The below question was posted to the Ask a Professor website, under Pre-Award Procurement and Contracting on 1/19/01 by XXXXXX.

"The Scenario
An IDIQ contract is going to be the result of this requirement. We're trying to find out the best method to solicit for it.

"The Question
Can you use a RFQ to award an IDIQ type contract? Or is an RFP the best route to go since it would include all required clauses. Also, the contractor would have a clearer idea of what he is quoting on. "
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Joel, here, is also ignorant about requests for quotations. Can somebody give me a primer on RFQ's and specifically answer XXXX's question? I thought RFQ's were a means to ask for quotes, rather than firm proposals but have seen considerable discussion about contracts or PO's issued in response to quotes. I seek guidance from anyone, including ANON's of all types!

I found a FAR reference in Part 13 Simplied Acquisitions. It appears that an RFQ is intended to seek quotes, probably appropriate for small purchases. If the Government buyer finds the best deal, the Government issues a purchase order (offer to buy at the quoted price and conditions?). The seller can accept or reject the Government's offer.

Here is the FAR reference:

"13.004 Legal effect of quotations.

(a) A quotation is not an offer and, consequently, cannot be accepted by the Government to form a binding contract. Therefore, issuance by the Government of an order in response to a supplier's quotation does not establish a contract. The order is an offer by the Government to the supplier to buy certain supplies or services upon specified terms and conditions. A contract is established when the supplier accepts the offer.

(b) When appropriate, the contracting officer may ask the supplier to indicate acceptance of an order by notification to the Government, preferably in writing, as defined at 2.101. In other circumstances, the supplier may indicate acceptance by furnishing the supplies or services ordered or by proceeding with the work to the point where substantial performance has occurred.

(c) If the Government issues an order resulting from a quotation, the Government may (by written notice to the supplier, at any time before acceptance occurs) withdraw, amend, or cancel its offer. (See 13.302-4 for procedures on termination or cancellation of purchase orders.)"

Although the reference is under Part 13, does anything prevent the Government from using RFQ's for larger acquisitions?
Happy Sails! Joel

By Anonymous on Thursday, January 25, 2001 - 10:28 am:

Joel,

I know of a few agencies (mostly doing R&D efforts) that use RFQs as a means to solicit quotes/proposals. They then conduct competitive discussions/negotiations with the highest ranked respondees. The reason is they want to allow maximum flexibility in responding (use of fixed priced as well as cost reimbursement contract types, educational institutions as well as for profit companies, etc.). In essence, they evaluate and select the best qualified source on the basis of capability, experience, novel approach, etc., and then negotiate things like contract type, T&Cs, prices, etc. with the selected firm.

By Eric Ottinger on Thursday, January 25, 2001 - 11:06 am:

Joel,

See FAR 16.505 Ordering.

"(b) Orders under multiple award contracts--(1) Fair opportunity. (i) The contracting officer must provide each awardee a fair opportunity to be considered for each order exceeding $2,500 issued under multiple delivery-order contracts or multiple task-order contracts, except as provided for in paragraph (b)(2) of this section.

(ii) The contracting officer may exercise broad discretion in developing appropriate order placement procedures. The contracting officer should keep submission requirements to a minimum. Contracting officers may use streamlined procedures, including oral presentations. In addition, the contracting officer need not contact each of the multiple awardees under the contract before selecting an order awardee if the contracting officer has information available to ensure that each awardee is provided a fair opportunity to be considered for each order. The competition requirements in part 6 and the policies in subpart 15.3 do not apply to the ordering process. However, the contracting officer must--

(A) Develop placement procedures that will provide each awardee a fair opportunity to be considered for each order and that reflect the requirement and other aspects of the contracting environment;

(B) Not use any method (such as allocation or designation of any preferred awardee) that would not result in fair consideration being given to all awardees prior to placing each order;

(C) Tailor the procedures to each acquisition;

(D) Include the procedures in the solicitation and the contract; and

(E) Consider price or cost under each order as one of the factors in the selection decision.
…

(B) Formal evaluation plans or scoring of quotes or offers are not required.

…

(3) Pricing orders. If the contract did not establish the price for the supply or service, the contracting officer must establish prices for each order using the policies and methods in subpart 15.4.

(4) Decision documentation for orders. The contracting officer must document in the contract file the rationale for placement and price of each order."


Note that 16.505 carefully avoids using the terms “offer,” “proposal,” and “quote.” The terms are “procedure” and “submission requirements.”

I believe the correct answer is to do whatever makes sense for the particular task or delivery order. It is important to understand that FASA created a new type of vehicle with new rules. The intent was to allow the maximum of flexibility.

The offerors can provide anything from a formal proposal to a quick stand-up briefing. Generally, the smaller the order, the simpler the procedure should be.

If the agency doesn’t provide a range of procedures depending on the size and complexity of the order, two bad things happen. All of the orders are done with Part 15 type procedures, making the whole process onerous for the technical customer and contractor. And, the technical customer will lump requirements together to minimize the amount of effort required for source selections.

As far as I can see, it doesn’t matter whether the PCO receives an offer (i.e. proposal) in response to a “Request for Proposals” (RFP) or a quote (which is not an offer). FAR 16.505 can be satisfied with even less.

Eric

By joel hoffman on Thursday, January 25, 2001 - 07:04 pm:

Eric, I beleive the original question was in relation to award of the initial contract, not orders after award. Something like "Can I use an RFQ to solicit quotes, then award an ID/IQ contract?" Happy Sails! Joel

By joel hoffman on Friday, January 26, 2001 - 08:28 am:

Thanks, ANON.

I guess I need to go back and research RFQ's some more! The only reference I saw in my FAR Internet search, yesterday, was under Simplified Acquisition in Part 13.

Good Grief,how I hate having to thumb through a book on the Internet!!! I can "speedread" through a hard copy to find a topic - not on this dadgummed computer! OKAY - somebody out there is going to tell me how backward I am and how some program will allow me to find anything, anywhere. I don't think Bob's FAR link had word search capability but will look again. Happy Sails!

By C Mercy on Friday, January 26, 2001 - 08:53 am:

Joel it would make a difference if you were acquiring commercial items or services or not. It would also make a difference if the value was known. So if commercial would it exceed five million? If not commercial is it greater than 100K?

By John Ford on Friday, January 26, 2001 - 03:39 pm:

Joel, although the FAR only discusses quotes in regard to Part 13, it does say a quote is not an offer which can be accepted by the Government issuing an order. That may be true in regard to acquisitions under the FAR, however, I do not believe it is true in regard to acquisitions using GSA schedules. When acquiring services under GSA schedules, it is common to ask for quotes then issue an order against the schedule based on those quotes. The difference may be that there is a contract already in place against which an order can be placed, similar to IDIQ contracts Eric discussed.

By joel hoffman on Friday, January 26, 2001 - 04:08 pm:

Thanks, everyone. Happy Sails! Joel

By Eric Ottinger on Friday, January 26, 2001 - 05:04 pm:

Joel and All,

I am going to make a distinction between the “traditional ID/IQ” and the “FASA ID/IQ.”

The traditional ID/IQ, going back 10 or 15 years into the past, was limited to fixed price, commercial type items.

The FASA ID/IQ is something else altogether.

I take it “Request for Quotations” means request for price quotes. In any case, that is what I would infer from the Form 18.

I think the person asking the question is looking for some way to do some kind of pre-qualification scheme. We discussed these issues at length on the old Water Cooler.

I believe, as much as we would like to simplify the source selection process, we are not free to narrow down the number of offerors without evaluating all of the criteria or at least the mandatory criteria in the FAR.

If the ID/IQ is a “traditional ID/IQ” with nothing to negotiate but price, I don’t see a problem.

Eric

By Robert Jackson on Saturday, March 03, 2001 - 08:46 pm:

If a project is not going to be over the formal bid threshold or less than the formal bid process. Other than requesting prices. How would you know get the best value. If you recevie three quotes and they are all different, it is more than likely that you would do a PO from the RFQ with the lowest dollar amount. How else would you get the best value? If it is an ID/IQ not exceeding the amount of 15,000. If a PO is not issued how will it be handle?