Government Contracting

You are a contract specialist at the Department of Occupational Guidance (DOG), a little known, but strategically important, federal agency. Over the years, the Department of Occupational Guidance has been assigned an increasingly broad range of missions. Like the Department of Homeland Security (DHS), however, it was created and grew over time with the reallocation of missions and resources from other, pre-existing agencies and offices. As a result, it has a somewhat disaggregated, mosaic-like organization chart and culture, which has been exacerbated by an extended period in which most of the department’s personnel have worked in a hodge- podge of temporary, substandard, and often poorly located office space.

In one of his last acts before completing his second term, President Heis Aout ordered the consolidation of the three largest satellite offices in your agency into the soon-to-be-completed, expanded, and fully renovated Department of Occupational Guidance headquarters building.
The renovations should be complete by September 30, 2017, and – after nearly a decade of displacements, delays, disruptions, and disappointments, what many in the agency view as “the great diaspora” – the agency will once again find itself all under one roof.

While none of the details are certain, your understanding is that as many as 1,500 FTEs (full- time equivalent employees) will work in the new building. (It is interesting to note that many of those FTEs are contractor personnel. Like many others, the Department of Occupational Guidance is staffed by a largely “blended workforce.”) Apparently, 1,200-1,300 people are expected to be in the building most days, with closer to 700 on Fridays (due to the flexible work schedule).

Many of the long-term agency employees were ecstatic to learn that the renovated building has a large, brightly lit space set aside for an agency cafeteria. The plans call for splendid floor-to- ceiling windows, and there’s even a large outdoor deck. The space was designed to be comfortable so agency personnel can linger and mingle. Everyone agrees that – after many years of working in satellite outposts – it’s time to try to reestablish some agency cohesion. And most of the employees don’t even know the best part yet!

You’ve been invited to the acquisition team planning meeting to discuss the future of the cafeteria and specifically, how to go about drafting and awarding the contract for the firm that will operate the cafeteria. In advance of the meeting, you learn that – in a unique agency experiment, a pilot project based on a Northern European public administration success story – the cafeteria will not be run as a concession. Rather, due to a unique Congressional appropriation, the agency is permitted to serve lunch to all personnel daily, at no charge to the employees. (For this purpose, all FTEs – whether civil servants, members of the armed services (on detail or loan), or contractor personnel – serving the Department will enjoy this daily largess.) Alas, there will be no breakfast or dinner, and no weekend service. The good news is that the contractor won’t have to deal with collecting cash from individual diners. The bad news is that no one in your agency has any experience working with a contract quite like this one.

Of course, employees are not required to eat in the cafeteria. In fact, they’re not required to eat at all. (It’s a free country, after all.) And nothing stops them from bringing their own lunch (for whatever reason). In other words, no one is required to attend or participate in lunch each day. For better or worse, the new headquarters building is in a much nicer part of town than the various satellite offices that previously housed DOG’s employees. The good news is that there are a number of restaurants within walking distance. The bad news is that they’re all rather pricey. They’re not the kind of places that government employees can afford to eat at on a daily (or even regular) basis.

The first major meeting of the acquisition team is scheduled for later this month.

Part A:

Before market research commences on the cafeteria contract, your boss asks you to prepare a brief memorandum for the acquisition team on the following topics. She encourages you to craft the memo so that the group will understand why they make the various decisions they need to make. While she suggests that your memo should offer food for thought, it should also give the group the analytical tools they need to agree on an approach.

She asks you to focus on four topics:
• What exactly are we buying: goods or services?
• What kind of contract makes sense – fixed-price (with or without incentive), cost- reimbursement, or something else?
• Could this be a commercial item contract? If so, does it make sense to go that route?
• In terms of procurement type, should we proceed using sealed bidding or competitive negotiations (and, if the latter, does LPTA make sense)?

Of course, your boss makes clear that she is much more interested in your analysis of each of these questions than your bottom-line answer. She’s more than willing to have you express a preference – if you have one – but she’s much more interested in having you guide the group through a thoughtful decision-making process for each question. In other words, she wants you to explain to the group how they should go about resolving each of these issues. (She also strongly encourages you to provide references to any FAR provisions that the acquisition team may need to rely upon when answering each question.)

Your boss also reminds you that – in an era of budget cuts and under-staffing – she’s quite busy and really doesn’t have time to read more than a few pages. She thus strongly encourages you to (please) limit your memo to three pages

Part B:

After turning in your memo, an acquisition intern in your office named Samantha stops by to ask you a few questions about the new cafeteria acquisition. Samantha, who joined the Department through the Presidential Management Fellows (PMF) program, admits that she knows a lot about public policy and administration, but nothing about government contracts. Indeed, she is finding the whole process to be quite different than she expected. Samantha’s boss is also part of the acquisition team, and her boss told her that, among other things addressed at the meeting, the acquisition team spent a lot of time talking about opportunities for small businesses to compete for government contracting opportunities.

In particular, Samantha explains that she has been reading about the FAR provisions that essentially require the agency to consider setting aside any given contract for competition among small businesses. She’s also heard a few people in your office discussing the so-called “Rule of Two” in relation to the cafeteria contract (and whether to set it aside for small business competition), but so far she hasn’t really been able to understand what this term means.

She asks you the following questions:
• What is the “Rule of Two”? She’s heard several of your colleagues repeatedly reference FAR 19.502-2, but as far as she can tell, the term “Rule of Two” isn’t anywhere in this provision.
• More generally, she asks for your opinion as to whether you think it makes sense that federal agencies are required to consider small business set-asides in nearly every contract. She asks you, “Shouldn’t the federal government care more about efficiency of the procurement process and ensuring that the goods/services it buys are of the highest quality? Isn’t the whole point to choose the very best contractor for the lowest price?”

You tell Samantha that these are both really good questions but that you don’t have the time right now to explain them to her right at this moment. You promise to respond, with a written email, that answers these two questions.