Dear Mr. Pitsch,

This letter provides comments in response to the proposed rule that would create a new solicitation clause, the aim of which would be to require offerors to “self validate the adequacy of their proposals” when certified cost or pricing data are required to be submitted.

Apogee Consulting, Inc. is a small business that provides advisory, training, and other services to government contractors in all industries. I provide these comments as an individual and any opinions I express are my own.

1. The proposed rule is unnecessary. Proposal adequacy is a matter of compliance with solicitation direction. A proposal may be properly excluded from consideration when it fails to comply with solicitation requirements. (See, e.g., Orion Technology, Inc. B-405077, August 12, 2011: “It is an offeror's responsibility to submit a well-written proposal, with adequately detailed information which clearly demonstrates compliance with the solicitation and allows a meaningful review by the procuring agency. Any proposal that fails to conform to material terms of the solicitation may be considered unacceptable and not form the basis for an award.” (Citations omitted.))

Accordingly, there is no need for the proposed checklist. Offerors that cannot comply with the solicitation requirements are also likely to be noncompliant with contract requirements after award—and the Defense Department should not be contracting with them, risking taxpayer funds on contractors that have proven they cannot follow directions.

It strikes me that DCMA contracting officers should not need a proposal adequacy checklist to determine whether or not an offeror complied with solicitation requirements. Shouldn’t that ability be confirmed before a warrant is awarded? If contracting officers are unable to determine a proposal’s compliance without an offeror “walking” them through it, item by item, doesn’t that indicate an urgent need for more and/or better training?

Finally, there is no reason that a contracting officer should rely on an offeror’s “self validation” any more than he or she should rely on an offeror’s ability to follow solicitation instructions. An offeror who cannot follow the solicitation’s directions is in no position to accurately confirm (or validate) that it followed the instructions of Table 15-2. In fact, contracting officer reliance on the offeror’s self validation is more likely to waste time and resources, because the contracting officer likely will focus on the checklist rather than the substance of the offeror’s proposal.

2. The proposed rule is duplicative. The Defense Contract Audit Agency (DCAA) already has a similar checklist, called “forward pricing adequacy checklist,” and the proposed DFARS checklist is largely duplicative of DCAA’s checklist. The problem is more than duplication. The items that DCAA considers in determining whether a proposal is adequate for audit are necessarily different from those items that a contracting officer would consider in determining whether a proposal is adequate for analysis. Thus, not only is the proposed checklist duplicative, it is also largely misleading in substance.

Moreover, the proposed checklist is also duplicative with the instructions found in FAR Table 15-2 (found at FAR 15.408). Roughly 30 of the 47 proposed “points of adequacy” merely ask the offer to confirm it is compliant with specific requirements of Table 15-2. That is superfluous. If such a confirmation is really needed, simply replace the 30 individual confirmations with one single point that requires the offeror to confirm that it complied with all applicable requirements of Table 15-2.

3. The proposed rule doesn’t address the real problem. FAR 15.404-2(a)(1) requires a contracting officer to first determine whether “the information available at the buying activity” is adequate for negotiating a fair and reasonable price before requesting field pricing assistance. If the information on hand is found to be adequate, then the contracting officer need not request field pricing assistance, and may proceed to proposal analysis. In my experience, much time and effort is wasted in obtaining field pricing information that was never needed by the contracting officer in the first place. So the real need is to assist contracting officers in determining whether or not field pricing assistance is necessary for proposal analysis. The real opportunity is to be found in the efficiencies created by eliminating unnecessary requests for field pricing assistance. The proposed rule does not help a contracting officer make that initial field pricing assistance determination, and thus it does not address the real problem.

4. The proposed rule should not be a regulation; it should be part of the PGI. DOD maintains its Procedures, Guidance and Information (PGI) to streamline the regulations, and to distinguish between internal direction/guidance and regulatory requirements. Assisting contracting officers in determining whether offerors’ proposals are adequate should be a matter of internal direction/guidance, and not a regulatory requirement. The proposal rule is fundamentally misguided because it does not belong in DFARS in the first place.

5. The proposed rule does not support the Better Buying Power Initiative. The proposed rule allegedly “supports one of DoD’s Better Buying Power Initiatives by … ensuring offerors take responsibility for submitting thorough, accurate, and complete proposals.” As noted herein, offerors do not need that assistance, nor should DoD offer it. Instead of assisting offerors in generating better proposals, the proposed rule (as drafted) requires little of substance and will result in nothing that can (or should) be relied on by contracting officers. Instead, the proposed rule creates another bureaucratic, non value-added requirement—a requirement which is actually contrary to the Better Buying Power Initiative.

First, there is nothing in the 23 principal actions of the Better Buying Power Initiative that even addresses proposal adequacy. So it is unclear why the DAR Council believes that the proposed rule supports it.

The Better Buying Power Initiative calls for reductions in “non-productive processes and bureaucracy.” Within that general heading, one finds this objective

Reduce non-value-added overhead imposed on industry. Industry has its own internal unproductive processes which add to project costs, but these are in some part a reflection of the requirements which the government imposes. A great number of the inputs I received from industry were directed at what was viewed as excessive overhead expenses based solely on non-value-added mandates and reporting requirements which may have been relevant at some point in time, but have little relevance in the world in which we now find ourselves. In order to identify and reduce these costly requirements, I am directing the Director of Industrial Policy, with support from DPAP, to more fully survey our industrial base to identify, prioritize, and recommend a path forward to unwind duplicative and overly rigorous requirements that add to costs, but do not add to quality of product or timeliness of delivery. As we remove these requirements, I will expect a decline in the overhead charged to the Department by our industrial base that reflects these reduced costs.

(Italics in original.)

I believe that this proposed rule (as drafted) is a good example of a “non-value added” mandate and reporting requirement that tends to increase contractor overhead. Accordingly, I urge the DAR Council to withdraw it in favor of a PGI entry that assists contracting officers to determine whether or not field pricing assistance is necessary.

Thank you for considering these comments to the proposed rule.

Sincerely,


Nicholas Sanders
President and Principal Consultant
Apogee Consulting, Inc.