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  2. You are welcome. Joel's idea of proposed question for the debrief is a good one. I will say I have seen agencies use unique ways to try and guide offerors on hoped for pricing. As you say it might or might not help the agency get competitive BAFO's.
  3. You’re welcome. I’d ask what they intended the competitive price range to signify. But mainly focus on the “lowest priced technically acceptable” basis of a competitive award, next time. Edit: I just thought of this. You said that your base Quote was about $1 above the lower end of the range. What if the winner had quoted $1 lower…? I also think it could have been quite convoluted if several competitors thought the number was a lower limit but had determined that they could provide the services for less, so just quoted the low end of the “range”.
  4. The term "competitive price range" was only used in the amendment on SAM.gov. Interestingly, there was a nearly identical procurement from the same contracting office going on simultaneously, and they also provided a competitive price range for that one on SAM and had a BAFO round (but did not amend the SOW at any point). We have not received a notification about the second one yet. It makes sense that the competitive range was not supplied as a requirement. But I have to wonder if it was meant to be an internal piece of data only. I do not think it provided a benefit to Offerors in preparing their offers, and it doesn't seem likely it would have increased price competitiveness for the Government during the BAFO round. It was simply confusing. If other small businesses like ours read it the same way and tried to ensure their offers were within the provided range, the government would likely have received mostly similar prices with one or a few outliers, one of which won the award. I'm obviously frustrated about the loss, but generally confused overall (and worried we'll face the same result on the other similar procurement). Thank you both for your insights. If possible, I'll report back if I find out anything in the debrief.
  5. If you are a small business government contractor who ever utilizes subcontractors to complete federal set-aside contracts, knowing what a “similarly situated entity” is for a given contract is vital to your success. So, let’s take it back to the basics of “similarly situated entities.” Even if you are not sure where this term comes from, don’t fret, a great place to start is this other Back to Basics blog on limitations on subcontracting. Because as you guessed it, the term comes from the SBA’s limitations on subcontracting. And since you can read-up on those at the links above, I will keep my explanation of the limitations on subcontracting pretty simple. For work that the federal government sets aside for any small business concerns–including those in the 8(a) Business Development Program, the Veteran Small Business Certification Programs (SDVOSB/VOSB), the Historically Underutilized Business Zones (HUBZone) Program, or either of the Woman-Owned Small Business Programs (WOSB/EDWOSB)–provided such contract exceeds the simplified acquisition threshold (which is currently $250,000.00 under FAR 2.101), there are limitations on how much the prime can subcontract out to whom. There are different sections of the SBA rule dedicated to–and thus, different limitations for–the various types of federal contracts as follows: A 50% limitation for services contracts and contracts for supplies or products (other than from a nonmanufacturer); An 85% limitation for general construction contracts; and A 75% limitation for specialty trade contracts. Note: the Nonmanufacturer Rule may be applied instead to contracts for supplies from a nonmanufacturer, but such is not relevant here; so, check out this other Back to Basics blog on it if you would like more information. Since all three of the limitations listed above utilize essentially the same language in regard to “similarly situated entities,” we will use services contract limitations to explain it. For those, SBA’s limitations on subcontracting rules state: (a) General. In order to be awarded a full or partial small business set-aside contract with a value greater than the simplified acquisition threshold (as defined in the FAR at 48 CFR 2.101), an 8(a) contract, an SDVOSB contract, a VOSB contract, a HUBZone contract, or a WOSB or EDWOSB contract pursuant to part 127 of this chapter, a small business concern must agree that: (1) In the case of a contract for services (except construction), it will not pay more than 50% of the amount paid by the government to it to firms that are not similarly situated. Any work that a similarly situated subcontractor further subcontracts will count towards the 50% subcontract amount that cannot be exceeded. In a nutshell, whatever this “similarly situated entity” is can actually help the prime contractor reach its 50% subcontracting limitation on a services contract. So, now we just need to fully understand that term. SBA’s definitions section of its government contracting regulations says the following: Similarly situated entity means a subcontractor that has the same small business program status as the prime contractor. This means that: For a HUBZone contract, a subcontractor that is a certified HUBZone small business concern; for a small business set-aside, partial set-aside, or reserve, a subcontractor that is a small business concern; for a SDVOSB contract, a subcontractor that is a certified SDVOSB; for a VOSB contract, a subcontractor that is a certified VOSB; for an 8(a) contract, a subcontractor that is a certified 8(a) BD Program Participant; for a WOSB or EDWOSB contract, a subcontractor that is a certified WOSB or EDWOSB. In addition to sharing the same small business program status as the prime contractor, a similarly situated entity must also be small for the NAICS code that the prime contractor assigned to the subcontract the subcontractor will perform. Crystal clear right? Ok, if not, I will break it down a bit. A “similarly situated entity” is a subcontractor that directly qualifies for: (a) the prime contract’s set-aside designation; and (b) the size standard assigned to the NAICS code for that prime contract. It is as simple as that, folks. Yes, by default, if a subcontractor meets (a) and (b) here, it will also have “the same small business program status as the prime contractor.” But again, since that should be inevitable if (a) and (b) are met–assuming the prime contractor was directly eligible for the prime contract’s set-aside and size standard to get the award–I think it is best to focus on (a) and (b). Here’s an example. Let’s say the government sets aside a contract for event planning services under NAICS code 812990, All Other Personal Services, with a corresponding size standard of $15 million, for the SBA’s SDVOSB Program. The prime contractor who received the award is “Blake Anderson Events, Inc.”–an SDVOSB with $10 million in annual receipts (thus, eligible for the prime contract). Blake Anderson Events, Inc., has two subcontractors for the prime contract: “DeVine Events & Services, LLC,” an SDVOSB with annual receipts of $12 million, and “Anders Activities & Events, Inc.” an SDVOSB with annual receipts of $20 million. Are these subcontractors “similarly situated entities” for the prime contract? Now, you might be tempted to say, “Yup, they are both SDVOSBs”–and move on. But remember it is a two-pronged qualification. The only “similarly situated entity” here for the prime contract awarded to Blake Anderson Events, Inc., would be DeVine Events & Services, LLC–meeting both the prime contract’s SDVOSB designation and its $15 million size standard (just like Blake Anderson Events, Inc.). Anders Activities & Events, Inc., is considered large under the prime contract’s $15 million size standard–and thus, doesn’t meet both prongs for qualification. As a quick side note, if you are at all wondering how this is possible, the SDVOSB rules (like some of the other SBA Program rules) allow an SDVOSB to be considered a small business for the purpose of participating in the SDVOSB Program generally if the company “meets the size standard corresponding to any North American Industry Classification System (NAICS) code listed in its SAM profile[.]” But they also note: “At the time of contract offer, a VOSB or SDVOSB must be small within the size standard corresponding to the NAICS code assigned to the contract.” And this second part of the rule is exactly what the two pronged approach to being a “similarly situated entity” is based on. To read up on all the SBA’s Program’s size qualifications, check out this blog. Finally, what does all this mean for Blake Anderson Events, Inc.? This simply means that any work Blake Anderson Events, Inc., subcontracts to DeVine Events & Services, LLC, will count toward the 50% minimum for Blake Anderson Events, Inc.’s, limitation on subcontracting for the prime contract here. But any work Blake Anderson Events, Inc., subcontracts to Anders Activities & Events, Inc., will count against the 50% minimum for Blake Anderson Events, Inc.’s, limitation on subcontracting for the prime contract here–or rather, it will count toward the 50% maximum that can be paid out to subcontractors for the prime contract. *** Understanding and complying with the SBA’s limitations on subcontracting is no easy feat. And the consequences can be dire for noncompliance. So, if you have rule application or compliance concerns, never hesitate to reach out for assistance–you are certainly not alone. Questions about this post? Email us or give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Back to Basics: Similarly Situated Entities first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  6. Different possibly the same conclusion. Never seen it but that does not mean it isnot done (obviously). Would be interesting to view RFQ's by same agency to see if the wording is used in other solicitations. Might be their thing! Going off the basic info provided agency set a range and asked for BAFO's. I do not see wording in your posts that BAFO's have to be in the range. So one might concluded something to the effect of - Agency - Here is our range. Offerors - Here is our BAFO's. Agency - Views the BAFOs and makes the final award decision. Wording that you have provided so far does not indicate that to be considered the BAFO must be within the competitve price range. My response provided above suggests why but more to the point LPTA means they will take the lowest price of the techincally acceptable proposals not that they will take the lowest price in the competitive price range. And while you may have a view of what is reasonable price the agency would support why they believe it is reasonable. My mind wanders to this - FAR 15.404-1(b)(2)(i) - "Comparison of proposed prices received in response to the solicitation. Normally, adequate price competition establishes a fair and reasonable price (see 15.403-1(c)(1))." Hope these thoughts help with your debrief strategy.
  7. So a subsequent amendment reduced the required labor after they revised the competitive price range in Amendment 5. Was the term “competitive price range” defined anywhere in the RFQ? Unless the term signifies a mandatory requirement, I doubt that a protest over award of a lower quote would be successful.
  8. Yep. Plus the prime always had the ability to request a DCAA assist audit but the prime's buyer was asleep at the switch.
  9. I don't know... I've never had any interaction with ASN(RDA).
  10. This is from Amendment 5 out of 6. Amendment 6 revised the SOW to remove 1 FTE, issued a new Schedule B, and extended the due date for the BAFO. "This change is hereby issued to Solicitation No. [number and name]... for the following: "(1) Revise the Competitive Price Range: $[xxxxxx] to $[xxxxxx]. "Best & Final proposal to be issued by [due date] to: [email address of CO] "End of Change"
  11. Well, ASN(RDA) relieved STRL from the burden of the making the determination. How do you think they would react if you did it anyway?
  12. Experienced this cluster with a capital F over the years. Prime flows down 52.216-7 + the kitchen sink in its T&C's with the sub. Prime's standard USG T&Cs include instructions to replace terms like 'Government' and 'Contracting Officer' with 'Buyer' and 'Buyer Representative', except all too often there is a carveout for audit responsibilities. The CPFF subcontractor will submit an ICS to their local DCAA office. In DCAA's review of the ICS, they see no prime contracts, so it gets placed in the sub's contract file without an adequacy review, citing FAR 52.216-7(d)(5): "...The prime contractor is responsible for settling subcontractor amounts and rates included in the completion invoice or voucher and providing status of subcontractor audits to the contracting officer upon request." Contract privity only exists between the USG and the prime, and between the prime and the sub. Contract years go by, the prime is unaware of its responsibility to finalize rates with this sub. Prime asks the sub constantly for its final annual indirect rates. Sub says they have nothing from DCAA, unaware DCAA has no reason to audit the sub's rates. Then the prime wakes up and realizes they have the responsibility to finalize the rates to close out its subcontract with the sub, but wants to see the ICS in order to do so. But guess what, sending the ICS to the prime wasn't part of the contract. In my anecdote, the absurdity is magnified by the fact the sub also had a cost-type sub to a competing prime for similar deliverables, and had NDAs in place with each prime stating 'proprietary cost data' will only be shared with the USG.
  13. Thanks, @Neil Roberts. This is superb. I appreciate it. Is it reasonable to assume the subsidiary should give their rates at-cost to their parent company and any fee/profit the parent company earns on the subsidiary is then shared with the subsidiary? Re: a teaming agreement or CTA where both have their own GSA schedules with terms and conditions, it sounds like that is a battle for the parent/subsidiary to hash out, right?
  14. Please quote the wording of the notice of competitive price range amendment. Thanks. In other words is this an absolute requirement or a recommendation?
  15. Hi everyone - thanks in advance for your help. I have found this forum to be an incredibly valuable resource. I work for a federal contractor, and I am looking for clarification on an LPTA situation I've never encountered before. My firm bid on an LPTA RFQ for services. In an amendment, the contracting office provided a "competitive price range" for the Base Year total and requested a BAFO proposal. We submitted a bid that was about a dollar inside the lower range figure for the Base Year, with modest escalation in the outyears. We received a notice of an unsuccessful bid, and the letter provided the award amount for all 5 years. On average across 5 years, their price was about 18% lower than the low end of the competitive range. The RFQ prescribed hours for each year, so outyear pricing could only go down by lowering hourly rates--not impossible, but highly unlikely. If they bid within the competitive range for the Base Year, the option years would have had to be reduced 22% on average. I need to request a debrief, but I want to word it intelligently. I can't find anything in the FAR that helps me understand this situation. So a couple questions: 1) I've never seen a contracting office provide a competitive price range on an LPTA procurement. Is this a done thing? 2) Are they allowed to award outside that range, once it is formally provided as an amendment to the RFQ? 3) If yes, how can they justify price reasonableness on a bid lower then their established competitive range? Thank you again!
  16. So no need for a determination in writing? Having said that, would it be best to still make a determination? Or, if factoring in the possibility of this being protested it would be best not to document that.
  17. I treat subcontracts to government prime contractors as being government contracts, not commercial contracts. Yes, such contracts are generally subject to the UCC if there is a dispute between the parties; however, the government generally has audit rights as conferred by subcontract terms and conditions (particularly if the subcontract is other than FFP). Chances are your prime contractor has listed your subcontract in its own Schedule J so that the auditors can initiate assist audits if they elect to do so. Because the government generally has audit rights that it may exercise, I treat the subcontract as being governmental.
  18. Yesterday
  19. This highlights a fundamental problem in government acquisitions - that discussions with offerors is seen by many as a way for an acquisition to go wrong, rather than as a way to get an acquisition right. How many of us would buy a home or a car or acquire anything meaningful without negotiations (aka in government acquisition speak, discussions)? If you do a professional job and do it right, don’t fear discussions - embrace them.
  20. @CuriousContractor_22, My argument in response is as follows: Task Order named awardee should request an arms length proposal from the subcontracted party and negotiate the fair and reasonable rate to be paid for its work by Task Order awardee. Any applicable GSA MAS existing rate for the subcontracted party should be considered in coming to such agreement with the understanding subject GSA MAS rate probably has profit in it and the subcontracted entity proposal and the agreed to rate is to be at cost unless otherwise permitted per FAR 31.205-26. A teaming agreement is irrelevant unless it was the task order awarded party.
  21. I'm confused, too. It doesn't make sense. Having said that, I think the deviation relieves STRL from having to comply with FAR 7.107-2 for contracts < $50 million.
  22. No, you cannot perform work -- or have subcontractors perform work -- in support of a FFP TO and charge that work to overhead. That is cost shifting and is frowned upon. If the work benefits a single TO then it needs to be charged to the TO.
  23. Hello, I am having trouble determining who would sign my J&A for Consolidation. I work for a Navy laboratory and I have a consolidation that is estimated to be $20 million. I am confused by the language in Annex 4 which says "Approval granted to increase current consolidation of contract approval thresholds from $2 Million to no more than $50 Million for STRL and less than $100 Million for Head of Contracting Activity (HCA)." Is it saying that the threshold established in FAR 7.107-2(a) is raised from $2 million to $50 million and is approved by the HCA if between $50 and $100 million? If so, who is the approving authority for below $50 million, the KO? If the threshold is raised to $50 million, does that mean the stricter requirements of FAR 7.107-2(a) are not required and there is a lower threshold for justification required implied by the increase in the threshold? Or, am I mistaken, who is the approval authority for less than $2 million and the justification requirements? I am on a small procurement team and no one has done this before so I'm in the dark and curious.
  24. Yes, sorry, that's absolutely right. What I meant was you can't immediately award to them. Another step is involved which adds more time to the process and creates another opportunity for something to go sideways.
  25. Thank you! That is what my PM wants me to do, modify the current agreement that is tied to the award and make it "indirect" where the staff will perform work under 2 (possibly more) FFP TOs that are under different prime contracts. His argument is that those TOs are FFP and we do not need to submit invoices for the subcontractor to the government and the sub is not directly billed to the government. I do not agree
  26. Off topic but one thing that really bothers me is the government taking long periods in performing evaluations. Often a company requests additional time for proposal submissions. It may be from the agency not allowing sufficient time initially or substantial revisions are made via amendments but the due date isn’t extended. Too often the contracting officer response is something like “this requirement is critical and we can’t afford another week.” Then the agency takes many months to evaluate. But they expect offerors to have the key personnel initially proposed available!
  27. If I have a subcontractor who is able to charge multiple cost objectives -- i.e., different projects with different Ts&Cs -- I would want to have a separate agreement for each project. That is to make sure the various prime contract clauses flow down correctly. This is also to make sure costs get to the correct project. However, if the subcontractor can charge multiple projects, then maybe the agreement needs to be 100% indirect. (See the FAR discussion of "indirect costs"). If the agreement is charged solely to indirect cost objectives -- i.e., overhead or G&A -- then I agree that no prime contract terms will flow down. I disagree that "no FAR provisions will apply" because some of those FAR Ts & Cs apply to indirect costs not just direct costs. Hope this helps.
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