Retreadfed

I don't think anyone can answer your question without knowing what the contractor's theory of recovery is and what costs are being claimed. Because this is a contract for commercial items, the cost principles from FAR Part 31 do not apply.

I don't understand the bona fide needs issue in this scenario. To properly obligate FY 16 funds, you have to have a bona fide need that exists now. The bona fide needs rule deals with obligation of funds, not when the services being acquired are performed or end. Thus, if a need for a service arises in FY 16, you can write a contract to satisfy that need, although the service may not begin until FY 17. The fact that the non severable services may not be complete until FY 18 doesn't seem to raise a bona fide needs issue. Think a NASA mission to Pluto or Jupiter that takes several years to complete. There may be non-severable services that are needed to support such a mission. This is not to say that there may not be a better way of obtaining the services, but I don't see the bona fide needs issue in such a scenario.

ACQCON, is the $99M limit a limit on the amount of work that can be ordered or a limit on the amount that can be spent under the contracts? There is a difference.

Sylvia, if FAR 52.244-6 is in your prime contract, that should go a long way toward answering your question.

Don, why do you think a deviation would be necessary in the examples I gave where the FAR provisions have already been ruled upon and found wanting? That is particularly true in regard to the Rothe situation where the underlying statute was held to be unconstitutional. What I hear you saying is that a contracting officer would need a deviation to give him/her permission not to do something that is unconstitutional. Based upon the contracting officer's oath of office, (s)he already had a duty not to comply with the FAR in that circumstance. In light of what I perceive to be an invitation from the Board, I would be willing to bite the bullet on 30.602(a) without a deviation and take my lumps if I am wrong. Vern, toward you comments, have you seen DoD's proposed rule on "non-traditional contractors"?

Don, the object of only considering if there is increased costs to the government in determining whether the contractor is entitled to implement the accounting practice change would be to challenge 30.602(a). If the ACO is wrong in doing so, the result would be a reiteration of Raytheon whether a deviation was obtained or not. If the ACO is correct that 30.602(a) is inconsistent with the statute, and the terms of the statute prevail, failure to get a deviation, if one was required, would likely be harmless error. But going to your point, it seems an overly broad statement to say that if a contracting officer ignores a FAR provision without obtaining a deviation, the contracting officer has acted improperly in all circumstances. For example, it would be pointless for a contracting officer to obtain a deviation to FAR 33.208(a)(2) when that provision has been held invalid at least three times by the Court of Appeals for the Federal Circuit. Similarly, it would have been pointless for a contracting officer to obtain a deviation from FAR 19.1104 after the Fed. Cir. issued its Rothe decision and before the FAR was revised to remove Subpart 19.11. Finally, I believe you have pointed out that agencies usually cave to protests challenging a failure to set aside overseas contracts for small business concerns. Maybe you know if they obtained a FAR deviation to do so but it seems that relying on the SBA regs would be sufficient without obtaining a deviation.

I would not get too excited about this decision. Note that the Board indicated there was an apparent inconsistency between the FAR and the CAS statute and CAS rules. However, since neither party brought up the inconsistency, the Board did not rule on the validity of the FAR provision. To me, this is an open invitation for contracting officers to look at the statute, follow it and challenge the FAR provision if a contractor disagrees with the finding of materiality.

TJ, was the termination total or partial? Also, what Termination clause is in your contract?

Vern has brought up some valid points. However, there are some subsidiary issues relating to this topic. First, is the set aside requirement for procurements over $2,500 but below the SAT. That requirement is contained in a separate subsection of 15 U.S.C. 644. Thus, it would be interesting to see how an agency argues that that requirement does not apply to contracts awarded overseas. Second, is achievement of small business contracting goals. I understand that there is disagreement between the SBA and some agencies as to whether overseas contracts should be included in the determination of whether an agency met its goals.

Joel, what is stupid? The statement you quoted was in regard to a change in the limitation on subcontracting.

.Don, in regard to the AF arguing that the FAR trumps the SBA rules, see MCS Portable Restroom Service, B-299291 (March 28, 2007). This was another protest where the AF interpreted the FAR in a manner inconsistent with statute and the SBA's regulations.

Don, don't forget the statutory changes to the limitation on subcontracting and SBA's changes in its regulations on that topic. However, I have not seen a FAR case to change the FAR to be consistent with the clear language of the statute and SBA rules.

Don, I don't know what the thought process was behind the SBA's adoption of this rule, particularly as it regards the question of what is a contract. It could well be that the SBA wrote the rule the way it did because it believe(s)(d) that an order is not a contract. In any event, I believe that not including orders in the definition of contract and continuing to curtail the opportunity to challenge the size status of a concern frustrates the policy underlying 121.108 and the Small Business Jobs Act. The SBA talks about a presumed loss because of a willful misrepresentation of size status, but provides only a narrow and limited ability to have this misrepresentation brought to light and addressed by a body with particular expertise in size determination matters.

Don, if 121.1004 is reconsidered in light of Kingdomware, and "contract" is interpreted to include orders, then (ii) could be eliminated.

Pepe, the issue is what is a contract for purposes of the SBA regulations? That term is not defined by the SBA. As currently written, it is not clear if the SBA accepts the FAR definition of a contract. If the term "contract" includes orders, then it would seem that 13 CFR 121.404, concerning when size status is determined, would have to be revised as well as 121.1004. If "contract" does not include orders, this should be stated explicitly so that it is clear what is meant by "contract." As a real world example of what I am talking about, I once filed a size protest concerning the size status of a concern that had been awarded a task order under a multiple award IDIQ contract. The contract had been set aside for small business concerns. After award of the contract, information came to light indicating that the contractor was affiliated with a large business concern that had not been identified by the contractor prior to award of the contract or task order. The protest was based on the premise that the order was a contract. However, OHA denied the protest on the grounds that an order is not a contract. Further, adoption of a broad definition of "contract" would facilitate the policy objectives underlying 13 CFR 121.108 and the government's interest in preventing fraud in this area.