Jump to content

52.217-8 and Expiring Task Order


Recommended Posts

Good Afternoon,

We are five months away from the end of the final period of performance of a task order issued under FAR Subpart 8.4 and the requesting activity requested that we extend the services for an additional six months while the new procurement is completed (solicitation should be posted in a few weeks). The solicitation this task order was awarded against did not contain clause 52.217-8, however, it was bilaterally added to the task order during the first period of performance. I have argued that extending the services for an additional six months constitutes a sole source procurement and requires a J&A in accordance with FAR Section 8.405-6 and FAR Subpart 6.3 (for open market items) as the clause was not included in the solicitation and considered as a part of the offers or resultant award. I am getting push back from management that a J&A is not necessary and we have the right to extend the services without synopsizing because the clause was bilaterally included in the task order, but I disagree. I would appreciate any feedback. Thanks.

Link to comment
Share on other sites

Guest Vern Edwards

I agree with you. Adding the -8 clause after the competition for and award of the order makes use of the clause a sole source contractual action. Among other things, the option prices could not have been evaluated at the time of order award. See Major Contracting Services, Inc., GAO Dec. B-401472, 2009 CPD ¶ 170, recons. denied, 2009 CPD ¶ 250:

The option to extend the contract here under FAR clause 52.217–8 was not evaluated as part of the initial competition, so that the exercise of this option amounts to a contract extension beyond the scope of the contract, and therefore effectively constitutes a new procurement.
Link to comment
Share on other sites

If you bi-laterally added 52.217-8 to the task order, why would you think it wouldn't apply to that task order? That clause, assuming you added it with the language as shown in the FAR, gives you the authority to continue performance. You don't need a J&A.

Link to comment
Share on other sites

Guest Vern Edwards

Why call the IG hotline to report excessive conference costs? You fight it as a matter of integrity and trying to do what is right. In the end, though, it's their decision and their responsibility.

Link to comment
Share on other sites

As the solicitation and order were done with regard to FAR Part 8.4 is your reference to "solicitation" with regard to the parent FSS contract or to the "solicitation" for the "task order" that was placed where the clause 52.217-8 was added at a later date to the "task order"? By asking this question I am just wondering if the answer might change if the 52.217-8 clause was in the FSS contract and adding it to the "task order" placed with repsect to FAR Part 8.4 was in fact a duplication of a clause already in the parent FSS?

Link to comment
Share on other sites

By a read of the many FSS contracts Yes if FAR Clause 52.216-18 is in the contract as well. Now there might be case law or something that says otherwise but that is my read.

While I have not checked ALL of GSA's FSS contracts but the clause with deviation is in many.

Here it is................

52.216-18 ORDERING (OCT 1995) (DEVIATION II -- FEB 2007)

(a) Any supplies and services to be furnished under this contract shall be ordered by issuance of

delivery orders or task orders by the individuals or activities designated in the Schedule. Such orders

may be issued from Date of Award through Contract expiration date.

(B) All delivery orders or task orders are subject to the terms and conditions of this contract. In the

event of conflict between a delivery order or task order and this contract, the contract shall control.

© If mailed, a delivery order or task order is considered “issued” when the ordering activity deposits

the order in the mail. Orders may be issued orally, by facsimile, or by electronic commerce methods

only if authorized in the Schedule.

Link to comment
Share on other sites

Never mind. I read it wrong. Although I have to say that if management says you don't need a J&A, why fight it. Assuming they're the ones signing your documents!

Although the clause was incorporated into the task order, it was done so after offers were evaluated and an award made. Executing the clause doesn't take away the fact that this, in my opinion, constitutes a sole source modification because none of the other offerors were given an opportunity to provide pricing and be considered at time of evaluation and award.

As the solicitation and order were done with regard to FAR Part 8.4 is your reference to "solicitation" with regard to the parent FSS contract or to the "solicitation" for the "task order" that was placed where the clause 52.217-8 was added at a later date to the "task order"? By asking this question I am just wondering if the answer might change if the 52.217-8 clause was in the FSS contract and adding it to the "task order" placed with repsect to FAR Part 8.4 was in fact a duplication of a clause already in the parent FSS?

I am referencing the task order solicitation, not the parent FSS contract solicitation. However, you raise a good point with regards to 52.217-8 being included in the FSS contract, which it is. The FSS contract contains 52.216-18 ORDERING (OCT 1995) (DEVIATION II -- FEB 2007), which states

"(

B) All delivery orders or task orders are subject to the terms and conditions of this contract. In the

event of conflict between a delivery order or task order and this contract, the contract shall control."

Therefore, the task order would be subject to 52.217-8 as it is included in the FSS contract. I would presume that one could argue that since 52.217-8 is included in the FSS contract all contractors understand that this clause flows down to their respective task orders and may be unilaterally exercised by the task order Contracting Officers (OCO). Since task orders are viewed as contracts, 52.217-8 could be exercised for this task order independently from the FSS contract even if the FSS contract was extended using 52.217-8. That being said, the OCO didn't need to bilaterally modify the task order including 52.217-8 as it was already included in the task order due to it flowing down from the FSS contract. Have I correctly interpreted your post?

Link to comment
Share on other sites

Guest Vern Edwards

Even assuming that FAR 52.217-8 applies to task orders individually, the use of the option in an order must be announced in the task order solicitation and the option costs must be evaluated during evaluation of quotes or proposals. See GSA's Ordering Guidelines, Item 26:

26. Options on Orders Placed Against GSA Multiple Award Schedule (MAS) Contracts

Options may be included on orders placed against GSA Multiple Award Schedule (MAS) contracts, provided that the options are clearly stated in the requirement and are evaluated as part of the ordering activity's best value determination. Such options may be exercised on GSA Schedule contract orders, provided that:

  • Funds are available;
  • The requirement covered by the option fulfills an existing government need;
  • Prior to exercising an option, the ordering activity ensures that it is still in the government's best interest, i.e., that the option is the most advantageous method of fulfilling the government's need, price, and other factors considered; and
  • The options do not extend beyond the period of the Schedule contract, including option year periods.

The length of the order and the risk to the ordering activity could be considered as part of the overall evaluation of best value.

Emphasis added. http://www.gsa.gov/p.../200369#options

I think that Ordering Guideline 26 must be interpreted to mean that 52.217-8 is not automatically included in individual task orders.

Link to comment
Share on other sites

Even assuming that FAR 52.217-8 applies to task orders individually, the use of the option in an order must be announced in the task order solicitation and the option costs must be evaluated during evaluation of quotes or proposals. See GSA's Ordering Guidelines, Item 26:

Emphasis added. http://www.gsa.gov/p.../200369#options

I think that Ordering Guideline 26 must be interpreted to mean that 52.217-8 is not automatically included in individual task orders.

Vern,

That's a good point. Even though 52.217-8 flows down to the task order, it is the OCO's responsibility to consider it during evaluations and ultimate award, exercising it appropriately in the future. In this particular case, just because 52.217-8 flowed down the OCO didn't take it into consideration at time of evaluations because there was no language in the task order solicitation requesting offerors to submit pricing for those six months and that offers would be evaluated inclusive of that clause. The only language in the task order solicitation was that the offers were evaluated inclusive of the base period and two one-year option periods.

Link to comment
Share on other sites

Guest Vern Edwards

I do not assume that 52.217-8 applies individually to task orders. I don't know whether it does or not. I do think it applies if invoked in a solicitation for an order. However, invoking it is not enough. You must price the option and consider the option price during evaluation.

Link to comment
Share on other sites

I do not assume that 52.217-8 applies individually to task orders. I don't know whether it does or not. I do think it applies if invoked in a solicitation for an order. However, invoking it is not enough. You must price the option and consider the option price during evaluation.

Let's assume that 52.217-8 does flow down to individual task orders. Since the task order solicitation was absent on how each offeror was to price the possible 6 months but did require offerors to propose on the two one-year option periods, could one conclude that the offerors received equitable treatment in the evaluation of their offers as each offeror should have considered the possibility of 52.217-8 being invoked some time in the future as it is in their respective FSS contracts?

Link to comment
Share on other sites

Guest Vern Edwards

Although equitable treatment of the offers may be an issue in the acquisition, it is not the issue with respect to your original request for feedback about needing a J&A. The issue in that respect is the failure to solicit competition for the -8 option prices and to consider the result of the competition when making your decision about whom to give the task order. Since the -8 option was not priced as part of the competition for the order, and since the option prices were not considered in making the award decision, adding the -8 option clause after award was inappropriate and exercising the -8 option would constitute a new work modification, for which you must either get competition or prepare a J&A. That's the gist of the GAO decision that I cited earlier, and it is consistent with GSA's ordering guidance.

I have given you the feedback you sought in your original post, so I'm signing off, unless someone thinks they can show that my analysis is wrong.

Link to comment
Share on other sites

Although equitable treatment of the offers may be an issue in the acquisition, it is not the issue with respect to your original request for feedback about needing a J&A. The issue in that respect is the failure to solicit competition for the -8 option prices and to consider the result of the competition when making your decision about whom to give the task order. Since the -8 option was not priced as part of the competition for the order, and since the option prices were not considered in making the award decision, adding the -8 option clause after award was inappropriate and exercising the -8 option would constitute a new work modification, for which you must either get competition or prepare a J&A. That's the gist of the GAO decision that I cited earlier, and it is consistent with GSA's ordering guidance.

I have given you the feedback you sought in your original post, so I'm signing off, unless someone thinks they can show that my analysis is wrong.

Vern,

I appreciate the responses!

Link to comment
Share on other sites

Guest Vern Edwards

What you also may have missed is the recent protest decision by the Court of Federal Claims, HP Enterprise Services, LLC v. U.S., No. 11-888 C, April 5, 2012 http://www.uscfc.usc...SH.HP040512.pdf. In that decision the court relied on the GSA Ordering Guidelines to interpret an option provision and determine that there was a latent ambiguity in a solicitation. It sustained the protest. In deciding to rely on the Ordering Guidelines the court cited the GAO's decision in Knoll, Inc.; Steelcase, Inc., GAO Dec. B-294986.3, 2005 CPD ¶ 63, in which the GAO enforced the GSA Ordering Guidelines concerning options after consulting with GSA.

GSA awards its contracts and its Ordering Guidelines are its instructions to other agency users of its contracts. Are they binding? Let's put it this way: If you ignore them and get a protest because you did, GSA will testify against you if consulted and I predict that you'd lose the protest.

Link to comment
Share on other sites

  • 3 years later...

Although equitable treatment of the offers may be an issue in the acquisition, it is not the issue with respect to your original request for feedback about needing a J&A. The issue in that respect is the failure to solicit competition for the -8 option prices and to consider the result of the competition when making your decision about whom to give the task order. Since the -8 option was not priced as part of the competition for the order, and since the option prices were not considered in making the award decision, adding the -8 option clause after award was inappropriate and exercising the -8 option would constitute a new work modification, for which you must either get competition or prepare a J&A. That's the gist of the GAO decision that I cited earlier, and it is consistent with GSA's ordering guidance.

I have given you the feedback you sought in your original post, so I'm signing off, unless someone thinks they can show that my analysis is wrong.

Hi Vern,

I know it's been three years since this topic was discussed, but recently the question has popped up again concerning whether or not the -8 clause could be bilaterally incorporated after award given it had not been included either in the solicitation at award. What has always perplexed me is the justification that by not including the -8 clause in the initial award, the losing Offerors were not given the opportunity to propose pricing for those six months, and subsequently the -8 pricing for all the bidders was not considered nor evaluated.

What prevents me from totally embracing the opinion that a Contracting Officer can not bilaterally incorporate the -8 clause after award, and opinion the -8 option can not be exercised even if it was included, but not considered or evaluated, is the language in the first two sentences of the clause:

"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 language in the -8 clause prohibits the Offerors from deviating from the pricing already included in their proposal, for those additional six months. Even if they are given an opportunity to propose pricing for those six months, they can only duplicate the rates already in the contract. So even if I forget to include the -8 extension in the solicitation and required the Offerors to propose pricing, I still would know how much it would cost the Government, for each and every Offeror, to extend the contract for up to six months. I would know, because I already have the pricing from which the extension pricing would be duplicated from, i.e. the pricing proposed in the last period of performance. This holds true whether we invoke -8 after the base period or the final period of performance. After all, could I not exercise the -8 option, let's say, at the end of Option 2 of a contract awarded with a one-year base and 4, one-year options? Of course in doing so, the contract would die at the end of the six month -8 extension (providing they extended for the maximum time allowed), and of course after that, the contract dies and option periods 3 and 4 are un-exercisable.

Following the premise that if we did not require Offerors to propose pricing for an -8 extension period, and subsequently we could not have evaluated or considered the pricing, we can neither exercise the -8 Option or incorporate if after the fact, wouldn't you in theory need to require Offerors to propose pricing for an additional six months after each and every period in the contract? Taking into consideration the 5 year contract example above, Offerors would be required to propose pricing for a total of 5, six month periods; one for the base year, and one for each of the 4 option years.

And it's at this premise I get hung up. The logic doesn't make sense to me, because we know what the pricing is going to be for all of those six month periods, and we actually have already evaluated that missing pricing prior to award, because the extension pricing is exactly the same as the period the extension is piggy backing on. Without the Offerors ever proposing pricing for any -8 six month extension, whether it be the base period or the last option period, we've already evaluated the pricing and determined the award winner is the best value to the Government.

Again, taking the example above, would you ever envision a scenario where a company could be awarded a contract after the CO has evaluated Offers that did not include the -8 option nor asked to provide any pricing, but if all the Offerors had included the six month extension pricing (which really just makes the 4th, one year option period, turn into a 18th option period at a continuation of the existing pricing), the outcome might turn out different? The pricing the Offerors propose for those six months can be neither reduced or increased. Is it then impossible for a losing Offeror, if given a new opportunity to bid on the -8 extension, which he previously was denied, offer the Government a 20% decrease in pricing and possibly tipped the scales in their favor making them the new overall lowest price Offeror? The bottom line is then, what we are trying to avoid denying us the ability to extend a contract using -8 if the extension pricing had been proposed but not evaluated/considered, nor allowing us to add -8 after award, is it not?

However, let's say three Offerors all bid 1 million dollars for the fourth option period. We know, whether we get pricing or not for the -8 extension period, each offer would cost the Government an additional 500k to extend the contract for six months. There is no uncertainty we may get a discount in those six months, or even an increase for that matter. And if you think about it, we actually have already evaluated and considered the pricing for those six months, even if the we didn't ask for them, because we've already evaluated the last option period where the pricing comes from. Expanding on that, we've really already evaluated and considered pricing for any extension, on any performance period we are allowed to exercise the -8 option clause.

So, I'd really like to know how someone explains, that after omitting the requirement to propose -8 extension pricing prior to award, and we later get to the end of the period of performance and discover we need to extend the contract six months and incorporate the clause bilaterally, we somehow have denied the losing Offerors an opportunity to have their -8 extension pricing considered when choosing the winner? We did and do know what pricing they would have proposed, and I can't see how adding it to the overall proposed amount would have changed the outcome of the award decision. I've gone round and round attempting to reconcile this in my brain, so any light on the subject would be most helpful.

thanks,

Laura

Link to comment
Share on other sites

You can evaluate the -8 option in several ways: 1) you can state that the final -9 option period will be multiplied by 50% and that the result will be added to the valuated prices for the base period and all -9 option periods; 2) you can ask the contractor to propose prices for the six months following the end of the last -9 option period and add them to the evaluated price for the base and -9 option periods; or 3) you can get prices for multiple 6 month periods corresponding to the end of the base period and each -9 options.

I like option 1 as a) GAO will allow it, 2) it is easy, and 3) it probably reflects the most beneficial outcome for the government in terms of price, performance and minimal admin burden.

Link to comment
Share on other sites

My take on why -8 can't/shouldn't be added is that it constitutes an out-of-scope modification, assuming several services. By adding -8, you're essentially increasing the quantity. So, let's think of it as nothing more than a mod to increase the quantity....What rules apply?

Link to comment
Share on other sites

Guest Vern Edwards

Laura:

In your analysis, the key language in 52.217-8 is this: "The Government may require continued performance of any services within the limits and at the rates specified in the contract." Emphasis added.

What rates are those?

You say: "[W]e know what the pricing is going to be for all of those six month periods, and we actually have already evaluated that missing pricing prior to award, because the extension pricing is exactly the same as the period the extension is piggy backing on."

Really? The clause says "at the rates specified." Some persons might say that the clause indicates that the parties will specify separate option rates. Your reading of the clause--which is that "at the rates specified" refers to the rates in effect when the option is exercised--is not explicit in the clause. But even if it were, how can the clause be said to bind the parties if it is not in the contract? It's not in the contract and you want to add it. Right? Well, how can the clause bind them of its not in their contract? How can you force the contractor to accept the clause at the rates then in effect? You might persuade them to accept those rates, but you can't say that they are bound to those rates. In any case, not all agencies apply the clause in the way that you think proper. See e.g., Strategic Resources, Inc., B-411024.2, 2015 CPD ¶ 200, April 29, 2015, in which the agency instructed offerors to propose specific prices for the -8 option. ("[T]he Cost/Price Matrix included prepopulated fields for ODCs, and also included a space for offerors to include the price for a 6–month option to extend, under Federal Acquisition Regulation (FAR) clause 52.217-8.")

You presume that all of the offerors will have understood the clause in the same way, and thus their interests would not be harmed by adding the clause bilaterally after award. But how can you know that they all understood the clause in the same way when it was not in the solicitation and when the clause is not explicit that "the rates specified" are the rates in effect when the option is exercised? How can you know what each of the various offerors overall pricing strategy might have been if the clause had been in the solicitation? How can you know that the current contractor would still have been the winner?

In my opinion, adding the -8 clause after award would be a new work procurement for up to an additional six months of service that is not in the contract and thus for which, in my opinion, you would need a J&A. If you haven't read it, see Major Contracting Services, Inc., B-401472, 2009 CPD ¶ 170, Sep. 14, 2009; Request for Reconsideration Denied, B-401472.2, 2009 CPD ¶ 250, Dec. 7, 2009. See also, "Exercising Options: An Unanticipated Issue," The Nash & Cibinic Report (June 2010), 24 N&CR ¶ 30.

Link to comment
Share on other sites

  • 4 weeks later...

If the 6 month extension was priced out by all the offerors, evaluated, and included in the award, then wouldn't you use the 52.217-9 to exercise the already existing option period? It would be no different then exercising option year 1 at that point, correct? And if this is true, then what's the point of having -8 if not for allowing the Government a little extra time  to keep a contract going, if for example a recompete is taking longer than expected?

Link to comment
Share on other sites

If you need six more months of service, and the FAR 52.217-8 clause is not in the contract/order, don't do a J&A and bilaterally incorporate the -8 clause into the contract/order, and then unilaterally exercise the option -- rather, just do a J&A and negotiate the new work into the contract/order, either as a modification to an existing CLIN(s) or by adding a new CLIN(s).

Either way, you need a J&A.

Here, J&A can also mean LSJ or JEFO or SSJ, depending on the circumstances.

Link to comment
Share on other sites

2 hours ago, ji20874 said:

If you need six more months of service, and the FAR 52.217-8 clause is not in the contract/order, don't do a J&A and bilaterally incorporate the -8 clause into the contract/order, and then unilaterally exercise the option -- rather, just do a J&A and negotiate the new work into the contract/order, either as a modification to an existing CLIN(s) or by adding a new CLIN(s).

Either way, you need a J&A.

Here, J&A can also mean LSJ or JEFO or SSJ, depending on the circumstances.

word

Link to comment
Share on other sites

Guest
This topic is now closed to further replies.
×
×
  • Create New...