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dennismcgowan

Contracts as a contingency against failure of logistics system

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Folks,

It has been some time since I posted here, but I need a hand. My concern is a customer wishes to use a contract as a back up to the existing logistics system being employed. I remember reading in the FAR, DFARS or AFARS that contracts will not be used as a contingency against the failure of an existing contract or other manner of receiving support.

Does anyone have a similar recollection? Thanks!

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Follow up. My question isn't about contingent liabilities. I am have a recollection of a prohibition against using contracts as back ups, or safety nets from the stand point of doing so largely being a waste of valuable 1102 time.

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Guest Jason Lent

Is you customer hoping to include some sort of CLIN for ordering materials that might be slightly related to contract performance?

An example would be a contract for multimedia services that includes a cost reimbursement aspect where the contractor can order replacement parts or upgraded hardware?

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More info is needed on what and how is being procured now and how they want to back it up.

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More info is needed on what and how is being procured now and how they want to back it up.

I agree with Boof. Before answering a general question, it would be necessary to know what type of materials or equipment are involved, some idea of the size of orders, etc. There may be alternative methods other than a "contract". What kinds of "failure" of an existing contract are you referring to?

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Gentlemen,

I fully realize the vagueness in my question and the desire of contracting professionals to have as much detail as possible. The product in question is food. Various types. Failure would be the inability of the government provider (supply system) to deliver the food. That is a much as I can provide, unfortunately.

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Could you set up basic ordering agreement(s) that can be used for orders only when needed as a back up?

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Along the lines of Joel's thinking, Multiple Award Contracts/Agreements are an example of contract duplication that is generally acceptable. One of the statutory exceptions for limiting competition in FAR 6.302-3 is to limit competition to "maintain properly balanced sources of supply for meeting the requirements of acquisition programs in the interest of industrial mobilization." Further, it is an interesting omission that FAR 8.002 through 8.003 (Required Sources of Supply) make no mention of existing agency contracts. I believe that some level of contract duplication is an acceptable business practice, but depending on the circumstances of the contract and operational necessity. Therefore, duplication of a contract is not expressly prohibited, but should be used only when it makes business sense.

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Could you set up blanket purchase agreement(s) that can be used for orders only when needed as a back up? Actually, a BPA was what I was thinking about earlier but In my haste while stopped on the side of the road, I mistakenly referred to a BOA. We don't know the size of an order that might be needed in the event of a problem with the regular food supplier.

The USACE was chastised about 15-20 years ago for having a plethora of MATOCs that resulted in many being "hollow contracts" with a paucity of actual orders. In addition to much duplication, the contracts had large order limits and overall estimated dollar estimates but were seldom maxed out in practice. In addition, if they are only to be used as a back-up for contingency purposes, it wouldn't seem prudent to have guaranteed minimums associated with them.

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Well you are reading some of the posts anyway. Sorry, I can't answer your initial questions. I'm trying to offer an alternative that doesn't involve establishing a pre-standing contract that might or might not be used. It could provide short term contingency source of food. Don't know if you have considered such an alternative.

Of course we don't know how much food or the duration that might be involved. We don't know if the current requirement is in support of a contingency operation, which would provide more liberal contracting rules and limits in the event of some type of "failure". You don't need to reveal too much info if you don't want to.

Setting up BPAs might allow you to find alternative sources that could be drawn upon to meet short term needs if necessary. It would seem to methat you could evoke expedited contracting methods under urgent and compelling circumstances. It appears that you'd like to have at least the knowledge of alternate sources ahead of time if thats why you are considering establishing a contingency backup contract.

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Joel offered,

I believe that some level of contract duplication is an acceptable business practice, but depending on the circumstances of the contract and operational necessity. Therefore, duplication of a contract is not expressly prohibited, but should be used only when it makes business sense.

I agree, but would make one small change for nuance,

I believe that some level of contract duplication is an acceptable business practice, but depending on the circumstances of the contract and operational necessity. Therefore, duplication of a contract is not expressly prohibited, but should be used only whenever it makes business sense.

We award contracts to meet needs. If you have a need for back-up support, you can write a contract for it.

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That was Metteec, not me, regarding the acceptability of duplicate contracts.

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While I worked in Europe, my office used to write contracts that would provide, as needed, fresh fruits and vegetables, water and other products required by forces afloat and in contingency ops.

We had no problem with duplication of support provided by DLA or the Navy Commissary system.

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When a customer asks the PM, KO or Specialist to initiate a backup contract overseas, wouldn't it be best for the PM, KO or Specialist would ask someone higher up in their agency's contracting chain, who should also have access to legal and finance and accounting experts. Why pose a vague, general question, that you aren't at liberty to explain, here on an open forum?

Aren't there any PARC's or other higher level contracting policy experts in government agencies that folks can refer questions to these days?

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Of course, one should check with the controlling operational organization. We checked with CINCUSNAVEUR to assure there was a need for the supplies or services we would place under contract.

Sometimes, Army and AF needed our contracts for provisions, contingency support, ship repair, car rental, or air terminal services. So, we wrote them broadly.

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