Summary
DISA should hit ‘Ctrl-Alt-Delete’ on this $8.2B IDIQ draft solicitation for cloud service offering and reboot. This amended draft still contains some substantial holes and conflicting signals on streamlined pricing requirements.
Background
The Defense Enterprise Office Solutions (DEOS) is an $8.2B IDIQ contract for integrated enterprise cloud service offering (CSO) for common communication, collaboration, and productivity capabilities serving approximately 3.15 million DoD consumers across three enterprise environments: “NIPRNet”, “SIPRNet”, and Denied, Disconnected, Intermittent, and Limited Bandwidth (D-DIL). The contract contemplates core based services including: Messaging, Office Productivity, Content Management, and Collaboration across four user types: Economy User, Basic User, Business User, and Enterprise User.
Source Selection Snapshot
The acquisition is a Full & Open competition with a single contract award using a best value 2-step source selection process. Evaluation factors include, Technical Approach Factor, Price Factor, and Past Performance Factor. The factors above are listed in descending order of importance. All evaluation factors other than cost/price, when combined, are significantly more important than cost or price. Our estimated scoring puts Technical Approach at 50%, Cost/Price at 30%, and Past Performance at 20%. The Total Evaluated Price (TEP) will consist of the contractor’s proposed price for the base period plus all option periods, to include pricing for the additional 6-month period. While cost realism is not appropriate since a fixed price contract is contemplated, importantly, no price realism is contemplated either. DISA makes no statement to indicate that price realism will be performed. Offerors should pay attention to this when structuring their pricing.
Currently, there is no task order award accompanying the IDIQ contract award. The SOO states the anticipated initial task order issued against this ID/IQ could potentially include the current 1.8 million legacy United States territories and possession NIPRNet DEE user population.
Pricing Requirements
The draft RFP requests a 30 page maximum pricing volume consisting of: Tab (A) Price Narrative (10 pages), Tab (B) - Price Information and Supporting Data (10 pages), and Tab(C) - Other Information (10 pages). The Excel pricing template (Attachment 6) is organized by CLIN/SLIN and SOO task and requests unit prices, quantities, and extended price. The pricing file is segregated between the 5-year base period and the 5-year option period. However, as we discuss below, the pricing instructions do not appear to align with the information requested in the Excel pricing model.
Pricing Issues
There are some noteworthy pricing issues discussed below including:
- (Un) Streamlined Pricing Volume
- No Meaningful Pricing Parameters Provided
- CLIN Confusion
- Conflicting Time Periods
- Plugged Up Plugs
- Odd Small Business Goals
(Un) Streamlined Pricing Volume
The RFP’s documentation and pricing detail requirements seem to conflict with the intent to streamline pricing. DISA invoked FAR Part 12 for pricing this contract (See L.5.4.2). In theory, this should mean that pricing data from bidders is sufficient for DISA to establish reasonableness of contract line item pricing from market comparisons of prices or from direct comparison of all offeror proposed prices. However, the RFP goes on to state, “Each Offeror’s Cost Submission must describe and price all resources required to accomplish its proposed technical and management solutions to the Government’s requirements. This cost or pricing data shall be submitted as described in Table 15-2 of FAR Part 15.408. Cost or Pricing Data submitted must be sufficient to support the total price for each CLIN, providing details at the sub-CLIN level in conformance with a Work Breakdown Structure to Level 3.” In another section the RFP states, “The Government is providing a detailed statement and description of requirements and expects Offerors to describe in detail the specific resource requirements including labor, materials, and specialized items unique to their approach to fulfilling every aspect of the Government’s requirements.” This language, along with Table 15-2 requirement, represents a cost breakdown of proposed price, not merely a breakdown of price by CLIN.
These requirements for cost information and documentation are contrary to the spirit of both commercial pricing and of a streamlined pricing volume. If this sort of cost detail is required, it also begs the question of commerciality of DEOS. Offerors should push back hard on DISA to clarify whether this is truly a FAR Part 12 pricing drill or if it’s really a full blown FAR Part 15 acquisition requiring data other than certified cost and pricing data. Finally, if a WBS is really required, we believe DISA should be on the hook to provide a Level 3 WBS to ensure some level of comparability between offerors.
No Meaningful Pricing Parameters Provided
The RFP instructs offerors to develop a Firm Fixed Price proposal “to meet the requirements as detailed in the Defense Enterprise Office Solutions (DEOS) SOO, and in accordance with the detailed listing of non-developmental requirements provided in the DEOS Functional Requirement Document (FRD).” However, the combined SOO, FRD, and PWS sorely lack any significant scoping, scaling, and quality of service information necessary for offerors to fully develop a firm fixed price. The draft RFP makes no references to bidder library resources that would surely be necessary for bidders to competently, comprehensively, and confidently develop their firm fixed pricing. Large incumbent insiders already doing business with DISA will clearly have an information advantage here that can be leveraged to scope the contract pricing. ‘Outsiders’ should complain.
CLIN Confusion
The CLINs identified in Section B of the solicitation do not align with the CLIN structure provided in Attachment 6 pricing template. Section B identifies (6) CLINs loosely align by DISA environment (NIPR, SIPR, D-DIL) and location (CONUS vs. OCONUS), along with (2) CLINs for ODC and Travel CLINs for a total of 8 CLINs per contracting period. The Excel pricing template identifies 14 CLINs which 3 environments, (8) functional areas, (2) CLINs for travel and ODCs, and an add’l CLIN for the 6-month option. The pricing template appears to contain the more accurate and up to date contract line item detail. However, offerors should confirm with DISA which CLIN structure is appropriate.
We also note that Section B also refers to fixed price labor rates which DISA intends to use as ceiling rates for the IDIQ contract. However, the RFP contains no instructions or guidance to offerors on providing fixed price ceiling labor rates. Offerors should seek clarification.
Conflicting Time Periods
The RFP instructs offerors to submit pricing by Contract Year (CY) for a Five Year Base Period and a one (5)-Year Option Period, including option pricing for an additional 6-month period that may be authorized IAW FAR 52.217-8. Yet DISA’s Excel pricing template requests offerors to provide their pricing over the entire base period (5 years) as a single period. The same appears to be true for the Option period. Offerors should request DISA clarify whether the template can be revised to break out pricing by contract year.
Plugged Up Plugs
The draft RFP instructs offerors to use plug figures for Travel and ODCs. However, it’s unclear if the plugs represent annual figures or if they represent a total value covering multiple years. The Excel pricing Exhibit seems to imply these plugs represent multiple years. We’re also not sure why DISA chose to include the following requirement, “Any proposed ODCs shall be annotated in detail (e.g., quantity, description, etc. as applicable) and include supporting documentation to justify the proposed cost (e.g., vendor quotes, price history, etc.).” Since plugs are mandated, detailed documentation is unnecessary. Offerors should request relief from this documentation requirement.
Odd Small Business Goal
The RFP states, a small business subcontracting goal 13% of the total value of subcontracts based on the offeror’s proposed pricing for the period of performance. So, the small business goal is tied to the prime’s overall subcontract strategy. Heavy use of subcontractors would result in a more significant SB subcontract goal. Conversely, a “prime heavy” solution would result in small business subcontracting targets that are significantly less than overall federal goals. For example, if the prime subcontracts out only 10% of the work, then the small business goal for that prime would be 13% x 10% = 1.3%. Is this what DISA really intended?
Conclusion
There are some significant pricing bugs in the current DEOS draft RFP. We think DISA should hit ‘Ctrl-Alt-Delete’ on this solicitation for cloud-based services and reboot the pricing requirements.
