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About HCuffage

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  1. Don, I am not familiar with what terms are in the GSA schedule contracts. That is why I stated that GSA's response to the similar question posted on their webpage under "FAQs" would likely control the decision.
  2. Sorry RetreadFed....don't know where I got that idea...
  3. Read closely RetreadFed's post where she cites the Federal Register posting on SBA's proposed rule to implement Section 1331 as follows: "SBA had proposed that a multiple-award contract...or an order issued against a multiple-award contract that is set-aside exclusively for 8(a) Program participants, ... or reserved solely for one or more 8(a) program participants..." She ends her post with the statement that SBA adopted the proposed rule as the final rule. "...or reserved solely for one or more 8(a) program participants" certainly sounds like sole source task order awards were intended to be allowed. I have not read in any authoritative source that the term "set aside" excludes sole source awards to eligible small business program participants in the 8(a), HUBZone, or SDVOSB categories. Yes, FAR says that if you have a reasonable expectation of receiving at least two (competition suggested) offers from small business concerns you must set the acquisition aside for small businesses. However, there is nothing to say if your market research finds three 8(a) concerns who could do the work and would submit offers that you cannot decide to sole-source to any one of the three. The fact that at least two exist means the acquisition must be set aside for small business and an award should be made to a small business, which an 8(a) business is. An 8(a) sole source is not the same as a sole source based on the competition exception "only one responsible source" can provide the services. I acknowledge that there is preference for increased competition, especially in the 8(a) program, but the FAR has not eliminated sole-source 8(a) awards. And there are still the other two socioeconomic categories (HUBZone and SDVOSB) whose program rules allow sole-source awards and, in fact, require them to be considered before small business set-asides. The 2010 Small Business Jobs Act at Section 1331 intended to restore a lot of opportunities for small businesses that had been lost to the popular interpretations of FASA fair opportunity language: that the fair opportunity language on MA IDIQ contracts precluded small business set-asides. The proliferation of the use of MA IDIQs and that interpretation was working to dramatically reduce opportunities for small businesses. The Delex decision by GAO rejected the notion that set asides were not allowed and later the MORI decision by the COFC declared that protests based on failure to do an adequate rule-of-two analysis were not protests "in connection with" the issuance or proposed issuance of a task order. It found that the phrase "in connection with" had more sweeping meaning under the Administrative Dispute Resolution Act (ADRA) than under FASA. In the case of an 8(a), yes the offer and acceptance provisions of the program will come into play and may complicate things. Yes I agree the FAR language could have been clearer, and, like always COs will shy away based on the most popular interpretation of the language it may well take additional regulation to clarify the intent. I followed this SBA proposed rule closely and for a long time (it sat for almost a year after public comments were in before the final rule was published.) This issue will likely be debated widely. I suggest that the poster raising the question consult the agency legal counsel and the agency's SBA rep before making a final decision. However the GSA response to the FAQs on the discretion to set aside as cited in earlier posts will likely control the decision for now. That response was simply that Section 1331 language allowed set asides but not sole source awards.
  4. The question on the table is whether issuing a solicitation without funds available is improper, or illegal. The inference from the question is that if law or regulations do not specifically prohibit this action then it must be okay. That inference suggests that anything not specifically proscribed is acceptable. I would suggest that similar to the principle that a contract does not have to specify every single detail of a requirement to convey an expectation, law and regulation do not have to proscribe with specificity (e.g. thou shalt not issue a solicitation without having funds available) every action that should or must not be taken. Let’s examine existing regulation and policy to see if we can advance a line of reasoning that leads to the conclusion that you should not issue a solicitation without having funds available, excepting the situation already discussed – situations where you are authorized to issue a solicitation, and indeed award a contract as a result, by conditioning both the solicitation and contract award on the availability of funds. As we examine existing regulation and policy, let’s also interweave prudent business practices to balance our examination. The guiding principles set forth in FAR subpart 1.102 establish that the vision for the Federal Acquisition system, in part, is that it will maintain the Public’s trust. FAR also establishes here that the system will (emphasis added), among other things, promote competition; minimize administrative operating costs; and conduct business with integrity, fairness, and openness. It will do these things to meet the end of satisfying the customer in terms of cost, quality, and timeliness of the delivered product or service. The FAR goes on to lay out performance standards (see 1.102-2) against these guiding principles. The System must provide uniformity where it contributes to efficiency or where fairness or predictability is essential. Each member of the Team is responsible and accountable for the wise use of public resources as well as acting in a manner which maintains the public’s trust. Industry, especially small businesses, can ill afford to waste bid and proposal (B&P) dollars on solicitations where there is no probability of an award, no matter the quality or competitiveness of their proposal. Predictability of an award as a result of fair competition is essential to the efficiency of the Federal Acquisition system. Agencies that engage in a practice of issuing multiple solicitations without funds available to support an award thwart that predictability and undermine the Federal Acquisition system. Keep in mind that the Small Business Act is a primary source of the requirement to post public notices of proposed contracting actions in order to give Small Businesses access to opportunities. You waste industry resources through this practice and eventually these wasted resources will be reflected in higher bid and offer prices, ultimately increasing the unit cost to the taxpayer. Once industry detects this practice, you can expect the number and quality of offers to decline and rather than promoting competition you will be stifling competition. How will industry know which solicitations are for real and which are due to the Government’s inability to make up its mind? The Government will quickly lose the public trust of Industry, a critical partner in the acquisition system. What value will the few responses you may get then really provide for the customer in making decisions? Not only do you waste industry resources, you waste the taxpayers’ resources and increase the operating cost of the Acquisition function. All the costs associated with issuing solicitations where no funds are available represent resources that could have been applied to improving the quality and efficiency of the acquisition processes for those requirements for which funds are available, i.e., that management has decided it will fund. You have just failed the accountability test for wise use of the public’s resources. Again, I am not talking about the proper use of the availability of funds clauses to award contracts in this fiscal year that will be properly chargeable to the funds of the next fiscal year. Over time, a continuation of this practice will alert industry that it cannot trust the public notices and the system will suffer degradation. Also, you increase the risk of a successful protest and claim for proposal cost recovery. The FAR does not specifically proscribe issuing solicitations when funds are not available as such a proscription would conflict with the authority in FAR 32.703 to properly condition a solicitation and the resultant contract on the availability of funds in very specific situations where it serves the Government’s critical interests to use this authority. I would posit that, here, FAR in prescribing the specific situations in which you are allowed to solicit without funds being available that it is proscribing all other situations. FAR Subparts 14.105 and 15.201 (e) provide authority to use RFIs when the Government does not presently intend to award a contract, but wants to obtain price, delivery, other market information, or capabilities for planning purposes. Arguably, if an agency does not currently have funds it is willing to commit to any specific requirement, or is not sure where and how it would like to apply its dollars available for obligation among multiple competing requirements, the sum of which cannot all be funded, then it does not “presently intend to award a contract.” Therefore, the use of RFIs in these situations is the appropriate course of action, remembering that industry is on notice that it will be expending B&P budget dollars without any expectation that an award will result…in other words, its B&P dollars will be applied to fostering an environment where an opportunity for competition in the future may evolve. That is, if the Government gets information of value, it may be influenced to issue a solicitation for a bid or proposal.
  5. Awards to JVs (and the 50% rule)

    Understood...and hopefully SBA will not take too long...it's a change they wanted. The have been unhappy for a long time with the seeming lack of ability and/or actual attempts to enforce compliance. The finalization of the Proposed Rule SBA put out to implement various sections of the 2010 Small Business Jobs Act is still pending also. In that proposed rule, SBA propsed to change the enforcement to the task order level and require task order COs to include compliance with subcontracting limitations as part of the official task order eval and report it in PPIRS. These changes make sense. There are no actual requirements with clear subcontracting opportunities at the master IDIQ contract level - only at the task order level. This also stops the dilemma of contractors appearing to be out of compliance on their first/first several task orders and promising to make it up on future orders, which are not certain to evolve and/or have sufficient subcontracting opportunities to create compliance across the contract.
  6. Awards to JVs (and the 50% rule)

    I have tracked down the status of the proposed redefinition of the Limitations on Subcontracting. It did nor survive in the original proposed form, but did get changed to what is being talked about -- subcontracting no more than 50% of the contract amount. It was passed in P.L. 112-239 - the 2013 NDAA, section 1651 of the enrolled bill. It amends 15 USC 631et seq by inserting a new Section 46 entitled "Limitations on Subcontracting." It was signed into law on January 3, 2013. So, it has not made its way to FAR yet and that is why the FAR clause at 52.219-14 still expresses the limit as 50% of costs incurred for employees. I am not sure where the FAR process is at, but hopefully the change will make it there soon and then the limitation can properly be characterized as "self-performing 50% of the work" or "limiting the amount that can be subcontracted to 50%."
  7. Awards to JVs (and the 50% rule)

    Please take note that the requirement is not 50% of the work, but rather "At least 50 percent of the cost of contract performance incurred for personnel shall be expended for employees of the concern" if this is for services (non-construction). Even for supplies, the requirement is limited to 50% of the cost of manufacturing the supplies and materials are excluded from that measure. This is an important distinction. Materials/supplies could constitute a significant portion of the contract costs and do not have to be self-performed. So it is not correct to characterize the requirement as either "self-performing 50% of the work" or "limit the amount that can be subcontracted to 50%." Read the 52.219-14 clause closely. On a note of interest, I saw somewhere a while back that the SBA was considering redfining this limitation to be that no more than 50% of the work could be subcontracted to other than small businesses. I don't remember if this was in a proposed rule stage or not - but have not seen anything come of it in the FAR, so I don't know where it stands. But it would be an interesting deveiopment if it comes to pass because it is easier to audit for compliance based on the value of subcontracts and business size. Another interesting aspect would be that such a rule would mean that the SB awardee can be a broker and sub everything as long as the subcontracts to businesses not small did not exceed 50% of the contract price.
  8. Vern, I omitted the rationale that led to my conclusion. I noted that it was a breach of contract and I am aware of the case law. As you said it is over 10 years old and my experiece is that many agencies have evolved to a practice of small minimum guarantees, usually a meager amount of $1,000 or two. It has been a long time since I have seen a contract with a minimum guarantee of $200,000 as in the case you cited. I have even seen agencies guarantee a minimum of $500.00. I also believe in making the contractor prove its damages. But most contractors would be hard pressed to scare up less than a couple of thousand dollars, or more starkly $500, in a breach impact claim, or even in termination costs. I recognize there may be some situations where a contractor may have virtually no cost impact, but those would be rare in my estimation. So, being a betting man, my assumption here was that the contract in question, being awarded in 2012, was was of the more recent ilk when it comes to the amount of the minimum guarantee and any breach claim would equal or exceed the minimum guarantee. More to the point, many contractors would simply submit an invoice for the minimum guarantee and, if so in this case, I think the agency may be getting a bargain by paying a thousand or so, or even less. They may even spend much more than that drawing the process out by asking for a more specific claim with documentatio and then having to analyze and respond to such a claim. To pay the requested amount in that situation may be the better business decision. In the end, it may well be cheaper to pay the requested minimum at that low end of the spectrum. I do know it is also true that often a contractor will not even request the minimum guarantee. Enough said - I take your point that it should not be an automatic conclusion and it wasn't so for me. My other assumption was that it was a multiple years contract with a base and options and diverdave corrected that by stating it was a 5-year ordering period. That said, the reality here is that the funds are multi-year and good through FY 2013. That being the case, the agency has about 6 more months to scare up a minimum requirement and place an order making use of the existing funds and this whole discussion becomes academic. I hope that is what they do. I will say that I don't agree with your position of blaming the CO, at least exclusively - joint blame is appropriate. I agree with you that the CO should have inquired. But while you call it the "Contracting Officer's contract," it is the Program Manager's tool for program execution. The PM is the requirements person responsible for identifying the need for the contract in the first place and it was the PM's responsibility to ensure minimum guarantee funds for the contract were made available by the Controller to the Contracting Officer to make the award. Utlimately, it is the PM's responsibility to make decisions about obligating program dollars. Both the CO and PM should have been monitoring the situation but I place greater expectation on the PM to be aware of the program status and alert the CO if there is going to be a problem ordering the minimum guarantee. And if the CO makes the PM aware that there could be termination costs, the PM then can assess whether it is more beneficial to identify a scope of work that can satisfy the minimum and be of value to the taxpayers. And hopefully the PM rightly decides to terminate if he believes either there is no or negligible value to the taxpayer to be had in ordering any work which would cost more than any expected breach or termination costs.
  9. You did not specify, whether your contract was a multiple year or multi-year contract. Assuming it is a multiple year contract with options for additional years and considering that options are not guaranteed, even if the contract did not state so the reasonable presumption wouldl be that any promised minimum guarantee would be ordered in the base year of the contract. In my opinion would be you have to pay the obligated minimum funding even though no task order was issued. The government breached its contract by not ordering the minimum guranatee and at minimum (no pun intended) the contractor should be put in the same position he would have been in if the government had not breached the contract. Assuming your agency exercised any options under the contract in a timely manner and otherwise in accordance with the contract terms and conditions, you can place the FY 2014 order, but must use 2014 funds on that order based on the bona fide needs rule as others have pointed out. . How did the government let this happen you ask? It is called failure to manage. The program manager should have identified some R&D effort, even if only calling for a report after a specified level of effort, that the agency could have gotten value from for its funds. It's not like he would have had to beat the bushes to scare up the funding - it was already there.
  10. jdm843, You are on point about a careless acquisition planning environment on the inside. It is not just potentially promoted, it has been occuring for years. I shared that I had been in your shoes - asked to issue solicitations for end of year awards using the availability of funds clause. How much clearer can the language in FAR get? First test - if the requirement is to start in this FY and you are soliciting in this FY, the only Availability of Funds authority that might be applicable is if you are issuing an IDIQ that crosses the FY with a minimum guarantee certain to be ordered in this FY (FY of award) and funded with this year's funds. If your requirement is not for an IDIQ that wil cross FYs and will start this FY, then that Availability of Funds authority does not apply. Second test - if the requirement is to start next FY and is properly chargeable to next year's funds, but you need to solicit and award now (this FY) in order to have the contract in place so work can start on time next FY, then use of the Availability of funds authority may be appropriate. Next test - is the requirement for O&M or continuing services that are both (1) necessary for normal operations, and (2) for which Congress previoiusly had consistently appropriated funds (unless other specific statutory authority exists). If the requirements cannot pass these tests, then use of the Availability of Funds condition cannot be used. The fact that many contracting offices allow program managers and, more often, finance and budget managers to insist on using the availabiltiy of funds conditon has already led to the careless planning process that we all see: wating until last minute to make decisions on competing priorities and request funds. Everyone is victim to the broken budget process where many agencies' components may not even know their authorized funding levels until late second or even third quarter. Then everyone scrambles to do a year;s worth of planning in two to three months to be able to execute a year's worth of requirements in the last quarter of the FY. This is not to say they are justified in using the lack of express funding authority as an excuse not to plan because they certainly could develop a priority list and then draw a line where funding stops once the budget is known. It is to say that too many federal employees are tired of the process that jerks them around every year and have simply given up on trying to be ahead of the curve and effectively plan. Also, many government finance and budget managers stamp the phrase "subject to availability of funds" conditon on every purchase request as they do not understand the FAR application of that condition and believe it means they can be non-commital until they have resolved all conflict between competing program managers and senior management in terms of where the agency should spend its dollars available for obligation. So you are on point on the careless acquisition planning process observation. It is a challenge for Contracting Officers, but understanding the proper applicaiton of the Availability of Funds conditoning on solicitations and resultant contracts should not be a challenge. In your original post, you made one statement that I would challenge: It has been my experience that most of the solicitations issued by many contracting offices are for requirements (bona fide needs) of the current FY. While most offices also issue solcitations in each FY for replacement contracts and option modifications for recurring severable services that will renew in the next FY (new performance period to start after September 30), I doubt if the volume of those equates to "essentially all solcitiations, except in the rare case of contracting offices whose only function is to award those types of actions. Even then, many of those recurring severable service contracts are now crossing fiscal years, which means they can be funded with funds appropriated to the same FY of solicitation. So I would not agree that esentially all solicitations satisfy the prescription ar FAR 32.705-1(a).
  11. Let me add one point to tie it all together. The availability of funds clause for contracts to be awarded this year for services to start in the next fiscal year is only authorized for O&M, as you acknowledged, but that is "necessary for normal operations,." according to FAR. Requirements that are discretionary, such as the small construction projects I cited in my example, do not come under the definition of "necessary for normal operations." Point being is that we should understand the scope of the availability of funds authority and not let agency indecision about discretionary items direct our actions. If an agency issues two appropriate solicitations for O&M using the availabiltiy of funds clause and then has to make decisions about service levels based on final appropriations, that is another story. The awarded contracts can be modifided using the T4C authority of the government which invokes certain protections for the contractor. In the case of IDIQs crossing fiscal years, if funds are not appropriated, the government is not obligated to order beyond the minimum guarantee, which should have been for requirements of the award year which were already funded by appropriations in place at the time of solicitation and award.
  12. Where in 32.703-2 do you read anything about shifting priorities? The availability of funds is about charging the proper fiscal year funds. It is the authority to solicit a contract in this fiscal year that will start in the next fiscal year and be chargeable to next year's funds. Generally, if an agency issues such a solicitation it should be sure it will award that contract unless the funds for that purpose are not approriated for the new fiscal year. Did you read the section about Congress having previously consistently appropriated funds for the purpose? The other application of the availability of funds clause is for IDIQs that cross the FY and that associated clause puts the offerors on alert that funds for task orders beyond the fiscal year of award are not available and no task orders can be issued after the FY until the funds are made available. The availability of funds applications are about fiscal law, not agency discretion on how or on what to spend its money. An agency should not exercise the resources of industry with solicitations under which it is highly likely that no award will be made. If an agency wants to put a disclaimer on a solcitation that it is not entirely committed to awarding a contract based upon shifiting priorities, then put such a statement on the solicitation and industry has fair warning that it will be exercising its B&P budget in a higher risk environment than usual. But do not mislead industry by using the availability of funds clause. Availability of funds is about the funds not being appropriated yet, not about having them but not being sure where you want to spend them. I have been in your shoes. I worked for an agency that wanted to issue 40 construction solicitiations at the end of the year to use up all of their O&M budgeted funds and then fund, say for example, the 20 they could based on offers received and wanted to always do that by using the Availability of funds clause in an improper and misleading manner. COs have to remember that not only is it a matter of fiscal law, but you are required to deal fairly with industry. It is not fair dealing to try and mislead them into spending B&P costs unnecessarily - my opinion.
  13. You should read FAR Subpart 32.703-2 closely. It clearly describes the situaitons in which you are authorized to condition a contract on the availabliity of funds. If you do not understand after reading, then come back with specific questions regarding the aspect you do not understand. Agencies often slap this phrase on solitictiations and resultant contracts without understanding the proper application.
  14. Fair Opportunity vs. "Rule of Two"

    the BC,,, you posted: You may want to read the Mori Decision mentioned in an earlier post. The Rule-of-Two analysis is done before you select a contract vehicle. So that means you do market research on the capability of all of the members in the SB community, not just those that hold your IDIQ contract. You may find there are two or more capable of peforming your requirement who you reasonably expect would submit an offer which you could negotiatie for a fair and reasonable market price. - and none of them may hold your IDIQ contract. In that event you would be using another exisitng vehicle whose scope covered your requirement and where at least two of the capable sources you found were contract holders, or you would be awarding a stand alone contract. You don't pick a vehicle and then see if you have two SB contractors holding that IDIQ contract who are capable and would submit offers.
  15. If you have determined that this is not a miscellaneous receipts situation as described by NavyContracting, you need a lot more information to get the right answer. First, this is likely a fiscal law issue. Some questions. What is the money collected for? What type of funding supports the contract? Appropriated? Non-Appropriated? Usually, when an agency collects monies for whatever: fees, tax payments, rents, to use some possible examples, the collected funds are required to be deposited in a specific Treasury account for those revenues. Does the agency have specific authority to deposit those funds and commingle them with its appropriated fund? If not, then there may be a violation of fiscal law and it may be a purpose (what the collected funds were to be used for) violation or an anti-deficiency through augmentation violation, or both, and/or others. You must get the correct answers to these questions in order to determine if it is a proper situation (keep the money in lieu of the Gov writing a check as Vern describes) by virtue of an authorization to keep the funds and commingle them with the fund source supporting the contract. If you do not find that this is the case, then you may have a sticky situation on your hands.