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2MuchWork

Adding Commercial Clauses to a Task Order

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The agency I work for is required to use mandatory-for-use department-wide IDIQ contracts for IT services (unless the requirement is not within scope, it falls within an exception, etc).  The contracts have FAR Part 15 clauses; they do not include commercial clauses (FAR Part 12).  The contracts allow for cost reimbursement, T&M, and FFP task orders.   There is discussion in my office that if we want to issue a T&M or FFP task order for a commercial service IAW this contract vehicle, that we would have to add the commercial clauses and provisions to the task order solicitation. Based on what was heard from the contracting officer (of the department wide IDIQ contract), the IDIQ contracts were intended for commercial and non-commercial use. However, I think adding the commercial clauses to the task order could possibly conflict with some of the clauses in the base IDIQ contract that should flow down to all task orders.   Has anyone been in this situation or does anyone have information regarding this topic?

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I haven't been in this situation, but I do see a problem. FAR 52.216-18 would make the clauses in the basic contract applicable to the orders. If these clauses are not prescribed for use in FAR part 12 contracts, the application of them to orders for commercial items could be inconsistent with customary commercial practice and you would run afoul of FAR 12.302(c). Further, if there's a conflict between the terms and conditions of the basic contract and those of the order, the terms and conditions of the basic contract control. There are conflicts between FAR 52.212-4 and FAR clauses used in noncommercial acquisitions.

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Don hit the nail on the head with respect to the clauses so I have nothing to add there. 

You stated that the department's contracting officer said "the IDIQ contracts were intended for commercial and non-commercial use" - have you seen a copy of the ordering procedures?  It's doubtful, but there may be separate procedures/T&Cs for commercial and non-commercial items stipulated there.

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19 hours ago, 2MuchWork said:

The agency I work for is required to use mandatory-for-use department-wide IDIQ contracts for IT services (unless the requirement is not within scope, it falls within an exception, etc).  The contracts have FAR Part 15 clauses; they do not include commercial clauses (FAR Part 12).  The contracts allow for cost reimbursement, T&M, and FFP task orders.   There is discussion in my office that if we want to issue a T&M or FFP task order for a commercial service IAW this contract vehicle, that we would have to add the commercial clauses and provisions to the task order solicitation. Based on what was heard from the contracting officer (of the department wide IDIQ contract), the IDIQ contracts were intended for commercial and non-commercial use. However, I think adding the commercial clauses to the task order could possibly conflict with some of the clauses in the base IDIQ contract that should flow down to all task orders.   Has anyone been in this situation or does anyone have information regarding this topic?

Emphasis added.

Based on the quote above, the office that awarded the contract was incompetent. It should have set up separate line items for commercial and noncommercial items and for different contract types with appropriate clauses designated for each line item. If they didn't do that, then the CO who signed the contract should be stripped of his or her certificate of appointment and relegated to contract close out.

My advice is to issue an order based on the contract that exists and to not add any clauses. Ordering offices should not add clauses to orders without the approval of the office that awarded the contract. To do so might make a bad problem worse. There really isn't anything else to say.

A competent CO would mod the contract to fix the problem and terminate any contractor for convenience that would not accept the change. This should be done on the basis of the Christian Doctrine and without equitable adjustment or consideration.

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Thank you all for the information.

 

Matthew – No, I did not see any separate procedures, etc for commercial and non-commercial items in the contract or ordering guide. (Oops)

 

Vern – You stated “Ordering offices should not add clauses to orders without the approval of the office that awarded the contract.” Are you stating that if the contracting officer (for the IDIQ contract) gave us permission to include commercial clauses at the task order level that it would be proper? 

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Well, it would be "proper" as far as that CO were concerned. I don't know if the contractor receiving the order would consider it to be proper. If I were the contractor I would believe that I could reject the order as being inconsistent with the terms of the contract, but that would depend on what clauses you were to add, whether I thought I could live with them, and whether I thought the order would be profitable.

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Theoretically, contractors should be more amenable to the standard commercial clauses versus any non-commercial counterparts (for example, consider in a commercial contract, all changes must be mutually agreed to IAW FAR 52.212-4( c ) whereas other Changes clauses, FAR 52.243-1 through 52.243-6, allow the government to unilaterally make changes to the contract).  Still, if a disagreement or dispute amongst the parties arises, Don is right that the basic IDIQ contract's clauses would govern in the event of a conflict, so I'm not sure how much use it would be to pursue incorporating commercial clauses when they could/would be overridden anyways IAW FAR 52.216-18.

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17 hours ago, Vern Edwards said:

A contractor could agree to accept other clauses in an order, and if it did it would be bound.

I agree, to an extent - my remarks/concerns are for instances where those other clauses would conflict with the clauses in the IDIQ - in those cases, wouldn't that require a deviation to FAR 52.216-18 which states "All delivery orders or task orders are subject to the terms and conditions of this contract. In the event of conflict between a delivery order or task order and this contract, the contract shall control." 

I suppose this is just another example where an ounce of prevention is worth a pound of cure.

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So if the parent/umbrella IDIQ does not provide that TOs can be for both commercial/non-commercial items in any way could a task order issued under same be considered a change in scope? 

After all the contract could be considered to have been competed as for noncommercial services only and as such may not have met the standard of CICA?

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1 hour ago, C Culham said:

So if the parent/umbrella IDIQ does not provide that TOs can be for both commercial/non-commercial items in any way could a task order issued under same be considered a change in scope? 

After all the contract could be considered to have been competed as for noncommercial services only and as such may not have met the standard of CICA?

Based on the facts provided by the OP, I don't think this is a reasonable assumption or pertinent to the discussion here.  We don't know the extent of what items/services may or may not be procured through the IDIQ, only the T&Cs that govern the resulting task orders.

As I read the issue, the problem is not that one is unable to procure commercial items through the IDIQ, but that if one were to procure commercial items through the IDIQ, the T&Cs would not include the appropriate commercial clauses.

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Carl brings up a good point and one which 2muchwork should address.  Does the basic contract have CLINs or a SOW that would permit the acquisition of commercial services?

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16 hours ago, Matthew Fleharty said:

Based on the facts provided by the OP, I don't think this is a reasonable assumption or pertinent to the discussion here.  We don't know the extent of what items/services may or may not be procured through the IDIQ, only the T&Cs that govern the resulting task orders.

As I read the issue, the problem is not that one is unable to procure commercial items through the IDIQ, but that if one were to procure commercial items through the IDIQ, the T&Cs would not include the appropriate commercial clauses.

OP Fact - "The contracts have FAR Part 15 clauses; they do not include commercial clauses (FAR Part 12)."

OP Fact -  "Based on what was heard from the contracting officer (of the department wide IDIQ contract), the IDIQ contracts were intended for commercial and non-commercial use."

So what am I missing?   In  this case the 4 corners of the solicitation and resulting contract govern do they not?  So how is the parent IDIQ allowing the purchase of commercial items?

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C Culham:

The apparent statement of the procuring or administering contracting officer suggests the parties, or at least the government, intended this to be a vehicle for procuring non-commercial and commercial items. Leaving out required clauses would not prohibit the acquisition of commercial items would it? Aren't the required clauses read in by operation of law (Christian Doctrine)?

I don't think the four corners doctrine is of concern. I mean it may apply if the parties disagree on the purpose of the contract including commercial and non-commercial requirements, but we do not know if there is a dispute on the intention of the contracting being for commercial and non-commercial items.

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Jamaal - So is the only concern the parties to the contract , or for instance should there be concern with regard to an interested party who otherwise might have proposed differently had they known they could have subscribed to customary commercial practices had they known that the solicitation provision, terms and conditions provided for same?  Could  not this potentially change the sum game with regard to pricing, performance metrics and considerations of contract administration?  We only have the OP's comments to go on and it would seem that the complete history and documents of the solicitation, negotiations and resulting contract would be the indicator of intent in this contractual relationship not what was heard?

I would agree that the contractor could provide what would be defined as a commercial item pursuant to the FAR but pursuant to the parent contract I am compelled by the facts to believe that that the contractor would in fact be providing non-commercial items as defined by the contract ( the 4 corners) subject to all the terms and conditions that might not otherwise apply to a commercial item.

Already stated in a different manner in this thread but what a messy idea and a very slippery slope in my view.

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17 hours ago, C Culham said:

Jamaal - So is the only concern the parties to the contract , or for instance should there be concern with regard to an interested party who otherwise might have proposed differently had they known they could have subscribed to customary commercial practices had they known that the solicitation provision, terms and conditions provided for same?  Could  not this potentially change the sum game with regard to pricing, performance metrics and considerations of contract administration?

The OP seems to be soliciting general info regarding an IDIQ missing clauses and the instruction to include additional clauses via task order - not potential impacts on the original solicitation's field of competition. Could the field of competition have been materially affected, sure. Was it, I don't know. We would have to know the story as told within the four corners, but again, that doesn't apppear to be within the OP concerns.

17 hours ago, C Culham said:

We only have the OP's comments to go on and it would seem that the complete history and documents of the solicitation, negotiations and resulting contract would be the indicator of intent in this contractual relationship not what was heard?

I would agree that the contractor could provide what would be defined as a commercial item pursuant to the FAR but pursuant to the parent contract I am compelled by the facts to believe that that the contractor would in fact be providing non-commercial items as defined by the contract ( the 4 corners) subject to all the terms and conditions that might not otherwise apply to a commercial item.

As you mentioned, we only have the OP's comments. Of course the complete history of the source selection would be 'an' indicator as to the intent of this contract. We will never have that. What we have are a few qualified statements from the OP, including what the OP says the IDIQ contracting officer stated was the intent of the contracts.

Your premise seems to be that the original source selection did not advise offerors and potential offerors that any resultant contract would issue commercial and non-commercial task orders. I see little reason to assume that, based on the OP's comments. As for all the references to the four corners -- we barely have four meaningful paragraphs, here, let alone the four corners of the contract.

My advice would be not to add clauses via order and to modify the parent contract(s) to include all applicable clauses. (I do wonder if commercial provisions were included in the source selection)

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For over 18 years  I have seen plenty of IDIQ contracts for commercial items/services awarded under the Uniform contract format (UCF) with no commercial item clauses in them.   The main reason is the CO was more comfortable with all the normal clauses being in the contract and thier familiarity with the UCF solicitation.  For three or four years as a junior CS I also used nothing but the UCF because that was standard in the office.  In 1998 the FAR rewrite was pretty new.  Most of the time no one complained and we  bought millions and millions of dollars of commercial supplies/services using FAR 15 versus 12. 

A couple of times we had offerors demand that the contract be solicited using the more vendor friendly commercial item clauses.  That why the commercial item procedures were created in the first place.  We usually admitted our error and resolicited using commercial item procedures and clauses.  That is how I really began realizing that I needed to use the right type of solicitation for what I was buying and that FAR 12 had some advantages for both the offeror and Government.   Protests do make us think and learn. 

I still see plenty of contracts for commercial items/services awarded using the UCF. 

I guess my point is that I would  just award the delivery orders using the contract as written.  Why fret over needing the commercial item clauses if a contractor is not complaining.  And they should not be since they signed the UCF contract.   

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Under FAR, commercial items are a different class of goods and services than noncommercial items. So i think that Carl has asked a good question.

I think the fact that a contract contains clauses for only noncommercial items makes a prima facie case that commercial items are outside the scope of the original competition. I do not think that the expectations or beliefs of the parties are proof against a protest that a purchase of commercial items is outside of the scope of the original competition. The question is: Did the Government expressly state that the prospective contract would cover both commercial and noncommercial items? The Government's unexpressed intent is irrelevant.

I think that the GAO might look at the synopsis, the solicitation, and the entire text of the contract when determining the scope of the original competition. But even then it might conclude that the parties wrote the contract for noncommercial items and thus commercial items are out of scope.

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On 11/19/2016 at 4:55 AM, C Culham said:

So what am I missing?   In  this case the 4 corners of the solicitation and resulting contract govern do they not?  So how is the parent IDIQ allowing the purchase of commercial items?

Is it inconceivable that a contract for or including commercial items could be awarded with the wrong, non-commercial clauses?

On 11/22/2016 at 3:43 AM, Vern Edwards said:

I think the fact that a contract contains clauses for only noncommercial items makes a prima facie case that commercial items are outside the scope of the original competition. I do not think that the expectations or beliefs of the parties are proof against a protest that a purchase of commercial items is outside of the scope of the original competition. The question is: Did the Government expressly state that the prospective contract would cover both commercial and noncommercial items? The Government's unexpressed intent is irrelevant.

I think that the GAO might look at the synopsis, the solicitation, and the entire text of the contract when determining the scope of the original competition. But even then it might conclude that the parties wrote the contract for noncommercial items and thus commercial items are out of scope.

Fair point - I suppose I'm a bit jaded from seeing too many commercial contracts awarded using the UCF and wrong (non-commercial) clauses.  In the event that the description(s) of the supplies/services in the IDIQ included commercial items, I don't think the clauses (or lack thereof) would trump those description(s).  Given the information provided thus far, I guess we cannot make a reasonable conclusion one way or another.

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The government bought "commercial items" long before there was a commercial item contract format. Thus, it is conceivable that a contract for or including commercial items could be awarded with the wrong, non-commercial clauses. 

Here, the OP is acquiring "commercial services". My thought is that, if the ID/IQ contract doesn't use the FAR mandated format and clauses for acquiring commercial services, then it isn't a suitable contract for commercial services.  An improper, non-conforming contract can't be mandatory for purchasing such services.

Challenge the premise that this contract vehicle is mandatory or suitable under the Regulations for purchasing "commercial services",  unless and until they fix it to include the mandatory, applicable clauses.  

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A long time ago I participated in a discussion about the "cost" of a commercial item that the government customer wanted to acquire under a FAR Part 15 cost-type contract. I argued the (apparently) unpopular notion that the contractor's cost in a CP environment was the established market price. I'm wondering whether acquisition of a commercial item under this ID/IQ contract might raise similar concerns when the cost and price analyses are performed. And I'm thinking both cost and price analysis would have to be performed since there was never any competition for the commercial items.

Just some idle thoughts....

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