Major Services Procurement Weakness:

The acquisition of professional and technical services (“services”) has degenerated to a very unsatisfactory situation because of the frequent compromise to desired quality sought by the government. This occurs primarily when inappropriate weight is placed on the cost/price aspects at the expense of the technical/management/past performance (i.e., quality) aspects in the evaluation and award determination process. The macro issue is, therefore, one of quality versus low cost.

While some buying organizations attempt to use “best value” techniques, in many instances these efforts lack the rigor and procedural discipline needed to avoid excessive price/cost bias in source selection.

Best-Value Concept:

A best-value award produces the government’s most advantageous acquisition decision through a disciplined application of a full and balanced set of weighted or explicitly rank-ordered evaluation factors against all significant requirements specified in the solicitation. Best-value procurement techniques are essential in the acquisition of services involving high-level, scientific, technical and management skills requiring substantial intellectual and analytical activity to produce demanding, creative and innovative solutions. In addition, best-value techniques are appropriate to the full spectrum of contract requirements for services using the following logic:

     1. for performance requirements demanding high levels of expertise and creativity the relative importance of quality/problem
         solving approach will be high compared to cost/price considerations; and

     2. for performance requirements which are straightforward and routine, the relative importance of cost/price will be higher.

Best-Value Process Disciplines:

The successful conduct of a best-value procurement requires a highly disciplined process organized around the following key elements:

Acquisition and Planning and Management
       • Very close coordination between the procurement contracting officer and contracting officer’s technical representative
         must be achieved especially in: drafting the statement of work; developing evaluation factors and weights; and, determining
         the appropriate type of contract.
       • Related to contract choice specific, attention must be given to relative performance, risks and financial and other rewards
         available to offerors.
       • Time management of the procurement cycle should be a major management priority - see attached standard timeline for
         typical professional and technical services procurements.

Performance-Based Contracting Methods - Policy Letter 91-2, entitled, “Service Contracting,” issued by the Office of Federal Procurement Policy (OFPP), establishes underlying tenets for value-based procurement of professional and technical services. These tenets include:

       • Statements of work that clearly reflect the specific (versus generic) requirements and the special quality demands of the
         customer and are expressed in terms of ‘what’ is required rather than ‘how the work is performed.
       • Formal and measurable (in terms of quality, timeliness, quantity, etc.) performance standards.
       • Evaluation and selection procedures that utilize quality-related factors such as: technical capability, management
         capability, cost realism, and past performance.
       • Incentive provisions to ensure reward for good performance based on predetermined performance standards.

Past Performance is a significant barometer of quality and thus must be included as a major source-selection criteria in all procurements for services. The system utilized by the government in collecting and using past-performance information must be open, consistent, secure and informative.

Preference for Incentivized Contracting - For the high technology and high intellectual/analytical problem-solving content contracts, a positive incentive/reward mechanism is considered imperative. Current cost-plus award fee type contracting has worked very well in the services sector. While it is viewed as carrying with it additional management paperwork burden, much or all of this work needs to be performed, in any case, in the course of exercising a prudent degree of oversight review and control of contractor activity. Clear benefits accrue to both buyer and seller when award-fee contracts are professionally and consistently applied.

Draft RFPs - It is proposed that draft RFPs be included for all acquisition using the Best-Value concept. Draft RFPs should include proposed evaluation factors and relative weights.

Evaluation Factors - A full and balanced set of evaluation factors, including the standard technical, management, past performance and cost/price should be developed with assigned quantitative weights or an appropriate measure of relative importance/rank order. Where appropriate, additional evaluation factors unique to the particular contract requirement should be added including desired performance levels, error rates, reliability/maintainability objectives, interoperability, expansion/upgrade objectives and others.

Cost Realism - Evaluation and scoring of a fully integrated set of factors including the price/cost factor places a premium on a rigorous, analytically-based assessment of cost realism. For services contracting, standard and case specific evaluation protocols need to be developed and routinely applied.

Evaluation and Selection - The balanced, integrated evaluation factors, which were originally set forth in the draft RFP focused through the use of a quality statement and replayed in the formal RFP, must then be consistently applied throughout the evaluation process leading to final quantitative and qualitative scoring and the production of a bottom-line score for each offer. This end-to-end disciplined adherence to the original evaluation factors and their relative weights is the most single, critical aspect of achieving integrity in best-value procurement. It results in the source-selection authority being presented with multiple offers each with a single bottom-line score. The source-selection authority can then make the selection using these scores and any other external factors or trade-off considerations which he/she wishes to impose.

Post-Award Debrief/Sunshine - The post-award debriefing process is frequently the significant contributor to the continuing and highly unproductive protest process in services contracting. The debriefing process needs to be far more formally structured, controlled and guided by desirable (not minimum) information content and explicitly related to the guidance and information provided on relative importance of evaluation factors and the manner in which they were applied to evaluate and score proposals - in short, a coherent and sunshine driven process. Where the government does this, (in a minority of cases) it is very effective as a final step in a well-executed procurement cycle and virtually preempts any consideration of formal or informal protect.