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Dash 8 Clause (FAR 52.217-8) and Major Contracting Services GAO decision


govt2310

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Some people are trying to do this, and it is a big problem. The best answer is NO.

You cannot dollarize the value of a -8 option with any confidence. The reason for the -8 option is from FAR 37.111, not anything at all related to the Government's computed need.

Since the -8 option is limited in time to six months, and since its price will be derived from prices already established in the contract, to me it makes no sense to try to dollarize it before award. Let's carry this thing to a rational conclusion -- can you include a -8 option under FAR 37.111 in a contract with a base year and four one-year options? Now you have exceed the five year period of performance rule, some will say. No, it is best not to count the -8 for total dollars and also not to count it for period of performance. That's my opinion.

It seems we're using the -8 option even while we have lost all sight of the purpose of FAR 37.111.

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Guest Vern Edwards

Some people are trying to do this, and it is a big problem. The best answer is NO.

You cannot dollarize the value of a -8 option with any confidence. The reason for the -8 option is from FAR 37.111, not anything at all related to the Government's computed need.

That's nonsense. It is a problem, a complication, but it is not beyond solution. You can and must "dollarize" the -8 option in order to evaluate it during source selection, as the GAO expressly requires based on rules in FAR Subpart 17.2 (see Major Contracting Services, Inc., Comp. Gen. Dec. B-401472, 2009 CPD ¶ 170, recons. denied, 2009 CPD ¶ 250), and to include the value of the option when applying dollar thresholds, as FAR 1.108( c) expressly requires. There are any number of ways to do it and produce a reasonable estimated dollar amount. Choose one. Document your rationale. Get on with the job.

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Vern,

That's what we do -- we take the value of the last performance option period and we cut it in half to arrive at a 12-month price -- but in reality, we might exercise the option at the end of the first year rather than at the end of the fifth year -- and we might exercise it for two months instead of six months -- there are so many possible permutations -- so we artifically dollarize it as I described solely for the sake of "complying" with the GAO decision but not for any common-sense business reason. Don's posting no. 25 said he thought no one was doing it. You expressed somewhere previously that you thought the GAO decision was a poor decision, and I agree, but we're complying. In a way, I wish I was wherever Don is so that we didn't have to comply.

I think the -8 should not be included in cost estimates and FPDS-NG reports and FAR Subpart 5.3 reports -- that's my opinion -- but we do it in an effort to comply with the GAO decision. Well, actually, we go further -- the GAO decision only said we had to evaluate the -8 option in order to exercise it later without a J&A or other justification -- but we're going further and are including an artificially dollarized amount for the -8 options in our FPDS-NG reports and so forth, even though we don't create CLINs for the -8 option.

Don,

Just to make it clear, yes, there are organization who are doing what you're supposing no one is doing. But some organizations aren't. For those that aren't, I don't know if that is because they are unaware of the decision or because they disagree with it.

p.s. The contracting officer for the porta-potties that drove the GAO decision later came to work for my organization -- he has some interesting insights.

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Guest Vern Edwards
I think the -8 should not be included in cost estimates and FPDS-NG reports and FAR Subpart 5.3 reports -- that's my opinion....

I understand, but you have no regulatory basis for not calculating and including it. If you do exclude it, you run the risk of a protest. What makes the most sense? By the way, I wrote a Nash & Cibinic Report article that was critical of the GAO decision. But so what. We have it, and there it is. Your statement that you "cannot" dollarize it with any confidence is simply wrong. Pure and simple. You can dollarize all sorts of contingencies and speculations with varying degrees of confidence.

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