As most federal contractors have heard, the Federal Acquisition Regulation is undergoing a major overhaul. FAR 2.0, commonly referred to as the Revolutionary FAR Overhaul (or just the “RFO”), is the responsibility of the Office of Federal Procurement Policy (OFPP) and the Federal Acquisition Regulatory Council (FAR Council). Initiated by Executive Order 14275, the new FAR 2.0 process has been going quickly, with lots of proposed revisions.
Our earlier posts regarding the RFO can be found here: Executive Order, Overview of FAR 2.0, FAR Part 6, FAR Part 19, FAR Part 12.
Work continues over at the OFPP and FAR Council, and today we’re covering some of their most substantial changes yet: Part 15 – Contracting by Negotiation.
Part 15 has seen some of the most substantial reorganization and redrafting yet proposed. As we’ve discussed previously, FAR 2.0 is designed to refocus the FAR on its statutory roots and simplify the procurement process. This is primarily being done by removing non-statutorily required provisions into non-binding “Practitioner Albums” designed to preserve decades of contracting experience and guidance while removing excess restrictions on COs and contractors. Consolidation and reorganization have been promised where needed, and there has been an emphasis on simplifying regulatory language for clarity.
The OFPP and the FAR Council have delivered on these reorganization, consolidation, and redrafting promises in Part 15. As detailed in the practitioner album accompanying the proposed language, this is “one of the most transformative aspects of the RFO, fundamentally redefining meaningful exchanges between the government and offerors throughout the source selection process.” Many federal contractors are likely familiar with the old distinctions between “clarifications” and “discussions” in the procurement process, or more likely, the difficulty in determining what category a particular interaction might fall into. These distinctions carried real consequences, sometimes making the difference between a successful and unsuccessful bid or protest. OFPP seems to have been aware of this potentially confusing and treacherous set of definitions, and has accordingly redefined a good deal of it.
Definitions and Terms
First, “communications,” in the context of the establishment of competitive range, have been eliminated entirely. “Discussions” have been replaced with “negotiations.” And “clarifications” have been given robust additional language to guide application. This has all been done to facilitate interactions initiated by COs, with the intention of improving offers and thereby the quality of services received by the government. “Clarifications” in the current version of the FAR permit minor corrections, but cannot be used for material revision of a proposal.
In addition, the term “proposal revision” is updated to include the phrase “material elements of a proposal”. This revision clarifies that some changes made during negotiations are not proposal revisions. Rather, the change has to be “focusing the definition on changes that are “substantive in nature.” The scope of their availability has been expanded so that COs can request additional information or documentation (so long as material elements like cost/price are not changed) at any time after receipt of proposals through contract award, regardless of whether or not a competitive range has been established. Thus, “Clarifications may be conducted at any time after receipt of proposals through contract award irrespective of whether a competitive range has been established.”
“Competitive range” has also been redefined: it is now a “group of evaluated proposals that the CO determines are best suited for further negotiation,” instead of “all of the most highly rated proposals.” Whether these new definitions deliver the intended flexibility and clarity remains to be seen, but these do constitute large-scale changes to the procurement process, especially compared to some of the smaller-scale redrafting in other proposed RFO language.
Process and Steps
Part 15 has also undergone substantial reorganization and consolidation. What once consisted of six subparts now features only five, and the organizational principle has shifted from topic-based to a “more intuitive acquisition flow.” The old subparts, in order, were:
- Source Selection Processes and Technique
- Solicitation and Receipt of Proposals and Information
- Source Selection
- Contract Pricing
- Preaward, Award, and Postaward Notifications, Protests, and Mistakes
- Unsolicited Proposals
Now, the flow is:
- Presolicitation and Solicitation
- Evaluation and Award
- Postaward
- Contract Pricing
- Unsolicited Proposals.
The intention here is “a more cohesive framework,” with provisions being relocated throughout to fit an organizational scheme that reflects the timeline of the acquisition process.
Clarifications now includes the following:
–Can occur anytime during source selection process, even when doing competitive range
–Can correct “Unclear proposal language”
–Can be used to verify understanding of proposal contents
–Can address adverse past performance info
–No revisions to proposal, but COs “may request additional information or documentation.”
A deficiency now means a material failure, but removes the concept of a “combination of significant weaknesses.” In addition, the RFO endorses the use of a concept called: Highest technically rated offer with reasonable price added (HTFRP). This idea is basically the reverse of LPTA, as price is less important in this type of evaluation.
The guidance states: “Having further negotiations with one offeror does not require the contracting officer to have further negotiations with other offerors. The deviation text provides guidance on industry communication through early exchanges and debriefing.” Other guidance makes clear that an agency “[m]ay have further negotiations with particular offerors without obligation to have further negotiations with other offerors.” This would seem to allow for an initial negotiations stage with all offerors, and then refinements that do not have to be equal. Material aspects can be revised during negotiations, including –material aspects such as pricing and intellectual property rights.
Much of the content retained is mandated by statutory language, while a fair amount has been removed to the FAR Companion (the non-binding guidance language accompanying the RFO roll out). Several provisions have been outright deleted, for example, former 52.215-5, Facsimile Proposals. The RFO has reserved this language, with the new regulation taking a more “technology-neutral” approach allowing agencies “the flexibility to authorize a range of modern electronic submission methods;” in other words, COs are allowed to request submissions through email or a website portal as opposed to through fax.
Takeaways
There are further reorganizations, redrafts, and removals throughout Part 15, all of which are detailed by OFPP’s practitioner album. For now, one bottom-line takeaway is that initial negotiations, if done, must be with all responsible offerors in the competitive range. Subsequent negotiations do not have to be the same for all offers (potentially undercutting unequal discussions arguments). Contracting officers must negotiate with each responsible offeror within the competitive range and may further negotiate as needed. The proposed text provided guidance on industry communication through the early exchanges and debriefing. As it stands, this new subpart is relatively streamlined and designed to give COs greater flexibility in how they request, receive, review, and clarify proposals. It remains to be seen what the full impact of this fairly significant revision will be, but as always, stay tuned here at SmallGovCon for further coverage of all RFO developments.
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