July 4th 2008

A new beginning.

New GAO Reports

Increased Focus on Requirements and Oversight Needed to Improve DOD’s Acquisition Environment and Weapon System Quality


DOD’s Practices and Processes for Multiyear Procurement Should Be Improved

Global Computer Enterprises, Inc.

1. Protest challenging the issuance of modifications to a task order under an indefinite-delivery/indefinite-quantity (ID/IQ) contract as being beyond the scope of the task order is dismissed; Government Accountability Office lacks jurisdiction to consider whether a modification is beyond the scope of the task order.

2. Protest that the agency improperly bundled work requirements previously performed by separate small businesses by means of the modification of an ID/IQ task order being performed by a small business is dismissed given the statutory bar on protests concerning the issuance of task orders.

Protest Dismissed

Procurement Round Table

There in an interetsing article available about a new approach to performance based services acquisition. Article at WIFCON.

GAO Opinions

Matter of: Al Long Ford
File: B-297807
Date: April 12, 2006

DIGEST
Where, after discussions had concluded, agency identified concerns pertaining to the achievability of protester’s proposed delivery schedule that should have been apparent to the agency prior to discussions, discussions should have been reopened since proposed delivery schedule was an area that had to be addressed in order for the protester to be in line for award.

DECISION
Al Long Ford (ALF) protests the rejection of its offer and the award of a contract to American Equipment Company, Inc. (AMECO) under request for proposals (RFP) No. W56HZV-05-R-D117, issued by the U.S. Army Tank-automotive and Armaments Command (TACOM) for light utility trucks and accompanying spare parts and manuals. The protester argues that its proposal represented a better value to the government than AMECO’s because it offered a substantially shorter delivery schedule.

We sustain the protest.

APPROPRIATION OPINION

Good example of what happens when you spend money improperly.

B-303920, Clarence Maddox - Relief of Liability for Improper Payments for Bottled Water, March 21, 2006

We deny relief for a disbursing/certifying officer of the United States District Court for the Southern District of Florida who certified improper payments to purchase bottled water for court employees in the absence of any documentation that the available drinking water posed a health risk. While the disbursing/certifying officer claims that he was unaware that the bottled water being purchased was for employees (bottled water for jurors is an allowable expense), and that he certified the payments in good faith, we do not agree. To find "good faith" as used in the relief statute requires that there be no doubt regarding, nor reason to doubt, the propriety of the payments. Since the record states that the payments for employee bottled water came from a different account than that for juror bottled water, and vouchers for the improper purchases indicate that each purchase was funded by that different, non-juror, account, we find that reasonable examination of the vouchers should have identified the water being purchased as other than for jurors. We therefore cannot conclude that he had no reason to doubt the propriety of the payments.

New Procurement Chief

President Bush named Mr. Paul Dennett as the head of OMB's procurement shop. Article

NCMA Worldwide Conference

Understaffing cited as main problem in procurement. Frank Anderson, President DAU has some views on training. Good article

New DAU Continuous Learning Modules

CL Module- CLB 014
Name: Acquisition Reporting Concepts and Policy Requirements for APB, DAES, and SAR (Acq Rptg Concepts&Policy Rqmts- APB,DAES,&SAR)

CLP's: 3

Description: The Acquisition Reporting Concepts and Policies for APB, DAES, and SAR module provides information on the terminology, concepts, and policies pertaining to required acquisition reports, such as the Acquisition Program Baseline (APB), Defense Acquisition Executive Summary (DAES) and Selected Acquisition Report (SAR). Upon completion of the module, students will be able to apply these concepts and policies in the preparation and review of reports generated using the Consolidated Acquisition Reporting (CARS) software.

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CL Module- CLC 108
Name: Strategic Sourcing Overview

CLP's: 2.5

Description: The U.S. Department of Defense, like the rest of the Federal Government, is discovering how Strategic Sourcing can be a key enabler for achieving improved quality and cost related to the purchase of goods and services. This course provides an overview of Strategic Sourcing concepts and techniques for helping organizations make the shift from tactical to strategic purchasing.

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CL Module- CLC 110
Name: Spend Analysis Strategies

CLP's: 4.5

Description: Spend Analysis is one of several tools the U.S. Department of Defense and other Federal agencies are using to gain critical insights into the procurement history and spend patterns for purchased goods and services. Ultimately, a Spend Analysis contributes to the "commodity fact base" that forms the foundation for identifying valuable strategic sourcing improvement opportunities.

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CL Module- CLE 010
Name: Privacy Protection

CLP's: 1

Description: After completing this module, members of the DoD Acquisition, Technology, and Logistics community will be able to recognize and respond appropriately to fundamental privacy concerns when performing activities in acquisition, requirements and research by: Describing the general scope of privacy protection; Listing key privacy protection guidance and laws governing privacy; Stating potential risks to privacy; Describing existing procedures to promoting privacy protection; Recognizing breaches of privacy in current cases; Naming contacts and steps to take regarding privacy questions.

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CL Module- CLM 028
Name: Space Acquisition

CLP's: 4


Description: The purpose of this continuous learning module is to explain the space acquisition process outlined in National Security Space Acquisition Policy 03-01 (NSS 03-01) dated 27 December 2004.

Congressman Out for Count

Congressman Randy "Duke" Cunningham was convicted of varoius criminal offenses involving Federal Government Contracting. Here is the federal plea agreement and the government's sentencing argument. Plenty of material for class discussion.

New Policy for Federal Civilian Agencies

A new policy for certification of contracting professionals was issued. DAU will play a prominent roll with FAI. Here is the reference.

Another GAO Update

MMI-Federal Marketing Service Corp., B-297537, February 8, 2006
DIGEST
Protest is sustained where the agency unreasonably determined that awardee’s quotation demonstrated compliance with the Berry Amendment’s domestic production requirements, in light of countervailing pre-award information that the awardee would not comply.

DECISION
We sustain the protest.

Good statement concerning GAO's standard of review:

In reviewing an agency’s technical evaluation of vendor submissions under an RFQ, we will not reevaluate the quotations; we will only consider whether the agency’s evaluation was reasonable and in accord with the evaluation criteria listed in the solicitation and applicable procurement statutes and regulations. American Recycling Sys., Inc., B-292500, Aug. 18, 2003, 2003 CPD ¶ 143 at 4. In determining the technical acceptability of a quotation, an agency may not accept at face value a promise to meet a material requirement, where there is significant countervailing evidence reasonably known to the agency that should create doubt whether the vendor will or can comply with that requirement. See Maritime Berthing, Inc., B-284123.3, Apr. 27, 2000, 2000 CPD ¶ 89 at 9. As relevant here, an agency should go beyond a firm’s self-certification regarding domestic manufacturing requirements where the agency has reason to believe, prior to award, that a vendor will notprovide compliant products. See Leisure-Lift, Inc., B-291878.3, B-292448.2, Sept. 25, 2003, 2003 CPD ¶ 189 at 3-4.

Another case -- Agencies Must Reasonably Consider and Evaluate OCIs

The Federal Acquisition Regulation (FAR) instructs agencies to identify potential organizational conflicts of interest (OCI) as early as possible in the procurement process and to mitigate significant potential conflicts before contract award. FAR 9.504. Contracting officers must exercise common sense, good judgment, and sound discretion in determining whether a significant potential conflict of interest exists and in developing an appropriate means for resolving it. FAR 9.505. Moreover, when evaluating potential OCIs, contracting officers should obtain the advice of counsel. FAR 9.504. In Greenleaf Construction Company, Inc., the offeror being considered for the award of a HUD contract also owned a HUD closing agent for the same area. To mitigate this OCI, the offeror transferred full ownership of the closing agent through the use of a purchase agreement. Prior to award, HUD discovered and advised the offeror of the need to further resolve this conflict as a result of learning that the offeror had retained a profit interest in the closing agent. The purchase agreement was subsequently amended to remove the profit interest and instead provided for a final fixed price to be paid over a number of weeks. Because of these changes, the contracting officer concluded that the OCI had been resolved and awarded the contract. Greenleaf protested the award and argued that the amended purchase agreement continued to pose an unacceptable OCI because the purchaser was still required to make significant monthly payments to the awardee. The GAO sustained the protest, holding that HUD failed to reasonably consider or evaluate the OCI implications resulting from the amended purchase agreement. The GAO determined that the contracting officer had failed to consider whether the magnitude of the payments was such to impair the judgment and objectivity of the awardee, or whether suitable mitigation was required to address the potential OCI.

Greenleaf Construction Company, Inc. From Steve Copetas at DAU South

GAO Update

GAO Denies Protest Involving "Neutral" Past Performance Rating

The GAO recently denied a protest to the award of a contract for lifeguard services at Andersen AFB, Guam. The protester took issue with the fact that it was assigned a "Neutral" past performance rating, indicating that it had no similar past performance, despite its experience managing the swim team on base. The GAO repeated its position that evaluation of past performance is within the discretion of the agency and that it will only review the evaluations to ensure that the agency's judgment was reasonable and consistent with the solicitation criteria and applicable statutes and regulations. The GAO found the evaluation unobjectionable in this case because the performance work statement for the solicitation required the contractor to provide services sufficiently different from what was required to manage the swim team. Before assigning a "Neutral" past performance rating, be sure to do the appropriate analysis to determine that the requirements of the current solicitation are sufficiently divergent from those of the offeror's past contracts to justify the rating.

Greater Pacific Aquatics, B-29765 From Steve Copetas, DAU South


GAO Denies Protest Where SSA Follows Minority Recommendation

In TruLogic, Inc, B-297252.3 (Jan 06), GAO denied the protest of a contract awarded at Tinker AFB for Interactive Electronic Technical Manual (IETM) systems development and Technical Order (TO) "sustainment." GAO found that the source selection authority's (SSA) disagreement with the majority of the evaluators and acceptance of the minority's recommendation that the awardee be selected for award was unobjectionable and was not evidence of a lack of impartiality, where the SSA reached a reasoned conclusion, supported by the record, that the awardee's lower-priced, lower-rated proposal deserved a higher technical rating than was assigned by the majority and represented the best value to the government. This opinion reinforces the importance of the SSA/contracting officer's thorough explanation of the reasoning behind the award decision in the record-especially when following a minority recommendation.

TruLogic, Inc. From Steve Copetas, DAU South

Another GAO Case

Novex Enterprises, B-297660; B-297660.2, March 6, 2006

DIGEST
Agency unreasonably selected higher-priced proposal based on the fact that its initial delivery was somewhat earlier than the protester’s, where the awardee’s overall delivery schedule was noncompliant with the delivery schedule established in the solicitation and significantly less advantageous than the protester’s compliant delivery schedule, and the agency apparently did not consider this in making the award selection.

DECISION
We sustain the protest.

Court Upholds HUD Reverse Auction

In MTB Group, Inc, v, United States, No. 05-375C, June 7, 2005, the U.S. Court of Federal Claims refused to enjoin HUD's reverse auctioning program used to receive bids on property inspections. The court's opnion discusses the release of pricing information and offers some insight as to how reverse auctions may be properly conducted. For example, HUD's program showed only the bid per lot and not by individual property. The program also did not disclose the identity of the bidders.
The court concluded:

Ultimately, plaintiff has not shown that HUD’s reverse auction procedure violates statute or an applicable procurement regulation, nor that HUD acted unreasonably in adopting it. While plaintiff disfavors the reverse auction procedure, plaintiff does not prevail on the merits of the case. Plaintiff’s argument is based on the assumption that competitors will be able to infer protected information from their competition. Such an inference is not sustainable.

Buy American Act Protest

In City Chemicals LLC, B-296135.2; B-296230.2, June 17, 2005. GAO provides an excellent analysis of price differential when applying the Buy American Act to maunfactures goods composed of domestic nd non domestic components.

Agency properly evaluated dye that protester proposed to furnish as a foreign end product where imported "raw" dye accounted for more than 50 percent of the cost of all components making up the dye.

In its decision GAO provides the following analysis:

The Buy American Act, 41 U.S.C. Section 10a-10d (2000 and Supp. I 2001), provides for the acquisition of American materials and goods for public use, except to the extent that it is inconsistent with the public interest or the cost is unreasonable. If there is a domestic offer that is not the low offer, and the restrictions of the Buy American Act apply to the low offer, the contracting officer must determine the reasonableness of the cost of the domestic offer by adding an evaluation factor (of either 6 or 12 percent for civilian agency procurements, Federal Acquisition Regulation (FAR) Section 25.105(a), or 50 percent for Department of Defense procurements, DFARS Section 225.105) to the low offer. The price of the domestic offer is reasonable if it does not exceed the evaluated price of the low offer after addition of the evaluation factor. FAR Section 25.105(c).

For manufactured end products, the FAR uses a two-part test to define a domestic end product: (1) the article must be manufactured in the United States, and (2) the cost of domestic components ( i.e. , components mined, produced, or manufactured in the U.S.) must exceed 50 percent of the cost of all components. FAR Sections 25.003 and 25.101; see also DFARS Section 225.101. The FAR defines "component" as an article, material, or supply incorporated directly into an end product. FAR Section 25.003.

[paragraph omitted]

In cases involving an end product derived from a single component or material, we have looked to whether the component/material has undergone substantial changes in physical character in determining whether manufacturing has occurred. A. Hirsh, Inc. , B-237466, Feb. 28, 1990, 90-1 CPD paragraph 247 at 3; 45 Comp. Gen. 658 (1966). See also General Kinetics, Inc., Cryptek Div. , B-242052.2, May 7, 1991, 91-1 CPD paragraph 445 (where we looked at whether the "essential nature" of the core component of the end product was altered in determining whether manufacturing had occurred). Further, since the BAA requires both that the end product have been manufactured in the U.S. and that the cost of components mined, produced, or manufactured in the U.S. exceed 50 percent of the cost of all components, where it is alleged that a foreign material has been manufactured into a component domestically and the component in turn manufactured into an end item domestically, we have also looked at whether the manufacturing process consists of two distinct phases, the first yielding a component that is distinguishable from the original material and the second yielding an end item that is distinguishable from the component. Davis Walker Corp. , B-184672, Aug. 23, 1976, 76-2 CPD paragraph 182 at 4-6; 45 Comp. Gen. 658. Where the original material is of foreign origin and we have failed to find two distinct manufacturing phases yielding two distinct products, we have found noncompliance with the two-pronged test for defining a domestic end product. 48 Comp. Gen. 727 (1969); 46 Comp. Gen. 784 (1967).

Interesting GAO cases

Late is still late. In Kesser International, B-296294 June 30, 2005, the GAO concluded that a bid received four minutes after bid opening was late despite the fact that the FEDEX driver was delayed at the security checkpoint for 20 minutes.

Agency properly rejected proposal as late where it was received minutes after closing time; 20 minute delay at a security checkpoint did not constitute improper government action and, in any case, was not paramount cause of late receipt, since delay took place 2 hours before closing time, leaving courier sufficient time to deliver proposal.

The government always has the chance to do it right. In Johnson Controls World Services, Inc., B-295529.2; B-295529.3, June 27, 2005, GAO dismissed the protest as academic where the government withdrew its certification of the MEO in an A-76 cost comparison study.

In the context of a cost comparison study of base operation services conducted pursuant to Office of Management and Budget Circular A-76, a decision by the agency's Independent Review Official to withdraw its certification that the agency's plan for performing the services includes all of the required costs associated with in-house performance renders academic a protest alleging that the agency's cost estimate for performing the work in-house failed to include all required costs.

If you are going to have multiple rounds of discussions you better have them with everyone. The GAO sustained a protest in Front Line Apparel Group, B-295989, June 1, 2005, where the government did not do that.

Protest is sustained where record shows that agency improperly engaged in a second round of discussions with awardees, but not protester; while there is nothing inherently improper in an agency's conducting additional discussions relating to previously-discussed issues with only one or a limited number of offerors where the agency has remaining concerns relating to those issues, where agency conducts multiple rounds of discussions relating to the same issues with one offeror, it must afford other similarly-situated offerors the same benefit of additional discussions.