Process Objective: Source Selection Reform
Rapidly reduce the field of prospective bidders to identify the most qualified companies and convince those companies who are not most qualified not to continue pursuit or submit proposals.
Additional benefits of the process are to dramatically reduce source selection time and costs for both government and industry.
Process Summary: Four Weeks
The rapid down-selection process consists of a quick but formal assessment by the government of a small number of relevant qualifications of interested bidders to determine those companies that are most qualified for the contract opportunity. The process takes approximately four weeks from start to finish.
Potential bidders that are determined to be not the most qualified are contacted by the government at a very senior level within the company with the recommendation not to continue to pursue the opportunity since they are unlikely to be the/a successful bidder. Based on the government assessment and feedback that a company is unlikely to be successful in winning the contract, senior management within companies voluntarily cease activities to pursue the opportunity (in favor of pursuing other opportunities with higher probability of success).
This process has been very successfully used a number of times.
The rapid down-select process works fundamentally because companies in general have more potential contract opportunities to bid than they have resources (people and funding) to support.
Step 1: (Early) Solicitation of industry interest
Note that it is very important that this first step begin early in the acquisition process and well before a formal RFP, and preferably well before a draft RFP. Otherwise, companies may have already invested considerable resources in pursuit of the opportunity and will be reluctant to forgo pursuit activities.
The first step is for the government to announce its intention of conducting a rapid down-selection for the upcoming acquisition in order to identify the most qualified potential bidders. Concurrently the government will request submission of information from industry using a request for information (RFI) that can be used to determine the most qualified contractors.
The RFI should be constructed so that it requests only that information that will help distinguish the bidders who are most qualified from lesser-qualified potential bidders. The information requested in the RFI should be focused (e.g., 5-7 questions) and tailored to the specifics of the upcoming procurement action. Industry responses would be expected to be approximately 10- 15 pages with two weeks allowed to submit responses to the RFI.
An example RFI question might be, assuming the purpose of the contract is to facilitate transition of technology solutions from research and development to operational use, to ask for specific examples where the prospective bidder had successfully done technology transition including describing the role of the contractor, key issues that had to be addressed, and how success of the transition was objectively assessed.
As another example, if the contract was for an integrated solution of products against very high reliability criteria, the RFI should request description of examples (ideally several) where the company had successfully engineered, developed and/or purchased, and delivered integrated solutions of a similar nature and complexity as what is envisioned in the future acquisition contract as well as how the high reliability was demonstrated in these instances.
Step 2: Government Evaluation of Industry RFI Responses
This step closely resembles a mini source selection process, but it is accomplished in about a week (or two) rather than months for a formal source selection. Prior to receipt of industry RFI responses, the government team will develop and document desired characteristics of the most qualified prospective bidders for each question. These characteristics are used as the benchmarks for evaluating the RFI responses. The industry responses are scored with each question being rated (for example on a 1-10 scoring system). Brief summary notes are developed to support the scoring.
Step 3: Determination of Most Qualified Prospective Bidders
The scores and notes for each prospective bidder are reviewed by a senior government individual ideally not involved in Step 2 of the evaluation process. This step also resembles a mini source selection process. In conducting the review, the industry submissions are referred to by letter (e.g., Respondent A, Respondent B, etc.) to reduce the potential for bias. The evaluation team provides a summary of the evaluation results, summarizes the discriminating differences, and shows the rank ordering of the companies from highest score to lowest score.
The senior individual first asks questions to gain comfort with the evaluation process. Then the discussion focuses on where the cut off should be for the group that will be identified as the most qualified bidders. Factors that influence this are the closeness of the scores, natural break points (i.e., there is a big gap between a set of scores and the next highest scoring company), and finally how many bidders the government wants to ensure adequate competition (e.g., the number of bidders would be larger if multiple awards are anticipated). After reviewing the scores and rationale, the senior individual makes the determination of the ‘most qualified’ companies.
Step 4: Notification of Bidders that are Not Most Qualified
Other than the need to conduct the rapid down-select process early in the process and specifically before companies have invested substantial resources, this step is the most critical to success of the rapid down-selection process. In concept, the step is relatively straightforward: a senior level government individual will place a telephone call to a very senior-level person in each of the companies who were not deemed ‘most qualified’. However, the manner in which this step is conducted is very important.
First, the government person who is making the contact needs to be recognized by industry as someone who can speak with authority on behalf of the government acquisition community. This should be a senior government executive, ideally an SES or Flag Officer for a large acquisition, in the acquisition community. For example, a Program Executive Officer (PEO) would be an appropriate person to make the calls to the bidders who were not deemed most qualified.
Second, the person contacted in the company must be a very senior level executive. Ideally, this executive is the CEO, COO, President, or a Senior Vice President.
The words used in the communication to the industry executive are very important. They must be exactly or similar to the following:
“Hello, my name is [Mr/Ms/Gen]. I am [describe role/title within the organization]. I am responsible for the upcoming acquisition of [Project] in the [name of organization]. Our organization recently conducted an evaluation of companies in order to determine those who were the most qualified to provide the products/services required for [Project]. Your company responded to our RFI where we asked for a summary of experience that would be required for the [Project].
“We then conducted a formal evaluation of your response against the expected criteria developed for [Project]. After a formal review of your response, I/we have determined that you do not stand a good chance of being a successful bidder for the [Project]. Therefore, I recommend that you not continue to pursue the [Project]. My team will contact your company’s point of contact and provide a debriefing of our evaluation to your team and explain our process and how your company scored in the evaluation.”
Note that the wording used does not say that the company cannot bid; the wording is that the government recommends that you not bid due to the very low probability of success based on the evaluation of the RFI response.
Explanation of Why This Process Works
The rapid down-select process works fundamentally because companies in general have more potential contract opportunities to bid than they have resources (people and funding) to support. Therefore, if they are informed prior to investing substantial resources that they have a very slight chance of winning, the prudent course of action by senior management is to forgo pursuit of that opportunity in favor of other opportunities with a higher probability of success.
Critical to the success of the rapid down-selection process execution is the following:
- The down-selection must be done early in the process, specifically before the investment in preparing for and bidding on a solicitation is largely a sunk cost. There is no magic here. Companies are very willing to redirect their investments if they have not already committed substantial resources to a course of action.
- The executive who is contacted in a company that is determined not among the best qualified, must be a very senior level individual. It is recommended that one start at the very top of the organization and work down only if necessary due to the size of the organization.
The reason is simple. it is at this level where resource allocation decisions are made. When this executive is told that his/her company has a very low probability of success, their decision is easy and automatic — we (the company) will not bid this and will focus scarce resources on other pursuits. A less senior person in the company may be reluctant to forgo the opportunity to bid since they may have included the opportunity in their business plan. The level of engagement is critical as the response will likely be different from less senior management.
This process has been used repeatedly with consistent successful results. In almost every case when a senior executive was contacted to inform them that they were not among the most qualified, they responded with: thank-you. The ‘thank you’ was because the process prevented the company from wasting resources where there was almost zero potential for success. This response is contrary to what many in government might expect. This process works not because it is based on a law or an acquisition regulation, but because it is based on common sense: companies don’t stay in business by investing resources in pursuits that have a low probability of success.
As an interesting anecdote, the author only had one instance where the government program team heard from a ‘not best qualified’ company who indicated that they were still planning to pursue bidding. In this instance the senior executive was contacted again. He quickly responded that he was not aware of his team’s plans to continue to pursue the effort but that it would stop immediately. He appreciated the call.
Lawyers and contracting officers will correctly observe that this rapid down-select process does not preclude a company who is not among the best qualified from bidding on the opportunity. One can hypothesize conditions where this might make sense to a particular company. However, the author never had any company continue pursue bidding after being informed that they were unlikely to be successful in a source selection.
Upon executing this process, the speed with which the source selection process can be executed accelerates dramatically. Bidder’s conferences can be held in a small room rather than an auditorium. Discussions on acquisition strategy, RFP structure, and evaluation criteria are focused on a small group of companies and quick. Finally, proposal evaluation time is significantly reduced, in some cases by an order of magnitude.
John M. Gilligan was a former Program Executive Officer (PEO) in the United States Air Force