On December 27, 2012, we wrote about antidotes for the "unabated crisis" raised by the Professional Services Counsel (PSC) and Grant Thornton LLP in their recent study report. In that piece, we suggested more myth busting memos from the Office of Procurement Policy (OFPP), instituting a help hot line, fixing the debriefing and LPTA debacles, educating the lawyers and training by the case study method. We believe we should establish a corps of experienced volunteers who are willing to spend time on the phone with less experienced professionals on the acquisition team (as defined in FAR 1.102(d)) advising them on areas within the experience and expertise of the volunteers.
We remember when a government investigator called us out of the blue and asked us questions about the Anti-deficiency Act. The investigator had read that we had written a case history about a violation of the Act occurring some time ago. We were more than happy to explain our understanding of that Act.
Our suggestion that the government rehire the retirees is impracticable and unworkable. It can and will never happen. We need not belabor the point. However, many of us are willing to reply to a request that we volunteer our time and supply answers to questions about our experience and expertise. The government could set up a help hot line which monitors could use to match the questioner with the appropriate experienced volunteer. This advice would be case specific answers to real time questions with the explicit disclaimer that the volunteer would not be speaking for the government but would instead be offering counsel and suggested solutions.
The big questions are whether any of the experienced people are interested in joining the corps, whether the government would accept the idea and whether anyone would actually use the help hot line. Big questions. And, Congress would have to approve this (because of the Anti-Deficiency Act) and provide a liability shield. The purpose of this piece is to elicit your reaction to see if it is appropriate to seriously suggest and promote this approach with the appropriate government acquisition executives.
So let us hear from you. We have thick skins so go ahead and tell us if you think this notion stinks.
bill@spriggsconsultingservices.com
Monday, January 14, 2013
Friday, January 11, 2013
FAR'S GUIDING PRINCIPLES
Today, we heard Joe Jordan, Administrator of the Office of Procurement Policy (OFPP), at a meeting of the Government Affairs Committee of the Professional Services Council (PSC), allude to the statement of guiding principles for the federal acquisition system set forth in FAR 1.102(d). Essentially, he said that if your proposed action is not proscribed by FAR you probably can take it provided it is in accordance with sound business judgment. Let's remind ourselves what the regulation says:
So if the strategy, practice, policy or procedure "is not addressed in the FAR", you can do it, provided it is not prohibited by a statute or case law, executive order or other regulation. (In these articles we are constantly calling attention to the case law which teaches both what to do and what not to do.) Joe Jordan's emphasis is on taking the initiative to try something new unless the law just flat out says you can't do it.
In our comments on what needs to be done to fix the procurement system, we have emphasized that senior leadership needs to pass down best practices and see to it they are followed in the field. But we also have criticized people at the working level for lack of initiative. We hope to hear more from Mr. Jordan about exercising initiative. Giving us some exemplary case histories of success stories would help.
But he also made a solid point that the acquisition team needs to increase its tolerance for taking risks. Initiative may lead to mistakes. They are to be expected. Our philosophy is that if you are not making mistakes, you are not improving the process.
bill@spriggsconsultingservices.com
The role of each member of the Acquisition Team is to exercise personal initiative and sound business judgment in providing the best value product or service to meet the customer's needs. In exercising initiative, Government members of the Acquisition Team may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in FAR, nor prohibited by law (statute or case law), Executive order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority.Notice the word "initiative" is used twice as if to suggest the entire statement is designed to engender such behavior. Also noteworthy is the reference to the Acquisition Team, which Mr. Jordan described in other remarks as including program management and all people supporting the contracting officer.
So if the strategy, practice, policy or procedure "is not addressed in the FAR", you can do it, provided it is not prohibited by a statute or case law, executive order or other regulation. (In these articles we are constantly calling attention to the case law which teaches both what to do and what not to do.) Joe Jordan's emphasis is on taking the initiative to try something new unless the law just flat out says you can't do it.
In our comments on what needs to be done to fix the procurement system, we have emphasized that senior leadership needs to pass down best practices and see to it they are followed in the field. But we also have criticized people at the working level for lack of initiative. We hope to hear more from Mr. Jordan about exercising initiative. Giving us some exemplary case histories of success stories would help.
But he also made a solid point that the acquisition team needs to increase its tolerance for taking risks. Initiative may lead to mistakes. They are to be expected. Our philosophy is that if you are not making mistakes, you are not improving the process.
bill@spriggsconsultingservices.com
Tuesday, January 8, 2013
COURT PROTESTS: ILLEGAL VS. ARBITRARY
Judge Susan Braden of the Court of Federal Claims (COFC) reminds us in a recent opinion of the difference between protests in that court based on a regulatory or procedural violation and award decisions challenged on the grounds that an agency acted in an arbitrary or capricious manner. The protest before her involved a design-build contract for medical facilities for the Army. After a lengthy opinion, she granted a preliminary injunction against the Army.
In the process of reaching her decision, she noted that the Court of Appeals for the Federal Circuit (CAFC) has emphasized that "best value" solicitations afford the contracting officer a great deal of discretion so that relative merit is primarily a matter of administrative discretion not to be interfered with by the court. However, that discretion does not allow the procuring agency the liberty to deviate from the requirements of the solicitation and ignore rules in the Federal Acquisition Regulation (FAR). Moreover, the agency must not ascertain best value in a manner that is arbitrary. Finally, discretion does not allow the court to overlook the fact that the administrative record does not contain sufficient information on which an agency could even make a rational decision.
When a bid protest is based on a regulation violation or deviation from the solicitation (illegality), the protester must show a clear and prejudicial violation of the regulation or solicitation provision. The burden is even greater when the procurement is best value. In deciding whether an agency has complied with the regulation on best value, the court may overturn the agency's decision if it is not grounded in reason. The inquiry becomes whether the agency provided a coherent and reasonable explanation of its exercise of discretion.
Alternatively, if the award decision is challenged on the grounds that an agency has acted arbitrarily or capriciously, the court intervenes only in very limited circumstances. An agency must entirely fail to consider an important aspect of the procurement. Or, it must offer an explanation for its decision that runs counter to the evidence before the agency or render an implausible explanation for its decision.
In the case before her, Judge Braden sided with the protester because the administrative record evidenced violations of the Competition in Contracting Act (CICA) and FAR. The agency decision contained no documents showing that the Army even considered the protester's "betterments" and omitted any discussion of their merits. This, she found, was arbitrary. and prejudicial to the protester. She also was completely put off by the paucity of the administrative record which failed to contain worksheets evidencing whether and how the Army evaluated the offerors.
In granting injunctive relief, Judge Braden was not persuaded by the Army's argument that an injunctive would imperil the Army's mission. The harm to the Army was self-inflicted.
A word to the wise. Follow FAR. Follow the solicitation. Document, document, document. Government lawyers: keep looking over the contracting officer's shoulder and put your foot down. Promptly redo things before there is protracted litigation which threatens the mission.
bill@spriggslawgroup.com www.spriggslawgroup.com
In the process of reaching her decision, she noted that the Court of Appeals for the Federal Circuit (CAFC) has emphasized that "best value" solicitations afford the contracting officer a great deal of discretion so that relative merit is primarily a matter of administrative discretion not to be interfered with by the court. However, that discretion does not allow the procuring agency the liberty to deviate from the requirements of the solicitation and ignore rules in the Federal Acquisition Regulation (FAR). Moreover, the agency must not ascertain best value in a manner that is arbitrary. Finally, discretion does not allow the court to overlook the fact that the administrative record does not contain sufficient information on which an agency could even make a rational decision.
When a bid protest is based on a regulation violation or deviation from the solicitation (illegality), the protester must show a clear and prejudicial violation of the regulation or solicitation provision. The burden is even greater when the procurement is best value. In deciding whether an agency has complied with the regulation on best value, the court may overturn the agency's decision if it is not grounded in reason. The inquiry becomes whether the agency provided a coherent and reasonable explanation of its exercise of discretion.
Alternatively, if the award decision is challenged on the grounds that an agency has acted arbitrarily or capriciously, the court intervenes only in very limited circumstances. An agency must entirely fail to consider an important aspect of the procurement. Or, it must offer an explanation for its decision that runs counter to the evidence before the agency or render an implausible explanation for its decision.
In the case before her, Judge Braden sided with the protester because the administrative record evidenced violations of the Competition in Contracting Act (CICA) and FAR. The agency decision contained no documents showing that the Army even considered the protester's "betterments" and omitted any discussion of their merits. This, she found, was arbitrary. and prejudicial to the protester. She also was completely put off by the paucity of the administrative record which failed to contain worksheets evidencing whether and how the Army evaluated the offerors.
In granting injunctive relief, Judge Braden was not persuaded by the Army's argument that an injunctive would imperil the Army's mission. The harm to the Army was self-inflicted.
A word to the wise. Follow FAR. Follow the solicitation. Document, document, document. Government lawyers: keep looking over the contracting officer's shoulder and put your foot down. Promptly redo things before there is protracted litigation which threatens the mission.
bill@spriggslawgroup.com www.spriggslawgroup.com
Wednesday, January 2, 2013
PAST PERFORMANCE NEED NOT BE CONSIDERED
Judge Victor Wolski of the Court of Federal Claims (COFC) observes that past performance of all offerors need not be considered under FAR 15.304(c)(3) and that consideration of past performance in commercial buys is not mandated. He specifically holds that a bidder can waive consideration of its past performance if the solicitation language alerts bidders that unacceptable technical proposals will not be further considered and a protesting contractor fails to raise objection prior to the close of the bidding process.
The case arose when the protester's proposal was rejected as ineligible based on the technical evaluation factor. The protester argued that if the agency considered past performance, it would have seen that all of the deficiencies in the technical proposal were addressed. But the solicitation clearly stated that an unacceptable technical proposal "will not be further evaluated." Based on court precedent, Judge Wolski rejected the protester's argument because the protester failed to object to the terms of the solicitation prior to the close of the bidding process.
But Judge Wolski went on to address the question of whether every offeror is entitled to a past performance evaluation. No, he says. Under commercial item buys, past performance should be evaluated but should is not mandatory. More broadly, FAR 15.304(c)(3) which makes evaluation of past performance mandatory (by using the word "shall"), does not refer to "all offerors" and "nothing in this provision precludes federal agencies from using an approach that weeds out offerors under other non-cost factors before past performance is considered."
To support his conclusion, Judge Wolski notes that price must be considered without exception when an award is made. However, it need not be considered for proposals that are technically unacceptable. "It is difficult to see how the less mandatory language of section 15.304(c)(3) could impose a greater obligation on agencies that is imposed for evaluation of price."
In conclusion, Judge Wolski opines:
bill@spriggslawgroup.com www.spriggslawgroup.com
The case arose when the protester's proposal was rejected as ineligible based on the technical evaluation factor. The protester argued that if the agency considered past performance, it would have seen that all of the deficiencies in the technical proposal were addressed. But the solicitation clearly stated that an unacceptable technical proposal "will not be further evaluated." Based on court precedent, Judge Wolski rejected the protester's argument because the protester failed to object to the terms of the solicitation prior to the close of the bidding process.
But Judge Wolski went on to address the question of whether every offeror is entitled to a past performance evaluation. No, he says. Under commercial item buys, past performance should be evaluated but should is not mandatory. More broadly, FAR 15.304(c)(3) which makes evaluation of past performance mandatory (by using the word "shall"), does not refer to "all offerors" and "nothing in this provision precludes federal agencies from using an approach that weeds out offerors under other non-cost factors before past performance is considered."
To support his conclusion, Judge Wolski notes that price must be considered without exception when an award is made. However, it need not be considered for proposals that are technically unacceptable. "It is difficult to see how the less mandatory language of section 15.304(c)(3) could impose a greater obligation on agencies that is imposed for evaluation of price."
In conclusion, Judge Wolski opines:
The FAR does not appear to contain any impediment to an agency's restricting past performance evaluations to offerors who have met some other non-cost factor threshold, such as suitably explaining how the requirements of a contract would be met.So this case if a reminder that objections to language in the solicitation must be raised prior to the closing of the bidding process. The case also is a lesson in shall vs. should and a clear indication that an agency can reject a proposal without consideration of past performance data.
bill@spriggslawgroup.com www.spriggslawgroup.com
Tuesday, January 1, 2013
THE MOST IMPORTANT PART BY (IN) FAR
This will be short and sweet. By far the most important section in the Federal Acquisition Regulation (FAR), for these trying times in particular, is FAR 15.201. We need to keep reminding ourselves and everyone in the procurement community about it. Following it is the cornerstone of any successful acquisition.
15.201 Exchanges with industry before receipt of proposals
Language in the myth busting memos lends further support to this basic admonition.
Nearly all the problems we've seen with procurements could have been avoided or ameliorated by following the clear and simple encouragement in FAR 15.201 to communicate. And, as we've pointed out, once the contract is inked, there is an obligation read into all contracts, as a matter of law, that the parties communicate with each other.
bill@spriggsconsultingservices.com
15.201 Exchanges with industry before receipt of proposals
(a) Exchanges of information among all interested parties, from the earliest identification of a requirement through receipt of proposals, are encouraged. Any exchange of information must be consistent with procurement integrity requirements (see 3.104). Interested parties include potential offerors, end users, Government acquisition and supporting personnel, and others involved in the conduct or outcome of the acquisition.Agencies are encouraged by the regulation to promote early exchanges of information. Among the techniques encouraged are: industry conferences, one-on-one meetings and draft solicitations.
Language in the myth busting memos lends further support to this basic admonition.
Nearly all the problems we've seen with procurements could have been avoided or ameliorated by following the clear and simple encouragement in FAR 15.201 to communicate. And, as we've pointed out, once the contract is inked, there is an obligation read into all contracts, as a matter of law, that the parties communicate with each other.
bill@spriggsconsultingservices.com
Sunday, December 30, 2012
IN-SOURCING CHALLENGE NEARLY SUCCEEDS
Judge Christine Miller of the Court of Federal Claims (COFC) has just issued an opinion denying injunctive relief to a contractor complaining that the Air Force's decision to in-source work the contractor had been performing violated statutory law. The contractor contended that the Air Force violated the National Defense Authorization Act (NDAA) for fiscal year 2012 which requires the Secretary of Defense to ensure that the cost of performance by a contractor compared to the cost of performance in house would be equal to or exceed the lesser of 10% of the personnel costs of performance or $10 million. Since the savings was 7.9% the contractor argued the in-sourcing decision violated the statute.
Judge Miller writes a veritable treatise on the key legal issues in bringing such a suit. This is great reading for lawyers. First, she addresses subject matter jurisdiction saying "prudential standing" must be considered after first determining jurisdiction. The key statutory requirement on jurisdiction is whether the alleged violation occurred in connection with a procurement or a proposed procurement. After a thorough discussion, she determines the definition includes the process for determining a need for property or services. The Air Force's decision to in-source involved such a process.
Next, Judge Miller examines whether the contractor was an interested party. The contractor was, after all, the incumbent contractor, and after a lengthy explanation, Judge Miller finds that the contractor was an actual or prospective bidder with a direct economic interest in the procurement or proposed procurement. Given the opportunity, the contractor would have as substantial chance of performing the services in the future. There also was an issue of mootness in the case. Because there was an option period remaining on the contractor's contract, Judge Miller found she could fashion a remedy and the case was not, therefore, moot.
Judge Miller than tackled the issue of prudential standing. Prudential standing requires that a contractor's grievance must arguably fall within the zone of interests protected by the statute invoked in the suit. Department of Defense (DOD) procedures required by the statutory provisions in the NDAA limit DOD's ability to convert from contractor to civilian performance. Therefore, the contractor came within the zone of interests protected by the NDAA and the contractor accordingly has prudential standing.
But Judge Miller denies injunctive relief primarily because the contractor's case failed on one of the four prongs of such relief, success on the merits of the case. Based on the timing of when the in-sourcing decision actually occurred, she holds the NDAA did not apply to the case at all. The statute was not retroactive and the Air Force was not required to adhere to the 2012 NCAA because the events complained of occurred much earlier. Although she found lack of success on the merits, Judge Miller also examined the irreparable harm to the contractor (existing), the balancing of the hardships (favoring relief in this case) and the public interest (determined against the contractor because no statute was violated).
We now have several opinions from the COFC upon which a contractor can seek judicial relief with regard to in-sourcing decisions. But the bottom line is that such a suit will not stand any chance of success unless the contractor can show a violation of a statute.
bill@spriggslawgroup.com www.spriggslawgroup.com
Judge Miller writes a veritable treatise on the key legal issues in bringing such a suit. This is great reading for lawyers. First, she addresses subject matter jurisdiction saying "prudential standing" must be considered after first determining jurisdiction. The key statutory requirement on jurisdiction is whether the alleged violation occurred in connection with a procurement or a proposed procurement. After a thorough discussion, she determines the definition includes the process for determining a need for property or services. The Air Force's decision to in-source involved such a process.
Next, Judge Miller examines whether the contractor was an interested party. The contractor was, after all, the incumbent contractor, and after a lengthy explanation, Judge Miller finds that the contractor was an actual or prospective bidder with a direct economic interest in the procurement or proposed procurement. Given the opportunity, the contractor would have as substantial chance of performing the services in the future. There also was an issue of mootness in the case. Because there was an option period remaining on the contractor's contract, Judge Miller found she could fashion a remedy and the case was not, therefore, moot.
Judge Miller than tackled the issue of prudential standing. Prudential standing requires that a contractor's grievance must arguably fall within the zone of interests protected by the statute invoked in the suit. Department of Defense (DOD) procedures required by the statutory provisions in the NDAA limit DOD's ability to convert from contractor to civilian performance. Therefore, the contractor came within the zone of interests protected by the NDAA and the contractor accordingly has prudential standing.
But Judge Miller denies injunctive relief primarily because the contractor's case failed on one of the four prongs of such relief, success on the merits of the case. Based on the timing of when the in-sourcing decision actually occurred, she holds the NDAA did not apply to the case at all. The statute was not retroactive and the Air Force was not required to adhere to the 2012 NCAA because the events complained of occurred much earlier. Although she found lack of success on the merits, Judge Miller also examined the irreparable harm to the contractor (existing), the balancing of the hardships (favoring relief in this case) and the public interest (determined against the contractor because no statute was violated).
We now have several opinions from the COFC upon which a contractor can seek judicial relief with regard to in-sourcing decisions. But the bottom line is that such a suit will not stand any chance of success unless the contractor can show a violation of a statute.
bill@spriggslawgroup.com www.spriggslawgroup.com
Thursday, December 27, 2012
ANTIDOTES FOR THE "UNABATED CRISIS"
This is the third in a series of comments on the Professional Services Council (PSC) and Grant Thornton LLP study report on acquisition's unabated crisis. Here, we suggest some antidotes for recovery.
Hopefully, we will see more myth buster memos. As for the other antidotes, let us know what you think.
bill@spriggsconsultingservices.com
- More Myth Busting. The report quotes respondents to the survey as generally applauding the Office of Procurement Policy (OFPP) myth busting memos but they were "not widely distributed" and they "need to be pushed". They need to get "marketed". Not only that, OFPP needs to write more of them. And senior procurement professionals need to help by suggesting new myth busting topics. Myth busting is the singular most important and potentially effective initiative undertaken in the procurement field in decades.
- Institute a Help Hotline. We've considered a mentor/protege program with retirees serving as mentors and rejected it as impracticable and unworkable. However, a well-designed and properly administered help hotline has a real chance of success. Well-screened retiree volunteers could handle requests for advice and counsel based on their particular field of experience and expertise.
- Fix the Debriefing Debacle. The myth busing memos just didn't go far enough. It's time to require oral debriefings and to enforce the regulation on what's discussed. And finally, it is time to release redacted copies of the source selection evaluation board report and the source selection decision prior to the debriefing. Enough is enough. Transparency begins here.
- Fix the LPTA Debacle. The pendulum has swung back to advertised procurement now know as sealed bidding. Best value is not LPTA. LPTA is tantamount to sealed bidding. Follow the tried and true rules in FAR. Get rid of LPTA in Part 15 and call a spade a spade. If the goal is lowest price, technically acceptable, use Part 14.
- Educate the Lawyers. One participant in the PSC/Grant Thornton survey said the myth busting memos "had a positive effect because we had general counsels saying, 'no, you can't talk to contractors at all.'" We know because we've been there. In house lawyers can be facilitators or obstructionists. We believe too many lawyers are the latter. They need to go to school taught by non lawyers who explain what clients are looking for. Their clients want them to act as facilitators. They should be helping their clients. They also need help on how to negotiate.
- Train by the Case Study Method. Law schools have been doing it forever. The only way to learn is by the case study method. In procurement, we have the opportunity to train by real life case studies. Experience is the best teacher. Next best is training by reviewing and analyzing actual cases.
Hopefully, we will see more myth buster memos. As for the other antidotes, let us know what you think.
bill@spriggsconsultingservices.com
Wednesday, December 26, 2012
ACQUISITION'S "UNABATED CRISIS"
As we've reported, the Acquisition Policy Survey conducted by the Professional Services Council (PSC) and Grant Thornton LLP is a must read for all executives and practicing professionals who deal with federal government acquisition in any form at any level. There is having to do less with less. Then, a highly risk-averse culture threatens innovation and smart buying decisions. Balancing price against tradeoff analyses has become an enormous challenge. To top it off, the very people responsible for the day to day decisions lack experience, mentoring and sufficient training. And their innovation and reasonable risk taking is severely inhibited by the growing compliance regime. (Oversight and transparency also inhibit contractor innovation.)
Budget uncertainty is a new issue. In the past, budgets did not receive a high level of attention in the survey. "Smart acquisition" has become the watch-phrase. But so far the prime, if not the almost singular example of smartness, is strategic sourcing. Smart buying requires smart people. With the challenges ahead, senior leaders recommend investments in training and maintaining the procurement workforce. But budget realities threaten investments in its size and competence. "Over the years, survey respondents have demonstrated a growing concern, even frustration, with the status quo. That concern, as well as a call for real change and action, is one of the clearest messages that can be drawn from this year's results."
Training alone cannot replace the value gained from experience. Retirements rob the workforce of mentors. Acquisition personnel have "stopped thinking" and lack necessary communication and negotiation skills. Notwithstanding OFPP's myth busting memo success, government personnel continue to fear bid protests and are uncertain about the rules of communication. "We still have contracting officers and program managers who have the perception that you can't speak with industry. We tell people they must so they can get better proposals." There is an urgent need to market the myth busting message.
"Money next year is declining, but the oversight interests will increase because there is less money, and there will be intense interest in how we're spending the money." Oversight is having a severely negative effect. "We have this zero-risk mentality from the oversight community and it has a chilling effect." Resources are overextended in responding to the oversight by Congress and the audit/inspector general communities. This inhibits taking reasonable business risks. Increasing audit and compliance requirements will continue to constrain innovation in the acquisition community.
"Budget pressures, concerns over protests and oversight scrutiny and relative ease of decision making have led to a shift from best value to LPTA as a more and more common driver for source selection decisions."
In summary, the survey report characterizes the challenges to the acquisition community as an unabated crisis. The the common thread throughout the report is the need to enhance the quality and quantity of the procurement workforce. The report concludes with this admonition:
bill@spriggsconsultingservices.com
Budget uncertainty is a new issue. In the past, budgets did not receive a high level of attention in the survey. "Smart acquisition" has become the watch-phrase. But so far the prime, if not the almost singular example of smartness, is strategic sourcing. Smart buying requires smart people. With the challenges ahead, senior leaders recommend investments in training and maintaining the procurement workforce. But budget realities threaten investments in its size and competence. "Over the years, survey respondents have demonstrated a growing concern, even frustration, with the status quo. That concern, as well as a call for real change and action, is one of the clearest messages that can be drawn from this year's results."
Training alone cannot replace the value gained from experience. Retirements rob the workforce of mentors. Acquisition personnel have "stopped thinking" and lack necessary communication and negotiation skills. Notwithstanding OFPP's myth busting memo success, government personnel continue to fear bid protests and are uncertain about the rules of communication. "We still have contracting officers and program managers who have the perception that you can't speak with industry. We tell people they must so they can get better proposals." There is an urgent need to market the myth busting message.
"Money next year is declining, but the oversight interests will increase because there is less money, and there will be intense interest in how we're spending the money." Oversight is having a severely negative effect. "We have this zero-risk mentality from the oversight community and it has a chilling effect." Resources are overextended in responding to the oversight by Congress and the audit/inspector general communities. This inhibits taking reasonable business risks. Increasing audit and compliance requirements will continue to constrain innovation in the acquisition community.
"Budget pressures, concerns over protests and oversight scrutiny and relative ease of decision making have led to a shift from best value to LPTA as a more and more common driver for source selection decisions."
In summary, the survey report characterizes the challenges to the acquisition community as an unabated crisis. The the common thread throughout the report is the need to enhance the quality and quantity of the procurement workforce. The report concludes with this admonition:
Efforts to enhance the support given to the acquisition workforce have not delivered the results needed. Going forward, new thinking--about training and development, hiring policies, supporting and encouraging innovation (including the inevitable associated failures) and appropriately resourcing the acquisition workforce--is clearly needed.In our next article, we will suggest solutions. Whether it's a crisis or a conundrum, we all need to address the issues. Our thanks to PSC and Grant Thornton. Their report is indeed required reading.
bill@spriggsconsultingservices.com
Monday, December 24, 2012
THE TOP THREE CHALLENGES FOR 2013
The Professional Services Council and Grant Thornton LLP have just released their biennial survey of federal government acquisition leaders. The purpose of the survey is to provide government and industry leaders perspectives on the state of federal acquisition policy. The report highlights the top three concerns: 1) budget stability, 2) the acquisition workforce and 3) collaboration, transparency and oversight. It's a must read for any professional in the field and for all government and industry leaders.
In every edition of the survey over the last decade, respondents to the survey have identified workforce resources, capabilities, training and development as top concerns. "People, people, people . . . having the right number of competent, trained acquisition personnel is the number one issue." With inexperienced people in the procurement workforce and an increasing federal retirement rate, acquisition leaders fear that education and training resources will not be available to meet the challenges ahead, particularly those resulting from budget austerity.
"Continuing resolutions (CRs) force agencies to procure only the barest essentials, regardless of the impact on an agency's investment strategy." Budget cuts mean tough choices. This translates into the need for a strong workforce to get the best value for expenditures. Tighter budgets force price-based decisions potentially limiting innovation and best value. The need for promoting lessons learned is greater than ever before.
Finally, the report notes: "We have this zero-risk mentality from the oversight community and it has a chilling effect." This mentality is coming at the worst possible time. "We are seeing the criminalizing of mistakes." In discussing collaboration, transparency and oversight, the report notes the need for greater speed in the acquisition process while maintaining safeguards, the need to institutionalize processes and encourage innovation.
The report notes that although workforce training exists, it cannot replace the value gained from experience and the benefits of mentoring. Experience and mentoring are both at risk from retirements. Above all, communication skills are needed. "Acquisition personnel have stopped thinking. They want templates." Critical thinking is now at a premium. The report concludes that although many talented and passionate people have tried to improve training, they have not delivered the needed results. "Now is the time to assess new, more innovative, cross-functional and contemporary ways to rapidly and more effectively help develop this vital workforce." (Emphasis added.)
One other major take-away from the report is the fundamental disconnect between the acquisition and oversight communities which must be reconciled and repaired. It's been called the "Great Divide". There is an ongoing and destructive conflict that is severely inhibiting innovation and reasonable risk taking. The every growing compliance regime may not be adding value to the procurement process and is robbing particularly the inexperienced workforce of the incentive to innovate and take risks.
bill@spriggsconsultingservices.com
In every edition of the survey over the last decade, respondents to the survey have identified workforce resources, capabilities, training and development as top concerns. "People, people, people . . . having the right number of competent, trained acquisition personnel is the number one issue." With inexperienced people in the procurement workforce and an increasing federal retirement rate, acquisition leaders fear that education and training resources will not be available to meet the challenges ahead, particularly those resulting from budget austerity.
"Continuing resolutions (CRs) force agencies to procure only the barest essentials, regardless of the impact on an agency's investment strategy." Budget cuts mean tough choices. This translates into the need for a strong workforce to get the best value for expenditures. Tighter budgets force price-based decisions potentially limiting innovation and best value. The need for promoting lessons learned is greater than ever before.
Finally, the report notes: "We have this zero-risk mentality from the oversight community and it has a chilling effect." This mentality is coming at the worst possible time. "We are seeing the criminalizing of mistakes." In discussing collaboration, transparency and oversight, the report notes the need for greater speed in the acquisition process while maintaining safeguards, the need to institutionalize processes and encourage innovation.
The report notes that although workforce training exists, it cannot replace the value gained from experience and the benefits of mentoring. Experience and mentoring are both at risk from retirements. Above all, communication skills are needed. "Acquisition personnel have stopped thinking. They want templates." Critical thinking is now at a premium. The report concludes that although many talented and passionate people have tried to improve training, they have not delivered the needed results. "Now is the time to assess new, more innovative, cross-functional and contemporary ways to rapidly and more effectively help develop this vital workforce." (Emphasis added.)
One other major take-away from the report is the fundamental disconnect between the acquisition and oversight communities which must be reconciled and repaired. It's been called the "Great Divide". There is an ongoing and destructive conflict that is severely inhibiting innovation and reasonable risk taking. The every growing compliance regime may not be adding value to the procurement process and is robbing particularly the inexperienced workforce of the incentive to innovate and take risks.
bill@spriggsconsultingservices.com
Tuesday, December 18, 2012
OUT OF SCOPE CHANGES
When is a change out of the scope of the contract? Judge Marian Horn of the Court of Federal Claims (COFC) has just written the definitive treatise on the subject of the rules used to decide when a change exceeds the scope of the original contract. Two types of facts are implicated. The first is when a contractor on an awarded contract complains the change is beyond the scope of the contract. The other is when a competitor complains that the change is beyond the scope of the original contract and therefore should, under the Competition in Contracting Act (CICA), be open for competition. Judge Horn had before her the latter complaint. In either case, however, the central question is whether the contract, as modified, calls for essentially the same performance.
The rule has always been that modifications of an existing contract are permissible as long as the modification is within the scope of the original competitive procurement. (The same rule applies to the scope of the changes clause.) Since the Federal Acquisition Regulation (FAR) is no help here, the judicial tribunals have relied on the "cardinal change" doctrine to test whether the modification or change is in-scope or violates the competition requirements of CICA. The cardinal change doctrine addresses whether a change or modification exceeds the scope of the contract changes clause. In the case before Judge Horn, the issue was whether the modification was within the scope of the original competition.
What is a cardinal change? A cardinal change occurs when the government alters the work so drastically that it effectively requires the contractor to perform duties materially different from those originally required. Just as the cardinal change doctrine prohibits an agency from compelling a contractor to perform beyond the scope of the original bargain, the CICA prevents an agency from ordering work materially different from the contract for which the competition was held.
What is "materially different"? Lack of resemblance to the original work. Substantial changes in the type of work, performance period and cost of the work. It's a question of fact for which there is no mechanical or arithmetical answer. The courts and boards look to changes to the quantity of work, an increase in the cost of the work, the sheer number of changes, the cumulative effect of the changes to the work and changes to the time and place of the work.
But in the bid protest arena, there is another factor to consider. Did the solicitation for the original contract adequately advise the bidders of the potential for the type of changes that in fact occurred? Is the modification of a nature which potential bidders would reasonably have anticipated? Is it something potential bidders would have expected to fall within the contract changes clause?
If the court concludes as a matter of law that the modification was contemplated in the original procurement and the type or work, quantity, performance period, and costs have not substantially changed, CICA is not implicated and the protest will be dismissed. Which is exactly what Judge Horn did. Case dismissed.
The cardinal change doctrine articulates a firm set of rules. Whether you are a disgruntled bidder or a contractor tearing out your hair over the nature or size of a modification, you can avail yourself of the argument that you have encountered a cardinal change. As a contractor, you don't have to perform such a change. It's a breach of the contract. As a disgruntled bidder, you can protest under CICA your right to compete for the work.
bill@spriggsconsultingservices.com
The rule has always been that modifications of an existing contract are permissible as long as the modification is within the scope of the original competitive procurement. (The same rule applies to the scope of the changes clause.) Since the Federal Acquisition Regulation (FAR) is no help here, the judicial tribunals have relied on the "cardinal change" doctrine to test whether the modification or change is in-scope or violates the competition requirements of CICA. The cardinal change doctrine addresses whether a change or modification exceeds the scope of the contract changes clause. In the case before Judge Horn, the issue was whether the modification was within the scope of the original competition.
What is a cardinal change? A cardinal change occurs when the government alters the work so drastically that it effectively requires the contractor to perform duties materially different from those originally required. Just as the cardinal change doctrine prohibits an agency from compelling a contractor to perform beyond the scope of the original bargain, the CICA prevents an agency from ordering work materially different from the contract for which the competition was held.
What is "materially different"? Lack of resemblance to the original work. Substantial changes in the type of work, performance period and cost of the work. It's a question of fact for which there is no mechanical or arithmetical answer. The courts and boards look to changes to the quantity of work, an increase in the cost of the work, the sheer number of changes, the cumulative effect of the changes to the work and changes to the time and place of the work.
But in the bid protest arena, there is another factor to consider. Did the solicitation for the original contract adequately advise the bidders of the potential for the type of changes that in fact occurred? Is the modification of a nature which potential bidders would reasonably have anticipated? Is it something potential bidders would have expected to fall within the contract changes clause?
If the court concludes as a matter of law that the modification was contemplated in the original procurement and the type or work, quantity, performance period, and costs have not substantially changed, CICA is not implicated and the protest will be dismissed. Which is exactly what Judge Horn did. Case dismissed.
The cardinal change doctrine articulates a firm set of rules. Whether you are a disgruntled bidder or a contractor tearing out your hair over the nature or size of a modification, you can avail yourself of the argument that you have encountered a cardinal change. As a contractor, you don't have to perform such a change. It's a breach of the contract. As a disgruntled bidder, you can protest under CICA your right to compete for the work.
bill@spriggsconsultingservices.com
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