# Presentation: 038776

## Lessons Learned

- A-76 Financial Services Study
- February 12, 2004

## Performance Work Statement (PWS) Issues	

- Adequate resources including time and personnel must be dedicated to write PWS
- Active procurement involvement required from inception
- Majority of our consultant’s A-76 experience was with DOD and lacked relevancy in some areas
- Scope of work and any underlying assumptions must be clearly defined and understood before beginning to draft PWS
- Conference call with sites under study to discuss workload collection methodology to improve consistency of data collected

## Request for Proposal (RFP) Issues

- Potential major reorganization/consolidation
- Change in technology (DISCAS to STARS)
- Disconnect between the work scope and workload information
- Timeline conflict – STARS implementation vs A-76 Study
- Not providing property and facilities
- Location(s) not given – Created problem with Service Contract Act (See Section L.23(i) on page L-13 of the RFP)
- Payroll Outsourcing to DFAS in process during solicitation
- Sites and Information Technology in and out of study

## RFP Issues

**Clauses M.2 and M.3 written for A-76 **
**	****(See Section M on page M-2 of the RFP)**
- 	M.2 OMB CIRCULAR A-76
- 	This solicitation is a Public-Private Competition under OMB Circular A-76 (Revised) May 29, 2003, Performance of Commercial Activities and the FAR.  Upon completion of the cost comparison, a best value determination will be made.  If the result of the best value determination favors Agency performance, this solicitation will be cancelled and no contract will be awarded.
- 	M.3 BASIS OF CONTRACT AWARD
- 	If the result of the evaluation favors performance under contract, the Government anticipates the award of a contract to the responsible offeror whose proposal is responsive to the solicitation and is determined to be the best value to the Government.   Selection of the best value to the Government will be achieved through a process to select the offer by evaluating and comparing proposals including the Agency submission in accordance with evaluation criteria in addition to the evaluated probable cost and fee.  The technical and business management criteria are approximately equal in weight to cost.  A best value decision reflects the Government’s willingness to accept other than the lowest probable cost and fee if the perceived benefits of the offer with the higher cost and fee merit the additional cost and fee.

## RFP Issues

- Announcements should be coordinated through SEB and their legal advisor (OMB Circular Attachment B, Section D.6 on       page B-17)
- Public announcements
- Personnel briefings

## Issues with OMB Circular A-76dated May 29, 2003

- The circular should be modified to require inclusion of procurement and legal representatives during the development and submission of the Agency proposal.

## Issues with OMB Circular A-76dated May 29, 2003

**Inadequate Commercial Proposals - CSO Decision**
- 	Attachment B, Section D.4.d. on page B-12 requires the MEO proposal to remain sealed until a review is completed of all commercial proposals to determine whether a commercial proposal is suitable for inclusion in the competitive range.  Under the debriefing rules in the FAR, those commercial offerors are required to be given a debriefing.   In a situation where all of the commercial proposals are rejected and do not make the competitive range, and the _CSO makes a determination that the procurement should be cancelled, re-solicited, or amended to resolve deficiencies_, then the government is required by the FAR to debrief the commercial firms.  _The agency submission must be returned sealed_.  Therefore, debriefing of the Agency is not allowed regarding the MEO proposal at the time other Offerors are debriefed.  Consequently, the agency is placed in a serious disadvantage in any re-competition process.  We believe this is a fundamental flaw in the OMB circular that needs to be addressed.

## Issues with OMB Circular A-76dated May 29, 2003

**Inadequate Commercial Proposals – Agency Proposal**
- 	In the situation where there are no acceptable commercial proposals for inclusion in the competitive range and the CSO determines to implement the Agency proposal, _it is conceivable that the Agency submission could be technically inferior and more costly than commercial firms that were eliminated_ from further consideration.  Consequently, the government is faced with having to “fix” the agency submission to the detriment of the offerors that were eliminated.  (Refer to Attachment B, Section D.4.d. on page B-12)

## Issues with OMB Circular A-76dated May 29, 2003

**Evaluation Factors**
- 	Attachment B, Sections D.3.a.(3)(a) and (4) on page B-8 lists personnel qualifications as an example of one of the items to be included as an evaluation factor.  Upon trying to implement this evaluation factor by _requiring the agency to provide personnel resumes in the same manner as required of the commercial firms_, the SEB was informed that it is _not feasible or practical for the agency to comply with these requirements because of statutory restrictions_.  By not being able to evaluate personnel qualifications, along with such items as past performance, small business plans, etc., it becomes extremely difficult to maintain a level playing field in the evaluation process.  The points normally assigned to these criteria constitute a significant portion of the total available points.  A neutral rating was assigned to these criteria for our solicitation.

## Issues with OMB Circular A-76dated May 29, 2003

**Corporate Commitment**
- 	Can the senior officials within the respective departments or agencies write letters of endorsement and commitment on behalf of the MEO or are they prohibited due to the firewall which was established to avoid the conflict of interest?  (i.e., Should A-76 cost studies continue to use corporate commitment as an evaluation criterion?)

## Issues with OMB Circular A-76dated May 29, 2003

**Limitations on Discussions with MEO**
- 	Attachment B, Section D.5.c.(2) on page B-15 includes a requirement to limit discussions with the agency to writing only.  This requirement is another instance where the playing field is not level in the evaluation process.  Furthermore, it is a major impediment to having effective dialogue between the SEB and the agency concerning deficiencies within the agency submission and needs to be corrected.

## Issues with OMB Circular A-76dated May 29, 2003

**Mode of Contracting**
- 	The policy established by Attachment B, Sections D.3.a.(3)(b) on page B-8 and D.5.b.(3) on page B-14 _to restrict the use of Best Value is not in the best interest of government contracting_. The best value contracting process is clearly established as an acceptable form of government contracting in FAR Section 15 and is highly used throughout the government.  The mode of contracting should be left to the discretion of the program managers and procurement professionals responsible for managing the various agency budgets.

## Issues with OMB Circular A-76dated May 29, 2003

**Return of Sealed Agency Proposal**
- 	Attachment B, Section D.4.d (2)(a) on page B-12 _requires the CO to return the sealed agency proposal to the ATO_.  It is a requirement within DOE and other agencies that all proposals be submitted electronically.  It is not possible to return a sealed electronic proposal.  (If the need arose, it was the intent of the SEB to download the MEO proposal putting a cover letter explaining it was being returned unopened in order to comply with the OMB policy.)

## Issues with OMB Circular A-76dated May 29, 2003

**Baseline Costs**
- 	Attachment B, Section A.4. on page B-1 _requires baseline costs to be determined during the preliminary planning process_.  However, the circular does not define what constitutes a baseline.  In addition, the circular does not provide guidance for computing a baseline and does not indicate how it will be used.  This may result in inconsistent implementation within and across agencies and departments.

## Issues with OMB Circular A-76dated May 29, 2003

**Identify Savings**
- 	Item 5.e on page 2 of the _circular states that the CSO shall identify savings resulting from completed competitions in accordance with OMB Circular No.    A-11_.  However, Circular A-11 does not currently provide instructions for computing or reporting these savings.

## Issues with OMB Circular A-76dated May 29, 2003

**Letter of Obligation**
- 	Attachment B, Section D.6.f (3) on page B-18 _requires the CO to establish an MEO letter of obligation with an official responsible for the performance of the MEO_.  There is presently no guidance for preparing such an instrument.  It is our recommendation that each Agency’s Office of Procurement Policy prepare an example of an MEO letter of obligation for inclusion in their acquisition guidance.

## Issues with OMB Circular A-76dated May 29, 2003

**MEO Contracting**
- 	The OMB Circular A-76 should be _clarified in regards to the MEO contacting private corporations for purposes of forming teaming arrangements, negotiating prime contracts for performance of the work statement_ (e.g., can this be done without using normal government procurement process to obtain such prime contracts), _and obtaining cost and pricing data_ (e.g., labor and indirect cost rates).  Should the MEO use existing rates of current contract without directly contacting company or should they develop an average rate based on a market survey for these services?

## Issues with OMB Circular A-76dated May 29, 2003

**Phase-In Plan**
- 	The OMB Circular (pages B-2, B-10, D-4, D-8) attempts to distinguish between  “Phase-in plan” and “Transition Plan.”  In the commercial world of government contracting no such distinction is made.  This creates major confusion and difficulty with the MEO submission when the solicitation only addresses the phase-in or the transition plan.  The OMB Circular should be modified.

## Issues with OMB Circular A-76dated May 29, 2003

**Employee Representative**
- 	The Circular on page D-4 (see also pages B-18 & B-20) defines that _a single individual can be appointed by a majority of directly affected employees as their agent and this individual would be a directly interested party_.  The Circular does not define how to set up the mechanism to select this individual or who has the responsibility for assuring that this individual is selected.  For competitions that only affect one site, this issue may be manageable.  However, where there are multiple sites, the issue of selecting a single individual to represent all affected employees becomes much more difficult.  This process could involve some significant difficulties in dealing with multiple unions.
- 	A suggested solution may be to appoint someone within the OMB designation of officials, such as the CSO or HRA, to take ownership of this process.  The consequence of not selecting an agent to represent the employees at the inception of the competition could potentially result in a sustainable protest due to a procedural flaw within the process.

## Issues with OMB Circular A-76dated May 29, 2003

**Agency Terminations**
- 	The Circular on page B-20 (E.6. Terminations) _requires the MEO or other public service provider be treated, for termination purposes, as any commercial provider in accordance with FAR Part 49_.  The questions which arise as a result of this requirement are:
- 	   1)	Will the MEO or other public service providers be given the 	same access to an Agency’s Board of Contract Appeals 	and/or the Federal court for resolution of disputes or 	terminations under the Contract Disputes Act? Will there be 	other options available to the MEO for resolving disputes 	that may arise?
- 	   2) 	Are Federal agencies prepared to terminate a part of their 	own organizations?  If termination occurs, how will the 	agencies resolve personnel issues?

## Human Resource Issues

- Adequate and dedicated resources should be provided to all teams (PWS, SEB, and MEO)
- ATO should have major responsibilities not only for drafting the MEO proposal but also for implementing and achieving the desired results after award.
- When firewalls are established, steps should be taken to ensure that the proper level of management has access to the ATO and MEO Team.

## Overview

- Suggest many modifications to the revised OMB Circular A-76, dated May 29, 2003
- Limit reorganization and consolidation for                   A-76 Studies
- Clearly define Statement of Work, i.e. systems, technology, etc.
- Adequate resources and skill mix to perform study