In February of this year, Dan Gordon, Administrator for Federal Procurement Policy issued a memorandum entitled “Myth-Busting: Addressing Misconceptions to Improve Communication with Industry during the Acquisition Process”. Dan’s memorandum passed the word to chief acquisition officers, senior procurement executives and chief information officers that early, frequent and constructive engagement with industry is important and authorized under the Federal Acquisition Regulation (FAR) (citing as one example FAR 10.002(b)(2) which authorizes a wide range of market research techniques).

Our sources say the chiefs and senior executives got the message and passed the word down. They also tell us few contracting officers, if any, paid heed. It’s business as usual. Don’t talk to the contractors.

Dan is the best Administrator for Federal Procurement Policy we’ve ever had and I have seen them all from the creation of the Office of Federal Procurement Policy (OFPP). Dan is leaving OFPP at the end of the year. However, he has left his mark and the next Administrator will not back down from Dan’s myth-busting crusade. (If you’ve heard one of his many speeches you know “crusade” is a pretty accurate description.)

1. Misconception – “We can’t meet one-on-one with a potential offeror.” Fact – Government officials can generally meet on-on-one with potential offerors as long as no vendor receives preferential treatment.

2. Misconception – “A protest is something to be avoided at all costs – even if it means the government limits conversations with industry.” Fact – Restricting communication won’t prevent a protest and limiting communication might actually increase the chance of a protest – in addition to depriving the government of potentially useful information.

3. Misconception – “Getting broad participation by many different vendors is too difficult; we’re better off dealing with the established companies we know.” Fact – The government loses when we limit ourselves to the companies we already work with. Instead, we need to look for opportunities to increase competition and ensure that all vendors, including small businesses, get fair consideration.

These are only 3 of 10 myths busted. What can we do? Remind contracting officers of what I will call “Dan’s Rules” and also of the implied obligation in every contract awarded to communicate with the contractor (see our blogs on the implied contractual obligations of the government).

SPEAKING OF ETHICS

One of the handicaps of being a society of laws is that we use the laws to define the line between acceptable and unacceptable behavior. We set the line of aspirational behavior at the level or laws. We then often explore how far short of that line we can come without being noticed. The law becomes our highest expectation and we even forgive ourselves for falling short. Ethics and morality are vague concepts not clearly defined and often described through the eyes of the beholders. Those standards elude us and today we seen them drift farther into obscurity.

We could ask, “Where are our moral leaders”? We should not look to institutions. Any moral leaders there must ascend the walls of political correctness to be seen. Our true moral leaders are those of us doing the right thing, often in total obscurity. And what is the right thing, after all? It’s trite but true: we can’t enact morality into law. We can’t even codify all the “principles”. All we can do is catalog actual cases of ethical and moral behavior. We literally make up such behavior as we go along. Each case of doing the right thing is unique. Just exactly what is right is in the eye of the beholder. Moral leadership through preaching so called principles is illusory without reference to the examples.

The law is not our line of aspirational behavior. The law actually is the line of minimally acceptable behavior. That’s the point. When confronted with the moral question, we each should aspire to find the right the right behavior and then act. Each of us can be a moral leader when we see the opportunity. Failing to know what is right is one thing. Failing to act when we see the opportunity leads us to a double fault. We leave the scene excusing ourselves as the one not responsible for the moral leadership. Or, we follow the minimal behavior required by law.

Morality is not too amorphous to define and describe. Countless examples through history paint a clear picture. We’re just not spending enough time observing it. However, observation is only one part of the equation. Having the will to act when given the opportunity and then taking action completes the record. We need not look far to see glaring examples of moral lapses in today’s society. They, too, can teach us. Examples of bad behavior can instruct us as well. Will we learn?

APPEARANCE OF IMPROPRIETY: WHEN IN DOUBT, THROW OUT?

We just can’t help but applaud any decision which upholds the very highest of ethical standards. But do OCI's really turn on the appearance of impropriety? See the postscript below.

GAO recently reiterated as “one of the guiding principles” the obligation of contracting agencies to avoid the appearance of impropriety in government procurements. The purpose of the procurement was to provide internet protocol communications as part of the Defense Information Systems Agency (DISA) Satellite Communications (SATCOM) program. One of the bidders had hired the agency’s former SATCOM Special Interest Program Manager. The contracting officer determined that although there may not have been an actual impropriety, there was an appearance of impropriety which could not be avoided, neutralized or mitigated. The contracting officer found that documentary evidence showed the Program Manager had access to source selection information and provided advice to the bidder in preparation of its proposal.

In addition to relying on several of its own decisions, GAO referred to an opinion by the Court of Appeals for the Federal Circuit (COFC) which overturned the lower court’s opinion that the appearance of an impropriety, alone, is not a sufficient basis to disqualify an offeror. GAO also pointed out that an unfair competitive advantage is presumed to arise where an offeror possesses competitively useful non-public information without the need to inquire as to whether the information was actually used.

GAO is synchronizing its decisions in this area with the opinions of the COFC. GAO went on to cite COFC opinions that “hard facts” of the existence or potential existence of a conflict are necessary and the mere inference or suspicion of an actual or potential conflict is not enough. Based on the COFC precedent, GAO will review the reasonableness of the contracting officer’s investigation and not overturn the contracting officer’s decision unless there is clear evidence it was unreasonable.

The protester complained that the SATCOM PM’s participation in the procurement was very limited and that the PM was “walled off” from the proposal effort. GAO was impressed with the contracting officer’s thorough investigation. The facts showed that the PM was not really walled off and that the PM was very much involved in the proposal effort. The PM also had access to and received acquisition sensitive non-public information while working at SATCOM. GAO concluded: “These facts, as identified by the contracting officer, created the presumption that an unfair competitive advantage has arisen, without the need to inquire as to whether the information was actually used by [the offending offeror] in the preparation of its proposal.” (Emphasis added.)

IMPORTANT POSTSCRIPT: Reconciling the OCI opinions of the COFC and the decisions of GAO is somewhat daunting. And just what are "hard facts" and whether they support the contracting officer's decision that those "hard facts" create an appearance of impropriety certainly is in the eye of the beholder. So what is the rule? It appears that whatever the contracting officer decides probably will be supported by either the court or the GAO provided the decision is based on a thorough investigation of the hard facts. If, however, that investigation falls short, the court or GAO must substitute its judgment and the result probably will be based on a view of the hard facts which avoids speculative appearances.

SMALL BUSINESS SET ASIDES ARE MANDATORY

Recently, a large business protested the decision by the Army to set aside a buy for small business competition. The protester contended the contracting officer unreasonably determined that two responsible businesses were capable of satisfying the RFP's requirements at fair market prices.

Prior to deciding to set aside the solicitation for small businesses, the Army issued three sources sought notices. The third notice sought information regarding the capabilities of small businesses' teaming partners, as well as the small businesses themselves. On the basis of this information, the Army concluded a small business set aside was appropriate.

GAO looked at FAR 19.502-2 for the rule. Procurements such as this one must be set aside for exclusive small business participation when there is a reasonable expectation that offers will be received from at least two responsible small business concerns and that award will be made at fair market prices. GAO said it will not question a set aside determination if there is a reasonable basis for the contracting officer's conclusion that small business competition may be expected.

The large business argued the small businesses must be "responsible". GAO said that does not mean there must be a responsibility determination. All that is required is an informed business judgment that there are small businesses capable of performing who will likely submit offers. So, GAO examined the evidence of capabilities and sided with the Army. GAO determined that the record demonstrated a reasonable basis for the contracting officer's conclusion that two small businesses were capable of performing. GAO will not question a small business set aside determination where the record demonstrates a reasonable basis for the contracting officer's conclusion that small business competition may be expected.

What are the lessons? The rule of two is alive and well. Shall still means shall. In this context, "two responsible" small businesses means "capable of performing". Capability is a matter of business judgment for the contracting officer.

“MYTH-BUSTING” IS NOT WORKING

SPEAKING OF ETHICS

APPEARANCE OF IMPROPRIETY: WHEN IN DOUBT, THROW OUT?

SMALL BUSINESS SET ASIDES ARE MANDATORY