In order to retain the maximum amount of creative input, compose your RFP statement of work to insert your agency's discretion and oversight into the process in a way that makes it clear that you will be working with the contractor, not simply rubber-stamping expenditure decisions.

This could involve creating a standing planning committee which would include members of your agency and the contractor's representatives. This committee could be charged with using the contractor's proposal as a starting point to discuss improvements and maintenance plans, all with an eye to the contractor's price-proposal limitations. If the contractor proposed a price per service, it would be even easier (than a fixed price bid) to pick and choose the services via such a committee. It would also be wise to leave in a line-item for miscellaneous additions, so that your committee could be flexible.

You would thus be hiring the contractor not only as a service provider but also in a consulting capacity, and might want to allow them to bill you separately for the "consultant" time; i.e.; the time spent in committee meetings.

You would, of course, want to announce this committee in your RFP solicitation, so that the contractor was aware of the decision-making protocol under the contract when the contractor's proposal was created.

Crystal D. Fox
Contract Administrator
Pennsylvania Department of Transportation
Bureau of Office Services
Harrisburg

A CENTURY OF DIFFERENCE

Competitive bids evolved the early 20th century and involve the award of contracts to the responsible bidder offering the lowest responsive bid. The key words here are:

1) responsible, as in proven capacity to deliver;

2) responsive, as in conforming to the state requirements of the solicitation; and

3) low, as in the lowest price offered.

A bidder must meet all three of these tests to be successful. This is a "go/no-go" decision. There have been many jokes about the low bidder but, in most cases if the procurement officer performs due diligence in the evaluation, the procurement will go off without a hitch. However, to win, a bidder must offer the bare minimum and no more than the bare minimum.

The first contract awarded through competitive sealed proposals on record was the purchase of B-52 bombers in 1958. The process must have worked because they are still flying. Competitive sealed proposals (a.k.a. competitive negotiations, RFP, best value and others) involve the award of contracts based on multiple factors. Key characteristics of the RFP method include:

1) use of multiple evaluation factors that may include price;

2) ability to seek clarification for a greater understanding of the government needs and the offer;

3) ability to negotiate with qualified offerors to improve or modify their offers; and

4) great discretion in the selection decision.

In the hands of a good procurement officer, the best value decision will result in a quality contract and will achieve the desired procurement outcome. There are some keys factors necessary for a successful selection decision.

1) Effective procurement planning;

2) SMART (specific, measurable, attainable, relevant and time bound) evaluation criteria;

3) Complete, clear and concise description of requirements;

4) Protection of confidentiality both prior to and after award;

5) Careful analysis of offerors and offers;

6) Competent negotiations to seek the proverbial "win/win" solution; and

7) Collaborative decision based on best value.

By the way, the space shuttle was not contracted via low bid!

So there is a century of difference, but RFPs have been around since the late '50s and were formally recognized in the FAR before 1960. State and local governments have been using competitive negotiations at least since 1979, when the ABA Model Procurement Code officially introduced the concept. Believe it or not, we are still inventing better and newer methods.

The article and author's solution also overlooked a number of other possible and practical solutions. For example, I would never use a design specification to contract for park operations. Instead, a performance-based contract or a risk-sharing contract would work very well by basing incentive and profit on outcomes or results rather than a level of effort. The author discusses multiple-award and single-award contracts and public relations which are certainly relevant, but imagine the great ideas that would have flowed forth with a procurement officer in attendance!

Please, oh please help your readers understand the difference between bids and proposals before we have another wave of reform. Oh, and by the way, I sure hope that parks director does not just arbitrarily select the highest price firm on the assumption that more is better!

John O. Adler, CPPO
Arizona State Procurement Administrator
Phoenix

THREE PHASES

The process of evaluation and selection is conducted in three phases.

Phase I

The evaluation committee (comprised of experts from the user agency) will screen each proposal for completeness to ensure that all mandatory requirements are addressed satisfactorily. All proposals that satisfy these requirements will be evaluated in Phase II.

Phase II

In this phase, the evaluation committee evaluates the quality and completeness of each technical proposal as it addresses each requirement of the RFP. For this example, a technical proposal can receive a maximum of 700 points (depending on the importance of the technical application versus price, the technical proposal can be assigned a practical maximum of 800 points and a minimum of 500 points). Technical proposals are evaluated and scored in categories, the points being published with the RFP. Each category is assigned a maximum point value. Only technical proposals that receive 525 points (75%) or more have the accompanying cost proposal evaluated in Phase III. A very important point: Only offerors who can fulfill our technical requirements proceed to the next step. It is rare, but we have had cases where none of the offerors passed the technical evaluation.

For those proposals that receive 525 or more points, their scores are adjusted to maintain the balance between the technical and cost components. The proposal with the highest technical score is adjusted up to 700 points. All other proposals with 525 or more points receive a prorated technical score calculated using the following formula: P/H x 700 = V (P = Technical score of the proposal being adjusted; H = Original technical score of the highest ranking proposal; V = Assigned points for proposal being adjusted.)

Phase III

Cost evaluations are performed by the DOAS Contracting Officer and, for this example, has a maximum of 300 points. Important note: Cost proposals are not opened by the contracting officer until the using agency provides him/her with the final results of the technical proposal to avoid any contamination of the technical evaluation by cost data. There can be no cost data contained in the technical proposal. Cost proposals must be presented on a fixed cost basis.

The proposal with the lowest total cost is awarded 300 points. All other cost proposals deemed to be acceptable will receive a prorated score calculated using the following formula: L/R x 300 = Z (L = Total cost of the proposal with the lowest total cost; R = Total cost of the proposal being ranked; Z = Assigned points.)

The resulting cost proposal scores will be added to the adjusted technical proposal scores developed in Phase II to identify the apparent successful offeror. The results are sent to the requesting agency and they then confirm the selection. Once the selection is approved through the agencies channels, the contract is signed and the results of the evaluation are posted on the registry.

Using this method, the state of Georgia can select a vendor that offers the best value to the state: It virtually guarantees an able vendor at a competitive price.

Pete Penny
Senior Contract Administrator
Georgia Department of Administrative Services

A FAIR, OBJECTIVE AND OPEN PROCESS

Before proceeding further, it is important to clarify terms that appear in the problem and solution statements. A request for proposals (RFP) is a solicitation method where price is not the most important evaluation criteria used in making the award decision. An invitation for bid (IFB) is the procurement method used if price is to be the determining factor in awarding a contract. The other significant difference in these two procurement methods is that an IFB requires detailed specifications that allow objective measurement of what is being offered between competing responses. It is also important to point out that only if it is determined a response complies with the required specifications is price considered. The important point to be kept in mind is that poor specifications will result in poor responses, which result in poor contracts, which result in unsatisfactory outcomes. Therefore, the correct statement is lowest bidder meeting specifications.

The RFP solicitation process is designed to take price into consideration, but to do so among a number of other evaluation criteria. In fact, price may be allocated the lowest number of evaluation points of all the criteria identified in the solicitation to determine the successful vendor. For example, out of 100 total evaluation points available, price may only account for five of those points. Other evaluation criteria, such as innovative park experiences or new/upgraded facilities, may be assigned point values much higher. An important point to remember is that the evaluation criteria must reflect what is important to achieve the outcomes you desire. Assigning the points in this manner forces solicitation respondents to focus on those areas as opposed to areas they feel are important or are to their greatest advantage.

Another differentiation between an IFB and RFP is that the RFP doesn't contain detailed specifications. For the purposes of an RFP, the scope of work must focus on outcomes, not detailed explanations on how to run the park. Tell the vendors what your vision is for these facilities and let them tell you how they will achieve that vision. This provides each vendor the opportunity to be as innovative as possible and allows the governmental entity to gain from that innovation.

It is critical that criteria be placed in the contract that allow the contractor's performance to be objectively measured. There are many ways of doing this, but it is critical to be able to document performance that in turn allows deficiencies to be identified and corrective action to be taken. It is equally important to put in place a strong contract monitoring program that continuously reviews contract compliance and takes action when required. Remember that the contractor is your partner and their success or failure is your success or failure. It is important to view contracts as partnerships rather than adversarial relationships.

Regarding how the solicitations should be issued and whether the contracts should be fixed price for the term, it depends. In order to get experience while managing risk, it might be prudent to issue management solicitations for the smaller, less complex parks first. This provides an opportunity to develop a system that will be very beneficial when the larger, more complex park solicitations are undertaken. In addition, I would not put the maximum contract value in the solicitations. While it is necessary to know the cost of supporting each park for evaluation purposes, let the vendors propose their fee based on the innovation and business plans contained in their response. If the fees are too high, the best and final offer process can be utilized to refine the scope of work and achieve the required expenditure level. I would also recommend that the solicitation provide the vendors an opportunity to share in any savings or increased revenue realized through innovations and operational improvements they put into place. The opportunity to earn higher fees is intended to motivate them to a higher level of performance and will be beneficial to both parties if it can be achieved.

Finally, investigate what other governmental jurisdictions are doing in this area. There is a good possibility that this has already been done somewhere else, which provides a tremendous opportunity to learn from others what worked and what didn't.

Wes Baysinger
Director, Materials Management
Maricopa County, Arizona

REMEMBER COMMUNITY INPUT

It was stated that these parks were revenue-providing, both direct and indirect. If you release a proposal and then a request to bid without community input, you could end up with a bunch of expensive, non-used facilities.

Often when legislatures make mandates, they forget that the public is affected. Just as often I have seen those folks releasing RFPs forget input from end users. I believe that all who have given input have given valuable knowledge and insight. But please do not forget the ultimate end users.

Cameron Lewis
Community Resource Developer
Idaho Department of Health and Welfare