Does Best Value contracting help federal agency's meet their minority/disadvantaged business contracting goals? If so, how?

By stan livingstone on Thursday, September 07, 2000 - 01:26 pm:

There are lots of different interpretations of "best value". If you mean using using a tradeoff process to make selection decisions, several agencies have been successful in applying it towards meeting goals. Most notably, the Department of Commerce established a multiple award GWAS program to acquire IT services. They termed it COMMITS, and restricted the awards exclusively to small, disadvantaged and women-owned concerns. They used evaluation factors other than price to ensure only well qualified, experiened, and good performers received contract awards. In that manner, they feel other agencies are attracted to using the program in both meeting their IT needs as well as achieving their own socio-economic goals.

By C MERCY on Thursday, September 07, 2000 - 02:25 pm:

HOW DID DOC RESTRICT COMPETITION TO WOMEN OWNED BUSINESS?

By C MERCY on Thursday, September 07, 2000 - 02:30 pm:

COME TO THINK OF IT HOW DID THEY RESTRICT IT TO SDB"S?

By Stan Livingtone on Friday, September 08, 2000 - 07:29 am:

I believe the DOC procurement was a SB set-aside. The evaluation scheme stated a minimum number of awards would be made within categories of SB, SDB, 8(a), and woman-owned.

By C MERCY on Friday, September 08, 2000 - 08:05 am:

I HONESTLY CAN'T SEE HOW THAT COULD BE DONE. I UNDERSTAND THE SMALL BUSINESS SET ASIDE BUT CATEGORIES WITHIN THAT FRAMEWORK? EXCEPT FOR DOD THERE HAS NEVER BEEN A CIVILIAN AGENCY SDB SET ASIDE: IN THE SITUATION YOU DESCRIBE 8A WOULD APPEAR TO HAVE TO COMPETE, POSSIBLY WITH OTHER 8A BELOW THE COMP THRESHOLD AND THERE HAS NEVER BEEN A PREFERENCE FOR WBES. IS THERE A SPECIAL PIECE OF LEGISLATION FOR DOC.....POSSIBLY?

By Stan Livingstone on Friday, September 08, 2000 - 09:03 am:

If you're interested, here's the site with all the information including the solicitation. It also includes background info and correspondence with OFPP and SBA.

http://oamweb.osec.doc.gov/conops/commits/

By Bob Hansen on Monday, September 18, 2000 - 02:40 pm:

I checked the Commits web site as recommended by Stan Livingstone, but found no authority to restrict awards to women-owned or small disadvantaged businesses. When I contacted Stan, he said that to his memory, the acquisition was only "a total small business setaside" ... "with an emphasis on including appropriate representation by minority, 8(a), and women-owned businesses."

Whether the awards were restricted to women-owned or small disadvantaged businesses or merely an "emphasis" placed on awards to those firms, I join with C Mercy's question, what is the legal authority for the restriction or emphasis?

According to Formation of Government Contracts, 3rd edition, page 1404, "The Comptroller General has ruled that an executive agency needs a clear grant of authority from Congress to implement a collateral policy that limits those who are eligible for award of contracts, 10 Comp. Gen. 294 (A-34106) (1931); 42 Comp. Gen. 1 (B-148930) (1962)." It would therefore seem inappropriate to make awards or insert evaluation criteria for socio-economic programs not authorized by law.

By Teresa Murray on Friday, September 22, 2000 - 03:49 pm:

Thank you Mr. Livingstone for the information you provided. When I referred to Best Value, I was referring to tradeoff/negotiation/competitive proposals. As a subcontracting evaluation factor, best value can encourage but not require subcontractors to fulfill minority/disadvantaged business goals. The State of Maryland, for instance, lists minority contracting as one of the factors considered by the selecting official when determining the "economic benefit" to the state when selecting a contractor.
Mr. Livingstone, you mentioned that "several agencies" in addition to the Dept. of Commerce have been successful in applying best value toward meeting minority contracting goals, could you tell me who those agencies are? That information would be helpful. Thank you again.

By joel hoffman on Tuesday, September 26, 2000 - 07:03 pm:

Teresa, This assumes that your initial question refers to prime contract awards to DBE's, not subcontracting goals. Yes, we have used Best Value RFP's to help meet our goals (construction contracts but I can also see a benefit for service contracting). DOD once had authority to restrict competition to DBE's, outside the 8(a) program. We selected some larger, more complex projects for the program. By using best value, we were able to screen out unqualified contractors, front operations for majority controlled JV's or subcontractors, were able to ensure that the DBE performed the requisite 15% of the real work, that the DBE would actually manage the job, were able to ensure that the specialty subs were experienced, etc., etc. I feel that you could do this with the competitive 8(a) program with similar results. It also speeds up award, because you don't have to negotiate on a sole source basis, eliminating audits, cost or pricing data, etc. Happy Sails!

By Stan Livingstone on Wednesday, September 27, 2000 - 09:34 am:

Teresa,

I noticed my prior response didn't make it to posting. If I correctly remember what I said, I did see at laest one agency who used a process similar to what Maryland did. I've also see prime contractor's record of subcontracting (actual vs what they promised in their pre-award subcontracting plan) used in past performance assessment. I don't have specifics in either of these but I'll keep looking and email the details if I find them.

Stan

By Joel Hoffman on Wednesday, September 27, 2000 - 02:45 pm:

Stan and Teresa, look in DFARS - goodness, I'm TDY, away from a copy - Probably 219 or 215. For the last two years, there has been a mandatory requirement for the Government on RFP's to evaluate past performance of all offferors - large or small- in subcontracting to small, SDB, etc. It has caused problems in that small business contractors have not kept statistics on past performance because they've never been required to develop subcontracting plans. This is a typical example of unplanned, uncoordinated do-good social policies. Happy Sails!

By Joel on Wednesday, September 27, 2000 - 02:58 pm:

DAU was off-line but the DFARS can be found at
"http://www.deskbook.osd.mil/"
Happy Sails!

By bob antonio on Wednesday, September 27, 2000 - 03:40 pm:

Joel:

Look to the your left. The third item under "Wifcon Main." It is the road to all "fardom."

By Vern Edwards on Wednesday, September 27, 2000 - 04:15 pm:

I'd like to take a shot at answering Teresa's question. The question was:

"Does Best Value contracting help federal agency's meet their minority/disadvantaged business contracting goals? If so, how?"

The answer is yes. It does so in at least two ways: first, by making proposed small-disadvantaged business participation in contract performance a source selection evaluation factor, and second, by giving small-disadvantaged businesses a favorable price evaluation adjustment.

FAR 15.304(c)(4) states that agencies must evaluate offerors' proposals for participation by small disadvantaged business concerns in the performance of the contract in certain acquisitions of $500,000 or more ($1,000,000 or more for construction work). The procedures for doing this are spelled out in FAR Subpart 19.12, Small Disadvantaged Business Business Participation Program. In brief, the program requires large business to propose targets for percentages of the contract work they propose to assign to small disadvantaged business firms. Agencies consider these percentages when evaluating the proposals of large businesses.

FAR Subpart 19.11 requires agencies to give small disadvantaged businesses a price advantage by adding a specified percentage amount to the proposed prices of all other offerors. This procedure applies only to acquistions in certain Standard Industrial Classification (SIC, now NAICS) groups. The Department of Commerce determines the percentage adjustment factor. A small disadvantaged business can either take the price evaluation adjustment or the small disadvantaged business participation credit described above.

These mandatory procedures apply to source selections conducted using either the tradeoff process or the lowest-priced, technically-acceptable process. All agencies must use these procedures when applicable. Thus, all agencies have "succeeded" to some degree through the use of these procedures.

These programs help agencies meet their goals by encouraging large businesses to team (joint-venture or subcontract) with small disadvantaged businesses or by giving small disadvantaged businesses a competitive price advantage. Presumably, these procedures will result in more awards to small disadvantaged businesses.

There is no statutory authority for a women-owned business set aside, and the FAR does not presently authorize such set-asides. Such a set-aside would have to be justified in some way under FAR Subpart 6.2.

By joel hoffman on Thursday, September 28, 2000 - 01:31 pm:

DFARS 215.304 and 215.305 address evaluating past performance of offerors on the extent of participation by SDB, small business, WO, etc. Thanks, Bob. I keep overlooking the most obvious source - WIFCON. I automatically go to my "Favorites" by subject, Happy Sails!