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A Defense entity is issuing an IDIQ contract against GSA schedules. The entity has stated the contract will be commercial, and the RFP includes FAR 52.212-4 -- but not Alternate I, for T&M contracts.

The CLIN for labor is labelled "FFP," and reads as follows:

"FFP - The contractor shall furnish all labor necessary to accomplish services in accordance with the RFP on each individual IDIQ task order. Payment will be based on hours worked."

Vendors have asked the government what kind of task orders will be issued under this IDIQ - fixed price or T&M. Here is the response.

"This order is being awarded as a service, and directly engaging the time and effort of a contractor. Payment will be based on actual hours worked on a FFP basis (FAR Part 37.101). All Task Orders will be placed with the understanding knowledge, extent and duration of work at the Task Order level. All Task Orders awarded to this IDIQ contract will be FFP as identified in the RFQ Contract Line Items... Payment will be based on actual hours worked on each Task Order."

WHAT does this answer mean?

I think it means they are going to issue T&M orders. But, since it's a Defense entity, and they've called it commercial, are they not forbidden from issuing T&M task orders per section 805 of the 2008 Defense Authorization Act, see http://thomas.loc.gov/cgi-bin/bdquery/z?d110:H.R.1585: (you may have to cut and paste this into your browser)

Thanks to anyone for help.

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WHAT does this answer mean?

Good question. My guess is they intend on issuing labor hour or T&M task orders and when they say FFP they are referring to fixed, loaded labor rates being set as opposed to the definition in 16.202 "A firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the contractor?s cost experience in performing the contract."

16.202 defines T&M as, "B) Description. A time-and-materials contract provides for acquiring supplies or services on the basis of?

(1) Direct labor hours at specified fixed hourly rates that include wages, overhead, general and administrative expenses, and profit; and

(2) Actual cost for materials (except as provided for in 31.205-26(e) and (f))."

Seems that T&M/Labor hour would fit the best based on the information provided. The government said payment would be based on actual hours worked rather than a total, non-adjustable price.

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Thank you for your input. Next question. Below I have pasted section 805 of the Defense authorization act for 2008. See ©. Assuming none of the exceptions applies, can a Defense service activity issue time and materials task orders against an IDIQ they have labelled "FFP" because the individual rates are fixed? Surely not. The task orders are contracts?

SEC. 805. PROCUREMENT OF COMMERCIAL SERVICES.

(a) Regulations Required- Not later than 180 days after the date of the enactment of this Act , the Secretary of Defense shall modify the regulations of the Department of Defense for the procurement of commercial services for or on behalf of the Department of Defense.

(B) Applicability of Commercial Procedures-

(1) SERVICES OF A TYPE SOLD IN MARKETPLACE- The regulations modified pursuant to subsection (a) shall ensure that services that are not offered and sold competitively in substantial quantities in the commercial marketplace, but are of a type offered and sold competitively in substantial quantities in the commercial marketplace, may be treated as commercial items for purposes of section 2306a of title 10, United States Code (relating to truth in negotiations), only if the contracting officer determines in writing that the offeror has submitted sufficient information to evaluate, through price analysis, the reasonableness of the price for such services.

(2) INFORMATION SUBMITTED- To the extent necessary to make a determination under paragraph (1), the contracting officer may request the offeror to submit--

(A) prices paid for the same or similar commercial items under comparable terms and conditions by both government and commercial customers; and

(B) if the contracting officer determines that the information described in subparagraph (A) is not sufficient to determine the reasonableness of price, other relevant information regarding the basis for price or cost, including information on labor costs, material costs, and overhead rates.

© Time-and-Materials Contracts-

(1) COMMERCIAL ITEM ACQUISITIONS- The regulations modified pursuant to subsection (a) shall ensure that procedures applicable to time-and-materials contracts and labor-hour contracts for commercial item acquisitions may be used only for the following:

(A) Services procured for support of a commercial item, as described in section 4(12)(E) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(12)(E)).

(B) Emergency repair services.

© Any other commercial services only to the extent that the head of the agency concerned approves a determination in writing by the contracting officer that--

(i) the services to be acquired are commercial services as defined in section 4(12)(F) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(12)(F));

(ii) if the services to be acquired are subject to subsection (B), the offeror of the services has submitted sufficient information in accordance with that subsection;

(iii) such services are commonly sold to the general public through use of time-and-materials or labor-hour contracts; and

(iv) the use of a time-and-materials or labor-hour contract type is in the best interest of the Government.

(2) NON-COMMERCIAL ITEM ACQUISITIONS- Nothing in this subsection shall be construed to preclude the use of procedures applicable to time-and-materials contracts and labor-hour contracts for non-commercial item acquisitions for the acquisition of any category of services.

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Well, I read it more that it articulates when you can although I suppose that is the same as saying you can't except here is when you can. If it doesn't fit in one of those scenarios then it would seem the answer is no, you cannot. Of course, there are a ton of things done across the government that aren't compliant. So a better answer may be you can't do it and be compliant with the regs if you don't meet the criteria that permits that contract type to be used with commercial items.

Task orders are contracts in the legal sense of the term at least.

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Apologize for the little faces in the cite, they are accidental.

First, an agency cannot award an IDIQ contract against GSA Schedule. The GSA Schedule contract is just that - a contract awarded by GSA on behalf of the entire government. In the case of services, the contract contains various labor categories and rates. Ordering agencies place task orders aginst the contract on either a firm fixed price basis (preferred) or a labor hour basis. The rates have already been determined as fair and reasonable by GSA prior to awarding the contract.

When agencies have reoccuring needs for supplies and/or services, they may elect to award a Blanket Purchase Agreement. That allows orders to be placed without additional competition if a single BPA was awarded or with limited competition if multiple BPAs were awarded. Often the BPA's are set up like a stand alone IDIQ contract.

From the posting, it's hard to tell what the agency is doing. It's also hard to tell if the action contradicts section 805 of the Appropriation Act.

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First, an agency cannot award an IDIQ contract against GSA Schedule. The GSA Schedule contract is just that - a contract awarded by GSA on behalf of the entire government. In the case of services, the contract contains various labor categories and rates. Ordering agencies place task orders aginst the contract on either a firm fixed price basis (preferred) or a labor hour basis. The rates have already been determined as fair and reasonable by GSA prior to awarding the contract.

When agencies have reoccuring needs for supplies and/or services, they may elect to award a Blanket Purchase Agreement. That allows orders to be placed without additional competition if a single BPA was awarded or with limited competition if multiple BPAs were awarded. Often the BPA's are set up like a stand alone IDIQ contract.

From the posting, it's hard to tell what the agency is doing. It's also hard to tell if the action contradicts section 805 of the Appropriation Act.

The CO has specifically and repeatedly stated she is not issuing a BPA. "This RFQ will not be used to award a Blanket Purchase Agreement (BPA) but rather an Indefinite Delivery Indefinite Quantity (IDIQ) contract. "

Are you sure an IDIQ can't be issued on GSA schedule? I agree with you that it is more usual to award a BPA. Also many GSA contracts state only fixed price and TM/LH contracts can be issued. It seems 8.4 says that, on MAS schedules, services are priced on an hourly or fixed price basis. I don't see how that would preclude issuing an IDIQ task order on which only hourly or fixed price orders could be made. Let me know what I am missing.

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The CO has specifically and repeatedly stated she is not issuing a BPA. "This RFQ will not be used to award a Blanket Purchase Agreement (BPA) but rather an Indefinite Delivery Indefinite Quantity (IDIQ) contract. "

Are you sure an IDIQ can't be issued on GSA schedule? I agree with you that it is more usual to award a BPA. Also many GSA contracts state only fixed price and TM/LH contracts can be issued. It seems 8.4 says that, on MAS schedules, services are priced on an hourly or fixed price basis. I don't see how that would preclude issuing an IDIQ task order on which only hourly or fixed price orders could be made. Let me know what I am missing.

If the agency is issuing a task order rather than establishing a "contract", then it's okay.

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If the agency is issuing a task order rather than establishing a "contract", then it's okay.

But you think Part 8 says government cannot issue an IDIQ on GSA schedule, even if the task orders are limited to fixed price or t&M? I just don't see where part 8 says that.

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But you think Part 8 says government cannot issue an IDIQ on GSA schedule, even if the task orders are limited to fixed price or t&M? I just don't see where part 8 says that.

That's not what I was saying. I meant if an agency was issuing a task order under GSA Schedule, then it's okay. If one is saying the term "task order" is synonymous with "contract", everything is fine. Originally I thought the agency was establishing their own FAR part 16 IDIQ contract. That's when I thought the action was proper.

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Another complication is that there is no way to report an IDIQ against a GSA Schedule to FPDS-NG. That isn't a recognized relationship in the FPDS-NG data schema.

This might not be a legal issue, but the current policy construct would appear to place some notional limits on what procurement actions are "sanctioned".

IMHO, it's backhanded policymaking like this that sure adds unnecessary fuzziness to operational contracting methods.

"Klaatu, ask her if she has a sister! If you're my kind of wingman, you'll tell her how cool it is I can vaporize matter by just staring at it."

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Guest carl r culham

Reading through the thread there are some inconsistencies with the method of procurement. First is the idea that an IDIQ Task Order is intended. Gort has already posed why such a route is problematic. Second is the idea that the DoD is using an RFP to solicit. It should be an RFQ. Finally is the fact that it will be T&M as a firm-fixed price quotation shall be requested, unless the ordering activity has made a determination that it is not possible at the time of placing the order to estimate accurately the extent or duration of the work, or to anticipate cost with any reasonable degree of confidence. When such a determination is made, a time-and-materials (including labor-hour) quotation may be requested. A time-and-materials order must include a ceiling price. Contractors exceeding the ceiling price do so at their own risk." (Quoted from GSA's Q&A about schedules found on their website http://www.gsa.gov/Portal/gsa/ep/contentVi...&faq=yes#1- )

I would suggest contacting the specific GSA contract specialist for the schedule and have your discussion with him/her about what DoD is doing to insure it is not only in keeping with FAR Part 8 but the specific schedule contract itself. Remember the schedule contract is the guiding light as to what can and can not be done.

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Reading through the thread there are some inconsistencies with the method of procurement. First is the idea that an IDIQ Task Order is intended. Gort has already posed why such a route is problematic. Second is the idea that the DoD is using an RFP to solicit. It should be an RFQ. Finally is the fact that it will be T&M as a firm-fixed price quotation shall be requested, unless the ordering activity has made a determination that it is not possible at the time of placing the order to estimate accurately the extent or duration of the work, or to anticipate cost with any reasonable degree of confidence. When such a determination is made, a time-and-materials (including labor-hour) quotation may be requested. A time-and-materials order must include a ceiling price. Contractors exceeding the ceiling price do so at their own risk." (Quoted from GSA's Q&A about schedules found on their website http://www.gsa.gov/Portal/gsa/ep/contentVi...&faq=yes#1- )

I would suggest contacting the specific GSA contract specialist for the schedule and have your discussion with him/her about what DoD is doing to insure it is not only in keeping with FAR Part 8 but the specific schedule contract itself. Remember the schedule contract is the guiding light as to what can and can not be done.

carl,

Why do you think that DoD is wrong in using an RFP? DFARS 208.405-70© discusses the receipt of offers, not quotations.

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Guest carl r culham

Don - Sorry I tried this post once and it failed or I messed up. Anyway in a prompt response I indicated that I was thinking like a civilian. Thanks for pointing out the DFARs and the error of my ways.

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carl,

Why do you think that DoD is wrong in using an RFP? DFARS 208.405-70? discusses the receipt of offers, not quotations.

Don,

Take a look at FAR 8.405-2 that says agencies shall issue RFQ's

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I always thought that RFQ's and RFP's were somewhat synonymous in that they were offers, as opposed to IFB's which were bids. RFQ's and RFP's are from FAR 15 while IFB's are from FAR 14, so perhaps perhaps an "offer" can be either a "quote" or a "proposal". Otherwise, we might have something called an RFO, or Request for Offers.

I remember hearing that from one of my DAU classes, but I do not have all my course material here in my new office.

Another good reason to invest in the Cibnic and Nash books, as I am sure this discussion is somewhere in their writings. I just got my first; Government Contract Changes (3rd), and it is a gold mine!

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Guest Vern Edwards

The terms request for quotations (RFQ) and request for proposals (RFP) are not synonymous. Proposals and bids are offers. Quotations are not. So RFPs and RFQs are very different. See the definition of offer at FAR 2.101. See Cibinic and Nash, Formation of Government Contracts, 3d ed., p. 217.

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Guest carl r culham

Don - After your initial question to me I did some research and at first was compelled to think that RFP is the right vehicle. Pursuant to FAR Part 2 and the DFAR supplement to same "offer" is defined as applicable to RFP/IFB and not RFQ. Based on the definition and then usage of the term "offer" in DFAR 208.405-70 it seems RFP is right.

However thinking about it further I believe RFQ is the correct vehicle and use of RFP is not correct unless DoD has specific authority to override the specifics of a GSA or other agency contract. I have not done the research to determine if such authority exists. Here is my thought process.

By definition of FAR Part 2 an "offer" is only received in response to an IFB and RFP. Responses to an RFQ are quotes. To help clarify further based on dwgerard's comments which I believe are off base keep in mind that a quote is different from an offer. In the situation of a quote acceptance of offer is not in the hands of the Government but rather the contractor. This is different for an IFB and in most cases RFPs where the right of acceptance is in the hands of Government. For RFP this is specifically noted in most cases where the RFP states that the Government reserves the right to accept an initial offer without further negotiation/discussion.

However when it comes to MAS, GWAC and MAC contracts the definition of FAR Part 2 (and any further details of the DFAR) does not apply, the specific terms and conditions of the contracts do. The Multiple Award Schedules function as an IDIQ. The Government Wide Contracts and Multi-Agency Contracts are similar therefore all three types stipulate the ordering procedures applicable. FAR Part 8 is generally a repeat of these procedures but the specific contracts stipulate the procedures, therefore use of RFQ as the tool to solicit offers is an operation of the contract and has nothing to do with the FAR. As another way of demonstrating if the specific schedule contract stated that agency's wanting to get offers from schedule contractor must utilize the "Goose Egg" tool then that is what must be used, even if "Goose Egg" are not defined in the FAR.

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Carl,

What makes this issue even more confusing is the GSA Schedule contracts require contractors to fulfill all orders received (with certain exceptions). So it appears the contractors are providing more than just a quotation since the government can accept the response by just issuing an order.

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Carl,

formerfed took the words out of my mouth. Unlike a purchase order, a task or delivery order under a Federal Supply Schedule is not an offer by the Government that the contractor can decline.

I honestly don't know the legal effect of a FSS contractor's response to an agency's task or delivery order solicitation. What happens if a FSS contractor responds with a price that is less than the schedule price, then changes his/her mind? We know that they are contractually bound by the schedule price, but are they bound by the price with which they responded to the task or delivery order solicitation? If the answer is yes, then I would say that the response was an offer. If not, then it was a quote.

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Carl,

formerfed took the words out of my mouth. Unlike a purchase order, a task or delivery order under a Federal Supply Schedule is not an offer by the Government that the contractor can decline.

I honestly don't know the legal effect of a FSS contractor's response to an agency's task or delivery order solicitation. What happens if a FSS contractor responds with a price that is less than the schedule price, then changes his/her mind? We know that they are contractually bound by the schedule price, but are they bound by the price with which they responded to the task or delivery order solicitation? If the answer is yes, then I would say that the response was an offer. If not, then it was a quote.

I have always wondered the same thing.

Another related question. Does a schedule holder that does not sell any fixed price services or supplies ever have to accept an order? See 8.405-2. For services not listed at a fixed price in the schedule holder's contract, ordering activities must provide an RFQ, with eval criteria, get 'responses' and evaluate per the criteria. So it seems that any schedule holder could effectively refuse an order by quoting an unreasonable price.

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contractor100,

You asked:

"Does a schedule holder that does not sell any fixed price services or supplies ever have to accept an order?"

I would say yes, the schedule holder still has to accept orders. Theoretically, an agency could issue an unpriced order requiring the contractor to begin work and then definitize the order later.

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contractor100,

You asked:

"Does a schedule holder that does not sell any fixed price services or supplies ever have to accept an order?"

I would say yes, the schedule holder still has to accept orders. Theoretically, an agency could issue an unpriced order requiring the contractor to begin work and then definitize the order later.

Issue a letter contract? I guess so. I had always thought only T&M or FP contracts could be issued under 8.4. Because all the actual GSA contracts I have seen say that only such contracts can be issued. But when I looked at 8.4, at the beginning of this discussion, to see whether IDIQ contracts could be issued, I did not see any proscription on issuing any kind of contract. So I guess anything but a cost type contract could hypothetically be issued. Hah.

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Guest Kenny

I would like to go back to what was said about BPAs and the competition requirement since I am trying to find information regarding BPA use and I didn't see any other place to ask the question. Our Agency is currently advertising a solicitation to get responses and establish BPAs with multiple vendors for service work. They are using the BPA approach because they do not have sufficient funds to apply as minimum quantities under multiple award IDIQ contracts. Since a BPA is not a contract, if my agency has a need that exceeds $100,000 can they simply go to the BPA holders and place a call? Or, do they need to advertise their requirement in FedBizOpps and then other vendors could compete on that requirement?

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