https://www.americancityandcounty.com/wp-content/themes/acc_child/assets/images/logo/footer-logo.png
  • Home
  • Co-op Solutions
  • Hybrid Work
  • Commentaries
  • News
  • In-Depth
  • Multimedia
    • Back
    • Podcast
    • Latest videos
    • Product Guides
  • Resources & Events
    • Back
    • Resources
    • Webinars
    • White Papers
    • IWCE 2022
    • How to Contribute
    • Municipal Cost Index – Archive
    • Equipment Watch Page
    • American City & County Awards
  • About Us
    • Back
    • About Us
    • Contact Us
    • Advertise
    • Cookie Policy
    • Privacy Statement
    • Terms of Service
American City and County
  • NEWSLETTER
  • Home
  • Co-op Solutions
  • Hybrid Work
  • Commentaries
  • News
  • In-Depth
  • Multimedia
    • Back
    • Podcasts
    • Latest videos
    • Product Guides
  • Resources/Events
    • Back
    • Webinars
    • White Papers/eBooks
    • IWCE Expo
    • Calendar of Events
    • How to Contribute
    • American City & County Awards
    • Municipal Cost Index
    • Equipment Watch Page
  • About Us
    • Back
    • About Us
    • Contact Us
    • Advertise
    • Cookie Policy
    • Privacy Stament
    • Terms of Service
  • newsletter
  • Administration
  • Economy & Finance
  • Procurement
  • Public Safety
  • Public Works & Utilities
  • Smart Cities & Technology
  • Magazine
acc.com

Procurement


Article

From proposal to award: Discussions in RFPs

From proposal to award: Discussions in RFPs

This article looks at the information exchange that occurs from the time proposals are received and the government’s obligations with respect to those exchanges.
  • Written by
  • 3rd April 2013

“We cannot regard as unreasonable the City’s apparent assessment that its duty to conduct discussions was satisfied …”

What duty to conduct discussions? This Hawaii court language raises some questions. Is your agency required to conduct discussions in requests for proposals? Should you? This article looks at the information exchange that occurs from the time proposals are received and the government’s obligations with respect to those exchanges.

In competitive sealed bidding, commonly called invitations for bid, there is little opportunity for information exchange between a bidder and the government about the bid before award. There may be very limited exchange related to mistakes by the bidder or clarification of minor informalities. However, except in very rare cases, the bid is not revised or prices changed.

This article looks at the other kind of competitive solicitation. The American Bar Association Model Procurement Code names this process “competitive sealed proposals.” The title of the Federal Acquisition Regulations section on the request for proposal (RFP) process is “Contracting by Negotiation.” Some states — Florida and California, for example — have separate statutory authority that permits competitive negotiation.

What characterizes this type of negotiation is the opportunity to have a give-and-take exchange of information. This exchange is significantly broader than permitted in sealed bidding. Ultimately, the exchange can lead to proposal revisions, often through a process called “best and final offers” (BAFO). But the process requires some oversight to ensure that the information exchange is fair to vendors.

Hawaii’s analysis of meaningful discussions

A 2012 decision from the state of Hawaii illustrates the importance of fairness in discussions. [Bombardier Transportation (Holdings) USA, Inc. v. Director, Department of Budget and Fiscal Services, 289 P.3d 1049 (Haw. Ct. App. 2012)]. The city and county of Honolulu issued a request for proposal for a large design-build-operate-maintain contract for the Honolulu transit corridor. The solicitation terms and conditions limited contractor liability, but the clause specifically exempted liability arising out of a contractor indemnity provision in the contract.

In its proposal, Bombardier stated that it assumed that the indemnification exclusion from the limitation of liability cap was an inadvertent oversight, because the exclusion would defeat the purpose of the limitation of liability provision and essentially eliminate any cap on liability of the contractor. During discussions before award, Bombardier argued that the limitation of liability provision should be amended to eliminate the exception for indemnification liability.

The city orally warned Bombardier that a conditional proposal would be considered nonresponsive. The city issued a BAFO request and an RFP addendum, retaining the language excluding indemnification claims from the liability cap. Bombardier submitted a confidential question to the city, asking again that the terms of the limitation of liability provision be revised. The city declined to respond but issued a final RFP addendum stating that no changes would be made to the limitation of liability provision.

Bombardier then submitted its BAFO. Its proposal said that Bombardier was basing its proposal on the assumption that the indemnification exclusion would be deleted from the limitation of liability provision. The city notified Bombardier that it had submitted an impermissible conditional proposal and awarded the contract to a competitor.

Bombardier protested the award, which was denied, and eventually filed a lawsuit against the city. Bombardier alleged that the city had failed to engage in “meaningful discussions,” a term well known in federal procurement law. Hawaii’s procurement code is based in large part on the ABA Model Procurement Code (itself modeled on federal procurement law). Hawaii’s statutes permit “discussions” with responsible offerors. Despite differences in language between the Federal Acquisition Regulation (FAR) and the Hawaii procurement code, the court considered federal precedent anyway regarding what constitutes “meaningful discussions.”

Federal procurement law requires, once an agency elects to conduct discussions, that the agency ensure that discussions are “meaningful.” That is, the agency is required to point out deficiencies or significant weaknesses in a proposal, or adverse past performance information, with enough specificity that the offeror is led into areas of its proposal which may require amplification or correction.

The court never articulated the standard for discussions under the Hawaii procurement law; it opted instead to address federal “meaningful discussions” standard argued by Bombardier. The court held that even under that more stringent federal standard, the city met its obligations regarding discussions. The court held also that the city was not required to conduct another round of BAFOs to permit Bombardier to revise its proposal to remove the conditional language. The court sustained the award.

Clarifications, discussions and fairness

We tread lightly into this topic of discussions because the Hawaii case, federal cases, and other state cases rely heavily on the specific language that governs the request for proposals process. While your agency’s statutory or regulatory language likely is different from that in Hawaii, the Bombardier case introduces guidelines regarding discussions that help make RFP processes fair to all vendors.

There is a distinction in many statutes and rules between clarifications and discussions. Clarifications are less comprehensive communications that generally address reasonable interpretations of the proposal and are not considered proposal revisions. Discussions under Hawaii’s procurement law are more comprehensive exchanges “to promote understanding of a state agency’s requirements.” They lead to proposal revisions. Discussions permit agencies to achieve better value and offerors to learn how to improve proposals.

Why is the distinction between clarifications and discussions important? Sometimes, a limited communication is needed to confirm an understanding of a proposal. In some less complex procurements, award can be made without discussions where only limited clarification exchanges are used. Likewise, where an agency’s procedures permit “short listing” (establishment of a competitive range), limited clarifications may be needed that are short of proposal revisions. If your jurisdiction distinguishes between clarifications and discussions, your counsel can help you assess whether communications have crossed the line into discussions that may involve proposal revisions.

Once communications cross the line into proposal revisions, Hawaii’s procurement code and federal regulations (FAR section 15.306) require all offerors to be given equal opportunity for discussions. Bombardier argued that the city’s discussions with it were not meaningful. The court noted that a specific written demand by the city that Bombardier remove the objectionable proposal language might have been preferable. But the court concluded that the progression of RFP amendments, oral warnings about the conditional nature of the proposal, and Bombardier’s own proposal language showed that Bombardier had fair notice about the seriousness of the issue.

There are other limits on discussions. An agency cannot disclose one offeror’s technical approach or pricing to another. Nor can an agency assist one company to improve its proposal through detailed identification of weaknesses while not providing the same level of assistance to other offerors, a practice sometimes known as technical leveling. For example, a six-page BAFO request letter might be sent to one offeror with detailed listings of weaknesses. If another offeror receives a one-page letter merely extending an opportunity to revise its proposal without identifying any weaknesses, technical leveling might be a concern.

Meaningful and fair

Promoting fairness to offerors through the discussion process is a role of the procurement professional. They should review agency communications before they are sent during evaluation and award in order to avoid misperceptions that discussions are unfair.

The use of best and final offers (proposal revisions) permits a freer and more open exchange of information before the ultimate award decision. Yes, they take additional time, but the BAFO request letter can discourage comprehensive proposal rewrites. Using instructions that invite only change pages to proposals, the time for BAFO submission can be reduced to a matter of days.

Extending an opportunity for proposal revisions in many respects eliminates the issue of the distinction between clarifications and substantive discussions before award. All offerors in the competitive range are given the same opportunity to revise proposals. But, as Bombardier and this article highlight, the discussions must be meaningful and fair.

Richard Pennington, CPPO, C.P.M., J.D., LL.M. is an NIGP Individual Member and NIGP Instructor. After federal procurement law practice as an Air Force judge advocate, he served as an assistant attorney general (procurement and contract law and litigation) and State Purchasing Director for the State of Colorado.

Tags: Procurement Article

Most Recent


  • solutions
    Public sector administrative software solutions provider rebrands as Euna Solutions
    Bringing together critical administration technology solutions for the public sector, GTY Technology has rebranded itself into Euna Solutions, which will merge its current companies into a more integrated suite of offerings. GTY Technology started as a special purpose acquisition company (SPAC) in 2016 and researched several markets before deciding government technology was the field for […]
  • metal buildings
    Metal buildings: Their versatility and durability suit them for public sector infrastructure
    Some cities and counties are looking at one structure type to help them meet their infrastructure needs, says Phil Skellorn, senior structural engineer at Buro Happold, an engineering and consulting services firm. “Some public owners are looking at metal buildings as an economical option.” Skellorn says metal buildings can offer advantages if the off-the-shelf product […]
  • sustainability
    To achieve their sustainability goals, cities and counties must engage with key stakeholders
    Local government leaders need to cast a wide net, says Laura Kroeger, technical director, leadership and management for the American Public Works Association (APWA). She also serves on the APWA Board of Directors, as chair of APWA’s strategic planning committee, and as executive director for the Mile High Flood District (Lakewood, Colo.). Kroeger urges agencies […]
  • green
    The future of carbon emissions and cities lies in green buildings
    When you envision the future, what do you see? For me, it’s a place where people of all generations live, work and thrive. And it’s a place where green, efficient buildings are integrated with nature and resilient infrastructure ties our healthy and productive places together into communities. However, in the face of climate change, that […]

Leave a comment Cancel reply

-or-

Log in with your American City and County account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • Deltek releases 12th annual Clarity Government Contracting Report
  • Amazon Business releases first B2B ecommerce report, highlighting e-procurement
  • Public procurement can be transformative for stakeholders in a community
  • The pandemic has led to big adjustments in procurement staffing in governments

White papers


5 reasons why Plan Examiners need Objective Trapeze

30th May 2023

7 Permitting & Licensing Fails Slowing Community Growth

24th May 2023

The Secret Ingredient to Local Government Employee Retention

23rd May 2023
view all

Webinars


How to Centralize and Build a Grants Management Process at your Organization

24th May 2023

Making Permitting Easier: What We’ve Learned Helping America’s Largest Cities Improve Their Permitting Process

16th May 2023

Digital Property Tax Collection: Tales from the Trenches of Modernization

16th May 2023
view all

PODCAST


Young Leaders Episode 4 – Cyril Jefferson – City Councilman, High Point, North Carolina

13th October 2020

Young Leaders Episode 3 – Shannon Hardin – City Council President, Columbus, Ohio

27th July 2020

Young Leaders Episode 2 – Christian Williams – Development Services Planner, Goodyear, Ariz.

1st July 2020
view all

GALLERIES


Gallery: Annual index ranks America’s top performing cities; most are in the West

30th May 2023

Gallery: Top 10 American cities for seasonal and summer jobs

25th May 2023

Gallery: 10 of America’s most affordable cities

9th May 2023
view all

Twitter


AmerCityCounty

Digital government comes with massive benefits — and new considerations, from accessibility to security to customer… twitter.com/i/web/status/1…

31st May 2023
AmerCityCounty

5 reasons why Plan Examiners need Objective Trapeze dlvr.it/Sptl5z

30th May 2023
AmerCityCounty

Navigating crises with confidence: Five ways strategic plans support crisis response dlvr.it/SptVKN

30th May 2023
AmerCityCounty

Gallery: Annual index ranks America’s top performing cities; most are in the West dlvr.it/SpszdK

30th May 2023
AmerCityCounty

2022 Crown Communities Award winner: Miami-Dade County Clerk of Courts’ jury selection system dlvr.it/SphCBk

26th May 2023
AmerCityCounty

Gallery: Top 10 American cities for seasonal and summer jobs dlvr.it/SpdFWy

25th May 2023
AmerCityCounty

How to leverage digital tools to drive innovation in government dlvr.it/Spcktb

25th May 2023
AmerCityCounty

With many cities facing a fiscal cliff as ARPA funding ends, debt ceiling debate continues on Capitol Hill dlvr.it/SpZLph

24th May 2023

Newsletters

Sign up for American City & County’s newsletters to receive regular news and information updates about local governments.

Resale Insights Dashboard

The Resale Insights Dashboard provides model-level data for the entire used equipment market to help you save time and money.

Municipal Cost Index

Updated monthly since 1978, our exclusive Municipal Cost Index shows the effects of inflation on the cost of providing municipal services

Media Kit and Advertising

Want to reach our digital audience? Learn more here.

DISCOVER MORE FROM INFORMA TECH

  • IWCE’s Urgent Communications
  • IWCE Expo

WORKING WITH US

  • About Us
  • Contact Us

FOLLOW American City and County ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookie Policy
  • Terms
Copyright © 2023 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.