?s recommendation would fix. The only benefit I see is it might drive the borderline ?Best-Value/LPTA? cases to be LPTA, which would save resources for these source selections and may result in a lower contract cost as well. If that?s what he is driving at, I would humbly submit that this is not a major problem in federal procurement (or at least it hasn?t been a major problem anywhere I?ve worked). Again, I acknowledge that it would pay dividends (if this is a major problem) by reducing the time/resources required for source selections and by guaranteeing that we in the government pay the lowest price for the goods we need. Unfortunately--and I probably shouldn?t say this--I wish this were a major problem. Quite frankly, I don?t know that this would make my ?Top 50.? There are much bigger problems and battles to fight.

  14. P

    PM63A4

    Mar 5, 2010 · 16y ago

    For what it?s worth, training personnel to do a better job documenting requirements might not fix any major problems either. Play along, and try this exercise:

    1. Do all the research you want on cell phones and then write down the minimum requirements for your next cell phone.

    2. Wait a couple of months.

    3. Go to the cell phone store and see if you would really buy the least expensive phone that meets those requirements. (You said you needed 8 hours of battery life, but bought a phone that just came out for an extra $10 because it has 20 hours of battery life, has a $50 rebate, and is waterproof, etc.).

    Now imagine trying to do the same thing for something as complex as a missile defense system, aircraft, tank, etc.

    My point is no matter how well we in the government do our research, we can, in some cases, be surprised by what we find available and at what prices. And all the training in the world won't change this.

    Going back to "best value" above, I acknowledge that such training has utility in that it would help us recognize when to do a "best value" award. However, it won't eliminate the need for "best value" (again, in those circumstances when LPTA isn't appropriate). And if we in the government conclude that we MAY be procuring something under these circumstances, I say we OUGHT TO use ?best value.? In fact, any mandate to use LPTA exclusively would strike me as similar to a mandate to use FFP vehicles for everything we procure. In a sense, it?s a declaration that everything we buy is simple and easy to define.

  15. G

    Guest Vern Edwards

    Mar 5, 2010 · 16y ago

    Play along? The thought exercise that you have laid out could be resolved by a smart 11th grader. You could write an LPTA spec that says that in order to be acceptable proposed cell phone battery life has to be equal to or greater than the longest available in the marketplace at the time of proposal submission.l Anybody so dumb as to not be able to solve that problem is too dumb to do best value.

    Nobody would advocate buying the development of a missile system, aircraft, or tank through LPTA. But keep in mind that in every major development that has gone haywire the contractor was chosen by the best value method. The Secretary of Defense is now withholding payment to Lockheed on the F-35 program due to unsatisfactory progress. The F-22 was cancelled due to poor program performance. So I dare mention the A-12?

    Nobody has said anything about eliminating best value. I would do no more than limit its use. As for training, it might teach people how to write smart specs for LPTA. I don't mind discussing this with you, but don't waste my time with arguments based on absurd high-school level scenarios. It's insulting.

  16. j

    joel hoffman

    Mar 5, 2010 · 16y ago

    I think that there are many situations where the trade-off approach with price as most important factor would drive lower prices than LPTA. In situations where there are significant differences between products, a slightly cheaper but significantly less capable product wins in LPTA, whereas in the trade-off, the proposer of the less capable product, assuming that it knows the competition, may be motivated to reduce its price significantly to ensure that the buyer doesn't select the more capable product. Example might be the B 767 tanker, which (according to Nothrup-Gruman/Eads: NGE) doesn't really offer much more refueling capability than the present B707 era (1950's) tankers vs. the larger Airbus KC-45, based on the A-330, which I think was more expensive. Both firms know their competition's capability. Boeing knows Northrup-Grumman/EADs' prices from the earlier Protest but the Air Force refused to provide Boeing's prices to NGE. I haven't read the new criteria, but NGE says they are going to pull out because the criteria is stacked toward Boeing. So I suspect that the criteria is heavily weighted toward price with both planes meeting the minimum technical criteria.

    Also at present, the Army requres high level approval to use LPTA per the AFARs/Army Source Selection Manual.

  17. j

    joel hoffman

    Mar 5, 2010 · 16y ago

    A big disadvantage of LPTA is that we normally can't pay $1 more for a better or more capable product or service, including those which offer a lower life cycle cost but cost more up front.

    The biggest advantage to me of LPTA is the relative ease of evaluation and selection. But the method doesn't necessarily guarantee or result in the lowest price that the buyer could otherwise get using trade-off process.

  18. G

    Guest Vern Edwards

    Mar 5, 2010 · 16y ago

    A big disadvantage of LPTA is that we normally can't pay $1 more for a better or more capable product or service, including those which offer a lower life cycle cost but cost more up front.

    The biggest advantage to me of LPTA is the relative ease of evaluation and selection. But the method doesn't necessarily guarantee or result in the lowest price that the buyer could otherwise get using trade-off process.

    Joel, what are you talking about? Under LPTA you can pay a higher purchase price in order to get a product that offers a lower life cycle cost. Try reading FAR 15.101-2(a):

    The lowest price technically acceptable source selection process is appropriate when best value is expected to result from selection of the technically acceptable proposal with the lowest evaluated price.

    Emphasis added.

    See too 15.101-2(B)(1):

    Solicitations shall specify that award will be made on the basis of the lowest evaluated price of proposals meeting or exceeding the acceptability standards for non-cost factors.

    Emphasis added.

    Lowest EVALUATED price. The lowest EVALUATED price can include life cycle cost. LPTA does not have to be based on the lowest proposed product price. LPTA is not sealed bidding. See FAR 14.101(e):

    Contract award. After bids are publicly opened, an award will be made with reasonable promptness to that responsible bidder whose bid, conforming to the invitation for bids, will be most advantageous to the Government, considering only price and the price-related factors included in the invitation.

    Emphasis added.

    In sealed bidding you consider "only price and price-related factors." In LPTA you consider technical acceptability and "evaluated price." See the discussion of LPTA in Competitive Negotiation: The Source Selection Process, 2d ed., by Cibinic, Nash, and O'Brien, page 231:

    Award may also be made to the technically acceptable proposal with the lowest discounted life-cycle cost. Hawaiian Tel. Co., Comp. Gen. Dec. B-187871, 77-1 CPD ? 298; University Sys., GSBCA 10600-P, 90-3 BCA ? 23,085.

    In other words, you can conduct LPTA as lowest life-cycle-cost technically-acceptable. All you gotta do is explain what you're doing in your RFP. Of course, people who don't know this probably don't know how to determine life-cycle cost.

    See A.B. Dick Co., Comp. Gen. Dec. B-211119, 83-2 CPD ? 360:

    The RFP was issued on May 24, 1982, for delivery of a maximum of 160 word processing units. The first 26 units were to be firm orders delivered the first year with an option of an additional 134 units over 4 years. The RFP advised that award would be made to the firm providing a technically acceptable product at the lowest overall cost to the Air Force, a determination which would include a lifecycle cost evaluation...

    The contracting officer performed an evaluation of price proposals and Compucorp was determined low offeror at a total evaluated price including life-cycle costs of $1,541,587... .

    Emphasis added. The protest was denied.

    Ignorance is the plague of our "profession." God save us from the doctor who cannot cure us because he was taught differently, because because he never did it that way, because he didn't know he could do it that way, etc., etc., etc. Ignorance is the disease of the 1102, and almost everyone is dying of it.

  19. G

    Guest Vern Edwards

    Mar 5, 2010 · 16y ago

    Here's an LPTA. Consider:

    THE RFP WAS ISSUED ON JULY 19, 1979 AND PROVIDED FOR AWARD OF AN INDEFINITE QUANTITY, INDEFINITE DELIVERY TYPE CONTRACT ON A FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT BASIS. AWARD WAS TO BE MADE TO THE RESPONSIVE, RESPONSIBLE OFFEROR WITH THE LOWEST PRESENT VALUE COST TO THE GOVERNMENT OVER THE 108-MONTH EVALUATED SYSTEMS LIFE. CONTRACT AWARD WAS MADE TO CENTEL ON DECEMBER 3, 1980.

    IN GENERAL TERMS, GSA SOUGHT THROUGH THIS PROCUREMENT TO OBTAIN AN AUTOMATIC, COMPUTER CONTROLLED TELEPHONE SYSTEM. SUCH A SYSTEM CONSISTS OF INDIVIDUAL TELEPHONES OR ?STATIONS? CONNECTED BY WIRES (LINES) TO CIRCUIT BOARDS WHICH ARE IN TURN CONTROLLED BY ONE OR MORE COMPUTERS AND THEIR ASSOCIATED SOFTWARE. THE COMPUTER, SOFTWARE AND CIRCUIT BOARDS ARE CALLED A CBX (COMPUTER BRANCH EXCHANGE) OR SOMETIMES A PABX (PRIVATE AUTOMATIC BRANCH EXCHANGE). CBXS ARE IN EFFECT SOPHISTICATED ?SWITCHES? WHICH COMBINE THE CAPABILITIES OF A COMPUTER TO PROCESS INSTRUCTIONS WITH THE CAPABILITY OF RAPIDLY PERFORMING A LARGE NUMBER OF SWITCHING FUNCTIONS.

    Capitalization in original. Emphasis added.

    See Southwestern Bell Telephone Co.; Northern Telecomp, Inc., Comp. Gen. Dec. B-200523, March 5, 1982. They were buying more than just ordinary things. The protest was denied.

  20. j

    joel hoffman

    Mar 5, 2010 · 16y ago

    Joel, what are you talking about? Under LPTA you can pay a higher purchase price in order to get a product that offers a lower life cycle cost. Try reading FAR 15.101-2(a):

    Emphasis added.

    See too 15.101-2(B)(1):

    Emphasis added.

    Lowest EVALUATED price. The lowest EVALUATED price can include life cycle cost. LPTA does not have to be based on the lowest proposed product price. LPTA is not sealed bidding. See FAR 14.101(e):

    Emphasis added.

    In sealed bidding you consider "only price and price-related factors." In LPTA you consider technical acceptability and "evaluated price." See the discussion of LPTA in Competitive Negotiation: The Source Selection Process, 2d ed., by Cibinic, Nash, and O'Brien, page 231:

    In other words, you can conduct LPTA as lowest life-cycle-cost technically-acceptable. All you gotta do is explain what you're doing in your RFP. Of course, people who don't know this probably don't know how to determine life-cycle cost.

    See A.B. Dick Co., Comp. Gen. Dec. B-211119, 83-2 CPD ? 360:

    Emphasis added. The protest was denied.

    Ignorance is the plague of our "profession." God save us from the doctor who cannot cure us because he was taught differently, because because he never did it that way, because he didn't know he could do it that way, etc., etc., etc. Ignorance is the disease of the 1102, and almost everyone is dying of bit.

    Vern, I prepared a response, but my personal laptop isn't recognizing the wirelss card, the desktop bit the dust this morning and I can't transfer the data to my government laptop due to Army security restrictions. And I'm not going to retype it all on this BB, which also has to be replaced, because it decides itself when to lock up in the middle of typing. I'll post it when I get things going here.

    Of course you are right that the government COULD include a life cycle analysis in the price evaluation. I actually knew that but it has been so long since I have personally worked with LPTA (Army hasn't wanted us to use it for many years and officially discouraged it in 2004) that I forgot it.

    I should have indicated that wekd have to incoporate some type of Life cycle cost analysis or other price or cost evaluation in order to be able to pay $1 more...

    My post will discuss some impracticalities of doing this in all situations where we'd want to be able to select better products or systems.

  21. G

    Guest Vern Edwards

    Mar 5, 2010 · 16y ago

    You don't need to point out any impracticalities to me. Save your breath, unless you want to educate others.

    I don't say that "best value" is never a good idea. Nor do I say that LPTA is always a better way to go. I say only that "best value" is used excessively and needlessly by people who don't know how to use it, which results in longer procurement administrative lead times and higher prices without real value. I therefore conclude that its use should be curtailed in order to bring more procedural balance to acquisition that would reduce lead times and costs to the taxpayers. All I pointed out in my last post is that you were wrong to say you that under LPTA you cannot pay a higher purchase price to get lower life cycle cost. People who are not qualified to do best value are not going to be qualified to do lowest-life-cylcle-cost technically acceptable either.

    I don't think that you and I disagree, except to the extent that you believe that LPTA is an inherently inferior procedure.

  22. j

    joel hoffman

    Mar 5, 2010 · 16y ago

    Vern, it is also possible in an IFB to manipulate various criteria as price related factors and use a "total evaluated cost method" to determine the lowest bidder.USACE did this about 16 years ago but it was controversial, unpopular with industry and a bit cumbersome. It survided the Protest process but went by the wayside. I recall that we used factors such as average time growth with a bid daily compensable time extension rate, average cost growth with a bid overhead and bond rates, etc., then added these factors to the construction bid price to determine the lowest "total evaluated cost" to determine the winner.

  23. G

    Guest Vern Edwards

    Mar 5, 2010 · 16y ago

    Vern, it is also possible in an IFB to manipulate various criteria as price related factors and use a "total evaluated cost method" to determine the lowest bidder.USACE did this about 16 years ago but it was controversial, unpopular with industry and a bit cumbersome. It survided the Protest process but went by the wayside. I recall that we used factors such as average time growth with a bid daily compensable time extension rate, average cost growth with a bid overhead and bond rates, etc., then added these factors to the construction bid price to determine the lowest "total evaluated cost" to determine the winner.

    That's interesting and true, I'm sure, but it has no bearing on LPTA.

  24. j

    joel hoffman

    Mar 5, 2010 · 16y ago

    That's interesting and true, I'm sure, but it has no bearing on LPTA.

    Vern, I was responding to your statement "In sealed bidding you consider "only price and price-related factors." In LPTA you consider technical acceptability and 'evaluated price.' " It appeared that you were trying to make a distinction between "price and price-related factors" and "evaluated price". I wanted to mention that price and price-related factors in an IFB can be considered in the "evaluated price".

    I don't think that we necessarily disagree about LPTA. I used to use LPTA and liked it. In fact, our situation with the trade-off process on our projects for a favorite DoD Service back in the 1990's was very frustrating. At one point I convinced our KO to use LPTA until they would quit demanding a "Cadillac desire" on a "Yugo Budget" for every project. Turns out that the client installation would have our A/E or in-house designers stack the scope of work and include a bunch of options and/or betterment options. Then they insisted that we stress a desire to obtain the best contractor team on construction and design-build projects. We actually ran off some of the best national contractors for several years because we discovered that the budget was so slim that all we could afford were the lowest-priced, minimally acceptable contractor teams, construction products and/or design solutions. With LPTA, we often ended up with the best technical qualifications as well as the lowest price. And the typical dirt-bags didn't bother to propose!

    At least we were being honest with industry and they appreciated the candor.

    I am just trying to point out that LPTA doesn't necessarily guarantee a lower price than the trade-off process when it is clear that price is the most important factor. And it often isn't easy to perform life cycle cost analysis. I won't bother with the details that I wrote about but didn't post.

  25. G

    Guest Vern Edwards

    Mar 5, 2010 · 16y ago

    Joel:

    In sealed bidding "price" is bid price. But I agree that "price related" factors can include some life cycle costs as determined by the government.

    Vern

  26. P

    PM63A4

    Mar 5, 2010 · 16y ago

    Vern-

    I'll drop the cell phone example I brought up because it's really not part of my argument. For what it's worth, I don't disagree with anything substantive that you said in your response to that. In all honesty, you didn't work with me as much as I had hoped a reader would with such a simplified "11th grade" example. My point was more about the subtleties of requirements training, not about which type of acquisition strategy to use. So we can drop that, unless you want to keep going and/or get the last word. But again, I don?t disagree with anything substantive that you said on this point. And I certainly didn?t mean to waste your time.

    But I wanted to go back to my original points, which was in regard to Mr. Doke?s testimony and its applicability to the use of best value vs. LPTA. I honestly think that Mr. Doke *is* advocating the use of LPTA/sealed bidding and *is* suggesting that best value is to be avoided at all costs. And I think you disagree with that, but I'm not sure.

    Again, Mr. Doke says the most important thing we can right now to fix government procurement is to have the government report to Congress any and all cases in which the government pays a "premium" for a contractor to exceed a stated requirement. So, for the purposes of this discussion, he wants any best value awards in which the award isn't given to the lowest bidder (within the competitive range) to be reported to Congress.

    Now, since Mr. Doke never says what Congress should do with the information, I think we are required to read between the lines. And when I do that in this case, I make assumptions and conclude that he is thinking that his recommendation will drive the behavior of government SSAs and decisionmakers away from best value and towards LPTA. Again, I'm reading between the lines, and I acknowledge that I can't authoritatively say what he's thinking. But my gut feel is he doesn't want the numbers reported to Congress as much as he wants us to make LPTA awards (which we wouldn't have to report).

    Do you agree or disagree with that? RSVP.

    I say this because someone as thorough and logical as he is should/would have stated what he would do with the information reported to Congress, but he didn't do that in his testimony, and he didn't do that in his 1995 article. This was the reason for the half-serious "What Next?" question in my original post. I still honestly don't know what his next step would be (if the information were actually reported to Congress), but I?m not sure it?s a relevant question (and I wasn?t sure when I asked the first time either). I?m not being facetious, I?m honestly trying to figure out what he?s thinking.

    At any rate, *if* you hop aboard this logic train, then I think you have to conclude that he is an advocate for a move to LPTA (and other cost-centric strategies), and away from best value. That is, I think he is hoping--first and foremost--to have this effect with his recommendation. And if I?m wrong and he truly is after the numbers, I go back to asking what good could come of knowing that it?s a really big number. Pragmatically speaking, you and I both know the number is not going to be exactly right, so he may as well just approximate the number (say, based on a sample of all contracts awarded), state for the record that it?s a really big number, and then continue with his argument (whatever that may be). But is this really his point? Deep down, I doubt it, but I really and honestly don?t know.

    Anyway, here?s where I was going with my original post: If I?m right and he is an advocate of a move from best value to LPTA at all costs, then (to me) he?s generally opposed to the vast majority of R&D efforts and complex weapon system programs (which, earlier, you agreed do not lend themselves well to LPTA). I?m generalizing, but I think you get my point. And being in the military, that bothers me a bit, so that?s why I was miffed. We in the government don?t know everything about what?s going on at Boeing and Lockheed Martin, any more than the folks at Lockheed know everything that?s going on at Boeing (or vice-versa). Ergo, best value has a role (and an important one in my opinion).

    Lastly, I understand your point about people being out of work and the government paying too much for goods and services , but as long as we?re investing defense funds in our own Congressional districts and not overseas, and we aren?t using too large a percentage of these funds to run the machine that is government procurement, then we are pouring that money into our economy and that?s not a bad thing. I?ve heard macro-economists summarize defense spending as the best jobs program imaginable because it has the residual effect of ?buying time? by producing weapons that provide for defense of that republic when times get tough and ?other countries have all the money.? Some would say this is where we are now, I don't know. At any rate, I think we both agree that when the costs associated with awarding federal contracts gets too high (because of things like contracting inefficiencies), then we?ve got a problem. And I think we both agree that we have that problem now (to one extent or another). And that?s why I said getting rid of duplicative vehicles is a problem that needs to be fixed. If we were to fix that problem, I think it would provide a huge ROI (in part by freeing up PCOs and buyers to be trained and/or to work on other efforts), which in turn would reduce the costs associated with awarding government contracts. By comparison, a switch from best value to LPTA (in all cases where LPTA arguably makes sense) would have a much smaller impact/ROI, in my opinion.

    Okay, I?m done, Vern. You get the last word unless you need me to clarify or give a response on something pertaining to my post. As always, if you think replying to this post is worth the effort, please do so. For whatever it?s worth to you, I do value your opinion, so I hope to see a response.

  27. f

    federalcontracts

    Mar 6, 2010 · 16y ago

    1. When was the last time you saw a Contracting Officer who, after evaluating the four factors at FAR 6.401(a), solicited sealed bids?

    2. The Government requirements development process is totally broken and devoid of guidance, intellect, effort and consequences.

    3. The subjectivity of these non-price related factors begs for cronyism and, just as Doke said, fraud. Past performance as an evaluation factor has turned into a travashamockery.

    4. The complexity of the processes currently used to conduct acquisitions within the United States Government is not a good match for the cognitive abilities of the civilian and military personnel currently conducting the acquisitions. The answer must be better personnel, a simpler set of processes, or continued failure. The smart money is being placed on continued failure.

    5. "Why should the Government pay a price premium for a contractor to perform more than satisfactorily? If the Government needs performance that is more than satisfactory, that must be because the Government has not properly defined what ?satisfactory? means in the specifications or statement of work." That is not a silly comment. That is an alert comment.

    6. Cost Plus Award Fee contracts generally, and Cost Plus Award Fees with zero base fee in particular, though not discussed, are emblematic of this 'paying extra' problem. Before you know it the Government is paying extra in Award Fee because the contractor exceeded requirements by washing the FDO's car.

    7. The notion that price could be permitted to play as low a weight as 10% in a Federal Procurement should trouble us more than it does.

    8. The gentleman's discussion of the fraud afoot in the current system is exactly on point. "I personally believe we have had more reported fraud in government contracting in the last 10 years (including fraud by high level government officials) than the combined amount in the previous 40 years. I believe the deficiencies in our competition process have given such enormous discretion to contracting officials that, together with a lack of transparency, they have created an environment and circumstances that have contributed significantly to this increase in fraud." I believe him.

    9. Part 11 needs a fresh look.

  28. G

    Guest Vern Edwards

    Mar 6, 2010 · 16y ago

    PM63A4:

    You wrote:

    Vern-

    I honestly think that Mr. Doke *is* advocating the use of LPTA/sealed bidding and *is* suggesting that best value is to be avoided at all costs. And I think you disagree with that, but I'm not sure.

    Again, Mr. Doke says the most important thing we can right now to fix government procurement is to have the government report to Congress any and all cases in which the government pays a "premium" for a contractor to exceed a stated requirement. So, for the purposes of this discussion, he wants any best value awards in which the award isn't given to the lowest bidder (within the competitive range) to be reported to Congress.

    Now, since Mr. Doke never says what Congress should do with the information, I think we are required to read between the lines. And when I do that in this case, I make assumptions and conclude that he is thinking that his recommendation will drive the behavior of government SSAs and decisionmakers away from best value and towards LPTA. Again, I'm reading between the lines, and I acknowledge that I can't authoritatively say what he's thinking. But my gut feel is he doesn't want the numbers reported to Congress as much as he wants us to make LPTA awards (which we wouldn't have to report).

    Do you agree or disagree with that? RSVP.

    I think that the best way to figure out what Mr. Doke wants is to quote Mr. Doke:

    When a contract is awarded to a competitor whose price is higher than the price offered in an otherwise acceptable proposal, the difference between the lowest price and the contract award price is the price premium being paid for the other, non-price, evaluation factors. In other words, the price premium reflects how much more the Government is paying for evaluation factors such as additional years of experience, better reputation, more intrinsic value, etc. That price premium must be documented in the contract file, but there is no requirement, anywhere, that these price premiums be reported above the contracting officer level.

    I respectfully submit to this Subcommittee that no more important service to government contracting could be provided, right now, than merely imposing a statutory requirement that price premiums paid for every contract be reported ?up-the-chain? to the Department level and aggregated at each level.

    The President stated in a Memorandum of March 4, 2009, 74 Fed. Reg. 9755, that spending on government contracts has more than doubled since 2001, reaching over $500 billion in 2008. Merely adding ?sunlight? and transparency to the price premiums being paid would, I believe, have a significant impact in slowing additional growth.

    He wants payments of price premiums to "be reported 'up-the-chain' to the Department level and aggregated at each level." He did not say that he wanted it reported to Congress. You infer that what he "really" wants is to have the information reported to Congress, and that might be a valid inference, but that's not what he said he wants. If he wanted what you think he wants, why wouldn't he have said it? He does not strike me as an allusive person.

    Nor does he urge the use of LPTA or sealed bidding to the exclusion of "best value." In fact, he used the work "lowest" only once, in the quotation I supplied above. He did not use the word "low" or the term "lowest-price technically-acceptable" at all.

    I think we have to take Mr. Doke's testimony at face value. He clearly distrusts Government personnel to make wise use of the discretion they have in a "best value" source selection. He wants disclosure to higher management within the Executive Branch whenever a decision is made to pay a price premium, as he defined it in the quote above. He clearly believes that this would make SSA's and other agency officials think twice about a decision to pay a premium. I find that recommendation to be sound and not especially burdensome. As I said in an earlier post, Mr. Doke does not go as far as I would, but I know the workforce better than he does.

    You asked me if I agree with the following: "[M]y gut feel is he doesn't want the numbers reported to Congress as much as he wants us to make LPTA awards (which we wouldn't have to report). Do you agree or disagree with that?" I don't agree because I simply don't know if that's true. Given the general thrust of his remarks I believe that he would be happy to see more sealed bidding and LPTA and less "best value" -- so would I -- but I don't believe that he wants agencies to use sealed bidding and LPTA to the total exclusion of "best value" -- nor do I. The "best value" approach is permitted by law, and he does not call for a change in the law.

    In your long conclusion you said:

    If I?m right and he is an advocate of a move from best value to LPTA at all costs, then (to me) he?s generally opposed to the vast majority of R&D efforts and complex weapon system programs (which, earlier, you agreed do not lend themselves well to LPTA). I?m generalizing, but I think you get my point. And being in the military, that bothers me a bit, so that?s why I was miffed. We in the government don?t know everything about what?s going on at Boeing and Lockheed Martin, any more than the folks at Lockheed know everything that?s going on at Boeing (or vice-versa). Ergo, best value has a role (and an important one in my opinion).

    Emphasis added.

    I think that if you take a second look at that statement you will agree with me that you went much too far. If I thought that Mr. Doke opposed the "the vast majority of R&D efforts and complex weapon system programs" I would not take him seriously, but I know him to be a serious man, and I take him very seriously and agree with much (but not all) of what he said. In any case, given that I would go much farther than Mr. Doke in curbing the use of "best value," then you must think that I am opposed to "the vast majority of R&D and complex weapon system programs." Do you think that?

    There are clearly valid uses of the tradeoff approach to source selection ("best value"). I don't think they include buying janitorial services and such-like. But having said that, one might ponder whether "best value" has worked all that well for for weapon system buys, given the problems we've had with those. (The literature on weapons acquisition is replete with embarrassing examples.) Maybe the problem is not the method, but the people using it, like the people who conducted the tanker source selection.

  29. P

    PM63A4

    Mar 9, 2010 · 16y ago

    Vern-

    Thanks again for the reply.

    I'll admit there was a bit of "conspiracy theory" embedded in my posts and that I may have gone too far. Let me try to put my posts into context. Shortly after President Obama entered office, he himself mentioned curtailing the use of cost-plus and T&M contracts, and to me, Mr. Doke?s testimony was a variation on this theme. So you?re right, I inferred a lot from what he wrote/said.

    I think we can all agree that best value approaches (and C-P and T&M type contracts) are overused--your "janitorial services" remark is, sadly, spot-on in some cases. And you know Mr. Doke and I don?t, so I hope you're right, and Mr. Doke is not indirectly suggesting that R&D and large weapons systems efforts need more oversight/reporting requirements and/or?more importantly?that these types of programs should be more susceptible to cuts simply because of their nature (i.e., the solicitation approach or, for the President, the contract type chosen/required).

    I guess my fear is that, collectively, this mindset this could evolve into ?open season? on any efforts in which the government pays a premium or has any cost risk whatsoever. I honestly don?t know that you have such a fear and/or agree with such a mindset, but I do think trying to curtail best value and T&M and C-P vehicles by requiring reporting on these would not have any positive effect (especially on R&D efforts and other complex efforts/programs that, at least in my experience, exhibit the tendency to ?pay premiums? to get certain very difficult/specialized work accomplished by a company that is more costly but also assessed to be much more qualified). I would submit that most of these efforts are important and are worth the cost, that they don?t need additional oversight/reporting, and that such reporting could very well cause more harm than good to our country and our economy. Cutting programs generally means cutting jobs, and I think there's a connection here. (On a side note, your point that the assessment I mention above is too often being done by people not qualified to do it is fair, but this is not the primary focus of my comments.)

    At any rate, while I?m still not *certain* what Mr. Doke was suggesting in his testimony, I?m assuming (rightly or wrongly) that he would not disagree that he is suggesting 1) that more reporting is a good thing, and (here?s where I?m putting words into his mouth?) 2) if programs get cut because of such reporting (whether arguably justified or not), so be it. I?m convinced you think that 2) above is not a fair conclusion based strictly on what he said, and you?re right. But if you consider what he said, and then make some (what I think are) reasonable assumptions about how this might play out (which Mr. Doke obviously knows), I think you can see how certain programs/efforts would certainly not be helped by such a law (and could very well be harmed). So I think there is a risk of ?collateral damage? when you lump all ?pay a premium? solicitations together and require additional reporting for these. By comparison, I think doing away with duplicative contracts will save more resources, solve more problems, and would have no (or very little) ?collateral damage.?

    And again, as long as these funds are stimulating the economy here at home and aren?t being eaten to any great extent by the overhead associated with awarding federal contracts, I say it?s not a bad thing economically. I think our near-term focus should be on making sure the overhead associated with awarding federal contracts isn?t too high, so I think the focus should, first and foremost, be on eliminating duplication of effort. I think this is a workable problem right now and that it would have a significant ROI. On the other hand, I think Mr. Doke?s approach is more along the lines of saving resources by not paying a premium (which is fine in some but not all cases, ?Minimum Needs Doctrine? be damned?) AND by perhaps cutting programs/efforts (which he doesn?t say but I infer, and with which I respectfully disagree). Perhaps my second concern is imagined, but I have absolutely no concerns about cutting the number of duplicative contracts, and again, I?m confident that reducing the number of such contracts would have a positive effect on federal procurement.

    Okay, I'm really finished this time. Thanks again for your views. BTW, were you goofing off on your ranch when they called these folks to testify? Sorry, couldn?t resist?.

  30. G

    Guest Vern Edwards

    Mar 10, 2010 · 16y ago

    PM63A4:

    The objection to paying premium prices is not about eliminating programs. That's way over the top.

    In any case, I just read the Air Force's now notorious tanker RFP and guess what? The source selection is lowest-price technically acceptable! "Best value" considerations would come into play only in the event that prices are within one percent of each other. The following is from Section M, page 1 of 17:

    In accordance with FAR 15.304(e), all evaluation factors other than cost or price, when combined, are approximately equal to cost or price.

    * * *

    1.1.1 The Government will evaluate the Mission Capabilities Factor (Factor 1) to determine technical acceptability. The Mission Capability subfactors (Key Systems Requirements, Systems Engineering, Product Support, Program Management, Technology Maturity, and Past Performance) will not be weighted and each subfactor will be evaluated as acceptable or unacceptable. Any subfactor that is evaluated as unacceptable will render the entire proposal unacceptable and ineligible for award.

    1.1.2 The Government will evaluate the 93 non-mandatory technical requirements (Factor 3). Each of these requirements will be evaluated as having been met or not met. For those non-mandatory requirements proposed by the offeror which are deemed to have been met, a point value for that requirement will be awarded as described in paragraph 2.4.2 below. The Government will calculate a total point score for Factor 2 by adding together all points awarded for each non-mandatory requirement that the offeror fully meets, except as otherwise indicated.

    1.1.3 The Government will evaluate each offeror's Total Proposed Price (TPP) in accordance with Section M, paragraphs 2.3.1, 2.3.1.1, 2.3.2.2, and 2.3.2.3. The Government will evaluate Total Proposed Price in discounted present value dollars, defined as TPP (PV), Integrated Fleet Aerial Refueling Assessment (IFARA), Fuel Usage Rate Assessment (FURA), and Military Construction (MILCON) in accordance with Section M, paragraphs 2.3.2, 2.3.2.1, 2.3.2.2, and 2.3.2.3. The Government will calculate a present value total evaluated price (TEP) [Factor 3] for each acceptable offeror by applying their IFARA, FURA, and MILCON adjustments to their respective TPP (PV).

    1.1.4 The Government will then compare the resulting TEPs for all acceptable proposals to determine the lowest TEP. If there are no acceptable proposals with a TEP [total evaluated price] that is less than or equal to 101% of the lowest acceptable proposal TEP, the Government will award a contract to that acceptable offeror with the lowest TEP without consideration of the Factor 3 score.

    1.1.5 If one or more acceptable proposals have a TEP that is less than or equal to 101% of the lowest acceptable proposal TEP, the Government will then compare the scores obtained in the Factor 3 evaluation for only these proposals, according to the criteria in paragraph 2.4.4.

    Emphasis added. So Factor 3 is a price tie-breaker. The Air Force calls this approach "best value," but they clearly mean best value as defined in FAR 2.101, and not as synonymous with the tradeoff approach described in FAR 15.101-1. So, it looks like the Air Force doesn't share your fears about LPTA, and they've done a few major system acquisitions. The RFP was reviewed and approved by DOD.

    One other thing: I don't agree with Mr. Doke's assertion of a minimum needs rule. He's wrong about that. There is no rule that the Government can buy only its minimum needs. However, I do share his concerns about the tradeoff process and price premiums.

  31. d

    dwgerard

    Mar 10, 2010 · 16y ago

    This have been one of the better threads to read for somone who considers himself to still be learning this profession well after earning the Level III certification and a graduate degree.

    One thing that stood out in this discussion over the last several weeks on the knowledge and abilities of contracting and other acquisition personnel is that the target is moving. I have been at my current command for less than a year, but in that time the contracting process has changed several times and the Policy Division has issued new directives every week since the first of February. Legal and senior managers have instituted a rigid peer review process, and Agency level requirements change with every package sent to them from single documents to complete solicitation and contract award packages.

    How can we become proficient, knowledgable and competent when the definition of that quality changes so rapidly? Even when we are up to date on the FAR, DFARS and AFARS, the guidance we are getting is often based on political decisions, old information, or in some cases policy, legal and senior executives who are more ignorant regarding the acquisition process than those producing the work.

    Personally, I have seen the Best Value process abused. I believe that unless someone has a definitive way of determining what constitutes BV, they should use LPTA methods to award contracts. But, as Joel said, there is resistance to that in the Army, and it is easier to get approvals for BV than LPTA as of right now. Which to me reflects the standard "But that is how we have always done it" disease.

    My biggest fear about this problem is that it will not get any better before I retire, which would be a sad thing to see.

  32. j

    joel hoffman

    Mar 10, 2010 · 16y ago

    This have been one of the better threads to read for somone who considers himself to still be learning this profession well after earning the Level III certification and a graduate degree.

    One thing that stood out in this discussion over the last several weeks on the knowledge and abilities of contracting and other acquisition personnel is that the target is moving. I have been at my current command for less than a year, but in that time the contracting process has changed several times and the Policy Division has issued new directives every week since the first of February. Legal and senior managers have instituted a rigid peer review process, and Agency level requirements change with every package sent to them from single documents to complete solicitation and contract award packages.

    How can we become proficient, knowledgable and competent when the definition of that quality changes so rapidly? Even when we are up to date on the FAR, DFARS and AFARS, the guidance we are getting is often based on political decisions, old information, or in some cases policy, legal and senior executives who are more ignorant regarding the acquisition process than those producing the work.

    Personally, I have seen the Best Value process abused. I believe that unless someone has a definitive way of determining what constitutes BV, they should use LPTA methods to award contracts. But, as Joel said, there is resistance to that in the Army, and it is easier to get approvals for BV than LPTA as of right now. Which to me reflects the standard "But that is how we have always done it" disease.

    My biggest fear about this problem is that it will not get any better before I retire, which would be a sad thing to see.

    Technically, both the "trade-off process" (FAR 15.101-1) and the "lowest price technically acceptable" process (15.101-2) are considered to be "Best Value" under the "Best Value Continuum" in FAR 15.101. They include both technical quality and price as selection criteria, as opposed to price only or to technical quality only. I remember that they were combined under "Best Value" processes in the "FAR 15 Rewrite" back in 1996. Prior to that, only the trade-off process was covered in the Part 15 "best value" paragraphs. LPTA was discussed separately.

    The design-build industry broadly defines acquisition processes (involving proposals vs. bids) that include both quality and price selection criteria as "best value" and processes that only consider qualifications as "Qualifications Based Selection".

  33. T

    TAP

    Mar 10, 2010 · 16y ago

    Vern,

    I'm a bit confused about your comment "There is no rule that the Government can buy only its minimum needs."

    The excerpt below is from the Guide to Specification Writing For U.S. Government Engineers by John Oriel, NAVAIR TSD:

    The specifier's authority

    "Here we have a civics lesson that deals with a topic fundamental to all modern forms of government: limitations on the authority of officials. It summarizes the essential difference between writing specifications for public contracts and writing them for private-sector work. Public policies imposing limitations on the authority of officials were developed in order to prevent the kinds of corruption that prevailed under the feudal system. Abiding by those policies is among the most fundamental of our responsibilities as government workers.

    As you probably know, the actual authority to obligate the Government contractually is held only by contracting officers, and the actions of those officers are very tightly constrained by extensive regulations. The work we do as acquisition engineers is actually in support of those contracting officers. We attend to the complex technical details while they take care of the complex legal and administrative details. By being delegated such responsibility, we also make a lot of decisions that affect the scope of the work to be done by contractors and the duties that must be performed by the Government.

    Along with this bit of delegated authority come the necessary limitations. For example, government engineers have authority to specify only minimum, essential, validated requirements. Such requirements should always be traceable to higher-level documentation, and should always be defensible in concrete terms of need. That means you can't specify a performance or design feature just because you think it's nice to have or is the latest and greatest thing to come from the vendors."

    I always assumed the above quote was correct, although I can not find any reference to the "minimum needs doctrine" as such. When I also consider "The Necessary Expense Doctrine" of appropriation law, I conclude the quote is correct. Isn't this very similiar to the "minimum needs doctrine" mentioned in the Doke testimony? So if the government has the authority to specify only minimum, essential, validated requirements, what gives it the authority to buy (or pay a premium for) more?

    Just trying to understand? Thanks!

    TAP

  34. j

    joel hoffman

    Mar 10, 2010 · 16y ago

    PM63A4:

    The objection to paying premium prices is not about eliminating programs. That's way over the top.

    In any case, I just read the Air Force's now notorious tanker RFP and guess what? The source selection is lowest-price technically acceptable! "Best value" considerations would come into play only in the event that prices are within one percent of each other. The following is from Section M, page 1 of 17: etc.

    Thanks for finding and sharing the evaluation criteria, Vern.

  35. G

    Guest Vern Edwards

    Mar 10, 2010 · 16y ago

    TAP:

    First, let's deal with the "necessary expense doctrine." because it does not say what you seem to think that it does. Here it is as explicated by the GAO in Principles of Federal Appropriations Law, Vol. 1, Ch. 4:

    The necessary expense rule is really a combination of two slightly different but closely related concepts:

    1. An appropriation made for a specific object is available for expenses necessarily incident to accomplishing that object unless prohibited by law or otherwise provided for. For example, an appropriation to erect a monument at the birthplace of George Washington could be used to construct an iron fence around the monument where administratively deemed necessary to protect the monument. 2 Comp. Dec. 492 (1896). Likewise, an appropriation to purchase bison for consumption covers the slaughtering and processing of the bison as well as the actual purchase. B-288658, Nov. 30, 2001.

    2. Appropriations, even for broad categories such as salaries, frequently use the term ?necessary expenses.? As used in this context, the term refers to ?current or running expenses of a miscellaneous character arising out of and directly related to the agency?s work.? 38 Comp. Gen. 758, 762 (1959); 4 Comp. Gen. 1063, 1065 (1925).

    The GAO has established a three-part test for the necessary expense doctrine:

    When applying the necessary expense rule, an expenditure can be justified after meeting a three-part test:

    1. The expenditure must bear a logical relationship to the appropriation sought to be charged. In other words, it must make a direct contribution to carrying out either a specific appropriation or an authorized agency function for which more general appropriations are available.

    2. The expenditure must not be prohibited by law.

    3. The expenditure must not be otherwise provided for, that is, it must not be an item that falls within the scope of some other appropriation or statutory funding scheme.

    E.g., 63 Comp. Gen. 422, 427?28 (1984); B-240365.2, Mar. 14, 1996; B-230304, Mar. 18, 1988.

    Nothing in that test prohibits the Government from buying more than its strict minimum need.

    As for the NAVAIR text that you cite, I think this is the pertinent passage:

    [G]overnment engineers have authority to specify only minimum, essential, validated requirements. Such requirements should always be traceable to higher-level documentation, and should always be defensible in concrete terms of need. That means you can't specify a performance or design feature just because you think it's nice to have or is the latest and greatest thing to come from the vendors.

    Note that the author is vague. What does minimum need mean? What does "nice to have" mean? Would a rifle that is more accurate than the one specified be nice to have because it would do a better job of killing? Well, if you want a rifle to kill, I think the answer is yes. So would it be fair to say that you need it in order to kill more effectively? Would there be any objection to buying it if it didn't cost more, or if it meant that we could save money by buying less ammo?

    We must make a distinction between specifying minimum need and buying minimum need. The author of the NAVAIR publication does not say that the Government cannot buy more than its minimum need, he says that the Government cannot specify more than its minimum need. The term "minimum need" appears at seven places in FAR: 6.302-1; 8.405-6; 11.103; 11.105; 17.105-1; and 34.001. (It appears in eight other places in agency FAR supplements.) In none of those places does the FAR say that the Government cannot buy more than its minimum need. If it did, then the only kind of procurements we could do would be sealed bidding and lowest-price technically-acceptable. But FAR expressly authorizes the use of the tradeoff procedure, through which the Government can pay more to get more if the more is useful in proportion to any price premium. FAR does not even say that the Government cannot specify more than its minimum need. What it does say is that it must specify its requirements in ways that promote full and open competition. The GAO has interpreted that to mean that it cannot specify its requires in ways that are "unduly restrictive" of competition.

    The GAO has explained its unduly restrictive rule as follows:

    A contracting agency has the discretion to determine its needs and the best method to accommodate them. Parcel 47C LLC, B?286324, B?286324.2, Dec. 26, 2000, 2001 CPD para. 44 at 7. In preparing a solicitation, a contracting agency is required to specify its needs in a manner designed to achieve full and open competition, and may include restrictive requirements only to the extent they are necessary to satisfy the agency's legitimate needs. 10 U.S.C. sect. 2305(a)(1) (2006); I_nnovative Refrigeration Concepts_, B?272370, Sept. 30, 1996, 96?2 CPD para. 127 at 3. Where a protester challenges a specification as unduly restrictive, the procuring agency has the responsibility of establishing that the specification is reasonably necessary to meet its needs. The adequacy of the agency's justification is ascertained through examining whether the agency's explanation is reasonable, that is, whether the explanation can withstand logical scrutiny. Chadwick?Helmuth Co., Inc., B?279621.2, Aug. 17, 1998, 98?2 CPD para. 44 at 3. A protester's mere disagreement with the agency's judgment concerning the agency's needs and how to accommodate them does not show that the agency's judgment is unreasonable. Dynamic Access Sys., B?295356, Feb. 8, 2005, 2005 CPD para. 34 at 4. Where, as here, a requirement relates to national defense or human safety, an agency has the discretion to define solicitation requirements to achieve not just reasonable results, but the highest possible reliability and/or effectiveness. Vertol Sys. Co., Inc., B?293644.6 et al. , July 29, 2004, 2004 CPD para. 146 at 3.

    When the GAO speaks of minimum need, it does so in the context of the effect on competition. The Government cannot specify more than it minimally needs if to do so would unduly restrict competition. But that having been said, if an agency receives an offer for more than that, and if the more is useful and proportionate in value to the price premium, no law or doctrine prohibits the Government from buying it, as long as the buy is consistent with the terms of the RFP. If that were not the case, the Government could not award a contract to an offeror with excellent past performance at a higher price than an offeror with satisfactory past performance.

    Make sense?

  36. T

    TAP

    Mar 10, 2010 · 16y ago

    Vern,

    Yes, that makes perfect sense. Regarding a contracting agency?s discretion to determine its needs and include restrictive requirements ?only to the extent they are necessary to satisfy the agency's legitimate needs.? The legitimate needs should be established in the agency's actual program requirements. Using the rifle example, sure there would be no objection to buying a more efficient rifle. But if one contractor proposed providing storage cases which were not ?necessary? to satisfy the agency's legitimate needs, then they should not pay a premium for the cases. If they needed the cases they should have asked for them. Going along with your previous post on this subject, I believe source selection trade-off procedure is often misused. The connection I was trying to make was that if either the RFP requirements or contractor?s proposed solution exceed the minimum, essential, validated requirements of the program for which an agency is contracting for, then any premium paid may or may not be a necessary expense? The ?discretion? to determine its needs may have already been exercised by the agency when it established its overall policy documents for carrying out its mission. The specifier needs to follow those policy documents and not add requirements just because they think they?re a good idea.

    Thanks for the lesson!

    TAP

  37. G

    Guest Vern Edwards

    Mar 10, 2010 · 16y ago

    Vern,

    Yes, that makes perfect sense. Regarding a contracting agency?s discretion to determine its needs and include restrictive requirements ?only to the extent they are necessary to satisfy the agency's legitimate needs.? The legitimate needs should be established in the agency's actual program requirements. Using the rifle example, sure there would be no objection to buying a more efficient rifle. But if one contractor proposed providing storage cases which were not ?necessary? to satisfy the agency's legitimate needs, then they should not pay a premium for the cases. If they needed the cases they should have asked for them. Going along with your previous post on this subject, I believe source selection trade-off procedure is often misused. The connection I was trying to make was that if either the RFP requirements or contractor?s proposed solution exceed the minimum, essential, validated requirements of the program for which an agency is contracting for, then any premium paid may or may not be a necessary expense? The ?discretion? to determine its needs may have already been exercised by the agency when it established its overall policy documents for carrying out its mission. The specifier needs to follow those policy documents and not add requirements just because they think they?re a good idea.

    Thanks for the lesson!

    TAP

    Good.

    Just a point. You said: "The specifier needs to follow those policy documents and not add requirements just because they think they?re a good idea." Specifiers commonly have considerable discretion in that regard. The extent of that discretion is a matter of agency policy and practice. Except at the highest levels, e.g., major weapons, specification is often very informal and writers can add "good ideas."

  38. b

    brian

    Apr 25, 2010 · 16y ago

    .

    Tip of the hat to federalcontracts. 8 EXCELLENT points. I'm wavering on #5.

    .

    THE ONE THING THAT I WOULD FIX TO IMPROVE GOVERNMENT CONTRACTING.

    .

    Why does the Government Accountability Office hate accountability ?

    In every competition, every unsuccessful bidder, and especially every unsuccessful bidder in the competitive range, ought to be told who won, at what price, and why the winner was determined to be the best value.

    A Contractor who thinks that they are an injured party is in the best position to hold contracting officials to the rules. GAO has even said that the protest function allows such injured parties to act as ?private Attorneys General? on behalf of the Government, greatly increasing the capacity of GAO to ensure accountability.

    But then GAO says no to making this sort of accountability MANDATORY, as if accountability doesn?t affect the outcome.

    Specifically,

    ?

    We dismiss the protest because an agency?s failure to provide a debriefing is not a matter that we will consider. This is because the scheduling of a debriefing is a procedural matter that does not involve the validity of an award

    .?

    Gary Kepplinger, May 2, 2008.

    The protestor didn?t protest the scheduling. This member of the competitive range protested the fact that the agency refused any debriefing, even refusing to say who won or at what price. The value with options was over $100 M. It was never announced as required by FAR 5.303(a).

    It ain?t just the 1102 workforce that?s deficient in job knowledge, a point someone here is trying to make. Just because someone graduated from law school and got a job at GAO doesn?t mean they understand the basics of contracting, with apologies to the blogmaster.

    More often than not, even after repeated follow-ups, I am not told the results of competitions I bid on, most of which are less than $200 K. I am often told to look for the results to be posted at FBO, but awards typically are not posted. If posted at a site like asfi, I have no way to find notices after they are removed from the database of active solicitations, which is usually before the award is made.

    Fixing this one thing ? requiring unsuccessful bidders be told why someone else won, who won, and at what price, would open the door to more protests, which is how, for better or worse, this system heals itself.

    .

  39. N

    Navy_Contracting_4

    Apr 26, 2010 · 16y ago

    .

    More often than not, even after repeated follow-ups, I am not told the results of competitions I bid on, most of which are less than $200 K. I am often told to look for the results to be posted at FBO, but awards typically are not posted. If posted at a site like asfi, I have no way to find notices after they are removed from the database of active solicitations, which is usually before the award is made.

    Fixing this one thing ? requiring unsuccessful bidders be told why someone else won, who won, and at what price, would open the door to more protests, which is how, for better or worse, this system heals itself.

    .

    Brian,

    Have you read FAR 15.503(B)?

    "(B)Postaward notices. (1) Within 3 days after the date of contract award, the contracting officer shall provide written notification to each offeror whose proposal was in the competitive range but was not selected for award (10 U.S.C. 2305(B)(5) and 41 U.S.C. 253b©) or had not been previously notified under paragraph (a) of this section. The notice shall include?

    (i) The number of offerors solicited;

    (ii) The number of proposals received;

    (iii) The name and address of each offeror receiving an award;

    (iv) The items, quantities, and any stated unit prices of each award. If the number of items or other factors makes listing any stated unit prices impracticable at that time, only the total contract price need be furnished in the notice. However, the items, quantities, and any stated unit prices of each award shall be made publicly available, upon request; and

    (v) In general terms, the reason(s) the offeror?s proposal was not accepted, unless the price information in paragraph (B)(1)(iv) of this section readily reveals the reason. In no event shall an offeror?s cost breakdown, profit, overhead rates, trade secrets, manufacturing processes and techniques, or other confidential business information be disclosed to any other offeror.

    (2) Upon request, the contracting officer shall furnish the information described in paragraph (B)(1) of this section to unsuccessful offerors in solicitations using simplified acquisition procedures in Part 13.

    (3) Upon request, the contracting officer shall provide the information in paragraph (B)(1) of this section to unsuccessful offerors that received a preaward notice of exclusion from the competitive range."

    Note that this says "shall." Any contracting officer not providing this basic information to unsuccessful offerors is not doing his/her duty, and is doing a great dis-service to industry and the entire acquisition community.

  40. f

    formerfed

    Apr 26, 2010 · 16y ago

    Brian,

    Where did you get this quote from? Is it from an offical GAO dismissal or someplace else? Knowing some of the specifics helps make more sesne out of it.

    ?We dismiss the protest because an agency?s failure to provide a debriefing is not a matter that we will consider. This is because the scheduling of a debriefing is a procedural matter that does not involve the validity of an award.?

    Gary Kepplinger, May 2, 2008.

    The protestor didn?t protest the scheduling. This member of the competitive range protested the fact that the agency refused any debriefing, even refusing to say who won or at what price. The value with options was over $100 M. It was never announced as required by FAR 5.303(a).

    It ain?t just the 1102 workforce that?s deficient in job knowledge, a point someone here is trying to make. Just because someone graduated from law school and got a job at GAO doesn?t mean they understand the basics of contracting, with apologies to the blogmaster.

  41. G

    Guest Vern Edwards

    Apr 26, 2010 · 16y ago

    See Barnesville Development Corp., B-400049, June 30, 2008, 2008 CPD ? 132 at 4:

    The protester also complains that the agency failed to furnish it with a debriefing. An agency's failure to provide a debriefing is not a matter that we will consider. This is because the scheduling of a debriefing is a procedural matter that does not involve the validity of an award. The Ideal Solution, LLC, B?298300, July 10, 2006, 2006 CPD ? 101 at 3 n.2; Canadian Commercial Corp., B?222515, July 16, 1986, 86?2 CPD ? 73 at 5.

    He got the quote from The Ideal Solution decision, signed by Gary Kleppinger, who was the GAO general counsel at the time.

    It helps in all professional communications to know how to properly cite a GAO, board, or court decision so that others can find it.

  42. f

    formerfed

    Apr 27, 2010 · 16y ago

    ?

    We dismiss the protest because an agency?s failure to provide a debriefing is not a matter that we will consider. This is because the scheduling of a debriefing is a procedural matter that does not involve the validity of an award

    .?

    Gary Kepplinger, May 2, 2008.

    The protestor didn?t protest the scheduling. This member of the competitive range protested the fact that the agency refused any debriefing, even refusing to say who won or at what price. The value with options was over $100 M. It was never announced as required by FAR 5.303(a).

    It ain?t just the 1102 workforce that?s deficient in job knowledge, a point someone here is trying to make. Just because someone graduated from law school and got a job at GAO doesn?t mean they understand the basics of contracting, with apologies to the blogmaster.

    Brian,

    So why do you feel the GAO position is wrong? To me it's pretty clear. GAO entertains protests on the award of contracts. A debriefing is a procedural process where offerors can obtain information. Now an offeror may or will use that information as a basis of their protest but failure to give a debriefing in a timely manner is not the basis to claim an award is invalid.

  43. b

    brian

    Apr 27, 2010 · 16y ago

    .

    Navy Contracting,

    I am familiar with the regulatory requirement for a debriefing, and when I don?t get one, I remind CO?s of that requirement. Nevertheless, I often don?t get one.

    I agree that any contracting officer not providing this basic information to unsuccessful offerors is not doing his/her duty, and is doing a great disservice to industry and the entire acquisition community.

    But my recourse is to file with the US Court of Federal Claims, since GAO won?t hear a protest of this failure to debrief.

    Former Fed,

    That came from an unpublished Decision on a GAO protest I filed, citing the same case Vern cites.

    Vern,

    Your pithy comment at NYT on PowerPoint was right on.

    I didn?t provide a cite because I didn?t want to have people trace it back to me. I figure that folks on this Blog are so resourceful that they can even find unpublished GAO Decisions.

    Former Fed,

    Unfortunately, I think that the GAO position is correct, as their authority is now written. In my Apr 25 2010, 01:15 AM post I meant that I would like it if GAO was given the additional authority to consider this type of complaint. I think it would improve the integrity of the procurement system.

    .

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