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A&E Single award IDIQ w/ 52.217-8


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Single award A&E IDIQ was awarded with a ceiling (maximum quantity) of $5,000,000.00.  52.217-8 was included, however the negotiated labor rates did not include the (-8).  The organization would like to use the (-8) to extend the contract, no adjustment to the ceiling (maximum quantity) amount is necessary.  The question is does FAR 36.602-1(c) "discussions with at least three firms" apply?  Does there need to be a J&A posted for the exception to CICA as required for unpriced options or would that even be possible since your in the A&E world which requires the minimum of three firms for discussions? 

I assume since there isn't a change in the overall amount (ceiling) and that the 52.217-8 clause was included, that all that is needed is to do a bi-lateral modification with the negotiated labor rates for the additional 6 months but would like others rational on this?

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18 hours ago, sackanator said:

52.217-8 was included, however the negotiated labor rates did not include the (-8). 

Can you explain this some more?

18 hours ago, sackanator said:

I assume … that all that is needed is to do a bi-lateral modification with the negotiated labor rates for the additional 6 months but would like others rational on this?

FAR 52.217-8 states, in part, that “[t]he Government may require continued performance of any services within the limits and at the rates specified in the contract. These rates may be adjusted only as a result of revisions to prevailing labor rates provided by the Secretary of Labor.”

 Does the IDIQ have specified rates?

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Jamall Valentine,

The rates in the IDIQ are the fully burdened rates for job disciplines, example (not actual rates)

                                             Base             OY1         OY2           OY3           OY4

Discipline                              Rate             Rate        Rate          Rate           Rate
Senior Civil Engineer        $ 101.00        $ 102.00   $103.00    $104.00    $105.00

 

The KO that awarded this contract did not include rates for the (-8) or a statement I sometimes see in the 52.217-8 clause "shall follow the rates of the proceeding the period of performance".   

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1 hour ago, sackanator said:

Jamall Valentine,

The rates in the IDIQ are the fully burdened rates for job disciplines, example (not actual rates)

                                             Base             OY1         OY2           OY3           OY4

Discipline                              Rate             Rate        Rate          Rate           Rate
Senior Civil Engineer        $ 101.00        $ 102.00   $103.00    $104.00    $105.00

 

The KO that awarded this contract did not include rates for the (-8) or a statement I sometimes see in the 52.217-8 clause "shall follow the rates of the proceeding the period of performance".   

The example statement simply explains how the -8 works (with or without the statement). The current rates continue to apply to the -8 exercise extension. Take another look at the clause language and see if you agree.

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The Government may require continued performance of any services within the limits and at the rates specified in
the contract
. These rates may be adjusted only as a result of revisions to prevailing labor rates provided by the
Secretary of Labor. The option provision may be exercised more than once, but the total extension of performance
hereunder shall not exceed 6 months. The Contracting Officer may exercise the option by written notice to the
Contractor within 60 days.

To me "within the limits and at the rates specified" seems to mean that if they are not part of the award (rates during the actual performance period of the -8) that they can't just be assumed.  However depending on which words you emphasize, I guess it could be read (restated) "performance will continue at previous rates and forwarded to the option (-8).  This would seem to cause more ambiguity since the rates increase every year and the clause "as written" would allow us to use rates from the years that were more favorable to the Government, the sentence doesn't specify which rates.   Since the -8 is unilateral it would seem using this approach I could direct which rates to use.  Not trying to argue the point, since what is suggested saves significant time and effort, but trying to read the language or understand it enough that if asked, I can justify with a logical response.  

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@sackanator, let me fill in some blanks for my own understanding. You/or someone has been awarded a "fixed price" single-award (SA) IDIQ for "whatever." It has a "base year" and "4 options" which are "one-year" in length. Each has a specific "fixed rate" for the period you are in. Those were "negotiated/proposed and accepted" which lead to the award.

Is the above correct?

Also, Vern is correct. When u see language of "at least 2/3" it is a competition requirement. If you have a SA-IDIQ, then competition requirements have been achieved/satisfied. See 52.216-18  and the agency supplement for ordering procedures. 

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6 hours ago, Vern Edwards said:

Basically, you signed up to a contract with options and you're not sure how the options are to be priced.

Am I correct? If so, call the contracting officer and work something out.

KO has departed, this single award A&E IDIQ was his last hurrah before departing out of contracting completely.  Even though its an IDIQ it has 4 option years (not something I would do), and each option year has negotiated rates per discipline.  The awards we do now include pricing/rates for 52.217-8 (if its exercised at the end of the last option or ordering period), but this one does not. 

Constricting Officer, your assessment is correct, the focus though was on using the (-8) which was not negotiated.    

My question(s) where, can the Government negotiate rates bi-laterally for the additional 6 months of the 52.217-8 or is it more complicated.  Vern Edwards responded that FAR 36.602-1(c) would not apply to the exercise of 52.217-8 so if I understand it correctly we just negotiate rates for the additional 6 months bi-laterally.  Per the usual, a follow on A&E IDIQ won't be in place in time thus the need for the (-8).  

The reason I posted the question was I wasn't sure on the Brooks Act (A&E) aspect and the unpriced (-8) if they factored in at all.   

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There's no connection between the Brooks Act and the exercise of the -8 option.

Arguably the -8 option is not "unpriced." In many agencies the interpretation is that the -8 option is to be exercised at the rates stipulated for the period in effect prior to the exercise of the option, the -8 option being a continuation of that period. According to the GAO, the contract must stipulate rates specifically for the option. See  Major Contracting Services, Inc., Comp. Gen. Dec. B-401472, 2009 CPD ¶ 170, recons. denied, 2009 CPD ¶ 250. But there is some disagreement about that.

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18 hours ago, Vern Edwards said:

According to the GAO, the contract must stipulate rates specifically for the option. See  Major Contracting Services, Inc., Comp. Gen. Dec. B-401472, 2009 CPD ¶ 170, recons. denied, 2009 CPD ¶ 250. But there is some disagreement about that.

Vern pointed you to a GAO decision on this matter.  However, you also have to consider what response you would make if the contractor asserted a claim for additional money if you exercise the option.  Therefore, you need to research board and court decisions concerning the -8 clause.

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11 hours ago, Jamaal Valentine said:

@sackanator,

You keep mentioning that the 52.217-8 option was not priced nor negotiated. Was the option evaluated at the time of award? If yes, how? The total evaluated price may offer some insight in the -8 pricing.

Jamaal Valentine,

The 52.217-8 was/is included in the solicitation and award.  When fully burdened discipline rates were negotiated that would be used for the task orders placed off the IDC, they did not include any rates past Option year 4.  Priced option may not be proper terminology (except its the only language I could find for exercising the 52.217-8 without the negotiated rates).  Total evaluated price is the Maximum order amount.  Hope this answers your question.  

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21 hours ago, Vern Edwards said:

Arguably the -8 option is not "unpriced." In many agencies the interpretation is that the -8 option is to be exercised at the rates stipulated for the period in effect prior to the exercise of the option, the -8 option being a continuation of that period. According to the GAO, the contract must stipulate rates specifically for the option. See  Major Contracting Services, Inc., Comp. Gen. Dec. B-401472, 2009 CPD ¶ 170, recons. denied, 2009 CPD ¶ 250. But there is some disagreement about that.

I remember that decision. I assumed that they meant that the price for extending an option had to be added to the price of the option to be extended during the price evaluation during the source selection. That was definitely different than many, if not all, agencies had been doing.

I’m not sure that an agency can elect not to exercise a following option but instead extend the current period using the -8 clause, if necessary. But if they could, only if they had evaluated prices as part of the initial competition, it would seem overly complicated with all the different possibilities. 

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3 hours ago, joel hoffman said:

I’m not sure that an agency can elect not to exercise a following option but instead extend the current period using the -8 clause, if necessary.

The government may choose between the -8 and -9 options. See Griffin Services, Inc., ASBCA 52280, 02-2 BCA ¶ 31943. I wrote two articles about that 15 years ago. At the end of the first article I said

Quote

I do not believe that a contractor could reasonably expect that the Government might use the FAR 52.217-8 option clause in a manner inconsistent with FAR 37.111 to avoid exercising a valid but higher-priced FAR 52.217-9 clause option. Nevertheless, according to the ASBCA, the presumptive purpose for a clause, as explained in the FAR, does not restrict its use during contract performance. Griffin was not the first time that the Government had chosen to use a FAR 52.217-8 option instead of a FAR 52.217-9 option, see, e.g., American Contract Services, Inc., ASBCA 46788, 94-2 BCA ¶ 26,855, aff'd on reconsid., 94-3 BCA ¶ 27,025, so let the seller beware. Contractors should be aware of this possibility and plan accordingly when negotiating a contract that includes both option clauses. One approach would be to propose specific rates applicable to the FAR 52.217-8 option if exercised at various points in the life of the contract. Another would be to propose that if the Government chooses to exercise the FAR 52.217-8 option instead of an available FAR 52.217-9 option, the prices would be those of the unexercised FAR 52.217-9 option. Before taking either of those approaches in a competitive procurement, contractors should make sure that it would not render their proposals unacceptable. Another tactic would be to submit a written question to the CO before the deadline for proposal submission asking whether the Government might choose to exercise the FAR 52.217-8 option instead of an available FAR 52.217-9 option and then propose based on the CO's written response. 

 

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Those seem like reasonable approaches to propose, IF the government would go along with it.

As one can see though, those or any other approach would make the initial price evaluation extremely complex if the government wants and/or needs the flexibility to exercise the -8 clause at any point other than at the end of the last available option.

That assumes that the price evaluation for an extension of an option is comparative rather than simply a determination of fair and reasonableness.

At any rate, if the KO has to evaluate all the option period pricing before selecting and awarding the contract and must further go through all the hoops at 17.207(c) before exercising each option, it would seem to me  that the ASBCA’s decision is superfluous and needless. 

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Wow, talk about rabbit holes! A light bulb woke me up this morning.  I don’t think any of the above discussion concerning price evaluation requirements at award is applicable to award of an A/E contract. This wasn’t a competitive best value source selection. It was a qualifications based selection using the Brooks Act procedures without price competition.

This is basically a short term extension of A/E services at the negotiated rates. I don’t think that this is an “unpriced” option.

The Service Contract Act probably isn’t even applicable, except perhaps for some non-professional support labor? 

There should have been no price discussions with three firms prior to selection, which provides an answer to the initial question.

I think we may be over complicating the situation, although I don’t understand what the government intends to do during the extension. Are you going to issue additional task orders for new work? If so, there might  be a need for discussions here concerning expanding the scope, if this possibility wasn’t known to all firms that responded to the announcement. 

 

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Which brought to mind whether the -8 clause is applicable or appropriate for an A/E contract, in particular for an ID/IQ. The clause doesn’t appear under the A/E contract heading but does appear under the Indefinite Delivery contract heading, as an A or “required when applicable”.  The  possibility of extending the services or ordering period should have been described in the A/E contract announcement. To simply add it at award might be out of scope…?

Edit: I forgot to mention that,  probably, in my opinion,  the reason the clause at 52.217-8 isn’t listed under A/E contracts is that most A/E contracts were for specific (definite) undertakings, not indefinite delivery, SATOCs. 

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Finally, since the contract was negotiated one on one, the parties should have both been aware of the possibility of an extension and should have discussed how it would work. It is listed as “required when applicable”. The government should have determined it was applicable before including it in the contract.

Thus -  It would be inappropriate for the government, in my opinion, to unilaterally include it at award without mutual understanding and agreement of how it would be applicable and how it would be priced. And the government should have identified the option to extend services in the original description of the time scope of the A/E services.

So, yes, the discussion herein before of how a firm could propose how to price such an extension is helpful. But discussion of whether the firm would be eliminated for doing so is inapplicable since there wasn’t any price competition.

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Quote

Are you going to issue additional task orders for new work? If so, there might  be a need for discussions here concerning expanding the scope, if this possibility wasn’t known to all firms that responded to the announcement. 

Joel,

Lot to digest.  Yes, the intention is to use the additional 6 months from the (-8) to issue task orders for new work.  The 52.217-8 WAS part of the solicitation posted on GPE (back then Fedbizopps).  To reiterate, no additional changes are being made (no change to the Maximum order capacity, no changes to scope of work, no clauses are being added).  The only thing seems to be needed is negotiated rates for the labor disciplines.  The only part that makes this complicated is its A&E (Brooks Act) and the (-8) labor rates weren't part of IDC.  The solicitation did state it was going to be a single award IDIQ.       

Side note, don't mean to start a different thread but its related, FAR 13 is derived from FASA, FAR 15 is derived from CICA, where is 16.5 derived from?  Trying to research/understand the how and why, also build training slides such as the relationship between exclusions from full and open competition (FAR 6/8/13/16.5).  Should I re-ask this question on a different thread?   

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3 hours ago, sackanator said:

Side note, don't mean to start a different thread but its related, FAR 13 is derived from FASA, FAR 15 is derived from CICA, where is 16.5 derived from?  Trying to research/understand the how and why, also build training slides such as the relationship between exclusions from full and open competition (FAR 6/8/13/16.5).  Should I re-ask this question on a different thread?   

Both FAR 13 and FAR 15 predate CICA, but were modified by CICA and by FASA. FAR 16.5 was created by FASA and has been modified by later legislation.

You should not be preparing training slides about such matters if you have not personally done appropriate historical research.

 

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9 hours ago, sackanator said:

The only part that makes this complicated is its A&E (Brooks Act) and the (-8) labor rates weren't part of IDC.

Does the contracting office have any -8 options that don’t use the preceding year’s  rates? Does the contractor have any contracts that do not use the preceding year’s rates?

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16 hours ago, sackanator said:

Joel,

Lot to digest.  Yes, the intention is to use the additional 6 months from the (-8) to issue task orders for new work.  The 52.217-8 WAS part of the solicitation posted on GPE (back then Fedbizopps).  To reiterate, no additional changes are being made (no change to the Maximum order capacity, no changes to scope of work, no clauses are being added).  The only thing seems to be needed is negotiated rates for the labor disciplines.  The only part that makes this complicated is its A&E (Brooks Act) and the (-8) labor rates weren't part of IDC.  The solicitation did state it was going to be a single award IDIQ.       

Side note, don't mean to start a different thread but its related, FAR 13 is derived from FASA, FAR 15 is derived from CICA, where is 16.5 derived from?  Trying to research/understand the how and why, also build training slides such as the relationship between exclusions from full and open competition (FAR 6/8/13/16.5).  Should I re-ask this question on a different thread?   

I think that the scope issue is resolved. It was within the intended scope of the solicitation.

The easiest resolution of the rates , since it is a government option, might be to use a literal sense of the term “at the rates specified in the contract”  and that there is no adjustment except for DOL wage rate adjustments - of which there wouldn’t be any for professional salary based rates. That was the traditional sense of use in our agency. Also, the cited ASBCA case involved a best value (price included) competition.

If new task order work is not of significant size/effort and time to complete, the contractor might not balk.

I don’t think that any other firm will object because the extension is within the scope of the original solicitation and the contract. The contract rates were a matter of negotiation between the two parties- nobody else.

I don’t think any other firm would object either if the A/E made a good, reasoned case for a need for a rate adjustment, either. 

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I am unable to edit the above post without it automatically going to another page.

I wanted to add: What prevents the parties from negotiating revised rates for the extension if they didn’t think of it during the original rate negotiations (other than the literal sense of at the (existing) rates ? 

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