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FAR 13.106-2 - Discussions - Contract Award Process - The Wifcon Forums and Blogs
By krusem, September 16, 2014 in Contract Award Process
krusem 0
I have a question regarding FAR 13.106-2 that I cannot seem to solve on my own, so I hoped the smart folks on WIFCON could provide guidance. Many might consider this a rather basic question, but nonetheless, I have managed to overthink it.
To provide some context for this question, let's assume we are discussing the purchase of commercial supplies below the SAT.
The excerpt at FAR 13.106-2( (3) reads, "Formal evaluation plans and establishing a competitive range, conducting discussions, and scoring quotations or offers are not required."
The excerpt at FAR 12.203 reads, "Contracting officers shall use the policies unique to the acquisition of commercial items prescribed in this part in conjunction with the policies and procedures for solicitation, evaluation and award prescribed in Part 13, Simplified Acquisition Procedures; Part 14, Sealed Bidding; or Part 15, Contracting by Negotiation, as appropriate for the particular acquisition."
What is the proper method for conducting discussions when using Simplified Acquisition Procedures? Is FAR 13 indicating that discussions are simply not required, but if they are utilized, the KO must follow the procedures at FAR 15.306?
In the event that the procedures at FAR 15.306 are not required, how are discussions performed when using SAP?
I've discussed this with fellow coworkers, senior contracting personnel, and searched case law to find information that helps me to form a solid conclusion; however, I have not found anything that I find sufficient. As stated, this is likely way more simple than I have made it, but I am wrapped around the axle on this one.
You may make it as complicated or as simplified as you want. I recommend not carrying your FAR Part 15 baggage into FAR Part 13 acquisitions.
If you receive five quotations and find something intriguing or perplexing in two quotations, you may talk to the two quoters. You may ask one of the two to give you an updated quotation. And then you can make award to a third quoter. All of this can be done with no competitive range determination and no request for final proposal revisions. In all this, you have to be fair.
"Discussions" is a term of art. It refers to an exchange of information between the Government and an offeror in a competitive procurement conducted pursuant to FAR Part 15 in accordance with the rules in FAR 15.306( c) and (d) and 15.307( b ). It is an exchange of information in which the Government (a) provides information to an offeror about any "deficiency" or "significant weakness" in its proposal (as defined in FAR 15.001) and about any adverse past performance information to which the offeror has not yet had the opportunity to respond and ( b ) gives the offeror a chance to revise its proposal (see the definition of "proposal revision" in FAR 15.001).
It does not make sense to ask how to conduct "discussions" when using simplified acquisition procedures, because the rules in FAR 15.306( c) and (d) and 15.307( b ) do not apply to simplified acquisitions, neither do the terms "deficiency", "significant weakness", and "proposal revision".
When conducting a simplified acquisition, the CO may talk about anything she likes with whichever quoter she likes, when she likes, in whatever manner she likes, without complying with the rules in 15.306( c) and (d) and 15.307( b ). She need not worry about the distinction between "clarification" and "discussion". She may talk with one of the quoters and not any of the others, a few of them, or all of them, and need not talk to any of them if she does not want to. She need not establish a competitive range and need not give any quoter a chance to revise its quotation. The only real rule is that she must treat all quoters fairly and impartially, in accordance with FAR 1.102-2( c)(3).
The key is for you to understand that the term "discussion" properly applies only in the context of FAR Part 15 and that if you are not conducting a FAR Part 15 competitive procurement you need not think about "discussions" and "clarifications" and you need not follow any particular procedure.
Vern, that was a phenomenal response and provides me with exactly what I needed to wrap my head around it.
I failed to ask this in my last post, but what about the following:
Although an agency is not required to establish a competitive range or conduct discussions under simplified acquisition procedures, we think that where an agency avails itself of these negotiated procurement procedures, the agency should fairly and reasonably treat quoters in establishing the competitive range and conducting discussions. See Finlen Complex, Inc., B-288280.
What would constitute an agency using negotiated procedures in lieu of simplified acquisition procedures? The aforementioend case seems to incidate that methodology used, not terminology, is the determining factor as to whether or not a KO is actually using negotiated procedures.
How does a KO ensure that an RFQ is not written in such a way that it is truly considered a negotiated procurement. In the event that negotiated procurement procedures are utilized, do the exchanges in FAR 15.306 become mandatory?
Ah, the good old Finlen Complex decision. I love that decision. It's one of my all-time favorites, because it shows a CO foolishly complicating a simplified acquisition by using FAR Part 15-like procedures. It is a lesson learned.
The GAO takes the position that if you conduct a simplified acquisition as is you are conducting a FAR Part 15 acquisition, asking for complex written proposals and using terms like "competitive range", "discussions", and final proposal revisions, then if there is a protest it will apply the rules in FAR Part 15. See e.g. ERIE Strayer Co., B-406131, 2012 CPD ¶ 101, Feb. 31, 2012:
As noted above, the procurement was conducted under the simplified procedures for evaluation of commercial items. Simplified acquisition procedures are designed, among other things, to reduce administrative expenses, promote efficiency and economy in contracting, and avoid unnecessary burdens for agencies and contractors. FAR §13.002; 41 U.S.C. §3305 (Supp. IV 2010). When using these procedures, an agency must conduct the procurement consistent with a concern for fair and equitable competition and must evaluate proposals in accordance with the terms of the solicitation.
Our Office reviews allegations of improper agency actions in conducting simplified acquisitions to ensure that the procurements are conducted consistent with a concern for fair and equitable competition and with the terms of the solicitation. Russell Enters. of N. Carolina, Inc., B–292320, July 17, 2003, 2003 CPD ¶ 134 at 3. Although an agency is not required to conduct discussions under simplified acquisition procedures, where an agency avails itself of negotiated procurement procedures, the agency should fairly and reasonably treat offerors in the conduct of those procedures. See Kathryn Huddleston and Assocs., Ltd., B–289453, Mar. 11, 2002, 2002 CPD ¶57 at 6; Finlen Complex, Inc., B–288280, Oct. 10, 2001, 2001 CPD ¶167 at 8–10.
In this regard, FAR §15.306 describes a range of exchanges that may take place when the agency decides to conduct exchanges with offerors during negotiated procurements. Clarifications are “limited exchanges” between an agency and an offeror for the purpose of eliminating minor uncertainties or irregularities in a proposal, and do not give an offeror the opportunity to revise or modify its proposal. FAR §15.306(a)(2); Lockheed Martin Simulation, Training & Support, B–292836.8 et al., Nov. 24, 2004, 2005 CPD ¶27 at 8. Clarifications are not to be used to cure proposal deficiencies or material omissions, or materially alter the technical or cost elements of the proposal, or otherwise revise the proposal. eMind, B–289902, May 8, 2002, 2002 CPD ¶82 at 5. Discussions, on the other hand, occur when an agency communicates with an offeror for the purpose of obtaining information essential to determine the acceptability of a proposal, or provides the offeror with an opportunity to revise or modify its proposal in some material respect. Gulf Copper Ship Repair, Inc., B –293706.5, Sept. 10, 2004, 2005 CPD ¶108 at 6; see FAR §15.306(d). When an agency conducts discussions with one offeror, it must conduct discussions with all other offerors in the competitive range. Gulf Copper Ship Repair, Inc., supra.
I wrote about ERIE Strayer for May 2012 issue of The Nash & Cibinic Report. See "Simplified Acquisition: Avoiding the GAO's Clarifications/Discussions Mess":
We are familiar with the GAO's stance that it will apply the rules in FAR Part 15 to decide protests when agencies use FAR Part 15-type procedures to conduct simplified acquisitions. See Finlen Complex, Inc., Comp. Gen. Dec. B-288280, 2001 CPD ¶ 167, 43 GC ¶ 435, which we discussed in Complicating Simplified Acquisition Procedures: A New Twist, 16 N&CR ¶ 2. We agree with the GAO that agencies using simplified acquisition procedures should truly simplify their processes, and we agree that agencies should clearly indicate which process they are using, Part 13 or Part 15. In that regard, we discourage agencies from using Part 15 terminology when conducting simplified acquisitions. See Simplified Acquisition Procedures: Why Can't We Keep Them Simple?, 21 N&CR ¶ 31, and Commercial Item Procurement: The Recent Comptroller General Decisions, 13 N&CR ¶ 35.
You can use FAR Part 15 procedures when conducting simplified acquisitions, but if you truly want to keep the SAP simple, then don't use FAR Part 15 terminology in your solicitation and don't ask for complicated written proposals. Consider what the agency did in Bio-Rad Laboratories, Inc., B-297553, 2007 CPD ¶ 58, Feb.15, 2006:
Here, nothing in the solicitation provided or otherwise informed offerors that FAR Part 13 simplified acquisition procedures applied, and as indicated above, this procurement was conducted in a manner that was not distinguishable from a negotiated acquisition conducted under the rules set forth in FAR Part 15. That is, detailed proposals were requested, received, and evaluated, discussions were conducted and revised proposals were received and evaluated, followed by a second round of discussions, the submission and evaluation of final proposal revisions, and a best value determination. Contracting Officer's Statement at 1–4. Given that the RFP on its face did not notify offerors that FAR Part 13 simplified acquisition procedures were being used and otherwise reasonably indicated that the procurement was for a commercial item using FAR Part 15 negotiated procedures, offerors could presume that the Part 13 provisions, which gave the agency the authority not to assign weight to the evaluation subfactors, were not applicable to this procurement, and that the ordinary rules that require the disclosure of the relative weight of factors and subfactors were applicable. See Finlen Complex, Inc., supra. [Footnotes omitted.]
Those are the kinds of things to avoid if you want to keep SAP simple.
Vern, your response is incredibly helpful. I greatly appreciate the time you've taken to help explain my question. That being said, I am going to ask one last question and hope I haven't worn out my welcome.
In the interest of treating quoters fair, is it necessary to provide all (or even some) offerors the opportunity to revise quotes, or is it acceptable to ask a single offeror to revise its quote?
I am torn between each, since it doesn't seem fair to allow a single offeror to revise its quote and not others, but it also seems to go against the intent of SAP to allow each offeror an opportunity to revise its quote; especially considering you didn't reduce the offerors down to a limited number via a competitive range.
I have read here in this forum and elsewhere that asking a single offeror to revise its quote is perfectly acceptable, but I would very much like to hear your opinion on the subject.
Great thanks to everyone who responded so promptly on this post. Much appreciated.
What does "fair" mean? (I'm sure you meant fairly.) Did you read FAR 1.102-2( c)(3), to which I referred you in my first post? Here is what it says:
The Government shall exercise discretion, use sound business judgment, and comply with applicable laws and regulations in dealing with contractors and prospective contractors. All contractors and prospective contractors shall be treated fairly and impartially but need not be treated the same. [Emphasis added.]
In short, what is fair depends on the rules and the circumstances. "Fair" does not necessarily mean that you do the same things with everyone. Fair means, among other things, treating firms the same when they are similarly-situated in the competition.
Now, suppose that you work for an agency and want to buy a commercial device. There are several manufacturers and retailers. You send out an RFQ and ask for quotes. Three sellers respond and all three quotes are acceptable, but one quote is clearly better than the other quotes in every respect -- product, delivery, and service. That quote would be even better if the quoter would make one change to its service terms. You want to ask the quoter to make the change. You're going to buy from that seller no matter what the answer, but you'd like to try to get a little more. Why would you talk to the other two? What would be the point? You are looking for a good deal for the taxpayers, but you have to make the buy and move on. You are not a tourist in the Grand Bazaar in Istanbul, haggling for fun, trying to get the vendors in the cheap leather goods section to fight over you. Ask your question and make the buy.
Same scenario, except that the three quoters are virtually tied, with each being better than the others in some respect, but each in different ways. None is clearly superior overall. In this case, why not talk to all three? If you chose only one to talk to, how would you justify your choice and your decision not to talk to the others? You can't say that you did it to save time, because that reason would not justify an arbitrary (and unfair) course of action.
So the answer to your question depends on the circumstances. In some circumstance it might make sense to talk to one or a couple of quoters and to ignore the others. In other circumstances it might make sense to do something else.
Thank you very much Vern. Great information. You should write a book!
...kidding, as I have your book on Source Selection - and it is quite good.