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joel hoffman posted a topic in Proposed Law & Regulations; Legal DecisionsIs GSA eBuy Schedule 56 buying “construction” as a Commercial Item for Supplies without mandatory construction clauses or any design related requirements? In a recent appeal of two ASBCA cases to Federal Court of Appeals for the Federal Circuit, the appellate Court concluded that two Army task orders using GSA Schedule 56 for Pre-engineered/prefabricated buildings were construction contracts and that requirements for performance and payment bonds were incorporated by operation of law. The Army used Schedule 56 for two contracts to procure and install two (pre-fabricated? Pre-engineered?) metal buildings from K-Con, who provides pre-engineered and pre-fabricated/modular buildings. Two task orders were issued using SF 1449 Solicitation/Contract/Order for Commercial Items without including any requirement for bonding. The Army required the contractor to provide bonds before issuing an NTP, which delayed start of the jobs for two years, until K-Con provided the bonds. K-Con submitted claims for delays and increased cost, which were denied and appealed to the ASBCA, which ruled for the Army. K-Con then appealed to the Court of Appeals for the Federal District. The contracts (task orders) did include Davis -Bacon Act requirements for applicable parts of the work. The Decision didn’t elaborate on whether the buildings were pre-fabricated in a factory or pre-engineered/site assembled from pre-fabricated materials and parts. The contractor argued that the contracts were contracts for commercial items, not construction, that the (formerly referred to as ) Miller Act bonding requirements weren’t applicable and alternatively, the contracts contained no requirements or clauses requiring bonds. The Case is found here: https://cases.justia.com/federal/appellate-courts/cafc/17-2254/17-2254-2018-11-05.pdf?ts=1541435554 I haven’t read the ASBCA Decisions yet. However, what the Appellate Court decision didn’t say raises several questions for me. How is GSA contracting for pre-engineered/prefabricated buildings and building materials? Do the schedules address or why don’t the schedules address A/E services and construction aspects for orders that include more than buying a delivered pre-fab building or building materials. Is a commercial item task order appropriate when the project includes or is for designed aspects and construction? Do GSA and agencies using the schedules know the difference between supplies and construction (or A/E services for that matter)? Since pre-engineered metal buildings usually are shipped as parts, which require assembly on-site, it would be very unlikely that the government would simply purchase them for delivery without provision for on-site erection (construction) and interior construction and the other building systems (construction). The military might buy a building that way for erection and construction by its military engineer teams. Prefab buildings can be bought for delivery to the site but if any related on-site construction is to be provided by the seller, the task order would have to cover those construction aspects. I found two websites that provide some interesting perspectives one is a GSA presentation at a construction conference. The other is the K-Con website for its GSA Schedule 56 Contract, which includes the GSA SIN numbers and descriptions. The SIN description appear to assume that these are not contracts involving A/E or construction (with some exceptions), even when design and building assembly, installation of materials and systems, and site work is included in the order. When construction is specifically included, the SIN acknowledges Davis-Bacon and other unspecified construction requirements. I’m not familiar with the Schedule contracts, so didn’t search for the entire contract format to see how those are addressed. K-Con advertises design/build as part of its services. GSA presentation: http://www.modular.org/documents/document_event/07gov_gsa2.pdf K-Con (this has been updated in 2018, since the contracts in question but the contract SIN descriptions may be the same) https://kconinc.com/wp-content/uploads/2018/03/KCON-GSA-Brochure.pdf When I was a consulting engineer many years ago, even the pre-engineered metal building manufacturers used registered architects and licensed professional engineers to supervise or perform designs and to stamp designs for their buildings.
Earlier this year the ASBCA concluded that the Christian Doctrine applies to performance and payment bond requirements. The case involved the construction of a pre-fab building. The CO used a GSA schedule contract to make award. The order did not include FAR 52.228-15, which implements the requirement for performance any payment bonds. Upon award the CO requested bonds. The contractor initially said it couldn't provide them, but ultimately did two years later! Upon providing the required bonds the CO provided equitable adjustment to compensate the contractor for the bonds that it said were to have been read into the contract to begin with. Upon completion of performance the contractor submitted a claim for delay costs among other things due to the two years that had passed between award and performance. One of the arguments the contractor made was that this was not a commercial contract and not a construction contract, so bonding wasn't required. The Board concluded the contract was for construction and that the Miller Act requirements still applied, even if the procurement was conducted as a commercial acquisition. The Board determined that inclusion of the clause was mandatory, even though the bonds statutes and implementing FAR regulation permit the CO to waive bonding. They reasoned that the CO could only waive the requirement in situations explicitly stated in the statute, which did not apply in this case (i.e., performance in a foreign country or authorized by another statute). The Board also concluded that bonding requirements are significant components of public procurement policy. In the request for reconsideration, the contractor cited a prior U.S. District Court case (Faerber Electric) as having held that the Christian Doctrine does not apply to the Miller Act. The Board distinguished this case from Faerber. It stated that the decision in Faerber was in the context of whether or not a subcontractor possessed a right of action against a prime contractor based on the presumption that the prime was required to have obtained a payment bond, despite both the CO and contractor having ignored the requirement. It also stated that Faerber did not decide address applicability of the Christian Doctrine. ASBCA Opinion http://www.asbca.mil/Decisions/2017/60686, 60687 K-Con, Inc. 1.12.17.pdf Request for reconsideration denied. http://www.asbca.mil/Decisions/2017/60686, 60687 K-Con, Inc. 5.8.17.pdf Prior related Wifcon discussion.
Greetings, I'm working on a training presentation for my coworkers, and my topic is the Christian Doctrine. As later Court of Federal Claims cases have ruled (such as General Engineering & Machine Works v. Sean C. O’Keefe), the Christian Doctrine applies only to "mandatory contract clauses which express a significant or deeply-ingrained strand of public procurement policy". The original G. L. Christian & Associates v. United States court explicitly mentioned the termination clause(s) in its decision, but I've run out of sources to research. Would any of the esteemed WIFCON forum members have other examples of "deeply-ingrained strands of public procurement policy?" Thank you!