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Don Mansfield

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Posts posted by Don Mansfield

  1. In addition, the DAR Council and the ASBCA have both interpreted the definition of "contract" at FAR 2.101 to include task and delivery orders. The DAR Council stated in the publication of the final rule under DFARS Case 2010-D004 (72 FR 76296):

    5. Applicability to task or delivery orders. One respondent recommended that the language at 222.7401(a), Policy, delete the reference to task or delivery orders and bilateral modifications adding new work.

    Response: DoD does not agree. In accordance with FAR 2.101, a contract includes all types of commitments that obligate the Government to an expenditure of appropriated funds. Task orders and delivery orders obligate funding, and if they utilize funds appropriated or otherwise made available by the DoD Appropriations Act for Fiscal Year 2010 that are in excess of $1 million, the section 8116 restriction would apply.

    From Ameresco Solutions, Inc. ASBCA Nos. 56824, 56867:

    The above FAR definition [of "contract"] is sufficiently comprehensive to include "delivery" orders. The fact that "delivery" (as opposed to "purchase") "orders" are not expressly enumerated is not significant. The listing of examples was not all inclusive. The delivery order here was clearly a bilateral "mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them." Moreover, delivery orders also qualify as "orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance." Id. Although the definition of "delivery order" in FAR 2.101 refers to orders "against an established contract," that language does not exclude the existence of both an "established contract" and a delivery order that also qualifies as a contract. We have, in fact, described delivery orders as contracts in decisions such as Mach II, ASBCA No. 56425, 09-2 BCA ~ 34,224 and Winding Specialists Co., ASBCA No. 37765, 89-2 BCA ~ 21,737. The DESC delivery order also describes itself as "this DO contract award" (SOF ~ 15). This case involves two different government "buyers." The relevant "buyer" for purposes of this dispute was not DOE but DESC, the only agency obligated to pay for the supplies/services furnished by Ameresco. Basic, essential operative contractual terms and details in dispute here were not in place prior to issuance of the delivery order. There was no "commitment" to purchase definite supplies/services, obligation to buy or sell such services/supplies, or agreement to expend appropriated DoD funds in a specific amount prior to execution of the DO. The DO's incorporation of some provisions in the DOE contract by reference, does not convert the DO into a DOE acquisition.

    Our conclusion that the delivery order constitutes a discrete contract under the above FAR definition is consistent with traditional case law analyses of what constitutes a contract. In determining whether an arrangement is a contract for purposes of jurisdictional statutes, the Federal Circuit has stated that "any agreement can be a contract within the meaning of the Tucker Act, provided that it n1eets the requirements for a contract with the Government, specifically: mutual intent to contract including an offer and acceptance, consideration, and a Government representative who had actual authority to bind the Government." California Federal Bank, FSB v. United States, 245 F.3d 1342, 1346 (Fed. Cir. 2001), cert. denied, 534 U.S. 1113 (2002); Massie v. United States, 166 F.3d 1184, 1188 (Fed. Cir. 1999).3 We have reached similar conclusions with respect to our jurisdiction under the CDA. Factek, LLC, ASBCA No. 55345,07-1 BCA ~ 33,568. Both appellant and the government characterize agreements that meet the requirements listed above as "common law" contracts. The government goes on to propose that even if delivery orders could be considered "common law" contracts, they would not have "contract status" because they are not set out in the above FAR definition of contracts. (Gov't reply at 2-3) Nothing in California Federal Bank, Massie, or Factek suggests that a contract for purposes ofjurisdictional statutes has to be explicitly listed in FAR 2.101. Implied-in-fact contracts are not listed and both the Court of Federal Claims and this Board have unquestioned authority to hear appeals relating to such contracts. 28 U.S.C. ? 1491(a)(I); 41 U.S.C. ? 7102(a). And, as noted, delivery orders are not excluded from the definition of "contract" in FAR 2.101. The listing of some contractual types and vehicles in that FAR section is not intended to be exhaustive and exclude others that satisfy the basic prerequisites.

    But maybe eriand2 knows something that nobody else does. I can't wait to find out.

  2. Vern,

    The application of trade agreements comes in two different forms. If an acquisition is subject to trade agreements, but not the WTO Government Procurement Agreement, then an agency will waive the restrictions of the Buy American Act for offers of end products from certain countries that have entered into a trade agreement with the United States. See FAR 52.225-3 and -4. The Government will still accept offers of foreign end products from countries that do not have a trade agreement with the U.S., but such offers would be subject to the BAA evaluation preference.

    If an acquisition is subject to the WTO GPA, then the Government will only accept offers of end products from "designated countries", unless it does not receive any offers of end products from "designated countries." See FAR 52.225-5 and -6. I assume that the solicitation that Whynot is writing about is subject to the WTO GPA because it contained FAR 52.225-6.

    What Whynot is proposing, lowering the price of the end item subject to the BAA evaluation preference, may work if the acquisition were not subject to the WTO GPA.

  3. Notwithstanding the two mistakes, can you tell what they meant by "secondary site of the work" for purposes of Davis-Bacon Act application and what is not considered to be a secondary site?

    It can make a big difference as to a contractor's labor costs and productivity.

    I think I get what they meant. A staging area in Tijuana would not be a "secondary site of the work" for a construction project in San Diego, for example.

  4. I don't think so. See FAR 52.225-6( c ) advises offerors as follows:

    The Government will evaluate offers in accordance with the policies and procedures of Part 25 of the Federal Acquisition Regulation. For line items covered by the WTO GPA, the Government will evaluate offers of U.S.-made or designated country end products without regard to the restrictions of the Buy American Act. The Government will consider for award only offers of U.S.-made or designated country end products unless the Contracting Officer determines that there are no offers for such products or that the offers for those products are insufficient to fulfill the requirements of this solicitation.

    I don't see anything that says "unless offers of other than U.S.-made or designated country end products are $0." I don't see any reason to infer such a thing, either.

  5. I think the first appearance of the word "of" may be a typo and it's meant to be "or". But are you talking about that kind of mistake?

    I don't know if it's a mistake or not, but it does seem a little circular to define something as being part of the secondary site of work so long as it is adjacent to the secondary site of work.

    That is one of the mistakes. The other is that "paragraphs (1)(i)" should be singular. These mistakes are not present in the same definition at FAR 52.222-6(a).

  6. Came across this one yesterday.

    From FAR 22.401:

    ?Site of the work.??

    (1) Means?

    (i) The primary site of the work. The physical place or places where the construction called for in the contract will remain when work on it is completed; and

    (ii) The secondary site of the work, if any. Any other site where a significant portion of the building or work is constructed, provided that such site is?

    (A) Located in the United States; and

    (B) Established specifically for the performance of the contract or project;

    (2) Except as provided in paragraph (3) of this definition, includes fabrication plants, mobile factories, batch plants, borrow pits, job headquarters, tool yards, etc., provided?

    (i) They are dedicated exclusively, or nearly so, to performance of the contract or project; and

    (ii) They are adjacent or virtually adjacent to the ?primary site of the work? as defined in paragraphs (1)(i) of ?the secondary site of the work? as defined in paragraph (1)(ii) of this definition;

    (3) Does not include permanent home offices, branch plant establishments, fabrication plants, or tool yards of a contractor or subcontractor whose locations and continuance in operation are determined wholly without regard to a particular Federal contract or project.

    That's one sentence. The bolded text contains two mistakes. See if you can find them.

  7. I read an article years ago that said "award fees" had to be fully funded at the time of original award, and even if it took years until they were "due" depending on the performance of the KTR, the agency always had to pay out of the original type and year of money. So I am thinking award terms is probably treated the same, right?

    If by "funded" you mean "obligated", then the article was incorrect. Typically, an award-fee contract provides for payment of award fee after some, or all, of contract performance has taken place and the Government has subjectively evaluated the contractor's performance. Until that time, the award-fee is a contingent liability. Contingent liabilities are not obligations and may not be recorded as such. For more on contingent liabilities, see pp. 7-55 and 7-56 of the GAO Redbook.

    In the case of an award-term contract, the Government has a contingent liability for the award term upon award. The liability does not arise unless and until the Government has determined the contractor's entitlement in accordance with the award-term provisions of the contract. As such, an obligation may not be recorded for unearned award-terms when the initial award-term contract is awarded.

  8. Vern,

    Generally, a bona fide need of FY12 would have to be funded with an FY12 appropriation. An exception to this would be the "severable services" exception, which is stated at FAR 32.703-3( b ):

    The head of an executive agency, except NASA, may enter into a contract, exercise an option, or place an order under a contract for severable services for a period that begins in one fiscal year and ends in the next fiscal year if the period of the contract awarded, option exercised, or order placed does not exceed one year (10 U.S.C. 2410a and 41 U.S.C. 253l). Funds made available for a fiscal year may be obligated for the total amount of an action entered into under this authority.

    As such, the exception permits the use of FY11 funds to fulfill the Bona Fide Needs of FY11 and FY12.

    This exception differentiates between 1) contracts, 2) options, and 3) orders placed under contracts. The exception applies if the contract was entered into, the option was exercised, or the order was placed in one fiscal year and performance extended into the next fiscal year. Thus, if a task order was not placed in FY11, this exception to the Bona Fide Needs rule does not apply.

    Based on our conversation, I expect that you will argue that the "severable services" exception allows for the use of funds obligated to cover the IDIQ minimum to fund a task order in a subsequent fiscal year. If that's true, I ask the following question:

    In the OP's scenario, the IDIQ contract ordering period was 1 Jul 2011 to 30 June 2012. If a task order was issued under the contract on 1 October 2011 and funded with the same funds that were obligated when the IDIQ contract was awarded (FY11 funds), then what would be the limit on the period of performance of the task order? Assume the IDIQ contract was awarded on 1 Jul 2011.

  9. Multiple award IDIQ contract was awarded with the guaranteed minimum obligated on the base contract with FY11 funds. The base ordering period is July 2011 - July 2012.

    (I am the ACO, I cannot speak as to why it was awarded this way.)

    While I understand that contractors aren't due the minimum guarantee until after the end of the base ordering period - I am concerned about violating fiscal law if all of the contractors are not awarded a task order by 30 SEP and the minimum is sitting on the base contract when we go into FY12.

    Am I required to spend the FY11 funds prior to 30 SEP, or can they be used in FY12? My gut feeling is that they must be spent in FY11 but I am not a fiscal law expert by any means.

    There's no fiscal law violation if September 30 comes and goes and you have not used the funds to issue a task order. However, you would not be able to use the FY11 funds used for the guaranteed minimum to issue a task order in FY12.

  10. I had to draw a decision tree for this one. Here's what I have come up with.

    1. If the acquisition will be conducted using full and open competition, then you must include FAR 52.219-4. FAR 19.1309( b ).

    2. If the following two conditions are met, then you must use the clause with its alternate I. These conditions are:

    a. At least two HUBZone small business concerns cannot meet the conditions of FAR 19.1308( a ); and

    b. At least one HUBZone small business concern can meet the requirement at FAR 19.1309( b )(1) or (2).

    So, if the contracting officer has not identified any HUBZone small business concerns, then condition 2b above would not be satisfied. As such, Alternate I would not be required.

    As to your second question, if the contracting officer determined that the conditions for a set-aside existed, then a set-aside would take priority over full and open competition and FAR 52.219-4 could not be used.

  11. Does 2nd tier subcontracting count towards the meetng the prime's small business sub goals in the prime contract?

    No. In fact, when the prime submits its individual subcontracting reports in eSRS, it must certify that the numbers reported do not include lower-tier subcontractors. This is from eSRS Quick Reference for Federal Government Prime Contractors filing an Individual Subcontracting Report :

    12. Certification: This is a testament that the data being submitted on the report is accurate and that the dollars and percentages reported do not include lower tier subcontracts (except as set forth for ANC and Indian Tribes. For more information on the special legislation for ANC and Indian Tribes visit http://www.regulations.gov/search/Regs/hom...900006480277f33 (See FAC 2005-19). If you select ?No? your report will be rejected.
    If not, why does the Large Business First Tier subcontractor have to complete a subplan for the prime?

    Because the prime promised to get one if certain conditions apply. See FAR 52.219-9(d)(9)

    Does the 2nd tier large business subcontractor have to track its own goals to the government and are these goals entirely separate from the prime sub goals? Under the same prime contract, this seems somewhat contradictory.

    Yes. I suggest you spend some time reading through the material on the eSRS Web site.

  12. Test your skills...

    Scenario: A contracting officer in an outlying area (as defined by FAR 2.101) has a requirement for supplies to be used in support of a contingency operation (as determined by the head of the agency). The supplies are to be delivered to an outlying area. The value of the acquisition is expected to be $500,000.

    1. According to the FAR, is the acquisition below the simplified acquisition threshold?

    2. According to the FAR, is the acquisition automatically reserved exclusively for small business concerns?

    Provide citations in the format described at FAR 1.105-2( c )(3) for full credit. Have fun.

  13. Don:

    I don't bother telling authors of books that their references are crummy, unless I know they are working on a new edition. What would be the point? If you read enough horn books on contracting and do some checking, you'll find that it is not unheard of for the authors to cite crummy decisions. I could point out several examples. Experts make mistakes, too. That's why I generally don't rely on decisions cited by other authors without first reading the decisions carefully.

    I don't know if you relied on those authors when making your post or if you found their footnote after you read my post, but there is nothing to stop you from notifying them if you like. Of course, you may disagree with me that Magnavox and Mil-Tech are crummy references.

    Vern,

    You may still think they are poor, but the referenced decisions were provided in support of the proposition that the Government cannot unilaterally increase the contract quantity in a supply contract by operation of the Changes clause. This was one of the questions posed by the original poster. They were not provided to illustrate the "scope of the competition" test. Government Contract Changes deals with the "scope of the competition" test seperately.

  14. Vern,

    The original poster wanted to know if the Changes clause could be used to order an additional quantity. The following is from Government Contract Changes, Third Edition, by Ralph C. Nash and Steven W. Feldman:

    Sec. 4:4 Changes in Quantity

    Increases or decreases in the quantity of major end items under the contract are generally considered to be outside the scope of the contract (except where authorized under another contract clause, such as an option clause or the standard Variation in Estimated Quantities clause (FAR 52.211-18). For example, the Court of Claims held that the deletion of one building in a 17-building complex was not permissible under the Changes clause. Decisions of the GAO have followed the same reasoning with regard to the addition of buildings to a project. This rule is also followed in supply contracts--changes in the quantity of end items to be delivered must be made outside the Changes clause.

    The footnote supporting the bolded statement cites Magnavox and Mil-Tech. If you think that those are crummy references, then you should probably let the authors know.

  15. Based on your description, this seems like a text book example of an out-of-scope change. The GAO has held that, in supply contracts, changes in the quantity of end items to be delivered must be made outside the Changes clause. See Magnavox--Use of Contract Underrun Funds, Comp. Gen. Dec. B-207433 and Mil-Tech Systems, Inc. & Department of the Army--Request for Reconsideration, Comp. Gen. Dec. B-212385.4.

  16. The most significant decision to come out in the last few years on this issue is Winter v. Cath-dr/Balti Joint Venture, 497 F.3d 1339 (Fed. Cir. 2007). In that case, the court held that because the subject contract contained DFARS 252.201-7000 and the DFARS prohibited a COR from changing a contract, there were no changes to the contract. This was a controversial decision because the court did not adopt the theory of implied authority to hold the Government to the actions of the COR. Some have questioned whether this meant the end of implied authority in DoD. The June 2011 issue of the Nash & Cibinic Report has an article that has tracked similar cases since the 2007 decision and found that they have generally followed suit. See POSTSCRIPT II: CONTRACTING OFFICER AUTHORITY, 25 NO. 6 Nash & Cibinic Rep. ? 30.

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