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FAR 52.215-1(f)(5)

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My interpretation of FAR 52.215-1(f)(5) is applicable to this situation:

If the RFP is issued for a base year with 4 one year options can the Government award a contract for a base and less than the 4 options periods? All things considered, knowing that the options are at the Government's discretion, is it OK to award for less than advertised?

Has anyone ever dealt with this? Any thoughts?

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I don't understand what benefit there could be in not including options in the base award, if that is what was solicited and offered on. They are only options. Awarding the base does not award the options.

If you have 52.217-5 in the solicitation, the options must be evaluated in determining the award. It is possible that evaluating all options could have a different result in the award decision than in evaluating for some of the options.

I suppose you could amend the solicitation and remove the options, and provide an opportunity for offerors to provide a revised proposal without options.

But why not leave the options there, and if the government does not need them, simply not exercise them?

Or might you be asking if you must award all options after the base is awarded? The answer to that question is, no.

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I don't understand what benefit there could be in not including options in the base award, if that is what was solicited and offered on. They are only options. Awarding the base does not award the options.

If you have 52.217-5 in the solicitation, the options must be evaluated in determining the award. It is possible that evaluating all options could have a different result in the award decision than in evaluating for some of the options.

I suppose you could amend the solicitation and remove the options, and provide an opportunity for offerors to provide a revised proposal without options.

But why not leave the options there, and if the government does not need them, simply not exercise them?

Or might you be asking if you must award all options after the base is awarded? The answer to that question is, no.

OK, all areas you've covered in your reply have been considered. We get all that and we're fully aware of the government's rights on options. The RFP has closed and we are inches away from making an award, however, our management believes they have valid reasons for only awarding the base and allowing for only 2 of the options to be placed on the schedule rather than the 4 that were advertised. FAR 52.217-5 was included in the solicitation. If you read 17.206( b ), you'll see that government does not have to evaluate options. FYI we are an R&D type agency and we are not subject to the provisions at 17.2, however we do, as a standard practice use options on our contracts.

My question deals with FAR 52.215-1(f)(5). Under the circumstances stated above and in my original post, perhaps someone can offer an interpretation of 52.215-1(f)(5) which states "The Government reserves the right to make an award on any item for a quantity less than the quantity offered, at the unit cost or prices offered, unless the offeror specifies otherwise in the proposal." Can it be interpreted that "any item for a quantity less than the quantity offered" can be applied to "an option"? Some in our office say yes, some say no.

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The solicitation provision at FAR 52.217-5, included in your solicitation, gives you an out at FAR 17.206 ( b ) -- if you only want to keep two options alive beyond the basic at the time of contract award, just evaluate those two options along with the basic. FAR 17.206 ( b ) says you "need not evaluate offers for any option quantities when it is determined that evaluation would not be in the best interests of the Government and this determination is approved at a level above the contracting officer." The paragraph goes on to provide an example of when this course would make sense, which might fit your case well.

Ideally, evaluating the basic-plus-two-options will provide the same apparently successful offeror as the basic-plus-four-options. But maybe not. Even so, you can still do it.

Just be sure that you're not dropping the two options primarily or even partly for the purpose of changing the apparently successful offeror. But dropping the two options SOLELY because there is no longer any reasonable expectation that funds will be available for them is okay, even if the action results in a different apparently successful offeror.

Of course, you could also choose to amend the solicitation and obtain new or revised proposals.

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OK, let me try this again but this time, let's forget all about the circumstances. I think it muddied the water.

I'll restate the question: 52.215-1(f)(5) which states "The Government reserves the right to make an award on any item for a quantity less than the quantity offered, at the unit cost or prices offered, unless the offeror specifies otherwise in the proposal." Can it be interpreted that "any item for a quantity less than the quantity offered" can be applied to "an option"? If the term "ANY ITEM" includes "OPTION #" like a CLIN, then I'm completely confident I know the answer. I believe this boils down to "intent" vs. reality. There are people in my office who feel differently.

This is not a debate on whether we evaluate the options. It's also not about awarding the options. I'm simply soliciting the opinions from this specialized community on the subject of 52.215-1(f)(5)...that's it.

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Depends on whether you consider an "item" to be an option and a "quantity" to be a number of option periods. IMHO it's stretching the plain meanings of the words too far, and I would not go there. (I write this with some trepidation, not having looked in FAR 2.101, as I just read Vern's article in the February issue of Contract Management that finally arrived today.)

Not sure what reasons there could be for not wanting to award the contract with the same options in the solicitation, unless somebody had an attack of good faith and didn't want to mislead a contractor by awarding option periods that had definitely been ruled out.

There doesn't seem to be anything wrong with notifying a contractor early (at award) that the Government does not intend to exercise some of the options, other than the points raised by others, but there seems to be no need to do so. Why commit to such a decision so early?

If you are looking for backup in 52.215-1(f)(5), it's analogous but not on point and therefore weak.

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Crazy KO,

I haven't looked up any cases, but it's clear that FAR 52.215-1(f)(5) makes no distinction between items that are "basic" or "optional." If someone is saying that FAR 52.215-1(f)(5) only applies to items that are "basic", but not "optional", they would need to show something other than that paragraph.

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I'll try to keep my comments general, in light of Post #6's attempts to divorce the question from any facts. The flexibility the government has in awarding partial quantities is separate from whether the government has evaluated proposals (e.g., total evaluated price) consistently with the terms of the RFP.

In Gulf Copper Ship Repair, Inc., B-272830, 96-2 CPD ? 124, the agency deleted one of three production subline items from the solicitation through an amendment to the solicitation following receipt of proposals. Consistent with the amendment, the subline was not included in the evaluated price. The competitive standing of the offerors remained the same, and the agency did not seek proposal revisions. The protester claimed that the amendment required the agency to open discussions. The GAO disagreed.

For a decision involving both partial quantities and options intended to be exercised contemporaneously with award, see E. W. Bliss Co., B-255648, B-255648.3, Apr. 26, 1994, 94-1 CPD ? 280. For a decision involving whether an offeror's language adequately put the agency on notice that it could not award partial quantities, see Kings Point Industries, Inc., B-229007, Dec. 14, 1987, 87-2 CPD ? 587.

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Guest Vern Edwards
My interpretation of FAR 52.215-1(f)(5) is applicable to this situation:

If the RFP is issued for a base year with 4 one year options can the Government award a contract for a base and less than the 4 options periods?

Usually, each option is a separate contract line item. If I understand the issue correctly, the question is whether the government can award on some items but not others. Is that right?

FAR 52.215-1(f)(5) gives the government the right to make an award "on any item for a quantity less than the quantity offered, at the unit cost or prices offered, unless the offeror specifies otherwise in the proposal." Thus, if an offeror proposes a price for a quantity of 50 of an item, the government can award at the same price for a quantity of 25. I don't see why that would not apply to options. But FAR 52.215-1(f)(5) does not say that the government can award on some items but not others. A quantity of zero on an item would not, in my opinion, constitute an award on the item.

Subparagraph (f)(6) provides for multiple awards, which means that the government can award some items to one offeror and others to other offerors. But that does not give the government the right to make a single award for some line items but not others.

In short, I don't think FAR 52.215-1(f)(5) has any bearing on the issue at hand. The case cited by Jacques, Gulf Copper Ship Repair, Inc., is based on an old provision, 52.215-16, that permitted award on "any item or group of items." But that provision now applies to something else. That rule now applies only to commercial items, 52.212-1, and under sealed bidding, 52.214-10. (The change was made during the FAR Part 16 Rewrite, FAC 97-02, in September 1997.)

Have I missed something?

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Appreciate the valuable comments/information/case data. Yes Vern, you got it right; didn't miss a thing. These questions come up all the time and when reference is made to FAR Subparts and policy, etc., that are not always black and white, it's nice to know there's a place to go. And just so you know...we will award the contract with all 4 options on the schedule and operate accordingly.

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But FAR 52.215-1(f)(5) does not say that the government can award on some items but not others. A quantity of zero on an item would not, in my opinion, constitute an award on the item.

Vern, you may very well be right, but do you have anything you can point to to support your opinion? On the narrow question of whether a CO can "zero out" a line item envisioned as part of the basic contract and rely on FAR 15.215-1(f)(5), I couldn't find any decisions either way. It remains an open question to me whether a quantity of zero is a quantity. FAR 52.215-1(f)(5) may be enough such that, if the offeror wants to insist on all or none, it is incumbent upon the offeror to so state. If anyone has a decision that answers this definitively, please post.

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Guest Vern Edwards
Vern, you may very well be right, but do you have anything you can point to to support your opinion?

Jacques:

Forgive me, but that's dumb. FAR 52.215-1(f)(5) says what it says. If you think it means something more, show me what you've got. I don't have to point to a darn thing.

"Do you have anything... ?" For pete's sake.

Vern

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Vern,

Obviously you don't owe me anything--you have no reason to care whether I agree with you or not. I was honestly curious whether there was more to the story.

It seems like you're relying on the absence of language in FAR 52.215-1(f)(5) (compared to what is in Part 12 or 14) to limit the government's ability to award less than all items. I guess I would point to 52.215-1( c )(2)(iii), SF 33 blk 12, and, to a lesser extent, FAR 15.504(B).

FAR 52.215-1( c )(2)(iii) provides that the first page of the proposal must show "a statement specifying the extent of agreement with all terms, conditions, and provisions included in the solicitation and agreement to furnish any or all items upon which prices are offered at the price set opposite each item." Consistent with this Standard Form 33 block 12 provides, "[T]he undersigned agrees...to furnish any or all items upon which prices are offered at the price set opposite each item..."

Finally, FAR 15.504(B) is certainly consistent with the government's ability to award less than all items, unless the offeror provides otherwise. It states, "When an award is made to an offeror for less than all of the items that may be awarded and additional items are being withheld for subsequent award, each notice shall state that the Government may make subsequent awards on those additional items within the offer acceptance period."

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Guest Vern Edwards

None of that is interesting. FAR 52.215-1(f)(5) does not authorize the government to award on "any item or group of items." FAR 52.215-1(f)(4) allows offerors to propose on any item or combination of items and (f)(6) allows the government to make multiple awards. Under those circumstances the government could award on selected items. But unless an offeror proposes on less than all items or the government is going to make multiple awards, I see no language in FAR 52.215-1 that permits the government to make one award and to pick and chose, and neither do you.

There are many interesting things to discuss in contracting. This is not one of them. You're wasting words and time on bull----.

If and when you come across something that dignifies your speculation, let us know.

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None of that is interesting. FAR 52.215-1(f)(5) does not authorize the government to award on "any item or group of items." FAR 52.215-1(f)(4) allows offerors to propose on any item or combination of items and (f)(6) allows the government to make multiple awards. Under those circumstances the government could award on selected items. But unless an offeror proposes on less than all items or the government is going to make multiple awards, I see no language in FAR 52.215-1 that permits the government to make one award and to pick and chose, and neither do you.

There are many interesting things to discuss in contracting. This is not one of them. You're wasting words and time on bull----.

If and when you come across something that dignifies your speculation, let us know.

FAR 52.215-1(f)(5) is silent on the question. You seem to read something into that silence. I read FAR 52.215-1( c )(2)(iii) and SF 33 blk 12 as establishing the "default" (in the absence of express language by either party) as permitting award of "any or all" items. In other words, in the absence of language to the contrary in a solicitation or proposal, the government seems free to award any or all items, in light of these references. I have not been able to find any regulation, provision, or decision that expressly prohibits the government from awarding "any or all items." In light of the language in SF 33 blk 12, it would seem that the standard offer envisions acceptance on such terms.

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I just realized I may have misinterpreted FAR 52.215-1(f)(5) for all years until I read this thread.

? The Government reserves the right to make an award on any item for a quantity less than the quantity offered, at the unit cost or prices offered, unless the offeror specifies otherwise in the proposal.?

In my opinion, any item means ?any item accepted by the Government? and for the item to be accepted, at least one quantity shall be awarded on that item. A quantity less than the quantity offered means ?a quantity less than the quantity the successful Offeror offered,? and does not mean a quantity less than the quantity Government required in the solicitation.

Let?s say the solicitation required 800 (QTY) of flashlights and the basis for award is LPTA. Two proposals were received, and both are determined technically acceptable equally. Offeror A proposed a unit price of $10.00 for the quantity of 800, which makes the total proposed price of $8,000.00. Offeror B proposed a unit price of $9.50 for the quantity of 1,000, which makes the total proposed price of $9,500.00. However, Offeror B failed to specify in its proposal that this unit price is applicable only when the quantity of 1,000 was purchased by the Government, implying it is offering a discount for a larger quantity and the unit price would be higher if the exact quantity of 800 would be purchased by the Government. In this case, the Government has the right to purchase only the quantity of 800 from Offeror B at the unit price of $9.50 that is the offered unit price in its proposal, and therefore, the awarded price will be $9.50 X 800 =$7,600.00. Offeror B?s proposal is determined to be the best value. If there are option periods included in the solicitation, the same logic shall apply. Again, in my opinion (and I could be wrong), FAR 52.215-1(f) discusses the Government?s right to decide the quantity to be purchased on a particular item(s), and does not discuss the right to decide whether to accept a particular item(s) (all items or less items).

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Guest Vern Edwards
FAR 52.215-1(f)(5) is silent on the question. You seem to read something into that silence. I read FAR 52.215-1( c )(2)(iii) and SF 33 blk 12 as establishing the "default" (in the absence of express language by either party) as permitting award of "any or all" items. In other words, in the absence of language to the contrary in a solicitation or proposal, the government seems free to award any or all items, in light of these references. I have not been able to find any regulation, provision, or decision that expressly prohibits the government from awarding "any or all items." In light of the language in SF 33 blk 12, it would seem that the standard offer envisions acceptance on such terms.

The only thing I read into 52.215-1(f)(5) is what it says.

But I have looked at ( c)(2)(iii) and SF 33 block 12. The language in ( c)(2)(iii) does not put offerors on notice that the government is reserving the right to accept any or all items -- as FAR 52.215-16 expressly did in the past and as 52.212-1 and 52.214-10 do now -- and I don't buy your "default" interpretation of that subparagraph. The current provision only calls upon offerors to grant that right; it does not reserve that right for the government. (I wonder how many COs actually check offers for the language.) Under 52.215-1 the government can pick and choose only if the offeror expressly grants it that right. Compare this, from 52.212-1(h):

Multiple awards. The Government may accept any item or group of items of an offer, unless the offeror qualifies the offer by specific limitations. Unless otherwise provided in the Schedule, offers may not be submitted for quantities less than those specified. The Government reserves the right to make an award on any item for a quantity less than the quantity offered, at the unit prices offered, unless the offeror specifies otherwise in the offer.

{emphasis added] to this from FAR 52.215-1( c)(2)(iii):

The first page of the proposal must show?(iii) A statement specifying the extent of agreement with all terms, conditions, and provisions included in the solicitation and agreement to furnish any or all items upon which prices are offered at the price set opposite each item[.]
[Emphasis added.]

The first statement clearly reserves a right; the second does not. The second instructs offerors to grant the right.

However, SF33 block 12 says:

In compliance with the above, the undersigned agrees, if this offer is accepted within calendar days (60 calendar days unless a different period is inserted by the offeror) from the date for receipt of offers specified above, to furnish any or all items upon which prices are offered at the set opposite each item, delivered at the designated point(s), within the time specified in the schedule.

I think that conveys the right to pick and choose if the form is used, which means that I agree with your interpretation of the form. Clearly, if an offer says that the government may accept any or all items, then the government can do it.

But this is a long way from 52.215-1(f)(5). Why didn't you point it out to CrazyKO in Post #10? The only reason I joined the thread was to point out that (f)(5) was inapplicable to the issue in the thread, which August had pointed out earlier, in Post #4. Why did you wait until Post #15 last night to bring up SF33? By then I was so mad about your Post #13 I wasn't interested in anything you had to say. Why did you ask me for proof if you knew about the form? Why didn't you just point it out then? In any case, good research and I apologize for saying that what you said in Post #15 wasn't interesting. After I cooled off I went and looked and it was very interesting.

Vern

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Why didn't you point it out to CrazyKO in Post #10? ... Why did you ask me for proof if you knew about the form? Why didn't you just point it out then?

I did not intend to ambush anyone. I wasn't thinking of SF 33 until I discussed it. In deciding to cite Gulf Copper, I only recalled that I had decided years ago that it remained persuasive notwithstanding the Part 15 Rewrite. I didn't remember how I came to that conclusion. It was bad judgment to have cited it without thinking it through again.

Anyone thinking about relying on this argument should realize that there are two issues here: (1) Offer and acceptance; and (2) following proper source selection procedures, including FAR 15.206. You need to satisfy yourself that you're meeting both.

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Guest Vern Edwards
Anyone thinking about relying on this argument should realize that there are two issues here: (1) Offer and acceptance; and (2) following proper source selection procedures, including FAR 15.206. You need to satisfy yourself that you're meeting both.

I think that if I were a CO and decided that I did not want to award on all items, but did not plan to make multiple awards, I would go the amendment/proposal modification route. That would be entirely noncontroversial and, frankly, fairer to the offerors.

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