By
GeneJ on Friday, May 09, 2003 -
12:34 pm:
Hi All
This is not a real question; yet, so any brainstorming is
welcomed.
We were talking what-if scenarios in our evaluation. The
question is if an offeror replaces a subcontractor after
proposals are due how much information can we get before
crossing into discussions.
The puzzle to me is can you look at the response before you
decide it was discussions or not. For example if you ask what
the impact of this replacement of subcontractors is and they
reply "there will be no impact to cost, schedule, or
performance." If they did say that, there is no question that
they had an opportunity to alter their proposal, but they didn't
avail themselves of it. Is it still discussions? Literal minded
among us think it clearly is.
On the other hand they say our costs will go up by 1.5% and
performance drasticly increases it clearly would be discussions.
With the rapid changes in telecom and software business status,
potential bidders buying vendors and vendors going bankrupt this
is more than theoretical. Obviously this is only important if
you think you could award without discussions, which we always
plan on but never do. So for the sake of this argument assume we
want to award without discussions.
GeneJ
By
formerfed on Friday, May 09, 2003 -
01:22 pm:
Gene,
That's a tough question to answer with the detail you provided.
I'm assuming this is a best value (tech/price tradeoff) source
selection as most are. How much that subcontractor impacts the
merits of the proposal is key. If it does, you might want more
than clarifications from the prime. Consequently I think
discussions are needed.
On the other hand, if the sub just provides some mundane task or
supplies some common components that are readily available from
many others, I think a good case for getting by without
discussions.
The way I like to look at things like this is the offeror is
making promises to you in their proposal. Will a change involve
changing the nature of those promises or the risk of them
delivering on them. If so, you need to discuss.
By
Eric Ottinger on Friday, May 09,
2003 - 01:30 pm:
GeneJ,
My take – strictly thinking out loud – if you want to award
without discussions you have to evaluate the proposal as it
stood at the time that it was submitted. The new information
regarding the change in the subcontractor has to be evaluated as
a risk.
Discussions are defined as that which allows the offeror to
change his proposal. Once you start talking about the new
subcontractor with the offeror you have effectively allowed the
offeror to change his proposal.
Regards,
Eric
By
Anonymous on Friday, May 09, 2003 -
04:13 pm:
The first question to address is whether or not the
offeror is allowed to revise its proposal after the due date,
without discussions and the opportunity for the others to revise
their proposals.
I'm taking a wild guess here that the instant offeror is the
otherwise successful offeror and that the clarification is
intended to ensure that the revision doesn't compromise the
terms of the offer or reduce the relative advantages of the
offer with respect to the others (i.e, it does not lessen the
value to the Government). In that case, I'd not further
publicize it here and consider it a clarification, if it does
not reduce the value of the original offer.
By
GeneJ on Monday, May 12, 2003 -
12:28 pm:
Hi
I'm just planning for a possible risk with this thread as we've
not even released the RFP yet.
However, most everyone I've talked to agrees with Eric:
"My take – strictly thinking out loud – if you want to award
without discussions you have to evaluate the proposal as it
stood at the time that it was submitted. The new information
regarding the change in the subcontractor has to be evaluated as
a risk".
Assuming the subcontractor is more than a supplier of
non-complex parts or services, this approach does not seem
supportable to me. If the presence (or absence) of the
sub-contractor on the team makes a difference to the evaluation
of strengths and weaknesses can I realy ignore that the
offeror's approach has changed and go to award anyway? It seems
that conducting unequal discussions is one of the most common
ways to loose a protest so not allowing any proposal revisions
until discussions does seem reasonable. Mind you I have not
found any discussion on this elsewhere so I'm working fact free
here.
Assuming the Prime contractor was otherwise competitive wouldn't
I be forced into discussions as I think we'd be unable to award
to any of the offerors?
GeneJ
By
Vern Edwards on Monday, May 12,
2003 - 01:02 pm:
GeneJ:
Did the offeror literally propose, i.e., promise to use a
particular subcontractor? If so, and if the offeror is now
telling you that it is not going to use that subcontractor after
all, then the offeror has revised its proposal whether you like
it or not. You cannot award to that offeror without discussions
in that case, because the original offer is no longer on the
table.
On the other hand, if the offeror merely informed you of its
intent to use a particular subcontractor, but did not make a
binding promise to do so, you have a different problem.
By
Eric Ottinger on Wednesday, May 14,
2003 - 12:25 pm:
GeneJ,
I haven’t found a case where a subcontractor departed after
receipt of proposals. However, in the following case a key
person leaves, the evaluators take this into account and proceed
to award without discussions.
Veda Incorporated, Comptroller General Decision , No.
B-278516.2, March 19, 1998
2. “Protest that the awardee materially misrepresented the
availability of 1 of its 45 proposed key personnel, who left
after the proposal was submitted, is denied, where the agency
was aware of the individual's unavailability and the offer of
this individual had minimal impact on the agency's evaluation of
proposals and source selection.”
Knowing Vern, I expected that he would raise the question of
what is the binding “promise” and what is not. In most
situations, I would assume that a prime can substitute a
different subcontractor (before or after award) without breaking
the binding “promise.” However, I agree that this is a good
question to raise with your smart lawyer.
By “risk” I meant that the probablity of not performing 100%
suceessfully would almost certainly increase, but the impact
might be very small and the evaluators may still be able to
determine that the offer was the best value choice without
discussions. The proposal is not revised but there should be an
impact on the evaluators ratings. I didn’t mean to suggest that
nothing changes, or that the evaluators can simply ignore the
departure of the subcontractor.
Eric
By
GeneJ on Thursday, May 15, 2003 -
12:25 pm:
Hi
Thanks for all the help. Treating a change/ deletion of a
subcontractor like key personnel makes sense to me. I have no
doubt we will end up in discussions, but we need to identify all
of the “risks” that may lead us there. It seems like the only
modification to the old acquisition procedures that people
understand is to award without discussions. I don’t know when or
how discussions became such a bad thing.
Where I was off track was thinking that if an offeror changed
their proposal for a valid reason (e.g. bankruptcy of a critical
subcontractor) that I would automatically need to open
discussions even if I wanted to award to someone else. I think
I’m convinced now I was being too considerate (ok everyone
called me nuts). I’ve never even worked around the issue of a
late proposal before, and I was surprised at the firm attitude
that some people have.
Especially as we move towards more oral proposals I hope that we
get to a point where we can discuss offer and proposal language
and not get blank looks in return.
GeneJ
By
Vern Edwards on Thursday, May 15,
2003 - 02:02 pm:
GeneJ:
It seems to me that you may be drawing too many conclusions too
quickly.
I am going to assume that your proposal preparation instructions
told offerors that they must identify their "proposed
subcontractors" and that you are going to evaluate them on that
basis.
The question that must be answered is whether or not a change in
a "proposed subcontractor" after proposal submission constitutes
a proposal revision as defined in FAR § 15.001. If it does, and
if you evaluate the proposal as revised, then you will have
conducted discussions and cannot then award without discussions.
If an offeror has notified you that it has revised its proposal
by changing a "proposed subcontractor," then you cannot evaluate
the proposal as originally submitted (i.e., based on the
original subcontractor) and you cannot award to that offeror
without discussions on the basis of the revised proposal. If you
don't want to conduct discussions you can tell the offeror that
you will not accept the revision and that it may either compete
on the basis of its original proposal or withdraw from the
competition.
The Veda decision cited by Eric does not stand for the
proposition that a change in subcontractors does not constitute
a proposal revision.
By
Eric Ottinger on Thursday, May 15,
2003 - 02:59 pm:
GeneJ and Vern,
Veda is fundmentally different from the situation Vern posits.
Veda did not notify the Navy that Dr. Hill had left. However,
all parties seeem to have been aware of this fact. A parallel
situation would be one where the subcontractor goes out of
business and all parties read this in the newspaper, but the
offeror does not explicitly notify the agency.
“Veda also protests that RCI improperly failed to inform the
Navy that Dr. Hill would not be available as one of its project
managers as RCI had proposed. The Navy and RCI respond that Dr.
Hill did not leave the employ of RCI’s subcontractor until after
the submission of proposals and that, because award was made
without discussions, RCI had no opportunity to change its
proposed personnel. The Navy notes that, in any event, it knew
during the evaluation of technical proposals that Dr. Hill had
changed employers and may not be available to be assigned to
tasks under the contract. The Navy also says that Dr. Hill, as
only 1 of 45 key personnel proposed by RCI, was not significant
in the agency’s evaluation of RCI’s proposal under the personnel
qualifications factor.”
Veda clearly does stand for the proposition that a change in key
personnel may not constitute a proposal revision.
A subcontractor may be equally insignificant.
Eric
By
jerry on Thursday, May 15, 2003 -
03:07 pm:
FAR 15.306(b)(2) also talks about comunications with
offerors before the establishment of the competitive range.
Since, under the "what if" scenario, award without discussions
is being considered, there is no need to establish a competitive
range (15.306(c). Thus, the issue is: Does the change in the
subcontractor "materially alter the technical or cost elements
of the proposal." If it does not, then, if I understand the FAR,
couldn't the contracting officer communicate with the offeror to
"facilitate the Government's evaluation process?"
By
Eric Ottinger on Thursday, May 15,
2003 - 03:59 pm:
Jerry,
Asking a question which leads the offeror to revise his/her
proposal is, by defintion, discussions. I don't see any way the
agency can ask the question without getting into discussions.
If the agency wants to award without discussions the agency must
first determine that the impact is less than significant (see
Veda), and second determine that the potential impact is not
such that it would swing the selection from one offeror to the
other.
Eric
By
jerry on Thursday, May 15, 2003 -
04:32 pm:
Eric,
I agree. The only thing I was saying is that, as long as the
communication is for the purpose of facilitating the
government's understanding of the proposal, including the impact
a change in subcontractors would have, and the offeror is not
allowed to change its proposal, the communication does not fall
under the definition of discussions.
Which is what I understand Veda says. No?
By
Eric Ottinger on Thursday, May 15,
2003 - 04:46 pm:
Jerry,
On this I agree with Vern. If the subcontractors change, the
proposal has been revised.
The only way to stick to the "award without discussion" plan is
to determine that it doesn't matter very much who the
subcontractor is going to be.
Keep in mind that we don't have privity of contract with the
subcontractor and primes don't automatically default just
because a subcontractor goes under.
Eric
By
Vern Edwards on Thursday, May 15,
2003 - 05:49 pm:
The issues that this discussion raises are the reasons
for, and potential consequences of, requiring offerors to
"propose" subcontractors.
What does it mean to "propose" a subcontractor? Does "propose"
mean "promise"? Would such a proposal be binding upon contract
award? If the government awards a contract based upon a proposal
that identifies a specific "proposed" subcontractor, would it be
breach of contract for the contractor to hire a different firm
to do the subcontract work? If an offeror "proposes" a
subcontractor and then notifies the government that it is
changing the subcontractor, is that a "proposal revision"?
Would it be different if the government asked for a list of
"prospective" subcontractors, instead of "proposed"
subcontractors, and made it clear in the RFP that the reason for
requesting the information was not to obtain the offeror's
promise to use specific firms, but to make a risk assessment?
Is it necessary to ask offerors to identify prospective
subcontractors in their proposals and to evaluate those
subcontractors? If the offeror has a good record of past
performance, doesn't that mean that it's doing a good job of
selecting and managing subs? Why bother to evaluate subs that
the prime is not obligated to use? If the offeror is hoping to
get a good past performance evaluation based on a
subcontractor's record, shouldn't the government obtain the
contractor's binding promise to use that sub?
If it's essential to evaluate prospective subcontractors in
order to perform the risk analysis that Eric mentioned, could
the government ask for information about subcontractors after
the proposal closing date and not as a part of the proposal?
Would such a request constitute "discussions," as described in
FAR § 15.306(d)?
Just some things to think about and discuss.
By
joel hoffman on Thursday, May 15,
2003 - 07:23 pm:
In construction or design-build (D-B) contracts, it is
useful and important to evaluate the capabilities, experience
and past performance of the proposed team. The team includes the
prime and critical trades, whether to be self-performed or
subcontracted. The Government defines those trades considered
critical in the RFP. We also evaluate the proposed designer for
D-B.
The prime often self-performs only the minimum amount of work
allowed (ranges from 10-20%). Guess what... A significant degree
of the success of the team will depend upon the performance of
the critical subs (as well as the designer). Most primes,
including the biggest construction firms in the world, can't
always directly control or manage the success of their critical
subs.
We include a clause entitled "Key Personnel, Subcontractors and
Outside Consultants" to attempt to manage proposed substitutions
after award. I described that clause and how we use it in
another current thread.
We evaluate proposals using a couple alternative approaches. In
one approach, the prime must commit to and identify the actual
critical subs to be used.
In another approach, we allow the prime to identify a list of
potential subs and submit the information on each. In that case,
we evaluate all and rate each factor based on what we consider
to be the weakest firm.
If discussions are conducted, the offerors may revise their
proposals. If discussions have not convened, the late proposals,
modifications or revisions provisions of 52.215-1 --
Instructions to Offerors -- Competitive Acquisition will govern.
The premise that "If the offeror has a good record of past
performance, doesn't that mean that it's doing a good job of
selecting and managing subs?" is too general an assertion in my
opinion and experience. I've seen the "A-team", as well as the
"B- team" from the same prime, with corresponding results. Few
design or construction firms have consistently stellar
performance records. The majority don't. That's why we have to
evaluate the field. happy sails! joel hoffman
By
Vern Edwards on Friday, May 16,
2003 - 12:10 am:
Joel:
"In one approach, the prime must commit to and identify the
actual critical subs to be used."
When you say that the prime "must commit to and identify" the
actual subs to be used, do you mean that the government's
position is that the prime must promise to use those subs and
only those subs and is contractually obligated to do so upon
award?
Vern
By
joel hoffman on Friday, May 16,
2003 - 09:47 pm:
yup. happy sails! joel
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