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HUNTSVILLEKO

Unfavorable CPARS rating

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We have an 8(a) company who for the last two years, received an unfavorable CPARs rating. The requirer wants to modify the current contract (which is a CPFF, runs out Dec 2015) by extending the period of performance for another 30 months and giving contractor approximately $6M (due to the funds expiring 30 Sep).

We have explained (to no avail) that if we try to use the adverse info in a future past performance evaluation, the contractor can point out that the performance problems must not have been that bad, since the Government turned right around and extended the contract for a considerable amount of time. They could also argue against any use of those ratings in ANY meaningful way. They could also argue that they did have performance problems but they fixed them (which they have not!), as evidenced by the Government's show of confidence in the contractor by way of a sizable contract extension.

Our proposed course of action is to let the current contract expire in Dec 2015, and initiate a new contractual effort with another contractor to complete what wasn't accomplished on the existing contract. However, that doesn't solve the issue of losing $6M in funding.

Another course of action that has been suggested is to do a UCA with another contractor to complete what wasn't accomplished on the existing contract (thereby freezing the $6M funds) and award sometime after the existing contract ends.

Needless to say, this is much more complicated than I have written down but I tried to keep it simple. I am looking for any suggestions that might get us both (requirer and contracting) what we need.

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You seem concerned about funding. You write about "funds expiring 30 Sep" and "the issue of losing $6M in funding." Can you talk about your funding situation? Is the contract for supplies or services? If services, is the effort severable or entire? What color of money are you using?

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Guest Vern Edwards

Can't you go to the SBA to find a different (and better) 8(a) contractor?

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You did not identify the nature of the performance issues or the severity of those issues. Those factors could make a distinction in determining the direction the agency should take to address performance issues.

There are many plausible instances where the agency could extend a contract despite performance being less than favorable. For example:

- The Contractor is the only source for the supplies/services;

- The agency believes it is possible for the contractor to improve performance; or

- Onboarding a new contractor would be more costly in terms of time/money.

The agency needs to determine whether the severity of the "unfavorable performance" and the potential for the contractor to correct its performance issues justifies the expense of exercising the option.

You may be able to use this additional work as leverage to negotiate a mechanism that promotes positive performance. For example, some or all of the work could be reclassified to a CPAF to incentivize the contractor to better meet the agency's needs. Alternatively, you could talk to the contractor and tell them that the agency is hesitant to extend the contract because of unfavorable performance, and ask them to propose a plan to improve performance at no cost to the agency.

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Another course of action that has been suggested is to do a UCA with another contractor to complete what wasn't accomplished on the existing contract (thereby freezing the $6M funds) and award sometime after the existing contract ends.

I don't follow. How would issuing a UCA "freeze" the funds?

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I know that if the performance is bad enough to default the contractor, you should not have to perform another competition. I don't think allows you to add the $6M, though. If you didn't have to obligate the $6M, just $4M, you could go right out and find an 8(a).

Does the requireer have a compelling sole source justifiation?

I apologize if these questions no longer pertain, my knowledge of the SB program has grown a little stale. This is a thinly veiled request for instruction on my part, I suppose . . .

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Was your current 8( a ) contract awarded competitively under FAR 19.805-1? or sole source under FAR 19.805-2?

It looks like you have three choices, assuming you stay within the 8( a ) program:

  • MODIFICATION TO EXISTING CONTRACT. Does your agency have a partnership agreement with the SBA? If so, does that agreement allow you to do an out-of-scope modification for $6 Million to the existing contract? If this is possible, you need not let the adverse CPARS reports stand in your way.
  • A NEW CONTRACT SOLE SOURCE. Do you want to try for a sole source 8( a ) under FAR 19.805-1( b )? Do you have an 8( a ) firm in mind?
  • A NEW CONTRACT COMPETITIVE. Why can't you do a quick competitive 8(a) procurement for $6 Million and be finished by Sep. 30?

Which one best suits your needs?

Can you trade your money with someone else? Maybe there is someone else who needs your money now, and can give you his or her money after the start of the new year? I'm talking about a legal money swap, of course.

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