DoD Issues Final Rule on Discussions Prior to Contract Award

September 20, 2011

DoD is amending the Defense Federal Acquisition Regulation Supplement (DFARS) to strongly encourage discussions prior to award for source selections of procurements estimated at $100 million or more. Effective Date: September 20, 2011. Federal Register Volume 76, Number 182 (Tuesday, September 20, 2011).

DoD published a proposed rule at 75 FR 71647 on November 24, 2010, to implement the recommendation of the DoD Source Selection Joint Analysis Team (JAT) to strongly encourage the use of discussions in all competitive negotiated procurements over $100 million. The period for public comment closed on January 24, 2011, and three respondents provided comments. The rule proposed to amend DFARS part 215 to strongly recommend, for acquisitions of more than $100 million, that contracting officers hold discussions rather than use the authority at FAR 52.215-1 to award on initial offers without discussions.

Discussion and Analysis
A. Proposed rule is excessive
Comment: One respondent said that the proposed rule is ''overkill.''
Response: No change was made in the final rule in response to this comment. The JAT advises that data shows that the number of protests filed against the award of competitive negotiated contracts and orders over $100 million is substantially higher when discussions are not held. A preference for holding discussions is recognition of a best practice.

B. Negative effects possible
Comment: One respondent wrote that requiring discussions could have negative effects, such as added Government and industry cost due to the significant increase in the source selection schedule and reduced solicitation and proposal quality due to a mindset that problems can be fixed during discussions.
Response: The JAT data demonstrates that procurement lead time is significantly extended when protests occurred. The second concern raised by the respondent, that proposals will be of lower quality, is unrealistic because the offeror that chooses to submit an inferior proposal always runs the risk of not making the competitive range and therefore not being considered for award.

C. Change reference
Comment: A respondent wanted to change the reference from 215.203-71 to 215.306(d) because the latter deals with discussions, which are covered at FAR 15.306(d).
Response: DoD agrees with the recommendation. The statement about holding discussions for actions of $100 million or more is relocated in the final rule to DFARS subpart 215.306(c) from 215.2.

D. Remove ''competitive range'' limitation
Comment: A respondent proposed deleting the phrase ''with offerors in the competitive range'' at the end of the sentence ''(F)or source selections when the procurement is $100 million or more, contracting officers should conduct discussions with offerors in the competitive range.'' The respondent noted that FAR 15.306(c)(1) and (d), read together, require the conduct of discussions with all offerors in the competitive range in every case.
Response: DoD agrees with respondent that the FAR already mandates discussions with all offerors whose proposals have been selected for the competitive range. The intent of this rule is to expand the situations in which discussions are held beyond those situations where they may be already mandated. The language in the proposed rule at DFARS 215.203-71 is relocated to 215.306(c)(1) in the final rule and revised to state ''For source selections, when the procurement is $100 million or more, contracting officers should conduct discussions. Follow the procedures at FAR 15.306(c) and (d).''

FOR FURTHER INFORMATION CONTACT: Mr. Dustin Pitsch, telephone 703-602-0289. 

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