FEDERAL CONTRACT LAW: Joseph J. Petrillo

Can we talk? Not as much as you think, GAO says

Joseph J. Petrillo

The Federal Acquisition Regulation Council and the General Accounting Office want to whittle away at one of the best recent procurement reforms.

The major rewrite of the FAR's Part 15 opened the door to more extensive and substantive discussions between the government and vendors competing for contracts.

But now a proposed revision and new GAO decisions threaten to limit these communications.

The prospective amendment would water down the rules about topics of discussion when the government opens negotiations with vendors it has decided are within the so-called competitive range.

As it stands, FAR requires the government to discuss deficiencies plus other aspects of the proposal'such as cost, price, technical approach, past performance, and terms and conditions'that in a contracting officer's opinion a bidder could change to materially enhance the proposal's chance of winning. Basically then, if the issue could be important, it's OK to discuss it.

But the FAR Council proposes to turn the clock back. Discussions would still have to cover significant weaknesses, deficiencies and adverse past-performance information to which the bidder hasn't had a chance to respond. But the contracting officer would only be encouraged, not required, to discuss other aspects of the proposal.

The revision idea came from a GAO protest decision [GCN, Feb. 8, 1999, Page 23]. GAO ruled that the rewritten FAR held that discussing other aspects was not mandatory, only optional. In other words, the word shall doesn't mean what we all thought it meant.

The proposed amendment takes its cue from GAO and changes the language from mandatory to optional. Citing the GAO case, the FAR Council calls the change a clarification.

Mum's the word

Another recent GAO decision also encourages agencies to clamp down on exchanges with bidders. This second case dealt with adverse past-performance information. Requiring past-performance evaluations was a cornerstone of procurement reform. In practice, however, problems and inconsistencies have plagued their use.

The rewritten Part 15 aimed to make it easier to get information from bidders about past performance. An agency wasn't limited to raising the topic only in formal discussions. It could also address past performance in new categories of talks called clarifications or communications'easier and less comprehensive exchanges.

In its recent decision, however, GAO held that agencies don't need to give bidders the opportunity to address adverse past-performance evaluations. Specifically, GAO said an agency did not have to raise the adverse findings with a bidder unless 'there clearly is a reason to question the validity' of the information.

But how would an agency know whether there is a reason to question the validity of the information? Wouldn't it make sense to ask the prospective contractor, who is in the best position to know and present the other side of the story?

The GAO decision itself tries to give an example of a clear reason to question the validity of a past-performance rating, such as 'where there are obvious inconsistencies between a reference's narrative comments and the actual ratings the reference gives the offeror.'

But this is no example at all. If the agency providing a reference gives inconsistent information, the first person to ask should be the agency's contact point. Why expect the contractor to know why the reference agency's comments rating is mixed up?

And GAO's ruling totally fails to acknowledge that it may be helpful to open a dialogue even when the adverse information is beyond question. Perhaps the company has learned from its mistakes and taken effective corrective measures. What's the harm in asking?

Once again, GAO is watering down important improvements in the negotiation process. Instead of encouraging full-and-robust communication, GAO is making it easier for agencies to talk less with bidders. And now the FAR Council wants to implement GAO's bad advice about the scope of discussions. It may do the same for clarifications and communications as well.

Joseph J. Petrillo is an attorney with the Washington law firm of Petrillo & Powell. E-mail him at jp@petrillopowell.com.

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