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Additive Alternates
By Willie Jones on Monday, June 24, 2002 - 05:15 pm:

How is an alternate determined. The reason I am asking this question, is because a program manager wanted to in the solicitation give the vendors and incentive to complete the project early. The end-user said that it was not written as an incentive it was written as and alternate. If you know where I can find it in the FAR I will be glad to look it up.

By Anonymous on Monday, June 24, 2002 - 07:41 pm:

Huh? What are you trying to tell us?

Are you saying a government PM wanted an early completion incentive and some end user differs? Are you in contracts and stepping into that? That seems to me to be a matter for the PM to resolve with the end user. If not, I have to wonder what concept of progarm management your agency is applying!

If the PM doesn't control schedule and funds why have one? Let the good times roll and everybody "manage." Hey, just sing "That's how we blow our money" to that old children's tune!

By joel hoffman on Monday, June 24, 2002 - 08:26 pm:

I believe that Willie is trying to find some advice to compare one acquisition method where the Government obtains proposed prices for various completion periods (e.g., cost for expedited completion date and for a longer period) in the RFP to another method, which incorporates some type of incentive for early completion in the RFP.

The end user apparently wants an incentive, but says that the RFP is currently written like the first method, above (obtaining prices for alternate completion periods), not as a true incentive, to reward the Contractor for achieving early completion.

I think Willie wants to find some guidance on one or both methods. Am I correct, Willie? happy sails! joel

By Willie Jones on Tuesday, June 25, 2002 - 03:39 pm:


You are correct. I just want to know when a program manager says this is and add alternate he means that the A/E has added optional work to be done. For instance, the budget is 1,000,000.00 and you want to know how much it would cost to repair the roof and if repairing the roof would not go over budget. Is an alternate something that could be done and they want to know how much it would cost to do that job. Give me the definition of an alternate or Add Alternate.

By joel hoffman on Tuesday, June 25, 2002 - 05:34 pm:

Willie, I thought you were discussing methods to incentivize early completion.

Yes, additives are common and usually involve optional work. If you aren't sure you have enough money to repair the roof, you might leave it out of the base scope and include it as an alternate. "Additive alternates" must be awarded at the time of contract award. Additive alternates are generally used with an IFB, rather than an RFP.

The solicitiation should organize the additives by priority (#1 is most desired, 2 is next, etc.) and should indicate how they will be evaluated and compared.

For instance, if you can't afford the base plus number 1 alternate, you can state that you will skip to base plus number 2, 3 etc. until you exceed the available funds. If you can't afford base plus 2 and 3, you can skip to base plus 2 and 4, etc.

The bidder which bid the lowest combination price for sequentially added additive alternates is the successful bidder. All bids must be compared the same way (you can't add base plus first additive for one bid, then add base plus second additive for another).

Here are some GAO decisions (I didn't read them)

Matter of Gatrell Construction, Inc., Comp. Gen. B-237032 (Jan 11, 1990)

Matter of Applicators, Inc. B-270162 (Feb 1, 1996)

Matter of Mallory Electric Co., Inc., B-244699 Oct 29, 1991)

Matter of Ahern Associates, Inc., B-254907 (Mar 31, 1994)

Matter of Caddell Construction Co., Inc., B-249879 (Nov 24, 1992)

Matter of John C. Grimberg Company, B-284013 (Feb 2, 2000)

Regarding schedule:

1. You could include a base contract completion period and additive alternates for a shorter stated contract completion period, e.g.: base bid = 250 days, additive alt. 1 = 220 days, additive alt.2 = 200 days. If you award a higher priced, shorter schedule, your organization must be very careful and diligent in administration of the contract - the contractor may take the money and still finish late.

2. You could allow the bidders to bid the number of calendar days less than a base period, then state that the bids will be adjusted for evaluation and award comparison purposes only, by multiplying each bidder's number of calendar days bid less than the base period times the daily liquidated damage rate, then subtract the result from the bid price to arrive at an "adjusted bid price" - again for award purposes only (the contract is awarded at the bid price). This procedure has been used with limited success by the Army Corps of Engineers. It is legal under Part 14 IFB procedures, because you have converted time (quality) considerations to $$, resulting in a price related factor - no quality factors considered. This method withstood GAO protests, although I don't have the references handy.

3. Another way to incentivize early completion is to offer a bonus for each calendar day that the contractor completes the project earlier than the contract completion date. This is tricky and can result in litigation if there is ANY excuse or alleged excuse for a time extension during contract performance. The contractor will be looking for time extensions, whether or not they are excusable or justified, so that it can finish ahead of the modified contract completion period. All changes, differing site conditions, or excusable delays of any type are ripe for debate over whether it affects the schedule and the extent of the delay.

4. Another method is to offer a bonus for completion by a certain date, with no time extensions allowed for anything but Government caused delays (i.e., no time extensions allowed for adverse weather, strikes, etc. delays). This will also involve some risk if there are ANY Government delays - the Contractor will find them if you can't!

5. If the project is a military construction appropriated project, the appropriate service secretary must approve expenditure of any additional funding necessary to expedite or shorten the contract completion period. That's law and restated in the DFARS. In other words, you aren't suppose to pay for a shorter than normal contract completion period, if it is an MCP appropriated project.

Does this answer your question, Willie?

happy sails! joel