1145 Engaging with Industry - Legal Presentation 2025.pptx

Engaging with Industry

Briefer, Position May 14, 2025 Updated as of Feb 19, 2025

“Our National Defense Strategy directs our intentional engagement with industry to harness and protect the National Security Innovation Base as well as modernize key capabilities. Cultivating a competitive mindset requires that we optimize our relationships with industry to drive higher performance while always remaining within the letter and spirit of ethics and procurement regulations.”

“Engaging with Industry,” Memorandum, Deputy Secretary of Defense (March 2, 2018)

Warfighter Always

PEOPLE PRECISION POSTURE PARTNERSHIPS

DoD policy is that personnel can and should engage in communication with industry. However, Such communications should be fair, even, and transparent and conducted in an appropriate manner, and Must take into consideration applicable ethics and procurement laws and regulations.

This requires that personnel maintain awareness of what is and is not appropriate to ensure that lack of knowledge is not causing them to unnecessarily restrict communications, on the one hand, or to engage in inappropriate communications, on the other hand.

In other words, personnel should find that midfield between not communicating due to fear of a misstep and inappropriately communicating due to lack of knowledge.

Engaging with Industry

Examples of Applicable Laws/Regulations:

Government officials may not participate personally and substantially in a particular matter that will have a direct and predictable effect on their financial interests or those of their spouses, minor children, general business partners, or prospective employers.

Government officials shall not knowingly disclose contractor bid or proposal information or source selection information.

Government officials may not disclose trade secrets or other proprietary information (which includes processes, operations, style of work, or apparatus, as well as the identity, confidential statistical data, amount or source of any income, profits, losses, or expenditures) unless authorized to do so by law. Such legal authority is rare.

Employees shall act impartially and not give preferential treatment to any private organization or individual. Employees should not participate in particular matters where the circumstances would cause a reasonable person with knowledge of the relevant facts to question the employee’s impartiality.

Employees shall not use or allow the use of nonpublic information to further any private interest, whether through advice or recommendation, or by knowing unauthorized disclosure.

Engaging with the Government – Best Practices:

Contractor and agency should set limits prior to the meeting, understand roles and authority of attendees.

Both parties should have an understanding of one another’s Ethics rules/policies.

The government cannot allow actual or perceived special access.

Meetings should be “powered down” to lowest appropriate level.

The parties cannot discuss current contracting issues, pending litigation, or commit to an action.

The government cannot disclose nonpublic information (source selection, cost info, bid ranks, proprietary, classified, Privacy Act, etc.).

The parties must avoid even the appearance of impropriety.

Hiring Government Employees – Best Practices:

Government Employees should obtain a Post-Government Employment letter from an Ethics Official. – You can ask for a copy.

Any discussion of potential position can be seen as “seeking employment.”

Provide clear answers and directions in discussions to prevent actual or perceived conflicts.

Government employees should not be on “both sides of the table.”

Government employees on Deferred Resignation or Terminal Leave may have additional restrictions during the deferred resignation period.

Contracting with DLA

Types of Contracts most common to DLA (FAR Part 16):

Fixed Price: A firm-fixed-price contract provides for a price that is not subject to any adjustment based on the contractor’s cost experience in performing the contract. This contract type places upon the contractor maximum risk and full responsibility for all costs and resulting profit or loss. It provides maximum incentive for the contractor to control costs and perform effectively and imposes a minimum administrative burden upon the contracting parties. FAR § 16.202-1.

Fixed Price Contract with Economic Price Adjustment: A fixed-price contract with economic price adjustment provides for upward and downward revision of the stated contract price upon the occurrence of specified contingencies. FAR § 16.203-1.

Contracting with DLA (Cont.)

IDIQ: An Indefinite delivery, indefinite quantity (IDIQ) contract provides for an indefinite quantity of goods or services for a fixed time. They are used when DLA can't determine, above a specified minimum, the precise quantities of supplies or services that DLA will require during the contract period. FAR § 16.501-2.

Guaranteed Minimum: The contract must require the Government to order and the contractor to furnish at least a stated minimum quantity of supplies or services. If ordered, the contractor must furnish any additional quantities, not to exceed the stated maximum.

The contracting officer should establish a reasonable maximum quantity based on market research, trends on recent contracts for similar supplies or services, survey of potential users, or any other rational basis.. FAR § 16.504(a)(1).

FAR 16.503 IDIQ Requirements Contracts

Provides for filling all actual purchase requirements of designated DLA activities for supplies or services during a specified contract period (from one contractor), with deliveries or performance to be scheduled by placing orders with that contractor. FAR § 16.503(a).

The contracting officer must state a realistic estimated total quantity in the solicitation and resulting contract based on reliable market information. FAR § 16.503(a)(1).

Part 13, Simplified Procedures for Certain Commercial Items

FAR Subpart 13.5 authorizes the use of simplified procedures for the acquisition of supplies and services in amounts greater than the simplified acquisition threshold ($250,000) but not exceeding amounts in FAR 13.500(c) ($15M), if the Contracting Officer reasonably expects that offers will include only commercial items.

The purpose is to award commercial solicitations in a simplified manner that maximizes efficiency and economy and minimizes burden and administrative costs for both DLA and industry.

FAR Part 15, Contracting by Negotiation:

Describes the procedures for competitive and non-competitive open market acquisitions exceeding the Simplified Acquisition Threshold.

For goods and services that are unique and not subject to market forces; therefore, a more rigorous procedure is required to ensure the goods are being obtained at a fair and reasonable price and that the goods obtained are of sufficient quality and value to meet the government’s need.

Lays out the foundational rules for negotiating, evaluating, and awarding these contracts.

FAR Part 15 is widely used and highly regulated.

Generally, DLA will create a Request for Proposals (RFP) and note which contractors will be eligible to submit proposals to the RFP.

Once proposals are submitted, DLA will determine a competitive range and “negotiates” with the contractors within that range.

DLA may engage in a trade-off process if DLA determines it “may be in the interest of the Government to consider award to other than the highest technically rated offeror.”

If so, the RFP will state whether all evaluation factors other than cost or price, when combined are significantly more important than, approximately equal to, or significantly less important than cost or price.

See, FAR §15.406.

Proposal writing – Key Observations:

Solicitations often state DLA’s intention to award without discussions!

GAO case law – offerors are responsible for submitting a well-written proposal.

Carefully read the solicitation and craft your proposal to answer DLA’s needs. Sometimes a picture may not be worth a 1,000 words.

Agencies are not required to “hunt and peck” for offerors’ solutions. Put technical solutions in the technical proposal, cost information in cost, and past performance in past performance.

Clarifications vs. Discussions:

FAR §15.306(b): Clarifications are limited exchanges, between the Government and offerors, that may occur when award without discussions is contemplated. Limited to minor revisions, such as obvious math errors, whose response will not alter the substantive nature of the proposal.

FAR § 15.306(d): Discussions are generally defined as exchanges with an offeror either to obtain information essential to determine the acceptability of the offeror’s proposal or allow the offeror to revise its proposal. If DLA conducts discussions with offerors, it is required to identify to the offeror all the deficiencies in its proposal. Additionally, DLA cannot just conduct discussions with one offeror, but rather must engage in discussions with all offerors being considered for award.

Late is late . . . most of the time.

Under the “late-is-late” rule, a proposal must be received by the government by the time stated in the solicitation. If the proposal is late—even by a minute—the government will not accept it.

One very narrow except applies to Requests for Quotes (RFQs). 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 the offer that the vendor may accept through performance or by a formal acceptance document. It follows that language in an RFQ requesting quotations by a certain date cannot be construed as establishing a firm closing date for receipt of quotations, absent a late quotation provision expressly providing that quotations must be received by that date to be considered.

Be wary of Contract Changes!

FAR § 43.102: Only contracting officers acting within the scope of their authority are empowered to execute contract modifications on behalf of the Government. Other Government personnel shall not- (1) Execute contract modifications; (2) Act in such a manner as to cause the contractor to believe that they have authority to bind the Government; or (3) Direct or encourage the contractor to perform work that should be the subject of a contract modification.

FAR 52.243-7, Notification of Changes, provides instruction about how to report Government conduct that the Contractor considers to constitute a change to this contract, an opportunity to seek clarification, and a manner by which to seek an equitable adjustment for added work.

Talk to Us!!

Timothy L. Wilson tim.wilson@dla.mil 445-737-5072

Kevin F. Phillips kevin.1.phillips@dla.mil 445-737-0048

Robert K. Palmer robert.k.pamer@dla.mil 445-737-2530

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