What criteria do you utilize to determine if you will use a RFQ or RFP under FAR part 13 procedures?
Great question! The answer is simple: the criteria is whether you want a quote or a proposal. However, determining when and why you want a quote vs. proposal is harder to articulate.
Let’s see if we can answer this as a group by discussing the Pros and Cons of each (RFQ/Quotes and RFP/Proposals).
I’ll go first:
RFQ’s are essentially requests for information and offer much more flexibility than RFP’s. For example, a resultant purchase order (government offer) doesn’t have to mirror the quote … the terms and conditions can vary and doesn’t constitute a counter offer. (this is important in a legal sense, but also for skirting clearance process mandates regarding negotiations)
I’m going to set the question up a little more in case people come to this without reading the discussion in this topic:
FAR 13.003(g) provides the authority to request a quote (RFQ), bid (IFB), or proposal (RFP) using the procedures in FAR Part 13.
FAR 13.003 – Policy
(g) Authorized individuals shall make purchases in the simplified manner that is most suitable, efficient, and economical based on the circumstances of each acquisition. For acquisitions not expected to exceed –
(1) The simplified acquisition threshold for other than commercial items, use any appropriate combination of the procedures in Parts 13, 14, 15, 35, or 36, including the use of Standard Form 1442, Solicitation, Offer, and Award (Construction, Alteration, or Repair), for construction contracts (see 36.701(a)); or
(2) $7 million ($13 million for acquisitions as described in 13.500©), for commercial items, use any appropriate combination of the procedures in Parts 12, 13, 14, and 15 (see paragraph (d) of this section).
Here is some information on quotes.
FAR 13.004 – Legal Effect of Quotations.
(a) A quotation is not an offer and, consequently, cannot be accepted by the Government to form a binding contract. Therefore, issuance by the Government of an order in response to a supplier’s quotation does not establish a contract. The order is an offer by the Government to the supplier to buy certain supplies or services upon specified terms and conditions. A contract is established when the supplier accepts the offer.
(b) When appropriate, the contracting officer may ask the supplier to indicate acceptance of an order by notification to the Government, preferably in writing, as defined at 2.101. In other circumstances, the supplier may indicate acceptance by furnishing the supplies or services ordered or by proceeding with the work to the point where substantial performance has occurred.
(c ) If the Government issues an order resulting from a quotation, the Government may (by written notice to the supplier, at any time before acceptance occurs) withdraw, amend, or cancel its offer. (See 13.302-4 for procedures on termination or cancellation of purchase orders.)
Here is information on offers, bids, proposals, and quotes.
FAR 2.101 – Definitions.
“Offer” means a response to a solicitation that, if accepted, would bind the offeror to perform the resultant contract. Responses to invitations for bids (sealed bidding) are offers called “bids” or “sealed bids”; responses to requests for proposals (negotiation) are offers called “proposals”; however, responses to requests for quotations (simplified acquisition) are “quotations,” not offers.
I consulted Google to find two other threads on the internet with a similar question. Neither have a answer about pros & cons choosing, haha:
Here’s an advantage to issuing a purchase order from a quote:
FAR 13.004(c ) If the Government issues an order resulting from a quotation, the Government may (by written notice to the supplier, at any time before acceptance occurs) withdraw, amend, or cancel its offer.
Can you expand on this? Are you advocating you can get by with only one contract clearance because you’re not technically conducting discussions? Reference
AFFARS 5301.9000 Scope and Definitions. Would you have some sort of exchange of information to decide on the updated terms & conditions?
We were just having a discussion about what we are requesting with our CSO.
Quote, proposal, offer, or something else? We anticipate most contracts/orders will be $100K or less. We settled on proposal, but I don’t think we had a strong reason for it. We looked at Broad Agency Announcements (BAAs) and settled on proposal since that is what BAAs use.
Should we be asking for quotes?
What I should have said is skirting the clearance process for discussions. Essentially, AFFARS 5301.9000(d) and (e) are written towards proposals and discussions, respectively. Quotes aren’t proposals and negotiations under SAP aren’t necessarily discussions under FAR Part 15. Therefore, the clearance approvals to begin negotiations, bargain (get revised quotes), etc. do not apply. Theoretically, I could employ this up to $7M.
I challenge people to send a purchase order (an offer) for less than the quoted price and see how it goes. You might be surprised!
(c ) “Business Clearance” means:
(1) For competitive acquisitions, approval to issue the solicitation.
(2) For noncompetitive contract actions, approval to begin negotiations.
(d) “Begin negotiations” means, for the purpose of noncompetitive contract actions, starting discussions with an offeror for the purpose of reaching agreement on all aspects of the proposal. Initiation of audits and fact-finding necessary to evaluate the proposal and develop the Government’s negotiation objective do not constitute negotiations.
(e) “Contract Clearance” means:
(1) For competitive acquisitions conducted without discussions, approval by the clearance approval authority for the Source Selection Authority (SSA) to make the decision to award.
(2) For competitive acquisitions with discussions –
(i) Approval by the clearance approval authority for the SSA to request final proposal revisions in accordance with FAR 15.307; and
(ii) Approval by the clearance approval authority for the SSA to make a source selection decision.
(3) For noncompetitive contract actions, approval by the clearance approval authority to award a contract or contract modification/contract action.
- No non-competitive business clearance since you’re dealing with a quote, reference AFFARS 5301.9000(b)
- No 2-step competitive contract clearance because you aren’t conducting discussions, reference AFFARS 5301.9000(e)(2). However, AFFARS 5301.9000(e)(1) would apply.
Correct. So here’s what it could look like.
- Get CAA approval to issue RFQ (business clearance); and issue RFQ
- Receive and evaluate quotes
- Pick a quoter to negotiate with and negotiate
- Send quoter unsigned purchase order for their signature
- Get CAA approval to award (i.e., sign and return purchase order)
Eliminated review and approval of ENs, PPNM, PNMs, FPRs (or their equivalents).
Looks like we have a textualist (or maybe a strict constructionist) on our hands,
Plain language…it’s the law,
*rules regarding statutory, regulatory, and contract interpretation would make a great discussion topic
We have listed some benefits of RFQs. Under what scenario (if any) would it make sense to issue an RFP? What are the pros & cons? Can you request proposals and follow FAR Part 13 evaluation & selection procedures?
RFPs are suitable when the solicitation provides a defined purpose, objective, and constraints (think concept), rather than a definite functional or detailed specification. RFPs may also be useful when seeking innovative solutions to requiring activity problems.
Issuing an RFP can formalize the acquisition and provide ‘procurement integrity’ protections that may not apply to RFQs and quotes (see FAR 3.104); this can be a pro or con.
A major RFP con that many are not aware of is that GAO will hold offices to the FAR Part 15 rules if they aren’t mindful and truly simplified. (see Finlen Complex, Inc., B-288280, October 10, 2001; and Kathryn Huddleston and Associates, Ltd., B-289453, March 11, 2002)
- FAR 14.502 may provide some points to consider.
- I would probably use an oral RFQ over an oral RFP
- RFQs being FAR Part 13 only is a myth … RFQs are integral to FAR Part 8 too
Would anyone use an RFQ for a cost reimbursement action? How about on a relatively undefined action with a Statement of Objectives (SOO)?
Can you use an RFP under FAR subpart 8.4?
Let’s convince people it’s important whether you issue a RFQ vs RFP. Does it really matter or is this just an academic discussion?
What’s an actual scenario where you would seriously regret issuing one or another? For the person who says this is irrelevant 95% of the time what would we say?
Does it really matter? I’d say it could. For example, it is inappropriate and contrary to FAR SubPart 8.4 to use RFPs under the ordering procedures for Federal Supply Schedules. Additionally, many proposals are not responsibly accepted and incorporated into a contract, which presents legal and other risks…that is a real reason to consider RFQ vs. RFP.
Nonetheless, if we’re honest, most everything in contracting is academic. When has a contracting error lead to a catastrophe or accountability? (read the annual antideficiency reports to understand the lack of holding people accountable)
I doubt the RFQ/RFP decision is really a source of any meaningful problems outside of reviews and inspections regarding PIIDs.
Maybe there should be a practical difference such as RFQs are best suited for price and price related factors only; whereas, RFPs are suited for priced and non-priced factors.
This is where I think the concept of Mission Focused Business Leadership is helpful. Some contracting issues matter to the mission and others don’t.
It would be fun to make a heat map of different solicitations and contracts to identify where you are most likely to lose in court in a way that impacts the mission (based on data, not common knowledge) or run into another issue that impacts the mission.
Maybe in a solicitation, the Q or R is very lightly colored and we can simply say
if you are using SAP, know you can ask for a proposal and understand
FAR 13.004 - Legal Effect of Quotations, but if you ask for a quote you’ll be fine 99% of the time. Now let’s go re-read Competitive Processes in Government Contracting: The FAR Part 15 Process Model and Process Inefficiency by Vern Edwards and focus on developing smart and innovative evaluation criteria.
This the beauty of asking questions and debating a subject, because in order to be better we need to have this conversations. This is what business focused leader will do, discovering what makes business sense within the parameters the regulations allows. Thank you for sharing your thoughts, it allows me to consider perspectives that I did not even think about.
I like the heat map idea and would be interested in playing with it but, frankly, I don’t know if losing in a tribunal matters to the mission in all, most or even many cases. For example, during a protest the HCA can award or continue performance; and in a dispute the contractor has a duty to proceed.
So…if performance can continue, what other remedies available in a protest or dispute? Monetary relief. Therefore, the biggest risk the government is facing is a financial one. If we award a poor contract, award to a poor or nonresponsible contractor, or lose a protest or dispute the worst outcome is monetary - specific performance or injunctive relief is generally not available or likely. (Agencies have access to a ‘Judgement Fund’)
What is the cost of poor contracting? I don’t know, but we should look, in part, at manhours, cost overruns, reprocurement costs, and remedy/relief fees and expenses paid.
Now, back to the heat map. Protests are really hard to lose and are the Boogey Man of acquisitions. See the protest stats below and remember, according to AFBIT-Lite, the Air Force awarded 56,169 actions in 2018 (protests are rare; sustained protests are rarer):
Another benefit of RFQs:
… late quotations may be considered up to the time of issuance of the order, because an RFQ, unlike a request for proposals (or an invitation for bids), does not seek offers that can be accepted by the government to form a contract. Rather, the government’s purchase order represents an offer that the vendor may accept through performance or by a formal acceptance document. DataVault Corp., B-248664, Sept. 10, 1992, 92-2 CPD para. 166 at 2. Moreover, we have found that language in an RFQ requesting quotations by a certain date does not establish a firm closing date for receipt of quotations, absent a late submission provision expressly providing that quotations must be received by that date to be considered. Instruments & Controls Serv. Co., B-222122, June 30, 1986, 86-2 CPD para. 16 at 3.