Competitive Sealed Proposals
(CSP)
The DBM Perspective on
HOW TO MAXIMIZE THE BENEFITS
OR
TWO OUT OF THREE ISN’T
ENOUGH
The DBM Perspective on
How to Maximize the Benefits of CSP
Presenter:
Joel Leberknight
Chief of Procurement, DBM
State employee for almost 34 Years
– 12+ Years with Dept. of Budget &
Management (DBM)
30 Years of Procurement Experience
– Has conducted or been actively involved in
hundreds of CSP procurements collectively worth
billions of dollars
BPW Seminar 7/31/2009 2
DBM Procurement Role
On average DBM is responsible for the:
– Direct procurement of about $1 billion per year
in services contracts
– Indirect procurement of about $1 billion per year
in services contracts entered into by other State
agencies
Most of these procurements are done via the
competitive sealed proposals procurement method
BPW Seminar 7/31/2009 3
Just the Highlights
In less than an hour I can’t adequately cover:
– Maximizing the benefits, and
– The many other complexities of CSP
So just the briefest highlights will be featured
– And we won’t get through all the slides today
A full review of the CSP process will be
presented in the 3 day CSP course in DBM’s
7 class procurement training curriculum
– Classes will be offered starting in the fall 2009
But as of yet there is no exact class schedule,
including when the CSP classes will be presented
BPW Seminar 7/31/2009 4
Flexibility (Advantages) of CSP
Offerors can correct some flaws that under
Competitive Sealed Bidding (CSB) would render
bidders non-responsive
Within limits, specifications can be changed after
proposals are received
Oral presentations and discussions enable evaluators
to “get to know” offerors and facilitate a thorough
understanding of offerors’ proposals
Through Best and Final Offers (BAFOs) offerors can
revise their original proposal submissions
– Or, via multiple BAFOs offerors can further revise already
revised submissions
– BAFOs can be requested for technical factors only, the
price only, or both technical and financial factors
BPW Seminar 7/31/2009 5
More CSP Flexibility
Through discussions and BAFOs improved
proposals should be sought from offerors that:
– Might be judged as being marginal
– Are also judged to have submitted good proposals
i.e., the objective of discussions is to get an even
better offer from all potentially qualified offerors than
was in their original submission
The award can be made to other than the lowest
priced offeror
– To the offeror that is most advantageous to the State
– i.e., the offeror judged to have the best combination of
product and price, or Best Value
The award is based upon subjective judgment
BPW Seminar 7/31/2009 6
A “2 Edged Sword”
(It Cuts Both Ways)
The above described flexibility is both an
Opportunity and a Responsibility
An Opportunity to obtain the Best Value
A Responsibility to exert effort to seek or
cultivate the Best Value
– Often the best value doesn’t happen by chance
– It happens because State personnel set up the
conditions to get improved offers
By eliciting information and improved proposals from
offerors
BPW Seminar 7/31/2009 7
Contradiction
State personnel can set up the conditions
to get better proposals by aggressively
using passive efforts
– This will be explained later
We can’t just tell offerors exactly what they
should include in proposals
Other than what is in the RFP
But we should continually tell them when
they are not giving us satisfactory
information, approaches, timeframes,
staffing, etc.
BPW Seminar 7/31/2009 8
Flexibility Gone Bad
Agencies fully understand that under CSP
there is flexibility not to award a contract to the
offeror with the lowest price
In fact, at times agencies seem to exercise this
flexibility to extremes
In some CSP procurements it seems that price
is effectively rendered irrelevant
This is taking a good thing too far
– Price should be an important award component,
even under CSP
In this session I’ll try to explain why this
happens and how to prevent it in the future
BPW Seminar 7/31/2009 9
Sports Analogy 1
In any sport one team or participant might
be dominant over another one for much of
the game or contest
In such a situation the dominant
team/participant wants to deliver a “knock-
out punch” so that the opponent has
virtually no chance of ultimately winning
the contest
BPW Seminar 7/31/2009 10
Sports Analogy 1 (Cont’d)
Conversely the team/participant that is losing
wants to “keep it close”
i.e., avoid getting so far behind there is no
realistic chance to pull a victory out in the end
As long as the score is close going into the 4th
quarter, the later innings, the home stretch, etc.
there is a chance for the trailing team/participant
to get “hot” and “grab victory from the jaws of
defeat”
BPW Seminar 7/31/2009 11
CSP Parallel
By using the processes described in this
class you are setting up the situation:
– Of “keeping it close” for offerors to improve their
proposals so they might ultimately win
– But also allowing even an offeror with a good
initial proposal to land a “knock-out punch” by
making its proposal even better
BPW Seminar 7/31/2009 12
Sports Analogy 2
CSP can be equated to a marathon rather
than a sprint
It isn’t who gets out of the starting gate the
fastest
– Who submits the best initial proposal
It’s who crosses the distant finish line first
– Who ultimately provides the best value to the
State
The best combination of technical proposal and
price
BPW Seminar 7/31/2009 13
2 Out of 3 Explained
There are 2 primary competitive
procurement methods in Md. procurement
– Competitive Sealed Bidding, and
– Competitive Sealed Proposals
Each has 3 words in its name
Agencies understand the “competitive” &
“sealed” parts
But there is not a clear understanding of the
3rd part
– The difference between “bidding” & “proposals”
BPW Seminar 7/31/2009 14
2 Out of 3 Explained (Cont’d)
Until there is understanding of the
differences inherent in these methods
And how to derive the full benefit of the
flexibilities listed on the preceding slides
The benefits of CSP will not be
maximized
BPW Seminar 7/31/2009 15
CSP History
When COMAR Title 21 first became
effective on 7/1/1981 what is now CSP
was called Competitive Negotiations
Around 1988 the name Competitive
Negotiations was changed to Competitive
Sealed Proposals
This was done because in Md.
procurement we do not really negotiate
BPW Seminar 7/31/2009 16
Negotiations
To negotiate means that one party makes an
offer to another party
– Or sometimes multiple parties
If that offer is unacceptable to the 2nd party,
the 2nd party usually makes a counter offer
– It tells the 1st party what it wants
This offer, counter-offer process continues
until there either is agreement or the
negotiations fail
BPW Seminar 7/31/2009 17
Negotiations (Cont’d)
In situations when ultimately there is
agreement
Often what is finally agreed to is very
different from the positions either party
started with
– Usually there is compromise by both parties
– Perhaps based upon a series of offers and
counter-offers
BPW Seminar 7/31/2009 18
We Don’t Negotiate
But in government procurement we don’t
negotiate
1st, typically we are dealing with multiple
vendors
2nd, aside from the specifications in a RFP
we don’t tell vendors exactly what we want &
see if they will comply
– We don’t make offers or counter-offers
Because we don’t “negotiate” the name was
changed to avoid confusion
BPW Seminar 7/31/2009 19
The Good & the Bad
This name change was good because it
eliminated the confusion between what true
negotiation is, versus what we do
But, the name change was also bad
because it removed the focus from the
essence of competitive negotiation, now
competitive sealed proposals
BPW Seminar 7/31/2009 20
The Essence of CSP
The essence of CSP is to seek improvement
in the proposals of possibly all offerors
– Not just accepting what offerors, including good
offerors, initially propose
– And, not immediately eliminating offerors with
deficiencies
Most agencies understand this concept from
the price perspective
– They understand that usually offerors should be
invited to submit a financial BAFO in an effort to
get a lower price
BPW Seminar 7/31/2009 21
The Essence of CSP (Cont’d)
But many agencies & procurement personnel
don’t seem to understand this same concept
applies to offerors’ technical proposals
Obtaining improvement in offerors’ technical
proposals benefits the State in two ways
– The obvious benefit (result) is there will be some
increased level of contract performance
The presumption is that even an offeror that submitted
a good proposal can improve its proposal
– Even if only slightly
– And, sometimes more than slightly
BPW Seminar 7/31/2009 22
The Essence of CSP (Cont’d)
But perhaps a not obvious benefit is to keep
more offerors in the running for the award
Offerors whose proposals as originally
submitted might have been determined
technically unacceptable, potentially can
revise them to make them acceptable
Being judged to be technically acceptable
means these offerors will remain in the
competition and have their prices opened
Which means more selection for the agency
to choose among to arrive at the best value
BPW Seminar 7/31/2009 23
Passive Negotiations
We don’t do this in an active way, such as in
negotiations, by saying exactly how an
offeror should change its proposal
We should do it in a passive way, by saying
what we don’t like or don’t understand
And then allowing the offerors to try again to
give us something we’ll like better
– And often trying multiple times, improving the
offer each time
– If at first you don’t succeed, try again
BPW Seminar 7/31/2009 24
That’s Not Fair!
The reaction of many of you to the
preceding slide is probably summed-up
above:
– It’s not fair to the offerors that submitted
good proposals to begin with
BPW Seminar 7/31/2009 25
It’s Too Much Work
Another typical reaction is that the process
of telling vendors their weaknesses and
allowing revisions, perhaps more than
once:
– Is too much work
– And, takes too much time to do
BPW Seminar 7/31/2009 26
Why We Think This Way
The reason for the 2 previously possible
reactions
– It’s unfair
– And, too much time and work
Likely stems from people letting their
understanding of Competitive Sealed
Bidding (CSB) influence how they think
Competitive Sealed Proposals (CSP)
procurements should be conducted
BPW Seminar 7/31/2009 27
Get the Best Deal for the State
The objective of both CSB and CSP is to
get the best deal for the State
In CSB the best deal is the lowest bid
– That is responsive
– From a responsible bidder
In CSP the best deal is the best value or
“Most Advantageous Offer”
BPW Seminar 7/31/2009 28
CSB
In public procurement what we call CSB has
existed much longer than what we call CSP
So the notion of lowest bid wins is widely
ingrained in people’s minds, including the
public, vendors and non-procurement State
personnel
Many people also understand that the core
principle of public procurement is Fair and
Equal Treatment of vendors in competing
for public awards
BPW Seminar 7/31/2009 29
CSB (Cont’d)
Since CSB existed long before CSP
To a large degree the concept of Fair and
Equal Treatment of vendors in competing
for public awards has been framed in the
context of what that means in CSB
As stated earlier in CSB the lowest bid wins
But it is understood that awarding to the
lowest bidder only makes sense if the bids
are comparable
– Bids must be “apples to apples”, not “apples to
oranges”
BPW Seminar 7/31/2009 30
Sealed Bid Avoids an Auction
Another core principle of CSB is that it is
not an auction
Vendors get 1 chance to bid
That is why their bids are sealed and
opened publicly
Each vendors submits its best bid and
hopes it wins
– There is no second chance
– No “Second Bite of the Apple”
BPW Seminar 7/31/2009 31
Responsiveness
The words “Responsive” and “Non-
responsive” came into being to indicate if bids
are compliant with the requirements of the
specifications, hence are comparable
– Are apples to apples
Procurement people should know that:
– Responsiveness is determined solely on the
basis of the submitted bid
Without additional explanation or supplement
i.e., as the bid came out of the sealed envelope
– Responsiveness doesn’t apply to CSP
BPW Seminar 7/31/2009 32
Summary of Key CSB Concepts
Fair and Equal Treatment
Responsiveness
– Judged solely on the basis of what is in the sealed
bid envelope
Only 1 chance to bid (1 bite at the apple)
– With rare exceptions you can’t claim you made a
mistake and change your bid
– Especially to a price that is now the lowest bid
– Otherwise it isn’t fair
Either because it’s an auction; or,
There is a risk of the prior bids being leaked
BPW Seminar 7/31/2009 33
A Little Knowledge Can be Bad
I’ve pointed out some of the highlights of CSB
to illustrate how easy it is for persons who
don’t really understand CSP to incorrectly
transfer what they know about CSB to CSP
They incorrectly think offerors that don’t get
their initial proposals right should be judged
non-responsive
– Based solely upon their initial proposal
As taken from the sealed envelope
– Otherwise an offeror has 2 bites at the apple
Which is perceived as unfair
BPW Seminar 7/31/2009 34
From the Past to the Present
Now that I’ve talked about the past
– About CSB
How it came into being
Some of its hallmarks
– And, about Competitive Negotiations and CSP
Let’s focus on the primary aim of this class
Maximizing the benefits of CSP
– i.e., focusing on the difference between bidding
and proposals
– The 3rd word in the title of the procurement
methods
BPW Seminar 7/31/2009 35
Question:
How do You Maximize the
Benefits of CSP?
Answer:
Change Your Thinking
BPW Seminar 7/31/2009 36
Whose Thinking Needs to
Change?
Procurement Officers
Program Personnel involved in CSP
procurements
Evaluation Committee members
Agency Middle & Upper Management
BPW Seminar 7/31/2009 37
How Should Thinking Change?
People need to forget what they know about
CSB when doing a CSP procurement
Instead they need to learn and accept:
– The Objective of CSP
To get the best value
– That time and effort are needed to achieve
that objective
BPW Seminar 7/31/2009 38
Objective of CSP
Get the best offer for the State (within reason)
Getting the best reasonably possible offer
is typically achieved by:
– Maximizing the number of offerors responding to
the RFP
– Fully using the flexibility of the CSP process to:
Avoid eliminating offerors for curable weaknesses or
deficiencies
Get improved technical and financial offers
BPW Seminar 7/31/2009 39
Less Isn’t More
I sometimes hear agency personnel state that they
want to save time and effort by only dealing with a
few, clearly qualified offerors
To achieve this mistaken objective of minimizing
their work such persons:
– Establish high minimum offeror response requirements to
hold down the number of offerors
– Eliminate all but the best initial offerors as quickly as
possible to get to the serious contenders
– Quickly open prices
– Then quickly make an award recommendation
As explained in this class, I don’t share that
perspective BPW Seminar 7/31/2009 40
Instead, More is Better
More is better in terms of:
– The initial competition
The number of offerors
– Continuing competition
More offerors being determined to be
technically acceptable and having their price
proposals opened
– The caliber of the competition
More offerors ultimately judged to have good
technical proposals
– It’s how they finish that counts, not how they start
BPW Seminar 7/31/2009 41
Why More Is Better
Although saving time and effort seems like a
laudable endeavor
When it comes to CSP procurements
frequently this premise is the equivalent of
being “penny wise and pound foolish”
While seeking to maximize competition will
likely cost thousands of dollars in person
hours of work by involved State employees
The potential payoff is hundreds of
thousands, or millions of dollars of savings
– And/or better performance
BPW Seminar 7/31/2009 42
Getting It Right
The best way to illustrate that going through the
effort pays off in the end is to cite real examples
The 4 procurements cited on the following slides
were done by DHMH over the past 4 years
3 of the 4 procurements involved the same
procurement officer (P.O.)
In 3 of the 4 procurements the P.O. awarded the
contract to a different offeror than the evaluation
committee recommended
– In each instance the agency head (the DHMH Secretary)
accepted the procurement officer’s decision
BPW Seminar 7/31/2009 43
Getting It Right (Cont’d)
All 4 decisions resulted in protests
3 of the protests were appealed to the Board
of Contract Appeals
– The 4th contract award wasn’t appealed
In 2 of the appeals DHMH’s decisions were
upheld
In the 3rd situation the BPW approved the
contract award notwithstanding protest and
the appellant withdrew its appeal
BPW Seminar 7/31/2009 44
Getting It Right (Cont’d)
The P.O. did not accept the evaluation
committees’ recommendations, because the
P.O. decided a different offeror represented
the best value
The P.O.’s decisions were based upon a
much greater price difference than the
perceived technical difference
– In these 3 instances the P.O. went with offerors
with much lower prices that were still technically
very capable
Why the evaluation committees didn’t reach
the same conclusion is perhaps a topic for
future training BPW Seminar 7/31/2009 45
Getting It Right (Cont’d)
Based upon the preceding litany of
overruling evaluation committees, incurring
protests, and fighting appeals at the Appeals
Board you may wonder what was achieved
for all this grief
The answer: collectively over $35 million in
lower prices
Judged in the context of $35 million, all the
other expenses in terms of the time and
effort of State personnel are trivial
BPW Seminar 7/31/2009 46
Getting It Right (Cont’d)
2 of these procurements happened 3-4
years ago and the new vendors have
performed very well despite their low prices
– In fact in both instances renewal options have
been exercised with the assessment that the
vendors are doing a fine job
2 of these procurements just happened, with
1 starting 7/1/2009 and the other to start
9/1/09
– So there is no performance record yet for these
BPW Seminar 7/31/2009 47
Example 1
Clifton Gunderson vs. Myers & Stauffer from
2006 to perform auditing services for the
Medical Assistance Program.
Clifton Gunderson (CG) was the incumbent &
was ranked #1 technically
Myers & Stauffer (MS) was ranked 2
technically
The rounded off prices were $26.6 million for
CG and $17.3 million for MS
The exact price difference was $9,305,130,
or 35% lower
BPW Seminar 7/31/2009 48
Example 2
ACS vs. PSI from 2005 to provide
Enrollment Broker Services for the Medical
Assistance Program
ACS was the incumbent and was ranked 1
technically, while PSI was 2nd technically
The rounded off prices were $47.5 million
for ACS and $41.9 million for PSI
The exact price difference was
$5,670,139, or 12% lower
BPW Seminar 7/31/2009 49
Example 3
IHAS vs. HCA to perform inpatient and outpatient
audits of payments by the Medical Assistance
Program to hospitals; IHAS was the incumbent and
was ranked first technically, with HCA ranked 2.
This contract started on 7/1/09
The pricing was a % of identified overpayments to
be paid to the contractor
IHAS quoted a 25% commission rate
HCA quoted a 12% commission rate
It is believed this difference will equate to over $1
million less for HCA versus IHAS
– A 53% lower commission rate
BPW Seminar 7/31/2009 50
Example 4
APS vs. ValueOptions to provide a Statewide
Administrative Services Organization for publicly
funded mental health services.
This contract starts on 9/1/09
APS was the incumbent and was ranked 1
technically; Value Options was 2nd technically
The rounded off prices were $71.1 million for
APS and $51.6 million for Value Options
The exact price difference was $19,443,425, or
27% lower
BPW Seminar 7/31/2009 51
Using the CSP Process
Fully and Conscientiously
A Quick Resource Guide
On How To Do It
Maximize the Number of Offerors
Responding to the RFP
Do outreach to adequately advise potential
offerors of the availability of the RFP
– Do focused, direct notice in addition to eMM
– Relying exclusively on eMM may cause you to
miss good vendors
Minimize Minimum Offeror Requirements
– Perhaps only requirements of law or regulation
Avoid excessive bond/insurance requirements
Avoid overly restrictive specifications
BPW Seminar 7/31/2009 53
Easier Said Than Done
Saying “avoid excessive or overly restrictive
requirements” is easy
Determining what is excessive or restrictive is much
harder to do
And, I know many persons believe not having
minimum offeror requirements, bonds, etc. will allow
unqualified vendor to submit proposals
So, how do you learn what to do, or consider, or not
do when drafting requirements?
All of the issues on the prior slide and many
more are extensively covered in the DBM
procurement training classes
BPW Seminar 7/31/2009 54
Do the 3 Step
(The Process, Not the Dance)
Many years ago when I took a seminar on
effective writing I was told to:
1. Tell the reader what I was going to tell them
Introduce the key points
2. Then tell them the information
3. Then tell them what I had told them
Again mentioning the key points
– The rationale for this approach was that
People learn by repetition
It will help ensure that even if the details are missed
or not comprehended the key aspects will be
understood
BPW Seminar 7/31/2009 55
The CSP 3 Step
1. Before the oral presentations (Orals) tell
offerors the aspects of their proposal that
are weak, confusing, or not justified
– Tell them whether to reply to these aspects
prior to the Orals, or at the Orals
2. Have the Orals and ensure that the
previously noted information is addressed
3. Allow offerors to provide additional follow-
up after the Orals
– If despite Steps 1 & 2 any aspect of offerors
proposals is still judged to be inadequate
BPW Seminar 7/31/2009 56
The CSP 3 Step (Cont’d)
By following this process usually offerors will
provide additional information or responses
Very few offerors will fail to make at least some attempt
to address identified deficiencies
This is part of the process of eliciting additional
information from offerors beyond what is in their
original proposals
If offerors don’t respond they have no excuse if
they are judged not qualified or not the best value
Even if offerors do respond, the responses still
may be judged as not being adequate
But at least the offerors had the opportunity
BPW Seminar 7/31/2009 57
The CSP 3 Step (Cont’d)
Hopefully, though, the responses will be
judged adequate, thereby ensuring the
continuation of offerors in the competition
Sometimes, the additional information may
even result in an offeror being judged to be
a star performer, although the original
submission didn’t indicate that
As described shortly, there are reasons why an
offeror may not originally submit a good
proposal, but subsequently can and will do so if
given the chance
BPW Seminar 7/31/2009 58
The CSP 3 Step (Cont’d)
Conversely not doing this may result in
missed opportunities for improved offers, or
lower prices or both
Figuratively “leaving money on the table”
And may actually prompt a protest when an
offeror is told it wasn’t selected because of
an aspect that was easily curable by the
offeror, or misunderstood by the State
BPW Seminar 7/31/2009 59
Do You Do All This with All
Offerors?
Ideally, without going through this process
you should only eliminate offerors that:
– Are clearly incapable of satisfying the
requirements of the RFP; and,
– Have virtually no possibility of becoming
capable during the timeframe of the evaluation
i.e., don’t seek to eliminate as many
offerors as possible, as quickly as possible
BPW Seminar 7/31/2009 60
Procurement Conceit
Frequently we take 6 months or more to
draft RFPs
Then we give vendors 30 days or so to
provide responses
We expect the responses to be totally
detailed and exactly as we direct
Without regard for:
– Competing demands on the vendors
They may also be responding to other RFPs
– The cost to offerors to respond
BPW Seminar 7/31/2009 61
Offeror Response Costs
Frequently offerors expend thousands of dollars to
respond to an RFP
– Sometimes tens of thousands of dollars
Vendors need to expend their resources wisely in
deciding which RFPs to respond to & how
extensively to do so
They may respond minimally if they:
– Don’t feel they have a good chance at winning a
particular award
– Recently learned of the RFP
– Are simultaneously responding to multiple RFPs
BPW Seminar 7/31/2009 62
Have Some Understanding
We should understand that there may be a big
difference between the amount of effort a vendor
will devote doing something on speculation
– Something they are not being paid for
Responding to our RFPs
Versus how they would perform on a contract they
are paid to perform
So a minimal initial response may not mean that a
vendor:
– Has little capability
– Would not fully, or even exceptionally perform a contract
– Would not quote a good price
BPW Seminar 7/31/2009 63
Have Some Understanding (Cont’d)
The cost to vendors to respond to a RFP
(CSP) is typically much higher than that of a
bid (CSB)
– This is another major difference between CSB
and CSP
– And why the rules and processes followed for
CSP are fundamentally different from CSB
BPW Seminar 7/31/2009 64
Keep Offerors Engaged
By going through the processes described in this
presentation we tell offerors
– They are still in the running
– Exactly what we need more information about
And the more effort offerors put into proposals,
even on an incremental basis
The more they will continue to be involved and
buckle down to win to justify their costs to date
And the more they continue in the running the
better understanding we will have of their strengths
and weaknesses
BPW Seminar 7/31/2009 65
Get to Know Offerors
The more you interact with offerors:
– The better you can assess their capabilities and
commitment
Especially any you haven’t dealt with previously
If you don’t have this interaction the offeror
may be just a name on a proposal
– You likely will be reluctant to take a chance with
an offeror you don’t know well
– You probably will play it safe and go with a
known (frequently the incumbent) offeror
BPW Seminar 7/31/2009 66
Ignorance Can Be Costly
Elimination of offerors for technical
insufficiency without getting to know their
capabilities has a cost
– We don’t know how good they would have been
– We don’t know what their price was
We pay for playing it safe
Even if such offerors are not eliminated we
still tend to not select them:
– We forego lower prices
– Sometimes substantially lower prices
BPW Seminar 7/31/2009 67
Fully Use the CSP Process
To use CSP to its full potential we must:
– Use the pre-proposal conference as an active two-
way communication tool
– Encourage questions and suggestions before,
during & after the pre-proposal conference
– Check references
– Hold meaningful discussions with all offerors
– Invite a Best and Final Offer (BAFO) after
discussions
More than one BAFO can be invited
BPW Seminar 7/31/2009 68
Hold Meaningful Discussions
Allow adequate time for discussions
Be prepared by thoroughly reading proposals
– Note areas of confusion, dislike, or if very good
– Earnestly prepare generic & specific questions
Control the discussions
– Engage the offerors (get them to talk)
– Tell offerors when they are not answering
adequately
– Ask appropriate follow-up questions
BPW Seminar 7/31/2009 69
Hold Meaningful Discussions (Cont’d)
Tactfully let offerors know of any aspect of their
proposals that are
– Deemed a weakness/not liked
i.e., anything for which the offeror might be downgraded
in the final evaluation
Allow the submission of written follow-up
information and/or proposal revision via BAFOs
– This affords offerors the opportunity:
To cure or improve upon deficiencies
For an already adequate proposal to be made better
BPW Seminar 7/31/2009 70
Hold Meaningful Discussions (Cont’d)
The ultimate purpose of discussions is to
improve the technical standing of all, or as
many offerors as is feasible
The result should be for agencies to have
more viable choices for the award
recommendation
“Viable choices” means more:
– Offerors under serious consideration for the award
– Opportunity for price to play a significant role in
the award decision
BPW Seminar 7/31/2009 71
Only the End Result Counts
One offeror can:
– Submit the best proposal at the beginning: and,
– Seem to be the sure winner based upon its initial
technical superiority
And another offeror may have lots of
omissions, ambiguities and weaknesses
– And have to make substantial changes to its
technical proposal
BPW Seminar 7/31/2009 72
Only the End Result Counts (Cont’d)
There is no:
– Averaging or blending of the original proposal
and the final proposal
– Consideration of how much one offeror had to
improve versus any other offeror
– Regard for the amount of effort you had to
invest to get to this point
All that matters is that when the time comes
to make an award selection, which offeror is
now judged to be the best value
– The most advantageous
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Fair and Equal Treatment
Fair and equal treatment in CSP means
offerors were given the same opportunities
The same opportunity to
– Cure deficient technical proposals
– Explain their proposals in oral presentations
– For technically qualified offerors to submit BAFOs
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Fair and Equal Treatment (Cont’d)
Fair and equal treatment also means if
discussions, etc. are held with one offeror,
they must be held with all offerors
– That have not been formally eliminated
Told they were eliminated
Fair and equal treatment doesn’t mean
– How many proposal aspects need to be cured
by one offeror versus another
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Real-life Parallel Scenario
You are shopping for a new car and the first
dealer you visit quotes a very high price
– And also might not have been very friendly
So you tell this dealer you will do some more
looking
– You might even say there is no way you will
purchase there
But typically you will already have provided
your name, phone number, etc., just to get the
price quote
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Real-life Parallel Scenario (Cont’d)
So you go to one or more other dealers in an effort to
get the “best deal”
– A good price from a dealer you trust
You may have eliminated the first dealer from
consideration and be just about to inform another
dealer you will purchase there
When the first dealer calls and quotes a much lower
price than it did originally
In fact, its price is now lower than any other dealer’s
BPW Seminar 7/31/2009 77
Real-life Parallel Scenario (Cont’d)
Also, the salesperson apologizes, apparently
sincerely, for the rudeness or lack of attention
from before
Do you say?
– Sorry, it’s too late.
– You had your chance and blew it
– No. I owe it to dealer X to buy from them. They
quoted me a good price from the start and treated
me very well
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Show me the Money!
Or, do you do the equivalent of the Cuba
Gooding Jr. character in the Jerry McGuire
movie and say, “Show me the money”?
– i.e., it doesn’t matter who quoted less originally
– It’s who is going to charge less now
For the same vehicle
With other comparable factors
– Immediate availability
– Cleaned and detailed
– Full tank of gas
– Delivered to your door
– All paper work properly done (Title, loan agreement)
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Show me the Money!
If you go with the ultimate most advantageous
offer in real life
– Despite that offer not being the best originally
Why wouldn’t you do the same thing in your
State job?
But, even if you personally wouldn’t buy from
the dealer that ultimately offered you the best
price, you are expected to go with the best
value in a State CSP procurement
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Let Price Be Important
If only 1 or a few offerors are judged to be
technically competent only this/these offerors
will be considered for the award
Even if other offerors are judged to be
reasonably susceptible of being selected for
the award, without a cure process they won’t
be under serious award consideration
because of perceived technical shortcomings
BPW Seminar 7/31/2009 81
Let Price Be Important (Cont’d)
This means that the agency will be almost
forced into accepting whatever price
this/these few offerors propose
– If the price is reasonable, this is fine
– But if the price is not reasonable, the agency
doesn’t have a legitimate alternative
– The agency has to pay the too high price
because it is not willing to select an offeror
perceived as being of lower quality despite a
much lower price
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Let Price Be Important (Cont’d)
But if through the discussion process other
offerors improve their proposals so they are
judged to be better than just marginal
If the highest technically ranked offerors have
prices that are judged unreasonably high
The agency has a real alternative to select a lower
technically ranked offeror whose lower price is
determined to more than offset its lower technical
capabilities
BPW Seminar 7/31/2009 83
Let Price Be Important (Cont’d)
And if the highest technically ranked
offerors are only minimally higher in price
The award can still be made to one of the
highest technically ranked offerors
– Because overall it is judged to be the most
advantageous
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