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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


NOVEMBER 2001
Vol. II, No. 11

CONTENTS

2001 FAR Published, FAC 2001-01 Issued
DFARS Changes on Progress Payments, 8(a) Program
Proposed FAR Changes on Construction, A-E Forms
Evaluation Factors Needed for "Simplified Buys"
Actions Related to September 11 and Anthrax Attacks



2001 FAR Published; FAC 2001-01 Addresses Veterans,
Davis-Bacon, Commercial Items, Very Small Businesses

In late September, the Government Printing Office (GPO) published a new 2001 edition of the Federal Acquisition Regulation (FAR), countering a decision made a year ago by the General Services Administration (GSA) to cease publication of a paper FAR version (see the October 2000 Federal Contracts Perspective article "GSA to Discontinue Paper Copy of FAR"). Then, less than a month later, the FAR Council published Federal Acquisition Circular (FAC) 2001-01, practically making it mandatory that federal contract practitioners either buy a new copy or download one from the Internet.

The 1997 version of the FAR had been amended by 27 FACs: several had different effective dates for different items, others contained major errors that had to be corrected, others were delayed or never went into effect. The result is that most people's versions of the 1997 FAR were a mess -- it was very easy to overlook that some of the items in FAC 97-17 had an effective date of April 25, 2000, but that other items in FAC 97-17 had an effective date of June 26, 2000, or that some of the items in FAC 97-18 were effective June 6, 2000, before some of the items in FAC 97-17! And it was very easy to overlook that the items in FAC 97-18 had three different effective dates, and that those effective dates overlapped the four effective dates of FAC 97-19 items. It was time for a nice clean copy of the FAR, without the skipped pages ("the next page is 15-21" and the squeezed-in pages (such as 15-20.1).

The 2001 FAR (with FACs for an indeterminate period) is available from the GPO for $220, Stock Number 922-006-00000-8 (toll-free telephone: 866-512-1800; DC Metro: 202-123-4567). It can be downloaded from the Acquisition Reform Network website at http://www.arnet.gov/far in the .pdf format. It is approximately 2000 pages, so it will take some time to download it and considerably longer to print (have four reams of paper ready). Of course, the 2001 FAR is available electronically at http://www.arnet.gov/far.

Note that the publication of the 2001 FAR did not change any of the regulations; the new edition is merely a nice, neat loose-leaf paper copy ready for the next round of FACs, starting with FAC 2001-01. Because the pages in the 2001 FAR are sequential and numerical, the replacement pages in FAC 2001-01 are formatted and numbered for the 2001 FAR. The FAC 2001-01 replacement pages will not fit in the 1997 version as modified by the 27 FACs. So, anyone who wants to continue using a paper version of the FAR needs to get the 2001 version from GPO or from http://www.arnet.gov/far.

FAC 2001-01, which was published on October 22, 2001, with all the revised regulations effective December 21, 2001 (except the prompt payment and veterans entrepreneurship interim rules, which are effective October 22, 2001), addresses the following subjects:



DFARS Changes on Progress Payments, 8(a) Program

The Department of Defense got off to a fast start in October by issuing seven final rules amending the Defense FAR Supplement (DFARS) on the 1st:



Proposed Changes on Construction Payments, A-E Forms

Two proposed FAR changes were published in October:



Evaluation Factors Needed for "Simplified Acquisitions"

In an important decision that could have far-reaching ramifications, the General Accounting Office (GAO) has ruled that, under certain circumstances, "basic fairness" requires that solicitations conducted under simplified acquisition procedures must disclose the relative weights of the evaluations factors that will be used to determine the winner (B-288280, Finlen Complex, Inc., October 10, 2001).

The Department of the Army issued a request for proposals (RFP) for meals, lodging, and transportation for applicants arriving for processing at the Military Entrance Processing Station in Butte, MT. The RFP cover sheet characterized the procurement as a "commercial acquisition, using simplified acquisition procedures." The RFP advised that offers would be "evaluated on facility quality, food and transporation proposal, facility location, quality control, past performance and price factors", and that "technical/quality factors [would be] more important than cost or price." The RFP was silent on the relative weights of the non-price evaluation factors.

Six proposals were received, and the decision came down to two offerors: Finlen, the incumbent contractor, and Best Western. Finlen's price was significantly lower than Best Western's, but Best Western received a higher evaluation score. The contracting officer awarded the contract to Best Western based on "best value." Finlen protested the award because the RFP did not disclose the relative weights of the evaluation factors.

The Army pointed out that paragraph (a) of FAR 12.602, Streamlined Evaluation of Offers [for commercial items], which permits the use of the procedures in FAR 13.106, Soliciting Competition, Evaluation of Quotations or Offers, Award and Documentation, if the acquisition is being made using simplified acquisition procedures, states that "contracting officers are not required to describe the relative importance of evaluation factors." Paragraph (a)(2) of FAR 13.106-1, Soliciting Competition, states that "solicitations are not required to state the relative importance assigned to each evaluation factor and subfactor..." Therefore, since the solicitation was identified as a commercial procurement using simplified procedures, the withholding of the relative weights of evaluation factors was authorized and no further analysis was needed, the Army argued.

GAO disagreed. "We look to the substance of an agency's actions, rather than form," GAO wrote. "In our view, the labeling of a procurement as 'simplified' does not absolve the agency from its obligation to treat vendors fairly...There is little about the procedures used in this procurement that can reasonably be called simplified. For example, the agency elected to use a request for proposal format that requires the commercial offerors...to prepare proposals addressing five non-price evaluation factors...Despite the 'simplified' label, this procurement is very similar to any other negotiated acquisition conducted under the rules set forth in FAR Part 15 [Contracting by Negotiation]. Those rules require that when offerors are asked to prepare detailed proposals, those offerors must be advised of the weight of all factors and signification subfactors that will affect the contract award."

GAO goes on to observe that when it asked the Army "to address why it would want to withhold this basic informatin from offerors preparing proposals, the agency answered 'that revealing the relative importance of factors may result in offerors skewing their proposals to the more important factors.' In addition, the Army argued that revealing the relative wieght of factors in the solicitation would hinder the agency's ability to change the weight of those factors during the course of its evaluation. In our view, neither of these considerations is appropriate under the circumstances of this, or any other, procurement, nor are they advisable for the integrity of the public procurement process."



Actions Related to September 11 and Anthrax Attacks

Many contract-related actions are being taken by the government in response to the September 11 and anthrax attacks: