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By
Rob on Tuesday, January 28, 2003 -
08:53 am:
Can anyone provide a clear distinction between the two
terms.
Can any discussions occur prior to a POM (after determination of
competitive range)?
By
formerfed on Tuesday, January 28,
2003 - 09:19 am:
Take a look through FAR part 15. You really need to
read it to get a thorough understanding. FAR 15.306(d)makes the
distinction between negotiations and discussions. It states
"Negotiations are exchanges...between the Government and
offerors, that are untaken with the intent of allowing the
offeror to revise its proposal....When negotiations are
conducted in a competitive acquisition, they take place
establishment of the competitive range and are called
discussions."
15.306(b) covers communications with offerors before
establishing the competitive range. Note while reading that
discussions and communications are both "exchanges" but there is
a distinction - you can communicate prior to establishing the
competitive range but not hold discussions.
Read the FAR first and see if this answers your question. If
not, reply with your specific question and we'll help with that
By
Eric Ottinger on Tuesday, January
28, 2003 - 12:51 pm:
Rob,
The answer to your second question is "No."
Discussions are a subset of negotiations. In a competitive
acquisition "negotiations" are "discussions." In noncompetitive
acquisitions, "negotiations" are "negotiations."
Discussions are constrained by certain rules which are required
to assure discussions with one offeror are not conducted in a
way that is unfair to other offerors. For instance, if one
offeror has a bright idea, I can't "tranfuse" the bright idea to
other offerors.
Eric
By
Eric Ottinger on Tuesday, January
28, 2003 - 04:53 pm:
Rob,
It appears that I misread your question and probably gave you
the right answer for the wrong reasons.
The POM appears to be a Pre-Negotiation Objective Memorandum. On
the face of it, it would appear that this should be completed
and approved before negotiations.
On the other hand, a Pre/Post may be the norm.
In any case, this is an agency requirement and you will have to
find your anwer in your agency regulations.
Eric
By
JS Rush on Tuesday, January 28,
2003 - 07:43 pm:
One way of looking at it is that "discussions" occur
when you can't award on initial offers. The KO establishes a
competitive range and discussions are conducted with those
offerors remaining in the competitive range. "Negotiations," as
Rob has indicated, are pre-meditated. When the RFP is published
your intent is to conduct negotiations. When you enter
"discussions" with offerors, your intent is to allow the offeror
to revise its proposal. Note the differences between 52.215-1
and 52.215-1 Alternate I. Important is that whether you call it
"discussions" or "negotiations," it must be meaningful. jr
By
JR on Tuesday, January 28, 2003 -
07:46 pm:
Sorry: "...as Eric indicated..." not Rob. jr
By
Vern Edwards on Wednesday, January
29, 2003 - 08:01 am:
Discussions and negotiations are the same thing. There
is no distinction between them. See FAR 15.306(d).
By
Chuck Solloway on Thursday, January
30, 2003 - 11:14 am:
JS,
You must indicate in the RFP whether it is your intent to hold
discussions or it is your intent to award without discussions.
Thus, discussions are always "premeditated" except under one
condition. That condition is when you informed offers that you
intended to make award without discussion but some significant
reason (all offers received are not responsive or are at other
than fair and reasonable prices, for example) requires that you
hold discussions notwithstanding your original intent.
I agree with Vern that discussions and negotiations are actually
the same thing. What we in government contracting call
discussions, a member of the general public would call
negotiations. In government contracting, we tend to use the word
"discussions" in competitive source selection situations and
"negotiations" in non-competititive situations such as when we
are negotiating equitable adjustments for changes.
There is no more convoluted part of the FAR than the FAR 15
coverage on exchanges and the FAR discussion of exchanges,
clarifications, communications, discussions and negotiations.
By
Eric Ottinger on Thursday, January
30, 2003 - 11:43 am:
Rob and All,
Everybody is correct, up to a point. Discussions and
negotiations are fundamentally the same.
However, it doesn’t follow that there is no distinction. One of
the goals of the Part 15 Rewrite was to make discussions in a
competitive procurement more like negotiations in a
noncompetitive procurement. For instance the government is
encouraged to ask for improvements, not just to highlight
weaknesses and deficiencies.
Although, in principal, you can probably get to pretty much the
same place with either process, part 15 discussions are of
necessity a more constrained and formal process. For instance,
if the parties decide that an essential requirement is
unnecessary or overly restrictive, it is a simple matter to
agree to the change in a sole source negotiation. In a
competitive negotiation, this kind of change requires an
amendment to the solicitation and new proposals. This can be
done, but it would not be done casually.
Eric
By
Anonymous on Wednesday, February
05, 2003 - 08:47 am:
Thank you Vern. I agree. Whenever, I use one term
someone always tries to correct it by saying Oh you mean
"negotiate" or you mean "discussions". I tell them "No. I use
the two terms interchangeability" You just reaffirmed by
position that what I am saying is appropriate regardless of
which term I use.
Thanks again.
By
Vern Edwards on Wednesday, February
05, 2003 - 10:23 am:
Anonymous:
It's an old question: What is the difference between discussions
and negotiations?
The statute requiring COs to conduct discussions with offerors
in a competitive range was originally enacted in 1962, as part
of the Truth in Negotiations Act (Public Law 87-653). It was
first codified at 10 U.S.C. 2304(g) and applied only to DOD and
NASA. It was voluntarily adopted by the civilian agencies by
incorporation into the old Federal Procurement Regulation, but
was not statutorily applicable to them until the enactment of
the Competition in Contracting Act in 1984.
The idea behind the requirement for discussions was that if we
were going to require contractors to submit and certify cost or
pricing data, then we should use it to negotiate for better
prices. However, for reasons unknown, Congress used the word
"discussions" instead of "negotiations," which led some to
wonder if there wasn't a difference. The GAO addressed itself to
this issue in a famous decision. See: To the Administrator,
National Aeronautics and Space Administration, 51 Comp. Gen.
621 (1972). In that decision the GAO said:
"THE ISSUE PRESENTED WITH RESPECT TO THE CONDUCT OF NEGOTIATIONS
TURNS ON THE MEANING TO BE ASCRIBED TO THE STATUTORY MANDATE FOR
'WRITTEN OR ORAL DISCUSSIONS.' WHILE THE PROVISIONS OF 10 U.S.C.
2304(G) DO NOT DEFINE THE NATURE, SCOPE, OR EXTENT OF THE
REQUIRED DISCUSSIONS, IT IS OUR VIEW THAT THE LEGISLATIVE
HISTORY EVIDENCES A CONGRESSIONAL INTENT THAT NEGOTIATIONS BE
CONDUCTED UNDER COMPETITIVE PROCEDURES TO THE EXTENT PRACTICABLE
AND THAT THEY BE 'MEANINGFUL BY MAKING THEM DISCUSSIONS IN FACT
AND NOT JUST LIP-SERVICE,' TO THE END THAT COMPETITION IS
MAXIMIZED AND THE GOVERNMENT IS ASSURED OF RECEIVING THE MOST
FAVORABLE CONTRACT."
Capitalization in original.
Furthermore, in early decisions based on the statute, GAO used
the terms interchangeably. See, e.g.: To the Secretary of the
Army, B-158686, September 2, 1966, in which the GAO said:
"THUS THE ARMED SERVICES PROCUREMENT ACT PERMITS NEGOTIATED
AWARDS TO BE MADE IN APPROPRIATE CASES WITHOUT WRITTEN OR ORAL
DISCUSSIONS, BUT REQUIRES THAT IF NEGOTIATIONS (I.E.,
DISCUSSIONS) BE CONDUCTED WITH ONE OF THE OFFERORS, THEN
NEGOTIATIONS SHALL ALSO BE CONDUCTED WITH ALL RESPONSIBLE
OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE,
AND OTHER FACTORS CONSIDERED. PART 8 OF SECTION III, ASPR,'PRICE
NEGOTIATION POLICIES AND TECHNIQUES,' SPELLS OUT THE
REQUIREMENTS IN GREATER DETAIL."
Capitalization in original.
However, as indicated by Eric, in competitive acquisitions there
has always been a tension between the objective of bargaining to
obtain the most favorable contract and being fair to
competitors. In the late 1960s, worries about "technical
leveling," "technical transfusion" (terms no longer in use) and
"auctioning" led to the development of a procedure of formal,
limited discussions, in which offerors were told of their
deficiencies and weaknesses, but in which little real bargaining
took place. The result was that many more protests were
sustained because COs did not say enough than were sustained
because they said too much.
The FAR Part 15 Rewrite of 1997 sought to encourage more
bargaining, hence the wording of the first paragraph of FAR
15.306(d), in which it is made clear that "discussions" is just
a synonym for "negotiations" and in which the "give and take"
bargaining aspect is emphasized. However, as you pointed out,
old beliefs and habits die hard, despite recent quotes from the
GAO such as this one from Sabreliner Corporation,
B-290515, August 21, 2002:
"To argue that the agency's failure to meaningfully evaluate a
material part of Orenda's proposal is excusable on the basis
that the plan's 'process itself is negotiable' and will be
considered and negotiated after award ignores the contracting by
negotiation process set forth in part 15 of the FAR. That
process generally provides that in negotiated acquisitions, an
agency is to evaluate proposals in accordance with the
evaluation factors set forth in the solicitation, document its
evaluation of proposals, if appropriate negotiate with
offerors through the conduct of discussions and allow
offerors to revise their proposals, and select a proposal for
award based upon the selection criteria set forth in the
solicitation. FAR §§ 15.304-15.308."
Italics added.
By
Eric Ottinger on Wednesday,
February 05, 2003 - 04:55 pm:
Anon,
Everything Vern has said is correct. However--
The phrase "meaningful discussions" is frequently used in
protests. You would have a hard time equating "discussions" in
this sense with "negotiations" in the usual sense.
Eric
By
Vern Edwards on Wednesday, February
05, 2003 - 08:05 pm:
Meaningfulness becomes an issue in competitive
negotiations when one offeror complains that the government
didn't really negotiate with it, so that it didn't have a
fair chance to improve its proposal. It's essentially a
complaint that the contracting officer didn't negotiate in good
faith and thus treated the offeror unfairly relative to other
offerors. This doesn't come up in sole source procurements
because there is only one offeror.
The requirement that negotiations be "meaningful" is basically a
requirement that the contracting officer negotiate in good faith
with all offerors, and not just with some. It does not reflect
any fundamental difference between the objectives of
negotiations in a competitive procurement and of negotiations in
a sole source procurement. The objective in all such
negotiations is to get better offers than those initially
proferred.
While some contracting officers have conducted negotiations in a
more limited and ritualistic manner in competitive procurements
than in sole source procurements -- due in large measure to
unfounded concerns about technical leveling -- it should be
evident from the case law and the changes wrought by the FAR
Part 15 Rewrite that this has been more a matter of misinformed
choice than of necessity. In the entire history of government
contracting, the GAO never sustained a protest of technical
leveling. Not once.
By
Anonymous on Wednesday, February
05, 2003 - 08:56 pm:
I'll admit that I was convinced that technical
leveling was great no-no, before the Part 15 re-write. Yes,
Nash's and Cibinic's reference books also cautioned against such
techniques. My techniques have now changed. The Government is
getting much better terms and technical proposals, as a result.
I'm convinced that it is still a common tendency among my
counterparts to hold back in negotiations on competitive RFP's.
Latest experience was on a billion+ competition in our program.
The Government wouldn't come right out and say they didn't like
portions of the offeror's technical solution, in several areas.
They beat around the bush. However, they wouldn't hammer home
their concerns. Of course there was a protest, but the protestor
failed to capitalize on the fact that the Government conducted a
half-hearted discussion. When the offeror didn't say what the
Government wanted to hear after just one question in at least
two technical areas, the discussion moved on, These parts of the
proposal were rated as significant weaknesses, which were
primary factors in the selection. I feel confidant that, had the
offeror been made aware that the Government didn't agree with
its initial answer, it could have adequately addressed the
problem in its revised proposal. It wouldn't have delayed the
source selection, a primary objective during the process. Sorry,
I need to remain anonymous.
By
Eric Ottinger on Wednesday,
February 05, 2003 - 09:58 pm:
Vern,
I agree with almost everything you say, but --
Can you show me an instance where the phrase "meaningful
discussions" is used with regard to anything other than
weaknesses and deficiencies. I think you would have to look
hard.
A more subtle point-- I regard the whole Part 15 process as
negotiation. Discussions are only one phase in the total
negotiation process. Further, I would say that it is negotiated
even if award were made without discussions.
Eric
By
Vern Edwards on Wednesday, February
05, 2003 - 10:32 pm:
Eric:
No, I can't show you an instance in which "meaningful
discussions" was used with regard to anything other than
weaknesses or deficiencies. (That doesn't mean that there has
not been such an instance, only that I haven't looked for it and
don't intend to do so. There are several hundred protest
decisions which mention the term "meaningful discussions." I
haven't read them all.) But I'm not sure what significance you
see in that.
As to your subtle point, I don't see any problem with what you
say. But rather than saying that discussions are only one phase
of the total negotiation process, I would say that negotiation
in the sense of bargaining is only one phase of the process
called "contracting by negotiation."
To me, the question is whether the negotiation process is
necessarily any different in a competitive procurement than
in a sole source procurement. I don't think it is,
necessarily, although I acknowledge that it usually is in
practice. I admit that many contracting officers do it
differently in a competitive procurement, but the question is
why, when the FAR says that competitive negotiations include
bargaining and give-and-take?
The only limits on competitive negotiations are in FAR §
15.306(e). In what way do those limitations require the use of a
fundamentally different bargaining process in a competitive
procurement than in a sole source procurement?
What do you do when you bargain? You say, "I don't like what you
offered." Then you either say, "I want this, instead," or, "I
want something different, what have you got?" Why can't you do
that kind of bargaining in a competitive procurement? Where does
FAR or case law say you can't? I don't think there is any reason
why you can't. Thus, I conclude that there is no fundamental
difference between negotiations in a competitive procurement
(called "discussions") and negotiations in a sole source
procurement.
Vern
By
Anonymous on Thursday, February 06,
2003 - 08:36 am:
Not any more - but the old days were different. Most
people have some baggage to overcome.
By
Vern Edwards on Thursday, February
06, 2003 - 09:35 am:
Anonymous:
To the extent that the old days were different, it was not
because the rules were different, it was because people didn't
understand the rules.
If you analyze the statutes, the regulations and the case law,
you will realize that bargaining was always permitted during
source selection discussions. People didn't do it because they
didn't understand the regs and GAO's decisions. Keep in mind
that the vast majority of sustained protests about discussions
were due to the government's failure to say enough, not to the
government having said too much.
Much of the current language in the first paragraph of FAR
15.306(d) was in the pre-Rewrite version of the FAR. The
following sentences: "These negotiations may include bargaining.
Bargaining includes persuasion, alteration of assumptions and
positions, give-and-take, and may apply to price, schedule,
technical requirements, type of contract, or other terms of a
proposed contract," were in FAR 15.102 prior to the Rewrite, and
we already know that the GAO considered "discussions" to be
"negotiations."
What the Rewriters mainly did was edit and revise the FAR text
for emphasis and clarification. For example, the Rewriters
changed the confusing "helping an offeror to bring its proposal
up to the level of other proposals through successive rounds of
discussion, such as by pointing out weaknesses resulting from
the offeror's lack of diligence, competence, or inventiveness in
preparing the proposal" to the slightly less confusing "conduct
that favors one offeror over another."
Another part of the problem was that almost all agencies modeled
their source selection procedures on the procedures used by DOD
and NASA in R&D procurements, in which there was a lot of
concern about the disclosure of of trade secrets during
discussions. The result was that many COs took would tell an
offeror about the deficiencies and weaknesses in an offeror's
proposal, but they would not tell them what they would like the
offeror to do instead. In short, they would not bargain, even in
contracts for laundry services. But statute, regulation and case
law did not prohibit bargaining.
The biggest culprit was the language about technical leveling,
which many COs took to prohibit bargaining, but which did not.
See: Geo-Centers, Inc., B-276033, May 5, 1997, a case
based on the pre-Rewrite language in which the GAO said:
"Technical leveling occurs where an agency, through successive
rounds of discussions, helps to bring a proposal up to the level
of another proposal by pointing out weaknesses that remain in a
proposal due to an offeror's lack of diligence, competence, or
inventiveness after having been given an opportunity to correct
them. Federal Acquisition Regulation (FAR) § 15.610(d);
Battelle Memorial Inst., B-259571.3, Dec. 8, 1995, 95-2 CPD
¶ 284 at 5. In this regard, our Office has recognized the
tension between the requirement for meaningful discussions with
all responsible sources whose proposals are within the
competitive range, and the admonitions in the FAR against
technical leveling, technical transfusion, and auctions.
Matrix Int'l Logistics, Inc., B-249285.2, Dec. 30, 1992,
92-2 CPD ¶ 452 at 5. We have held that this is an area where
contracting officers necessarily have considerable discretion.
Id.
"Our review of the pleadings and the record as a whole leads us
to conclude that the Army has not acted improperly in this
regard, and instead, has held detailed and thorough
negotiations consistent with its obligation to conduct
meaningful discussions. FAR § 15.610(c)."
Italics on "negotiations" added.
A related problem was confusion over the notion of "multiple" or
"successive rounds" of discussions. The GAO pointed out nearly
one hundred times that technical leveling could not occur
without multiple rounds. But what was a "round"? A "round"
included talk and a BAFO submission; the BAFO was what
closed a round." It was only upon requesting a BAFO that the CO
was to notify the offerors that "discussions are concluded." See
pre-Rewrite FAR 15.611(b). Discussions were only "reopened"
after receipt of BAFOs. See pre-Rewrite FAR 15.611(c).
So you could talk a little today, ask for a proposal revision,
consider it; talk a little more next week, ask for another
proposal revision, consider it; and then talk a little more the
week after that and get yet another proposal revision without
ending a "round." You didn't end a round until you asked for and
got a Best and Final Offer and notified everyone that
"discussions are concluded." But most COs (and agency lawyers)
didn't understand that.
By
Anonymous on Thursday, February 06,
2003 - 09:55 am:
I will agree with you that we didn't understand the
rules. My sources of training and references didn't promote hard
bargaining. They emphasized staying away from leveling the
offerors and stressed discussion of significant weaknessess or
deficinecies, which would render the proposal unacceptable. Nash
and Cibinic discuss the change in the regulatory (FAR 15)
guidance and stress of the guidance in Formation of Government
Contracts, 3rd edition, starting on page 883.
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