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The Office of Management and Budget (OMB) Goes Myth-Busting

In February, the administrator of federal procurement policy, Dan Gordon, released a 13-page memorandum that addressed the most widely-held contracting misconceptions, which includes communicating with a vendor placing a government bid on a contract. This lack of communication is the greatest barrier between the two entities and can hinder a good contract. The memo required all federal agencies to submit a vendor communication plan by the summer of 2011.

Chief Acquisition Officer Mindy Connolly said that both vendors and the GSA should have better dialogue in the lead-up to contract awards and during the process of implementing Federal Acquisition Regulations. The OMB offered agencies guidance on improving communications with contractors as many believed they could not speak to a bidder for fear that a competing vendor would file a protest. OMB states that this is a myth and, rather, that if communication started during the bidding process it would result in better contracts, better bids and better results.

The memo coincided with OMB’s announcement that there was a decrease in contract spending by $21 billion from 2009 to 2010 and this decrease continues. President Barack Obama ordered agencies to find another $40 billion in contract savings for the 2012 fiscal year and to reduce their use of high-risk contracts, such as time and materials and labor-hours contracts. The administration expects agencies to buy less and buy smart.

According to the memo the “Top 10 Contracting Myths” are:

Misconception #1: “We can’t meet one-on-one with a potential offeror.”
Fact: Government officials can generally meet one-on-one with potential offerors as long as no vendor receives preferential treatment.

Misconception #2: “Since communication with contractors is like communication with registered lobbyists, and since contact with lobbyists must be disclosed, additional communication with contractors will involve a substantial additional disclosure burden, so we should avoid these meetings.”
Disclosure is required only in certain circumstances, such as for meetings with registered lobbyists. Many contractors do not fall into this category, and even when disclosure is required, it is normally a minimal burden that should not prevent a useful meeting from taking place.

Misconception #3: “A protest is something to be avoided at all costs, even if it means the government limits conversations with industry.”
Fact: Restricting communication won’t prevent a protest, and limiting communication might actually increase the chance of a protest, in addition to depriving the government of potentially useful information.

Misconception #4: “Conducting discussions/negotiations after receipt of proposals will add too much time to the schedule.”
Fact: Whether discussions should be conducted is a key decision for contracting officers to make. Avoiding discussions solely because of schedule concerns may be counter-productive, and may cause delays and other problems during contract performance.

Misconception #5: “If the government meets with vendors, that may cause them to submit an unsolicited proposal and that will delay the procurement process.”
Fact: Submission of an unsolicited proposal should not affect the schedule. Generally, the unsolicited proposal process is separate from the process for a known agency requirement that can be acquired using competitive methods.

Misconception #6: “When the government awards a task or delivery order using the Federal Supply Schedules, debriefing the offerors isn’t required so it shouldn’t be done.”
Fact: Providing feedback is important, both for offerors and the government, so agencies should generally provide feedback whenever possible.

Misconception #7: “Industry days and similar events attended by multiple vendors are of low value to industry and the government because industry won’t provide useful information in front of competitors, and the government doesn’t release new information.”
Fact: Well-organized industry days, as well as pre-solicitation and pre-proposal conferences, are valuable opportunities for the government and for potential vendors—both prime contractors and subcontractors, many of whom are small businesses.

Misconception #8: “The program manager already talked to industry to develop the technical requirements, so the contracting officer doesn’t need to do anything else before issuing the RFP.”
Fact: The technical requirements are only part of the acquisition; getting feedback on terms and conditions, pricing structure, performance metrics, evaluation criteria and contract administration matters will improve the award and implementation process.

Misconception #9: “Giving industry only a few days to respond to an RFP is OK since the government has been talking to industry about this procurement for over a year.”
Fact: Providing only short response times may result in the government receiving fewer proposals and the ones received may not be as well-developed, which can lead to a flawed contract. This approach signals that the government isn’t really interested in competition.

Misconception #10: “Getting broad participation by many different vendors is too difficult; we’re better off dealing with the established companies we know.”
Fact: The government loses when we limit ourselves to the companies we already work with. Instead, we need to look for opportunities to increase competition and ensure that all vendors, including small businesses, get fair consideration.

On August 10, the FAI held its first agency training to understand communication between sellers and buyers. Within the next few months, the Federal Acquisition Institute (FAI) and the Defense Acquisition University (DAU) will be offering more information for industry engagement to both agencies and vendors. NACM-GBG will remain active in the myth-busting initiative and has been in contact with the OMB, offering to help with any type of forum needed to increase communication between vendors and agencies.

FAPIIS Disclosure Rules

Federal Awardee Performance and Integrity Information System, known as FAPIIS, is a FAR rule. Ever heard of it? Want to know what this important FAR rules states, since it affects your contracts? If the expected value of a contract (or grant) exceeds $500,000, agencies must insert a new implementing clause (FAR 52.209-7) that requires certified disclosures from contractors pertaining to certain criminal, civil, and administrative proceedings. Vendors must provide this information through the Central Contracting Registration (“CCR”) database. The OMB has issued guidance to help agencies implement this FAR rule.

Understanding the FAR & AbilityOne Performance Based Contracting

The AbilityOne Program was formerly known as the Javits-Wagner-O’Day Program. This program is a Federal initiative that works with public and private organizations to expand employment opportunities for Americans with disabilities. Most NISH service contracts are Performance Based Contracting (FAR 37.601). A Performance Based Contract is structured around the purpose of the work as opposed to the manner in which it is to be performed and:

  • Uses measurable performance standards (i.e., terms of quality, timeliness, quantity)
  • Specifies procedures for reductions to price when services are not performed
  • Includes performance incentives where appropriate

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