I have been having an on-going disucssion/debate with the CO on how to conduct the trade-off analysis for awarding a contract to an offeror that may not be the highest technical proposal and/or the lowest overall price/cost. The CO insists the award is based on adequate price competition, while I take the position that a trade-off analysis must be accomplished to justify award when a premium is to be paid for a higher rated technical proposal. I believe this analysis can include quantitative as well as qualitative analysis of the benefits the Government will receive for the of award to a higher priced/higher technical proposal. I am also of the opinion that a lower priced proposal can and sometime does represent the best value to the Government when proposals are considered technically equal. I am in the midst of an award recommendation so I cannot offer significantly more detail. But please tell me if I am on the right trail.

Also, do you foresee any problems in advising offerors in the solicitation that this scenario may happen. I have seen this language in a number of solicitations and it is included n the solicitation that I am currently working. I am just all of a sudden being challenged on the language included. No issues came up during the solicitation stage concerning this strategy - i.e. protests. Do you see any problems. Hopefully there is enough input to receive helpful responses to convince the CO her strategy is incorrect. Thanks for any inpput you can provide.

P.S. I didn't write the language in the soliciitation, I am just trying to award to the criteria included in the solicitation.

Any advice you can offer would be greatly appreciated.

By fprmerfed on Thursday, June 12, 2003 - 09:58 am:

You said all the right things in your first paragraph so you obviously understand the proper process.

The questionable part comes into play with your second paragraph and the statement in the following sentence about not writing the language into the solicitation. What does your solicitation specifically say about which offeror get selected for award?

The key thing GAO looks at in any protest decision is whether the agency followed the process described in their solicitation.

By joel hoffman on Thursday, June 12, 2003 - 10:44 am:

Please clarify what you mean by "The CO insists the award is based on adequate price competition".

Also, what is the specific, stated basis of award language in the solicitation that you are referring to? It's not clear why the CO is challenging the stated basis of award, unless it's a debate over interpretation of the language. Once in the solicitation, the Government needs to follow it. However, if the language is ambiguous, it may invite a protest.

You can e-mail me (check and edit my e-mail address), if you don't want to share the RFP language in public. happy sails! joel hoffman

By ji20874 on Thursday, June 12, 2003 - 11:46 am:

If your solicitation has already been released, you have to do your evaluation in accordance with the criteria in the solicitation -- however, as formerfed mentioned, you can do everything you want to do if the solicitation says so.

If your solicitation does not permit a price-quality trade-off, and you still want to do one, you may need to amend the solicitation and invite updated proposals.

However, you say that your solicitation does include the trade-off language. This is good. Then, the question becomes, who is the source selection authority? (See FAR 15.303(a) and (b)(1)-(6).) If the contracting officer is the SSA, then he or she is solely responsible for making the subjective judgment of which proposal provides the best value to the Government in accordance with the evaluation criteria in the solicitation. If someone else is the SSA, then that person must make that decision.

This is not a matter between "adequate price competition" and a "trade-off". Regardless of where you are on the best value continuum (see FAR 15.101), your contracting officer will likely use adequate price competition to determine that the price to be paid is fair and reasonable (even if a higher-priced offeror is selected).

By Eric Ottinger on Thursday, June 12, 2003 - 01:49 pm:

Anon2,

The concept of "adequate price competition" is used to determine whether cost or pricing data will be required. You are confusing yourself using this term in other contexts.

What you have said generally goes for any Part 15 competition other than LPTA. Hence, there shouldn't be much need to provide special notification to offerors.

Eric

By anon2 on Friday, June 13, 2003 - 08:57 am:

I will try to respond to the issues.

The CO says she will go to the bottom line price and determine the price as fair and reasonable. No justification for the premium paid, if award is at a higher price.

The language in the solicitation indicates that if proposals are determined to be technically equal/substantially equal, price/cost will be the deciding/controlling factor for award.

The technical factors are in descending order of importance. Technical is more important than price/cost, but price/cost will not be ignored in the evaluation and award of a contract. Then the four eval factors/with subfactors are listed.

My issue is that the contracting officer needs to do more than a bottom line comparison for adequate price competition to justify the premium to be paid if award is at the higher price.

Eric, I don't really understand you post.

Let me know if you need more information

By formerfed on Friday, June 13, 2003 - 09:33 am:

You seem to be combining two issues that are actually separate. Eric's point is that the Contracting Officer must determine prices paid in every contract are fair and reasonable. Obtaining adequate price competition is one way. See FAR 15.402 for further detail. If adequate price competition isn't obtained, another method is required such as obtaining the submission of cost or pricing data.

Now when you get to the source selection, you must decide which is the most beneficial source. Conduct your evaluation. If technical rankings are essentially equal, price becomes controlling. If not, perform your tradeoffs and make a decision consistent with what you said in your last paragraph.

By joel hoffman on Friday, June 13, 2003 - 10:56 am:

formerfed is essentially correct. Unless the solicitiation specifically states that award will be made on the basis of the lowest price-technically acceptable offer by a responsible offeror (according to the above information, it doesn't), you have a best value trade-off source selection. Then, a cost-technical trade-off analysis is mandatory.

It doesn't matter whether or not the solicitation mentions a trade-off analysis. That step is inherent in the "best value trade-off" acquisition method. The boards and courts are consistent in requiring such an analysis to justify the selection.

See also the discussion in FAR 15.308 "Source selection decision" concerning mandatory trade-offs, to include documenting the benefits associated with paying additional costs.

The published scheme states that technical is more important than price, except that "if proposals are determined to be technically equal/substantailly equal, price/cost will be the deciding/controlling factor for award."

As a minimum, the source selection authority (the C.O., here) must determine whether or not the technical proposals are "technically equal/substantially equal". If they are, then the lowest, fair and reasonable price (and any other stated price evaluation criteria) will determine the selected awardee, assuming that they are determined to be responsible, etc.

If they aren't, the C.O. must make a trade-off comparison of relative advantages and disadvantages between proposals, bearing in mind that technical was officially stated as more important than price. If award is to be made to other than the lowest priced, technically acceptable offer, the C.O. must justify the price premium, based on the trade-off analysis.

From what you have presented as the scenario, I don't see much room for debate on these issues. happy sails! joel hoffman

By Eric Ottinger on Friday, June 13, 2003 - 12:05 pm:

Formerfed,

Thanks for the help.

Anon2,

Actually, I agree with everything Joel said up to the last. Although there is general agreement on CTTO (cost-technical trade-off) there will be no end of debate on the level of detail, facts and analysis required.

My first bit of advice is to not argue with the CO unless you think there is a high probability of an ugly protest. (However, given a choice between an ugly argument with the boss and an ugly protest, I would choose the argument with the boss.)

Instead, take this opportunity to educate yourself. Go to the GAO website.

http://www.access.gpo.gov/su_docs/aces/aces170.shtml?/gao/index.html

Put “cost-technical trade-off” into the search. You will get 19 hits. (I am sure that you can get many more with some tweaking.)

After you have read some cases you will begin to get a sense about the quality of the justification that GAO expects to see.

Professional Software Engineering, Inc. has a good discussion.

http://frwebgate4.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=5156866113+2+0+0&WAISaction=retrieve

BNUMBER: B-272820, DATE: October 30, 1996, TITLE: Professional Software Engineering, Inc.

Note that the PCO identitfies several discriminators but doesn’t quantify the dollar impact of any particular discriminator.

Give the Comp. Gen. credit for having common sense. The greater the cost difference (and the smaller the technical difference) the greater the rigor and detail that the Comp. Gen. will expect to see in the CTTO analysis. In the “Professional Software Engineering, Inc.” case a few well chosen narrative comments were sufficient.

Eric

By joel hoffman on Friday, June 13, 2003 - 02:29 pm:

Agree, Eric. What I mean is that there is little room for debate about whether or not a cost/technical trade-off analysis is necessary to justify selection of a higher priced proposal. happy sails! joel

By Vern Edwards on Saturday, June 14, 2003 - 12:38 am:

Anon2:

While all have provided you with good information, ji20874 has given you the best response. If the CO is the source selection authority, then FAR 15.303 and 15.308 say she is responsible for the source selection decision. No one here can give you a better response based on the information that you have provided. Also, I presume that the decision will be reviewed by an agency lawyer.

The key rule is that the source selection authority must make the source selection decision in a manner that is consistent with the terms of the RFP, whatever those terms may be. If the RFP requires a tradeoff analysis, then a tradeoff analysis must be done. Unless the RFP is very ambiguous, then as Joel said, there should be little room for debate.

Read regulations and case law if you like, but I suggest that your time would be best spent doing your part of the job as well as you can.

By Anon2 on Monday, June 16, 2003 - 08:02 am:

Thank you Joel,

Your points are exactly what I have been telling the CO. The CO isn't the boss, but I don't believe she knows the level of detail required to justify a price premium. I know that we have an overall responsibility to ensure prices, whether a higher price or the lower price, are fair and reasonable.

I know most of you are in the Government procurement arena either now or have been in the past and most know the CO doesn't make the determinations and documentation cited here, the Contract Specialist does. If this isn't the case, it has been my experience for 20++ years. My CO's have reviewed my determinations and recommendations and 98% of the time have concurred with my findings, not the case in this instance.

Yes on the ugly argument and yes on the ugly protest.

Essentially, I have already made the determination that offerors technical approach are essentially technically equal and have started to make the argument why they are technically equal and will let price be the controlling factor. The thing is until you get to this point, technically equal or a superior/ better technical apporach, I don't think you can't make the argument that adequate price competition will be the sole basis for the award. You need to be able to make the determination that the price is fair and reasonable whether to a higher technical, higher priced offeror or the lower priced offer.

Thank you Vern, I agree there should be little room for debate. I don't know why there is except for maybe a philsoophical difference on how the trade-off process is accomplished. The CO made the argument the solicitation didn't say we would do a trade-off.

Eric, As for your post regarding the GAO website. Usually right before beginning the docuemntation for the source selection decisions, I go to the website and see what the latest GAO decisions are with respect to the source selection process. I want to see what issues are addressed by protestors and to the extent possible how the Government handled the issues during the source selection process.

Sorry, I can't give any more information at this time and I hope I haven't confused things more by my responses. I'm trying not to confuse anyone, but also I am trying not to reveal too much so as to not jeopardize the awards.

By joel hoffman on Monday, June 16, 2003 - 09:36 am:

Good luck, Anon 2.

Because there may be some disagreement among the respondents, I'd like to reiterate one point. Absent specific language in the solicitiation that describes some alternative method for determining the winning offer, when using the best value trade-off method described in FAR Part 15, it's my opinion that a cost/technical trade-off analysis is necessary. That step is still mandatory if the RFP doesn't specifically "require a trade-off analysis".

In the instant case, according to the information provided, if technical proposals are determined to be essentially equal, the RFP specifies the trade-off methodology. It states that price will be the controlling factor in such an instance. Someone must first compare technical proposals to determine if they are essentially equal. If they are, the price comparsion criteria kick in.

If they aren't considered to be essentially equal, a trade-off analysis is still required, even though it didn't appear to be required by the RFP.

As anon2 and others stated, "adequate price competition" isn't the criteria for the source selection decision.

Yes - the ultimate decision making responsibility is the C.O.'s, irrespective of anon2's opinion. Anon2 seems to be correctly advising him/her. happy sails! joel

By Anon2 on Monday, June 16, 2003 - 12:55 pm:

Thank you Joel,

I have a feeling I am going to need it.

By Anon2 on Monday, June 16, 2003 - 01:43 pm:

Eric,

I was unable to locate the protest you reference using the hyperlink, but one I am referencing is B-265865.3 & .4 Southwest Marine and American Systems Engineering Corp. Jan 1996. B-29002.2, VAntage Associates as it applies to technical evaluations being essentially equal.

By Eric Ottinger on Monday, June 16, 2003 - 04:55 pm:

Anon2,

Go to the GAO site. Put B-272820 into the search.

I cited "Professional Software Engineering, Inc." because it was the first "on point" case out of my 19 hits and because it has a good discussion.

Eric

By Anonymous on Monday, June 16, 2003 - 06:55 pm:

Joel's comments are on target. If the solicitation says the award will involve a tech-price tradeoff, then the CO cannot simply take the low guy because it is easy. You have to look at what the technical differences will give you and record a determination that they are not worth the price premium.

There have been protests that faulted the CO for awarding to the low offeror without really addressing whether the next proposals' technical superiority was worth a little extra money.

By Eric Ottinger on Monday, June 16, 2003 - 09:00 pm: