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Legal Impact of Solicitation Responses under IDIQ Contracts


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Guest Vern Edwards

CharliD:

The key thing to do is this: Read FAR 16.505 thoroughly. ji20874 is correct in emphasizing that. Know it inside and out. Pay special attention to 16.505( b )(1). Note that it does not prescribe a detailed procedure for providing a fair opportunity, so develop a procedure or set of procedures that complies with specific direction but that is efficient, fast, and inexpensive for the contractors. As much as possible, avoid the FAR Part 15 process model and its attendant terminology (competitive range, clarifications, discussions, final proposal revisions, etc.).

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I don't see anything wrong with using RFP in the context of requesting proposals for a new task order against a multiple award contract. If you had 2 or more small business you could send out a "notice" of a planned small business set-aside for a new task order, then based on the response send out the actual task order "solicitation" (RFP) accordingly once the acquisition strategy was determined.

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Oh, TAP -- please, no -- don't tell me I have to do a notice and then a solicitation!

No, no , no. [I hope this isn't too doctrinaire :-) ]

The notice required by FAR 16.505( b )( 2 )( iii )( B )( 1 ) or ( iv )( A ) is all that is required -- you don't need a notice and then a separate solicitation. In this regard, the notice is the solicitation, whether you call it a notice or a solicitation or a TORP or a TORFP or whatever other term is being used.

Anyone involved in this business really needs to actually read FAR 16.505( b ). I also recommend that they follow it.

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Guest Vern Edwards

Chill. You're being silly. A notice could be an email:

To: All contractors

Fm: Contracting officer

Subject: Notice of fair opportunity

Hi all. This is a heads up notice pursuant to FAR 16.505( b ) that we're going to buy services under the contract by issuing a task order. We plan to email the TORFP for a firm-fixed-price order in about 10 days from today. The TORFP will include the statement of work. We expect the price to be no more than $,$$$,$$$.

We will give you 5 days to comment on the statement of work, which we will then finalize within 5 days. We plan to give you 10 days to email your proposals to me after we send you the final version of the SOW. The evaluation factors will be past performance and price, which will be equally important. We'll evaluate past performance based on what we already know. No need to submit anything but a price.

Please acknowledge this email and let me know tomorrow by the close of business whether you plan to submit a proposal, then get ready to rumble. We plan to keep this thing simple and get it done likety-split.

Call me if you've got worries that are going to keep you up at night.

Thanks, Contracting Officer

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How about using the notice as the solicitation, as contemplated by FAR 16.505( b )? Something like,

To: All Contractors

Fm: Contracting Officer

Subject: Notice of Fair Opportunity

Hi all. This is a notice pursuant to FAR 16.505( b ) that we're going to buy services under the contract by issuing a task order. The statement of work is attached. We expect the price to be no more than $,$$$,$$$.

You are afforded an opportunity to respond to this notice by submitting an offer for the Government's consideration. Your response is due to me by reply e-mail by [date]. The evaluation factors will be based on past performance and price, which will be equally important. We'll evaluate past performance based on what we already know. No need to submit anything but a price, in the following format:

. Item Description Qty Unit Unit Price Amount

. 001 Services As Described 12 MO $_____ $_____

. in SOW

Call me if you've got worries that are going to keep you up at night.

Thanks, Contracting Officer

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I didn't say you had to do a notice and then a solicitation. I would probably only do so if I had 2 or more small business, as well as other than small businesses, and I planned on soliciting as a small business set-aside. If 2 small business didn't respond I'd then go unrestricted.

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Guest Vern Edwards

ji20874:

I'd buy that. However, in my original formulation the contractors get five days to comment on a draft SOW before they have to submit a proposal. I like that feature. That's why the heads up notice before the solicitation.

Remember, there are virtually no rules under FAR 16.505( b ). I would keep it informal, simple, and fast, but I want a chance to get feedback from offerors and maybe even to discuss it with them before I ask them to commit.

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A notice of intent may (or may not) be presented as a solicitation:

Notice of intent that is a solicitation: The Government intends to place an order for XYZ on 9/2/15. The purchase will be made based on price alone and will be awarded to the contract holder offering the lowest price. Please submit your best pricing for XYZ by COB 9/1/15.

Notice of intent that is not a solicitation: The Government intends to place an order for XYZ on 9/2/15. The purchase will be made based on price alone and will be awarded to the contract holder offering the lowest price. The Government will consider IDIQ established prices and all subsequent pricing offers submitted to the Government by COB 9/1/15.

In the first example the notice is requesting an offer “please submit…”. In the second example the notice does not request anything. It only states what the Government intends to do.

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  • 3 months later...

FAR 2.101 "Contract" appears to define a Task Order as a contract that becomes effective by written acceptance or performance.

If a RFP is issued under a multiple award task order contract, would the government's acceptance of the offer/proposal and resultant issuance of a Task Order create a binding contract or would the contractor need to sign or perform in order to establish a contract?

How about if a RFQ is issued under a multiple award task order contract, would the government's resultant issuance of a Task Order create a binding contract or would the contractor need to sign or perform in order to establish a contract?

How do you navigate clauses such as 52.216-22 that seem to indicate that once the government issues an order in accordance with the ordering clause that a contractor is bound to furnish the services?

In an effort to harmonize everything (definitions, forms DD 1155/SF 26, clauses, law, etc.), does it make more sense to issue solicitations, under IDIQs, without labeling them RFQ, RFP, etc.? Interesting enough, FAR 16.505 only uses the term quote for ordering instructions under the SAT. It uses the term offer for ordering instructions under and over the SAT.

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If a RFP is issued under a multiple award task order contract...

Why would you issue a RFP under a multiple award task order contract? FAR 16.505( b ) says nothing about an RFP. Since the FAR doesn't use that term, I don't use that term. Rather, FAR 16.505( b )( 1 )( iii )( B )( 1 ) (for proposed actions exceeding the SAT) and 16.505( b )( 1 )( iv ) (for proposed actions over $5.5 Million) uses the term "notice." I recommend you use the term "notice" for your solicitation instead of RFQ or RFP. The notice is supposed to include all the essential information so a contract holder can respond and be considered.

FAR 2.101 "Contract" appears to define a Task Order as a contract that becomes effective by written acceptance or performance.

No, it doesn't. You might be conflating purchase order and task order. FAR 2.101 defines contract as including purchase orders, not task orders, that become effective by written acceptance or performance.

With those two notions knocked down, then the clauses at FAR 52.216-18 and -22 are left by themselves, and the correct principle is undisturbed -- a task order is effective and binding upon issuance. If you don't label your notices (or solicitations) as RFPs or RFQs, you can help avoid the problems that others create when they try to impose FAR Part 13 or 15 procedures onto fair opportunity considerations under FAR 16.505( b ).

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ji20874:

The terms quote and offer appear to be strategically placed in FAR 16.505. It seems logical that RFQs net quotes, and IFBs and RFPs net offers. This is supported in 2.101 under "solicitation".

How do you reconcile language in 2.101, which states "Contract means...orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance..."?

See also - http://www.wifcon.com/discussion/index.php?/blog/6/entry-2044-dar-council-interprets-contract-to-include-task-and-delivery-orders/

Note, I don't favor this interpretation. Furthermore, I believe I understand what you are getting at with identifying the solicitation as a notice, but that doesn't address the fact that 16.505 uses the terms quote or offer explicitly.

Quote and offer is used below the SAT suggesting we can solicit either, but offer is used exclusively over the SAT. Does that suggest we should only solicit offers over the SAT? If it's not expressly prohibited by rule, it should be allowable to request quotes over the SAT.

Despite what the solicitation was called, the contractors submission seemingly has to be considered as a quote or an offer. If that's true, we know the legal effects of quotes and offers, which may lead to the inconsistencies I originally stated.

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Guest Vern Edwards
With those two notions knocked down, then the clauses at FAR 52.216-18 and -22 are left by themselves, and the correct principle is undisturbed -- a task order is effective and binding upon issuance. If you don't label your notices (or solicitations) as RFPs or RFQs, you can help avoid the problems that others create when they try to impose FAR Part 13 or 15 procedures onto fair opportunity considerations under FAR 16.505( b ).

Emphasis added.

Not necessarily.

The ordering clause, FAR 52.216-18, is dated 1995. It was written before the emergence of the modern task order contract. It was written with the expectation that the items in IDIQ contracts would be fully priced, and so an "order" would be just that -- a command -- that could be issued once the Government unilaterally determined the quantity to be acquired. But today's task order contracts commonly do not stipulate specific tasks or task prices. They stipulate only labor rates, and the Government may be not be contractually empowered to dictate either the kinds or hours of labor that are to be consumed in performance. In such a case, and absent a contract term to the contrary, an order cannot be priced without mutual assent. Under some task order contracts, contractors are not even required to submit quotes or offers for prospective task orders.

If an order cannot be priced without mutual assent, then it follows that it is not binding upon issuance without mutual assent. The question thus becomes: How will the parties manifest mutual assent? Is the order an acceptance of an offer by the Government? Is it an offer from the Government that is to be accepted by the contractor, either by signature or performance? You cannot dodge those issues though your choice of name: notice vs. RFP or RFQ. You must read and interpret a contract as a whole and consider all the facts. You cannot rely on the ordering clause without considering the rest of the contract and integrating all terms.

If a RFP is issued under a multiple award task order contract, would the government's acceptance of the offer/proposal and resultant issuance of a Task Order create a binding contract or would the contractor need to sign or perform in order to establish a contract?

The FAR definition of contract has no bearing on the answer to that question. Read the contract. Read the contractor's response to the notice/solicitation. Read the order. Was mutual assent required? If so, how was it to be manifested? Was it manifested in accordance with the terms of the contract or the agreement of the parties?

What you call things may not be decisive. What is more likely to be decisive is what those things are in fact and law.

Jamaal, I think you are looking for a simple answer to a complex question.

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I think you're making it too hard.

FAR 16.505( b ) doesn't require either RFQs or RFPs. It doesn't require solicitations, either. Since FAR 16.505( b ) doesn't require solicitations for fair opportunity considerations, your reliance on the definition of solicitation in FAR 2.101 is misplaced. You may forget everything you ever learned about RFQs and RFPs and simply stay within FAR 16.505( b ). Under the SAT, FAR 16.505( b ) doesn't provide any terms at all, so if you choose to use "RFQ" and "quotation" that is your own choice. Over the SAT, FAR 16.505( b ) only requires notices which afford contract holders an opportunity to submit offers for the Government's consideration. Call those solicitations if you choose to, but don't read the FAR 2.101 definition of solicitation into it. To me, it is clear that the definition of solicitation in FAR 2.101 does not reach to the notices required by FAR 16.505( b ).

What difference does it make? If you send a notice to the IDIQ contract holders, and they respond with offers for you to consider, what difference does it make whether you style them as quotes or offers? You simply consider them, select the winner, and issue the task order. The task order is binding on the contractor; provided, the task order is within the bounds of the contract clauses at FAR 52.216-18 and -22. I wonder if this is your real question: are you wondering if a task order is binding on the contractor?

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Guest Vern Edwards
If you send a notice to the IDIQ contract holders, and they respond with offers for you to consider, what difference does it make whether you style them as quotes or offers? You simply consider them, select the winner, and issue the task order. The task order is binding on the contractor; provided, the task order is within the bounds of the contract clauses at FAR 52.216-18 and -22.

That passage reveals a profound lack of understanding of the variety of task order contracts issued today and of contract law.

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Over the SAT, there will always be an offer from the successful multiple-award IDIQ contractor that forms the basis for the task order -- the FAR requires the contracting officer to issue notices to all contract holders so that they can submit offers for the Government's consideration. Mutual assent is achieved if the process is followed.

Under the SAT, it seems pretty obvious that for any complex service, an IDIQ contract will not have sufficient information for a contracting officer to issue a task order without first contacting the contract holders. Those contacts will result in information being provided which will serve as the basis for the task order -- mutual assent is achieved. If the contracting officer styles the contact as a RFQ and the contractor styles its response as a quotation, well, everyone knows that it wasn't a FAR Part 13 quotation -- rather, it is more like a FAR Subpart 8.4 quotation, which the Government can accept by issuance of a binding order. A schedule contractor cannot weasel out of a schedule order by saying that its response to the Government was only a quotation and therefore was not susceptible to being accepted by the Government.

If a contracting officer does issue a task order without mutual assent, the contractor can reject the order under the Disputes clause of the contract. But I am supposing that 99.9%* of all task orders for complex services under FAR 16.505( b ) are issued with mutual assent -- and it isn't worth stopping the whole process for the 0.1% anomaly, and the Disputes clause can take care of the anomaly situations.

*No, I do not have empirical evidence to support this figure.

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Vern,

Are you saying that if a contracting officer obtains "quotes" or "quotations" from multiple award IDIQ contract holders, then the resulting task order is not binding but is merely an offer which the contract holder can accept or reject? And that because of the word "quotes" or "quotations"?

I submit that a "quote" or "quotation" submitted under a FAR 16.505( b ) situation may be relied upon to form a binding task order.

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Guest Vern Edwards

Over the SAT, there will always be an offer from the successful multiple-award IDIQ contractor that forms the basis for the task order -- the FAR requires the contracting officer to issue notices to all contract holders so that they can submit offers for the Government's consideration. Mutual assent is achieved if the process is followed.

Under the SAT, it seems pretty obvious that for any complex service, an IDIQ contract will not have sufficient information for a contracting officer to issue a task order without first contacting the contract holders. Those contacts will result in information being provided which will serve as the basis for the task order -- mutual assent is achieved. If the contracting officer styles the contact as a RFQ and the contractor styles its response as a quotation, well, everyone knows that it wasn't a FAR Part 13 quotation -- rather, it is more like a FAR Subpart 8.4 quotation, which the Government can accept by issuance of a binding order. A schedule contractor cannot weasel out of a schedule order by saying that its response to the Government was only a quotation and therefore was not susceptible to being accepted by the Government.

If a contracting officer does issue a task order without mutual assent, the contractor can reject the order under the Disputes clause of the contract. But I am supposing that 99.9%* of all task orders for complex services under FAR 16.505( b ) are issued with mutual assent -- and it isn't worth stopping the whole process for the 0.1% anomaly, and the Disputes clause can take care of the anomaly situations.

*No, I do not have empirical evidence to support this figure.

First, the SAT has no bearing on the issue at hand. None whatsoever.

Second, you said: "Mutual assent is achieved if the process is followed."

What process? Is the process sound? Have you any idea how many times agencies have followed a process for contract formation without achieving mutual assent? Do you understand the concept of mutual assent?

Third, you said: "Under the SAT, it seems pretty obvious that for any complex service, an IDIQ contract will not have sufficient information for a contracting officer to issue a task order without first contacting the contract holders. Those contacts will result in information being provided which will serve as the basis for the task order -- mutual assent is achieved."

Nonsense. That proves to me that you don't understand mutual assent.

You wrote: "t is more like a FAR Subpart 8.4 quotation, which the Government can accept by issuance of a binding order."

Where in 8.4 does it say that you can "accept' a "quotation"? I can't even find the word "accept" in 8.4. Where is it?

You wrote: "A schedule contractor cannot weasel out of a schedule order by saying that its response to the Government was only a quotation and therefore was not susceptible to being accepted by the Government."

That's interesting. Please cite a BCA or COFC decision in support in a matter involving a complex task order.

You wrote: "If a contracting officer does issue a task order without mutual assent, the contractor can reject the order under the Disputes clause of the contract."

The contractor wouldn't need the Disputes clause to reject the order. It would need the Disputes clause if the Government tried to enforce the order, say, by terminating for default.

And I won't ask you for empirical data to support your 99.9% figure, because even if it's true it's irrelevant to the matter at hand.

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Guest Vern Edwards

Vern,

Are you saying that if a contracting officer obtains "quotes" or "quotations" from multiple award IDIQ contract holders, then the resulting task order is not binding but is merely an offer which the contract holder can accept or reject? And that because of the word "quotes" or "quotations"?

I submit that a "quote" or "quotation" submitted under a FAR 16.505( b ) situation may be relied upon to form a binding task order.

I'm saying no such thing. What I'm saying is (1) that what is binding or not binding depends on the terms of the contract, the language in the contractor's submission, any other communications between the parties, and any order that the CO might issue and (2) that you've been saying a lot of nonsense.

I am not as quick as you to assert. It's contract law we have to talk about ji20874, not the bleeping regulations. I think you know better than this. I think you popped off without thinking things through. As for your last assertion, it's just more nonsense.

You ain't thinkin' bro. Go think.

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