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Tuesday, September 22, 2015

Protests: "the worst outcome for both parties"

Guam is in the process, over the last few years, of making some essential, if not earth-shattering, procurement reforms.  Many ideas have been floated, but sunk by the Executive Branch, including the Attorney General's office, which is fixated on the idea that protests are typically "frivolous" and all protests should be deterred with protest bonds, as well as shortened -- and "jurisdictional" -- time limits (see, How Draconian are those procurement time limits, really?).

The notion that protests are not the problem -- but that the time to it takes to finally resolve them is -- has been coolly received; efforts to give effect to the authority which procurement agencies already have, to settle and resolve them before litigation, have been beaten back.

For mine, it is worth spending a bit of up front time to try to resolve disputes and get on to the acquisition, where the dispute is clearly without merit, or get on with acknowledging and the fixing the solicitation when the dispute is meritorious or even arguably so. Better a few more days, or weeks, up front than a few more months, or years, spent litigating the dispute to finality.

As the article below opines, "when both sides get so dug into their positions and don’t listen to each other it will lead to a legal action (i.e. protest).  This is the worst outcome for both parties....". 

(As usual in this blawg, I may take great liberties with articles presented here for my own instructional purposes. You need to read the original at the provided link, and not take my version of it as what was intended.)

Deflategate and federal procurement process, by Mike Sade
As I watched the "Deflategate" story unfold, I could not help but consider the parallels between this case and government contracting.

•Source selections officials (in most cases the contracting officer) have absolute authority to make the award decision.
•Clearly identify the process, how the decision will be determined, and what the outcomes will be for failing to meet the standards.
•Fairness in the process is paramount to a successful outcome.
•If an appeal is filed, the agency must ensure that due process is afforded to both sides.

In my experience, within the federal procurement process the rules are well defined; the process is clear; and, the avenues for appeal of a source selection decision are all in statute and regulation. Similar to the process in the NFL collective bargaining agreement.

What remains unclear is the fairness of discovery within the process.

What the NFL failed to do in the case against New England Patriots quarterback Tom Brady was clear to Judge Richard Berman. He did not question the commissioner’s authority; what he questioned was the fairness of the player’s ability to question or cross examine the “right” personnel, and the failure to clearly state facts in support of the finding. Often in government procurement this is what the debrief process should afford.

So what can a source selection official learn from this case? First, a solicitation must clearly outline the requirements, proposal preparation instructions, and most importantly the source selection criteria. Then, after proposals are submitted, if there are serious questions about what a proposal includes, or what the requirements mean, there should be discussions.

Too often I have seen source selection decisions made where there are unanswered questions, or where the government might disqualify a really good proposal because they are in a hurry to get to an award instead of finding the best solution. In the NFL case the commissioner relied solely on the Ted Wells report (i.e. the technical report in government procurement) without questioning what went into the report and how they came to the conclusion.

Second, I have often seen actions in arbitration or other informal ADR processes I would equate to a debriefing. The government is too focused on defending the award decision and not listening. In the “Deflategate” case the NFL failed to ask the right questions and allow the player to address those issues.

In a government debriefing the government should understand a debriefing is an opportunity to identify the reasons for the award decision as well as learn what they might have missed in the process of reaching that decision by listening to a losing contractor’s position.

Finally, when both sides get so dug into their positions and don’t listen to each other it will lead to a legal action (i.e. protest). This is the worst outcome for both parties because it is costly in terms of personnel cost and legal fees.

One of my favorite lines from the movie “Other People’s Money” is when Danny DiVito says “Our side has lawyers because their side has lawyers, but once you use them it gets all [messed] up.” This is not a slam on lawyers but it is the worst state of events when you have a mission to accomplish and distracting resources from accomplishing that mission to defending a decision which is detrimental to the agency mission.

So how does a source selection official avoid the pitfalls of “Deflategate”? Here are my suggestions to improve communications and avoid the pitfalls:

•During market research, understand the market, listen to industry to help define the requirements and outcomes, identify what the best source selection criteria should be, and how to rank those criteria.
•During proposal evaluation, ensure the technical panel clearly identifies strengths and weaknesses in a proposal, and if a proposal has some promise to provide the best solution, give the company the opportunity to address those deficiencies through discussions.
•During a debriefing, give a company a chance to clearly articulate why they felt they had a winning proposal. If the company identifies areas where the evaluation process missed something -- or was wrong – address how you will fix that mistake. If the company is wrong, educate them on how they can improve in the future.

My message is don’t fall in to the “Deflategate” syndrome by standing your ground without listening to others and admitting you made a mistake. It can only embarrass the agency and affect the mission.

Nobody wins in this scenario.

UPDATE October 4, 2015.

Apropos the idea of this post, that resolving and settling well laid disputes, rather than denying the and girding for battle, is better for everyone:

Oak Bluffs advised to reboot bid process for North Bluff seawall project
When Oak Bluffs selectmen unanimously voted on Sept. 22 to accept a $5.25 million bid from MIG Corporation to rebuild the new North Bluff seawall, contingent on additional Community Preservation Committee funding, it appeared that the long awaited project would move ahead. However, due to a bid complaint from Northern Construction Service, Oak Bluffs selectmen, on the advice of town counsel Michael Goldsmith, have called a special meeting this Tuesday to rescind their decision, and to re-bid the project.

“We awarded the bid and then a complaint was filed in regards to the language in the bidding,” chairman of the board of selectmen Mike Santoro told The Times on Friday. “Right away we filed an appeal with the Attorney General for a hearing next Wednesday, but in the process, we found it would be easier to rescind the vote and put it back out to bid again.”

At issue is the wording of the RFP which asked for the bid to be broken into sections—the “base bid” was for construction of the steel sheet seawall and boardwalk from the harbor to the fishing pier, along with hazardous waste removal. Addendums to the bid were requested for the cost of continuing the wall and boardwalk to the SSA terminal. Northern Construction did have the lowest bid for the entirety of the project, at $5.9 million.

However, all bids, including MIG’s, came in well over the $5.6 million the town had received in state grants for the project, once management fees and a 5 percent contingency fund was added to the bottom line. So a decision was made to begin with the most crucial part of the project, e.g. the base bid, where MIG Corporation came in lower than Northern Construction by $103,000.

Once selectmen rescind the bid on Tuesday, the project will go back out to bid, which is a 30 day process. Despite the month long delay, project manager David Lager told The Times that the re-bid would not significantly delay the project.

“It’s in our best interest to deal with the ambiguities in the RFP (Request For Proposal) and start with a clean slate,” town administrator Robert Whritenour told The Times. “A bid protest that goes to hearing and then an appeal can take a lot longer than a month.”

Mr. Whritenour said it is possible that the re-bid process could reduce, and possibly eliminate, the overage that required selectmen to request $230,000 in additional funds from the Community Preservation Committee (CPC), which was approved at last Monday’s CPC meeting.

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