Thursday, December 2, 2010

Selection Records and Scores: Public Records or Confidential?

Generally, most information maintained by public agencies about selection processes for contractors, consultants, and vendors is a matter of public record and subject to disclosure to anyone requesting such information.  But there are important exceptions.

When to Withhold Information:  If a public agency is using a two or three step selection process, information about scores from the early selection stages is generally not something that should be disclosed until the complete selection process has been completed.  

2 Step Selection Process:  Under a two step selection process, an agency asks for qualifications first, followed by a price or cost proposal from a short-list of firms.  The scores from both the qualifications and prices are added together to determine the highest ranked firm.

3 Step Selection Process:  Under a three step selection process, an interview might be added in as a third step after qualifications are scored and before price proposals are received.

Risks of Disclosing Information Early:  Providing information about the scores from the qualifications and/or interview stages before the price proposals are due may invite firms to calculate what their price needs to be in order to win the award, a low price may not be beneficial to the public agency if the firm has not covered all of its costs, and it creates a less than open and transparent selection process.

Let me provide a couple of examples to illustrate:
  • GC/CM Selection:  In selecting a contractor to serve as General Contractor/Construction Manager (GC/CM) on a public works construction project, a three step process is generally used in the State of Washington.  Public agencies should not disclose the scores or order of ranking of the finalists selected to submit prices until after the deadline for submission of prices.  To disclose the scores for the qualifications and interview prior to the deadline for the prices invites contractors to calculate how low their bid needs to be in order to be the highest ranked firm.  There have been examples of public agencies in Washington who have made the mistake of disclosing the scores for the first two stages early with the result being that contractors have low-balled the project, essentially buying the award of the project.  Prices that are artificially low may cause performance problems for the public agency during construction.
  • Air Force Bid:  As part of the ill-fated $40 billion Air Force air-refueling tanker contract, the Air Force recently made a "clerical error" and sent critical price information received from the two finalists (Boeing and Airbus) to the competing firms.  In other words, Boeing received the Airbus pricing and Airbus received the Boeing pricing.  The final step of the selection process is for both firms to provide a best and final price offer to the Air Force.  Fortunately, both firms realized the mistake of the Air Force and returned the data to the Air Force, but it isn't known whether they looked at the information and obtained any advantage.  Click here for a Seattle Times article on the Air Force error.
Under a multi-step selection process, it is obviously very important to keep certain information confidential (scores, ranking, and pricing) until the final selection has been made.  Otherwise, the entire selection process becomes tainted, and may become the subject of a protest.  At a minimum, such early disclosure undermines the integrity of the selection process and decreases the public's confidence in the transparency of the process.
Mike Purdy's Public Contracting Blog 
© 2010 by Michael E. Purdy Associates, LLC

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