Glen:

Task order contracts based on hourly labor rates confront COs with a problem when it comes to evaluating price or cost to the government as required by FAR 15.304(c)(1).

The problem is this: How do you "price" work that hasn't been specified and won't be specified until the government issues task orders? COs have developed several solutions to this problem.

One solution is to require offerors to submit prices or estimated costs and fees for sample tasks and to use their responses when making nonprice-price tradeoffs.

Another solution is to require offerors to offer prices or estimated costs and fees for real tasks and to use those prices or costs and fees when making tradeoffs and when issuing the task orders after award.

A third solution is to input the offerors' proposed labor rates into a government-developed pricing model and then use the model's outputs when making nonprice-price tradeoffs.

Although none of these solutions is ideal, all are acceptable to the GAO. However, since COs must evaluate cost-realism when evaluating proposals for cost-reimbursement contracts, the third solution has one big advantage over the first two. Both of the first two solutions require the CO to make independent assessments of the realism of each offeror's proposed estimated costs based on each offeror's unique approach to doing the work. This is a lot of work. The third solution does not require the CO to make an independent assessment of the realism of each offeror's proposed estimated costs based on its unique approach because the offerors do not propose estimated costs, only labor rates. (Depending on the nature of the work, a CO may want to evaluate proposed labor rates for the effect that they may have on an offeror's ability to attract and retain competent personnel.)

Pricing models based on an agency's own expectations about the types of tasks that it will issue are not difficult to design and work fine for price analysis purposes. Sample tasks are just that, and real tasks may not be available or, if available, may not be representative of all of the work that an offeror may be required to do.

One of the chief advantages of task order contracts is that they allow agencies to defer specification of work until they know what they want done. However, except for advance agreements about hourly labor rates, deferred specification usually means deferred pricing. Pricing models are, in my opinion, the best solution to the problem of the evaluating price or cost to the government in source selections for task order contracts.

By Ramon Jackson on Monday, July 24, 2000 - 01:56 am:

Glen,

I tend to agree with you on "approach." Too often it simply offers a wonderful wedge for offerors to wiffle all over the place with platitudes and fancy dancing that eats time, creates unending discussions and opinions (sometimes very counterproductive) among evaluation teams, obscures the substance in page count or hot air that all becomes largely meaningless when rubber meets road.

Limiting offerors to one or two "pages" explaining the approach seems sufficient for all but the exotic R&D fields. If the seven stone carvers are the team, conventional wisdom might call for the graduating class, then a page explaining what is different in their approach that makes this possible should suffice.

By Glen on Sunday, July 23, 2000 - 06:04 pm:

Vern
First off I agree with the steps you've outlined for a phased procurements. The thread on "interesting procedure" at the Water Cooler makes a rock solid case. However, how do you evaluate price-related factors on cost plus task order contract? To make a short question long, on the service contract acquisitions that I've worked on in the past only a fraction of the tasks would be suited to get bids on. The contracting officers I've worked with have had a strong preference to get bids from offerors that allow the bidder to show their approach. This leads to staffing plans and detailed qualification statements which are then pitched with the first change (they are cost plus). I think the theory is you can have a meaningful comparison between the contractor who proposes 7 people who helped daft the original stone tablet version of the FAR and the offeror who proposes to use the entire 2002 class of Antioch College. I'd like to compare the overhead rates, G&A, Fee, and average salary by grade. Unfortunately, my approach (silly engineer me) does not allow the offerors to distinguish themselves by technical or management approach. To shorten up the question again; what should you use for price in an IDIQ CPFF contract absent a detailed technical approach?
Glen

PS
I've never seen an offeror submit a proposal that took serious exception; does it happen?

PPS
The email adress is silly but I never get any spam.

By Vern Edwards on Friday, July 21, 2000 - 09:04 am:

The best way to go about conducting a phased evaluation is to evaluate the following factors in the following steps, eliminating proposals in each step:

1. offer acceptability (i.e., assent to the terms of the RFP without exception, evaluated on a pass or fail basis);

2. price (by comparing the offerors to each other and eliminating any whose prices are too high);

3. price and experience; and

4. price, experience, and past performance.

Only after evaluating these factors and eliminating offerors that are not competitive on those bases should you go on to receive oral presentations or to evaluate written technical proposals.

This approach assumes that your RFP will state that the Govt intends to award without discussions.

By Patrick Gourley on Wednesday, July 19, 2000 - 09:02 am:

I would like some suggestions of easily verifiable evaluation critera which would allow our organization to limit the number of written technical proposals we read to an administratively manageable number. In Phase I of the evaluation, we want to limit the number of technical proposals based on some general capability requirements or discriminators, but we are not sure how to go about this. Our organization has already decided:

1) to write our own contract rather than use a GWAC
2) to make a single award IDIQ contract
3) to permit CPFF, T & M, or Fixed Price task orders
4) to require written technical proposals

It would be great if someone could refer me to an existing solicitation which uses this approach. Thanks in advance for any suggestions.

Patrick