The FAR debate rages over determinations of competitive range
Rewriting these rules is key to reinventing procurement. The first draft of the
revisions, however, drew much controversy and criticism. The second draft, published in
the May 14 Federal Register, wisely avoids trying to revolutionize the procurement process
in one swift stroke and instead focuses on incremental improvement.
Unfortunately, the revisions are the subject of strong debate. Opponents argue that the
revisions would lead to a dozen offerers quickly being whittled down to one or two
finalists. Proponents, meanwhile, point to the wasted effort of keeping alive six or eight
companies throughout a lengthy procurement that only one will win. Neither side, however,
offers much evidence to support their claims.
For all the controversy, the issue comes down to a matter of statistical
probability-the chance of prematurely eliminating a superior contractor weighed against
the effort to keep a marginal offerer in the competitive process. This would be easy for a
contracting officer to determine, simply by analyzing past procurement history. Given a
dozen offerers in the competitive range, what have been the odds, over the past decade or
so, that the third-ranked offerer would win the contract award? Or the sixth? Or the
Arriving at these percentages for all possible permutations of rank and number of
offerers would give contracting officers an objective way to judge the potential benefits
of keeping in the competition the fifth-ranked of eight offerers or the fourth-ranked of
five. It may well be the solution to the problem of making procurement efficient.
There are other notable features of the second draft. Among the most interesting are
the new rules regarding the scope of discussions.
One commonly voiced problem in the current system is that offerers can't tell whether
or by how much they should exceed the minimum criteria.
The solicitation rarely gives offerers enough information to judge whether the
procuring agency will value an additional feature more than its extra cost.
The draft regulations offer two kinds of help. First, the government can release to all
offerers its estimate of a reasonable price or cost.
This can help vendors calibrate proposals to meet the government's expectations.
Offerers also may be helped by knowing an agency's budget for a contract, assuming it is
different from the price estimate.
The second innovation would provide more specific information. During negotiations, the
government will be able to "negotiate with offerers for increased performance."
Alternatively, the procuring agency can suggest that a proposal would be more
competitive if it offered fewer extras at a lower cost. These changes would let an offerer
learn if its proposal has overshot or undershot the mark.
The new draft continues the trend toward improved communications between vendors and
the government, which will likely make acquisitions easier and more effective.
However, procurement officials must diligently guard against more open communications
degenerating into unfair preference. A reprise of such past abuses will lead to future
There is much more to this lengthy proposal, and it warrants careful study. At some
point in the not-too-distant future, this draft, or something similar, will define the new
environment in which we all must sink or swim.
Joseph J. Petrillo is an attorney with the Washington law firm of Petrillo &