Jump to content
The Wifcon Forums and Blogs
YOM

A-E terminate prior to negotiations

Recommended Posts

I am working on a new A-E IDIQ award with a base year and 4 one-year option periods with a not to exceed amount over the TINA threshold of $750,000.  The process has been on-going for over two years primarily because the Pre Price Negotiation Memorandum (PPNM) has not passed business clearance even though it has been rewritten and submitted several times.

The #1 most highly qualified firm is a large business and even though the cost and pricing data was submitted, this contracting office (with several Level II certified specialists) does not have on-the-job experience with what to do with it (online courses and in-resident classes taken years ago do not equate to real knowledge) and how to extrapolate the information needed.  The people reviewing the Business clearance have not approved the PPNM written for the 1st firm and  have recommended we proceed to the 2nd most highly qualified firm ‘since the first choice refuses to negotiate.’  The chief of the contracting office has instructed us to follow that recommendation. I pointed out that 1) the 1st firm very much wants to negotiate and is in constant communication asking if any other information is required from them; 2) that if the government terminates efforts with the 1st firm they will very likely file a protest and 3) furthermore we will run into the same difficulties in trying to get the PPNM for the 2nd firm approved through the business clearance process since no real knowledge has been gained through this 2 year process in the evaluation of cost and pricing data.  FAR 36.606 (A-E Negotiations) (a) says negotiations are conducted in accordance with FAR Part 15 beginning with the most preferred firm and paragraph (f) says “if a mutually satisfactory contract cannot be negotiated, the contracting officer shall obtain a written final proposal revision from the firm, and notify the firm that negotiations have been terminated.”  My question is - can the government terminate efforts with the #1 firm if actual, come-to-the-table negotiations have not be attempted? If not, what do I tell the chief and if so, what do I tell the contractor?

Share this post


Link to post
Share on other sites
26 minutes ago, YOM said:

The #1 most highly qualified firm is a large business and even though the cost and pricing data was submitted, this contracting office (with several Level II certified specialists) does not have on-the-job experience with what to do with it (online courses and in-resident classes taken years ago do not equate to real knowledge) and how to extrapolate the information needed.

I gather the problem is that the contracting office does not know how to properly evaluate cost & pricing data submitted by the apparently successful offeror and, further, does not know how to document cost and price analyses performed on that data.

I work with contractors that have the same problem with respect to obtaining consent to subcontract or negotiating a prime contract price where subcontracting is a significant portion of the total estimated contract cost. Which is to say, contractors solve their lack of expertise by hiring consultants to help them. Do you have that ability? Can your contracting office bring in some outside assistance to evaluate the data and effectively document that evaluation?

Hope this helps.

Share this post


Link to post
Share on other sites
Guest Vern Edwards

The contract is to be IDIQ, so I presume that you will price each task order on an ad hoc basis. That being the case, some questions:

1. What do you mean by "Pre Price Negotiation Memorandum"? Is it a memorandum of prenegotiation objectives as per FAR 15.406-1?

2. What are you negotiating? Rates?

3. On what basis have the reviewers rejected the PPNM?

 

Share this post


Link to post
Share on other sites

YOM, please provide a much clearer description of the process you are using to "work on a new A-E IDIQ award" .  As Vern asked - what are you supposed to be negotiating?  - Is it contract rates?  Is it a proposal for a specific task order? Someone had to prepare a detailed government estimate per FAR 36.605. 

For instance, if it is a specific design task, does your organization have technical personnel with experience in A-E contracting and project management of A-E contracts to perform technical and cost analyses of design task order proposals? 

Someone needs to have a basic understanding of the scope of the design effort, the types of design disciplines involved, etc. A large business A-E firm (especially) will eat your lunch if you don't.  And - if the organization doesn't have that expertise,  I don't think that it (the organization) should be doing A-E contracting. There Is also  a statutory fee limitation involved for the design effort as described under 15.404-4 (c)  One must also be able to determine which part of the effort falls under the fee limitation. Note that the "fee limitation" is incorrectly described under the 15.404-4,  "profit" paragraph, because the "fee" for A-E design services includes costs as well as markup. 

I didn't get a clear picture of the overall process you are using, what the specific problems are and what expertise is available within the organization.

When you said  "terminate prior to negotiations" in the thread's title, I can't tell if you are in the A-E selection phase or negotiating a task order after award of the ID/IQ contract.

Share this post


Link to post
Share on other sites

From your description,  it appears to me that contract specialists are attempting to negotiate A-E contracts based upon contracting course training without the subject matter knowledge.

 I had the occasion to observe a few  KOs or their contract specialists "winging it" in source selection technical and price discussions without expert input. They were not successful and probably looked like "rubes" to the contractors,  (some of whom I personally knew from my own experience in conducting discussions and negotiations). They had no business leading discussions without knowing where or why the prices were questionable, whether the technical approach was sound or even if the government's requirements were reasonable. 

Share this post


Link to post
Share on other sites
On 10/17/2016 at 0:31 PM, YOM said:

My question is - can the government terminate efforts with the #1 firm if actual, come-to-the-table negotiations have not be attempted? If not, what do I tell the chief and if so, what do I tell the contractor?

YOM, if you are asking if it is permissible to terminate efforts with the #1 firm without conducting meaningful negotiations, all you have to do is read FAR 36.606 -- Negotiations.My answer would be that the firm would seem to have reasonable grounds for a protest, based upon the scenario you described.  Tell the chief what the FAR requires.  TWO YEAR process in evaluating the cost or pricing data?  I doubt if the data is even current after that amount of time. 

I seriously suggest that you get some help.  I know a retired USACE A-E contract negotiator who might be able to find you some help but I hope it wouldn't take your organization that long to contract for or have one of the USACE A-E contracting offices help you.  The Mobile District office has used IDIQ A-E contracts for decades. 

If you want some USACE help, you can message me and we can talk about it on the phone.  I am willing to get in touch with my old District and/or my retired friend.  

Share this post


Link to post
Share on other sites

YOM:

Regarding your specific question, what did your legal counsel opine and what was the basis for their opinion?

Seems you are with the Air Force and your clearance approval authority is telling you what they think is incorrect, but cannot or will not help you get to correct.I assume this you are trying to negotiate a price list of rates as fair and reasonable. You cannot successfully use any techniques in FAR 15.404-1(b)(2)? Not even the previous contract?

I presume you are operating under FAR 15.403-3.

Do you have a sample or a seed project? Probably not, but either way, I doubt that the project would be over the Truthful Cost or Pricing Data threshold. Since this is an IDIQ see FAR 15.403-4(a)(1)(i).

NOTE: Federal Acquisition Circular (FAC) 2005-73, effective May 29, 2013, renamed the TINA, "Truthful Cost or Pricing Data".

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.

×
×
  • Create New...