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slthomas527

When the PoP of the new contract overlap with the current contract

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I am in the process of preparing a follow-on contract and the requested PoP is 9/1/2018. My confusion is that the current contract is not scheduled to end until 9/15/2018. The contract is being processed on a sole source basis. The contractor is offering to pro-rate the cost to cover the overlap between the current contract and the new contract. Pro-rating the cost covers the financial portion of the contract. My concern is can I award a contractor a contract to begin when the PoP for the current contract that is awarded to the same contractor has not ended?

 

 

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The obvious question is “Why is there an overlap?”

Must there be an overlap?  

If you are “preparing the follow-on contract” you should be able to write it so that there is no overlap. 

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If you don’t want to answer that question, I can only speculate. If the contractor will “pro-rate” the cost for 15 days , the proper way is likely a partial termination for convenience, reducing the contract performance period by 15 days. 

Why does the follow on contract have to be for 12 months?  Why not 11 months and 15 days for the initial period of performance, for example? 

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This sounds like a software license agreement "co-terming" situation. Either the Government is requesting to move the start date so they can exercise all SLAs at the same time each year, or the manufacturer is requiring it because that's the schedule they want everybody to be on.

If this is the case, I there's nothing wrong with it as long as you've got service during the overlap and you're paying no more than you agreed to under the first contract.

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As a matter of form, follow-on contracts in their true sense are rather rare.  I suspect there might be a misapplication of the term here.  On the civilian side, follow-ons are addressed under 41 USC 253(d)(1)(B) and cover “the continued development or production of a major system or highly specialized equipment.”  On the DOD side, the term has its statutory definition under 10 USC 2304(d)(1)(B) and covers the same variety of services for development and production as well as those that are highly specialized.  Is this a non-commercial buy?  It sounds like it might be an acquisition of commercial items.  I would suggest you follow the applicable requirements under Subpart 6.3—Other Than Full and Open Competition if you are operating under Part 15 and comply with any publicizing requirements outlined in Subpart 5.2. 

You have left several gaping omissions in your scenario/question.  Like the others contributors, I am not sure why you require an “overlap” of services.  If this has to do with an SLA, then we are talking about a subscription, which is typically considered the purchase of a supply.  Why was the POP on the original contract miscalculated vis-à-vis the contractor’s current expectations?  Did they not agree to the terms as already stated either through signature or start of performance?  Lest we forget they have a contract with the Government, the conditions of which should be apparent.  I would caution you against duplication of supplies/services.  As far as any strict prohibition, you have a fair amount of latitude, so long as you adequately document your file.  If this is something on which a big company seems to have your back against the wall so to speak, to appease their own internal contract processes, I would simply take care to ensure you are meeting your fiduciary duty to the taxpayer.

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Guest Vern Edwards
1 hour ago, Guardian said:

As a matter of form, follow-on contracts in their true sense are rather rare.  I suspect there might be a misapplication of the term here.  On the civilian side, follow-ons are addressed under 41 USC 253(d)(1)(B) and cover “the continued development or production of a major system or highly specialized equipment.”  On the DOD side, the term has its statutory definition under 10 USC 2304(d)(1)(B) and covers the same variety of services for development and production as well as those that are highly specialized.

@Guardian

I don't know what you mean by "true sense" of follow-on contracts.

Such contracts are not addressed in 41 USC 253(d)(1)(B), because there is no such place in the current Title 41.

There is no statutory definition of the term in 10 USC 2304(d)(1)(B). That reference does nothing more than refer to a particular kind of follow-on contract in the context of sole source contracts.

How do you know that follow-on contracts, whatever they are, are rare"?

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1 hour ago, Vern Edwards said:

@Guardian

I don't know what you mean by "true sense" of follow-on contracts.

Such contracts are not addressed in 41 USC 253(d)(1)(B), because there is no such place in the current Title 41.

There is no statutory definition of the term in 10 USC 2304(d)(1)(B). That reference does nothing more than refer to a particular kind of follow-on contract in the context of sole source contracts.

How do you know that follow-on contracts, whatever they are, are rare"?

Here is a link to the code in question, Vern.

http://uscode.house.gov/view.xhtml?req=granuleid:USC-1999-title41-section253&num=0&edition=1999

(B) in the case of a follow-on contract for the continued development or production of a major system or highly specialized equipment when it is likely that award to a source other than the original source would result in (i) substantial duplication of cost to the Government which is not expected to be recovered through competition, or (ii) unacceptable delays in fulfilling the executive agency's needs, such property may be deemed to be available only from the original source and may be procured through procedures other than competitive procedures.

By "true sense" I mean "term of art" as you have described in your writings, as opposed to some colloquial usage.

No, there is no express "statutory definition" found in Title 10 of which I am aware.  I was drawing an inferred definition from the context in which it is used under that section.  FAR Subsection 6.302-1 makes three references to the same term.  All exist in the same context, the only variation being that one paragraph also mentions supplies for the same.

By "rare" I mean, relatively speaking, the number of reported contract actions in FPDS categorized as such compared to the total number of reported actions within the most recently completed fiscal year.  Moreover, I would further qualify that statement by underscoring "those that have been reported properly per the guidance that FPDS as administered under GSA provides."

Specifically, you asked, "How do you know that follow-on contracts, whatever they are [emphasis added], are rare"?  I would submit to you that we must reach some consensus as to what a follow-on contract is before we can move on to the question of whether they are rare.

A question for you: If I am correct to understand you apply a broader definition to "follow-on contract" than what I have cited, I would appreciate your definition and its statutory and regulatory basis, including citations.

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Guest Vern Edwards
3 minutes ago, Guardian said:

Here is a link to the code in question, Vern.

The link you provided was to the 1994 code and a 2000 supplement. We're in 2018. Try again.

4 minutes ago, Guardian said:

By "true sense" I mean "term of art" as you have described in your writings, as opposed to some colloquial usage.

Okay, so what is the meaning of that term of art?

5 minutes ago, Guardian said:

By "rare" I mean, relatively speaking, the number of reported contract actions in FPDS categorized as such compared to the total number of reported actions within the most recently completed fiscal year. 

What are the numbers for FY 2016?

6 minutes ago, Guardian said:

If I am correct to understand you apply a broader definition to "follow-on contract" than what I have cited, I would appreciate your definition and its statutory and regulatory basis, including citations.

You are not correct. I don't have any definite understanding of what the term means in actual usage. I suppose that different practitioners would define the term differently. I have made no affirmative statement about the meaning of follow-on contract. I am not aware of any overarching official definition of the term, and if the term is a rises to the status of a term of art we wouldn't cite a statute or a regulation. We would refer to instances of usage.

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GAO/NSIAD-86-59 from April 1986, PROCUREMENT The Use of Unpriced Options and Other Practices Needs Revision

Page 26, Footnote 1.

‘“Follow-on contract” means a new, noncompetitive procurement placed with an incumbent contractor, either by a separate new contract or by a supplemental agreement, to continue or augment a specific military program, where such placement was necessitated by prior procurement decisions. An example is a contract award for production of a major weapon system to the contractor that developed the system when award to any other source would result in substantial duplication of cost to the government that is not expected to be recovered through competition.

http://www.gao.gov/assets/150/144237.pdf

I love WIFCON - and thank you JWomack!

 

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38 minutes ago, Vern Edwards said:

The link you provided was to the 1994 code and a 2000 supplement. We're in 2018. Try again.

Vern, just because a law is dated 1994 or 2000 ipso facto does not nullify the law.  You know that as well as I.  But your larger conclusion is correct; that particular title and section were repealed [handclap]. Any insight as to why?  The parallel citations in regulation for the term in question are still there, as is the substantially parallel statute in Title 10.  So then, my larger point stands supported.  I am still waiting on your citations.

Okay, so what is the meaning of that term of art?

There is no definition in Part 2, nor one in code.  The most pertinent context seems to be the reporting field in FPDS, which refers us to 6.302-1.  Based on what GSA wants me to input for awarded actions, I would have to defer to the citations they provide, which point right back to what I stated earlier.

What are the numbers for FY 2016?

If you read the second part of my statement you will see that I allude to the fact that there is a fair amount of reporting under this field, which is likely erroneous.  I recently attended an FPDS reporting webinar sponsored by GSA and the moderator indicated that this is a grossly over-reported field that "rarely" applies.  He cautioned us against selecting it.  Here is the guidance from the FPDS user's manual.

Follow-on contract – For a Definitive Contract, report this code if the action was justified pursuant to FAR 6.302-1(a)(2)(ii) or FAR 6.302-1(a)(2)(iii).

You are not correct. I don't have any definite understanding of what the term means in actual usage. I suppose that different practitioners would define the term differently. I have made no affirmative statement about the meaning of follow-on contract. I am not aware of any overarching official definition of the term, and if the term is a rises to the status of a term of art we wouldn't cite a statute or a regulation. We would refer to instances of usage.

Ok, so then based on your candid admission, are you comfortable with a fluid definition depending on the user's interpretation or are you more so of the mindset that with the term shrouded in such ambiguity, perhaps we should be careful making liberal references to it?

 

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Guest Vern Edwards
4 hours ago, Guardian said:

Vern, just because a law is dated 1994 or 2000 ipso facto does not nullify the law.  You know that as well as I.  But your larger conclusion is correct; that particular title and section were repealed [handclap]. Any insight as to why?  The parallel citations in regulation for the term in question are still there, as is the substantially parallel statute in Title 10.  So then, my larger point stands supported.  I am still waiting on your citations.

Guardian, if you're going to lecture someone about usage and then cite statute in support, do your homework.

Title 41 was recodified seven years ago. See FAR 1.110 and 6.302-1(a)(2)(ii)(B). 41 USC 253(d)(1)(b) is now 41 USC § 3304(b)(2). The old section was repealed as part of the new positive law codification. You have a lot of nerve asking me for citations.

4 hours ago, Guardian said:

Ok, so then based on your candid admission, are you comfortable with a fluid definition depending on the user's interpretation or are you more so of the mindset that with the term shrouded in such ambiguity, perhaps we should be careful making liberal references to it?

Candid admission? I haven't made any admission, candid or otherwise. What I did was call you out because you said:

8 hours ago, Guardian said:

I suspect there might be a misapplication of the term here. 

You then followed that statement with a lot of malarky. Your "larger point" is pointless. The OP did not misapply the term. His usage is not contrary to any official definition or established term of art, and you cannot prove differently.

The GAO definition that Carl quoted has no official standing. The quote was just an expression of GAO's view of what it thought that the term should have meant in the DOD context discussed in the GAO report. DOD concurred, but that definition was never inserted into statute or the FAR.

Since that report, GAO has used the term "follow-on contract" in exactly 200 protest decisions. In several, GAO has referred to the idea of a "competitive follow-on." See e.g., Worldwide Language Resources, Inc., B-299315.7, 2010 CPD ¶ 208:

Quote

Protest that agency improperly increased dollar ceiling of contract for linguist and translator services in support of U.S. troops in Afghanistan to bridge the period until the agency can award a competitive follow-on contract for the services is denied where the record shows that the agency reasonably concluded that the incumbent contractor was the only firm capable of meeting the agency's interim need for the services.

So GAO's own usage has not been consistent with its 1986 proposed definition.

I know what I think the term ought to mean based on my own experience with usage. But I would not say that someone who uses it differently is necessarily using it wrongly. My view is as I put it in the thread to which Carl provided a link: "However, you can never be quite sure about what a person means when they use the term 'follow-on contract' or 'logical follow-on', so it's always a good idea to ask for clarification."

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Guest Vern Edwards
18 hours ago, slthomas527 said:

My concern is can I award a contractor a contract to begin when the PoP for the current contract that is awarded to the same contractor has not ended?

If the overlap in time is for the same work, then the answer is no. There is no law or regulation to that effect, but it should not take much in the way of brains for a CO to see that such an overlap would make no sense. Why do what would not make sense?

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For my post, I am defining a "follow on contract" to mean a contract for continued services (IT helpdesk, security guards, emergency response services... anything where continued performance will be required), which I have encountered quite frequently.

I believe that, depending on the type of service provided, the requiring activity may want that overlap to allow for a smooth transition from one contractor to another.  Since in many of these cases, the workers are merely "changing their shirts", this overlap is primarily for the new management team that comes in and for any turnover that results because of the contract change (for example, employee XX is offered a lower salary by the new contractor, promptly quits and then a new employee is hired).

It is not uncommon in these situations for an overlap to exist.  If the incumbent wins the contract, a bilateral modification normally follows (or a partial T4C to the previous contract).

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Guest Vern Edwards

If that's what the OP was talking about, then the term for the "overlap" is phase-in, phase-out period or just phase-in period.

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