Lionel Hutz

I agree.

When discussing appropriations, the term “availability” or “available” is a term of art that means an organization has legal authority to obligate the funds in question, i.e., the prerequisites of purpose, time, and amount have been satisfied. Per the OP, the funds were available; the PR was certified by the budget office but could not be routed through the IT system. The fact that the budget office had technical issues routing the PR does not render otherwise available funds “unavailable.” An appropriation is a type of budget authority that allows an agency to incur obligations and make payments out of the Treasury for specified purposes. Below an appropriation is the “apportionment,” which is a distribution by the OMB of amounts available in an appropriation into amounts available for specified time periods, activities, projects, or programs. The OMB apportions funds to prevent obligation at a rate that would create a need for a deficiency or supplemental appropriation. Administrative subdivisions imposed by an agency are the third level of fiscal control. These administrative subdivisions are divided into “formal” and “informal” administrative subdivisions. Formal administrative subdivisions consist of allocations and allotments. Informal administrative subdivisions are created by agencies at lower levels and are considered funding targets, or “allowances.” The Antideficiency Act, 31 U.S.C. §§ 1341-42, 1511-19, prohibits any government officer or employee from: a. Obligating, expending, or authorizing an obligation or expenditure of funds in excess of the amount available in an appropriation, an apportionment, or a formal subdivision of funds. b. Incurring an obligation in advance of an appropriation, unless authorized by law. c. Accepting voluntary services, unless otherwise authorized by law. Exceeding an allowance or other informal subdivision of funds does not violate the ADA unless to do so would also cause a formal subdivision, an apportionment, or an appropriation to be exceeded. The purpose of 52.232-18 is to prevent a contracting officer from violating the Antdeficiency Act when it is necessary to take a contract action (e.g., contract award or option exercise) in one fiscal year but funds will not be available (i.e., they will not be appropriated, apportioned, and formally subdivided) until the next fiscal year. With regard to the issue raised by RachelleR’s original post, I’ll need to speculate a bit, so take the following with a grain of salt. RachelleR stated that the budget office had certified the funds as available. This leads me to believe that funds had been appropriated, apportioned, allocated, and allotted as needed. However, an IT glitch prevented the routing of the funded PR. I do not know the administrative ramifications are of routing the PR in RachelleR’s agency. It could simply be a technical notification process with no impact on the funds at all. But at most, it involved a transfer of funds authority between informal subdivisions, i.e., an allowance, and obligating in excess of that allowance does not implicate the ADA. Therefore, while the KO might have committed an internal, administrative violation, the exercise of the option was valid. It was not necessary to exercise the option “subject to availability of funds” because the funds were legally available and exercising the option did not violate the ADA. Stating the option was being exercised pursuant to 52.232-18, while not technically accurate or necessary, did not cause any harm, assuming unbroken service was not needed.

Of course there is a contract. Just because the contract has expired, does not mean it does not exist. I recently dealt with a contractor claim filed 4 years after the end of the contract. I would have loved to have told the contractor that there was no contract. Have the rights and responsibilities of the parties changed under that contract? Absolutely. That is why the option cannot be unilaterally exercised. But the contract still exists. The issue is not whether the contract exists, but whether there is authority to modify the contract to allow the parties to exercise the option. Yes, this is exactly my point. I literally said, “my suggestion for modifying the contract to exercise the option is a legal fiction. In reality, the KO is awarding a new contract for the work.” It does not make sense to add an unlimited number of bilateral modifications on to an existing contract because when you start adding work that is not already covered by the underlying contract, then you need to make sure you have evaluated the proposed work, modified the SOW, included any applicable clauses that are needed, etc. You are not saving yourself any work and are potentially making the contract documents more confusing. In addition, by extending the contract you might inadvertently revive or extend the period to file a claim. I can think of many reasons why you would not want to continually add work to a contract or revive an expired contract via a BAA award. But those are administrative concerns, not CICA violations. Fortunately, modifying the contract to exercise the lapsed option does not implicate those problems. The work was already proposed and evaluated. The terms and conditions have already been agreed upon. My proposed solution is premised on several prerequisites including “1) the BAA allows for a direct award of a contract,” and “2) the work could otherwise be awarded as a new contract under the BAA…” As you noted above, a BAA award is not an exception to CICA, it is full and open competition. (See FAR 6.102(d)(2)(1).) Why would a direct award of a contract via modification of an expired contract be a violation of CICA, if a direct award of a stand-alone contract for that same work would not? CICA governs the “competition,” it does not mandate the format of the contract award. The peer/scientific review already happened when you awarded the contract. Get a memo from the technical office saying the previous evaluation and selection decision has not changed. Yes. That is up to the contracting officer to decide. But we are not talking about adding work that requires a new SOW and clauses along with a new technical submission and evaluation. We are addressing a situation in which the evaluation has already been conducted, all the terms and conditions have already been agreed to by both parties and the same work is still needed. In that situation, every KO I have worked with has preferred to modify an existing contract rather than start from scratch. No. Hopefully, the contracting officer is never exercising an option, modifying a contract, or awarding a contract without involving the requiring activity/program office in some way.

GAO has held that the preliminary written notification is a measure that benefits the contractor and may be waived by the contractor. This waiver could be in the form of a modification, but does not have to be. If the period in which to exercise the option ends before the end of the contract, then the parties could bi-laterally modify the contract to extend the term in which to exercise the option. For example, "The Government may extend the term of this contract by written notice to the Contractor within 30 and 60 days before the contract expires; provided that the Government gives the Contractor a preliminary written notice of its intent to extend at least 90 days before the contract expires. The preliminary notice does not commit the Government to an extension." In such a case, the parties could agree two weeks before the contract expires to modify the clause to read, "The Government may extend the term of this contract by written notice to the Contractor at any time before the contract expires," or other such language. The option could then be exercised in accordance with the terms of the clause as modified. However, by my read of the regulations and GAO case law, once the contract has expired, the option can no longer be exercised. There may still be contractual obligations that need to be fulfilled or claims to be resolved, but the contract itself is done. As I noted above, my suggestion for modifying the contract to exercise the option is a legal fiction. In reality, the KO is awarding a new contract for the work. The modification is an administrative convenience.

The government must exercise an option in accordance with the terms of the contract. If the government was required to exercise the option in January, and did not do so, it lacks authority under the contract to do so six months later. When parties bi-laterally agree to modify the contract to exercise an option after the period to do so has expired, it is equivalent to a sole-source award. That is why a J&A is often required. But, a FAR Part 6 J&A is not always required. Imagine a contract with a lapsed option period valued at $8,500. In that case, the “sole source” award is below the micro-purchase threshold. Because no J&A would be required to issue a sole source award of such work, then a J&A is not needed to agree to a modification to add the work. Similarly, if the lapsed option period was valued at $175,000, and a sole source could be justified under FAR Part 13.106(b), then a modification supported by a memo from the KO determining only one source reasonably available would be sufficient. All the legal requirements for competition (or limiting competition) must be met, and the modification is simply an administrative convenience that takes the place of having to award a new contract. Now let’s apply those principles to a contract awarded under a BAA. The period to exercise the option has lapsed. Therefore, as stated above, the parties cannot simply agree to modify the contract. One option would be to support the modification with a J&A or FAR 13.106(b) memo as appropriate. However, that is not necessarily the only option. The original contract was (likely) negotiated and awarded on a sole source basis under the terms of the BAA. So, my advice would be to have the contracting officer review the terms of the BAA. Assuming: 1) the BAA allows for a direct award of a contract, 2) the work could otherwise be awarded as a new contract under the BAA, 3) the option price is still fair and reasonable, and 4) modifying the contract to exercise the option is in the best interest of the government, THEN the parties may bi-laterally agree to modify the contract and exercise the option PROVIDED the KO documents the file to reflect the above determinations AND as part of that determination states that although a new contract could be awarded, for administrative convenience the parties have agreed to exercise the lapsed option. If, for some reason, the underlying BAA requires some form of competition, or if the BAA has expired and a new one has not yet been issued, then the contracting officer must justify the limitation of competition in order to directly negotiate, modify the contract, and exercise the option (e.g., FAR Part 6 J&A or FAR 13.106(b)).

FAR 15.404-1(b)(2)(i) states, “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)(i)).” In other words, there must be adequate price competition to rely on a comparison of proposed prices. “Adequate price competition” requires, in part that “Two or more responsible offerors, competing independently, submit priced offers that satisfy the Government’s expressed requirement…” FAR 15.403-1(c)(1)(i) (emphasis added). How can you know whether a competing offer satisfies the Government’s expressed requirement if you have not determined technical acceptability? I do not agree that comparison of proposed prices establishes price reasonableness when only one offeror has been determined technical acceptable. To do so ignores the requirement that there be “adequate price competition.” Of course, as others have mentioned, the OP does not have to evaluate all the offers as there are other ways to determine price reasonableness. In fact, the prices may have already been found fair and reasonable. This is a TO competition. Brent, were ceiling prices established and found fair and reasonable when the contract was awarded? If so, is there any reason those prices would not still be fair and reasonable?

I'm not sure that this is the definitive answer, but DFARS 204.7103-1(f) states, "If a supply or service involves ancillary functions, like packaging and handling, transportation, payment of state or local taxes, or use of reusable containers, and these functions are normally performed by the contractor and the contractor is normally entitled to reimbursement for performing these functions, do not establish a separate contract line item solely to account for these functions. However, do identify the functions in the contract schedule. If the offeror separately prices these functions, contracting officers may establish separate contract line items for the functions; however, the separate line items must conform to the requirements of paragraph (a) of this subsection." (emphasis added) So, it seems like the contracting officer can establish separate contract line items for other direct costs like transportation, provided it satisfies the listed requirements. Or am I reading that wrong?

Retreadfed identified the applicable portion of the regulation. The Standards of Ethical Conduct impose duties and requirements on federal employees that are enforceable by the government, not by the public. However, if a company has a separate and independent contractual cause of action, then a COR’s violation of ethics regulations could strengthen a claim/appeal. For example, if a contractor alleges the CO’s and COR’s treatment of the contractor was unreasonable, increased the cost of performance, and violated the contract’s implied duty of good faith and fair dealing, then the COR’s violation of the ethics regulations lends weight to the contractor’s argument. It doesn’t prove anything, but in my opinion, a court or board of contract appeals will be less deferential and more skeptical of the actions and explanations of a COR who has a “covered relationship” with the contractor and was appointed in violation of ethics regulations. Even if there is not a claim or appeal in play, a contractor can still seek redress, it just depends on how much of a nuisance she wants to make herself over this issue. In my experience, the key to getting results is to increase the “pain” level until ignoring the issue is more burdensome than dealing with it. So, start by notifying the contracting officer. Maybe she/he was not aware of the prohibition and it can be solved at that level. If you get ignored, go to the Chief of the Contracting Office. Then, the Chief Counsel, Agency Ethics Official, and Agency Inspector General’s Office. If no one in the Agency will address the situation, contact your Senators and Congressman. It’s amazing how quickly an issue will get addressed when a Congressional response must be provided. At each step of the way, articulate the harm being caused to your company by this apparent violation of ethical regulations. This course of action is provided with the following practical considerations: 1) Make sure the issue is worth it. If you go to your Congressman or the IG with every contract issue you have, your complaints will start to lose their effectiveness. Become a “frequent filer” of complaints and people will start thinking the problem is with you and not the Agency. 2) Is the COR actually doing something to negatively affect your company? If this is just an issue that you think doesn’t look right, but the COR is not actually doing anything problematic, it may not be worth becoming a nuisance and jeopardizing your relationship with other agency personnel. 3) In less than a year, the COR will no longer be in a “covered relationship” with the company and will be permitted to be the COR again. Will getting the COR “kicked off” this contract for 6 months make working with him more difficult in the future? 4) Finally, as Vern points out, the regulation says “should” not “shall,” and the “agency designee” can authorize someone to work on a matter regardless of any real or perceived impartiality. In the end, while you may be able to force an answer out of an agency, it won’t necessarily be the one you want.

I didn’t quote the entire section because I thought it was obvious that a company that has a contract has a financial interest in that contract. I was trying to draw Lois’s attention to the fact that there is a “covered relationship” due to the prior employment. If that was misleading, I apologize. While paragraph (a)(2) addresses situations when there is no financial interest, it is not applicable here because there is a financial interest. For clarification purposes, let me explain. 2635.502(a) says that if a government employee has a covered relationship with a party that has a financial interest in a matter, that government employee should not participate in that matter (or get authorization) if circumstances would cause a reasonable person with knowledge of the relevant facts to question his impartiality. As quoted above, a “covered relationship” includes “Any person for whom the employee has, within the last year, served as officer, director, trustee, general partner, agent, attorney, consultant, contractor or employee…” 5 CFR 2635.502(b)(1)(iv). In this context, “Person means an individual, corporation and subsidiaries it controls, company, association, firm, partnership, society, joint stock company, or any other organization or institution, including any officer, employee, or agent of such person or entity.” 5 CFR 2635.102(k). So, in Lois’s scenario, the COR most likely has a covered relationship with his former employer because he worked there less than one year ago. Because the actions of a COR can have a direct and predictable effect on the financial interests of a contractor, the COR should not be assigned to his former employer’s contract if circumstances would cause a reasonable person with knowledge of the relevant facts to question his impartiality. We don’t know all the relevant facts. Perhaps, there are a unique circumstances here that would not cause someone to question the COR’s impartiality. Or, perhaps the KO sought and received authorization from the agency designee to appoint the COR despite the appearance of impartiality. In any event, Lois, if you are concerned about that individual being the COR, you have plenty of regulatory support for looking into this matter further and asking the KO if he/she complied with these regulations.

Possibly, depending on the circumstances. See 5 CFR § 2635.502(a) which states, in part, Paragraph (b) then says So, as an employee within the last year, the COR likely has a covered relationship with the company. The issue is whether "reasonable person with knowledge of the relevant facts" would question the COR's impartiality, keeping in mind that under the general principles of government ethics, an employee should avoid even the appearance of unethical behavior. 5 CFR § 2635.101(a)(14).

Agree

The language you quoted addressed noncompetitive purchase orders issue against noncompetitive BPA's. See the subsequent GAO decision involving the same procurement (posted earlier by Jwomack) stating that if competitive procedures are used to establish the BPAs, then orders may be rotated among the BPA holders. In the hypothetical presented, we are dealing with simplified acquisition procedures under the SAT. Under FAR 13.104, "maximum practicable competition" can be obtained by soliciting quotations from three sources within the local trade area. Therefore, Vern's recommendation of soliciting and establishing priced BPAs with at least three local vendors satisfies the requirement for maximum practicable competition. Because "competitive procedures" were used in establishing the BPAs, the orders may be rotated without additional competition.

Sorry. Just getting around to seeing this again. But the info does need to be filled in. See 52.104(d), which I also cited.

Take a look at FAR 52.102(a)(3)&(4), as well as FAR 52.104(d).

The GAO Redbook says the following, "GAO has conducted several studies of year-end spending and has consistently reported that year-end spending is not inherently more or less wasteful than spending at any other time of the year. In one report, GAO suggested that year-end spending surges are really symptomatic of a larger problem—inadequate management of budget execution—and that the apportionment process could be more effectively used to provide the desired management." (Vol. 1, Ch. 5, p. 5-17.) Unfortunately, out of the five studies cited, four are from the 1980s and one dates from 1998.

Thanks, again.

Thank you Vern! I understand that a trade off process would offer an "advantage" in that small business wouldn't have to be referred to the SBA for COC consideration. But, when comparing only an LPTA using "responsibility-type" evaluation factors to a Price only evaluation using Special Standards of Responsibility, it sounds like neither option provides an "advantage" over the other (with regard to SBA COC issues) because both would require referral to the SBA. Is that correct?

The above discussion primarily compares "Special Standards of Responsibility" and evaluation factors used in a best value, trade-off source selection. I have a question about "Special Standards of Responsibility" vs LPTA evaluation factors, which are also evaluated on a pass/fail basis. Under Simplified Acquisition Procedures, assuming the discriminating factors that you want to evaluate are responsibility type factors (e.g. Experience, Adequate Facility, Required Certification) is there a benefit to choosing one type of evaluation over another, i.e., Price only evaluation with Special Standards of Responsibility vs LPTA? I have not dealt with Special Standards of Responsibility much, but it seems that the general process would be similar and the outcome the same. For DoD organizations, the FY17 NDAA requires a limitation on the use of LPTA be included in the DFARS. Would changing LPTA evaluation factors into Special Standards of Responsibility (to the extent you can) be a way of maintaining a similar source selection process without having to deal with the limitations, justifications, and other hurdles that may be implemented in the DFARS? I know we can’t really answer that last question until we see what the regs say. But if anyone has ideas on the matter, I’d be interested in hearing them. Thanks.

I'm not sure if the psych exam example you provided is the issue that you are facing. But if it is, I just wanted to point out that DOJ receives a special appropriation for the Fees and Expenses of Expert Witnesses. Further, "Funding allocated to this activity is also used to pay the fees of physicians and psychiatrists who examine defendants upon order of the court to determine their fitness to stand trial." (https://www.justice.gov/file/969041/download) I know that doesn't directly address the question you raised. But, if you are working with DOJ there should be an established process in that office. There is no exception that would remove this acquisition from the FAR. As others have noted, a micro-purchase using a GPC would be pretty darn quick. However, if the cost exceeds the micro-purchase threshold (or even SAT) the procurement can still be conducted quickly. A sole source contract for expert services can be awarded pursuant to the authority of FAR 6.302-3(a)(2)(iii) (“to acquire the services of an expert or neutral person for any current or anticipated litigation or dispute.”) If it is a recurring requirement, and you want to speed up the process, consider issuing a class J&A while maintaining a running list of qualified experts. For an example, see the SEC Division of Enforcement here: https://www.fbo.gov/index?s=opportunity&mode=form&id=f293c58f774e1e7b57e85d171881a1bb&tab=core&_cview=1

Ah well, unfortunately, I do not have time for a proper response as an extra-long weekend is calling my name, and there is work yet to be done. I'll just say I disagree and return the courtesy of leaving you the last word. As always, thanks for the discussion!

I’d like to correct something I wrote earlier. I previously stated that “Price reasonableness is a subjective determination.” When I stated that, I meant that a determination of price reasonableness would vary depending on the facts and conditions of the acquisition. I still believe that; however, that is not the proper use of the term “subjective.” The reasonable person standard is an objective, not subjective standard. In an objective standard, the personal beliefs of the party are irrelevant. What matters is what a typical person exercising ordinary prudence would find reasonable. On the other hand, a subjective standard considers the actual beliefs of the party when deciding whether he or she acted reasonably. See the following article for a discussion of The Objective Theory of Contracts. (http://scholarship.law.tamu.edu/cgi/viewcontent.cgi?article=1301&context=facscholar) which states: The Dimatteo article cited by Vern also makes this same point when it states: Further, I agree that when dealing with professionals, the reasonable person standard is elevated to that of a reasonable professional in that field. A professional has skills and abilities superior to the average person and is expected to utilize those skills/abilities when appropriate. So, for example, a doctor that treats a person with a broken leg will be held to the standard of a typical doctor exercising ordinary prudence, not just a typical person. So, to summarize up to this point: There is not a limit on what can be considered a reasonable price in all acquisitions; it will vary depending on the circumstances. In addition, the whims and subjective beliefs of a contracting officer are NOT considered in determining whether a price is reasonable. Rather, the decision must be viewed from the objective standpoint of a reasonable person. And finally, because we are dealing with professionals exercising skill in their chosen profession, the reasonable person standard is elevated to the standard of a reasonable professional. It seems, the disagreement lies in whether the hypothetical “reasonable professional“ should be the more specific “typical contracting officer,” or the more general “typical business person.” First, with regard to determining price reasonableness, contracting officers are not generally accepted as having skills and abilities superior to business people in private industry, such that they should be considered separate or held to a higher standard. There are highly skilled, intelligent and educated people in both the public and private sector. It may appear that the two groups are at odds in determining price reasonableness if you compare the price at which a typical business person would like to SELL to that which a typical contracting officer would like to PAY. But that is the wrong comparison because the circumstances are not the same (sell vs pay). Rather, the question to be asked is, whether under the same circumstances, a typical business person would PAY the price being evaluated for the needed goods or services. In other words, is the Government getting a worse deal than the private sector would get in the same situation? I see no reason to believe contracting officers, as a class, have superior abilities and make better price reasonableness determinations such that they should be held to a higher standard. Next, the rights and duties of a contracting officer are not inherently greater than that of a private business person. The US Supreme Court stated, “When the United States enters into contract relations, its rights and duties therein are governed generally by the law applicable to contracts between private individuals.” Winstar v. United States, 518 U.S. 839, 895 (1996) (quoting Lunch v. United States, 292 U.S. 571 (1934)). When the Government wants to impose rules, obligations or standards on a contracting officer that are in addition to, or more strict than, the private sector (for example, restrictions on accepting gifts) it does so through specific statutes, regulations, and policy. Absent such a specific requirement, the actions of the Government and its contracting officers are governed by the law applicable to the private sector. Finally, the FAR already allows a contracting officer to rely on what a typical business person considers reasonable in the form of published market prices. See FAR 15.404-1(b)(2) (“The Government may use various price analysis techniques and procedures to ensure a fair and reasonable price. Examples of such techniques include… (iv) Comparison with competitive published price lists, published market prices of commodities, similar indexes…”) There is no caveat that private industry market prices support a determination of price reasonableness only if they also pass another more stringent level of scrutiny. Based on this, I believe that a contracting officer can conclude that a price is fair and reasonable if he or she determines that typical business person, with ordinary prudence, in the same circumstances, would pay the price.

Jamal, I agree. When examining issues of “reasonableness” the law uses what is known as the “Reasonable Person” standard. It is most often associated with the law of Torts, but is equally applicable to contract law, when it is sometimes called the “reasonably prudent business person” standard. http://injury.findlaw.com/accident-injury-law/standards-of-care-and-the-reasonable-person.html When we talk about whether a price is reasonable, we are asking whether a reasonably prudent business person in a given situation would pay the price in question. This standard is reflected in the advice of the Director of Defense Pricing (quoted in my post above) when he states that the determination should be made from the point of view of “a reasonable businessman or business woman reviewing the data.” Under this standard, it is not be enough for the contracting officer merely to say, “The price is reasonable to me.” Nor is it required that the specific price be reasonable in all situations. Rather, the contracting officer must be able to say, “A typical business person, with ordinary prudence, in the same circumstances I am in, would be willing to pay this price.” When you see examples of unreasonable pricing, it is because it does not meet that criteria. Either, there are other equivalent options at better prices, or the government’s need is not great enough to pay the requested price and it is more prudent to simply go without. For example, under normal circumstances, a contracting officer is not going to be able to determine $10,000 to be a reasonable price for a coffee pot. It does not matter how much he or she subjectively loves coffee. Nor is it enough that an extravagant millionaire might purchase a $10,000 coffee pot as a luxury. There are many options when it comes to purchasing coffee pots, and a typical business person, with ordinary prudence under normal circumstances is not going to pay that price for a coffee pot. A good example in private industry is a television commercial. Without context, $4M for a 30 second commercial sounds unreasonable. And, if a local cable company demands $4M from Pepsi for a 30 second ad during a rerun of McHale’s Navy, it would be unreasonable. The need for any one ad is not that great, and there are other less expensive, equally effective opportunities to air commercials. A reasonably prudent business person would not pay that price. But if FOX demands $4M from Pepsi for a 30 second ad during the Super Bowl, it may be determined to be a reasonable price. The number of viewers plus the potential for ads to go viral and generate “buzz” make the return on that $4M purchase a much better deal. Considering prices at this year’s Super Bowl approached $5M, one might even think Pepsi was getting a good deal at only $4M. The product and price haven't changed, but the circumstances have. Tweak the scenario just a bit more and the price can become unreasonable again. Imagine a company that does not sell products to the general public and is operating at maximum capacity such that a Super Bowl commercial is not going to help generate sufficient revenue to justify the purchase. In that case, even the “bargain” rate of $4M is not a price that a typical business person with ordinary prudence would pay in those circumstances. Keep changing the circumstances, i.e., the data, and you can find multiple scenarios in which the same price for the same item is either reasonable or unreasonable from the point of view of an typical business person with ordinary prudence. If reasonableness of price did not depend on the specific facts of a procurement, then the Government could come out with a universal price list that capped the prices across all government contracts. The FAR recognizes the variable nature of the price reasonableness determination and puts that responsibility on the individual with the most knowledge of the circumstances of the procurement.

There is no hard and fast definition. U.S. Supreme Court Justice Potter Stewart once famously penned (about defining pornography), "I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it…" I think the FAR and GAO have taken a similar approach with the definition of a fair and reasonable price. See, for example, Matter of Nutech Laundry & Textiles, Inc., B-291739, February 10, 2003: Here you can see GAO essentially saying, it is up to a contracting officer to determine whether a price is reasonable, unless they think it is unreasonable. While they may render a decision on a case by case basis, they do not try to establish the outer boundaries of reasonableness. Even the Director of Defense Pricing, when discussing price reasonableness in the context of a Commercial Item purchase, does not establish a bright line rule. He writes, http://www.acq.osd.mil/dpap/policy/policyvault/USA007164-14-DPAP.pdf On the one hand, it would be nice to have more guidance, but on the other, the more you define and establish hard and fast definitions, the more you limit the discretion afforded to a contracting officer.

Don, Ha ha. Believe me, I know that consistency is not a strong suit of the FAR Council. My statement was a reflection of a cannon of statutory and regulatory construction. See pages 15-16 of this CRS Report for Congress (pdf pages 19-20) (https://fas.org/sgp/crs/misc/97-589.pdf) : And I don't know that there is an organization more dysfunctional than Congress, yet that is how Courts and administrative bodies statutes and regulations. Yes, sometimes cannons of construction are legal fictions. But if the Courts and GAO use them, they're good enough for me. Finally, I'll just add one last quote from GAO: Granted, that is just one case. But it is a protest in which GAO examined the language of FAR 15.402(a), noted that it said "contracting officer," and concluded that it is a "fundamental requirement" that applies to "a government agency."

Vern, We can agree to disagree. No problem. I enjoyed the discussion, thanks! My comments that follow are not directed at you or anything you have written. Cheers!