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  1. 17.207 Exercise of options. (a) When exercising an option, the contracting officer shall provide written notice to the contractor within the time period specified in the contract. (B ) When the contract provides for economic price adjustment and the contractor requests a revision of the price, the contracting officer shall determine the effect of the adjustment on prices under the option before the option is exercised. © The contracting officer may exercise options only after determining that— (1) Funds are available; (2) The requirement covered by the option fulfills an existing Government need; (3) The exercise of the option is the most advantageous method of fulfilling the Government’s need, price and other factors (see paragraphs (d) and (e) of this section) considered; (4) The option was synopsized in accordance with Part 5 unless exempted by 5.202(a)(11) or other appropriate exemptions in 5.202; (5) The contractor is not listed in the System for Award Management Exclusions (see FAR 9.405-1); (6) The contractor’s past performance evaluations on other contract actions have been considered; and (7) The contractor’s performance on this contract has been acceptable, e.g., received satisfactory ratings. (d) The contracting officer, after considering price and other factors, shall make the determination on the basis of one of the following: (1) A new solicitation fails to produce a better price or a more advantageous offer than that offered by the option. If it is anticipated that the best price available is the option price or that this is the more advantageous offer, the contracting officer should not use this method of testing the market. (2) An informal analysis of prices or an examination of the market indicates that the option price is better than prices available in the market or that the option is the more advantageous offer. (3) The time between the award of the contract containing the option and the exercise of the option is so short that it indicates the option price is the lowest price obtainable or the more advantageous offer. The contracting officer shall take into consideration such factors as market stability and comparison of the time since award with the usual duration of contracts for such supplies or services. (e) The determination of other factors under paragraph ©(3) of this section— (1) Should take into account the Government’s need for continuity of operations and potential costs of disrupting operations; and (2) May consider the effect on small business. (f) Before exercising an option, the contracting officer shall make a written determination for the contract file that exercise is in accordance with the terms of the option, the requirements of this section, and Part 6. To satisfy requirements of Part 6 regarding full and open competition, the option must have been evaluated as part of the initial competition and be exercisable at an amount specified in or reasonably determinable from the terms of the basic contract, e.g.— (1) A specific dollar amount; (2) An amount to be determined by applying provisions (or a formula) provided in the basic contract, but not including renegotiation of the price for work in a fixed-price type contract; (3) In the case of a cost-type contract, if— (i) The option contains a fixed or maximum fee; or (ii) The fixed or maximum fee amount is determinable by applying a formula contained in the basic contract (but see 16.102©); (4) A specific price that is subject to an economic price adjustment provision; or (5) A specific price that is subject to change as the result of changes to prevailing labor rates provided by the Secretary of Labor. (g) The contract modification or other written document which notifies the contractor of the exercise of the option shall cite the option clause as authority. (The purpose of the separate analysis is that after time market prices can change. You need to ensure you are not paying to much for a specific product. For example, lets say one of your spare parts is made out of Aluminum and when you signed the contract 3 years ago Aluminmum was $4 dollars an ounce. If today, the price for an ounce of Aluminum is $1 dollar your option would fail the above because a new solicitation would produce significantly better prices.) Hope this helps.
  2. Acquisition Type: Cost Reimbursement Contract - Non-Completion Effort – The services would be best described as a “Term” effort or severable services.
  3. In the "Source Selection Answer Book" second addition by Vern J. Edwards page 98. It recommends the use of three source selection factors. 1: Offer Acceptability 2. Risk - based on offeror experience and past performance 3. Price I have two questions. One has anyone used these in a source selection and if so could you please provide your experience with these evaluation factors? Second with regard to cost realism did you experience any concerns with completing a cost realism analysis or do you perceive any concerns with regard to completing cost realism based on these factors without receiving a full up technical proposal?
  4. Has anyone ever attempted to make a contractors "ability to propose", aka quality of proposal submission (clarity, error free, aligned with source selection factors, etc.) a source selection requirement? The reason that I ask is that it seems to me that an inherent ability of a contractor to work under a multiple award IDIQ (especially one with an aggressive ordering processes) is their ability to produce quality proposals in a timely fashion. I have read about PoP quizzes and other types of tests being incorporated into a formal source selection but the focus was on technical capability not necessarily their overall proposal capabilities. Any input, suggestions, comments or warnings about potentially making this a source selection criterion would be greatly appreciated.
  5. Good Afternoon, Really appreciate any help I can get on this issue. As I understand it, when you award a Multiple Award IDIQ Contract (MAC) the "rule of two" still applies to all future competitive awards that happen under that MAC contract. Additionally the "rule of two" as it pertains to small business applies inside and outside of the MAC aranagement. For example, if my customer proposes to compete a requirement under their newly formed MAC contract we first have to determine whether a small buseinss can do the requirement. Additionally we have to consider offerors outside of the MAC contract. Is this correct? I vaguly remember a GAO case about this but I could not find it in my searches. Second Question: Assuming a MAC is awarded, could you limit competition after initial task orders are award to specific regions, essentially establishing a sole source environment within the MAC contract for that particular region. Can you do this? I would have originally said no but I reviewed the FAR in regards to establishing the ordering process under the MAC contract and it appears to be very open to interpretation. Does anyone see any concern if we establish at the time of the original solicitation within the intended MAC ordering process that once a Task Order is awarded for that region that region is in a sole source environment for any future work as long as it is for that specific region? Thank you for your help.
  6. When conducting a LPTA source selection are you required to review the technical and OCI proposal for every offeror or only the offeror with the Lowest Price?
  7. This is just an overall note on Wage Determinations. It is important to watch in the out years that if there are increases to the WD rates as a result of updates to the printed WD and the offeror/contractor is already paying that adjusted rate of higher then that adjusted rate may not be eligible for an increase to the direct labor rate as a result of changes to the WD. Example WD 2012 = Typist is $12 an hour Contractor is paying the Typist $14 dollars an hour. WD 2013 = Typist is $13 an hour. The contractor is still in accordance with the WD. The WD is only a minimum requirement. It is my opinion that in this instance the contractor would not be entitled to an increase in the labor rate as a result of adjustments to the WD. I had an experience when a contractor tried to argue the opposite but we did not entertain their proposed increase in ceiling as a result of this increase in rates.
  8. Joel, The complete price proposal would arrive at the begining of phase 3. To everyone, I really appreciate all the input. Sincerely, Ndean
  9. Hello, I am looking for comments, suggestions, and opinions on the following proposed approach to source selection. The GAO it seems is supporting the general rule that in-depth OCI reviews on only the offeror chosen for contract award is not sufficient. Additionally, if you wait to do an in-depth OCI review until right before award a problem could arise that can put an acquisition team in a bad place if your best value offeror has a potential OCI issue. I know that each organization has their own OCI policies and I am sure we are all waiting on the FAR council to approve the new OCI language. To overcome OCI concerns on a large upcoming procurement, I formulated the following idea and I wanted to see if anyone has tried something similar and could share lessons learned or if there are any ideas on how to overcome OCI concerns in a major procurement. Goals: Highlight potential OCI concerns early to help contractors determine whether or not they are able to fulfill the requirement. Provide Government review team amply time to review and mitigate potential OCI concerns. Enable the Government to make updates to the RFP stating mitigation plans that were accepted or rejected without sharing proprietary data. (This way if an offeror wants to protest based on one of those OCI issues they will have to protest the RFP instead of the award) Reduce probability of OCI protest at time of award Assumptions: - Large complex source selection - Dollar value over 100 million dollars - Performance Based Requirement - Large potential for OCI issues - All offerors have to submit proposals in phase 1 to be considered for award Proposal: 3 Phase Proposal Receipt: Phase 1: The RFP would be released complete with the SOW, L&M, etc. Within 21 days of the release of the RFP any potential offeror would be instructed to submit the following. - Complete OCI package - Minimal Technical Proposal which only shows they meet the must haves of the requirement (essentially a capabilities statement). - Evidence of an approved accounting system capable of attaining Government cost type contracts. Phase 2: The Government Team reviews the OCI submission, minimal technical proposal, and proof an approved accounting system. The Government team would then draft discussion topics and highlight potential OCI concerns. The Government would send out those discussion topics to the potential offerors along with a request for a complete technical, business, and past performance proposal due in 30 days from this second request. Phase 3: Establish competitive range, complete meaningful discussion with competitive range contractors, and make award. This is very high level and I am looking for comments on the concept and potential ways to improve it or why it won’t work. I am sure we all have different processes that our agencies make us do but I am looking more conceptual ideas on how to meet the goals stated above. Thank you in advance for your comments, suggestions, and criticisms. It is very much appreciated. Sincerely, Ndean
  10. "d) Limitations. A time-and-materials contract may be used only if— (1) The contracting officer prepares a determination and findings that no other contract type is suitable. The determination and finding shall be— (2) The contract includes a ceiling price that the contractor exceeds at its own risk. The contracting officer shall document the contract file to justify the reasons for and amount of any subsequent change in the ceiling price. Also see 12.207( B ) for further limitations on use of Time-and-Materials or Labor Hour contracts for acquisition of commercial items. · (i) Signed by the contracting officer prior to the execution of the base period or any option periods of the contracts; and (ii) Approved by the head of the contracting activity prior to the execution of the base period when the base period plus any option periods exceeds three years;" Three Questions: Does this requirement trickle down to subcontractors? If so when we see that an offeror proposes a T&M subcontractor should we immediately request HCA approval? At a very minimum, is the prime required to justify T&M contracts longer then a 3 year period of performance?
  11. My question is this: When a contractor uses a commercial credit card like AMEX, Discover, etc. and accumulates either travel points or some other type of award for using that credit card as a result of travel or expenses required by a contract with the Government is the Government entitled to those points? Would it be permissible to add contract language which would stipulate prior to direct charging the contract for either travel or ODCs the contractor would be required to use points generated from work executed for that particular contract?
  12. I have a question which is similar to the above topic. Is it possible to establish a FFP contract with Firm Fixed Price Unite Cost for a certain service and still have variability in the amount of units expended and paid for during each month and at the end of each contract year? For example, the Government contracts with company X to process images. A contract is created establishing a firm fixed price unit cost. Each image processed will be $.03. The contract is for 10,000 units but if the contractor only processes 9,500 the Government only intends to pay for those units. Is this a type of labor hour contract? or is it a case that the contract would just have to modified each year to represent the actual amount of units purchased so the contract can remain FFP? It was my understanding of Firm Fixed Price is that the total price is negotiated and the price is the price. If we put in 10,000 units and the government only requires 9,500 without a mod the contractor is entitled to be paid for all 10,000. Is that a correct assertion?
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