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Are GAO tests for competitive range determinations still alive? The change in law manifested by the FAR Part 15 rewrite has relegated these GAO tests to the graveyard of procurement law.

Before the rewrite and adoption of Federal Acquisition Regulation (FAR) Part 15, the General Accounting Office (GAO) had "tests" as guidance for competitive range determinations. This article will review the validity of these tests, in light of recent experience with the FAR Part 15 rewrite and GAO decisions.

The GAO tests are referred to as the "Reasonable Chance Test," the "Meaningful Negotiations Test," and the "Major Revisions and/or Additions Test." (1) The GAO competitive range tests grew out of the comptroller general's attempt to increase contracting officers' competitive range determinations, keeping with the mandate of the Competition in Contracting Act of 1984 (CICA).

Due to the FAR Part 15 rewrite--made mandatory for all solicitations after January 1, 1998--the value of these three competitive range tests needs to be revisited. Although the competitive range decision is not well defined, it is one of the most important decisions in the negotiation process. The range determination is often a point for protests, especially with the GAO. The GAO in various decisions has discussed these three tests for determining the competitive range. (2)

Reasonable Chance Test

FAR 15.609(a), before the rewrite, provided that the competitive range "shall include all proposals that have a reasonable chance of being selected for award." The contracting officer decides the likelihood that offerors stand a chance for eventually being awarded the contract. If the contracting officer decides that the chances are poor, then that offeror should be dropped from the range. GAO opined that it would be a waste of time and resources for an offeror to continue in the process; even if there were room for negotiations, the offeror should be eliminated. (3)

Even during the time of maximizing competition directed by the Competition in Contracting Act of 1984, the FAR did not require agencies to retain a proposal in the competitive range simply to avoid a competitive range of one, since conducting discussions with offerors with no reasonable chance of award would benefit neither the offerors nor the government. (4)

The pre-rewrite FAR also said, "When in doubt as to whether a proposal is in the competitive range, the proposal should be included." (5) The previous rule, "When in doubt, leave them in," has been replaced in the FAR Part 15 rewrite with "When in doubt, leave them out." (6) The competitive range will now include all the most highly rated proposals, unless the range has been reduced for purposes of efficiency. Firms do not bear the unnecessary bid and proposal expenses when they are not one of the most highly rated offerors.

The FAR's direction to limit the competitive range to "all of the most highly rated proposals" does not require an agency to retain even a second-rate proposal, if it reasonably concludes that the proposal has no realistic prospect of award. (7)

Meaningful Negotiations Test

This test has a lot to do with the negotiation process. The test is that a proposal is included in the competitive range, unless it is so technically deficient or out of line from a price standpoint that meaningful negotiations are precluded. (8) Since the GAO had not defined the term "meaningful negotiations," it held that it is primarily for determination by the contracting entity, whose judgment will not be disturbed unless clearly without a reasonable basis. (9)

With the rewrite of FAR Part 15, the communication process between the government and offerors has become more complicated. Communications with offerors before establishment of the competitive range are "exchanges." These exchanges are centered on "clarifications," which are limited exchanges when award without discussions is contemplated.

Clarifications are permitted concerning certain aspects of the proposal such as past performance information or resolution of minor or clerical errors. (10) If, however, a competitive range is to be established, these communications are limited to proposal ambiguities or other concerns such as perceived deficiencies, weaknesses, errors, omissions, mistakes, and information concerning relevant past performance. (11)

Meaningful negotiations finally come into play when discussions are conducted after establishment of the competitive range.
Negotiations are exchanges, in either a competitive or sole source
environment, between the government and offerors that are undertaken
with the intent of allowing the offeror to revise its proposal. These
negotiations may include bargaining. Bargaining includes persuasion,
alteration of assumptions and positions, and give-and-take, and may
apply to price, schedule, technical requirements, type of contract, or
other terms of a proposed contract. (12)


The FAR rewrite now envisions the full array of negotiations. Full-blown discussions, as they are now called, take place in competitive acquisitions after establishment of the competitive range. Such discussions involve proposal weaknesses and deficiencies and other aspects bearing on cost, price, technical approach, past performance, and terms and conditions--all leading to better understanding by the contracting officer, to maximize the government's ability to award the best value contract and get the "best bang for the buck."

The discretion given to government negotiators is broad and with few limitations. Such limitations include (1) favoring one offeror over another, (2) revealing proprietary information surrounding one offeror's intellectual property to a competitor, and (3) disclosing the price of offerors' proposals to others without permission. However, it is permissible to tell an offeror that its price is too high, too low, or unsubstantiated, but to reveal the names of individuals providing past-performance information to and knowingly provide source selection information is a violation of law. (13) Meaningful negotiations only become meaningful when all aspects of the acquisition and the offerors' proposals are open to discussion.

Once the government permits an offeror to revise a proposal, the exchange between the parties becomes "discussions" and triggers the requirement that an agency must provide all offerors an opportunity to submit revised proposals. (14)

Revisions and/or Additions Test

This test centers on the amount of effort needed to bring an offeror into (or keep the offeror in) the competitive range. If an offeror's proposal must be substantially rewritten before it can be categorized as being technically acceptable, then it must be excluded from the competitive range. Thus, a proposal may be excluded from the competitive range if deficiencies are so material that major revisions and additions would be required to make it acceptable. (15)

The idea was to stop offerors from having "two bites at the apple," which could lead to "technical leveling" (i.e., helping an offeror to bring its proposal up to the level of other proposals through successive rounds of discussion, such as pointing out weaknesses resulting from the offerors lack of diligence, competence, or inventiveness in preparing proposals). (16)

Surprisingly, under the FAR Part 15 rewrite, technical leveling is no longer specifically prohibited. Agency discussion questions designed to provide an offeror with an opportunity to improve its proposal and correct aspects that may not have met the requirements are "totally appropriate" and a "legitimate goal of discussions." (17)

The major revisions test put an outside limit on the FAR guidance of "when there is doubt as to whether a proposal is in the competitive range, the proposal should be included," as discussed previously. This test has lost its efficacy with the incorporation of the new FAR Part 15; if an offeror's proposal is in need of major revisions to make it viable, it should be eliminated early in the evaluation process. Using the trade-off process of FAR 15.101.1, technically weak proposals should be eliminated early in the process before the competitive range is established. Remember--the new Rule I, "When in doubt, throw them out." (18)

Competitive Range Tests

The old competitive range tests survive, in name only, but have lost their effectiveness with the FAR Part 15 rewrite. All these tests have been abrogated by the new contracting officers' newly enhanced power of discretion to reduce the competitive range "for the purposes of efficiency." (19) Keeping with the broad discretion given to the contracting officers by the FAR rewrite, "the contracting officer may determine that the number of most highly rated proposals that might otherwise be included in the competitive range exceeds the number of which an efficient competition can be conducted." (20)

As long as the solicitation informs offerors that the competitive range can be limited for efficiency, "the contracting officer may limit the number that will permit an efficient competition among the most highly rated proposals." (21) The change in direction of the law of competitive range determinations from maximizing competition and expansion of the competitive range--in accordance with the Competition Act of 1984--now allows the contracting officer greater latitude and discretion in determining the competitive range. The stated purpose of the new FAR Part 15 regulations was "to provide for empowerment and flexibility" and "shift from rigid to guiding principles." (22) Specifically, the new regulations were intended to "support more open exchanges between the government and industry, allowing industry to better understand government proposals." (23)

The review of the GAO competitive range tests shows that they have been overcome by events. The FAR Part 15 rewrite, which expands the contracting officers' discretion in narrowing the competitive range, has replaced the concept of expanding it under the CICA guidance.

What is left of the three GAO competitive range tests? The change in the law manifested by the FAR Part 15 rewrite has relegated the tests to the graveyard of procurement law. May the old competitive range tests "Rest in Peace."

Endnotes

1. Laurence M. Smail and John W. Simmons, "Competitive Range Determinations: Tough Decisions Getting Tougher," Contract Management (May 1985).

2. Laurence M. Smail, "Competition and Source Selection from an Army Perspective," Military Business Review (May/June 1986).

3. Center for Employment Training, Comp. Gen. Dec. B-203555, March 17, 1982, 82 CPD 252.

4. Clean Serve Co., Comp. Gen. Dec. B-281141.3, 99-1 CPD 36.

5. FAR 15.609(a).

6. FAR 15.306(c)(3).

7. Matrix Gen., Inc., Comp. Gen. Dec. B-282198, 99-1 CPD 108.

8. Magnetic Corporation of America, Comp. Gen. Dec. B-187887, June 10, 1977, 77-1 CPD 419.

9. WASSKA Technical Systems and Research Company, Comp. Gen. Dec. B-189573, August 10, 1979, 79-2 CPD 110.

10. FAR 15.306(a).

11. FAR 15.306(b).

12. FAR 15.306(d).

13. FAR 15.306(e).

14. FAR 15.306(a).

15. Spectrum Leasing Corp., Comp. Gen. Dec. B-261982, 82-1 CPD 383.

16. FAR 15.601(d) (previous version).

17. Imagine One Tech. & Mgmt. Ltd., Comp. Gen. Dec. B-289334, January 10, 2002, 2002 CPD 18.

18. FAR 15.609(a).

19. FAR 15.306(c)(1).

20. Ibid.

21. FAR 15.306 (c)(2) and FAR 52.215-1.

22. 62 Federal Register (Sept. 30 1997) 51, 225.

23. Ibid., at 51, 224.

About the Author

LAURENCE M. SMAIL, CPCM, Fellow, is an assistant professor of management for the Florida Institute of Technology Hampton Roads Graduate Center in Virginia. He is a retired procurement attorney for the U.S. Army. He was a founding member and president of the Hampton Roads Chapter and NCMA vice president for the Mid-Atlantic Region. Send comments on this article to cm@ncmahq.org.
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Title Annotation:general accounting office
Author:Smail, Laurence M.
Publication:Contract Management
Geographic Code:1USA
Date:Oct 1, 2004
Words:1836
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