joel hoffman

As far as I can tell, the term "workplan" comes from the service contracting world. Some organizations have issued service contracts for work that really involves A-E services and/or construction for design of new or modifications to real property or real property installed equipment and systems. I see the term as a camouflge for developing partial designs or "design criteria" to be used for construction. In my opinion, it is improper to use price competion for design efforts, using a MATOC for "services". I would agree with you that such scope of work definition and/or design criteria development should be done under some type of A-E contract vehicle, such as a an A-E ID/IQ. This is A-E services, not a "service". It is also improper, in my opinion, to use the workplan task order to develop a budget, rough order of magnitude estimate, cost proposal, etc. for that same contractor to perform the associated construction work. This is essentially a phased approach to implementing design and construction, whereupon the government hires one firm to develop the scope of work with or without some type of construction pricing being included in the original task, and/or then develop some type of price for the scope of work, then allow the government to issuye an option for construction or follow on task order for construction. There are numerous variations to this scheme but they often circumvent the Brooks Act procedures for procuring design services. Phased approaches to obtaining design and then issuing options or task orders for construction do not constitute authorized "design-build" acquisition methods, either. FAR 36.209 says:"36.209 -- Construction Contracts With Architect-Engineer Firms. No contract for the construction of a project shall be awarded to the firm that designed the project or its subsidiaries or affiliates, except with the approval of the head of the agency or authorized representative." Issuing a task to a firm to prepare the scope of work, then develop or finalize the price, is a violation of 36.209 in my opinion. There is an imminent official update to an agency regulation that will discuss such practices. My suggestion would be to use in-house or an AE ID/IQ to develop what constitutes a "workplan", or partial design, design criteria, etc., with a ROM estimate for decision making, then use a MATOC or SATOC to issue the construction task, including any further design-development or refinement, if necessary. This assumes that the workplan is for more than very simple repairs or minor non-structural alterations, etc. That is seldom the case, though.

Mdtpham, your answer is more interesting than what I thought you originally indicated. I thought you said that they added the site work for one project to an existing contract which included the scope of site work for another building. That raised a question in my mind as to how the site work for the second building was within the scope of the contract for the first project. Now you are telling me that they added the scope of both sites to an existing contract for a third building project as a change order. I'm mildly curious why the government would have the right the add the scope of work for 2 separate building sites to another contract for one or more specific buildings by means of a change order under the Changes Clause? Is that within the original scope of the larger contract? Just because an existing contract includes paving work, for example, doesnt meant that one can just go out and add paving of additional parking lots all over an installation under the Changes clause. As another example, consider a painting contract for 25 buildings. One cant just go out and add more buildings to that contract using a change order just because "painting" is the scope of the contract.

Vern, I just noticed that you have updated your post #10, above. I was primarily curious about how "DODCO", who I am assuming is a contracting officer at DOD level or at one of the Services, would rank order proposals using a numerical evaluation approach.

What do you mean by "the expired phase" and are they needed to cover obligations that occurred during "the expired phase"?

mdtpham, are you indicating that the KO added the separate scope of the site work for the second, separate project to an existing contract for the first project, using the Changes Clause? That is very interesting.

DODCO, One must consider price in the trade-off comparison, as Vern already explained above. How would one simply rank order proposals using a mechanical, numerical evaluation approach without going through some type of qualitative cost/technical trade-off comparison between the various proposals? Would you score price then add to the quality points? What does that tell you? How would you correlate points per dollar to quality points? Do you divide the price by the technical points ("$/Point" ratio)? That's a goofy method that our organization abandoned 20 years ago. In addition, we must comply with AFARS, which has prohibited scoring price for years (5115.305 -- Proposal evaluation. (a) (1)) and has prohibited using numerical weights for non-price factors since 2004 (5115.304, ((2)(D))

Carl, I see now that you were referring to the statement "That would include set-asides for service disabled veteran owned small business concerns. If the procurement was set-aside for SDVOSBC's, then the clause should be in the contract. " As Vern did say in the first sentence, in accordance with the language of FAR 19.508(e), the limitations on subcontracting clause must be included in all solicitations and contracts if any portion of the requirement is set aside for small business concerns. I think this is a case where existing FAR coverage didn't keep up with the addition of more set-aside programs for various specific small business categories. It seems that Congress isn't consistent in drafting new categories of small business or small, disadvantaged business type set-asides.

Ca- a subcontractor is not a joint venture partner. You said that the Small Disabled Veteran, Small business prime contractor has a small buisness subcontractor - if I read your acronyms correctly. Thus, 13 CFR 125.6(h)[actually, it is 125.6(i)- there is no 125.(6)(h)(i)] doesn't apply here. Neither would 13 CFR §121.103(h)(3).

Good point, Don. I had noticed that the other day but forgot. My comments above apply to SDVOB set-asides. Ca2cs, what type of set-aside was this? If it was a small buisness set-aside, I think that the 52.219-14 clause, Limitation on Subcontracting is mandatory by Law. It would probably be incorporated by operation of law, anyway. I'm in California, but my folder on this topic is back home.

Note that a joint Venture as an entity may fulfill the self-performed work requirement, without the SDVO small business performing the required percentage. Under 13 CFR 125.6((5): "In accordance with §125.15((3), the SDVO SBC joint venture must perform the applicable percentage of work." Under FAR Clause 52.219-27 (d)," A joint venture may be considered a service-disabled veteran owned small business concern if— (1) At least one member of the joint venture is a service-disabled veteran-owned small business concern, and makes the following representations: That it is a service-disabled veteran-owned small business concern, and that it is a small business concern under the North American Industry Classification Systems (NAICS) code assigned to the procurement; (2) Each other concern is small under the size standard corresponding to the NAICS code assigned to the procurement; and (3) The joint venture meets the requirements of paragraph 7 of the explanation of Affiliates in 19.101 of the Federal Acquisition Regulation. (4) The joint venture meets the requirements of 13 CFR 125.15(" 13 CFR 125.15( says: (Joint ventures. An SDVO SBC may enter into a joint venture agreement with one or more other SBCs for the purpose of performing an SDVO contract. (1) Size of concerns to an SDVO SBC joint venture. (i) A joint venture of at least one SDVO SBC and one or more other business concerns may submit an offer as a small business for a competitive SDVO SBC procurement so long as each concern is small under the size standard corresponding to the NAICS code assigned to the contract, provided: (A) For a procurement having a revenue-based size standard, the procurement exceeds half the size standard corresponding to the NAICS code assigned to the contract; or (B ) For a procurement having an employee-based size standard, the procurement exceeds $10 million; (ii) For sole source and competitive SDVO SBC procurements that do not exceed the dollar levels identified in paragraphs ((1)(i)(A) and ( of this section, an SDVO SBC entering into a joint venture agreement with another concern is considered to be affiliated for size purposes with the other concern with respect to performance of the SDVO contract. The combined annual receipts or employees of the concerns entering into the joint venture must meet the size standard for the NAICS code assigned to the SDVO contract. (2) Contents of joint venture agreement. Every joint venture agreement to perform an SDVO contract must contain a provision: (i) Setting forth the purpose of the joint venture; (ii) Designating an SDVO SBC as the managing venturer of the joint venture, and an employee of the managing venturer as the project manager responsible for performance of the SDVO contract; (iii) Stating that not less than 51% of the net profits earned by the joint venture will be distributed to the SDVO SBC(s); (iv) Specifying the responsibilities of the parties with regard to contract performance, source of labor and negotiation of the SDVO contract; (v) Obligating all parties to the joint venture to ensure performance of the SDVO contract and to complete performance despite the withdrawal of any member; (vi) Requiring the final original records be retained by the managing venturer upon completion of the SDVO contract performed by the joint venture; (3) Performance of work. For any SDVO contract, the joint venture must perform the applicable percentage of work required by §124.510 of this chapter. (4) Contract execution. The procuring activity will execute an SDVO contract in the name of the joint venture entity or SDVO SBC. (5) Inspection of records. SBA may inspect the records of the joint venture without notice at any time deemed necessary.

Ah,the Robinson-Patman Act. I had hand written that into my textbook back in 1983 under the discussion that I mentioend above. As the links that Vern provided above describe, this is something that a good lawyer would have to delve into and make sense of...

OldHickory, while sellers may offer different prices or discounts, there may be limits or situations where it isn't considered legal. According to my 1980 and very likely outdated UCC Business Law textbook edition, there were laws that prohibit price discrimination between different buyers of commodities where the effect of such discrimination may be substantially to lessen competition or to restrain trade (e.g., the Sherman Anti-trust Act). I don't know whether such apparently wide discrepancies in prices offered to different buyers are legal or not. Collusion, restraint of trade or some other typing of price fixing might also be very difficult to prove. If you seriously suspect something or just want to know what type - if any- limits can be put on price discrimination in such cases, I'd advise you to contact a good business law lawyer for advice, regardless of what FAR says. As for government procurement personnel, they wouldn't have any direct way of knowing that those practices you described occurred. Unless reported to one of the (not always so highly competent criminal investigative agencies) - they probably won't know any more than you or me if they are improper or illegal trade practices. Then - the Department of Justice is busy enough not to bother with many instances where alleged illegal activities occurred, unless it is worth the effort and cost to pursue. After reading this thread, I went to my old textbook because I remembered my prof from that 1983 night class discussing certain illegal pricing practices that I had never even dreamed of. There may or may not have been be something improper going on. P.S. , I'm not a lawyer.

Vern, I wasn't speaking to you. I don't really care what you said 3 times either. I was trying to explain to Jan what I meant, after you kept repeating that it isn't relevant. Jan, this topic picqued my interest because of the requirement in the contract for all work to be covered by professional liability insurance. I don't know what GSA's policy is as an organization on requiring that type of coverage. It is protection for the design firm more than for the client. From my experience long ago in a consulting firm, we found that is extremely expensive and difficult for a small firm to obtain and maintain this type of insurance. It adds a significant share of design costs for a small firm, which must spread those costs over a smaller workload than that of a large firm. I don't think that it is a Federal requirement. It is possible that requiring such insurance might put small consulting firms at a disadvantage. I don't know what business the recommended subconsultant normally performs. You mentioned that the work involved "planning services" . That doesn't look so risky that it would normally merit the requirement for such insurance to protect the owner's interest. The contract already contains the contract clause "Responsibility of the Architect-Engineer Contractor". However, this contract requires such coverage of whomever that performs it. I don't think that the government could simply waive or change requirement.at this point without the consent of your firm. You can argue that to do so would alter the risk arrangement that was established in the contract by requiring it in the first place. The risk for errors by the subconsultant are the contractor's. Edited 2/23: So, you asked for options in your original post. In your second post, you said there aren't any other options than to say you can't breach the contract requirements. To summarize, I think that there is more than one option: 1. Your original option was to say no, because the contract requires the insurance and the subconsultant doesn't possess it. 2. Agree to hire the sub w/o insurance and accept any impacts, such as additional costs or liability over the original plan. Not advisable. 3. Agree to accept a change to the requirements waiving the required insurance, which might or might not effectively increase your firm's exposure for the risk of liability due to errors and omissions by the sub. 4. Take the position that the original requirement effectively provided some liability protection for the contractor and its subs. Such a change would increase your firm's risk exposure and the subconsultant's risk for cost or other liability due to errors and omissions by the sub. Therefore to accept such a change to the requirements is effectively out of scope. To do so. would first require mutual agreement as to any price or the terms and associated impacts , including but not limited to pricing the change for any direct cost impacts versus your otherwise planned performance method. 5. Find out if the subconsultant can obtain the insurance. I doubt it can do so for only one assignment but it might be able to. If it can, you can explain to the government what, if any, costs would be above and beyond your originally planned method of performance that would comply with the contract's requirements, if it still wants the specific person to do the job. 6. Possible other options(?)

The contractor should tell the government that the subconsultant doesnt currently possess professional liability insurance, which is a contract requirement. Plus, it should discuss any other concerns that it has concerning the issue. If the contractor is concerned about cronyism, unacceptable risks, the additional cost to hire this particular person versus self-performance or another qualified, insured person, or its original planned approach was different, or whatever other concerns it has. Let me rephrase why I said that whether or not the government should or could "encourage" or even require such an "encouraged" arrangement to hire a subcontractior that doesn't currently possess the required professional liability insurance is beyond the scope of this discussion. We don't have enough information to determine that. We don't know for certain whether or not the government's preference for the subconsultant is improper. The subconsultant might - or might not - be highly technically qualified to perform the service. We know that this person/firm - like many small firms performing architectural and engineering services - doesnt currently have professional liability insurance. This type of insurance is extremely expensive for any firm, let alone a small firm. It might - or might not - be possible for the "subconsultant" to obtain coverage to perform the services required by the contract. We know that whoever performs the service must have coverage per the terms of the contract. This will probably be within the cost of the subcontract, if subcontracted - or not. We don't know whether or not the contractor otherwise cares who performs the service or if the identified person is highly qualified - or not. She might be the best technical choice for the job - or not. She might have extensive knowledge and experience concerning the instant services - not. "For all we know", which is nothing, she might be somebody's aunt - or not. She might be more expensive than another choice to perform the services - or not. Using this person to perform the services without obtaining the professional liability insurance does potentially increase the prime contractor's liability exposure, which could be a problem - or not. The cost to obtain insurance, if available, might be cost prohibitive - or not. At first glance, it looks like the government doesnt have the right at this point to require the prime to hire somebody that doesnt have the insurance - as a change to the requirement, if it would increase the prime's liability exposure. There isn't enough information to tell other than that the current agreement requires such coverage.

Vern, I don't disagree with you. I was wondering how the requirement for professional liability insurance ended up in the A-E contract. As to whether or not the government should or could "encourage" or even require such an "encouraged" arrangement to hire a subcontractior that doesn't currently possess the required professional liability insurance, that is beyond the scope of this discussion.

Thanks, Jan. I couldnt find such a requirement in the FAR or GSAM. This is really more of a requirement to protect the interest of the contractor and its sub than that of the government. But definitely bring it to the attention of the government, which might be able to modify its requirement - or might not. Of course, not having such insurance might increase your firm's exposure to professional liability due to a sub's actions. Your firm might not be willing to assume this risk.

I agree that this is a topic to dicuss with the Government if they want this firm as a subcontractor. However, could you clarify a couple of points? I am assuming that your agreement with GSA that requires insurance requirements to flow down refers to government required liability insurance. Is this a service contract or an A-E contract? Where you referring to a clause that requires you to have liability insurance? ...professional liability insurance? What is the clause? Just curious, thanks.

Deefarrd, did the person explain what processes should or do apply to purchasing materials for such emergency surgeries? Are you questioning the legality of the Air Force Instruction? Do you know under what authority it was issued or are you just thinking that it appears to be illegal? Is it possible that the Air Force or DoD has approved some type of class waiver for such situations or that other statutory or regulatory authority might apply? Is there any documentation required to support the urgency of the acquisition? You said that you don't really see any other way and you didn't ask a question. What do you want to know? How is the actual purchasing done in such situations? I doubt that the Commander or doctor personally contacts a vendor and makes the purchase. Do they?

Onmeld, I didnt have time earlier to respond to your other issue of unbalanced pricing. Although you didn't ask a question, you identified as a possible issue and provided an opinion that it isnt necessary to document why its ok to award to a firm with unbalanced pricing. You said: "The provisions of 52.215-1 f(8) however are discretionary and only go to rejection of the proposal (which in this case we want to award on). If there is an explanation regarding the unbalace I believe we are OK to award (an would be OK even if we did not document an explanation)." I don't necessarily agree that it "would be OK even if [you] did not document an explanation." Please see 15.404-1 -- Proposal Analysis Techniques, (g) Unbalanced pricing. Subparagraph (2) of this paragraph REQUIRES the KO to analyze prices to determine if they are unbalanced. OK, you've done that. However, once unbalanced prices are found (OK, you did find unbalancing here) the KO SHALL consider the following in making the source selection decision and in determining the competitive range, if conducting discussions: "...(2) [All offers with separately priced line items or subline items shall be analyzed to determine if the prices are unbalanced]. If cost or price analysis techniques indicate that an offer is unbalanced, the contracting officer shall -- (i) Consider the risks to the Government associated with the unbalanced pricing in determining the competitive range and in making the source selection decision; and (ii) Consider whether award of the contract will result in paying unreasonably high prices for contract performance." Your KO SHALL "consider" the risks during the source selection and consider whether award will result in paying unreasonably high prices for contract performance. I believe that these considerations and resulting determinations or decisions should always be documented in the source selectiion documentation. In the event that there is a protest over unbalancing, I've seen (even in the last week or two in the WIFCON digest of protest decisions. See:(W.B. Construction and Sons, Inc., , B-405818; B-405818.2, January 4, 2012, which is summarized on WIFCON at http://wifcon.com/pd144042g.htm ) where the GAO or a Court sustained issues when the KO had no documentation of his/her considerations and reasoning and the GAO did not accept after the fact explanations of what the KO supposedly considered and determined during the competition. I'd also caution that, if this is a construction contract, in the event that the contractor defaults and the surety has to take over and complete the contract, the government can get into some serious trouble if it has overpaid the contractor due to unbalanced pricing or for other reasons. The surety normally must get by on the remaining unpaid contract balance from the government to complete the job, except for what extra losses and costs it can recover from the defaulted contractor. That is often like squeezing blood from a vampire's victim. I have seen cases over the years where the surety sued or claimed harm caused by owner negligence due to overpayments for overvalued work and the owner was required to reimburse the surety for those losses to help complete the remaining work. So, there may well be some risk to the government for unbalanced construction contract unit prices or for unbalanced lump sum prices in addition to the rather simple explanation provided in FAR 15.404-1. There is some discussion of unbalanced bidding in Nash and Cibinics' "Formation of Government Contracts" (mine is the Third Edition, which has been since updated). If this is an unbonded type contract, such as one for services or supplies, unbalanced pricing can increase the risk of total cost to the government for reasons beyond that explained in the FAR. If one overpays a contractor who later defaults, it will probably cost more than the remaining contract balance to get another firm to complete the defaulted contract effort. These are just some thoughts for you to consider.

It should be obvious but I would advise the person(s) evaluating pricing to determine or at least estimate if and how the unacceptable technical aspects of each of the other 4 proposals affected those price proposals. For example, If you are soliciting the quality level of a Caddy and someone proposed a Buick or a Chevy, that firm's pricing wouldnt really be representative of the specified requirement, would it? My caveat to you in using the pricing from the technically unacceptable proposals for your price analysis would be to determine the relevancy of those other prices to the specified requirements for pricing comparisons and consider that in the price analysis. You said that the solicitation says that the price evaluation is conducted separately from the technical evaluation, which is common. Even so, the price evaluators should normally have access to the technical proposals to be able to determine whether the prices seem representative of the proposed technical proposal. They should probably also be able to learn what technical deficiencies were found in order to facilitate that evaluation. You apparently have enough information to determine that the technically acceptable proposal is unbalanced. The usual danger is technical evaluators being prejudiced by the pricing rather than the price evaluators being prejudiced by the technical aspects. In fact, someone normally has to put all this together to determine whether the proposed prices are fair and reasonable per discussion throughout 15.404 and 15.405.

Its one thing to determine if a contractor has an adequate cost accounting system. From my experience, it would be sad if the government has to rely on contractor hired CPA's to review and verify incurred costs or even to review and/or audit proposals for new contracts or contract actions. There are differences between what are legitimate or legal accounting practices and what the cost principles and procedures in Part 31 and 31.2 allow that are often overlooked in proposals. Heck, the DCAA isnt even normally trained to spot these type cost duplications or non-allocable costs. For years, I had to provide the DCAA with standard pre-printed guidelines as part of my technical analysis input to the audit, identifying those points to address in auditing overhead and G&A rates. I'm not faulting the auditors because that is a specialized area but the DCAA as an Agency didnt pick up very well on construction contract auditing. I say that only because they require a lot of help from technical and cost analysts and they, as a group are often ignorant of the contractual cost aspects of proposals

Yes, see posts #6 and #7 abnove for a reason why one cannot just simply rely on a letter from a CPA stating whether the contractor's system is adequate. The CPA would have to show competency in that particular area.

Thanks, Carl, for your post and reference.

The clause states in part (taking the liberty to substitute "subcontractor" in place of "offeror"): "The subcontractor, upon request by the Contracting Officer [or Contractor, if that is applicable], shall submit and negotiate a subcontracting plan." The plan discusses "planned" subcontracting, right? The sub wasn't required or requested to submit a plan at subcontract award and wasn't requested to submit one while the mods were being issued. If the request came after there were no further subcontracting opportunities, as stated, then how can the sub be in non-compliance or breach?

I agree. Subcontracts are usually subject to state laws. Hire lawyers who deal with contract law at the various states' level.