Don Mansfield

JimS,

In my view, each toll is a "micro-purchase" as defined at FAR 2.101:

“Micro-purchase” means an acquisition of supplies or services, the aggregate amount of which does not exceed the micro-purchase threshold.

The fact that all micro-purchases for the month are included on one bill does not mean that the purchase of all tolls in the preceding month are one micro-purchase.

If you were to buy an annual toll road permit today for $7,340 that allowed you to use the road for the next year, then that would be one micro-purchase.

Question: Can we create a purchase order directly to the manufacturer to train our contracted employee?

I don't know of anything that would prohibit it.

Also, we are paying for their travel, lodging, etc according to the Joint Travel Regulations. We cannot tell the contracted employee to stay at whichever hotel or what flight to take thus we leave it up to our contractor to provide us with a quote on the travel. The contractor wants to add G&A on top of the JTR rate which I do not believe is acceptable.

Question: Can the contractor add G&A on top?

If the contractor's standard practice is to allocate G&A to its travel costs, why shouldn't they do so in this case?

If you intend to award using the LPTA method, you have concluded that best value is expected to result from selection of the technically acceptable proposal with the lowest evaluated price--how would a higher priced small business then become the best value?

Because the "evaluated price" of the large business would be the proposed price + 6%.

_{As we discussed by phone, I think that FAR 8.405-5( d ) only makes sense if price were the only factor. If the evaluation factors were price and past performance, for example, it would be permissible to give preference to a large business with superior past performance even if both the large and a small business proposed the same delivered price.}

_{As you suggested, I will contact GSA to get an interpretation of their acquisition letter. I will post what I find here.}

I don't think it would be in the "best interests of the Government" to let individual COs or contracting offices establish formulaic price preferences when placing orders against GSA FSS contracts. That's not the same as making an analytical best value decision based on proposal evaluations and comparisons.

If the only evaluation factors were price and socioeconomic status (currently permissible under FSS ordering procedures), it wouldn't be much different. The only difference is that you would be disclosing how much more you'd be willing to pay for a desired socioeconomic status in the solicitation.

GSA’s opinions on procurement matters do not necessarily coincide with GAO’s or the Courts'. As an example, see The Argos Group, LLC, B-406040, Jan 24, 2012.

Regarding the impact of FAR 3.101 on the application of pricing preferences, see this Congressional Research Service Paper on the use of geographic pricing preferences: http://assets.opencrs.com/rpts/R41115_20101001.pdf.

I believe the principle set out on page 8 applies to socioeconomic price preferences as well: “Agency attempts to favor local vendors without specific statutory authority would violate both procurement integrity regulations and the Competition in Contracting Act (CICA) of 1984.”

I agree with everything you wrote. However, wouldn't 15 USC 644(a) provide adequate statutory authority (as cited by Navy_Contracting_4 in post #16)?

Even if you don't think it does, the point I'm trying to make is that I don't think it would be consistent for GSA to state that consideration of socioeconomic status in awarding orders is permissible, but the use of the price preference is impermissible. I'm not arguing that either technique is legal (i.e., would hold up at GAO or the Courts).

joel,

I don't think the letter does anything more than authorize the use of socioeconomic status as an evaluation factor when placing orders under Federal Supply Schedules. However, given that this practice is permissible, I don't see how GSA could say that use of a price preference is impermissible. The only difference is that the agency would be specifically stating how much small business status would be worth in the solicitation instead of stating something vague like "socioeconomic status will be considered."

Joel,

GSA first advised agencies that this was permissible in 2005. See here. The last extension to this policy is here. It seems like the policy is still effective.

According to GSA, agencies were authorized to use "socioeconomic status" as an evaluation criterion in awarding FSS orders. Presumably, they thought this was authorized by statute and regulation because it fell within the wide latitude that agency officials had in choosing appropriate evaluation factors. Use of such a factor provides a preference that is not expressly authorized by statute or regulation. Do you think that conflicts with FAR 3.101?

This is an interesting question. Prior to the FAR expressly permitting small business set-asides under FSS contracts, GSA advised that agencies could use socioeconomic status as an evaluation factor for award. This may still be common practice. This implied that 1) an agency could attribute value to the socioeconomic status of an offeror and 2) an agency would potentially be willing to pay more to obtain the benefit of awarding to an offeror with a desirable socioeconomic status.

In gmdubya's scenario, the agency would be stating how much they value socioeconomic status up front. If evaluating socioeconomic status was ok in awarding FSS orders, I don't see how GSA could say that using a price evaluation preference would be wrong.

Debra,

If the T&M contracts are noncommercial, then the answer to your question is yes. Reimbursement for materials (including applicable indirect expenses) is governed by FAR 52.216-7 (see FAR 16.307(a)(1)).

Good point. This teaches me not to answer questions during the holidays.

I'm researching the matter. There have been exceptions. See, e.g., Raytheon STX Corp. v. Department of Commerce, GSBCA No. 14296-COM, 00-1 BCA para. 30632. So it's not exactly clear cut. I would think that a presidential proclamation is a sovereign act, but something is bothering me. I'll post my research findings when I have them.

In Appeals of Holmes & Narver Services, Inc., 90-3 BCA P 23198, August 6, 1990, the board recognized the closing of executive department offices by Executive Order as a sovereign act:

"Sovereign Act." In closing executive department offices by Executive Order, the President is clearly acting in a sovereign capacity, as the Government here notes.

The Executive Orders in that case excused Federal employees from work around Christmas in 1986 & 1987.

Don, are you equating closure of a facility to conceal covert activities to deploy to Afghanistan immediately after 9-11 with a general shut down for Christmas Eve?

Inasmuch as they are both sovereign acts, yes. Neither was an act of the Government in its contractual capacity.

This issue comes up every year for service contractors working at a government facility. Since we will have no governmentwide policy about how to handle this matter, it is up to COs to make provision for it in their contracts. A government closure is a change to the specified contract work hours, and if it affects the cost of performance, including profit, then there ought to be an equitable adjustment pursuant to the Changes clause.

Vern,

If the closure is a sovereign act (which it typically is), wouldn't the Sovereign Acts doctrine preclude claims for increased costs? See Appeal of Conner Brothers, ASBCA 54109.

CSCM2012,

I should add that if your contracts are cost-reimbursement, paid administrative leave may be allowable as a fringe benefit. The applicable coverage for contracts with commercial organizations is at FAR 31.205-6(m)(1). Again, this assumes that nothing in your contract addresses these specific costs.

Retreadfed,

You may already know this, but the DCAA CAM contains coverage of Administrative Leave due to Weather-Related Closures at 7-2124:

When contractor personnel receive paid administrative leave due to inclement weather, the allowability and accounting treatment of such payments should be evaluated on a case-by-case basis in accordance with FAR 31.205-6. Paid absences are fringe benefits that, per FAR 31.205-6(m)(1), are allowable to the extent that they are reasonable in nature and amount and are required by law, employer-employee agreement, or an established policy of the contractor. The reasonableness of the amount paid is generally not an issue. The issue is whether or not the circumstances warranted the payment of administrative leave. Some factors to consider in determining reasonableness include the severity of the weather conditions and whether other businesses and organizations in the same geographical location were closed. The fact that the Federal Government suspended similar operations in the area due to the weather generally would support that it was reasonable for the contractor to incur the administrative leave costs. If the costs are determined to be allowable, they should be charged in accordance with the contractor’s disclosed or established cost accounting practice for charging paid absences.

I couldn't find anything about closures for other reasons.

Retreadfed,

Assume they were. What are you thinking? Constructive change?

Unless your contract contains something dealing with this situation (doubtful), I believe that your contracts would need to be modified for your employees to receive the holiday benefit. The executive order excused federal employees from work and concluded with the following:

This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

If agencies are afraid of the GAO, then they should do what GAO recommends. It's their business and their call. If there was any leadership at OFPP, which there isn't and has not been, it might be able to work out differences with GAO on certain issues. Or OFPP could require changes to FAR to fix problems like the late proposal rule. OFPP should make it clear to GAO that it will not stand by while they engage in ad hoc and unofficial rule-making through the protest process.

It would be great to have that kind of leadership at OFPP.

Vern,

I think that your proposal certainly solves the problem caused by conflicting GAO and COFC decisions. It would also make the protest process much more efficient. My only problem with it is the amount of power the GAO would have. While agencies can reject GAO recommendations, the reality is that most agencies lack the will to do so. Also, my impression of the GAO is that they are too inconsistent on certain issues and have a tendency to engage in ad hoc rulemaking through their decisions. Despite the case I cited to begin this thread, I don't have the same impression of the COFC. If it weren't for these issues, I think your proposal would work.

For what it's worth, I would propose a protest system modeled after the disputes process, as follows:

1. Interested party must first submit a timely protest to the contracting officer. Automatic stay of performance unless overridden (same rule as now). Agency override decision may be challenged at COFC.

2. After receiving contracting officer's decision on protest, interested party may appeal decision to either BCA or COFC (must choose one). Decisions of the BCA and COFC would be binding on the agency.

3. Agency or interested party may appeal decision of BCA or COFC to CAFC. CAFC decisions would be binding precedent.

4. Agency or interested party may request rehearing en banc at CAFC or petition for writ of certiorari to SCOTUS.

No appeals. GAO decisions would be recommendations, as they are now and always have been. Agencies could reject them, as they can now and always have been able to do.

Where would an interested party challenge an agency's override of a CICA stay?

In short, I would deprive the federal courts of protest jurisdiction and give exclusive jurisdiction to the GAO.

Vern,

Would an interested party have any appeal rights, or would the GAO become the Supreme Court when it comes to bid protests?

Since the contract authorized oral orders, I would argue that the CO directing you to perform work and promising to pay was a task order issued orally. Alternatively, I would argue that the oral direction from the CO was a constructive change to an existing task order.

I don't think that the GAO adopted the COFC decision. In fact, I don't think that the GAO's view changed at all. They knew that the VA wasn't going to follow their recommendation, so they dismissed the case. From Kingdomware Technologies--Reconsideration, B-407232.2, Dec 13, 2012:

While this Office has set forth its view of the 2006 VA Act in Aldevra and its progeny, as well as in testimony before the Congress,[3] the VA has elected not to follow our recommendations. In addition, the court has reached a different conclusion about the meaning of the 2006 VA Act. Although our Office is not bound by the court’s decisions, its decision in Kingdomware, together with the VA’s position on the meaning of this statute, effectively means that protesters who continue to pursue these arguments will be unable to obtain meaningful relief. Consequently, under these circumstances, we will no longer consider protests based only on the argument that the VA must consider setting aside procurements for SDVOSBs (or VOSBs) before conducting an unrestricted procurement under the FSS.

I like how the GAO handled this. It would be nice if they adopted a practice where they would dismiss a case if their decision would have contradicted a COFC decision.

john_doe (if you're still there),

Did the contract authorize the CO to issue orders orally?

ji20874,

That's not how I read the case. The plaintiff needed to prove that CICA applied in order to make the case that nonprice factors should have been used in making the selection. The court explained how in-scope modifications were not subject to CICA. Thus, the court had to decide whether the addition to the contract was within scope or not. They decided it was in scope. Thus, CICA (and the requirement for nonprice evaluation factors) didn't apply.

American Apparel alleges that DLA violated the competition requirement in CICA and the Federal Acquisition Regulation in connection with the September 22, 2011 request for additional Items 0006 and 0007. Specifically, plaintiff contends that,

pursuant to 10 U.S.C. § 2305(a)(2)(A)(i), FAR 15.304©(2), and FAR 16.505((1)(v)(A)(1), the agency was required to include non-price factors in its award evaluation criteria in addition to an evaluation based on price. American Apparel claims that the September 22, 2011 request for additional items was a solicitation, and resulted in a “competitive negotiated procurement” between two current contractors. Therefore, according to American Apparel, DLA was obligated to comply with the

competition requirements mandated by CICA and the FAR and not only review price but also other factors, such as past performance. Plaintiff asserts that this court has jurisdiction to review its claims because it has alleged a “violation of statute or regulation in connection with a procurement or a proposed procurement.” See 28 U.S.C. § 1491((1).

[internal citations omitted].