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  1. Today
  2. Service contract or supply contract shouldn’t matter? Labor prior to rental doesn’t count. Commercial Rental with standard delivery charges common to all rentals. Delivery to site shouldn’t be subject to SCA should it? Repairs are the responsibility of the rental company per standard commercial rental rates and terms. Conclusion- there is no labor involved. SCA inapplicable. Government will provide routine servicing and will operate the backhoe. Unbelievable to me why there would be no classification for a standard commercial equipment rental without operator , with standard rates, standard delivery charges if you need it delivered, standard terms and conditions: Sunbelt Rentals, United Rentals, Blue Rent, etc., etc., etc. What kind of a contract would be used to rent a power tool, or a truck or car, or a chain saw, or an air compressor, or a lawn mower, or some tables and chairs, etc., etc., etc.?
  3. This thread doesn’t end. I don’t think any post is going to change opinions. The Anchorage Telephone Utility ASBCA case Jacques mentioned in the Nov7 post is interesting and shows similar issues aren’t clear cut even to the Boards. On one hand we have the FAR definition of service and years of experience saying it’s a supply. On the other hand we have business practices, industry classifications and FPDS codes, and accounting principles saying it’s a service. Who knows?
  4. Yesterday
  5. Since one of the more useful definitions in trying to figure out whether a software license or a subscription or a rental or a lease or anything else is a supply or a service is the FAR 37 definition of service, which you quote, I think it is important to point out that the key part of the definition is "directly engages the time and effort of a contractor [i.e. an employee...] to perform an identifiable task", not the "primary purpose" that you highlight. In this example the provision of a backhoe only engages the time and effort of a contractor employee for about the same amount of time purchasing the backhoe might take, i.e. working the rental/sales counter and maybe delivering and picking up the item, therefore the amount of time and effort the contractor employee spends on an identifiable task (providing a backhoe) is the same for a rental as for a purchase. The vast majority of the cost associated with the contract is in the equipment, not in the identifiable task a contractor employee performs. Otherwise, by your logic, any supply purchase would be a service contract because the "primary purpose" is to provide some supply. In the FAR 47 transportation service example you are "directly engaging the time and effort of a [truck driver] whose primary purpose is to perform [the task of transporting something]. These two examples couldn't be more different.
  6. Another interesting concept from a couple agencies including the DHS Innovation Lab. It’s amazing the ideas people come up with given the opportunity and the right place with the right management. https://www.federaltimes.com/govcon/contracting/2019/10/30/want-to-win-a-government-contract-try-a-selfie/
  7. I've never seen the federal government "liquate" bonds for cash amounts.
  8. A payment bond is separate from a performance bond. The stated limit is 20% of the initial contract amount. I suppose that if you default and also don't pay your labor and/or subs and suppliers, then your exposure to indemnify the surety company to complete the project and to pay outstanding payment obligations could be up to 20% on each bond. However, as Carl mentioned, the Federal Acquisition Regulations at 28.102-2 generally require much more than 20% penal sums for both performance and payment bonds, unless the KO determines that a lessor amount will be adequate to protect the government's interests. The current default limits for initial amount on each bond are 100% of the contract amount.
  9. It's a federal construction contract. I haven't personally dealt with bonds for federal contracts before, but for other types of contracts, the way it's typically worked is a bank would underwrite the project and principal, and then issue irrevocable bonds to the client (government). These bonds are then at the discretion of the government as to whether they liquidate them or not (in the event of some breach). The bank, to protect their exposure, sometimes asks for all or a portion of these bonds to be collateralized with some form of company asset. The bank also charges fees for issuing these bonds. Now in terms of these RFPs that require 20% perf and 20% payment bonds, I guess what I'm asking is what the contractor's exposure or "capital at risk" would be. So is it fair to say that 40% of the value of the contract is the contractor's exposure (again, in the very worst case scenario that breaches result in liquidation)? If that's the case, it just seems like a lot of capital at risk because you would have to add on top of that the working capital the contractor actually invests in the project. I'm just trying to confirm that I'm understanding this 40% exposure thing correctly.
  10. Another question not posed is are you referring to bonding with regard to a Federal contract? If so you may want to refer to Federal Acquisition Regulation (FAR) Part 28, especially subparts 28.1 and 28.2. I pose the question and provide the reference as in Federal contracting the performance and payment bonds are typically 100 percent and the bid bond is at least 20 percent so your reference to something less is confusing. Here is a link to FAR Part 28 https://www.acquisition.gov/content/part-28-bonds-and-insurance#i1088580
  11. This was CPFF and evaluated at the Total Taxable Compensation amount not including PTO which is in Fringe. Offerors provided a labor buildup in their own format including any locality allowance, non-discretionary incentive bonuses, and any subsistence allowance. Offerors were advised that none of these items were in Other Direct Cost.
  12. - max, Is year one a base period with years 2-5 individual options or is this simply a five year contract with only guaranteed minimum for year one ? I noticed that you last visited the site on November 8. Did you resolve your concerns?
  13. In addition, I don’t know if you have ever been bonded on other contracts. The bonding company and its agency generally investigate and pre-qualify or qualify the principal, which may take some time. Not all companies are considered bondable. Another reason to contact a surety bonding agency and ask those questions.
  14. Don’t know what type of contract the bonds are required for. Construction? Services? Performance and payments bonds (for construction) are sold together with a single premium. The penal amount that you are referring to is 20% of the contract amount (total is 20%). I suggest that you call a bonding agency and get the particulars. The government doesn’t “hold on to the bonds” per se. They don’t get “returned” to the contractor. The bonds are effective for the performance and payment obligations required under the contract. If there is a warranty period, then the bonds might or might or not be effective during that period.
  15. I'm coming across RFPs where there is a 20% performance (of bid value) and 20% payment bond required in the event you get the contract. Unclear to me how it works mechanically though. Are you supposed to submit bonds on day one essentially for 40% of the contract value? And do they hold on to those for the duration of the contract? And do we know when they release those - whether immediately upon end of the contract or for a longer period thereafter? (40% just seems like a very high number to me...)
  16. maxj, are years 2-5 stated to be options in the contract? If so, the Government would have to exercise the options in a timely way per the option contract language and that is when you will know. If there are no options, and for example, the contract states something to the effect that year 1 is considered consideration for years 2-5, your company may be contractually obligated to fulfill orders during years 2-5 whenever ordered. As joel hoffman indicated, answers to your concerns require knowledge of the pertinent contract language. With so much at stake for a small business, you may want to engage the services of an attorney specializing in government contracts.
  17. Last week
  18. Hi All, Have a contractor providing security services. We are ready to exercise an option bilaterally (we didn't provide timely notice). However, the vendor has stated they messed up, thinking the option would occur in February (they didn't understand BPA vs. the BPA Call). They are negotiating a CBA with the employees' union, but that likely won't be complete until Jan/Feb time frame. My question is - My CO said we can only incorporate a CBA into the Call on award or option modification. Is this accurate, or must the new CBA be addressed whenever approved between the contractor/union? I searched FAR 22 and DOL, as well as this website, but couldn't find anything completely relevant. Thanks all.
  19. Forming a joint venture is an important tool to help small businesses increase their competitiveness under federal acquisitions. But for all the benefits, some headaches remain. One common issue arises when a solicitation requires the prime contractor to hold a facility security clearance. Because a joint venture is an unpopulated legal entity formed for the purpose of bidding on a specific opportunity, the joint venture itself (as the prime contractor) often lacks the needed clearance—even though the joint venture’s members might both hold it. In these situations, a form-over-substance evaluation may leave the joint venture ineligible for award. Fortunately, the SBA has recognized the silliness of such an exclusion and has invited feedback on a potential solution. The issue of whether a joint venture itself must hold the requisite facility clearance is raised fairly frequently. In fact, my colleague Rob Kampen discussed the ProTech Services decision just a couple of months ago. In that bid protest, ProTech (a joint venture) challenged its exclusion from competition for lacking a facility clearance, even though each of its members held the required clearance. Finding that ProTech failed to meet an express solicitation requirement, the Department of Homeland Security excluded it from competition and, ultimately, GAO affirmed this decision. In my opinion, this is an absurd result. The SBA’s regulations make clear that joint ventures are separate legal entities under which the joint venture members “combine their efforts, property, money, skill, or knowledge” to jointly bid on and perform contracts. In other words, a joint venture is nothing more than the sum of its parts—it relies totally on its members for all of the resources it needs to perform a contract. And because a joint venture is a limited purpose, limited duration entity, the reality is that some (if not most) have never needed a clearance before. Not allowing joint venture members to rely on the members’ clearances—particularly if all members have the clearance, as in ProTech Services—defies logic. Thankfully, the SBA intends to step in and fix this issue. In its recently-released proposed rule, the SBA says it is not appropriate for an agency to exclude a joint venture from competition based on the lack of a clearance if both venturers individually hold the clearance. As a solution, the SBA is considering amending the regulations to require either the joint venture itself or the lead venturer to hold the required clearance. The SBA explains: If such a provision were finalized, a joint venture lacking its own separate facility security clearance could still be awarded a contract requiring such a clearance provided the lead small business partner to the joint venture had the required facility security clearance and committed to keep at its cleared facility all records relating to the contract awarded to the joint venture. Additionally, if it is established that the security portion of the contract requiring a facility security clearance is ancillary to the principal purpose of the procurement, SBA believes that the non-lead partner to the joint venture (which may include a large business mentor) could possess such a clearance. To me, this is a great solution. It recognizes that a joint venture might not have the requisite clearance but its lead member might. In that case, it would be ridiculous to exclude the joint venture from competition—especially because joint ventures are, at their heart, aimed at allowing lead venturers the ability to enhance their competitiveness. Though this solution is included in the proposed rule, it is not styled as a revision to the SBA’s regulations. Instead, the SBA has sought feedback on this suggestion and invited further recommendations on how to fix this issue. Comments on the proposed rule are due January 17, 2020. If implemented, this solution would fix the issue underlying ProTech Services and bring clarity to joint ventures and procuring agencies alike. But what’s a joint venture to do in the interim? If faced with a restrictive solicitation requirement relating to facility clearances, offerors should be prepared to discuss the issue with the contracting officer and, if necessary, consider filing a pre-award protest challenging the solicitation’s terms. If you have any questions about the SBA’s proposed rule, please give me a call. View the full article
  20. @Don Mansfield is right. The OP is not the first person to make this mistake. See, e.g., Congressional Research Service Report R42826, "The Federal Acquisition Regulation (FAR): Answers to Frequently Asked Questions," Nov. 16, 2012 (repeating the error at text surrounding note 44). However, it is a mistake nonetheless. See also 5 U.S.C. 553(a)(2); Essex Electro Engineers, Inc. v. U.S., 960 F.2d 1576, 1581 (Fed. Cir. 1992).
  21. GSA released a Draft Identity, Credentialing, and Access Management (ICAM) Solutions Catalog in response to an Executive Order and a new Office of Management and Budget (OMB) policy. These ICAM Solutions will assist federal agencies in managing and monitoring user access to information systems in order to ensure secure operations and could change security and authentication procedures for federal contractors. From the President on down, cybersecurity, including authentication, is a pressing concern for all federal contractors. In May, the President released an Executive Order on Securing the Information and Communications Technology and Services Supply Chain, declaring a national emergency regarding the nation’s “vulnerabilities in information and communications technology and services, which store and communicate vast amounts of sensitive information[.]” The Order explained: To deal with this threat, additional steps are required to protect the security, integrity, and reliability of information and communications technology and services provided and used in the United States. In accordance with the Order, the Office of Management and Budget (OMB) promptly released an updated ICAM policy memorandum, providing guidance for the federal government and outlining specific responsibilities for the agencies. The memorandum said that “[a]dvances in technology have enabled more digital interactions and business transactions, offering the Federal Government an opportunity for faster, more reliable connections and operations.” But it cautioned that, with such advances, “a new set of challenges has emerged.” The memorandum explained: In favor of this opportunity, the Federal Government continues to refresh its digital infrastructure through comprehensive efforts focused on cybersecurity, procurement, and management of a workforce capable of operating modem, frequently cloud-based environments. The memorandum explained that “GSA serves as the executive agency for Government-wide acquisitions of information technology related to identity management initiatives[,]” and it specifically instructed GSA to publish “a consolidated catalog of existing ICAM solutions and shared services.” GSA released its Draft ICAM Solutions Catalog in August. GSA’s assistant commissioner for the Office of Information Technology Category says this ICAM policy comes at a “crucial time,” and explains: [T]he discussion around defining identity is evolving rapidly. Identity is now more than just a person; it is a unique representation of a subject and can include devices like cell phones, tablets, TVs, or any network connected item. Ensuring the right people (or device) have the right credentials and access are paramount. GSA’s ICAM solutions will assist agencies in conducting identity proofing, establishing digital identities, and adopting secure processes for authentication and accessing secure information. The ICAM Solutions Catalog “is designed to help agencies translate between requirements and technical solutions.” And GSA intends for agencies to “leverage these solutions now to begin meeting the requirements of the OMB ICAM policy.” The Draft ICAM Solutions Catalog includes several special item numbers (SINs) within Multiple Award Schedules (MAS) IT Schedules 70 and 84, which were part of GSA’s MAS consolidation this year. The enhanced security and authentication requirements could affect electronic resources, such as files or computer systems, and physical resources, such as server rooms and buildings. One requirement of the ICAM policy is that GSA work with OMB to establish or leverage “a public or private sector capability for accrediting ICAM products and services available on GSA acquisition vehicles,” intended to “support and not duplicate existing Federal approval processes[.]” These authentication concerns will bring about new opportunities for IT contractors to provide services, but could also result in additional interface verification requirements for federal contractors and tighter security restrictions on privately and publicly stored federal contract information. No matter what, agencies and contractors doing business through a GSA IT Schedule, or planning to, should expect to see at least some changes to the previous security and authentication procedures. View the full article
  22. Incorrect. The APA does not apply to the Federal Acquisition Regulations System (Title 48 of the CFR). Congress adopted an APA-like procedure for acquisition regulations that is codified at 41 U.S.C. 1707.
  23. Joel is right in his recommendation. By way of an aside, though, if you haven't already read it, I encourage you to read Ruling Letter DBRA2003-1, "Excavation and Restoration as construction work under the DBA" available here. It concludes work can be for environmental work and still be subject to Davis-Bacon Act.
  24. As I mentioned in a separate thread , I suggest that you ask the Wage and Hour Division or someone else in the DOL.
  25. The Wage and Hour Division or other office in the Department of Labor would be the one to ask rather than here. Generally, exploratory drilling for soil or water table condition borings is considered a service, while drilling working wells is considered constriction. I don’t think that it matters whether or not the wells are permanent or temporary. But ask the DOL about monitoring wells. I’m guessing that the project also includes wells for pumping contaminated water for treatment purposes and/ or injection wells. Those would be considered construction.
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