Contracting Officer Podcast Slides Knowledge Insights From Contracting

Contracting Officer Podcast Slides Knowledge & Insights From Contracting Officers 1

Episode 033 How Do Sole-Source Contracts Work? Original Air Date: June 29, 2015 Hosts: Kevin Jans & Paul Schauer 2

Formatting notes • Hyperlinks: Blue font indicates hyperlinks – presentation must be in ‘Slide Show’ mode to activate the link • Red bold font indicates a point of emphasis • Green bold font indicates CO’s personal comment or perspective 3

Introduction • Industry says, “I can do this for you, cheap and easy. ” • Customer says, “…just award it as sole source. It’s faster that way. ” • Really? • Purpose of this podcast: • To examine whether awarding a ‘sole-source’ contract is really faster than competing the requirements 4

What Are We Talking About? • Industry says, “I can do this for you. ” • Customer says, “Just award it sole source. It will be easier. ” • CO says: • “Faster to award and obligate the funds? Yes. • Easier to award? Maybe. • Easier to administer. Possibly. ” 5

What Are We Talking About? • FAR says: Contract ‘can’ be awarded sole source • Through FAR 6. 3 – Other Than Full and Open Competition • Through 8(a), WOSB, SDVOSB, and other socio-economic set-aside programs 6

When do Sole Source Contracts happen? • Acquisition Time Zones (from Podcast Episode 003) • Execution Time Zones (from Podcast Episode 084) • Requirements Zone • Kick Off Zone • Market Research Zone • Performance Zone • RFP Zone (proposal zone) • Re-compete Zone • Source Selection Zone • Wrap-up Zone 7

Why are Sole-Source Contracts Important? • The perception is that companies want them • Some do… especially those who have them • The perception is that customers want them • Some do… until they get burned • Happy customers want them • Users who are happy do not want competition just because the FAR says it is required. 8

Why are Sole-Source Contracts Important? • Competitors do not want them • Capitalists do not want them • Taxpayers do not want them (what if they actually save money? ) • However, they make sense often sometimes (see Episode 017) 9

Factors to Consider • What if you refined the requirement to make it competitive? • Do you really NEED that solution? • What if you took another month, week, or DAY to do an RFI? • Be on offense. Spend the time up front! 10

Factors to Consider • Tell Industry You are Looking to Compete the Requirement • They will rally to help you compete (because they want to win the work) • Or they will self-eliminate if given enough information to understand that they cannot compete and win 11

Factors to Consider • Sole Source negotiations • Weighted Guidelines (Episode 022) • “leverage” • “expectations” • Tripwires, landmines, and ‘misunderstandings’ woven into contract under theory of awarding quickly 12

Factors to Consider • Will a competition make an incumbent more “honest” during negotiations? • More innovative solution? • Lower price? 13

Why Should Government Care? • Book answer: • FAR 6. 3 says you have to compete • Our answer: • You may award faster, but… • You may pay more… if not in contract value then in labor and admin effort • Unless the winner bought their way in over the incumbent 14

Why Should Government Care? • What if one company is truly miles ahead of others but one of the laggards wins? • You have potentially wasted time while your winner reaccomplishes effort that the leader had completed • The Follow-on paradox: FAR says compete, so you do even though the users are happy, there are no “real” competitors, etc. • Have courage to pursue the sensible option 15

Why Should Government Care? • On the other hand: • If we want to get better at source selections, here’s our chance to do more, smaller ones! • This is how we learn how to do source selections well (instead of waiting until we hit the $100 M contract…) 16

Why Should Industry Care? • Competition is incredibly inefficient for industry • Writing a proposal to meet Section L & M requirements is a completely different world than writing a proposal that best describes and sells your product or strategy • What about Follow-on efforts? • If you target, and are AWESOME, you will win competitively and have more flexibility, have to share less pricing data, less admin, etc. 17

Summary • Sole source contracts are faster and easier to award. • That does not mean that the resulting contract is more successful. • And what are you really trying accomplish? • What if source selection unnecessarily delays mission satisfaction? 18

Contact us • We are on Linked. In, Twitter and Facebook • We also started the Government Contracting Network Group on Facebook. Join us there! • Send your topics to paul@Contractingofficerpodcast. com • For Community support, contact Shelley Hall at shelley. hall@skywayacquisition. com 19