CATEGORY: INNOVATION IN IMPLEMENTING ACQUISITION FLEXIBILITIES Bargaining to Achieve Mission Outcomes by JAMIE NELSON, MISSILE DEFENSE AGENCY The Missile Defense Agency (MDA) effectively used the bargaining technique allowed in the Federal Acquisition Regulation (FAR) to achieve timely award of a mission-critical, $3.3 billion competitive requirement for the Ground- based Midcourse Defense (GMD) Weapon System (GWS). When a single, unaffordable proposal was submitted, the Acquisition Team of program managers, acquisition, tech- nical, and contracting professionals researched and formulated a creative and unique solution which enabled both parties to fully clarify mission requirements and expectations and resulted in an affordable Final Proposal Revision. The on-time award of the GWS contract enabled ground system Builds 10A & 10B Development, Phased Array In-Flight Interceptor Communication System Data Terminal (IDT) Development, and Sustainment Support in the short-term. The team’s efforts established a 10-year enduring contract to execute ground system mission needs and fully field the Next Generation Interceptor (NGI) capability by 2030. The approved acquisition strategy intended to leverage maximum competition from industry partners on the GWS contract by competing the disparate components that comprise the next-generation capability of the GMD weapon system. However, the technical complexity of the requirement, coupled with competition-limiting Organizational Conflict of Interest (OCI) realities, ultimately resulted in only one proposal in response to the competitive solicita- tion. Unfortunately, the single industry proposal substantially exceeded the independent government cost estimate as well as the available budget. Despite receipt of only one unaffordable proposal, the Source Selection Evaluation Team devised a plan to push forward, strictly adhering to the GWS Source Selection Plan and Part 15 of the Federal Acquisition Regulation, Contracting by Negotiation. The team followed the standard competitive procedures, including establishing a competitive range and holding multiple rounds of discussions, and proposal updates from the offeror. The team’s responses to Requests for Information (RFIs) were drafted while keeping in mind what other RFIs might have been submitted by other potential offerors. This technique had the intended outcome of delivering the perception that there were multiple offerors still in competition for the award. While the intentional approach to retain the competitive forces of the source selection resulted in the single offeror reducing its price, the final proposal revision remained unaffordable. The team was faced with several potential courses of action, to include amending, canceling, or resoliciting the requirement. Finding none of these solutions palatable, the team researched additional solutions with the MDA leadership team. Thanks to this team’s leadership and drive, it identified an opportunity to leverage the broad authorities inherent in FAR Part 15 and Department of Defense Instruction 5000.02 to address the impasse. FAR Part 15.306, subparagraph (d), Exchanges with Offerors After Establishment of the Competitive Range , states the following, in part: Negotiations are exchanges, in either a competitive or sole source environment, between the Government and offerors, that are undertaken with the intent of allowing the offeror to revise its proposal. These negotiations may include bargaining. Bargaining includes persuasion, alteration of assumptions and positions, give-and-take, and may apply to price, schedule, technical requirements, type of contract, or other terms of a proposed contract. The Acquisition Team researched other instances across the DoD where bargaining was used successfully as well as extensive research of existing case law. The team engaged with numerous competition experts within the agency, as well as externally with other departments and federal agencies. The team employed a thoughtful, innovative, and disciplined approach to program management that achieved the desired outcome of awarding this mission critical contract on time and within budget constraints. To date, MDA had never used bargaining as a tool in a competitive source selection. This is because the discretion afforded by bargaining (i.e., persuasion, give and take, changes in schedule, and requirements) could lead to dispa- rate application of bargaining techniques among potential offerors (even those who chose not to submit a proposal), which, in turn, could increase the government risk of sustainable protest. However, since competition was already limited to a few viable providers and was further restricted due to OCI implications, the risk of sustainable protest was minimal. This risk was also balanced against the likelihood of not achieving an affordable solution without more open dialog between MDA and industry. Based on this research, the team concluded that bargaining, with open exchanges, was necessary to expedite contract award at an affordable price. This technique enabled the government to conduct more meaningful, back-and-forth
May-June 2025 | DEFENSE ACQUISITION
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