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Prezmil2020

FFP or T&M Task Order Using FAR 8.4

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Good Afternoon,

I have a requirement for servicing and repairing Automated Integrated Survey Instruments (AISIs). The PWS reads that each instrument requires the same type of work to be performed on it: replace internal battery, external and internal adjustments and cleaning, check all seals and fitings, etc. The Requesting Activity stated that there is a minimum of 10 and a maximum of 120 AISIs that may be required each year. I am still new to contracting and would like to know how you would award this task order-FFP, T&M, FFP w/ EPA, etc. Some Contracting Officers state that it should be FFP because the risk is mostly with the Contractor but others are arguing for a T&M or LH because the Government doesn't know how many AISIs will need to be serviced throughout the year. What are your thoughts? Let me know if you need additional information in making your response.

Prezmil2020

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Good Afternoon,

I have a requirement for servicing and repairing Automated Integrated Survey Instruments (AISIs). The PWS reads that each instrument requires the same type of work to be performed on it: replace internal battery, external and internal adjustments and cleaning, check all seals and fitings, etc. The Requesting Activity stated that there is a minimum of 10 and a maximum of 120 AISIs that may be required each year. I am still new to contracting and would like to know how you would award this task order-FFP, T&M, FFP w/ EPA, etc. Some Contracting Officers state that it should be FFP because the risk is mostly with the Contractor but others are arguing for a T&M or LH because the Government doesn't know how many AISIs will need to be serviced throughout the year. What are your thoughts? Let me know if you need additional information in making your response.

Prezmil2020

I am assuming that you are using some type of GSA Schedule, due to the thread you posted under.

You don't know how many, but you know the minimum and maximum number per year. You also know the scope of services and know that the scope is the same for each instrument, so the scope of the service requirement is fixed. Why not use a unit-price contract arrangement (cost per instrument) and set up a BPA with one or more firms for repetitive needs? T&M or labor hour pricing arrangement wouldn't be appropriate when the scope of services for each unit is known and is essentially fixed.

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I am assuming that you are using some type of GSA Schedule, due to the thread you posted under.

You don't know how many, but you know the minimum and maximum number per year. You also know the scope of services and know that the scope is the same for each instrument, so the scope of the service requirement is fixed. Why not use a unit-price contract arrangement (cost per instrument) and set up a BPA with one or more firms for repetitive needs? T&M or labor hour pricing arrangement wouldn't be appropriate when the scope of services for each unit is known and is essentially fixed.

That is correct, I plan on awarding a task order against an FSS contract. I forgot to mention that the manufacturer of the instruments will not allow the Government to own the data rights, as per the Requesting Activity, therefore it is the only one who can perform the services required. This will be a sole source procurement. Does this change your procurement method?

Thanks,

Prezmil2020

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That is correct, I plan on awarding a task order against an FSS contract. I forgot to mention that the manufacturer of the instruments will not allow the Government to own the data rights, as per the Requesting Activity, therefore it is the only one who can perform the services required. This will be a sole source procurement. Does this change your procurement method?

Thanks,

Prezmil2020

I'm curious what others think but no, I would still use unit prices. With sole source, I assume that you'd negotiate the unit price. Hope that somebody has an idea of the amount of effort necessary to service those instruments.

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I'm curious what others think but no, I would still use unit prices. With sole source, I assume that you'd negotiate the unit price. Hope that somebody has an idea of the amount of effort necessary to service those instruments.

There is a new requirement to the PWS. In addition to the standard maintenance of each system, the Requiring Activity would like the Contractor to assess each system and inform the Government if it needs to be repaired. If the costs to repair the system are less than 65% of purchasing a new system, than the Contractor shall repair the system. How would you solicit and award the repair element of the PWS? Again, this will be a sole-source buy under FAR 8.4 with the manufacturer of the system. Until the system is assessed, the Contractor and the Government won't know what parts need to be replaced or repaired. The Requiring Activity is standing firm (no pun intended) that the award be firm-fixed price but the variance in level of effort to fix one system versus another system can be rather large. Any thoughts?

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There is a new requirement to the PWS. In addition to the standard maintenance of each system, the Requiring Activity would like the Contractor to assess each system and inform the Government if it needs to be repaired. If the costs to repair the system are less than 65% of purchasing a new system, than the Contractor shall repair the system. How would you solicit and award the repair element of the PWS? Again, this will be a sole-source buy under FAR 8.4 with the manufacturer of the system. Until the system is assessed, the Contractor and the Government won't know what parts need to be replaced or repaired. The Requiring Activity is standing firm (no pun intended) that the award be firm-fixed price but the variance in level of effort to fix one system versus another system can be rather large. Any thoughts?

The contractor gives you a price for repair after they inspect/assess, right? Do the repair on a FFP basis. The risk to the contractor is small since they should no what's required at that point.

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Guest carl r culham

Prezmil2020 - You note throughout your posts that you are getting services - servicing and repair of the AISI's. I do wonder what GSA-FSS contract you are doing this under. While Schedule 66 is for scientific instruments and services whether the services you need are actually covered under the specific GSA-FSS contract is a question I want to raise. While a GSA contractor may state in their synopsis of the GSA contract that the servicing and repair is available it may not be on the specific GSA-FSS contract. If not on the contract remember you are then seeking the services as an open market item rather than as an GSA-FSS item. To ensure the GSA-FSS contract does cover "services" too you may want to read the actual contract and/or contact the GSA representative that oversees the contract. Other ways of checking is to review the GSA Advantage price list of the specific contract. I note all this as it has been my experience that many GSA-FSS contracts for supplies are simply for that, supplies, and services provided are outside the scope of the GSA-FSS contract and again must therefore be purchased as an open market under other parts of the FAR.

To read the contact clauses of Schedule 66 go here http://www.gsaelibrary.gsa.gov/ElibMain/co...heduleNumber=66 and click on view solicitation clauses. This same link lists the GSA contact for the schedule.

If you have already researched this sorry for mudding the water and not addressing your real questions, I am just concerned that all have reasoned that the needed services are GSA-FSS services.

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Carl,

Your words of warning are sound. However Group 66 does have a lot of services on it. This is from one of the item numbers:

"66 502 Equipment Maintenance and Repair - This PSO offers customers the choice between hourly repair and annual service agreements. Examples of such PSO's include time and material service and fixed price per incident repair service. "

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Prezmil2020 - You note throughout your posts that you are getting services - servicing and repair of the AISI's. I do wonder what GSA-FSS contract you are doing this under. While Schedule 66 is for scientific instruments and services whether the services you need are actually covered under the specific GSA-FSS contract is a question I want to raise. While a GSA contractor may state in their synopsis of the GSA contract that the servicing and repair is available it may not be on the specific GSA-FSS contract. If not on the contract remember you are then seeking the services as an open market item rather than as an GSA-FSS item. To ensure the GSA-FSS contract does cover "services" too you may want to read the actual contract and/or contact the GSA representative that oversees the contract. Other ways of checking is to review the GSA Advantage price list of the specific contract. I note all this as it has been my experience that many GSA-FSS contracts for supplies are simply for that, supplies, and services provided are outside the scope of the GSA-FSS contract and again must therefore be purchased as an open market under other parts of the FAR.

To read the contact clauses of Schedule 66 go here http://www.gsaelibrary.gsa.gov/ElibMain/co...heduleNumber=66 and click on view solicitation clauses. This same link lists the GSA contact for the schedule.

If you have already researched this sorry for mudding the water and not addressing your real questions, I am just concerned that all have reasoned that the needed services are GSA-FSS services.

Carl,

You are 100% correct. I did some additional market research and am having doubts as to whether or not the services are awarded under the contract. I had asked for additional information and am waiting for this. Thanks for the advice.

Prezmil2020

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The contractor gives you a price for repair after they inspect/assess, right? Do the repair on a FFP basis. The risk to the contractor is small since they should no what's required at that point.

That makes sense to me. With that said, if the Contractor quotes me a price for repair for a specific unit is the task order still considered FFP as the repair price of each unit may change depending on what is wrong with it or is it T&M? My understanding of FFP is that the price never changes and the Government is responsible of paying the total amount agreed upon when the contract or order is awarded and the Contractor is responsible for delivering or performing what is required by the Government. As the Government doesn't know how many units will need to be repaired other than a minimum of 10 and a maximum of 400+ or the scope of repair for each unit, would it still be FFP if each unit is priced that way?

Prezmil2020

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f the Contractor quotes me a price for repair for a specific unit is the task order still considered FFP as the repair price of each unit may change depending on what is wrong with it or is it T&M? My understanding of FFP is that the price never changes and the Government is responsible of paying the total amount agreed upon when the contract or order is awarded and the Contractor is responsible for delivering or performing what is required by the Government. As the Government doesn't know how many units will need to be repaired other than a minimum of 10 and a maximum of 400+ or the scope of repair for each unit, would it still be FFP if each unit is priced that way?

Prezmil2020

Are you going to order maintenance/repair on a unit-by-unit basis, one order per unit? If so, then use FFP. The prices of each of the various orders might be different, but so what?

If you are going to send a set of units to the contractor to be maintained and repaired under a single order, and if the work might be different for each of the various units, then you might not be able to agree to a fixed-price per order, unless you have the contractor examine the units and then quote a price. If you're not going to do that you might have to use a T&M arrangement.

However, Automated, Integrated Survey Instruments, which are electronic instruments used by topographic and construction surveyors, might be simple enough that the cost of maintenance and repair does not vary much per unit. If so, it might be easy to agree to a fixed-price, either per unit or for all work.

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Are you going to order maintenance/repair on a unit-by-unit basis, one order per unit? If so, then use FFP. The prices of each of the various orders might be different, but so what?

If you are going to send a set of units to the contractor to be maintained and repaired under a single order, and if the work might be different for each of the various units, then you might not be able to agree to a fixed-price per order, unless you have the contractor examine the units and then quote a price. If you're not going to do that you might have to use a T&M arrangement.

However, Automated, Integrated Survey Instruments, which are electronic instruments used by topographic and construction surveyors, might be simple enough that the cost of maintenance and repair does not vary much per unit. If so, it might be easy to agree to a fixed-price, either per unit or for all work.

I have a follow-up question. Our funding official is questioning how the task order will be established as FFP (if that is the route I go). Essentially, the Government requires the Contractor to service each instrument, diagnose each instrument if something is found to be wrong with it, and repair the instrument if the Government agrees that it is below the Beyond Economic Repair cost (a percentage of what it would cost to buy new). Historically, the Government has sent approximately 55 instruments to be serviced, diagnosed, and/or repaired. However, the Government does not know how many specifically will need to be serviced, or diagnosed, or repaired each year-all it knows is that there are 190 in theatre and at any point something may break. With that said, would it make sense to: FFP the servicing portion of the PWS, FFP the diagnosing portion of the PWS, and FFP the repair portion of the PWS? If so, how would the Government fund this? Would a MIPR for an estimate of 55 for the year suffice? What if the Government doesn't send to the Contractor 55 instruments? I have yet to take Appropriations Law courses and funding is still new to me. Thanks.

Prezmil2020

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FFP can either refer to the total job or the unit price. In this case, I would negotiate a FFP unit price for servicing the instrument . You could do repair FFP either on a per unit basis, which could be the same amount for each instrument, different for each instrument, or on the basis of the entire lot of intruments the contractor has in their possessionat that time.

My suggestion is conduct market research (even though this is sole source) and

I think your funding official has the impression, firm fixed price applies to the entire work. It likely doesn't. What you may end up with is s eries or orders issued separately over a year.

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FFP can either refer to the total job or the unit price. In this case, I would negotiate a FFP unit price for servicing the instrument . You could do repair FFP either on a per unit basis, which could be the same amount for each instrument, different for each instrument, or on the basis of the entire lot of intruments the contractor has in their possessionat that time.

My suggestion is conduct market research (even though this is sole source) and

I think your funding official has the impression, firm fixed price applies to the entire work. It likely doesn't. What you may end up with is s eries or orders issued separately over a year.

Let me make sure I am understanding you correctly. I can negotiate the FFP of each labor category and parts that make up each unit and when the Government needs to have one serviced the Contractor will send me a FFUP for that specific instrument and that will be the total FFP for that instrument? We also agree that the FFUP can change depending on what needs to be repaired on each instrument, correct? Lastly, while I negotiate the FFP of each labor category and parts before the contract is awarded I will not know how many instruments will ultimately be needing services performed on them. Is a solution to have the Government obligate funds by quarter based on an estimate of how many instruments may need to be serviced that quarter? As each instrument is worked on by the Contractor and accepted by the Government than the Government will pay for those services from that MIPR, essentially drawing down from the funds. If there is money left over it gets carried over into the next quarter. At the end of the base period (one year), if there is money left over, the Government deobligates the rest, correct?

Prezmil2020

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Good Afternoon,

I have a requirement for servicing and repairing Automated Integrated Survey Instruments (AISIs). The PWS reads that each instrument requires the same type of work to be performed on it: replace internal battery, external and internal adjustments and cleaning, check all seals and fitings, etc. The Requesting Activity stated that there is a minimum of 10 and a maximum of 120 AISIs that may be required each year. I am still new to contracting and would like to know how you would award this task order-FFP, T&M, FFP w/ EPA, etc. Some Contracting Officers state that it should be FFP because the risk is mostly with the Contractor but others are arguing for a T&M or LH because the Government doesn't know how many AISIs will need to be serviced throughout the year. What are your thoughts? Let me know if you need additional information in making your response.

Prezmil2020

Try a mixed contract type. CLIN 1 is a firm fixed price for the first zero to ten units. CLIN 2 is a unit price for up to 110 additional units.

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