2. 1 What Language Are We Speaking? The Art of Meaningful Discussions Breakout Session #A09, Room 210 Name: Melissa Starinsky, Deputy Director Office of Acquisition and Grants Management Centers for Medicare and Medicaid Services (410) 786-8798 or melissa.starinsky2@cms.hhs.govmelissa.starinsky2@cms.hhs.gov Date: Monday, July 30, 2012 Time: 11:15 am-12:30 pm

3. 2  Understand distinction between clarifications, communications and discussions  Improve communication between Government and industry during the discussion phase of FAR Part 15 negotiated procurements  Learn ideas for a more effective and streamlined process that will reduce administrative burden for both Government and industry  Develop skills and tips to reduce protest risk  Identify strategies that will yield better and more meaningful information to allow the Government to reach a best value decision  Share meaningful feedback during the debriefing phase to improve contractors' chances for and improve Government performance on future source selections Learning Objectives

4. What are Discussions? “When negotiations are conducted in a competitive acquisition, they take place after establishment of the competitive range and are called discussions.” ~ FAR 15.306(d)

5. 4  Face the person in row before or behind you  Share your experiences with “discussions” What worked well? What could have been improved? Were discussions “meaningful?” What does “meaningful” mean to you? Did the Government get the best deal? What did you learn from the experience? Icebreaker

6. 5  FAR 15.002(b) – Competitive Acquisitions “…procedures of this part are intended to minimize the complexity of the solicitation, the evaluation, and the source selection decision, while maintaining a process designed to foster an impartial and comprehensive evaluation of offerors’ proposals, leading to the selection of the proposal representing the best value to the Government.”  FAR Part 15.306 – Exchanges with Offerors Clarifications and award without discussions Communications before competitive range Negotiations = Discussions (post competitive range) FAR Part 15 – Contracting by Negotiation

7. Types of Exchanges 6 ClarificationsCommunicationsNegotiations = Discussions IF award without discussions, offerors may be given opportunity to clarify certain aspects of proposals or to resolve minor or clerical errors Government must have stated, in solicitation, its intent to award without discussions IF a competitive range is to be established Limited to adverse past performance to which an offeror has not yet responded and/or offerors’ whose inclusion or exclusion in competitive range is uncertain Used to enhance Government understanding but NOT to correct or revise proposal WHEN competitive range is established Intended to allow offerors to revise proposals Deficiencies, significant weaknesses, and adverse past performance (to which an offeror has not yet responded) information must be discussed Other issues that could enhance materially proposal’s potential for award CO not required to address every area where proposal could be improved

8. Limits on Exchanges  Government shall NOT engage in exchanges that: Favor one offeror over another; Reveal an offeror’s technical solution; Reveal an offeror’s price without that offeror’s permission; but, − CO may inform an offeror that its price is considered by the Government to be too high, or too low, and reveal the results of the analysis supporting that conclusion. − CO can indicate to all offerors the cost or price that the Government’s price analysis, market research, and other reviews have identified as reasonable. Reveal the names of individuals providing reference information about an offeror’s past performance; or Knowingly furnishes source selection information.

9. 8  Specific, but not limited to, FAR Part 15 process: Deficiency Weakness Discussions/Negotiations Competitive Range Final Proposal Revisions (FPRs)  Avoid using FAR Part 15 process AND terminology for other acquisition strategies (e.g., GSA, commercial item acquisition, simplified, IDIQ orders) FAR Part 15 Terminology

10. 9  “The more complicated the process, the more vulnerable to mistakes and successful protests” (Source: Acquisition Solutions Advisory October 2001 – Source Selection: A High- Stakes Game of Many Rules)  If it looks like a FAR Part 15 buy, GAO will treat it like a FAR Part 15 buy…meaning you must follow the FAR Part 15 rule- laden and complex process You cannot skip a step See GAO decision (Digital Systems Group, Inc., B-286931; B- 286931.2, March 7, 2001) Non FAR Part 15 Buys – Keep Simple

11. 10  “The single biggest problem with communication is the illusion that it has taken place.” (George Bernard Shaw)  Form is important but substance is MORE important!  TALK with one another!!! In-person if possible, and by telephone at a minimum  Should be a very interactive time period  Could take days, weeks, or even months depending on complexity of acquisition but try to streamline – every issue does not need to be resolved Meaningful Discussions: Best Practices

12. Award without Discussions  Government may ONLY award contract without discussions if FAR Clause 52.215-1 is in the solicitation Government intends to evaluate proposals and award a contract without discussions with offerors Offeror’s initial proposal should contain the offeror’s best terms from a cost or price and technical standpoint  Can Government award without discussions if apparently successful offeror has weaknesses in its proposal? What about a deficiency?

13. Initiating Discussions  CO must comply with solicitation and do what you say you are going to do!  Goal is to award contract without discussions – do it if you can!  Should strive for ONLY 1 round of discussions if a competitive range is set  Send discussion questions to vendors before kicking off negotiations  Assemble acquisition team for initial call with vendor  Be approachable and accessible – answer phone when contractor calls  Have confidence in your abilities to facilitate discussions  Get back to vendor with answer if you don’t know it  Memorialize conversations in writing for things that change or are significant – not every detail

14. Discussion Questions  Technical and business panels should identify issues but CO should be intimately involved in the framing of discussion questions Ask open-ended questions; do not “lead your reader” CO needs to understand questions and they need to be in “plain language” How you phrase the question matters  Consider telling ALL contractors what price/cost the Government believes to be reasonable  Carefully consider which questions to ask – not all issues need to be addressed  Can you tell an offeror that their proposed cost is higher relative to the other offerors for the procurement?

15. Concluding Discussions  CO should get draft FPR before concluding discussions  BAFO – NOT! Long gone term Correct Terminology: “Final Proposal Revisions” or FPR  Each offeror still in the competitive range shall be given an opportunity to submit a final proposal revision. CO must establish a common cut-off date for receipt of final proposal revisions. Requests for final proposal revisions shall advise offerors that the final proposal revisions shall be in writing and that the Government intends to make award without obtaining further revisions.  Red-lined version of FPR is not necessary and creates increased burden on both contractors and Government

16. Contractor Proposals/Tips  Original offer should be your best offer; increasingly agencies are awarding without discussions  If you don’t understand a question, ask CO for clarification  Assemble your team for discussion kickoff  Don’t ask: “If we were to do “X”, would that be an acceptable solution to Government?”  Avoid surprising the Contracting Officer with new or different information in the Final Proposal Revision (FPR)

17. Debriefings – FAR 15.506  May be conducted pre (if eliminated from competitive range or post award)  Contractor debriefing requests submitted in writing 3 days post award  CO conducts debriefing within 5 days of receipt of request  CO may accommodate untimely debrief requests  CO may be conducted orally, in writing or any acceptable method  At a minimum include: significant weaknesses/deficiencies; overall evaluated cost/price and technical rating of successful offeror and debriefed offeror; past performance info on the debriefed offeror; overall ranking of all offerors; summary of rationale for award  Do not include point by point comparisons of offeror’s proposals

18. Debriefings – Best Practices  Conduct in-person, if possible, and over phone at a minimum  Avoid “sorry letters” that only tell unsuccessful offerors that their proposal did not represent “best value”  CO should solicit feedback from offerors on what worked well and what could be improved upon in the process  CO should strive to give unsuccessful offerors meaningful feedback that will enhance their chances for award on future procurements Example: Instead of telling offeror that staffing plan was weak, tell them what they could have done to give the Government a greater degree of confidence that the contractor had thought through a sound staffing approach.

19. Scenario #1: Award without Discussions Government requirement for national education and outreach program to reach all populations. RFP did not explicitly require multiple languages to deal with potential language and cultural barriers. Vendor X did not acknowledge and propose a technical approach to address potential language and cultural barriers which is considered a deficiency. Vendor Y has an almost perfect proposal and CO wants to award without discussions. What are the risks if CO moves forward with award to Vendor Y without discussions? If a competitive range was set, how might the CO pose this question? Moral of the Story: Award may be made without discussions if the solicitation states that the government intends to evaluate proposals and make award without discussions.

20. Scenario #2: Cost Realism In cost-reimbursement scenario, Government makes its award selection decision based on evaluated cost but awards contract based on proposed cost CO wants to award to high tech/low cost offeror (both proposed and evaluated). Proposed cost is $100M and evaluated cost is $150M. All other offerors’ proposed and evaluated costs are well over $150M. Is this or could this be a problem? See FAR 15.401-1(d)(2)(i) - The probable cost shall be used for purposes of evaluation to determine the best value. Moral of the Story: Significant variance between proposed and evaluated cost could be a viable basis for a protest. CO must determine that award amount is fair and reasonable.

21. Scenario #3: Adverse Past Performance Vendor X is rated as the highest technical proposal with the lowest evaluated cost and CO wants to award without discussions. Vendor Y – is the next rated offeror but the CO uncovers past performance issues for which Vendor Y has not yet had an opportunity to respond. This information is the determining factor that would preclude the CO from including Vendor Y in the competitive range. May the CO award without discussions to Vendor X in light of the adverse past performance information on Vendor Y? If the CO decided to address Vendor Y’s adverse past performance information before the establishment of the competitive range, what type of exchange would this be? Moral of the Story: Adverse past performance is tricky. Make sure you understand FAR rules and engage legal counsel.

22. Scenario #4: Small Business SubK Plan An acceptable small business subcontracting plan is a requirement to be eligible for award but is not an evaluation factor Company X is the apparently successful offeror but has not submitted an acceptable small business subcontracting plan with its Final Proposal Revision Can the CO re-engage Company X, without reopening discussions with other offerors to address the small business subcontracting plan? What if small business subcontracting plan was an evaluation factor? Moral of the Story: Know whether small business subcontracting plan is an evaluation factor for award or ONLY a matter of responsibility for award. See GAO Case B-401600, AP Logistics, LLC

23. Scenario #5: Conflict of Interest Three proposals received and all three offerors were in competitive range Discussions have concluded and CO has determined Vendor X to be the apparently successful offeror based on Final Proposal Revisions (FPRs) CO realizes that there appears to be an unmitigated organizational conflict of interest with the Vendor X proposal Must CO re-open discussions with all offerors to allow Vendor X an opportunity to resolve the OCI? Can the CO award and resolve issue with Vendor X post-award? Moral of the Story: CO can re-engage ONLY Vendor X for the purpose of resolving the OCI. This does not constitute discussions. See GAO Case B-401106.6, C2 Solutions and Trust Solutions

24. Questions?