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52.222-46, Evaluation of Compensation for Professional Employees


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Question -

Does the IDIQ permit the addition of non-negotiated "new" labor categories?  If so, is there a percentage limitation?  It appears to me that if the IDIQ does not specifically address this possibility, then you may be wanting to do something that is out of scope of the IDIQ contract.  

 

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@MAY-D-FAR-B-WIT-U, this post is extremely hard to follow. You seem to be asking multiple questions and implicating multiple issues. I strongly recommend reviewing the following post, then editing for clarity.

Are you trying to find out if the inclusion of FAR 52.222-46 in a TORFP converts the solicitation procedures from 16.505 to 15?

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Thanks FrankJon, my initial question is to find out if 52.222-46 applies to orders under 16.505 when the evaluation required by the clause was already performed during the award of the IDIQ?  I then read the prescription for the clause a second time and saw that it only applies to "negotiated contracts", which led to my next question and maybe resulted in my confusing post.

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2 hours ago, MAY-D-FAR-B-WIT-U said:

my initial question is to find out if 52.222-46 applies to orders under 16.505 when the evaluation required by the clause was already performed during the award of the IDIQ?

It depends. In reality, it's up to the CO. Why do I say that? Let's break down the prescription at 22.1103. 

  1. It applies only to "negotiated contracts." According to FAR 15.000, a negotiated contract is:

    Quote

    A contract awarded using other than sealed bidding procedures is a negotiated contract

    Therefore, a task order contract qualifies as "negotiated," not just FAR 15 contracts. See also the definition of "negotiated contract" in The Government Contracts Reference Book. So go to #2.

  2. There's a $700,000 threshold. Is your task order over or under that? If over, continue to #3. (And if it's under, I don't think there's anything stopping you from continuing to #3 if you think it's appropriate.)

  3. It applies when "services are to be provided which will require meaningful numbers of professional employees." Huh?? What is a "meaningful number"? This is why I say it's up to the CO. Any number can be considered "meaningful" or "non-meaningful" depending on perspective. This prescription is kind of ridiculous in this sense. Also, have you confirmed that these are "bona fide" professionals you're hiring, in accordance with FAR 22.1102? I've seen COs overlook this language, thinking the provision applies to all service contracts. In reality, it applies to only a sliver of the service contract pie.

  4. Last, I'll point out that the Provisions & Clause Matrix indicates that this provision is not intended for commercial services. So there is another discriminator if you're looking for wiggle room.

So, if upon reading all of that, you think it applies, then it applies. But there's also a common sense aspect to this. Doing the evaluation required by this provision at the IDIQ level in a multiple award setting doesn't achieve much because the risks it is supposed to mitigate will return once the task orders are competed. That is, contractors may feel incentivized to under-compensate professional employees in order to win work. Unless this provision or similar price or cost realism language is in the TORFP, then they will have the flexibility to do just that. 

When you're contracting for services in a competitive environment, it's usually a good idea to include some kind of "realism" evaluation language in the solicitation to protect the Government's interests (even if it's just "optional" language). Whether you do that through 52.222-46 or custom language is up to the CO.

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16 hours ago, FrankJon said:

So, if upon reading all of that, you think it applies, then it applies. But there's also a common sense aspect to this. Doing the evaluation required by this provision at the IDIQ level in a multiple award setting doesn't achieve much because the risks it is supposed to mitigate will return once the task orders are competed. That is, contractors may feel incentivized to under-compensate professional employees in order to win work. Unless this provision or similar price or cost realism language is in the TORFP, then they will have the flexibility to do just that. 

It depends as well, in my read, on whether the parent IDIQ(s) set specific rates for categories of workers or other side boards with regard to the exact professional employees that are contemplated to perform task order work.   I note this based on the sentence in the clause that states " As a part of their proposals, offerors will submit a total compensation plan setting forth salaries and fringe benefits proposed for the professional employees who will work under the contract."  wherein if the plan applies to the whole of the work contemplated under the parent IDIQ(s) it would seem re-evaluation would not be necessary at the task order level. 

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47 minutes ago, Retreadfed said:

As regards the clauses that apply to that contract, look at FAR 52.216-18.

OP is asking about a provision, which isn't in the contract. Maybe the Government stipulated that rates are fixed, as @C Culham suggested, in which case that term would apply per 52.216-18. But I doubt that's what occurred.

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On 7/2/2018 at 8:45 AM, MAY-D-FAR-B-WIT-U said:

Is a task order competed among multiple IDIQ holders considered a "negotiated contract"

Yes.

On 7/2/2018 at 8:45 AM, MAY-D-FAR-B-WIT-U said:

does a negotiated contract only refer to contract awarded using FAR 15 procedures?

No.

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Guest Vern Edwards

Oh, for Pete's sake. See FAR 22.1103. FAR 52.222-46 is a solicitation provision that is to be inserted in RFPs for new contracts. It has no bearing on fair opportunity procedures under FAR 16.505(b)(1). It does not apply when conducting competitions for task orders under MATOCs, which does not entail issuing an RFP, because it is not a new competition, but an order against an existing contract. FAR 16.505(b) does not require the issuance of a solicitation.

FAR is a mess. You have to make sense of it. Professional employee compensations should have been evaluated in connection with the award of the underlying IDIQ contract.

 

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6 minutes ago, Vern Edwards said:

Oh, for Pete's sake. See FAR 22.1103. FAR 52.222-46 is a solicitation provision that is to be inserted in RFPs for new contracts. It has no bearing on fair opportunity procedures under FAR 16.505(b)(1). It does not apply when conducting competitions for task orders under MATOCs, which does not entail issuing an RFP. Get a clue. You people are making life too complicated for yourselves.

Why? What are you basing this on other than "See FAR 22.1103"? Where within 22.1103 did you pull the "RFP" terminology on which you appear to be hanging your hat? 

I reviewed 22.1103. I talked about it. I gave my reasoning for my conclusion, based upon regulation and business rationale. If you have additional insight that's not conclusory and needlessly abrasive, I'm sure we'd all like to hear it.

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Frank, the prescriptive language in 52.222-46 says to insert the following provision.in accordance with 22.1103.  In turn 22.1103 requires contracting officers to insert the provision at 52.222-46 in solicitations for negotiated contracts, i.e., RFPs.  Nowhere is 52.222-46 referred to as a clause.  Looking at FAR 2.101, a provision goes into a solicitation not contracts.  On the other hand, a clause goes into both solicitations and contracts.  Based on this it is clear that 52.222-46 is not a contract clause and should only be inserted in solicitations.  It should not be in an IDIQ contract.  If it is, someone made a mistake and would not be the first time a contracting officer included a solicitation provision as a clause to a contract.

I do not know why someone would include 52.222-46 in an IDIQ contract as part of the  procedures for issuing orders under that contract if that is what happened here.  Some people just like to make extra work for themselves.

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Guest Vern Edwards
2 hours ago, FrankJon said:

I reviewed 22.1103. I talked about it. I gave my reasoning for my conclusion, based upon regulation and business rationale. If you have additional insight that's not conclusory and needlessly abrasive, I'm suare we'd all like to hear it.

It's simple. Look at the OP's question:

On 7/2/2018 at 5:59 PM, MAY-D-FAR-B-WIT-U said:

My initial question is to find out if 52.222-46 applies to orders under 16.505 when the evaluation required by the clause was already performed during the award of the IDIQ?

The answer is no.

2 hours ago, FrankJon said:

Why? What are you basing this on other than "See FAR 22.1103"? Where within 22.1103 did you pull the "RFP" terminology on which you appear to be hanging your hat? 

FAR 22.1103 requires inclusion of FAR 52.222-46 in "solicitations for negotiated contracts." Such solicitations are RFPs. See FAR 2.101. FAR 52.222-46 is a solicitation provision.

FAR 16.505(b) does not require the issuance of an RFP when giving offerors a fair opportunity to be considered for an order under a MATOC. COs only need issue a "fair notice." Nothing in FAR describes such notices as solicitations or requires that they be in writing. 

While COs may, and have, evaluated professional employee compensation when awarding task orders, there is no requirement that they do so, and if they do so there is no requirement that they cite FAR 52.222-46, which is much too formal.

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@FrankJon,

You second post answered most of my questions and although I pride myself on being able to research different topics and drawing a conclusion, you response shows me that I have a long way to go and I need to learn to be patient when seeking answers and dig even further. Thanks for taking the time.

@Vern Edwards

I also read "negotiated contracts" to mean RFP i.e. FAR 15 and did not think the provision will apply to orders under 16.505 but the FAR definition (A contract awarded using other than sealed bidding procedures) made me second guess myself and scratch my head a little bit.

@Retreadfed

56 minutes ago, Retreadfed said:

Based on this it is clear that 52.222-46 is not a contract clause and should only be inserted in solicitations.  It should not be in an IDIQ contract.

I am guessing by "IDIQ contract" you are referring to orders under an IDIQ. While I do understand the logic in your response, we sometimes insert additional provisions when competing orders under 16.505 and in this case, we have. included additional provisions and making the decision not to include 52.222-46 because it's a provision will just be selective reasoning. I am not saying its right or wrong to include provisions in orders under 16.505 but i remember a post by Vern in which he stated that "IDIQ contracts were originally designed to be used to buy pre-specified and pre-priced products and simple services". Now we have IDIQ's used my multiple agency and sometimes we need to bring in agency specific provisions.

Just to clarify a few points,

The evaluation called for in the provision was completed during the award of underlying IDIQ contracts and the maximum rates were fixed for all IDIQ holders during award. FrankJon makes the point that "Doing the evaluation required by this provision at the IDIQ level in a multiple award setting doesn't achieve much because the risks it is supposed to mitigate will return once the task orders are competed". This is important in my case for 2 reasons 1) we encourage offerors to provide a discount to the IDIQ rates and 2) Because the IDIQ is used by a few agencies,  it permits deviations from the standard labor categories in the IDIQ to accommodate everyone. In our case, about 30% of our labor categories are deviations ( all requiring higher education and experience) from the standard labor categories. These deviations are new labor categories that were obviously not evaluated at the IDIQ level.

Thank you all for your input, I think I have enough information to recommend a course of action to my KO.

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Guest Vern Edwards
On 7/2/2018 at 8:56 PM, FrankJon said:

Therefore, a task order contract qualifies as "negotiated," not just FAR 15 contracts. 

I disagree. FAR 15.000, Scope, says:

Quote

This part prescribes policies and procedures governing competitive and noncompetitive negotiated acquisitions. A contract awarded using other than sealed bidding procedures is a negotiated contract (see 14.101).

You have to interpret regulations as a whole. The second sentence in the above quote explains the scope of FAR Part 15. It is not a definition of "negotiated contract" that applies throughout the FAR. There is no FAR-wide definition of negotiated contract. In that regard, see FAR 1.108(a), 2.101, and 52.202-1.

While delivery and task orders issued pursuant to FAR 16.505 may be contracts as defined in FAR 2.101, I see no justification for saying that such orders are negotiated contracts as that term is explained and used in FAR 15.000 or used in FAR 22.1103. I don't recall anything in FAR 16.505(b) indicating that FAR Part 15 applies to the MATOC ordering process or that COs must comply with 22.1103 when providing a fair opportunity. So, absent other authority, any notion that FAR 22.1103 and 52.222-46 apply to MATOC orders because FAR 15.000 indicates that they are negotiated contracts is based on a false premise.

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The language of the provision at 52.222-46 Evaluation of Compensation for Professional Employees, appears to only be applicable when re-competing for existing services. It doesnt seem to fully line up with the broader policy stated in in FAR 22.11.

 However, it seems that the policy in FAR 22.11 or the procedures therein for evaluating proposed  compensation for professional employees could  be as important or applicable in a task order as it would be for re-competing services for a new stand alone service contract. This would be applicable where not all professional compensation is pre-priced in the base ID/IQ contracts or where the competing firms may offer discounted pricing,

In such situations, the government would be soliciting* a proposal or proposals for a task order,  not simply “issuing an order”. I don’t see why it would be inappropriate to include the provision at 52.222-46, Evaluation of Compensation for Professional Employees (or similar evaluation language) in such a solicitation*.  

*The definition of solicitation in FAR Part 2 says, in part: “Solicitation means any request to submit offers or quotations to the Government. “

I think that this is what MAY-D-FAR is referring to in his/her last post. 

Quote

The evaluation called for in the provision was completed during the award of underlying IDIQ contracts and the maximum rates were fixed for all IDIQ holders during award. FrankJon makes the point that "Doing the evaluation required by this provision at the IDIQ level in a multiple award setting doesn't achieve much because the risks it is supposed to mitigate will return once the task orders are competed". This is important in my case for 2 reasons 1) we encourage offerors to provide a discount to the IDIQ rates and 2) Because the IDIQ is used by a few agencies,  it permits deviations from the standard labor categories in the IDIQ to accommodate everyone. In our case, about 30% of our labor categories are deviations ( all requiring higher education and experience) from the standard labor categories. These deviations are new labor categories that were obviously not evaluated at the IDIQ level.

 

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Guest Vern Edwards

I agree that a check of professional compensation might make sense when issuing an order, but that was not the question.

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12 minutes ago, Vern Edwards said:

I agree that a check of professional compensation might make sense when issuing an order, but that was not the question.

I wasn’t sure what the original question was. The OP apparently rewrote it after several responders questioned it. 

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Well I am still stuck on the original question as posed.   I believe it was whether the provision 52.222-46 should be included in a TO solicitation under an IDIQ or something close to this question?  I did a query of the GAO protest website using a couple of different search criteria and several decisions came up.

In my quick read of a few of the decisions that came up I did not find one that was definitive as to whether the provision applies to TO RFP’s but it is clear that agencies have included it in TO RFP’s and information received in response to the TO RFP has been used in the evaluation of responses to TO RFP’s.  My conclusion is that as GAO has opined about how the provision is applied to evaluation of a TO RFP response  and at the same time never questioned it being in the TO RFP then yes an agency may determine when the provision is applicable and include it in the TO RFP.  

Here is a couple of GAO decisions that lead to my conclusion.

https://www.gao.gov/products/D15639

https://www.gao.gov/products/D16573#mt=e-report

I would note that in the several hits (decisions) that came up they addressed other issues discussed in this thread as well as they relate to the provision such as inclusion in commercial item solicitations, etc.

I did not research the OP’s   question,  now posed after edits, but going out on a limb I would say that absent something different from GAO it appears GAO considers RFP’s for TO that lead to an awarded contract are “negotiated contracts” at least for application of provision of 52.222-46.  I say this noting as well that GAO has adopted the rule, at least by my read over the years, that if an agency applies FAR Part 15 processes to selection of a contractor for award then FAR part 15 is used as the determining principles as to whether an agency followed due process and therefore the definition of FAR Part 15 applies.

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Guest Vern Edwards
1 hour ago, C Culham said:

I would say that absent something different from GAO it appears GAO considers RFP’s for TO that lead to an awarded contract are “negotiated contracts” at least for application of provision of 52.222-46. 

I searched Westlaw for any GAO decisions that included both phrases "task order" and "52.222-46". I found a total of 23 such decisions, which included the two to which Carl provided links. The earliest  was from July 1995 and the most recent was from June 2018.

Of the 23, only seven were about task order competitions, including competitions under 16.505, FSS, GWAC contracts, and BPAs. Here they are:

  1. LOGC2, B-416075, Jone 2018 (FAR 16.5 protest; Army task order "RFTOP" did not include FAR 52.222-46; protest denied)
  2. Target Media Mid Atlantic, B-412468.8, June 2017 (Navy "Seaport" formal RFP; expressly invoked FAR 52.222-46; protest denied)
  3. Micro Technologies, B-413091.4, February 2017 (Air Force GWACS formal RFP; expressly invoked 52.222-46; protest denied)
  4. Micro Technologies, B-413091, August 2016 (same procurement as No. 3, above; protest sustained)
  5. Odyssey Systems, B-412519, March 2016 (Air Force "RFTOP" under GWACS; expressly invoked FAR 52.222-46; protest dismissed/denied)
  6. Systems Research and Applications, B-406775.3, April 2013 (Navy "Seaport" "TORFP"; expressly invoked 52.222-46; request for atty's fees; request denied)
  7. Belzon, B-404416, February, 2011 (Army "RFQ" against a GSA FSS BPA; FAR 52.222-46 not included in solicitation; protest denied)

I searched those decisions for the phrase "negotiated contract." That phrase did not appear in any of those decisions. 

I do not see any justification for Carl's conclusion that "GAO considers RFP’s for TO that lead to an awarded contract are 'negotiated contracts'”.

As far as I can tell, the GAO has never addressed the question of whether task orders are "negotiated contracts" as that term is used in FAR 22.1103, has never suggested that it thinks they are, has not ruled that they are, and has not indicated that FAR 52.222-46 necessarily applies to task order competitions under FAR 16.505(b) or any other task order competition procedure. If a CO invokes the provision, then GAO will consider whether the agency applied it properly. All the more reason not to invoke the provision.

 

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On 7/3/2018 at 5:39 PM, Retreadfed said:

Frank, the prescriptive language in 52.222-46 says to insert the following provision.in accordance with 22.1103.  In turn 22.1103 requires contracting officers to insert the provision at 52.222-46 in solicitations for negotiated contracts, i.e., RFPs.  Nowhere is 52.222-46 referred to as a clause.  Looking at FAR 2.101, a provision goes into a solicitation not contracts.  On the other hand, a clause goes into both solicitations and contracts.  Based on this it is clear that 52.222-46 is not a contract clause and should only be inserted in solicitations.  It should not be in an IDIQ contract.  If it is, someone made a mistake and would not be the first time a contracting officer included a solicitation provision as a clause to a contract.

Retreadfed: I'm not sure what you're getting at. You said: 

On 7/3/2018 at 11:25 AM, Retreadfed said:

As regards the clauses that apply to that contract, look at FAR 52.216-18.

In response, I said:

On 7/3/2018 at 12:17 PM, FrankJon said:

OP is asking about a provision, which isn't in the contract. Maybe the Government stipulated that rates are fixed, as @C Culham suggested, in which case that term would apply per 52.216-18. But I doubt that's what occurred.

I was clarifying that your suggestion to look at 52.216-18 did not address OP's original question, unless the CO had incorporated the information received from 52.222-46 into the IDIQ and in some way made it binding (which I doubt).

On 7/3/2018 at 5:39 PM, Retreadfed said:

I do not know why someone would include 52.222-46 in an IDIQ contract as part of the  procedures for issuing orders under that contract if that is what happened here.  Some people just like to make extra work for themselves.

Because maybe it makes business sense. What if, as I suspect, the CO included it in the original solicitation as a basis to establish the IDIQ awardees, but did not incorporate the information into the contracts? The risks discussed by 52.222-46 would reappear with each TORFP. Maybe a simpler realism analysis would do the trick. Maybe the CO thinks 52.222-46 is more appropriate. As I said in my original response, I think that should be at the CO's discretion. I don't believe that 52.222-46 could ever truly be made "mandatory" because the prescription is vague.

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Guest Vern Edwards
20 minutes ago, FrankJon said:

I don't believe that 52.222-46 could ever truly be made "mandatory" because the prescription is vague.

The worst thing about 52.222-46 is the language of the provision itself:

Quote

Recompetition of service contracts may in some cases result in lowering the compensation (salaries and fringe benefits) paid or furnished professional employees. This lowering can be detrimental in obtaining the quality of professional services needed for adequate contract performance... Additionally, proposals envisioning compensation levels lower than those of predecessor contractors for the same work will be evaluated on the basis of maintaining program continuity, uninterrupted high-quality work, and availability of required competent professional service employees. Offerors are cautioned that lowered compensation for essentially the same professional work may indicate lack of sound management judgment and lack of understanding of the requirement.

As Joel has pointed out, that language suggests that the provision applies to recompetes. Yet the prescription seems to apply it to any service contract that will employ significant numbers of professionals.

There is no requirement to use the confusing boiler plate of 52.222-46. If you want to evaluate professional compensation under a prospective task order, write your own language.

And don't go overboard. Keep it simple.

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On ‎7‎/‎3‎/‎2018 at 6:47 PM, Vern Edwards said:

While COs may, and have, evaluated professional employee compensation when awarding task orders, there is no requirement that they do so, and if they do so there is no requirement that they cite FAR 52.222-46, which is much too formal.

Vern: To be clear, I don't think anybody (including myself) suggested that 52.222-46 is mandatory when issuing a TORFP (this is the term OP used, by the way). I said that it's at the CO's discretion. I recommended usually performing, or at least leaving door open for performing, some kind of realism analysis. If the CO wants to do that informally, that's fine. If the CO thinks 52.222-46 applies, that's fine. Given that there is no FAR-wide definition of "negotiated contract," I stand by my "clueless" advice.

Here is what The Government Contracts Reference Book (4th ed.) says for "Negotiated Contract":

Quote

A contract awarded using a procedure other than sealed bidding. FAR 15.000. Procedures for awarding negotiated contracts are in FAR Part 15. Negotiated contracts may be awarded on a competitive or sole source basis. Smaller negotiated contracts are awarded using the simplified acquisition procedures in FAR Part 13. Contracts for commercial items are awarded using the procedures in FAR Part 12.

This says to me that the likes of Ralph Nash et al. think that the term "negotiated contract" applies beyond FAR 15.

And here's an example I found from Vern Edwards (2012 ed.):

Quote

Even with the labor and fee rates you must request certified cost or pricing data if the order exceeds $700,000 and if none of the exceptions applies. That's because certified cost or pricing data are required before the award of a "negotiated contract," and a CPFF LOE task order is a negotiated contract. See FAR 2.101 for the definition of contract, FAR 15.000 for the definition of "negotiated contract," and FAR 15.403-4(a)(1)(i) for the requirement for certified cost or pricing data. The price for CPFF LOE task orders is not established at the time of award of the underlying IDIQ contract. See FAR 15.401 for the definition of "price." The price is established after the award of the underlying contract -- prior to the award of the task order, whether CPFF term or LOE. The establishment of hourly rates for cost estimating purposes does not constitute establishment of prices for orders.

This tells me that Vern Edwards (2012 ed.) thought "negotiated contract" could apply specifically to 16.505 procedures, despite the fact that Vern Edwards (2018 ed.) confidently states:

On ‎7‎/‎4‎/‎2018 at 1:28 AM, Vern Edwards said:

While delivery and task orders issued pursuant to FAR 16.505 may be contracts as defined in FAR 2.101, I see no justification for saying that such orders are negotiated contracts as that term is explained and used in FAR 15.000 or used in FAR 22.1103.

 

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The general policy and prescription at 22.1103   “Policy, procedures, and solicitation provision” don’t align with the language in the Provision at 52.222-46, which seems to concern re-competing services that include meaningful numbers of professional employees.

 Nonetheless, the expressed policy would logically seem to be applicable to other than IFB acquisitions -at least for recompeting services (and maybe for new services) -whether they be for a new stand-alone contract or for a task order under an ID/IQ contract. 

Why would the government not be equally concerned about the realism of compensation plans for professional employees for a new contract as well as for a task order?  

Granted, there are disconnects between the prescription at 22.1103 and the language in the Provision but the policy concerning realistic compensation plans and the stated concerns In the provision for recompeted services would seem to be valid for a task order or for a C-type separate contract. 

So, should a contracting officer merely literally read and follow the FAR or try to understand the intent of the labor policy and reasonably apply it? 

Not having access to a law library or to LEXIS, etc., I tried to follow the regulatory trail of the prescription and the Provision. I wasn’t able to view the older Federal Register volumes that cited  in my various hardbound FAR’s. My oldest is from 1996. The Provision dates back to 1993 and the FR pages are dated 12/21/1992 (which I couldn’t download). The language and paragraph organization of the prescription in the 1996 FAR varies somewhat but still references similar scope of the policy. 

 

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Note: I was composing my above post while Vern and the others were posting during the past hour or so.  I agree that the CO should use their head to compose appropriate language to meet the intent of the policy if the application would not fit the wording of the provision. 

The disconnect between the policy and the provision goes back to at least the 1996 FAR.  

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