Don Mansfield

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].

I thought I knew what "scope of the contract" meant. Apparently, I did not. See http://www.wifcon.com/cofc/12-293.pdf.

DLA awarded a contract for coats that contained a clause stating that they had the right to add or delete quantities. The original solicitation did not state (or estimate) additional quantities, nor did they receive or evaluate pricing for the potential additional quantities in making the award. After award, DLA decided to add the coats to the contract. They solicited prices from the two contractors that were awarded the original contracts, selected one, and modified their contract to include the additional quantities. The modification increased the value of the contract from ~$20 million to ~$37 million. COFC says no problem with CICA, modification is within scope.

Now, if the contract had contained a priced option for a definite (or estimated) quantity of additional coats, FAR 17.207(f) would have required evaluation of the option prices as part of the initial competition to be compliant with FAR part 6 (the part that implements CICA). Now, if I understand the COFC decision correctly, as long as I say I may order additional quantities in the solicitation without specifying (or estimating) a quantity or soliciting a price, I may do so without regard for FAR part 6. Go figure.

FAR 2.101: “Task order” means an order for services placed against an established contract or with Government sources.

Does that help?

(Note, I know that DOD now prohibits base fee).

That's not true. The only limitation on base fee is that it can't exceed three percent of the estimated cost. See DFARS 216.405-2(3)(iii).

Was the work performed under a task order or not?

Thanks, Don. Having you been getting my trip reports?

Yes. Great reading. If you give up on acquisition, you've got a career in travel writing. Looking forward to the chapter on Angkor Wat.

Then I would say that the exception doesn't apply to the case.

DFARS 252.225-7012( c )(2) uses the word "end product"--not "component." I don't see how it would apply to components.

The exception applies to "incidental amounts of cotton, other natural fibers, or wool incorporated in an end product." The carrying case may meet the definition of "component", but is it "incorporated" in the optical sight?

As I told my friend, Prof. Nash, all of our efforts to streamline, simplify, and improve the source selection process, his, mine, and John Cibinic's, over many years, have gone for naught.

That's not true. Max Planck once said:

A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it. In a sense, you teach that new generation the truth from the beginning.

In my very first source selection, we used LOCAR. The contracting officer who's idea it was to implement LOCAR won a Meritorious Civilian Service award for streamlining the source selection process. When I moved on to my next position, I implemented my own version of LOCAR and that command is still using that process to award their contracts.

The seeds have been sown by Nash, Cibinic, and yourself. Your ideas make perfect sense to folks who have not been polluted by tradition. I can understand your frustration and you're not wanting to teach/write about source selection any more (most people would have probably given up sooner). However, don't think it was all for naught.

Time out. What are those two clauses doing in the same contract? If it's a DoD contract, FAR 52.225-1 doesn't apply.

In any case, DFARS 252.225-7012( c ) is clear on when the clause does not apply:

( c ) This clause does not apply—

(2) To incidental amounts of cotton, other natural fibers, or wool incorporated in an end product, for which the estimated value of the cotton, other natural fibers, or wool—

(i) Is not more than 10 percent of the total price of the end product; and

(ii) Does not exceed the simplified acquisition threshold in FAR Part 2;

What are you having trouble understanding?

A day or three going through the thing page-by-page and sorting it out with a very limited number of offerors (no more than three, preferably two) by eliminating ambiguity and vagueness and filling important gaps, followed by responsive proposal revisions, might be the best investment an agency can make in a complex acquisition.

Assuming that no more than three offers were expected to compete, why couldn't this be done prior to the receipt of initial proposals? (Replace "proposal revisions" with "proposals" in your assertion). Why must the Government have an offer in hand in order to have such a meeting?

The short answer is that you shouldn't have discussions if the cost outweighs the benefit. Remember that the objective of source selection is to select the proposal that represents the best value. FAR 15.302. Sometimes you can achieve this objective on the basis of initial proposals, sometimes you can't. If you can achieve this objective based on initial proposals, then award without discussions would be appropriate.

The DoD policy is the result of a study of sustained protests on high-dollar DoD acquisitions. The conclusion was that, in many cases, things would have turned out better had the SSA conducted discussions. Note that the policy is not a mandate to conduct discussions (see definition of "should" at FAR 2.101). However, to those that are averse to thinking for themselves and using judgment, it is interpreted as a mandate.

Am I correct that, technically, the contractor is the SBA? Might the SBA then be liable for the cost of the agency to provide the services itself?

Yes, the prime contractor is technically the SBA. See FAR 19.800(a).

No, the SBA will not be liable for termination or reprocurement costs. See 13 CFR 124.518(a):

§ 124.518 How can an 8(a) contract be terminated before performance is completed?

(a) Termination for default. A decision to terminate a specific 8(a) contract for default can be made by the procuring activity contracting officer after consulting with SBA. The contracting officer must advise SBA of any intent to terminate an 8(a) contract for default in writing before doing so. SBA may provide to the Participant any program benefits reasonably available in order to assist it in avoiding termination for default. SBA will advise the contracting officer of this effort. Any procuring activity contracting officer who believes grounds for termination continue to exist may terminate the 8(a) contract for default, in accordance with the Federal Acquisition Regulations (48 CFR chapter 1). SBA will have no liability for termination costs or reprocurement costs.

Ron,

What does it say in endnotes 203 & 204 of the article?

gboyle,

Is the contract going to be modified?

MegB,

I don't know of any such guidance by DoD. However, there was an excellent article in the October 2012 issue of Contract Management magazine that contained a discussion of what constitutes "substantial transformation." The article is "Purchased in the USA: An Examination of Emerging Issues Surrounding Foreign Acquisition" by Eric Cho. See the section titled "Determination of Country of Origin for Supplies--'Made in U.S.A.' vs. 'Domestic End Product' vs. 'U.S. Made End Product'."

The issue is far from clear.

here_2_help,

No, this isn't SWDIVNAVFACENGCOM, but you're not far off (geographically). Thanks for the reply.

-Don

I'm looking for feedback from contractors on a contracting office's newly drafted local clause. The local clause is used in cost-reimbursement contracts that contain DFARS 252.232-7006, Wide Area WorkFlow Payment Instructions, and it supplements that clause. Contractors doing business with this contracting office are complaining that the administrative burden goes way beyond DFARS 252.232-7006 and their complaints sound valid. And, no, the contracting office did not comply with the Paperwork Reduction Act prior to using the clause, probably because it didn't occur to them. Anyway, take a look and let me know your thoughts:

SUPPLEMENTAL WIDE AREA WORKFLOW PAYMENT INSTRUCTIONS

(a) The following Wide Area WorkFlow (WAWF) payment instructions supplement DFARS Clause 252.232-7006.

( b ) Interim Voucher costs are to be broken down in a clear and logical manner, and presented consistent with the way the contractors proposal was structured. Cost information shall include identification of: 1) all labor categories utilized during the billing period; 2) number of hours and unburdened hourly labor rates per category; 3) indirect rates for each labor category; 4) material (consumable and non-consumables) purchase description and amount; 5) travel costs itemized by cost element, date and person; 6) other indirect costs not already included in #3;

7) other direct costs not separately identified; e.g., reproduction, cell phones, equipment rentals, etc.; 8) subcontractor costs itemized with the same level of detail. Subcontractor data shall be delivered directly to the COR; 9) Fully burdened hourly labor rates inclusive of fee; and 10) Average actual hourly labor rates (total actual fully burdened labor cost/total # hrs performed). Attachments created with any Microsoft Office product or Adobe (.pdf files) are to be attached to the invoice in WAWF. The total size limit for files per invoice in WAWF is 5 megabytes. If Requested by the COR, cost back-up documentation (such as delivery receipts, labor hours & material/travel costs etc.) shall be provided to the Government.

( c ) Contractors approved by DCAA for direct billing will not process vouchers through DCAA, but will submit directly to DFAS. Vendors MUST still provide a copy of the invoice and any applicable cost back-up documentation supporting payment to the Acceptor/Contracting Officer's Representative (COR) if applicable. Additionally, a copy of the invoice(s) and attachment(s) at time of submission in WAWF shall also be provided to each point of contact identified in section (g) of DFARS clause 252.232-7006 by email. If the invoice and/or receiving report are delivered in the email as an attachment it must be provided as an Adobe (.pdf file), Microsoft Office product or other mutually agreed upon form between the Contracting Officer and vendor.

(d) A separate invoice will be prepared no more frequently than for every two weeks. Do not combine the payment claims for services provided under this contract.

(End of instructions)

I know of no exception to the rule of two for the situation that you are describing.

It's part of the Air Force. Why would it pay taxes?

You think that the Air Force doesn't have to pay taxes? When the Air Force awards a fixed-price contract that contains FAR 52.229-3, aren't they paying taxes? If the Air Force awards a cost-reimbursement contract that contains FAR 52.216-7, aren't some taxes an allowable cost pursuant to FAR 31.205-41?

What is the basis for the KO's assertion that the ANG does not pay taxes?

Has anyone ever attempted to make a contractors "ability to propose", aka quality of proposal submission (clarity, error free, aligned with source selection factors, etc.) a source selection requirement?

The reason that I ask is that it seems to me that an inherent ability of a contractor to work under a multiple award IDIQ (especially one with an aggressive ordering processes) is their ability to produce quality proposals in a timely fashion. I have read about PoP quizzes and other types of tests being incorporated into a formal source selection but the focus was on technical capability not necessarily their overall proposal capabilities.

Any input, suggestions, comments or warnings about potentially making this a source selection criterion would be greatly appreciated.

Wouldn't that fall under "compliance with solicitation requirements" at FAR 15.304( c )(2):

The quality of the product or service shall be addressed in every source selection through consideration of one or more non-cost evaluation factors such as past performance, compliance with solicitation requirements, technical excellence, management capability, personnel qualifications, and prior experience...

For example, does it include the text of, or references to, FAR 52.216-23, -24 and -25? All letter contracts are required to include them, along with "the clauses required by [the FAR] for the type of definitive contract contemplated. . ." (see FAR 16.603-4.)

The OP said that DoD issued the letter contract, so it shouldn't include FAR 52.216-25. DoD has its own "Contract Definitization" clause at DFARS 252.217-7027. See DFARS 216.603-4( b )(3).

Second, although I'm sure the CO would deny it, this is a classic example of "We really want the incumbent back, but we have to go through the motions, so... ."

I had the same impression. If what the agency really valued was experience, why did it choose this evaluation scheme?:

management plan (35 points); staffing plan (30); similar experience (15); technical approach (10); and transition/start up plan (10)

Did the agency want the incumbent because they were adept at creating management plans, staffing plans, transition/start up plans, and describing their technical approach in proposals? Is this what the agency would be requiring the contractor to do under the task order? Why not just evaluate experience?

Too often agencies are thoughtless when choosing evaluation factors. The selection of evaluation factors is a mechanical, rather than deliberative, process. Some agencies also try to mitigate the inherent advantage of the incumbent by evaluating things that they don't really value out of a misguided notion of fairness. They don't seem to realize that these practices create a bigger target for protesters to shoot at.

Had the CO made no mention of the offeror's price, but had merely said that the low labor rates prompted the agency to downgrade the score(s) for management plan and/or staffing plan based on the risk to staffing and thus to the quality of performance, the GAO might have denied that part of the protest.

I would hope that the GAO would be consistent in that regard. However, there are a couple of statements in the decision that are troubling:

While it is within an agency’s discretion to provide for a price realism analysis in awarding a fixed-price contract to assess understanding or risk, see FAR § 15.404-1(d)(3), offerors competing for such an award must be given reasonable notice that a business decision to submit low pricing will be considered as reflecting on their understanding or the risk associated with their proposals. Analytic Strategies, B-404840, May 5, 2011, 2011 CPD ¶ 99 at 2-3.

Because below cost prices are not inherently improper, when offerors are competing for award of a fixed-price contract, as explained above, they must be given reasonable notice that their business decision to submit a low-priced proposal can be considered in assessing their understanding or the risk associated with their proposal. See Milani Constr. LLC, supra, at 5.

Is this another case of the GAO attorney being unfamiliar with their own case law, or do we an exception to the "risk assessment is inherent in proposal evaluation" rule when it comes to price realism? I hope it's the former.

charles,

For purposes of interpreting the word "contract" as it is used in the FAR, task orders are contracts. Note that in the ASBCA decision that you cited, the board was not trying to interpret the word "contract" as it is used in the FAR--they were trying to interpret the term "contracting opportunities" as that term was used in a statute.

See http://www.wifcon.com/discussion/index.php?app=blog&module=display&section=blog&blogid=6&showentry=2044.