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Multiple Contracts for Same Requirement


JDRYKS

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JDRYKS, before you get hit for not posting this in the newbie section your question is way to vague. But in some instances you need to look at multiple awards first. Again I don't know what you are exactly asking. In the example below you can see the use of multiple awards

16.504 Indefinite-quantity contracts

c) Multiple award preference?

(1) Planning the acquisition.

(i) Except for indefinite-quantity contracts for advisory and assistance services as provided in paragraph ©(2) of this section, the contracting officer must, to the maximum extent practicable, give preference to making multiple awards of indefinite-quantity contracts under a single solicitation for the same or similar supplies or services to two or more sources.

(ii)(A) The contracting officer must determine whether multiple awards are appropriate as part of acquisition planning. The contracting officer must avoid situations in which awardees specialize exclusively in one or a few areas within the statement of work, thus creating the likelihood that orders in those areas will be awarded on a sole-source basis; however, each awardee need not be capable of performing every requirement as well as any other awardee under the contracts. The contracting officer should consider the following when determining the number of contracts to be awarded:

(1) The scope and complexity of the contract requirement.

(2) The expected duration and frequency of task or delivery orders.

(3) The mix of resources a contractor must have to perform expected task or delivery order requirements.

(4) The ability to maintain competition among the awardees throughout the contracts? period of performance.

(B) The contracting officer must not use the multiple award approach if?

(1) Only one contractor is capable of providing performance at the level of quality required because the supplies or services are unique or highly specialized;

(2) Based on the contracting officer?s knowledge of the market, more favorable terms and conditions, including pricing, will be provided if a single award is made;

(3) The expected cost of administration of multiple contracts outweighs the expected benefits of making multiple awards;

(4) The projected task orders are so integrally related that only a single contractor can reasonably perform the work;

(5) The total estimated value of the contract is less than the simplified acquisition threshold; or

(6) Multiple awards would not be in the best interests of the Government.

© The contracting officer must document the decision whether or not to use multiple awards in the acquisition plan or contract file. The contracting officer may determine that a class of acquisitions is not appropriate for multiple awards (see Subpart 1.7).

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I'll be the first to admit to being a newbie. I have no pride so that's ok. If there is a different location to ask these questions I'd be happy to. If you told me to send up smoke signals to get some answers I'd probably do that to. B) Believe me, I very much appreciate the help i've gotten so far from these discussions.

Attempt to Clarify: I have an FFP contract that states in the statement of work that the vendor shall accomplish all approved aircraft modifications as directed by the ACO and PCO. No specific modifications are mentioned. The FMS customer wants the aircraft modified by a different vendor. I'm told that since we have this vendor on contract for this capability we cannot contract to anyone else for this same capability. Every local contracting officer I speak with says there is a FAR or clause that states you can't have two vendors on contract for the same effort unless it is a multiple award IDIQ. I just want to be able to point to that FAR or clause when I explain this to our FMS customer.

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Guest Vern Edwards
Every local contracting officer I speak with says there is a FAR or clause that states you can't have two vendors on contract for the same effort unless it is a multiple award IDIQ.

What do you mean by "the same effort"?

Let's consider two scenarios.

In Scenario 1, Aircraft 54637 must be repaired. If you hired two contractors to make the same repairs to the aircraft, you would be hiring two to perform "the same effort." There is no express rule in FAR against it that I know of, probably because no one thinks that anyone would be stupid enough to do it.

In Scenario 2, ten C-130s must be repaired in exactly the same way. All of the aircraft are parked on the same flight line. There is no problem with hiring one contractor to repair 1 through 9 and another to repair 10. In that case you would not be hiring two contractors to perform "the same effort." You don't need to award an IDIQ contract.

Now, do you have a scenario in mind other than the two I just discussed that explains what you mean by "the same effort"?

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Or is it Scenario 3:

You have a requirement to repair a C-130 for an FMS customer. You have an IDIQ contract with Contractor A to repair C-130s. Although you could, the FMS customer does not want you to issue a task order to Contractor A to repair his C-130. He wants you to use Contractor B.

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If the FMS customer wants you to contract to a particular contractor, you can go ahead and do it....provided that foreign government specifies that particular firm in an official direction to the U.S. Govt, such as a Letter of Offer and Acceptance [FAR 6.302-4(B)(1)]. If the FMS customer does that, then FAR 6.302-4 International Agreement applies and you can award a sole source contract for effort that is "duplicate" (with the exception of which country owns the aircraft) with another Govt. contract.

If the FMS customer will not officially specify the particular firm, then you will have trouble justifying a sole source contract to a new contractor if identical work is being currently provided by another contractor.

The FMS customer can insist on its own contract (after all, it is the foreign country's money, not the U.S. Govt.'s). However, there is still no guarantee the FMS customer's preferred contractor would win the contract.

Otherwise, I know of no prohibition for two Government contracts buying the same thing. In fact, the Govt. does this all the time. Different federal agencies are buying the same things at the same time under different contracts. Fortunately, the Govt. is trying to leverage economies of scale when it can via "Strategic Sourcing" initiatives.

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If the FMS customer wants you to contract to a particular contractor, you can go ahead and do it....provided that foreign government specifies that particular firm in an official direction to the U.S. Govt, such as a Letter of Offer and Acceptance [FAR 6.302-4(B)(1)]. If the FMS customer does that, then FAR 6.302-4 International Agreement applies and you can award a sole source contract for effort that is "duplicate" (with the exception of which country owns the aircraft) with another Govt. contract.

If the FMS customer will not officially specify the particular firm, then you will have trouble justifying a sole source contract to a new contractor if identical work is being currently provided by another contractor.

The FMS customer can insist on its own contract (after all, it is the foreign country's money, not the U.S. Govt.'s). However, there is still no guarantee the FMS customer's preferred contractor would win the contract.

Otherwise, I know of no prohibition for two Government contracts buying the same thing. In fact, the Govt. does this all the time. Different federal agencies are buying the same things at the same time under different contracts. Fortunately, the Govt. is trying to leverage economies of scale when it can via "Strategic Sourcing" initiatives.

While I am getting off the original topic somewhat, I think that "two Government contracts buying the same thing" is not what JDRYKS meant. As I read his post and the follow-ons, we are talking about the same agency having two contracts to do the same work on the same aircraft because the FMS customer wants a different vendor. In that case, leaving aside the FMS aspect, my response is that the agency does not have a bona fide need for the second contract because the first contract already has and continues to fulfill that need. Customer preference does not constitute a BFN. Thus, I would argue that the agency cannot properly obligated the 2nd contract funds without violating the Anti-Deficiency Act (again, without addressing the unique aspects of FMS funding).

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The only clause I can think of that limits you to one Contractor is the Requirements Clause (52.216-21).

( c ) Except as this contract otherwise provides, the Government shall order from the Contractor all the supplies or services specified in the Schedule that are required to be purchased by the Government activity or activities specified in the Schedule.

However, even this clause has 2 "outs". The first is the statement "Except as this contractor otherwise provides", and the second is paragraph (e)

(e) If the Government urgently requires delivery of any quantity of an item before the earliest date that delivery may be specified under this contract, and if the Contractor will not accept an order providing for the accelerated delivery, the Government may acquire the urgently required goods or services from another source.

Is this an IDIQ or Requirements contract?

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JD, you may be thinking of requirements contracts, which are intended to be used for all purchase requirements for designated supplies or services, with exceptions, as Desperado pointed out. Thus, if the work is presently carried out under a requirements contract. you wouldn't normally split the work.

"16.503 -- Requirements Contracts.

(a) Description. A requirements contract provides for filling all actual purchase requirements of designated Government activities for supplies or services during a specified contract period, with deliveries or performance to be scheduled by placing orders with the contractor.

(1) For the information of offerors and contractors, the contracting officer shall state a realistic estimated total quantity in the solicitation and resulting contract. This estimate is not a representation to an offeror or contractor that the estimated quantity will be required or ordered, or that conditions affecting requirements will be stable or normal. The contracting officer may obtain the estimate from records of previous requirements and consumption, or by other means, and should base the estimate on the most current information available.

(2) The contract shall state, if feasible, the maximum limit of the contractor?s obligation to deliver and the Government?s obligation to order. The contract may also specify maximum or minimum quantities that the Government may order under each individual order and the maximum that it may order during a specified period of time.

(B) Application.

(1) A requirements contract may be appropriate for acquiring any supplies or services when the Government anticipates recurring requirements but cannot predetermine the precise quantities of supplies or services that designated Government activities will need during a definite period.

(2) No requirements contract in an amount estimated to exceed $100 million (including all options) may be awarded to a single source unless a determination is executed in accordance with 16.504©(1)(ii)(D).

© Government property furnished for repair. When a requirements contract is used to acquire work (e.g., repair, modification, or overhaul) on existing items of Government property, the contracting officer shall specify in the Schedule that failure of the Government to furnish such items in the amounts or quantities described in the Schedule as ?estimated? or ?maximum? will not entitle the contractor to any equitable adjustment in price under the Government Property clause of the contract.

(d) Limitations on use of requirements contracts for advisory and assistance services.

(1) Except as provided in paragraph (d)(2) of this section, no solicitation for a requirements contract for advisory and assistance services in excess of three years and $11.5 million (including all options) may be issued unless the contracting officer or other official designated by the head of the agency determines in writing that the services required are so unique or highly specialized that it is not practicable to make multiple awards using the procedures in 16.504.

(2) The limitation in paragraph (d)(1) of this section is not applicable to an acquisition of supplies or services that includes the acquisition of advisory and assistance services, if the contracting officer or other official designated by the head of the agency determines that the advisory and assistance services are necessarily incident to, and not a significant component of, the contract."

Except for requirements contracts, one could compete the work between other in-scope ID/IQ contracts.

Also, in the event that you have a new requirement that meets an "urgent and compelling" exception to full and open competition und FAR 6.302-2, one could compete it among availalble contractors on an installation. That is a more preferrable solution to me than sole sourcing urgent and complelling requirements under an exception in FAR 6.302-2. I have competed such new work between various contractors working on an installation, then added the work as an out of scope supplemental agreement on the winner's contract.

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  • 3 weeks later...

I am a newbie here... so please advise if I have posted in the wrong area. However, I am very interested in this particular topic as I currently have a very similar issue. My organization is part of a DoD unit that is currently co-located with another DoD agency --- "we" are using a new contract for the provision of bulk cargo type products --- under a Requirements / IDIQ contract which was awarded by yet a third DoD agency. The "issue" is this... our 'sister' agency does not appreciate the 'nuances' of the required (WAWF) payment process under the current contract and they are now seeking to establish their own contract. Their contract is to run concurrently with the present contract, using the same funds, the same contractor, for the same products, the same delivery points , at the same times, the same period of performance and (hopefully), the same prices! My questions: does this not circumvent the intent of a "requirements" contract? Wouldnt the contractor have grounds for additional costs (G&A, Overhead, etc) under the new contract? I am sure there may also be other 'issues' to consider here and would like your thoughts/feedback/suggestions/ideas. Thank you and I look forward to receiving your input.

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We need answers to two questions before anyone can respond. First, are you sure it is a "Requirements" type of contract? You said "Requirements/IDIQ." Those are actually different. Within Indefinite Delivery types of contracts, you have a "Requirements" type and an "Indefinite Quantity." Indefinite Delivery is often referred to as IDIQ.

The second question is what does the scope of the contract say? Even if it were a Requirements type, the use might only be required for one agency and not the other.

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We need answers to two questions before anyone can respond. First, are you sure it is a "Requirements" type of contract? You said "Requirements/IDIQ." Those are actually different. Within Indefinite Delivery types of contracts, you have a "Requirements" type and an "Indefinite Quantity." Indefinite Delivery is often referred to as IDIQ.

The second question is what does the scope of the contract say? Even if it were a Requirements type, the use might only be required for one agency and not the other.

FormerFed... thanks for the input --- and my apologies for the vagueries!

But, in answer to your questions:

1. The contract is a definitely a "requirements" contract --- with estimated minimum and maximum quantities (the commodity is: fuels).

2. The estimated quantities for the 'sister' agency were provided by that agency.

3. The contract was issued to cover their requirement in consolidation with the two other co-located agencies.

4. Solely for the purpose of 'consolidation and 'ecomomies of scale' a third agency was selected to solicit and award this contract.

Hope this info further claarifies the situation... and thanks again for any input/ideas/assistance!

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soboco,

It doesn't make any difference who awarded the contract, it still is a requirements contract to satisfy the needs of the designated agency(s). If your "sister" agency pulled out from ordering under the contract just because they don't like the nuances of the payment process, they (or the government) are in breach. Perhaps they didn't understand what they were getting themselves in for when they provided estimates of their needs to the third agency placing the contract.

However the contractor is the injured party. What happens next depends upon them. They could agree to a seperate contract at the same prices to your "sister" agency. Or they might want higher prices for one or both contracts as compensation. Regardless an ordering agency not liking the nuances of the payment process doesn't sound like valid basis to back out of a contract and establish a new one.

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Guest Vern Edwards
My organization is part of a DoD unit that is currently co-located with another DoD agency --- "we" are using a new contract for the provision of bulk cargo type products --- under a Requirements / IDIQ contract which was awarded by yet a third DoD agency. The "issue" is this... our 'sister' agency does not appreciate the 'nuances' of the required (WAWF) payment process under the current contract and they are now seeking to establish their own contract. Their contract is to run concurrently with the present contract, using the same funds, the same contractor, for the same products, the same delivery points , at the same times, the same period of performance and (hopefully), the same prices! My questions: does this not circumvent the intent of a "requirements" contract? Wouldnt the contractor have grounds for additional costs (G&A, Overhead, etc) under the new contract? I am sure there may also be other 'issues' to consider here and would like your thoughts/feedback/suggestions/ideas. Thank you and I look forward to receiving your input.

Emphasis added.

Come on, newbie! Think about it. Yes, what your "sister" agency is doing circumvents the contract. That's what they want to do, because they don't like the contract. The contractor is partially to blame for the situation, because it is going along with the new contract. It's a co-conspirator. (It probably doesn't like WAWF either.)

Tell the contractor that you want to partially terminate your contract for convenience in order to delete the "sister" agency and its requirements. Yes, the contractor would ordinarily seek an increase of the unit prices in response to the reduction in quantities, in order to recover its fixed costs and unabsorbed overhead. If the contractor seeks to do that, tell them to get lost, that you want a no cost settlement, because you won't reward them for going along with the new contract. Make it clear to the contractor that it has to take some responsibility for the need to T for C. Take the role of the injured party. Demand a no cost settlement, meaning that the product unit prices are not changed.

Make sure that you do not link the no cost settlement to orders under the new contract. I know that sounds inconsistent, and it is. But hang tough. Blame the contractor for your predicament. If they threaten not to go along, tell them you'll T for C anyway and let them file a claim. Tell them they can tell their story to the board of contract appeals or the Court of Federal Claims and explain why they should be rewarded for their role in the conspiracy with the "sister" agency.

Alternatively, do nothing. If the contractor complains that it is not getting the orders under the contract that it should, tell them that it's their own fault. Tell them to file a claim and to prepare to explain it all to the board or the court.

The T for C approach is more work, but would be more fun. You'd get to show your stuff as a negotiator. Consider it a training opportunity--an opportunity to excel.

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I tend to agree with Vern, here. And a partial Convenience Termination would clean up the contract to avoid future claims. This would be especially important if the contract admin team changes over the course of the contract. However, it looks like another agency has the contract (Defense Fuels Agency, perhaps?).

What is "WAWF"?

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Guest Vern Edwards

Wide Area Work Flow.

Wide Area Workflow (WAWF) is a secure web based system for electronic invoicing, receipt, and acceptance. WAWF allows government vendors to submit and track invoices and receipt/acceptance documents over the web and allows government personnel to process those invoices in a real-time, paperless environment. It is also the only application that will be used to capture the Unique Identification (UID) of Tangible Items information. WAWF is in accordance with the 2001 National Defense Authorization Act (DFARS 252.232-7003/252.232.7003 Electronic Submission of Payment Requests - January 2004) which requires claims for payment under a Department of Defense Contract to be submitted in electronic form.

As of March 03, 2008, DOD has issued a final rule amending the Defense Federal Acquisition Regulation supplement (DFARS) to require use of the Wide Area Workflow as the only acceptable electronic system for submitting requests for payment (invoices and receiving reports) under DOD contracts.

https://wawf.eb.mil/

It's yet another gift of the IT community, complete with complex registration, user IDs, passwords, goofy new procedures to learn, help desk, and never-ending system messages, fixes, and workarounds. You don't want to know what I ask for when I pray about IT.

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