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napolik

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  1. Does the trade-off determination meet the threshold for being able to determine that the price of the successful offeror is fair and reasonable based on competition?

    No. Source selection decisions and price reasonableness determinations are 2 different steps. See FAR FAR 15.308 and 15.305(a)(1).

    Does there have to be a separate and distinct price analysis performed or does the best value trade-off serve as determination of reasonableness of price?

    You document 2 different steps.

    ... probable costs were developed - so the elements of the non selected proposals that can be used to determine price reasonableness are good for you but you would probably need to quantify each trade off and still do a price analysis.

    You need not "dollarize" tradeoffs. See Kay and Associates, Inc. File: B-258243.7 Date: September 7, 1995:

    Kay argues that Customs did not conduct a meaningful cost/technical tradeoff. According to Kay, the agency did not adequately take into account the fact that the evaluated cost of Kay's proposal at the conclusion of the reopened negotiations was approximately $12.2 million lower than Beech's; the protester argues that the agency should have quantified the additional value offered by Beech's technical advantages. Kay maintains that its proposal, not Beech's, would have been rated the best value had Customs done so since, notwithstanding the fact that Beech's was rated outstanding and Kay's was rated good, Kay believes the proposals were close technically. (Kay expressly states that it does not challenge the results of the technical evaluation.)

    In a negotiated procurement, there is no requirement that award be made on the basis of lowest cost unless the RFP so specifies. Henry H. Hackett & Sons, B-237181, Feb. 1, 1990, 90-1 CPD para. 136. Cost/technical tradeoffs may be made in deciding between competing proposals; the propriety of such a tradeoff turns not on the difference in technical scores or ratings per se, but on whether the agency's judgment concerning the significance of that difference was reasonable and adequately justified in light of the RFP evaluation scheme. Brunswick Defense, B-255764, Mar. 30, 1994, 94-1 CPD para. 225. Federal Acquisition Regulation Sec. 15.612(d)(2) requires that documentation supporting the selection decision show the relative differences among proposals as well as their strengths, weaknesses and risks along with the basis and reasons for the decision. There is no requirement, however, that selection of a higher- cost proposal be justified through an exact quantification of the dollar value to the agency of the proposal's technical superiority. Picker Int'l, Inc., B-249699.3, Mar. 30, 1993, 93-1 CPD para. 275. Further, even where a selection official does not specifically discuss the cost/technical tradeoff in the selection decision document, we will not object to the tradeoff if it is clearly supported by the record. Maytag Aircraft Corp., B-237068.3, Apr. 26, 1990, 90-1 CPD para. 430.

  2. During the course of source selection is it allowed to not evaluate a price for a item that has been determined above the requirements. It was discovered during the course of the technical evaluation that this particular item was not needed. The solicitation has an "evaluated" price and since this was not part of the SOW/requirements can I leave it out of the evaluation.

    In your solicitation, you should have a definition of "evaluated price" (e.g. sum of Section B line items' extended prices, plus line item extended prices of options for additional quantities).

    What does your solicitation say?

  3. In my experience, it is unusual that an attorney would not want to incorporate the contents of the solicitation. It could be that your attorney is concerned that the solicitation no longer reflects the intent of the parties or of the procurement regulations.

    I have reviewed proposed awards following discussions when the exchanges between the contracting specialist and the contractor addressed the solicitation’s contents. By this I mean that the exchanges represented a de facto amendment of the solicitation. Had we simply incorporated the solicitation without amending it correctly, the contract would not have accurately reflected the intent of the parties.

    By chance, did you have discussions during which you addressed the contents of your solicitation (e.g. CLIN structure, SOW, delivery or performance schedule, clauses)?

    Or, subsequent to the solicitation’s issuance, was the FAR or your agency FAR supplement modified to add a clause that should or must be included in the contract?

    If either case occurred, did you officially amend the solicitation?

  4. There is no question that a contracting officer may issue a unilateral purchase order. However, it is important to remember that the issuance of the unilateral purchase order does not create a contract. The contract embodied in the purchase order comes into effect when the contractor either countersigns the purchase order or commences its performance.

    See the definition of “Contract” in FAR 2.101:

    “Contract” means a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing. In addition to bilateral instruments, contracts include (but are not limited to) awards and notices of awards; job orders or task letters issued under basic ordering agreements; letter contracts; orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance; and bilateral contract modifications. Contracts do not include grants and cooperative agreements covered by 31 U.S.C.6301, et seq. For discussion of various types of contracts, see Part 16.

    Quote

  5. Typically, an order under an IDQ contract is issued unilaterally by the government's contracting officer.

    Your IDQ contract should contain a Section B listing all the items of supply or service covered by the contract along with the unit prices for each item. When you submit a proposal to the contracting officer, you should be using the Section B lisitng to identify the items and prices you are proposing.under your contract. Since the contracting officer is placing an order for the items and prices listed in your contract, he or she does not need your signature.

  6. As you pointed out, the clause 52.216-18 makes the delivery order subject to the Limitation of Subcontracting clause. Paragraph (b ) of the -18 clause makes very explicit the applicability of the Limitation clause.

    If the contractor has stated that it will not comply with the clause, it is unacceptable. See this recent GAO decision - Sealift, Inc., B-409001 (Jan. 6, 2014):

    Quote

    As a general matter, an agency’s judgment as to whether a small business offeror will be able to comply with a subcontracting limitation presents a question of responsibility not subject to our review. Dorado Services, Inc., B-408075, B-408075.2, June 14, 2013, 2013 CPD ¶ 161 at 11; Spectrum Sec. Servs., Inc., B-297320.2, B-297320.3, Dec. 29, 2005, 2005 CPD ¶ 227 at 6. However, where a proposal, on its face, should lead an agency to the conclusion that an offeror has not agreed to comply with the subcontracting limitation, the matter is one of the proposal’s acceptability. TYBRIN Corp., B-298364.6, B-298364.7, Mar. 13, 2007, 2007 CPD ¶ 51 at 5.

    If it is unclear that the contractor will comply with the Limitations on Subcontracting clause, I would send an e-mail to the contractor:

    Dear Mr. Contractor, as you know, the clause entitled “Limitation on Subcontracting (Nov2011)”, FAR 52.219-14, is included in the Multiple Award IDIQ Master Contract under which our solicitation was issued. The clause applies to every order placed under the contract.

    Please confirm your intention to comply with this clause should you receive the award of an order under the solicitation we issued. Please do so by 1 April 2014.

    You are not invited or authorized to submit a revised proposal. Any revision to your proposal will not be considered.”

    If you are concerned that other contractors may not be in compliance, send the e-mail to all the competitors.

    Since the contractor cannot revise its proposal, you have not held discussions.

  7. Those orders not requiring a statement of work list fixed price items with a spec or SOW contained in the schedule. The fixed prices for FAR 8.405-1 tasks or items were subject to competition when GSA awarded the schedule.

    If a contracting officer leaves the RFQ open for 30 days, but receives only a single quote, can the CO cite the competition leading to the award of the schedule as a basis for price fairness and reasonableness?

  8. DPAP just issued a deviation to FAR 8.404(d) : http://www.acq.osd.mil/dpap/policy/policyvault/USA001004-14-DPAP.pdf.

    FAR 8.404 (d) tells one to do a price evaluation in accordance with FAR 8.405-2(d). The latter paragraph includes this sentence: "The ordering activity is responsible for considering the level of effort and the mix of labor proposed to perform a specific task being ordered, and for determining that the total price is reasonable."

    Given the explicit words in 8.405-2(d), does anyone know why DPAP felt obligated to issue a deviation?

  9. I just received the following e-mail:

    March 13, 2014

    The Government Accountability Office (GAO) today issued the following Decisions and Opinions of the Comptroller General:

    Appropriations Decisions:

    GAO-14-163SP, Principles of Federal Appropriations Law: Annual Update of the Third Edition, March 13, 2014 http://www.gao.gov/products/GAO-14-163SP

    This is the annual update of the third edition of Principles of Federal Appropriations Law. Our objective in this publication is to present a cumulative supplement to the published third edition text that includes all relevant decisions from January 1 to December 31, 2013.

    ===========================================================

    This list is produced by the Government Accountability Office to provide information about GAO Decisions. The home page for GAO is http://www.gao.gov

    Note that the document is " ... a cumulative supplement to the published third edition text that includes all relevant decisions from January 1 to December 31, 2013."

  10. Contracting is an art, and every contracting officer is an artist. So, there is more than one approach you can take.

    One approach is to solicit and evaluate proposals using a down select process combined with the award of purchase orders or contracts. Solicit and evaluate proposals, identify the 3 proposals representing best values, award three purchase orders requiring the analysis of samples, and use the evaluation of the samples and proposed prices to make your source selection.

  11. In its decisions involving the evaluation of quotes submitted under a FAR 8.4 procurement, the GAO has consistently stated that it “ … will review the record to ensure that the agency’s evaluation is reasonable and consistent with the terms of the solicitation and applicable procurement laws and regulations.” See a recent decision involving a FAR 8.4 competition: United Facility Services Corporation d/b/a EASTCO Building Services, B-408749.2, Jan. 17, 2014.

    http://www.gao.gov/assets/670/660296.pdf.

    For me, it is indisputable that you must evaluate all quotes you receive against the criteria you identify in your solicitation.

  12. I just received my first commerical-item SAP. While conducting market research, one of mysuggested sources asked if I would be setting aside any work for SDVOSBs. I said no as the work is already reserved for SBs above $3k but not exceeding $150k. (Our IGCE estimates the services at approx. $50K). The same source then asked if he could subcontract work under the purchase order. Common sense tells me no but I want to respond with a FAR reference as to why not. Any ideas? FAR 52.219-14 Limitations on Subcontracting refers to offers/contracts versus quotes/purchase orders.

    You can do a SDVOSB set aside if you wish. See FAR 13.003(b )(2).

    There is no FAR barrier to subcontracting the work.

    BTW, you would not use 52.219-14 under $150k. See FAR 19.508(e ). Also, subcontracting plans are not required from small businesses. See FAR 19.702(b )(1).

  13. I just received my first commerical-item SAP. While conducting market research, one of mysuggested sources asked if I would be setting aside any work for SDVOSBs. I said no as the work is already reserved for SBs above $3k but not exceeding $150k. (Our IGCE estimates the services at approx. $50K). The same source then asked if he could subcontract work under the purchase order. Common sense tells me no but I want to respond with a FAR reference as to why not. Any ideas? FAR 52.219-14 Limitations on Subcontracting refers to offers/contracts versus quotes/purchase orders.

    You can do a SDVOSB set aside if you wish. See FAR 13.003(b )(2).

    There is no FAR barrier to subcontracting the work.

    BTW, you would not use 52.219-14 under $150k. See FAR 19.508(e ). Also, subcontracting plans are not required from small businesses. See FAR 19.702(b )(1).

  14. KME,

    Let me get this straight. It's a CPFF level-of-effort where the contractor is required to deliver a level of effort we'll call 100 time units. They deliver a fraction of 100, but the Government pays 100% of the fixed-fee.

    If that's right, then I would say that is wasteful. The percentage of fee paid should be linked to the percentage of the level of effort delivered. This principle is evident in FAR 52.249-6(h)(4)(i), which states that if the contract were terminated for convenience, the contractor would be entitled "a percentage of the fee equal to the percentage of completion of work contemplated under the contract." See also FAR 52.232-22(l).

    Why not take the fixed fee proposed, divide by 100, and pay that much fee for each time unit delivered?

    Why not create a FFP LOE and use this clause:

    Payment

    Monthly Payments: The contractor shall be paid based upon level of effort (LOE) expended for all sites, plus travel, training, and surge support costs incurred. The amount of the payment for the monthly LOE expended shall be developed by multiplying the percentage the month's LOE for all sites represents of the total annual LOE for all sites times the firm fixed price.

    Assuming the total firm fixed price is $5,000,000, the total annual LOE for all sites is 56,640 hours, and the monthly LOE expended for all sites is 4,700 hours, the monthly payment would be $414,901 plus any travel and training costs and surge support.

    Monthly payment = [(monthly LOE for all sites/ annual LOE for all sites) X firm fixed price] + travel costs+ training costs+ surge support.

    Monthly payment = [(4,700/56,640) X $5,000,000] + travel costs + training costs+ surge support Monthly payment = (.0083 X $5,000,000) + travel costs + training costs+ surge support Monthly payment = $414,901 + travel costs + training costs+ surge support

    Total Payments: The contractor shall be paid the entire firm fixed price only if the contractor expends the entire LOE for all sites. If the entire LOE for all sites is not expended, the total of monthly payments to the contractor shall be a percentage of the FFP equal to the total LOE expended for all sites divided by the total LOE for all sites set out in Section B.

    Assuming the contractor expends 56,000 hours, the total payments to the contractor would be $4,943,502.50 plus any travel and training costs and surge support.

    Total Payments = [(total LOE expended / total Section B LOE) X firm fixed price] + travel costs + training costs+ surge support Total payments = [(56,000 / 56,640) X $5,000,000] + travel costs + training costs+ surge support Total payments = (.9887 X $5,000,000) + travel costs + training costs+ surge support Total payments = $4,943,502.50 + travel costs + training costs+ surge support

  15. You are right, the key words include "ability to execute". While the contractor can buy in, the contracting officer must decide whether or not the contractor can perform the contract given its very low price. If the contracting officer does not think the contractor can perform at the buy-in price, he or she must determine the contractor to be non-responsible.

    Let me provide a couple of examples to illustrate that compliance with law and regulation is not the only consideration you make when facing a “buy in” circumstance.

    First, assume you need a contractor to provide security services for a Navy ship visiting a middle-eastern port. The price is 20% below the nearest competitor’s price and 35% below the government estimate. You ask the contractor to explain how he or she could obtain the barges, barriers and services needed to execute the contract per the SOW. The contractor is unable to demonstrate that it has identified sources and prices for the security barges and for the tugs needed to maneuver the barges, but the contractor insists that its competitors are greedy and making too much profit. Do you determine the contractor to be responsible because the contractor has never run afoul of a US or foreign law or regulation affecting port security services?

    Next, assume you are seeking to contract for household good shipment (HHG) services. The price is well below competitors’ prices and 10% below the existing contract. When you speak with the contractor, you discover that it lacks experience and sources associated with shipping HHG overseas. The contractor tells you not to worry because he has relatives located overseas who know sources that can handle the shipments. What is your decision concerning responsibility?

  16. Responsibility addresses a number of issues involving the contractor's ability to execute its proposal at the proposed price as well as its compliance with laws and regulations. Take a look at the standards the contractor must meet to be determined “responsible".

    9.104-1 -- General Standards.

    To be determined responsible, a prospective contractor must --

    (a) Have adequate financial resources to perform the contract, or the ability to obtain them (see 9.104-3(a));

    (b ) Be able to comply with the required or proposed delivery or performance schedule, taking into consideration all existing commercial and governmental business commitments;

    (c ) Have a satisfactory performance record (see 9.104-3(b ) and Subpart 42.15). A prospective contractor shall not be determined responsible or nonresponsible solely on the basis of a lack of relevant performance history, except as provided in 9.104-2;

    (d) Have a satisfactory record of integrity and business ethics (for example, see Subpart 42.15);

    (e) Have the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain them (including, as appropriate, such elements as production control procedures, property control systems, quality assurance measures, and safety programs applicable to materials to be produced or services to be performed by the prospective contractor and subcontractors). (See 9.104-3 (a).)

    (f) Have the necessary production, construction, and technical equipment and facilities, or the ability to obtain them (see 9.104-3(a)); and

    (g) Be otherwise qualified and eligible to receive an award under applicable laws and regulations (see also inverted domestic corporation prohibition at 9.108).

  17. Let me supplement Retread's post with the relevant FAR cite, FAR 1.108(d). Look at paragraph (d)(3):

    (d) Application of FAR changes to solicitations and contracts. Unless otherwise specified –

    (1) FAR changes apply to solicitations issued on or after the effective date of the change;

    (2) Contracting officers may, at their discretion, include the FAR changes in solicitations issued before the effective date, provided award of the resulting contract(s) occurs on or after the effective date; and

    (3) Contracting officers may, at their discretion, include the changes in any existing contract with appropriate consideration.

    In my experience, it is not uncommon for a new contracting officer to seek to consolidate contract documents and to insert the current FAR clauses. However, this must be done bilaterally.

    It would not surprise me if the contracting officer has not considered the impact of the new clauses. Bring them to his or her attention and identify any consideration you desire.

  18. The 4th edition of the Government Contracts Reference Book defines and describes “Certification” as follows:

    A signed representation that certain facts are accurate. A certification can entail either (1) an explicit representation of fact requiring the inclusion of data and signature by the contractor (“The contractor hereby certifies that …” or “This is to certify that …”), or (2) a deemed representation of a particular fact without execution of a specific certification document or use of specific certification language. All certifications required by solicitations are included in Section K of the UNIFORM CONTRACT FORMAT. FAR 14.201-5, 15-204-5. The government has traditionally used certifications in such matters as contractor status; truth of a matter; origin of a component; compliance with specifications; compliance with applicable laws; accuracy, currency, and completeness of cost or pricing data (see CERTIFIED COST OR PRICING DATA); and good faith, accuracy, and completeness in reflecting the amount owed with regard to claims, past contractual performance, and other matters. The CLINGER-COHEN ACT OF 1996 required the government to reduce the number of certifications in its contracts, and this was accomplished by 62 Fed. Reg. 233 (Jan. 2, 1997) and 62 Fed. Reg. 2612 (Jan. 17, 1997) by adopting the ONLINE REPRESENTATIONS AND CERTIFICATIONS APPLICATION system.

  19. Don, see here: https://dap.dau.mil/aap/pages/qdetails.aspx?cgiSubjectAreaID=31&cgiQuestionID=114586

    Block 9. Recommendations. Enter the Contracting Officer’s recommendation whether the acquisition should be pursued under one of the small business preference programs for SB/SDB business, etc. Recommendation must consider the DoD set-aside program order of precedence in DFARS 219.504. Block 9a pertains only to Section 8(a) acquisitions. If all recommendations are “No”, an explanation must be provided in Block 14.

    BTW, a propsed, new 2579 was circulated for comment this past summer. The final, new 2579 should be issued very soon.

    In the draft, new form 2579 the recommendation is made at block 10:

    10. Recommendation Check the recommended type of procurement. Check all that apply, e.g., a small business set-aside could also be a MAC. If Block 10a. is checked and “Partial” is checked, then the percentage estimate is calculated by considering market research, acquisition history, and the independent government estimate of services or supplies suitable for a small business set-aside. Attach the proposed acquisition strategy/plan. For J&As >$20 million (blocks 10b., c., and d.), attach J&A. If Block 10j. is checked, then the acquisition strategy/plan must indicate contract number, if any portion of the requirement will be set aside for small business, if reserves will be used, and if orders may be set aside for small business (ref. FAR Subpart 19.502-4).

    While this does not identify the signer, the Instructions at the top of page 3 of the draft, new 2579 said:

    All DoD activities shall use DD Form 2579 in accordance with DFARS 219.201(d)(10). The Contracting Officer with execution authority commensurate with the estimated cost of the subject acquisition is responsible for preparing the form and coordinating all small business strategy decisions or recommendations on a particular acquisition with the local Small Business Professional. After signing the completed form, the Contracting Officer will submit it to the Small Business Professional and a Small Business Administration Procurement Center Representative (PCR) who will review and sign it before synopsis. Utilize the process in FAR 19.505 to resolve any failure to agree. The contract file shall retain a copy of the signed form with all attachments.

  20. I have played games (i.e. performed exercises) involving languages, math, science and, most recently, information and personal security. However, if I hadn't read, studied and applied vocabulary, equations, formulas, or policy directives, the games merely entertained me and occupied my time. They didn't provide knowledge.

    In the case of procurement "games", in my view, one cannot develop legal and effective tactics or strategies until such time as one possesses a knowledge of procurement fundamentals. Before one can address any issues raised by program managers or industry responders, one needs to know what the statutes and regulations say and mean.

    I don't think that games can create the knowledge lacking in the procurement "profession" today.

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