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Conflicting Terms b/w IDIQ Master Contract and Task Order RFP

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An agency issues a task order solicitation off of a Multiple Award IDIQ Master Contract. It is a competitive 8(a) award off of the 8(a) STARS II GWAC. The Master Contract requires the task order solicitations to contain the Limitation on Subcontracting clause. Somehow, the ordering agency forgot to include this clause. In evaluating the proposals, the agency realized this particular FAR clause is missing. For very good reasons which I will not go into here, the agency believes it is best NOT to amend the solicitation. That would require allowing for revised proposals and starting the evaluation process all over from the beginning. Is there any authority which the agency can use to say that the missing FAR clause is "included by reference" or something like that?

We looked at the Christian Doctrine, but it turns out it only applies to contracts, not solicitations.

We looked at FAR 52.216-18, which says that, in the event of any conflict between the Master IDIQ K and the task order, the Master Contract takes precedence. But again, it sounds to us like that clause only applies/addresses the contract administration stage, not the solicitation and evaluation of proposals stage.

If we have to amend the solicitation, then it would be good to have GAO or COFC decisions to support this course of action so as to more easily convince the end user program office client of why it needs to be done.

So we looked at whether this could be framed as a "scope" issue. FAR 16.505(a)(2) requires the orders to be "within the scope . . . of the contract." Could the task order, which was missing the FAR clause on Limitation on Subcontracting, be considered beyond the "scope" of the Master Contract, because it was missing that clause? But that seems like a dead end b/c there is a GAO decision which stated that the "scope of work" in these scope determinations refers only to the real "work" in the solicitation, meaning "Section C" stuff, not anything else. See Colette, Inc.--Request for Reconsideration, B-407561.2, Jan. 3, 2013 ("In entertaining protests related to the issuance of task orders, we have consistently understood "scope" to refer to the scope of work authorized in the underlying contract." GAO rejected the protester's argument that non-compliance with the Master Contract's instructions on how to conduct task order competitions increased the scope of work).

Any ideas?

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If you're otherwise ready to award, how about sending a note to your intended contractor saying the clause required by the master contract at FAR 52.219-14 was inadvertently omitted from the solicitation but will be included in the task order, and asking for the contractor's concurrence as a clarification? The contractor already knows that the clause is supposed to be there, and is likely already intending to comply. You could send the note to all the contractors who submitted offers.

This can be clarifications, not discussions. See GAO Decision B-408890, IAP-Leopardo Construction, Inc. (Dec. 2013). This case discusses the differences between clarifications and discussions in a fair opportunity FAR 16.505( b )( 1 ) environment.

But it seems you have a defect in your solicitation. You need to address it during the solicitation phase, either by amendment or through clarifications or some other way.

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What if the scenario is that there is an offeror whose proposal clearly does NOT comply with the FAR clause on Limitation on Subcontracting. Basically, the CO and agency evaluators are considering rating the proposal as non-conforming, but then they aren't sure b/c that FAR clause was missing . . .

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What outcome do you want?

Do you want to throw out the offer? Do you want to accept the offer?

If you want to throw out the offer, you can. If you want to keep the offer in the running, you can. Either way, you will have to deal with the sloppiness of the missing clause, but that shouldn't be too big a deal if, as you said, the parent multiple-award contract clearly requires the clause. I might be able to help you if I know which way you want to go.

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Let's say the evaluators rated the proposal in question very highly on Technical Approach and all the other evaluation factors. The evaluators deemed the proposal to be the best value and intended to award to this offeror. But now that they realize the subcontracting problem (say the offeror intends to subcontract 90% of the work), they don't know what to do.

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I hope the evaluators don't get to pick the awardee.

Go out to all the contractors submitting offers by letter or e-mail and tell them the clause required by the master contract at FAR 52.219-14 was inadvertently omitted from the solicitation but will be included in the task order, amenable to the instructions in the parent contracts. Invite updated offers within five calendar days. You may or may not have to re-do the technical evaluations, depending on how the contractors update their offers.

If you want to throw out the favored contractor, you might make an argument that it should have known that the clause was required and its 90% subcontracting approach violates the parent contract and makes its present offer unacceptable and unawardable. Just award to the next contractor in line, and in the debriefing (if one is required under FAR 16.505( b )( 6 )), tell the contractor why its offer was unawardable.

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As you pointed out, the clause 52.216-18 makes the delivery order subject to the Limitation of Subcontracting clause. Paragraph (b ) of the -18 clause makes very explicit the applicability of the Limitation clause.

If the contractor has stated that it will not comply with the clause, it is unacceptable. See this recent GAO decision - Sealift, Inc., B-409001 (Jan. 6, 2014):

Quote

As a general matter, an agency’s judgment as to whether a small business offeror will be able to comply with a subcontracting limitation presents a question of responsibility not subject to our review. Dorado Services, Inc., B-408075, B-408075.2, June 14, 2013, 2013 CPD ¶ 161 at 11; Spectrum Sec. Servs., Inc., B-297320.2, B-297320.3, Dec. 29, 2005, 2005 CPD ¶ 227 at 6. However, where a proposal, on its face, should lead an agency to the conclusion that an offeror has not agreed to comply with the subcontracting limitation, the matter is one of the proposal’s acceptability. TYBRIN Corp., B-298364.6, B-298364.7, Mar. 13, 2007, 2007 CPD ¶ 51 at 5.

If it is unclear that the contractor will comply with the Limitations on Subcontracting clause, I would send an e-mail to the contractor:

Dear Mr. Contractor, as you know, the clause entitled “Limitation on Subcontracting (Nov2011)”, FAR 52.219-14, is included in the Multiple Award IDIQ Master Contract under which our solicitation was issued. The clause applies to every order placed under the contract.

Please confirm your intention to comply with this clause should you receive the award of an order under the solicitation we issued. Please do so by 1 April 2014.

You are not invited or authorized to submit a revised proposal. Any revision to your proposal will not be considered.”

If you are concerned that other contractors may not be in compliance, send the e-mail to all the competitors.

Since the contractor cannot revise its proposal, you have not held discussions.

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Just to be clear, the master IDIQ states that clauses will be restated in the T.O. RFP? What is the point of having an IDIQ with terms and conditions if you have to restate them every time you go to issue an order? What happens the one time that some KO with ordering authority accidently omits a clause?

It sounds like if the contract truly states this, then the Government should amend the T.O. RFP to do what the contract says that the Government must do. Beyond that, I will say that regardless of whether it needs to be re-invoked every time the Government issues a T.O. RFP, it's already invoked in the basic IDIQ, therefore, it applies whether it is in the T.O. RFP or not. Or cancel the T.O. RFP and start over. Or revoke the ordering activity's authority to order against the IDIQ.

The Limitations on Subcontracting clause is a core control mechanism in contracts used to keep 8(a) companies from just becoming a passthrough business model for large business to take advantage of the program. I wonder what the SBA would say about an 8(a) award that doesn't limit subcontracting.

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WAIT A MINUTE::::::::nobody has brought up 13 CFR 124.510 and whether GSA and SBA have made a determination that the 8(a) must comply with the limitation on individual TOs. I suggest reading the contract as well as contacting the FSS GSA CO.

Otherwise they are an 8(a) so they know program rules as well which the limitation is to maintain eligibilty again unless changed per the above CFR,

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MORE......By my read the STARS Ordering Guide notes that the limitation applies to the "contract" and that the ccontract holder is responsible for balancing the work under their own contract.

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C Culham is correct. Sorry for causing confusion to everyone.

I did a closer read and some more research. The 8(a) STARS II Ordering Guide does indeed say the Limitation on Subcontracting applies only to the contract the company has with GSA on that GWAC. So the company could perform 90% or even 100% of the work on a task order, as long as their total work on ALL the task orders they are awarded does not exceed 50%.

The GWAC Master Contract actually DOES NOT require the 50% Limitation on Subcontracting clause to be incorporated/applicable at the task order level. So if an ordering agency wanted the 50% rule to apply, it would have to put that clause in the task order solicitation from the beginning.

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An agency issues a task order solicitation off of a Multiple Award IDIQ Master Contract. It is a competitive 8(a) award off of the 8(a) STARS II GWAC. The Master Contract requires the task order solicitations to contain the Limitation on Subcontracting clause. Somehow, the ordering agency forgot to include this clause. In evaluating the proposals, the agency realized this particular FAR clause is missing. For very good reasons which I will not go into here, the agency believes it is best NOT to amend the solicitation. That would require allowing for revised proposals and starting the evaluation process all over from the beginning…

* * *

Any ideas?

govt2310:

I have an idea. Fire the contracting officer. This discussion is shameful. If you want the clause in, then amend the solicitation, like you know you should. If you don't want the clause in, then don't amend it. All this B.S. about the Christian Doctrine, etc., is a professional embarrassment. To even bring up the Christian Doctrine in this situation is a sign of dishonesty, bad faith, a lack of ethics, and an orientation toward third-rate legalistic skullduggery. In general, the government's conduct reveals its incompetence.

You know the right procedure. Follow it or don't. People at Wifcon must be bored to death to go into this at such length.

This thread is outrageous. I wish I knew what agency is involved in this episode.

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GOVT 2310 – Noting Vern’s advice to you I would caution you about adding the Subcontracting Limitation Clause to the Task Order without conferring with the GSA CO.

GSA has a longstanding position that adding provisions and clauses to a GSA FSS GWAC is okay as long as such provision/clause does not conflict with the original contract. This is supported by FAR 8.402(f) which suggests that if you add a conflicting clause it would create the situation that the TO is “open market” rather than a GSA FSS procurement due to the “conflict” situation.

Other additional support to my view is:

STARS II was a competitive 8(a) procurement and as such has some unique features that may not be found in other GSA FSS GWACS. Specific to the issue of Subcontracting Limitations the STARS II contract states the following:

15. SUBCONTRACTING CONSIDERATIONS

15.1. There are two related considerations that take center stage. The first is the Limitations on Subcontracting, and

the second is what is known as Pass Throughs. All STARS II prime contractors are responsible for managing the workload mix being performed under their contract(s) and Orders.

15.2. In accordance with the 13 CFR 125.6, and associated FAR Clause 52.219- 14, a small business concern contracting for services will perform at least 50 percent of cost of the contract incurred for personnel with its own employees. Similarly, STARS II prime contractors are expected to perform a meaningful amount of work/add significant readily-identifiable value on each Order to prevent pass-through situations. This is an area of increasing regulation, as evidenced by the DoD interim rule for pass throughs cited in GAO report GAO- 08-269, January 25, 2008, and as identified in Section 866 of the Duncan Hunter National Defense Authorization Act of 2009, P.L. 110-417 (“DHNDAA” or “NDAA 2009”).

15.3. It is a best practice for OCOs to require industry partners to disclose the amount of work they intend to perform with their own resources in Order RFQs and RFPs. OCOs may require Order invoice level subcontracting reporting should they wish to monitor these matters closely during Order performance. A good rule of thumb at the Order level is for the small business prime contractor to be expected to perform approximately 50% or more of the work itself, or to follow specific customer agency standards (such as those promulgated in DoD’s interim rule cited above).

15.4. It is reasonable and routine that on larger tasks small business prime contractors may manage capacity building through subcontracting with other mall business firms and other than small business firms to provide scalability in the early stages of performance. It is reasonable to consider the total prospective life cycle of an order, including option periods, when evaluating how much work the prime plans to perform for a given task order. OCOs may request a well-defined plan from 8(a) prime contractors to facilitate this review, and may qualitatively evaluate such plans during task order source selection if they establish that in their task order solicitations.

15.5. Consent to subcontract pursuant to FAR 44.2 is applicable on an ad hoc basis at the Order level. OCOs may require subcontractor responsibility determinations of prospective subcontractors per FAR 9.103 and 9.104-1. Consent to subcontract is not required at the Basic Contract level. 15.5. Consent to subcontract pursuant to FAR 44.2 is applicable on an ad hoc basis at the Order level. OCOs may require subcontractor responsibility determinations of prospective subcontractors per FAR 9.103 and 9.104-1. Consent to subcontract is not required at the Basic Contract level.

( Reference (a) STARS II Solicitation QTA609MCA0010 which GSA lists as the “Conformed Contract on the STARS II website’)

Adding 52.219-14 to a TO would be in direct conflict with this clause of the STARS II Contract in that GSA and the Contractor(s) are responsible for monitoring subcontract limitations at the contract level and not the Agency through an issued the TO. Ordering contracting officers monitor contractor performance to the “rule of thumb” which is a different standard than the explicit statements of 52.219-14 which again the GSA has retained authority over at the contract (not task order) level.

Additionally as supported by GSA instructions provided for in the STARS II Ordering Guide, which you already referenced, 13 CFR 124.510© is the guide for monitoring subcontracting not 52.219-14 which again is left in GSA’s and Contractor(s) hands at the contract level.

(Reference http://www.gsa.gov/portal/mediaId/171175/fileName/S2OrderingGuide.action) .

Link to discussion on the conflict position of GSA - https://interact.gsa.gov/wiki/adding-provisionsclauses-rfqs

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GOVT 2310 – Noting Vern’s advice to you I would caution you about adding the Subcontracting Limitation Clause to the Task Order without conferring with the GSA CO.

GSA has a longstanding position that adding provisions and clauses to a GSA FSS GWAC is okay as long as such provision/clause does not conflict with the original contract. This is supported by FAR 8.402(f) which suggests that if you add a conflicting clause it would create the situation that the TO is “open market” rather than a GSA FSS procurement due to the “conflict” situation.

Other additional support to my view is:

STARS II was a competitive 8(a) procurement and as such has some unique features that may not be found in other GSA FSS GWACS. Specific to the issue of Subcontracting Limitations the STARS II contract states the following:

15. SUBCONTRACTING CONSIDERATIONS

15.1. There are two related considerations that take center stage. The first is the Limitations on Subcontracting, and

the second is what is known as Pass Throughs. All STARS II prime contractors are responsible for managing the workload mix being performed under their contract(s) and Orders.

15.2. In accordance with the 13 CFR 125.6, and associated FAR Clause 52.219- 14, a small business concern contracting for services will perform at least 50 percent of cost of the contract incurred for personnel with its own employees. Similarly, STARS II prime contractors are expected to perform a meaningful amount of work/add significant readily-identifiable value on each Order to prevent pass-through situations. This is an area of increasing regulation, as evidenced by the DoD interim rule for pass throughs cited in GAO report GAO- 08-269, January 25, 2008, and as identified in Section 866 of the Duncan Hunter National Defense Authorization Act of 2009, P.L. 110-417 (“DHNDAA” or “NDAA 2009”).

15.3. It is a best practice for OCOs to require industry partners to disclose the amount of work they intend to perform with their own resources in Order RFQs and RFPs. OCOs may require Order invoice level subcontracting reporting should they wish to monitor these matters closely during Order performance. A good rule of thumb at the Order level is for the small business prime contractor to be expected to perform approximately 50% or more of the work itself, or to follow specific customer agency standards (such as those promulgated in DoD’s interim rule cited above).

15.4. It is reasonable and routine that on larger tasks small business prime contractors may manage capacity building through subcontracting with other mall business firms and other than small business firms to provide scalability in the early stages of performance. It is reasonable to consider the total prospective life cycle of an order, including option periods, when evaluating how much work the prime plans to perform for a given task order. OCOs may request a well-defined plan from 8(a) prime contractors to facilitate this review, and may qualitatively evaluate such plans during task order source selection if they establish that in their task order solicitations.

15.5. Consent to subcontract pursuant to FAR 44.2 is applicable on an ad hoc basis at the Order level. OCOs may require subcontractor responsibility determinations of prospective subcontractors per FAR 9.103 and 9.104-1. Consent to subcontract is not required at the Basic Contract level. 15.5. Consent to subcontract pursuant to FAR 44.2 is applicable on an ad hoc basis at the Order level. OCOs may require subcontractor responsibility determinations of prospective subcontractors per FAR 9.103 and 9.104-1. Consent to subcontract is not required at the Basic Contract level.

( Reference (a) STARS II Solicitation QTA609MCA0010 which GSA lists as the “Conformed Contract on the STARS II website’)

Adding 52.219-14 to a TO would be in direct conflict with this clause of the STARS II Contract in that GSA and the Contractor(s) are responsible for monitoring subcontract limitations at the contract level and not the Agency through an issued the TO. Ordering contracting officers monitor contractor performance to the “rule of thumb” which is a different standard than the explicit statements of 52.219-14 which again the GSA has retained authority over at the contract (not task order) level.

Additionally as supported by GSA instructions provided for in the STARS II Ordering Guide, which you already referenced, 13 CFR 124.510© is the guide for monitoring subcontracting not 52.219-14 which again is left in GSA’s and Contractor(s) hands at the contract level.

(Reference http://www.gsa.gov/portal/mediaId/171175/fileName/S2OrderingGuide.action) .

Link to discussion on the conflict position of GSA - https://interact.gsa.gov/wiki/adding-provisionsclauses-rfqs

C Culham,

Excellent job quoting the 8(a) STARS II Contract. Agree with your position. However, within some other parts of your discussion you are confusing FSS with a GWAC. There is no such animal as an "FSS GWAC". For example, 8.402(f) is not applicable to 8(a) STARS II. Your link to interact discussion is for FSS. While the analogy is the same, FSS has nothing to do with 8(a) STARS II other than they are both GSA Vehicles. Just like a chipmunk is not a cinder block, FSS Contracts awarded under FAR 8.4 are NOT GWACs awarded under FAR 16.5.

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C Culham - Thank you for clearing that up. I was going to say something about that (how 8(a) STARS II is under FAR 16.5, not FAR 8.4), but you did it for me. Thanks!

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shikakenin - You are correct, sorry for the confusion. In place of my refernece to FAR 8.402(f) the reference would be the STARS II ordering guide which states:

"STARS II was established with commercial terms and conditions. Additional FAR provisions and clauses that do not conflict with the basic contract may be added at the order level. If the OCO intends to implement non-commercial terms and conditions, he/she should structure the order RFQ or RFP accordingly.

Provisions and clauses that supplement the FAR, which are prescribed and included in authorized agency acquisition regulations, may be added at the order level so long as they are not inconsistent with the basic contract. Refer to FAR 52.101 ( B)(2)(i)(A-C) for examples of provisions and clauses."

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As part of the 8(a) STARS II ordering process, the ordering agency CO must submit the draft solicitation to the Master Contract's CO (in this case, that would be a GSA CO as the 8(a) STARS II GWAC is run by GSA). The GSA CO must conduct a "scope review" to ensure the task order solicitation SOW and terms are within the scope of the Master Contract. If the Limitation on Subcontracting clause were included in the task order solicitation, the GSA CO is supposed to catch it and flag it as an issue, if it is an issue.

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The real question is why an ordering CO would want to apply the limitation to a task order. SBA does not require that. See 13 CFR 124.510( c )(1). GSA does not require that. By doing that the ordering CO makes the limitation his problem, instead of just the GSA CO's problem, and deprives the contractor of some flexibility that he has under the 8(a) STARS II contract.

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So, does this mean that the original posting was in error when it asserted that "[t]he Master Contract requires the task order solicitations to contain the Limitation on Subcontracting clause"?

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