Evaluating Travel Costs for FFP and T&M Contracts

[Prezmil2020]

Good Afternoon,

Was wondering if my peers could explain their best practices when evaluating and awarding travel in contracts and/or task orders against contracts. I have noticed that the IGCEs I review usually don't have travel included because it is not known where in CONUS the contractor is coming from so travel is hard to estimate. Any suggestions and best practices would be greatly appreciated.

Prezmil2020

[Guest carl r culham]

Prezmil2020 - While a long and sometimes convoluted read you may want to look at this recent thread in WIFCON. while it first started regarding FSS orders is does provide insgiht into travel pricing in general. http://www.wifcon.com/discussion/index.php...ic=353&st=0

Specifically this post by Vern Edwards on Sept 24 at 2:18 PM in the thread should help.

"Joel, I'm sorry, but I don't entirely understand what you've said.

What I would do is instruct the competitors to propose travel rates based on specified travel in the SOW (subject to adjustment after award based on actual travel): air fare per destination, per diem per destination, whatever else. I would then calculate total travel for each competitor and factor that into my overall price evaluation and pick a winner. Then, if necessary, I would negotiate a better deal with the selectee one-on-one. (Better air fare, etc.) Travel would be priced at firm-fixed unit prices, flights, days at site, etc. Its' really very simple and it's not a new approach."

I do want to note too FAR Part 31.102 regarding Fixed-price contracts and FAR 31.205-46 regarding travel costs which can be used as guidance.

[Guest Vern Edwards]

You've asked how to evaluate travel costs when the government cannot estimate travel costs. If the government can't do it, then I presume that the contractors can't do it, either. Or am I wrong about that? If they can't, then they can't propose it. If they can't propose it, then you can't evaluate it.

The issue is whether you should (a) evaluate travel cost or ( "normalize" travel cost and thus exclude it from the evaluation. If you really can't estimate the cost (I won't go there), and if prospective contractors can't either, then you should not attempt to evaluate travel cost. See Bendix Field Engineering Corporation, Comp. Gen. Dec. B-246236, 92-1 CPD ? 227 (1992):

In short, we find that the agency should not have permitted offerors' proposed travel costs to become a factor in determining award, especially when the agency itself admits that it was impossible to predict the amount of travel required by this contract. Therefore, we conclude that the agency's adjustments here are irrational and fail to equally adjust differences between offerors where the solicitation contained insufficient information to permit offerors to submit informed proposed travel costs. See Kirschner Assocs., Inc., B–199547.2, Aug. 26, 1981, 81–2 CPD ? 178, aff'd, B–199547.3, Dec. 1, 1981, 81–2 CPD ? 435 (agency unreasonably permitted widely varying proposed travel costs to play a role in its decision to award a cost-plus-fixed-fee contract to the low cost offeror, even though the solicitation failed to provide sufficient and unambiguous information permitting competition on an equal basis); Moshman Assocs., Inc., B–192008, Jan. 16, 1979, 79–1 CPD ? 23 (protest sustained where agency failed to normalize travel costs given uncertainties in solicitation).

(As used by the GAO in this case, "normalize" means to make the same; to eliminate or disregard differences.) The legal basis for this is that you cannot have full and open competition if offerors or quoters cannot compete on the same basis, and they cannot compete on the same basis if the government cannot provide them with the information needed to compete on the same basis.

Don't evaluate travel cost if you and prospective contractors cannot estimate it. Document the file as to why travel cost cannot be estimated.

(Are you sure that travel costs cannot be estimated? Have you checked? Do you know enough to know if you're being BS-ed?)

[Prezmil2020]

You've asked how to evaluate travel costs when the government cannot estimate travel costs. If the government can't do it, then I presume that the contractors can't do it, either. Or am I wrong about that? If they can't, then they can't propose it. If they can't propose it, then you can't evaluate it.

The issue is whether you should (a) evaluate travel cost or ( "normalize" travel cost and thus exclude it from the evaluation. If you really can't estimate the cost (I won't go there), and if prospective contractors can't either, then you should not attempt to evaluate travel cost. See Bendix Field Engineering Corporation, Comp. Gen. Dec. B-246236, 92-1 CPD ? 227 (1992):

(As used by the GAO in this case, "normalize" means to make the same; to eliminate or disregard differences.) The legal basis for this is that you cannot have full and open competition if offerors or quoters cannot compete on the same basis, and they cannot compete on the same basis if the government cannot provide them with the information needed to compete on the same basis.

Don't evaluate travel cost if you and prospective contractors cannot estimate it. Document the file as to why travel cost cannot be estimated.

(Are you sure that travel costs cannot be estimated? Have you checked? Do you know enough to know if you're being BS-ed?)

Thanks for the insight. Perhaps I was not clear in my original question. Here is the scenario: Agency XYZ wants a five-day training course to be performed in November 2009 in Washington, D.C. Market research indicates that there are at least 10 contractors that have awarded this class under an IDIQ contract (MAS contract, specifically) and they are located throughout CONUS. You can perform market research and find out how much a flight costs to D.C. from each of the 10 contractors' locations and what the per diem is for D.C. during November 2009. Is that enough information to complete the IGCE or is that overkill? Also, it is not known which contractors will submit quotes and who will eventually win an award. What if the contractor that wins is located in Alaska and in the IGCE airfare from Alaska was never calculated because it was not known at the time that a contractor from Alaska would submit a quote?

Thanks,

Prezmil2020

P.S. I am pretty new to contracting, as you probably could tell.

[formerfed]

That's overkill. I would first just do the IGCE for just the training exclusive of travel. Then I would make a note that this might increase for travel if a contractor was selected outside the DC area. You could take a mid-range estimate and add if you like (for example from Chicago).

[joel hoffman]

That's overkill. I would first just do the IGCE for just the training exclusive of travel. Then I would make a note that this might increase for travel if a contractor was selected outside the DC area. You could take a mid-range estimate and add if you like (for example from Chicago).

Maybe I'm missing something here. Why cant you have a FFP line item for travel or better yet, have them include the travel cost in the price for the course? You know when the course will be and where...???

As for the IGCE, how are you going to use it? If you include a range of flight and other time related travel costs in the IGCE, if you are going to use it to evaluate reasonableness, you can apply the range to the proposals that you are looking at, knowing where the particular firm is from. The IGC is only an estimate - why cant it be adjusted if some new information comes up?

Why would you want to hire somebody from Alaska and pay that much more to travel to the East Coast if there are other firms that can do a good job for much less cost? Seems like this is overkill, anyway. Can't you hire someone based on qualifications and a reasonable overall price, including proposed lump sum travel cost?

[formerfed]

Maybe I'm missing something here. Why cant you have a FFP line item for travel or better yet, have them include the travel cost in the price for the course? You know when the course will be and where...???

That's what the OP should do. I misread what he asked with the reference to IGCE.

Prezmill2020,

Are you trying to develop an evaluation scheme to select a contractor to do training and you want to know how to structure the solicitation? If so, Joel's suggestion is the best approach - require each offeror to propose a total price to do the training. If they are outside the area, they need to compute their cost for travel as part of their proposed amount.

I thought from your last post you were doing something else and that's preparing an IGCE (independent government cost estimate). That's something different. An IGCE is the governments estimate on how much they think the acquisition will cost. It's used for a variety of reasons from budgeting, completing the requisition package, helping to decide which provisions to include in the solicitation because applicability of many depend upon the dollar value, and by the Contracting Officer in negotiating and determining whether proposed prices/costs are fair and reasonable. In other words, it’s the governments guess on how much it will cost.

The solicitation, on the other hand, instructs offerors how to propose and in what manner. In this case, you can have them include all costs in one bottom line amount. Alternatively you can have them propose the training and their travel separately. Regardless you compare each with respect to how much the government will pay.

[Guest Vern Edwards]

Here is the scenario: Agency XYZ wants a five-day training course to be performed in November 2009 in Washington, D.C. Market research indicates that there are at least 10 contractors that have awarded this class under an IDIQ contract (MAS contract, specifically) and they are located throughout CONUS. You can perform market research and find out how much a flight costs to D.C. from each of the 10 contractors' locations and what the per diem is for D.C. during November 2009. Is that enough information to complete the IGCE or is that overkill? Also, it is not known which contractors will submit quotes and who will eventually win an award. What if the contractor that wins is located in Alaska and in the IGCE airfare from Alaska was never calculated because it was not known at the time that a contractor from Alaska would submit a quote?

Just ask for a quote for the class. Don't worry about travel cost. Don't ask about it. Don't worry about cost at all. Just ask for a price, all inclusive.

You could have bought the class in less time than this thread has taken.