Winnowing your list of suitable bidders just got a lot tougher

There are now five things you might not want to do: Tug on Superman's cape. Spit into
the wind. Rip the mask off the ol' Lone Ranger. Mess around with Jim. And, now, throw
anyone out of the competitive range--ever.

The law of unthought-through consequences has reared its ugly head again.

The first four don'ts are more or less obvious, but for the fifth you've got to review
your scorecard.

We'll use the 41 U.S. Code 253b(d) version. The Federal Acquisition Streamlining Act of
1994, or FASA I--the procurement reform to end all procurement reform, removed old (d)(2)
and replaced it with old (d)(4) (Revision 1., (d)(2), hereafter R.1.(d)(2)).

The procurement reform items attached to the 1996 Defense authorization bill, or FASA
II, creates a new (d)(3) using FASA I's (d)(2) (which was old (d)(4) ) and adds yet
another (d)(2), hereafter R.2. (d)(2). Good luck on electronic searches of cases
interpreting 41 USC 253b(d)(2).

R.2. (d)(2) has some odd language which, when implemented, is going to either cause
havoc or be totally ignored as the dumbest legislation in the history of the planet.

Lets go back to a time before most people on earth today were born, the mid-50's. The
Defense Department solved a problem it had been having with contract negotiations.

It seemed that when it held a negotiation party, too many vendors showed up.

It was obvious that some should be turned away at the door.

These unlucky souls were outside the ""range of consideration.'' When the
Comptroller General blinked at such a notion, DOD was emboldened to regulate the practice.
It declared in 1961 that when a negotiation was held, discussions would only be undertaken
with those bidders in a ""competitive range.''0

Congress thought this was a good thing and, as is typical of procurement reforms,
enacted it for DOD in Public Law 87-653 in 1962. The civilian agencies had the same rule,
amazingly enough.

The rule was later modified slightly to say that if discussions were not necessary,
agencies could make an award without them. Agencies just had to make sure that discussions
were not held only with the winner, which would be cheating.

Then, someone decided that the negotiation parties still were too big to provide for
efficient competition, an oxymoronic phrase if there ever was one. The decision obviously
was based on a statistically significant sample of double-blind scientific studies on
identical acquisitions that showed that efficient-sized competitive ranges were much
better than inefficient-sized competitive ranges.

Surely, no one was guessing or basing this monumental legislative effort on anecdotal
information. Right?

Anyhow, let's speed up to current times. R.2. (d)(2) states: ""If the
contracting officer determines that the number of offerors that would otherwise be
included in the competitive range [el1] exceeds the number at which an efficient
competition can be conducted, the contracting officer may limit the number of proposals in
the competitive range, in accordance with the criteria specified in the solicitation, to
the greatest number that will permit an efficient competition among the offerors rated
most highly in accordance with such criteria.'' (If you move your lips while you read,
take a breath now.)

What R.2. (d)(2) means is that after an initial evaluation of proposals sufficient to
ascertain the reasonable probability of one being selected for award, the contracting
officer does a first cut. Then, if holding discussions with some of the remaining bidders
would result in inefficient competition, the contracting officer can make a second cut
using criteria specified in the solicitation. But the contracting officer doesn't have to.

What criteria might the contracting officer use in exercising his or her discretion to
screen for an inefficient competitive range size? How about an arbitrary number like
three. Well, that's not much of an exercise of discretion, so that wouldn't even pass the
""arbitrary, capricious, or abuse of discretion'' test.

But suppose it did pass the test (shudder), or someone forgot to protest the rule of
three before receipt of initial proposals?

Then suppose four vendors make the initial cut, and the contracting officer decides to
invoke the rule of three. At this juncture, the contracting officer may have ranked the
proposals by, say numerical scores, which at best are guides to decision-making but hardly

So there is no surefire way to know which of the four should be booted. But our
intrepid contracting officer rushes in where the angels say, ""Not me, baby,''
and pushes out one of the four like a baby bird from the nest. This leaves three
interested parties when number four squawks. And all three will show up to the protest,
because any one of them might be shoved out of the nest next if number four is successful.

Thus, in those exclusion-from-the-competitive range protests where the three interested
parties previously would all have been content to sit on the sidelines and watch number
four twist slowly in the wind, they now will be fighting like wildcats in a pillow case to
preserve their place. So much for efficiency.

And so, dear regulators, leave this one alone. It is mischief on the hoof. If you don't
think so, regulate the competitive range short list notion into the Federal Acquisition
Regulation and just watch what happens.

Bob Little, an attorney who has worked who has worked for the General Accounting
Office and a Washington law firm, now teaches federal contract law.

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