New work- Modify or Compete?

[mm6ch]

Up front: Here is a situation I walked into at a new assignment. I’m getting conflicting guidance. The contract contains FAR 52.243-1 Alt I.

Scenario: A Firm Fixed Price Task Order was awarded under a Multiple Award IDIQ Contract for ~$80M for a wide range of services one of which is training support. Four months later a new requirement for more of the same training support arises within our office. The IGCE for the new work is $7M.

Question, what is the proper approach:

1. Compete this work and award a new task order under FAR 16.5.
   
2. Modify the work onto the existing task order without a J&A? Bilateral mod, in-scope change. Same type of work, eventhough the quantity change is rather large (~10% of basic contract value)
   
3. Modify the work onto the existing task order, however a J&A is required. Bilateral mod, out-of-scope change as work was not contemplated at time of award. Post IAW 16.505 ( B )(2)(ii)(D).
   

Again, the contract contains FAR 52.243-1. However, the added work doesn’t seem to fall within the changes described in Alt I. On an aside, are all changes outside those enumerated in FAR 52.243-1 (whatever ALT) considered out of scope?

Guidance Received:

1. The work is out of scope. Either:

a. conduct a new competition under the IDIQ IAW FAR 16.505( B )(1) or

b. a J&A is needed and will be posted IAW 16.505( B )(2)(ii)(D) if you are going to modify this work onto the existing task order. However, this could cause the initial award to be protested. Offerors may have contemplated proposing on the work if these changes were included with the initial solicitation or the award determination may have been different if these requirements were included.

2. The work is in-scope.

You should not release a new task order under this IDIQ for Training and Support. This work should be modified onto the existing task order. We cannot have two task orders for the same requirement under this IDIQ. We already have a task order for this work and the new requirement is within the scope of that contract. The new work should be modified under the existing task order. If we don’t take this approach, the awardee (of the $80M) could protest the release of this requirement and claim they were awarded this scope of work and are entitled to the work released under the new task order.

The guidance in #2 confused me. To me that sounds like a Requirements Contract IAW 16.502(a). In my opinion, the change is out of scope and a new TO competition should be conducted, however when I received the guidance in #2 I started second guessing myself. Thanks

P.S. I can't edit out these damn smiley faces...smile = b...my apologies.

[ji20874]

If you're relying on the logical follow-on authority of FAR 16.505( b )( 2 )( i )( C ) ("sole-source basis in the interest of economy and efficiency because it is a logical follow-on to an order already issued"), you should not use the Changes clause for the modification.

Here are my questions for the contracting officer:

( 1 ) Is the work within the scope of the existing task order, as defined by the Changes clause? select one: YES or NO. No if's or but's, just YES or NO.

. ( a ) If YES, then use the Changes clause as the authority for the modification to the existing task order.

. ( b ) If NO, go to (2) below.

( 2 ) If the work a logical follow-on as described in FAR 16.505( b )( 2 )( i )( C ), or can any of the other exceptions in FAR 16.505( b )( 2 )( i ) apply, perhaps ( A ) or ( B )? select one: YES or NO. No if's or but's, just YES or NO.

. ( a ) If YES, write your justification, issue the modification to the existing task order, and post your justification for the public to see.

. ( b ) If NO, compete the requirement among all the task order contractors.

[Guest Vern Edwards]

Nothing in the changes clause authorizes the Government to procure additional services. You can change the description of the service you have already bought, but you cannot buy additional services. The only clause that I know of that would provide for that would be an option clause. In my opinion you must conduct a new competition. It's not even a close question.

[brian]

I thought that this proliferation of IDIQ contracts for anything under the Sun was because it is so easy to do a TO/ DO competition.

[dcarver]

You have a multiple award contract, compete it. Why would you want to issue a multiple award contract and then start modifying existing delivery orders to add all of the additional work? Seems counter intuitive to me. The whole point of multiple award ID/IQ contracts was to promote competition so the Government wasn't setting aside hundreds of millions of dollars of repeating requirements to one company when multiple companies could continually satisfy the work.

[napolik]

This thread offers opinions and citations on Scope of Contract as it applies to increased quantities: http://www.wifcon.co...chedule-change/.

[mm6ch]

Thank you

[Boof]

Brian,

Cutting task orders against IDIQ contracts used to be easy and safe. Now that they can be protested they are neither. I find it almost as difficult as doing a full and open.

But beyond my griping about the award process, every new task order requires the awardee to have a program office with a program manager and staff. In Afghanistan, Iraq, and other not so nice places this gets very expensive. So you try to avoid multiple offices by using the follow on card (J&A)as much as possible.

[Guest Vern Edwards]

Would the new requirement be a legitimate "follow on" per FAR 16.505((2)(i)( C)?

[mm6ch]

The work (training support services) is currently being provided under a task order that was competed amongst the IDIQ awardees IAW with the fair opportunity process. This task order has a base period that expires February 2014 and two additional 1 year options. The added work is the same type of work however, the quantity of the service would be an increase in LOE and $ of approx. 10% of the contract value. That said, this does not appear to be a logical follow-on nor does it appear to fall within the other exceptions in FAR 16.505( b )( 2 )( i ).

[ji20874]

mm6ch,

If you believe the work is not within the general scope of the existing task order (your first posting) and you also believe the work is not a logical follow-on (your last posting), then you don't seem to have a sole-source basis. Here's how it comes out, re-using my structure from earlier...

. ( 1 ) Is the work within the scope of the existing task order, as defined by the Changes clause? select one: YES or NO. No if's or but's, just YES or NO.

. . ( a ) If YES, then use the Changes clause as the authority for the modification to the existing task order.

. . ( b ) If NO, go to (2) below.

. ( 2 ) If the work a logical follow-on as described in FAR 16.505( b )( 2 )( i )( C ), or can any of the other exceptions in FAR 16.505( b )( 2 )( i ) apply, perhaps ( A ) or ( B )? select one: YES or NO. No if's or but's, just YES or NO.

. . ( a ) If YES, write your justification, issue the modification to the existing task order, and post your justification for the public to see.

. . ( b ) If NO, compete the requirement among all the task order contractors.

Now, here's my next question -- are you the contracting officer, who has to make these decisions? Or someone who provides insight to the contracting officer? It is possible for reasonable people to disagree on matters like this.

[mm6ch]

I am not the contracting officer. Your structure was helpful...thank you. If any work not covered by the changes clause is considered out-of-scope, then this work would require a new task order competition because it's out of scope & no exception applies. I have discussed this issue with a few COs and received conflicting guidance regarding the "scope" issue. The "rub" seems to be that some CO's use 10% as a "rule of thumb" for in/out of scope determination regardless of contract value. Now for another question. If the requirement were for professional services, how would this change this guidance, if at all? I misread Alt III initially with an "and" vs. an "or" in between "architecture-engineering or other professional services"...I read architure-engineering and immediately disgarded ALT III. I believe these would be "other professional services" as defined in FAR 2.101( . We are talking about training support for a field that is technical/engineering in nature. The IDIQ contains both FAR 52.243-1 ALT I and ALT III. Am I interpreting "other professional services" correctly and would that change the determination if so?

[ji20874]

I'm not sure that "training support" is a professional service, but I suppose the particular facts will drive that.

But regardless, I don't think that affects the definition of "within the general scope of the contract" [or task order].

[Guest Vern Edwards]

Whether the services are professional or not does not affect the scope issue. But is scope the issue? I don't think so.

Scope is an issue when the question is whether work can be added to a contract. But when the question is whether work can be added to a task order without giving the other offerors a fair opportunity to be considered, the issue is not whether the work is within the scope of the task order, but whether adding the work would fall under any of the exceptions to the fair opportunity rule in FAR 16.505((2)(i) and whether it would be permissible under the terms of the contract.

None of the exceptions says it's okay to add work to a task order without complying with the fair opportunity rules if the work is within the scope of the order. The only exception that might apply in the case under discussion in this thread is ( C):

The order must be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order.

So the question is whether the work is a "logical follow-on" to the work already on order. FAR 16.505((2)(ii)(4) says this about the justification for use of an exception to the fair opportunity rule:

(4) ... If the contracting officer uses the logical follow-on exception, the rationale shall describe why the relationship between the initial order and the follow-on is logical (e.g., in terms of scope, period of performance, or value).

Thus, being within scope might demonstrate that the additional work is a logical follow-on, but not necessarily. Merriam-Webster's online dictionary defines "follow-on" as:

being or relating to something that follows as a natural or logical consequence, development, or progression.

The underlying idea seems to be that follow-on work is a logical "next step" in a series of steps. The fact that the additional work to be added is similar to or even identical to the work already covered by the order does not, in and of itself, make the additional work a logical follow-on. On the other hand, the fact that the additional work is not within the scope of the order does not necessarily mean that it is not a logical follow-on. In a 1986 letter to the Secretary of Defense about noncompetitive procurement, the GAO defined "follow-on contract" as follows:

“Follow-on contract” means a new, noncompetitive procurement placed with an incumbent contractor, either by a separate new contract or by a supplemental agreement to continue or augment a specific military program, where such placement was necessitated by prior procurement decisions. An example is a contract award for production of a major weapon system to the contractor that developed the system when award to any other source would result in substantial duplication of cost to the government that is not expected to be recovered through competition.

See The Honorable Caspar W. Weinberger, The Secretary of Defense, B-217655, Apr. 23, 1986. Production of quantities of a system is not within the scope of a contract to develop the system, but it is a logical follow-on to such a contract.

The concept there appears to be that follow-on work is the next step in a progression. Again, the mere fact that additional work is within the scope of an order or that it is similar to work already on order does not make that additional work a "logical follow-on."

FAR does not define "follow-on," but see FAR 6.302-1(a)((2)(ii) and (iii):

(ii) Supplies may be deemed to be available only from the original source in the case of a follow-on contract for the continued development or production of a major system or highly specialized equipment, including major components thereof, when it is likely that award to any other source would result in (A) substantial duplication of cost to the Government that is not expected to be recovered through competition, or ( unacceptable delays in fulfilling the agency's requirements.

(iii) For DoD, NASA, and the Coast Guard, services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in (A) substantial duplication of cost to the Government that is not expected to be recovered through competition, or ( unacceptable delays in fulfilling the agency's requirements.

Again, in (ii) we see the notion of progression in "continued development", but in (iii) we see "continuation," which in context seems to connote extension rather than progress. I can't say whether adding a additional training support to a contract for training is the same as extending an order to provide that training, but even if it is, it might not be uneconomical or inefficient to order the additional support from another contractor. I guess it depends.

In any case, I don't think the issue is whether the additional training support is within the scope of the task order, but whether it is a "logical follow-on" to the work already under order and whether it is necessary to add the work to the task order for purposes of economy or efficiency.

By the way -- a change order issued against an order under a task order contract need not be within the scope of that order. It need only be within the scope of the contract under which the order was written.

[mm6ch]

The letter from GAO now leads me to believe that the augmentation of a service could be considered a logical follow-on.

Follow-on contract means a new, noncompetitive procurement placed with an incumbent contractor, either by a separate new contract or by a supplemental agreement to continue or augment a specific military program, where such placement was necessitated by prior procurement decisions.

Furthermore, FAR 6.302-1(a)((2)(ii) and (iii) talks to the duplication of cost in the event

that award to any other source would result in (A) substantial duplication of cost to the Government that is not expected to be recovered through competition...

It seems reasonable that one could state the potential gains in awarding a new task order through competition, IAW FAR 16.5, are less than the Government effort required by the government to solicit, evaluate and award the task order, i.e. the duplication of cost.

Side bar: I mean, a cost-benefit analysis would probably bear this out if you really wanted to get deep into the numbers with respect to the cost to the Government of drafting the RFP documentation in addition to the cost of an evaluation team of approx. 5 govies sequestered for a month or two.

The Merriam Webster definition and the interpretation of "next-step in a progression", while not inconsequential, holds less weight than the GAO letter and the definition in FAR 6.302-1(a)((2)(ii) and (iii) in my opinion.

Follow-on to me means...next step in a process, but looking objectively at the information provided in the previous post, it seems to me reasonable that augmentation of a service could fit within that definition as well.

[Guest Vern Edwards]

I'm happy if you're happy.