Inflated T&M Estimates to Account for Unexpected Surges

[rios0311]

I'm the contracting officer on a new requirement which will encompass consolidating 15 smaller contracts (currently performed by small and large businesses) into 3 separate orders under the CIO-SP3 GWAC. We intend to award the 3 orders to a small business, a HubZone and a Woman Owned Small Business.

Among the numerous questions that the program office has raised, they submitted this to me this morning:

"What is best approach in structuring this contract/RFP so that it can accommodate unexpected surges in current work and new work, all within the same scope of "Operations"? While we want to stay honest and keep our estimates for level of effort real based on what we know today, we all know each year (Program) has "pop-up work" that was not planned at the time a contract is awarded. So to help minimize the work on both Acquisitions and (Program), we want to maximize the value and scope of this contract (say $23M over 5-6 year), either by adding hours, or adding say an SME labor category not currently needed, or adding optional tasks under one or more of our 5 functional areas (Testing, Sys Admin, Security, etc.), or other. And can we do something like a 9 month base period, with 5-6 one-year options under a T&M?"

I'm trying to come up with the best way to respond to this. I see a few items of concern with what the program office wants to accomplish with this contract, but I would like someone else's perspective on it. The services that we're procuring are IT support services such as help desk, security, system admin, database admin and testing. Program has requested a T&M contract for these services. I dislike T&M (and LH) contracts, but since what we're essentially procuring is bodies, I think this is the route we'll take. However, is there a better contract type for procuring bodies?

What I'm particularly uncomfortable with is "unexpected surges in current work and new work all within the same scope". For "surges to current work", the work may be the same, but depending on how much of a surge they experience, it may not be within the scope of the contract. But what if potential surges are contemplated in the solicitation? Is it appropriate to over estimate hours to account for potential surges?

As for "New work", new work is definitely not within the scope of the order. But is it appropriate to add labor categories for related services that we're certain we won't need at the inception of the contract, but might require down the road if? And is it appropriate, once the contract is being performed, to modify it to reduce hours from one or more labor categories to increase hours in another labor category provided that the contract value remains essentially unchanged? Can doing this be considered a change in scope?

Thank you.

[woops85]

At my old organization we had a contract with the Reserves that included support for various distance learning centers (the infrastructure install, maintenance, de-install if needed). Because the contract POP was covering years when BRAC moves would be made, the customer knew there would be times when an existing learning center would have to be de-installed from one location and then re-established somewhere else, usually in the same geographic area. They were able to use previous BRAC move history to estimate a number of times this would occur but they could not estimate the when - RFP was on street before BRAC commission announced recommendations and then there's the fighting afterwards to stop it. They set it up as an optional task within the SOW and the cost proposal for that task was for a specific scenario - take it down from point A, re-establish it at Point B within a 500 mile radius. Timing was good as BRAC recommendations came out during evaluations and Govt wound up using a NTE number for that task each year based on vendor bid and their estimate of number of times it would happen. As I recall, wound up not having that task exercised until Opt 2 but they were pretty close on number of times we needed to do it each year.