Vbus

fereirra,

Perhaps you are thinking about T&M? If the contract type was time-and-materials or labor-hour then the applicable payment clause prohibits the payment of fee on materials, which includes subcontracts for supplies and incidental services for which there is not a labor category specified in the contract. See FAR 52.232-7((7).

Do the procedures of FAR 43 apply to task orders under IDIQ contracts? (I'm really asking.)

43.000 Scope of part.

This part prescribes policies and procedures for preparing and processing contract modifications for all types of contracts including construction and architect-engineer contracts. It does not apply to?

(a) Orders for supplies or services not otherwise changing the terms of contracts or agreements (e.g., delivery orders under indefinite-delivery contracts); or

( Modifications for extraordinary contractual relief (see Subpart 50.1).

I always "liked" this sentence:

19.602-1 Referral.

(a) Upon determining and documenting that an apparent successful small business offeror lacks certain elements of responsibility (including, but not limited to, capability, competency, capacity, credit, integrity, perseverance, tenacity, and limitations on subcontracting, but for sureties see 28.101-3(f) and 28.203(c )), the contracting officer shall?

(1) Withhold contract award (see 19.602-3); and

(2) Refer the matter to the cognizant SBA Government Contracting Area Office (Area Office) serving the area in which the headquarters of the offeror is located, in accordance with agency procedures, except that referral is not necessary if the small business concern?

(i) Is determined to be unqualified and ineligible because it does not meet the standard in 9.104-1(g), provided, that the determination is approved by the chief of the contracting office; or

(ii) Is suspended or debarred under Executive Order 11246 or Subpart 9.4.

Vbus, not that it is a particularly burning topic, but what do you mean by the statement "Woe is me! -Part 53?" Just curious

The FAR has 53 parts. People often think it ends at 52 and forget 'Forms'. An anthropomorphized Part 53 might say, "Woe is me" as a way to express its sadness over constantly being forgotten and/or disrespected. If you're not sure that 'Part 53' would feel that way, consider a similar story: http://www.amazon.com/Little-Red-Caboose-G...k/dp/0307021521

Woe is me!

-Part 53

I couldn't help myself. Loki, Is this your scenario?

WIFCON readers,

WIFCON readers,

I'm advising on an agency level IDIQ evaluation for professional engineering services.

We are evaluating proposals under a solicitation for an IDIQ contract for services.

Prices to be on contract will be ceiling prices for various line items of professional labor, with task orders competed for upcoming requirements.

The contract will have loaded labor rates. The contract will be multiple award and task orders will be competed.

The solicitation language makes line item price reasonableness important, but also has a balancing test that gives consideration of the line item prices in the context of the overall offered/evaluated price (line items x estimated quantities for each).

The price of each loaded labor rate is being evaluated. Also, the total price of the contract is being evaluated by multiplying the proposed labor rates by our estimated number of hours for each labor category.

That balancing test was intended to make sure no line item prices were excessive, but to allow for natural variation amongst offers above and below the mean (or median) without setting arbitrary cutoffs for line item pricing - with the notion that true outliers on a CLIN would be deemed a high risk, and result in offeror elimination.

My plan was to evaluate both labor rates and total contract price so that our price evaluation is complete. I believe that although an offeror may propose some labor rates that are higher than Government estimates and perhaps higher than the average of all offerors, having higher rates on a few labor categories doesn't mean that the offer doesn't represent the best value. I believe that only when evaluating labor rates and total contract price can our price evaluation be complete.

Total price to the Government was to be assessed through the lens of the overall offered price values.

So again, total contract price is being evaluated.

Both the evaluation of line item pricing and the evaluation of overall offered price had roles.

And to restate, our price evaluation will include evaluating labor rates and total contract price.

New players have come into the mix, and are debating taking a very hard line on CLIN level pricing, as opposed to just scrubbing the CLIN level for excessive prices - which in my view may nix the balancing test, potentially rendering the role of the overall offered price case meaningless, and I see risk in that.

Some in my office have commented that we should only evaluate labor rates and not total contract price. These individuals feel that we should not consider offers where the offeror proposed any labor rates that are determined to be too high. I believe to automatically "throw out" an offer that contains one or more labor rate that is deemed "too high" doesn't allow for the possibility that the offer as a whole represents the best value.

The expressed reason for the new take on what to do with CLIN level price evaluation is that the solicitation states CLIN prices will be reviewed for reasonableness.

The reason that some in my office have the opinion that we should only evaluate labor rates is because that's what our solicitation states.

True, but that's true regardless of if that's stated or not, and has to understood in context of the overall price evaluation model so as to not upset the balancing test (to not render it meaningless).

It is true that the solicitation states that the Government will evaluate labor rates. I believe that does not mean that we can not / will not also evaluate total contract price.

It seems to come down to two different views of what is reasonable for CLIN level prices in the award of a contract.

So there is disagreement in my office on how to perform the price evaluation. Some believe we should evaluate only labor rates. I believe that we should evaluate labor rates and total contract price.

Any suggestions of what to say to or show (e.g., words, FAR or case law cites) folks to help them use jurisprudence in this matter - they seem stuck and the conversation is looping?

Any thoughts?

Thanks Don!

Looking for a case where prior to exercising an option, the Contracting Officer failed to conduct an "informal analysis" of the market to determine that the option price was still better than prices available on the open market, where it was later discovered that the option price was no longer the best price and the CO was held accountable for claiming that he had made that determination. Does this sound familiar to anyone?

dw,

A follow-up question to your discussion: If you place an FSS BPA in which task orders against the BPA will all be T&M or LH, should the ordering CO perform the necessary D&F at the BPA-level, or should each task order under the BPA have its own unique D&F?

Formerfed,

Yes, my mistake, the COPPER CAP program is Air Force. Navy (and several other agencies) have similar programs:

http://www.fai.gov/FAIC/AcquisitionInternPrograms.asp

The following article describes the impending executive order to end the Federal Career Intern Program:

http://www.washingtonpost.com/wp-dyn/conte...0122502099.html

I'm curious what you think this will mean to programs like Navy's COPPER CAP program, The Treasury Acquisition Institute, and DOI's Governmentwide Acquisition Management Intern Program, and what this will mean to the 1102 workforce in general.

As a follow-on to Bailers question, how do you classify an acquisition that will include work that is both construction and services? If Bailer's IDIQ contemplated the award of task orders for dredging work and environmental site assessment work, would you classify it as construction or services based on the higher percentage or would you need to follow regulations that governed both the acquisition of construction and services?

I happened to come across this example on FBO:

https://www.fbo.gov/index?s=opportunity&amp...mode=list&=

The Government's objective is to obtain services, including all labor, material, transportation, equipment, and supervision required to provide environmental services entailing a wide range of projects; such as, but not limited to: AST/UST removal and/or replacement; remediation and testing; asbestos, lead and mold abatement; facility decontamination and demolition; soil and groundwater sampling and remediation; site characterization and assessment; hazardous and environmental waste documentation, handling, treatment, and disposal; landfill maintenance and repair; unexploded ordinance removal and disposal; long term monitoring and operation and maintenance of remediation facilities; along with wetland and dredging operations.

I don't understand that statement. The fee is fixed. Under a properly written CPFF/LOE/Term form contract, the contractor will earn all of its fee only by delivering the entire level of effort. If the contractor consumes all of the estimated cost at 80 percent of the level of effort, and if the government does not fund the overrun, then the contractor will earn only 80 percent of the fee. It would not be able to improve its chances of earning all of the fee by "incurring the maximum amount of costs allowed under the contract."

As for efficiency, if you want to motivate the contractor to deliver the level of effort at less than the estimated cost, use a CPIF contract.

My apologies for typing faster than thinking. I was attempting to draw the correlation between LOE and cost and did so inarticulately.

When a CPFF Term form contract includes a clause to the effect that if the contractor does not deliver the entire level of effort it will be entitled only to a percentage of the fixed fee that is commensurate with the percentage of the level of effort actually delivered (i.e. if contractor delivers 80% of LOE it is entitled to 80% of fixed fee), the contractor will "maximize" their fee (i.e. get 100% of fixed fee) by expending the entire level of effort (i.e. performing 100% of the LOE). This is, of course, allowed under the contract but provides no incentive for the contractor to achieve the objectives of the contract at less cost. I agree a CPIF contract is the way to so incentivize a contractor.

My experiences have been similar to DBH's where a contractor under a CPFF/LOE contract claims that government technical direction altered the contractor's technical approach / labor mix.

I disagree with both of those statements.

First, under a CPFF/LOE/Term for contract, the stipulation of a level of effort reduces the likelihood of cost overruns, because the contractor is not working toward completion, but only to deliver a stipulated number of hours. An overrun will occur primarily if (1) labor costs more than anticipated and/or (2) indirect costs are higher than anticipated. Quantity of labor is not a source of risk. The main source of risk is the direct labor rate. But labor rates are relatively easy to track and manage, and a competent CO will establish ceilings, so that the contractor will need the CO's approval in order to be compensated for the use of more expensive labor after award. Also, the CO should write a clause to the effect that costs incurred for hours in excess of the level of effort will be unallowable, unless personally approved in advance by the CO.

Second, any competent CO writing a CPFF/LOE/Term form contract will include a clause to the effect that if the contractor does not deliver the entire level of effort it will be entitled only to a percentage of the fixed fee that is commensurate with the percentage of the level of effort actually delivered.

If a contractor's goal is to obtain the maximum amount of fee, then under a CPFF Term Form contract can't the contractor can best achieve that by incurring the maximum amount of costs allowed under the contract? There's no incentive for the contractor to find efficiencies or find other ways to reduce costs. Cost control on these contracts relies almost solely on Government surveillance, which would seem to make it the most difficult to control. In DBH's case where the contract also allows for the flexibility of government personnel to direct contractor performance, that technical direction may alter the technical approach and/or labor mix used by the contractor from what they had originally proposed. I agree the contractor is bound to the LOE and labor rates stated in the contract, but without an incentive to reach the contract's objective or a final end product for the Government to accept, the burden is on the Government to surveil the contract to ensure costs are being incurred wisely.

Perhaps its better to say that the worst contract for controlling cost overruns is the contract that does not include the proper controls and incentives for monitoring costs, and is administered by personnel who don't understand how or care about controlling contract costs.

American Recovery and Reinvestment Act of 2009 (ARRA) reporting requirements. These contractor submitted reports are housed in ANOTHER federal database (federalreporting.gov) and require lot of duplicative information already found in FPDS. One of the most noteworthy reporting requirements is the "Jobs Created" field that requires the contractor to calculate the number of jobs created or saved for each reporting quarter. This is done through an awkward calculation of hours performed on the contract per quarter divided by 520 regular quarter hours (2080 hours / 4 quarters = 520 qtr hrs). This must be done on FFP contracts as well. The report must be submitted by the 15th after each quarter and reviewed by at least one agency official. A government review board reviews all recipient reporting for each agency for consistency. The review board informs the Contracting Officer of any reporting issues that may need to be corrected and the CO coordinates any reporting fixes with the contractor before the 30th after each quarter. There was (and continues to be) a significant amount of training to both government and contractor employees on ARRA reporting requirements, generally developed and given by government employees. There was agency policy developed for both grants and contracting offices. Automated financial and procurement systems were altered to properly track ARRA contracts and grants. ARRA funds were available for obligation in FY09-10.

Scenario: There is a CPFF/LOE contract that was awarded in the competitive environment. The period of performance is for 1 year. There are many subcontractors under the prime contractor. After X months, the prime contractor notifies the Government that it will not be able to deliver the specified LOE within the negotiated contract cost. The Government takes the position the prime contractor can?t deliver the specified hours due to cost growth. The prime contractor takes the position that the ?cost growth? was a result of the Government, after contract award, directing the prime contractor to allocate more LOE to more expensive subcontractors on their team than the LOE the prime contractor originally allocated in their cost proposal during negotiations.

1. What control mechanism are present in a Cost type LOE contract that prevents a contractor from staffing positions with individuals with rates that far exceed their original cost estimates?

2.If you assume that there was some direction from the Government, how does the Government account for the difference between cost growth and ?directed cost growth??

Cost-plus-fixed-fee (CPFF) Term Form contracts are probably the worst contract type for controlling cost overruns (maybe T&M is worse). For CPFF Term Form contracts, the contractor is required to put forth its best effort to meet the Government's requirement up to the estimated level-of-effort negotiated and stated in the contract. If the contractor's performance is satisfactory (not "if the work was completed"), then the contractor is due the full payment of fixed fee.

If you are looking to "account for differences" between certain cost overruns under a contract, I believe you should start with your COTR. What are the documentation requirements that the COTR must follow when issuing technical direction? Ask the COTR to provide that documentation and compare it to contractor-provided invoices/progress reports. Review the contractor's progress reports/invoices for instances when there was a change in costs not initiated by government direction or their proposal. Discuss any changes with the contractor. Perhaps there is other rationale for a change, such as unknown site conditions. If you can substantiate that a contractor did not provide their best effort to perform some amount of services under the contract, the CO can require corrective performance in accordance with the contract's acceptance clause.

Lastly, if you have a COTR that is issuing a significant amount of technical direction that is significantly affecting the contract scope or cost, reign them in! If it's not already required, ensure that you are copied on all technical direction correspondence. Make sure its always in writing. Instruct the contractor not to accept any technical direction that is not in writing (or at least followed-up in writing). Review all technical direction from the COTR and make sure they are not exceeding their authority such as instructing the contractor to do something outside the terms of the contract. Some agencies even have policy against directed subcontracting (though that may not apply to team subcontractors). Document your file with all your findings so that the next time this requirement is competed, the placement CO can consider the historical information and perhaps choose a different contract type.

The contractor is obligated to provide the specified LOE as stated in section B of the contract.

"The Contractor shall provide no less than 100,000 hours under Category 1."

"The Contractor shall provide no more than 100,000 hours under Category 1."

"The Government anticipates the Contractor shall perform 100,000 hours under Category 1."

"For proposal preparation purposes, the Offeror shall assume 100,000 hours under Category 1."

Each of these phrases is very different, and the way its stated in your contract is key. Depending on how its worded, the answer to your question will be different. Can you "cut & paste" the language from your Section B?

I assume being IDIQ that your contract contains FAR 52.216-19 Order Limitations:

52.216-19 Order Limitations (Oct 1995)

(a) Minimum order. When the Government requires supplies or services covered by this contract in an amount of less than _____________ [insert dollar figure or quantity], the Government is not obligated to purchase, nor is the Contractor obligated to furnish, those supplies or services under the contract.

( Maximum order. The Contractor is not obligated to honor?

(1) Any order for a single item in excess of _____________ [insert dollar figure or quantity];

(2) Any order for a combination of items in excess of ______________ [insert dollar figure or quantity]; or

(3) A series of orders from the same ordering office within _____________ days that together call for quantities exceeding the limitation in paragraph ((1) or (2) of this section.

(c ) If this is a requirements contract (i.e., includes the Requirements clause at subsection 52.216-21 of the Federal Acquisition Regulation (FAR)), the Government is not required to order a part of any one requirement from the Contractor if that requirement exceeds the maximum-order limitations in paragraph ( of this section.

(d) Notwithstanding paragraphs ( and (c ) of this section, the Contractor shall honor any order exceeding the maximum order limitations in paragraph (, unless that order (or orders) is returned to the ordering office within _____ days after issuance, with written notice stating the Contractor?s intent not to ship the item (or items) called for and the reasons. Upon receiving this notice, the Government may acquire the supplies or services from another source.

In your scenario, $500K would be the figure found at ((1). The important paragraph here is (d) which states that the contractor shall honor ANY task order regardless of the dollar amout unless the contractor returns the order to the Government with the reasons why it can perform/deliver.

FAR 52.217-6 isn't required. FAR 52.217-7 could be used or a clause substantially the same as either FAR 52.217-6 or -7.

Don,

I thought you used 52.217-6 (or one substantially the same) if you want the option for additional quantities of an item you are already buying, and you used 52.217-7 (or one substantially the same) if you want the option for some quantity of items that you aren't already buying. In baierle's case, he's already buying 5 widgets and he could include 52.217-6 to state that the Government has the option to buy more of those same widgets at that same price. My understanding is that he'd use 52.217-7 if he wanted to buy a different product spelled out on a different line item where the award quantity is 0.

Have I got this mixed up?

In the future, if your customer may require additional widgets, you could include the option for more. You would need to specify the potential optional amount, include FAR 52.217-6 Option for Increased Quantity in the solicitation and award, and ensure you evaluate the optional quantities as part of the overall price evaluation.

Vbus:

I did not say that the proposed PWS is not a proposal. I said exactly the opposite. An RFP can require offerors to submit a QASP. See FAR 37.604. It can require the QASP as part of the proposal or as just a recommendation to the government.

Vern, I should have been more precise. I agree that a PWS is a "proposal" in that it is something proposed by an offeror to be accepted by the Government. I do not believe that a PWS can represent a full proposal by an offeror when other documentation would be necessary to be submitted as well in order for a proposal to be acceptable, such as other submission requirements of the RFP to be evaluated, subcontracting plan, information other than cost and price data, etc. I think we are in agreement that a PWS is something proposed by the offeror, but that it is only one part of the offeror's full proposal.

I agree with Vern that the PWS is only one part of the entire proposal.

As for page limits, that should be dictated by the nature of your acquisition. If this is a simplified acquisition and you expect the PWS to be 2 pages long, then maybe 35 pages overall is ample. I suspect an advocate for PBA would tell you not to impose page limits on an offeror's proposal when they are submitting a PWS to a Government's SOO. An offeror's PWS may be very simple or very complex and a page limit may stifle an innovative approach. The size of the proposed QASP may also be dictated by that offeror's approach.

In effect, the PWS they offer is their proposal. So it is one and the same document.

No, they are not one in the same. As Vern stated, a proposed PWS is not a proposal. A PWS describes the offeror's planned approach to meeting the objectives of the SOO. It would not contain any other information required by the Government's solicitation such as description of their technical experience, past performance, subcontracting plan, reps and certs, not to mention a proposed Quality Assurance Surveillance Plan (QASP) that they would propose to describe how the performance of the PWS will be measured and monitored.

DFARS 208.7401 Definitions.

"Software maintenance" means services normally provided by a software company as standard services at established catalog or market prices, e.g., the right to receive and use upgraded versions of software, updates, and revisions. [bold added]

Software updates = software maintenance = services

Right?

mrbatesville,

Be sure to scroll to the bottom of the matrix and see Note 2. It lists clauses specific to 8(a) contracts:

Note 2: The following clauses are prescribed for use in Small Business Administration 8(a) contracts:

52.219-11, Special 8(a) Contract Conditions.

52.219-12, Special 8(a) Subcontract Conditions.

52.219-14, Limitations on Subcontracting.

52.219-17, Section 8(a) Award.

52.219-18, Notification of Competition Limited to Eligible 8(a) Concerns.

52.219-18, Alternate I

52.219-18, Alternate II