In discussing this issue at my site, there was some disagreement, so I figured I'd throw the issue out here. The discussion is "Level of Effort" versus "term" (or completion) types. It is sometimes debatable if the work is "services" or supply". If we knew for sure what the end result was it would be supply but because we don't it is often labeled a service- is a new radar sensing system based on software code change a "supply" or a "service" (one could write the contract either way).

The disagreement is on IDIQ type Task Order contracts for these “service” type efforts. In our area, one frequently knows there WILL be work, and on issuing the Task Orders, the work is reasonably defined, but at the time of contact, it is not. The discussion is if one is thereby forced to use LOE, and if so, how one can structure the LOE.

It is being argued that the only "LOE" method is to use hours. So the first issue is IF one uses Level of Effort (vs. term) can one use something other than hours to gage the level of effort.

The second issue is more difficult: CAN one use a “completion” structure for the overall contract if one knows one will have has "completion" type Task
Orders, but does NOT know how many one will issue, how frequently etc (i.e. one knows that any DO issued will be completion, but not much else)?

By Vern Edwards on Thursday, June 07, 2001 - 12:17 pm:

Peggy:

I don't understand your question(s).

Vern

By Peggy Richter on Thursday, June 07, 2001 - 12:30 pm:

The arguement is that you have to use an LOE type contract (specifying hours) even if you know that ALL task orders will be completion type (defined objective/ result) because one doesn't know how many TOs will be issued, etc. I'm not sure that this is true.

IF you do have to use an LOE contract, is it mandatory to always define LOE by hours or can one use a different criteria?

The contracts in question are IDIQ TO contracts (almost always CPFF) and usually defined as "service" contracts even though the TOs usually have true "supply" end items (defined objectives/ results).

By Vern Edwards on Thursday, June 07, 2001 - 12:41 pm:

Peggy:

Level of effort (LOE) and completion are pricing arrangements. If you're awarding an IDIQ task order contract the basic contract doesn't have to be one thing or the other; you can provide for the issuance of LOE task orders, completion task orders, or both. The basic contract can include labor categories and labor rates that can be used to price both the LOE and the completion task orders. The minimum and maximum quantities may be stated in terms of hours or dollars. So it's wrong to say that the basic contract must be LOE.

Level of effort is generally stated in terms of hours and I think that's what FAR Part 16 envisions. However, it may be possible to state a level of effort in other terms, such as number of persons or full time equivalents. Do you have something specific in mind?

Vern