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CharterParty

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  1. @Don Mansfield, poor choice of words on my part with “typical Government Contracting Officer response” the issue is no less important and the referenced case Neil R. Gross & Co., 69 Comp. Gen. 247 (B-237434), 90-1 CPD ¶212: the quote includes a very important reference to the solicitation methodology “We also consider whether the solicitation for the original contract adequately advised offerors of the potential for the type of changes during the course of the contract that in fact occurred … or whether the modification is of a nature which potential offerors would reasonably have anticipated under the changes clause”. BAA’s are structured to be open calls, many are Funding Opportunity Notices under 2 CFR 200 in addition to Contract Solicitations or even the new hot topic of OTA vehicles, all into one solicitation vehicle. The method can advise the entire US industry base of research interests of the US Government and the possibility of grants/contracts/OTAs. The Government decided how/what type of vehicle best fit the circumstances of the response nothing foretold the award was to be a FAR based contract. Options are not even advertised in a BAA solicitation like in a FAR 15 solicitation. The question of what option authority is necessary is even a question in my mind given 17.200, which makes the option subpart inapplicable. @Don Mansfield you state "taken to its extreme, you would have to say that it's impossible for the work covered by the unexercised option to be out of scope. It may or may not be within scope." I am saying that any unexercised option under a contract initially awarded under a BAA with that option is within scope and bi-laterally executable . Now more generally if a contract initial award under a BAA included an option that for any reason the Government failed to exercise during its unilateral right period, can both parties agree to perform the work originally agreed to at award? Does it run afoul of CICA or the “Spirit of CICA”? Which specifically separated out the BAA. All, I really appreciate the discussion.
  2. @joel hoffman Let's keep the facts as close to B-219136 as possible. January was the option date, and the modification is executed in June. Again not a current item, it is just to flush out does the nuance of a BAA award change the normal J&A position.
  3. @Don Mansfield, I think the method used to place the original contract is incredibly important, in this fact set. I understand it is not a determinative factor in determining an in-scope change, an Agency can't just say any modification to contract originally awarded under a BAA is in-scope. I am saying CICA dictates that the Contracting Officer is to compete known requirements or to justify in writing consistent with the exceptions. It also acknowledged the Government may not be omniscient and allows for the BAA process in Basic Research (Again BA 1,2,3). I have not found any cases only opinions, and I believe that the typical Government Contracting Officer response to the scenario is changed by that key fact, the original award was properly executed against a BAA. Contracting Officers have been bound to compete or Justify a failed to exercise option under a requirement otherwise subject to competitive procedures, when a PoP has lapsed since CICA and the case B-219136. I believe the key piece of information is the work performed was otherwise known to the Government, in other words otherwise subject to statuary requirements for competition. @joel hoffman, you are correct my goal in the question was to lay out a fact pattern at the most basic level. A Contracting Officer failed to timely exercise an Option in a contract properly awarded against a BAA. The option was originally contemplated and placed in the contract, and the previous period of performance under the contract has since past. The parties agree to continue performance originally contemplated at award.
  4. Don Mansfield: Here is my reasoning. The sample scenario stated "An agency failed to exercise an option to extend the period of performance and the contract expired in January, in June the contractor and the Agency agree bilaterally to a modification to re-establish and continue originally planned work under the contract to the original option period of performance completion date of December of the year. The contract was initially award as valid contract against a Broad Agency Announcement and is for Basic Research (Budget Activity 1/2/3)." Here is the relevant text from B 288969.4 "Once a contract is awarded, our Office will generally not consider protests against modifications to that contract, because such matters are related to contract administration and are beyond the scope of our bid protest function 4 C.F.R. § 21.5(a) (2002); Stoehner Sec. Servs., Inc., B-248077.3, Oct. 27, 1992, 92-2 CPD ¶ 285 at 4. The exception to this general rule is where, as here, a protester alleges that a contract modification is beyond the scope of the original contract, because, absent a valid sole-source determination, the work covered by the modification would otherwise be subject to the statutory requirements for competition. Neil R. Gross & Co., Inc., B-237434, Feb. 23, 1990, 90-1 CPD ¶ 212 at 2, aff’d, Department of Labor--- Recon., B-237434.2, May 22, 1990, 90-1 CPD ¶ 491. In determining whether a modification triggers the competition requirements in the Competition in Contracting Act of 1984, 10 U.S.C. § 2304(a)(1)(A) (2000), we look to whether there is a material difference between the modified contract and the contract that was originally awarded. Evidence of a material difference between the modification and the original contract is found by examining any changes in the type of work, performance period and costs between the contract as awarded and as modified." The work does not fall into the category of "the work covered by the modification would otherwise be subject to the statutory requirements for competition". As pointed out by Pepe " It's not like a FAR Part 15, distinct service requirement where a competitor can swoop in and perform the work instead. In research and development, each approach is unique and it's not feasible to substitute one contractor for another." Under the GAO test an out of scope modification has not occurred, no material difference between the modified contract and the contract as original awarded, the contractor is continuing the same "type of work" (as Pepe pointed out unique to the firm). The performance period continues to its original planned end date (The original contract contemplated continuing through December, it was Agency failure to exercise. The contractor agreed to continue through execution of the bi-lateral modification), let's assume cost is unchanged. Therefore, their is no one the Agency should/could have offered the work to perform, no statutory requirement to compete the work.
  5. Here is a question and some thoughts hopefully to gain a better understanding. Possible Scenario: An agency failed to exercise an option to extend the period of performance and the contract expired in January, in June the contractor and the Agency agree bilaterally to a modification to re-establish and continue originally planned work under the contract to the original option period of performance completion date of December of the year. The contract was initially award as valid contract against a Broad Agency Announcement and is for Basic Research (Budget Activity 1/2/3). Thoughts: When a competitively awarded contract is awarded using FAR part 15 solicitation procedures, and the contracting officer fails to exercise an option and allows a contract period of performance to expire such that the contract has expired either a justification in accordance with FAR part 6 is necessary or a new competition is required. Either to establish a new contract vehicle or execute a bi-lateral modification to extend/reactivate the period of performance. See Washington National Arena Limited Partnership, B-219136, OCT 22, 1985, 65 COMP.GEN. 25. [Relevant text below and credit to Vern under http://www.wifcon.com/discussion/index.php?/topic/2164-option-to-extend-the-term-not-exercised-on-time-now-what/&page=2]. Relevant text from CICA relating to a BAA (FAR 35.016) “The term 'competitive procedures' means procedures under which an executive agency enters into a contract pursuant to full and open competition. Such term also includes ….(2) the competitive selection of basic research proposals resulting from a general solicitation and the peer review or scientific review (as appropriate) of such proposals.” Here is an example where the issue was worked by DAU/Ask A Professor (https://www.dau.mil/aap/pages/qdetails.aspx?cgiSubjectAreaID=3&cgiQuestionID=114379). I note the response does not address the basis for the original award. My position is should the fact pattern presented in B-21913 be modified to switch the award authority the conclusion would change. In the possible scenario above should an Agency fail for any reason to exercise an option under a contract properly awarded against a BAA a bi-lateral modification to continue the original performance be agreed to by the parties then performance may continue absent the need for a FAR 6 J&A. Is such a modification an abuse of the Agency's authority and outside the regulations? Relevant Text from Washington National Arena Limited Partnership. “WE AGREE WITH TICKETCENTER THAT THIS ATTEMPT WAS IMPROPER. UPON EXPIRATION OF TICKETRON'S CONTRACT, NEITHER THE GOVERNMENT NOR TICKETRON WAS OBLIGATED BY ANY OF THE CONTRACT TERMS; TICKETRON NO LONGER WAS BOUND TO PROVIDE VISITOR RESERVATION SERVICES, AND THE GOVERNMENT NO LONGER WAS BOUND TO PAY TICKETRON COMMISSIONS FOR SUCH SERVICES. THE UNEXERCISED OPTION PROVISIONS WERE PART OF THE CONTRACT AND, THUS, NECESSARILY EXPIRED WHEN THE CONTRACTUAL RELATIONSHIP WAS TERMINATED. THUS, THE ATTEMPTED RETROACTIVE EXTENSION OF TICKETRON'S CONTRACT WAS NOT AN EXTENSION AT ALL- - THERE WAS NO CONTRACT TO EXTEND- BUT THE NONCOMPETITIVE CREATION OF A NEW CONTRACTUAL RELATIONSHIP WITH TICKETRON. UNDER CICA, AGENCIES ARE REQUIRED TO "OBTAIN FULL AND OPEN COMPETITION THROUGH THE USE OF COMPETITIVE PROCEDURES" IN PROCURING PROPERTY OR SERVICES. 41 U.S.C. SEC. 253. CERTAIN EXEMPTIONS FROM THE COMPETITION REQUIREMENT ARE LISTED, BUT IT DOES NOT APPEAR FROM THE RECORD, AND NPS DOES NOT ARGUE, THAT ANY OF THESE EXEMPTIONS WOULD APPLY TO JUSTIFY A NONCOMPETITIVE AWARD TO TICKETRON UNDER THE CIRCUMSTANCES HERE. CONSEQUENTLY, WE SUSTAIN THE PROTEST ON THE GROUND THAT NPS SHOULD HAVE CONDUCTED A COMPETITIVE PROCUREMENT FOR THESE VISITOR RESERVATION SERVICES.” Washington National Arena Limited Partnership, B-219136, OCT 22, 1985, 65 COMP.GEN. 25 (https://www.gao.gov/products/461444#mt=e-report) Hoping for a good discussion, not based on a current fact set.
  6. Conundrum or Not? Do the procedures of FAR 13,14, & 15 apply to R&D contracts solicited following the procedures of 35.007? Here are my thoughts, FAR 35.006 is titled “Contracting Methods and Contract Type” the same title as SubChapter C (Parts 13-18). Within FAR 35 when other areas of contracting methods are required to be followed it states so expressly for example FAR 35.008(d) and (e), 35.007(d) and (e) . In contrast, FAR PART 13 states in 13.000 “Scope of part.” “This part prescribes policies and procedures for the acquisition of supplies and services, including construction, research and development,….the aggregate amount of which does not exceed the Simplified acquisition threshold”…. Is an award solicited via a BAA consistent with FAR 35.007 below the SAP to perform an analysis consistent with FAR 13.106-3 or 35.008? FAR PART 15 states in 15.00 “Scope of part.” “This part prescribes policies and procedures governing competitive and noncompetitive negotiated acquisitions.” The restrictions on the exchanges normaly provided in FAR 15 are removed in FAR 35. Do the procedures in FAR 13.106 and FAR 15.404 apply note the statement at the end of 35.008(e)? Thoughts and general discussion is appreciated.
  7. I agree with Vern please don’t assume either the best or the worst. This is an intellectual question, not a questions of particular facts. Here is language from the NAVSUP 4200.85D: “FAIR AND REASONABLE PRICE DETERMINATION Ref: Purchase Request/Solicitation Number_____________________ 1. I am recommending award to XXXXXXX. I used one or more of the following price analysis techniques compared to the quoted price of $____________. The quoted price was similar enough to the comparative price(s) to conclude that the quoted price is determined fair and reasonable. a. Adequate Price Competition. XX vendors were solicited and XX quotes were received. After comparing the quoted prices, I consider the quotes to be competitive. See the Simplified Acquisition Worksheet or other record of price quotes received.” Page 6-12. I have seen similar templates before in several offices. These are template documents that have check boxes. The contracting officer makes an assertion (Box check or otherwise like above) that the price is fair and reasonable based on competitive quotes and then two or more quotes are in the file to review. I don’t like this template’s use of the term “Adequate Price Competition”. As far as I can tell “Adequate Price Competition” is a term of art to describing procedures laid out in FAR 15. I have seen these templates in several offices and this question is one that always comes up. FAR 13.106-3(a) has only three options for price fair and reasonableness (1), (2), or (3). (1) leads with “ (1) Whenever possible, base price reasonableness on competitive quotations or offers. “ then (2) states “ (2) If only one response is received, include a statement of price reasonableness in the contract file. The contracting officer may base the statement on— (i) Market research; (ii) Comparison of the proposed price with prices found reasonable on previous purchases; (iii) Current price lists, catalogs, or advertisements. However, inclusion of a price in a price list, catalog, or advertisement does not, in and of itself, establish fairness and reasonableness of the price; (iv) A comparison with similar items in a related industry; (v) The contracting officer’s personal knowledge of the item being purchased; (vi) Comparison to an independent Government estimate; or (vii) Any other reasonable basis.” Competitive is not defined in FAR 2 or FAR 13 and I don’t know how you would apply the definition of adequate price competition to a FAR 13 procurement. Do two tractor suppliers who sell you a computer for your tractor count as competition? These tractor suppliers are stuck buying the computer from tractor manufacturer who normally does not sell direct (even to the federal Government). Don’t use the term tractor to confuse this question, it could equally be cell phone maker, engine manufacturer, software supplier. I also suspect this will become more of an issue in the future as software makes more items unique and necessary to keep the whole package working.
  8. While conducting reviews of SAP purchases a colleague and I had an discussion about what is necessary to award at a fair and reasonable price, in a particular situation. While price reasonableness is always a function of all the facts in a given procurement, absent any clear evidence of collusion or improper business relationships. Would two quotes from authorized distributors be sufficient fair and reasonable pricing? Assume that the determination necessary to support a single source BN/OEM has been properly executed for a part/item. Award is made to low price quoter of the same part/item. Would quotes from two different authorized distributors for the same BN/OEM item be sufficient price analysis to meet the threshold of FAR 13.106-3(a)(1)?
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