Don Mansfield

I didn't intend to criticize CM--they are just providing a forum for others to speak. Sometimes their articles are actually quite good. The Legal Forum, written by Jack Horan, is usually worth the price of the issue. The article on contract types wasn't all that bad--the authors are just confused on some technical points. I've read CM articles that are so bad that I wouldn't know where to begin a critique.

Don,

Why not add a subpagraph (iv) to FAR 15.403-4(a)(1) something similar to:

"?Unless an exception applies, cost or pricing data are required before accomplishing any of the following actions expected to exceed the current threshold or, for existing contracts, the threshold specified in the contract:

"(iv) The issance of a task or delivery order under an indefinite-delivery, indefinite quantity contract, where the price is negotiated."

Or better yet, add the clarification to (i):

"(i) The award of any negotiated contract, including task or delivery orders under indefinite-delivery/indefinite-quantity contracts (except for undefinitized actions such as letter contracts)."

I realize that the existing language may be based upon the TINA statutory language, but why can't the FAR council add clarifying language, assuming that the courts and boards "commonly understand" that task and delivery orders are considered to be contracts for this specific purpose?

I dont think that it would be wise to simply directly add task and delivery orders to the definition of a "contract" at 2.101, because there are instances where the base contract already covers or complies with certain FAR requirements applicable to "contracts", that dont have to be repeated each time a task or delivery order is issued.

That would clear up the TINA issue. However, there are other instances in the FAR where some find it unclear whether "contract" includes task and delivery orders. For example, the authors of the Government Contractor articles that I referenced didn't think that the automatic stay provision of CICA applied to protests of task and delivery orders because FAR 33.104 just mentions "contracts." There are probably other instances in the FAR that cause similar confusion.

If not a new definition, perhaps a new reading convention at FAR 1.108 that states that, unless otherwise specified, a requirement that applies to the award of a basic indefinite delivery contract applies (or alternatively, "does not apply") to subsequent task and delivery orders issued thereunder. As it is now, we are being left to guess which requirements apply to task and delivery orders and which do not.

Don,

This is one of your better blog posts. The FAR Councils need to clear up confusion, in terms of both TINA and CAS administration. In particular, what is the contract award value of an ID/IQ with respect to CAS administration? The DCAA says it's the ID/IQ ceiling value but that's a puerile position, particularly when there are multiple ID/IQ awards being made. Will you be submitting a request to open a FAR Case?

here_2_help,

I didn't intend to submit a request to open a FAR Case. That's not typically something a DAU professor does. However, I am going to write the POC for the final rule I referenced and ask why TINA applicability must be determined at the task/delivery order level, but CAS applicability doesn't.

Hi, Seeker,

I agree that the definition of "contract" at FAR 2.101 encompasses task and delivery orders. It's clear to me, but that doesn't mean it's clear enough. The authors in the cited articles were reading the FAR definitions. The problem is that they were arriving at the wrong conclusion. They are not alone. Every so often there are debates in the Wifcon forum on this subject. If I polled a random sample of 1102s I think that many would say that task and delivery orders were not contracts even after reading the definition. The level of confusion is high enough to warrant a revised definition, in my opinion.

I don't know if FAR 16.505((3) alone adequately communicates that cost or pricing data are required for task or delivery orders. It apparently hasn't prevented the FAR Council from receiving questions about the applicability of TINA when pricing task and delivery orders. Yes, I suppose that a CO could write the type of Section H clause that you described. But why the inconsistency? If there's a standard FAR clause that requires submission of cost or pricing data when pricing modifications, why not one for task and delivery orders?

Thanks for writing.

Thanks for bringing the case to my attention. You made my day.

Thanks, Bob. I didn't know about that.

However, I still think that the FAR would need to be changed to give COs the discretion to choose among programs. As such, my advice is still the same.

here_2_help,

I thought this entry would get your attention.

A couple of questions for you:

1. Why not assume that the award fee paid would fluctuate in proportion to the amount of the under/over estimate? In other words, make the same assumption for AF contracts that is made for CPFF contracts?

2. You wrote:

Look the underpinning of CAS is materiality. You cannot have a CAS noncompliance for an immaterial amount of costs. Given the process and dollars already involved, the AF deltas are immaterial or should be considered to be so.

Why should award fee deltas be considered immaterial, but fixed-fee deltas considered material?

Vbus,

Does a task order placed against an IDIQ contract meet the definition of an undefinitized contract action?

No, a task order is not a UCA per se. However, if a task order were unpriced, then it would be a UCA.

If, for example, funding was obligated to an IDIQ contract in FY09, would it be improper to allocate that funding to a task order that was placed in FY10?

Yes. If you are placing a task order in FY10, then you need to fund it with FY10 funds (assuming annual appropriations). This would be true even if you awarded the IDIQ contract in FY09, obligated FY09 funds, and had not yet met the minimum.

Think about it. Imagine if an agency were allowed to use the funds obligated to cover the IDIQ minimum from a prior fiscal year to cover its current fiscal year's needs. What would stop the agency from awarding IDIQ contracts in one year with inflated minimums as a way to "park" funds to be used on task orders in future years?

Good point, Vern.

Hi, NavyKGuy,

Thanks for commenting.

Your argument fails to address two key questions: If the FAR required price analysis always, then 1) why would it qualify the price analysis requirement at FAR 15.404-1(a)(2) with "when cost or pricing data are not required" and 2) why the use of "should" at FAR 15.404-1(a)(3)?

In order to perform a price analysis, you need some basis of comparison. However, there can be situations where such information is not available because the supply or service being purchased is so unique. In such situations, the contracting officer would have to rely on cost analysis alone to determine a fair and reasonable price.

My point is simply that, despite what many people think, the FAR does not require price analysis for all acquisitions. If this blog entry caused some people to open up the FAR and rethink what they had been told or taught about the FAR, then perhaps they will be less likely to take what they are told or taught at face value. In general, I don't think that we (members of the Federal contracting community) do a good job at scrutinizing information--we tend to believe what we hear if it sounds reasonable or if it is spoken or written by someone of "experience." This is why our field is so rich with misinformation. While this is fun to write about, it's also somewhat disheartening. I'd prefer having less material.

leo1102,

Yes. That's why I added the warning at the top of the blog entry. I wouldn't use the table for now.

My point is that FAR does not require a price analysis in every acquisition. Whether or not it's a good idea to perform price analysis in every acquisition is another matter. When cost or pricing data are required, I think that one should perform price analysis for the reasons you cited (and because the FAR says so). However, we need to recognize that there may be situations where we simply do not have information adequate to perform a price analysis. In such situations, the FAR permits the contracting officer to forego price analysis.

Don,

I'm thinking about an order that would contain price and quantity information required by FAR 16.505(a)(6), but wasn't negotiated per the ordering language of the contract. In other words, the KO issues an order based on the Government estimate, as opposed to a negotiated price or agreement on IDIQ quantities for example. Could this be binding?

Thanks!

TAP,

I don't think that such an order would be binding. What you describe seems more like a purchase order than a task or delivery order.

TAP,

I don't think an order that did not contain a price or quantity (minimum information required by FAR 16.505(a)(6)) would be binding unless the contractor agreed to accept such orders in the contract. For example, I have seen IDIQ contracts that contain a special clause whereby the contractor agrees to accept undefinitized orders.

Vern,

I don't think that 8(a) has priority over the other programs the way that HUBZone set-asides do--it's more of a "soft" priority. 8(a) is not mandatory, but I think it is more than discretionary. If an agency ignored the possibility of offering an acquisition under the 8(a) program and went forward with a small business set-aside, they better have a good reason due to the language in FAR 19.800(e). "Should consider" is more than "may consider." It's not like the relationship between SDVOSB set-asides and SB set-asides, where the CO has complete discretion to choose either one--that's parity.

Regarding the "shall" in 19.5, I think we need to interpret that in a way where there is no conflict with 19.800(e). The only way to do that would be to say that the "shall" applies only after the agency has complied with FAR 19.800(e). Otherwise, FAR 19.800(e) would be meaningless.

Vern,

No, I haven't. I'll give GAO a call and let you know what happens.

I contacted the chief of the contracting office that received the protest to clarify the facts of the TYBRIN case. He told me that CENTECH's proposal did not contain an express provision stating that it intended to perform less than 50% of the cost of the contract work. This was inferred from information contained in their cost proposal. Further, the work percentages that would be performed by the prime and subcontractors were not "accepted" by the Air Force in the sense that they became part of the contract (i.e., they were informational, not promissory).

I don't agree that "The language of the decision clearly indicates that there was more to this than a conclusion derived from the analysis of numbers in a cost estimate." However, I will take your advice and contact someone knowledgable about the decision. I'll let you know what I find out.

Vern,

You wrote:

This was more than a matter of the contents of a "cost estimate." This was a matter of an express provision of a proposal, which the Air Force understood, yet accepted nevertheless because of its own misinterpretation of the rule about limitations on subcontracting.

Do you mean that there was a part of the proposal (other than the cost estimate) that stated that the offeror did not intend to perform 51% of the work, and that part of the proposal became part of the contract? If so, then I don't know how you reached that conclusion based on the passage you cited from the case. If that's not what you mean, then I don't know what you mean.

"Presumably these business rules are written as an interpretation of policy and regulation."

That's a questionable presumption.

If what you've written is correct, then all we can conclude is that the folks who developed the business rules did not want obligations on basic IDIQ contracts reported in FPDS. This does not mean that obligations are not created or that obligations should not be recorded in the agency's accounting records when IDIQ contracts are awarded.

I guess the point is that under the language in the Order Limitations clause, if all MATOC holders refuse to submit a proposal on a task order (one that is within the O.L. clause), the Government can essentially issue one of the MATOC holders a task order and require performance? Essentially, the moment the Government actually issues a compliant order, the contractor holding the IDIQ is bound to perform.

Correct.

So the distinction I see is this: under a MATOC, a contractor is not required to respond to the order notice, but when it does (or if the Government then issues the order), it must perform.

Correct, with a caveat. Some MATOCs may require contractors to submit proposals in response to task order solicitations.

In theory, the Government could hold a task order competition, receive proposals from all MATOC holders except contractor A, then issue an order to contractor A on a noncompetitive basis (provided one of the exceptions to fair opportunity applied) and contractor A would have to perform.

I understand your point, but what about an order under a multiple award contract? Though the clause is required for MATOCs, I don't conceptually understand the concept in that framework. A contractor would not be required to accept an offered task order; rather, the MATOC holders may compete within the parameters of the fair opportunity task order process outlined in the soliciation. The language in the Order Limitations Clause makes far more sense in the context of a requirements contract or a SATOC, but less so in a MATOC. Is it your opinion that the government can demand that a MATOC holder accept a task order if it is within the proper parameters of the ordering limits and the Order Limitations clause? What then of fair opportunity (I am making the assumption that an exception is not applicable)?

I have always had a hard time understanding the language in the Order Limitations clause in the context of multiple award IDIQ contracts, so any insight you can provide on this would be appreciated.

Mr. Warren,

If a contract contains the Indefinite Quantity clause (FAR 52.216-22), then the contractor is required to perform if the Government issues a task or delivery order, provided the Government complies with the Ordering (FAR 52.216-18) and Order Limitations (FAR 52.216-19) clauses. This requirement is in no way conditioned on the method the Government uses to select the contractor for an order under a MATOC (i.e., competitively or noncompetitively). So to answer your question, if the Government issued an order to a MATOC holder, they would have to perform whether the Government provided each offeror a fair opportunity to compete for the order or issued the order noncompetitively.

If the Government issued an order to a MATOC contractor noncompetitively and no exception to fair opportunity applied, I don't know if that would then give that contractor the right to refuse the order. While other MATOC contractors could potentially file a claim or protest for the Government's failure to provide a fair opportunity, I have a hard time imagining what the MATOC contractor who received the order could argue. I would be surprised to see such a claim or protest.