Jump to content
The Wifcon Forums and Blogs
j_dude77

Follow-On Contract

Recommended Posts

Can someone tell me where to find a definition of a follow-on contract. I know what they are, but I am dealing with some people that do not. I am preparing a justification using FAR 6.302-1 for the complete remanufacturing of a crane. We have had this piece of euipment for ten years. I have cited 6.302-1(a)(2). The one approving the justification keep telling me that I must explain how the procurement will eliminate substantial duplication of costs or prevent unacceptable delays. I have already told them that the language found in 6.302-1(a)(2)(ii)&(iii) only applies to follow-on contracts; but it does not seem to register with them. I have looked in multiple places and have not been able to locate a definition.

Share this post


Link to post
Share on other sites

How then have you determined that only the OEM can remanufacture the crane?

Share this post


Link to post
Share on other sites
Guest Vern Edwards

I know of no official (statutory or regulatory) definition and I know of no precise informal definition.

Follow-on contracts are used when a project or program is carried out in phases and the government contracts for each phase separately. Examples are contracts for system development in which the concept phase is followed by the R&D phase, which is followed by engineering development phase, which is followed by the full scale development phase, and, finally, the production phase The contract for each successive phase is a "follow-on" to the contract for the previous phase. The follow-on is "logical" in the sense that it continues something begun under an earlier contract or is a consequence of an earlier contract.

Usually, the contractor who performed the contract for the previous phase has knowledge and experience with the project or program that no other company possesses and which accrues to the benefit of the government. A different contractor would have to work to catch up in order to perform the follow-on, which would cost time and money and increase project or program cost, schedule, or performance risk. However, follow-on contracts can be awarded competitively or on a sole-source basis.

Follow-on contracting is a very old concept. See Roberts and Dyer, The Role of Follow-on Contracts in Government-Sponsored Research and Development (MIT, July 1967) http://dspace.mit.edu/bitstream/handle/1721.1/48973/roleoffollowonco00robe.pdf?sequence=1. However, you can never be quite sure about what a person means when they use the term "follow-on contract" or "logical follow-on", so it's always a good idea to ask for clarification.

Share this post


Link to post
Share on other sites

How then have you determined that only the OEM can remanufacture the crane?

This is a complete tear-down and rebuild of the crane. Many new major components are being replaced. We have determined that only the OEM can perform the work because if a non-certified repair facility does the work, the OEM will not recertify the crane. If you have a crane that is not certied, it is useless becuase it would be illegal to operate it.

Vern, the way you explain it is they way I interpret in FAR 6.320-1(a)(2)(ii) & (iii). I guess I will have to break it down in simple terms for them. The way I see it; how can you have a follow-on contract for a piece of equipment that is ten years old, and nothing like this has been done to it before.

Share this post


Link to post
Share on other sites

I don't think that it is a follow-on contract. You just explained why you must use the OEM to perform the work. We don't know what type crane this is (e.g., bridge crane, crawler crane, truck mounted crane, etc.), I was wondering how you determined that only the manufacturer and not a dealer could overhaul the crane.

When I was in the Air Force in the 1970's, Oshkosh Truck MFG Corporation would re-build and update the big AF snowplow truck, runway brooms and truck mounted snow blower Fleet for the whole Air Force on a periodic basis because no dealer could handle such a big workload.

Share this post


Link to post
Share on other sites

Joel,

It is a dealer doing the work. The dealer is also factory authorized repair facility. The other issue is that the dealers have area agreements, so no other dealer can come into the area and do work. We contacted other dealers in the country and they kept reffering us back to the local dealer. Our local dealer covers the entire southeast US. Anyway the crane is a pedistal mounted Manitowoc 2250.

Share this post


Link to post
Share on other sites

Joel,

Just an aside. I was stationed in the UP of Michigan and spent many cold nights on Snow Control Detail tearing down Oshkosh brooms and replacing all the wire bristles. No fun for a desk jockey. Then there was the shovelling flight line lights at 35 below zero. Memories......

Share this post


Link to post
Share on other sites
Guest Vern Edwards

It wouldnot be a follow-on effort. Why use a justification that would make you look foolish at best? I think you justified sole source in your response to my post.

Share this post


Link to post
Share on other sites

Joel,

Just an aside. I was stationed in the UP of Michigan and spent many cold nights on Snow Control Detail tearing down Oshkosh brooms and replacing all the wire bristles. No fun for a desk jockey. Then there was the shovelling flight line lights at 35 below zero. Memories......

Holy cow, Boof! Were you at KI Sawyer? If so, please contact me separately. In addition to my primary day job as a CE Officer from 72-76, I served as "Snow Control Officer" at night every other week ("extra duty"). I often helped our mechanics tear down and replace the bristles on the runway brooms. A new set cost $1000 and would only last about 24 hours during a blizzard. We had 6 power brooms among 62 pieces of snow removal equipment in the overall fleet - largest in the Air Force. On the Graveyard shift after the Base Brass were all asleep, I also drove Oshkosh Rollover plows, pulled the power brooms, operated graders, front end loaders, dump trucks and the big Oshkosh Blowers. Almost got hit by a KC-135 landing in a snow storm late one night after the tower forgot we had 4 plows working on the runway and myself in the staff car performing an RCR (runway condition reading, measuring tire friction). I had JUST exited the "closed" runway when a Tanker touched down about 100 feet behind me. I couldn't see its approaching landing lights due to the heavy snowfall. Fortunately, the plows were on the opposite end of the runway. BTW, Calumet AFS at the top of the Keweenaw Penisula was also one of my responsibilities.

Share this post


Link to post
Share on other sites

Joel,

It is a dealer doing the work. The dealer is also factory authorized repair facility. The other issue is that the dealers have area agreements, so no other dealer can come into the area and do work. We contacted other dealers in the country and they kept reffering us back to the local dealer. Our local dealer covers the entire southeast US. Anyway the crane is a pedistal mounted Manitowoc 2250.

Ldude, I think you have described why you have to use the OEM authorized dealer to rebuild the tower crane. One suggestion - you may want to compare the cost to re-build vs. buying a new crane. I don't know if you could include the old one as a trade-in or salvage in the actual purchase. Due to appropriations law complications, any direct salvage income received from the sale of the old crane or from turn-in for scrap would go to the Treasury - I'm not sure if that is considered in an economic comparison of re-build vs. buying new. Probably cheaper to overhaul, unless the actual boom and tower structure, etc. must be re-built.

Share this post


Link to post
Share on other sites

GAO/NSIAD-86-59 from April 1986, PROCUREMENT The Use of Unpriced Options and Other Practices Needs Revision

Page 26, Footnote 1.

‘“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.

http://www.gao.gov/assets/150/144237.pdf

Share this post


Link to post
Share on other sites

GAO/NSIAD-86-59 from April 1986, PROCUREMENT The Use of Unpriced Options and Other Practices Needs Revision

Page 26, Footnote 1.

‘“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.

http://www.gao.gov/assets/150/144237.pdf

Good resource. Then this isn't an incumbent contractor.

Share this post


Link to post
Share on other sites

Maybe the J&A approving official is asking an entirely reasonable question. Before approving the J&A, he or she wants to know if the non-competitive approach (sole source with a certified dealer) is less expensive than a competitive approach. To me, whether the proposed remanufacturing contract is or is not a follow-on contract doesn't matter and isn't worth arguing about. We read in one posting that the work had to be done by the OEM. Then we read in a subsequent post that it was going to be done by a certified dealer. I'm glad the J&A approving official didn't sign if the original document didn't answer his or her questions.

But if the J&A explains the facts, he or she likely will sign.

- The agency needs a crane with certain lift and other capability.

- We have an existing crane, but it requires remanufacturing at this time because _____ and _____.

- Remanufacturing the existing crane will cost $_____.

- A new crane will cost $_____.

- Remanufacturing is far less expensive and makes good business sense.

- We did market research to see if there are any remanufacturing alternatives. There aren't. We also looked for other firms to do the remanufacturing, but none exist.

- - Remanufacturing can only be done by OEM or authorized dealer because otherwise the certification for use would be lost, and that certification is required to legally operate the equipment.

- - The authorized dealer has an exclusive geographic territory, honored by the OEM and other authorized dealers.

- Therefore, only one source exists and no other approach will satisfy agency needs.

Share this post


Link to post
Share on other sites

I thank everyone for the responses. My question has been answered.

Maybe the J&A approving official is asking an entirely reasonable question. Before approving the J&A, he or she wants to know if the non-competitive approach (sole source with a certified dealer) is less expensive than a competitive approach. To me, whether the proposed remanufacturing contract is or is not a follow-on contract doesn't matter and isn't worth arguing about. We read in one posting that the work had to be done by the OEM. Then we read in a subsequent post that it was going to be done by a certified dealer. I'm glad the J&A approving official didn't sign if the original document didn't answer his or her questions.

But if the J&A explains the facts, he or she likely will sign.

- The agency needs a crane with certain lift and other capability.

- We have an existing crane, but it requires remanufacturing at this time because _____ and _____.

- Remanufacturing the existing crane will cost $_____.

- A new crane will cost $_____.

- Remanufacturing is far less expensive and makes good business sense.

- We did market research to see if there are any remanufacturing alternatives. There aren't. We also looked for other firms to do the remanufacturing, but none exist.

- - Remanufacturing can only be done by OEM or authorized dealer because otherwise the certification for use would be lost, and that certification is required to legally operate the equipment.

- - The authorized dealer has an exclusive geographic territory, honored by the OEM and other authorized dealers.

- Therefore, only one source exists and no other approach will satisfy agency needs.

All of this is addressed in the J&A. They specifically were looking for language to address how this procurement would eliminate substantial duplicative costs. In the J&A I never made that argument, much less referenced it. This is something that they came up with on their own.

I thank everyone for the responses, and I have my answer. As I suspected, this is clearly not a follow-on contract.

Share this post


Link to post
Share on other sites

Glad you got your answer. Thought I would throw in my 2 cents since I work on Major Weapon Systems and follow-on contracts.

Vern Edwards nailed the explanation of follow-on in post #3 as well as the true path forward in post #8.

I swear the problem with many of these things is how they are named. At face value, the term "follow-on" really just means "what we are doing next." With a major weapon system, the last living stage is typically sustainment and would fall under the dictionary definition of follow-on, but is generally not the type of work to be done as a "contracting world" follow-on. A better term might be a "Intregral Completion" contract.

I like throwing "completion" in there to focus everyone on the radical concept of potentially competing the work (or aspects of it) once some critical milestone has been met (such as MS-C on a MWS).

If we REALLY want to confuse everyone- maybe start calling it a non-severable completion contract... with of course THIS use of the term non-severable being independent of that associated with funding...

Share this post


Link to post
Share on other sites

Okay, besides j_dude77 specific inquiry. Based on the definition of a follow-on, "a follow-on contract is a separate, new contract for which the price is noncompetitively negotiated with the incumbent contractor." (http://www.gao.gov/a.../150/144237.pdf) This may be a dumb question... but what is the appropriate term to use for a reoccurring requirement (e.g., services) that is solicited competitively, negotiated, etc.? "The new contract?" I've seen some CS use the term follow-on in context of a competed action, not awarded to the incumbent contractor.

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.

×
×
  • Create New...