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Modification versus new buy
mjthomas  Posted on Friday, July 11, 2003 - 07:34 am:

What is the threshhold whereas you perform a modification in lieu of a new buy. Here's my problem. The base award is for $1.5M per year. We have a moddifcation that is within the scope, but it will increase the award $1.5M. I know I have read somewhere based on the dollar amount of the initial award, I need to treat this a new buy. Thoughts???

ji20874  Posted on Friday, July 11, 2003 - 07:43 am:

Dollar amount is not a good indicator -- quantity is better. Are you buying more of the same? Then you can do either--
(i) a new buy; or
(ii) a modification supported by a J&A.

If you're new requirement is really "within the scope" of the current contract (and an increase in quantity is not in scope), then perhaps you're talking about a change in the requirements that can be covered by modification under the changes clause of the contract.

Anonymous  Posted on Friday, July 11, 2003 - 07:50 am:

Need more specifics, how does doubling the amount still stay "within scope"? Is the original contract for labor hours i.e. 20,000 hours at x dollars per hour and the change is to increase the # of hours to 40,000? If so, that's not "within scope". Or is it for supplies i.e. 100 cars @ $15,000 each, change to increase quantity to 200 cars. Lacking the specifics, my gut reaction is this is a new acquisition.

Anonymous  Posted on Friday, July 11, 2003 - 07:54 am:

I see ji got his post in before I did, but if this is a sole source to the incumbent and you decide to go with the mod supported by an approved JOTFOC, remember the requirements of FAR Part 5, publicizing contract actions.

mjthomas  Posted on Friday, July 11, 2003 - 08:06 am:   

Here's more specifics:

It's a T&M task order under a GSA contract. The original task was for installation of fiber optic cable for two buildings. The modification added 2 additional buildings.

Anonymous  Posted on Friday, July 11, 2003 - 08:12 am:

New procurement.

ji20874  Posted on Friday, July 11, 2003 - 08:54 am:

Hey, it's under a GSA contract -- it's easy to issue a new order, isn't it?

There was a case I learned about a long time ago, the principles of which might apply here -- as I recall, the contract was to build a sewer line from a building to the just-being-planned brand new sewer plant -- after the contract award for the new sewer line, the base changed the location of the sewer plant for environmental reasons or something -- so the contracting officer issued a change order to the new location that more than doubled the contract value -- another sewer line contractor protested, saying this should be a new procurement -- but the contracting officer prevailed, with the argument that the requirement was not for 1 mile of sewer pipe, instead, it was for sewer pipe between this building and the new sewer plant -- if the contract had been written for 1 mile of sewer pipe installed, then changing the requirement to 2 miles would have been additional quantity and out-of-scope -- but since the contract was written for a connection between this building and the new plant, then the change in location of the new sewer plant was an in-scope change to the specifications within the changes clause.

Is your current order written for fiber optic cable between two buildings? If so, then adding the two additional buildings is out of scope. Is your current order written for ALL fiber optic needs of the installation? Then you might be within scope by adding the two additional buildings.

But perhaps we're analyzing this too much -- a new order under a GSA schedule should be easy -- I recommend doing it, based on the information I can see.

joel hoffman  Posted on Friday, July 11, 2003 - 09:29 am:  

I would consider it to be out of scope. You are doubling the actual scope of work and going beyond the intent of the original order. A comparable situation might be a contract to build two buildings, but now we need 4. If you procure while the current contractor is still there, you might obtain a cost break from it. If he is gone, there is no justification to mod his contract as in-scope, anyway. happy sails! joel

Anonymous  Posted on Friday, July 11, 2003 - 09:32 am:   

Good example with the sewer line ji. And with using 8.4 of the FAR there's no need to synopsize.

Money doesn't necessarily drive the decision of what constitutes new procurement. Back in the eighties I issued an $800,000 dollar change order for software changes to comply with new laws passed after award was made, seems like a lot of bucks but the IT system was in excess of $160M, so that change order represented about one half of one percent of the acquisition value.

mjthomas  Posted on Friday, July 11, 2003 - 09:59 am:

Thanks for all of the help!! I will issue as a new procurement.

Anonymous  Posted on Friday, July 11, 2003 - 11:54 am:

The sewer example is also a good lesson on requiring language. All too many try to specify beyond the range of a project's certainty. Specifying the length required when the real requirement is connectivity is an excellent example of requirements being a problem, not a solution.