Search the Community
Showing results for tags 'Consolidation'.
Found 4 results
FARmer posted a topic in Contract Award ProcessHello All, I have been searching WIFCON for information on the interpretation of consolidation want to piggyback off a post from 2013 (link provided at the bottom of the post). Essentially I am wondering if I am over interpreting the definition of consolidation. FAR 2.101 states: “Consolidation or consolidated requirement”-- (1) Means a solicitation for a single contract, a multiple-award contract, a task order, or a delivery order to satisfy-- (2) Separate contract as used in this definition, means a contract that has been performed by any business, including small and other than small business concerns. (i) Two or more requirements of the Federal agency for supplies or services that have been provided to or performed for the Federal agency under two or more separate contracts, each of which was lower in cost than the total cost of the contract for which offers are solicited; or (ii) Requirements of the Federal agency for construction projects to be performed at two or more discrete sites." (Bold for emphasis) Below is the scenario: You have three separate contracts, each for a separate requirement, with the following costs: 1. $900,000 2. $100,000 3. $100,000 You plan to consolidate them into a single contract with total costs of $700,000. Because Contract #1 cost $900,000 and is higher than the new requirement ($700k), is this an immediate "no, not consolidation" per the FAR definition? Or is it consolidation even though Contract #1 doesn't meet the full definition (because the cost is higher), Contract #2 and #3 do meet the definition? 2013 discussion:
We are considering doing a SATOC small business set-aside for construction rather than MATOC. The Defense consolidation memo of October 28, 1996 would indicate this is a consolidation even though it is for construction. Value overf $25M. Though it would be "new" work because it is construction, it is work that could be performed by smalls. Should this be subject to a consolidation analysis and if so, would this a quantitative justification to show the benefits. The Jobs Act refers to this but does not seem clear. Thanks.
rios0311 posted a topic in Contract Award ProcessBackground: My customer has 15 contracts that are coming to an end at different times in the near future. Those contracts are being performed by large and small businesses. The customer wants to roll-up the 15 requirements into 3 separate awards under the CIO-SP3 GWAC and place the 3 orders under the small business section of this GWAC to ensure the awards go out to small businesses. The rates on the GWAC are lower than the rates being charged under the incumbent contracts. I believe that this is a contract consolidation (not bundling). Please see 15 U.S.C. 657q Consolidation of Contract Requirements. Specifically, the definition of the term Consolidation of Contract Requirements". I believe this is also Section 44 of the Small Business Jobs Act of 2010 (PL 111-240-Sept. 27, 2010). I apologize if the reference is incorrect. I’ve included the definition below: It states: The term “consolidation of contract requirements”, with respect to contract requirements of a Federal agency, means a use of a solicitation to obtain offers for a single contract or a multiple award contract to satisfy 2 or more requirements of the Federal agency for goods or services that have been provided to or performed for the Federal agency under 2 or more separate contracts lower in cost than the total cost of the contract for which the offers are solicited. If the requirement I’m working on is indeed a consolidated requirement, there are certain statutory requirements that the acquisition team must comply with prior to awarding the contract. I raised my concern to my division chief, but he disagreed with my interpretation of the definition. He does not believe my requirement is a consolidation. I would be fine with his interpretation, were it not for the possibility of my requirement being exposed to a protest and the consequences of not having complied with the statutory requirements of a consolidated contract. I underlined the text in the definition that my division chief and I are having difficulty with. We do not agree on its meaning. The division chief argues that a requirement is not considered a consolidated contract if the resulting [consolidated] award is lower in cost than the TOTAL cost of the separate contracts prior to consolidating them. According to him, if my [consolidated] contract is lower in value than the total cost of the separate contracts, I do not have a consolidated requirement and therefore do not have to comply with any of the statutory requirements. I interpret the definition as meaning that provided that EACH of the separate contracts prior to consolidating them is lower in cost than the total cost of the resulting [consolidated] contract (which I expect would occur in the majority of cases), then my requirement is in fact a consolidated contract. In researching this I turned up a number of protests related to the issue of consolidation. Every example of consolidation I found while reading GAO decisions included consolidated contracts in which the price or cost of the consolidated contract was lower than the total cost of the individual requirements prior to consolidating them. Those contracts were in fact considered consolidated contracts. This is in direct contrast to the division chief’s interpretation. According to GAO, the area of concern with consolidating requirements (excluding bundling) resides with the restriction of competition (without regard to business size). GAO has stated that because bundled or consolidated procurements combine separate and multiple requirements into one contract, they have the potential for restricting competition by excluding firms that furnish only a portion of the requirement; See 2B Brokers et al., B-298651, Nov. 27, 2006, 2006 CPD ¶ 178 at 9; Pemco Aeroplex, Inc., B-280397, Sept. 25, 1998, 98-2 CPD ¶ 79 at 8-9. I could not find anywhere where the cost or price of the final contract (in relation to the individual contracts prior to the consolidation) was a consideration in determining if a contract is considered consolidated or not. Further, according to GAO an agency may consolidate or bundle requirements where the agency reasonably determines that consolidation will result in significant cost savings or efficiencies. B.H. Aircraft Co., Inc. , B-295399.2, July 25, 2005, 2005 CPD ¶ 138 at 7. This statement seems to evidence that consolidation occurs with or without regard to cost savings on the resulting [consolidated] contract. Although the determining factor is not the final price of the consolidated contract alone, the final price may be a deciding factor in determining whether or not the consolidated contract is permissible or not. What is the proper interpretation of the definition? Is my requirement a consolidation of contract requirements per the definition?
So I am seeking opinions, and hopefully evidence. I want to consider the DFARS definition of consolidation of requirements only, and not to even discuss bundling, my scenario is OCONUS and FAR 19 for the most part doesn't apply and neither does bundling. However, DFARS part 7 does apply and there is debate regarding how to apply the definition of consolidation to construction requirements. DFARS -207.170-2 Definitions. “Consolidation of contract requirements” means the use of a solicitation to obtain offers for a single contract or a multiple award contract to satisfy two or more requirements of a department, agency, or activity for supplies or services that previously have been provided to, or performed for, that department, agency, or activity under two or more separate contracts. Furthermore, the DoD Office of Small Business Programs further defines bundling and consolidation in their Guidebook dated Oct 2007. http://www.acq.osd.mil/osbp/news/Bundling%20Guidebook%20October%202007.pdf in this guidebook the definition of consolidation states "As recently defined in statute, for a consolidation to exist, the proposed acquisition must be combining two or more requirements that were previously provided or performed under separate contracts." It also gives a definition of consolidation and "new work" in that it says a previously performed requirement combined with "new work, i.e., work that has never been performed under contract." is still consolidating. So how would these definitions ever apply to construction? The argument is that Agency XYZ has previously built a Dining Facility at Fort Fairy Tale. So when you go to build a Dining Facility at Fort Dumbo you have a previously performed requirement under a separate contract. I disagree with that interpretation, they are totally separate requirements because they are totally separate locations with different environments, site conditions, etc. In conclusion I don't see how consolidation definition can ever apply to construction. I can see how bundling could apply to construction because that has to do with limiting small business participation. But I believe consolidation strictly applies to supplies/services. For those who know construction, there are individuals that believe if you combine two facilities, you are "consolidating", and then those who think only when you combine separately appropriated Project Numbers it is considered "consolidating". I have yet to been given any evidence supporting these claims, just passing along the info I've been given, and not saying there isn't evidence either. Agree? Disagree? Have any evidence? Let me know. Thanks!