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CuriousProcurementAnalyst

Multiple Award IDIQ - Fair Opportunity Process

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After being in the procurement arena for over 13 years, I finally have a question to ask those that know this business best! 

Our agency is contemplating putting a Multiple Award IDIQ in place for services.  It is anticipated that the awardees will all be best in breed within their industry.  As you know, with the normal fair opportunity process the govt releases an RFQ in which the IDIQ holders submit bids in response to the task order requirements, including pricing. Award is made to the quoter determined to offer the best value based on the RFQ criteria.  Our customer in this case is requesting that, in lieu of doing a competition for task orders, we put a process in place where orders are given to vendors in a specific order.  For example, if 4 awards were made to Companies A through D, when requirements come out, the first task order would go to Company A, the 2nd task order to Company B, 3rd to Company C, 4th to Company D, and the 5th task order would go to Company A, etc. etc.  The IDIQ program office said that they would like the task orders all to be of a limited size or value, meaning that most task orders would be relatively the same size (which I think would be difficult, but I'm not the program office).  I am unsure whether the IDIQ program office has gotten stakeholder buy-in on this approach.    With this approach all vendors would receive nearly the same amount of task order awards over the course of the IDIQ PoP, which is not the case in all multiple award contracts in which some may not win any or very few task order awards, while other are very successful.   

As long as the task order award process is included in the IDIQ RFP, do you all think this meets the criteria of "fair opportunity" as it's meant in 16.505?  Please provide any positive, negative or other opinions about this approach.  Any input regarding legal precedence, risks, etc., would be appreciated. 

 

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No.  So long as the planned orders meet the criteria for requiring fair opportunity, it must be given consistent with the ordering procedures stated in the contract, save an exception to fair opportunity applying (FAR 16.505(b)(2)).  See FAR 16.505(b)(1)(ii) which states that while CO's have broad discretion in developing appropriate order placement procedures, the CO must-

(A) Develop placement procedures that will provide each awardee a fair opportunity to be considered for each order and that reflect the requirement and other aspects of the contracting environment;

(B) Not use any method (such as allocation or designation of any preferred awardee) that would not result in fair consideration being given to all awardees prior to placing each order;

(C) Tailor the procedures to each acquisition;

(D) Include the procedures in the solicitation and the contract; and

(E) Consider price or cost under each order as one of the factors in the selection decision.

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Beat me to it Todd.  The quote is from p. 2 of the report below.

Quote

The relevant provision in FASA states: "When multiple [task or delivery order] contracts are awarded . . .all contractors awarded such contracts shall be provided a fair opportunity to be considered, pursuant to procedures set forth in the contracts, for each task or delivery order in excess of $2,500 that is to be issued under any of the contracts."  (emphasis added)

Look at this report by GAO:  The Federal Acquisition Streamlining Act of 1994 – Fair opportunity procedures under multiple award task order contracts

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Instead of four multiple award IDIQ contracts, how about four single-award IDIQ contracts?  With single-award IDIQ contracts, one never approaches FAR 16.505( b ).

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Often times customers do not like the fact that they have to "re-compete" work and wonder why they can just "pick" who gets a particular order.  Like it or not, fair opportunity is normally required.  However, there are alternatives to multiple award IDIQs where appropriate.

  • Use of a requirements type contract does not require fair opportunity for obvious reasons. 
  • Also, there are exceptions to the issuance of multiple awards (FAR 16.504).  Not sure if any fit your situation or if a single award is even desirable in your situation.

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Guest Jason Lent

With regards to Fair Opportunity, what extent constitutes "fair opportunity to be considered"?

My copies of Formation of Government Contracts and Administration of Government Contracts are quiet on the issue, and my Government Contract Reference Book doesn't have any primary sources I can easily access. Reading WIFCON has churned up only discussions with regards to Federal Supply Schedules.

1. A commercial requirement is below the SAT.

2. The multiple-award IDIQ (not FSS) features about a dozen contract holders and is silent on this case aside from stating the requirement for Fair Opportunity as described in FAR 16.505(b).

3. The requirement was solicited to each contract holder and there were six quotes received; the basis of issuance of the order is LPTA.

4. Each quote was determined technically acceptable and the only difference was price.

5. The lowest-priced quote is <1% more than the funded amount for the requirement and considerably less than the second-lowest priced quote.

Does Fair Opportunity preclude the contracting officer from going back to only contract holder who submitted the lowest quote in efforts to reduce their price?

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Jason,

Commercial is irrelevant.

If your requirement is below the SAT, then FAR 16.505( b )( 1 )( ii ) applies -- you may contact each of the contract holders, but you don't need to if you are otherwise have enough information to provide a fair opportunity to all of the contract holders.

The procedures of FAR Subpart 15.3 do not apply.  You do not need to establish a competitive range.  Yes, if Company A already provides the most advantageous solution, you can call Company A and ask if it can sharpen its pencil and give you a better price.  If it does, that's great -- if it doesn't, well, it still provides the most advantageous solution and is the company to whom you will make award.  However, you will want to make sure that any offered price reduction doesn't come with any reduction in quality.

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Jason, I see nothing in the FAR that would prohibit you from conducting discussions with only the one contractor.  However, note that the procedures for affording each contractor a fair opportunity to be considered for award are to be set forth in the contract.  What does the contract say about what procedures will be used?  Remember, if you do not follow the procedures set forth in the contract, this can give rise to a claim under the Disputes clause instead of a bid protest.

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40 minutes ago, Jason Lent said:

With regards to Fair Opportunity, what extent constitutes "fair opportunity to be considered"?

See GAO document B-302499.  Must give "meaningful consideration."

GAO Decision B-400390.  "Opportunity to compete".

GAO Decision B-299255.   Agency must specificy "process and selection criteria that it will use to ensure that all awardees are given a fair opportunity to be selected."

FAR 16.505(b)(1) also has specific procedures for actions over the SAT. 

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Guest Jason Lent

Folks, thank you greatly for the replies.

18 hours ago, Todd Davis said:

See GAO document B-302499.  Must give "meaningful consideration."

GAO Decision B-400390.  "Opportunity to compete".

GAO Decision B-299255.   Agency must specificy "process and selection criteria that it will use to ensure that all awardees are given a fair opportunity to be selected."

FAR 16.505(b)(1) also has specific procedures for actions over the SAT. 

I found those cases in my research. The crux of my question (or internal second-guessing) sits with what it means to give "meaningful consideration" and a "fair opportunity". Certainly in the case of the IRS case, that's a violation: essentially the "IDIQ in the form of a Task Order". In my wandering around my academic resources, it seemed as though "fair opportunity" only cares that you let everyone have a chance to provide a response to the solicitation and give it the fair shake as required by FAR 1.102-2(c)(3). Most of the controversy with fair opportunity involved the aforementioned "IDIQ in the form of a Task Order" and other instances where contract holders didn't have the opportunity to submit a response, met with appropriate acknowledgement and consideration, to a solicitation.

18 hours ago, ji20874 said:

Jason,

Commercial is irrelevant.

If your requirement is below the SAT, then FAR 16.505( b )( 1 )( ii ) applies -- you may contact each of the contract holders, but you don't need to if you are otherwise have enough information to provide a fair opportunity to all of the contract holders.

The procedures of FAR Subpart 15.3 do not apply.  You do not need to establish a competitive range.  Yes, if Company A already provides the most advantageous solution, you can call Company A and ask if it can sharpen its pencil and give you a better price.  If it does, that's great -- if it doesn't, well, it still provides the most advantageous solution and is the company to whom you will make award.  However, you will want to make sure that any offered price reduction doesn't come with any reduction in quality.

I figured the status of it being commercial was irrelevant. FAR 16 and FAR 12 don't restrict each other's applicability, so I tossed the detail in just in case I had missed something.

I knew that FAR 15 didn't apply, per FAR 16.505(b)(1)(ii). The specific phrasing of "fair opportunity" sent me down a road of self-doubt whether FAR 16.505 was unusual in granting limited authority to limit conversations (departing from the term "discussions" for clarity's sake).

18 hours ago, Retreadfed said:

Jason, I see nothing in the FAR that would prohibit you from conducting discussions with only the one contractor.  However, note that the procedures for affording each contractor a fair opportunity to be considered for award are to be set forth in the contract.  What does the contract say about what procedures will be used?  Remember, if you do not follow the procedures set forth in the contract, this can give rise to a claim under the Disputes clause instead of a bid protest.

The lowest-priced quote that is technically acceptable would be used for the award, and the low quote (in this situation) would get the award (whether we had to secure the additional funds or lowered the overall price to an amount that current funding could cover.

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The GAO knows and has repeatedly affirmed that FAR Subpart 15.3 procedures don't apply to fair  opportunity considerations.  Discussions can be held without invoking 15.3 procedures.  The GAO's only requirement is that the discussions be fair and not be misleading.  

In the case at present, it would be fair to ask the already-most-advantageous offeror if it can sharpen its pencil and give a better price.  

 

 

 

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Thank you for all the input.  I couldn't find a way to incorporate what our customer was hoping for with our multiple award services contract, but I thought I'd give the creative pros here a chance to weigh in.  Thanks for all the suggestions. 

A single award would not work due to the sheer volume of anticipated task orders required for very disparate programs and customers. I don't think one vendor would be have the capacity.  We are also anticipating doing a small business set-aside so that would really not be possible.  I used 4 awards as an example so I can circle back to company A quickly and easily in my scenario example; the actual amount of planned vendors is actually more than double that amount. 

On ‎5‎/‎31‎/‎2016 at 4:21 PM, ji20874 said:

Instead of four multiple award IDIQ contracts, how about four single-award IDIQ contracts?  With single-award IDIQ contracts, one never approaches FAR 16.505( b ).

Because we are trying to streamline the ordering for these types of services across a large agency, and because the number of contracts is anticipated to be more than 4, I don't think this would be the most effective way to meet this requirement.  Thanks for the suggestion though!

I appreciate all of the help! 

 

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