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Reprocurement After T4C


jjj

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Reaching back into a pool of competitive offers for a second award from that pool is permissible after the first award is terminated for default (GAO bid protest decision Maersk Line, B-410445; B-410445.2, December 29, 2014) -- this is rather commonly done.  The Court of Federal Claims allowed this reach back (instead of a new competition) after the first award was terminated for convenience (Coastal Environmental Group, No. 13-71C, August 13, 2014) -- this is probably done only rarely.

My contracting office is thinking of drafting a provision for use in solicitations for service contracts to put offerors on notice that we may may want to exercise this reach back flexibility (instead of a new competition) if we terminate the first awarded contract for default or convenience, or otherwise choose not to exercise an option, within 15 months of the date of the first award.  One might say that we already have this flexibility even if we're silent (at least for terminations), but we have no problem with being transparent and providing a notice.  I'm interested in any thoughts on this approach from the WIFCON community. 

Here's the draft of our provision--

AWARD OF A REPROCUREMENT CONTRACT

          (a) The Government intends to make one contract award resulting from this solicitation to the offeror that provides the best value to the Government.  At any time within fifteen months after award of that contract (the first contract), the Government may award a reprocurement contract to another offeror (based on the evaluation conducted for award of the first contract) if the Government—

                    (1) terminates the first contract; or

                    (2) does not exercise a performance period option under the first contract.

          (b) Award without discussions.  If an identification of a second-ranked offeror was made for award of the first contract, the contracting officer may rely on that ranking to select the offeror to be awarded the reprocurement contract.  If a ranking of offerors was not made, the selecting authority may re-visit the evaluation results and select the best value offeror.  In either case, if the period for acceptance of offers has ended and the prospective awardee does not agree to extend its offer acceptance period, another offeror may be selected.

          (c) Award with discussions.  The contracting officer may establish a competitive range of the most highly rated proposals based on the evaluation that supported the first contract award.  The procedures of FAR 15.306 and 15.307 will apply.  The offeror’s final proposal revision shall specify the period for acceptance of its offer.

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Guest Vern Edwards
35 minutes ago, jjj said:

My contracting office is thinking of drafting a provision for use in solicitations for service contracts to put offerors on notice that we may may want to exercise this reach back flexibility (instead of a new competition) if we terminate the first awarded contract for default or convenience, or otherwise choose not to exercise an option, within 15 months of the date of the first award.  One might say that we already have this flexibility even if we're silent (at least for terminations), but we have no problem with being transparent and providing a notice.  I'm interested in any thoughts on this approach from the WIFCON community. 

You're not being clear.

  1. Are you saying that your office want to reserve the right to accept an offer ("reach back") from one of the unsuccessful offerors up to 15 months after the first award?
  2. Are you saying that you think you already have that "flexibility"?
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jjj,

3. Are you saying that the government's declination to exercise a performance period option is tantamount to a termination for default?

4. Are you saying that the GAO decision you cited supports a "reach back" instead of a new procurement, where the government declines to exercise a performance period option?

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jjj -

Have you considered FAR Subpart 1.4 in creating and inserting your provision in light of the comments already posted?   

Further is it really a provision or should it be a contract clause in consideration of the definitions of FAR Part 2?

Leave it alone you are headed down a slippery slope.   

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Thanks for feedback!

Vern Edwards,

  • 1.  Yes.  15 months might be a little excessive, and we might want to use a shorter period.
  • 2.  Just wondering, not asserting.  It is already clearly established that we have some reach back ability in a T4D situation.  We're wondering if that flexibility can apply in other situations when an awarded contract does not complete.

here_2_help,

  • 3.  No, I never said that.
  • 4.   No, I never said that.

Retreadfed,

Neil,

  • There are no cost or pricing data or certification concerns in a competitive acquisition, and if there were, extending the validity of an offer is a wholly voluntary action.

C Culham,

  • There is no deviation.
  • Yes, we're looking at it as a provision, because it only has meaning in an unaccepted offer.

All,

  • In simplest terms, the purpose is to give notice to unsuccessful offerors that, after award of the first contract, the Government might approach them and invite them to extend the validity of their offer in case the first contract doesn't complete.  In some cases, this approach will be more advantageous to everyone than starting an entirely new acquisition.
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20 minutes ago, jjj said:

,

  • There is no deviation.
  • Yes, we're looking at it as a provision, because it only has meaning in an unaccepted offer.

No deviation?  How so?  Have you made that determination based on both FAR 1.401 (a) and (f)?

 

Provision?  Related to my comment above are you sure your provision at (a) ((1) does not impact and have bearing on the rights of the contractor being terminated whether T4C or T4D per the termination clauses that would be in their contract.  The later is noted as your provision simply says terminated.  Full comment made as government has responsibility to mitigate dollars and cents under any termination, partial or full.

 

 

 

 

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Guest Vern Edwards

@jjj

Your office is thinking about including the following provision in its RFPs:

On 7/17/2018 at 7:57 AM, jjj said:

AWARD OF A REPROCUREMENT CONTRACT

          (a) The Government intends to make one contract award resulting from this solicitation to the offeror that provides the best value to the Government.  At any time within fifteen months after award of that contract (the first contract), the Government may award a reprocurement contract to another offeror (based on the evaluation conducted for award of the first contract) if the Government—

                    (1) terminates the first contract; or

                    (2) does not exercise a performance period option under the first contract.

          (b) Award without discussions.  If an identification of a second-ranked offeror was made for award of the first contract, the contracting officer may rely on that ranking to select the offeror to be awarded the reprocurement contract.  If a ranking of offerors was not made, the selecting authority may re-visit the evaluation results and select the best value offeror.  In either case, if the period for acceptance of offers has ended and the prospective awardee does not agree to extend its offer acceptance period, another offeror may be selected.

          (c) Award with discussions.  The contracting officer may establish a competitive range of the most highly rated proposals based on the evaluation that supported the first contract award.  The procedures of FAR 15.306 and 15.307 will apply.  The offeror’s final proposal revision shall specify the period for acceptance of its offer.

The question is---what is that supposed to accomplish?

See FAR 49.402-6:

Quote

 

49.402-6 Repurchase against contractor’s account.

(a) When the supplies or services are still required after termination, the contracting officer shall repurchase the same or similar supplies or services against the contractor’s account as soon as practicable. The contracting officer shall repurchase at as reasonable a price as practicable, considering the quality and delivery requirements. The contracting officer may repurchase a quantity in excess of the undelivered quantity terminated for default when the excess quantity is needed, but excess cost may not be charged against the defaulting contractor for more than the undelivered quantity terminated for default (including variations in quantity permitted by the terminated contract). Generally, the contracting officer will make a decision whether or not to repurchase before issuing the termination notice.

(b) If the repurchase is for a quantity not over the undelivered quantity terminated for default, the Default clause authorizes the contracting officer to use any terms and acquisition method deemed appropriate for the repurchase. However, the contracting officer shall obtain competition to the maximum extent practicable for the repurchase. The contracting officer shall cite the Default clause as the authority. If the repurchase is for a quantity over the undelivered quantity terminated for default, the contracting officer shall treat the entire quantity as a new acquisition.

(c) If repurchase is made at a price over the price of the supplies or services terminated, the contracting officer shall, after completion and final payment of the repurchase contract, make written demand on the contractor for the total amount of the excess, giving consideration to any increases or decreases in other costs such as transportation, discounts, etc. If the contractor fails to make payment, the contracting officer shall follow the procedures in Subpart 32.6 for collecting contract debts due the Government.

 

The following is from a very recent GAO decision:

Quote

As a preliminary matter, with regard to the repurchase of supplies or services not delivered under a contract terminated for default, FAR §49.402–6(b) provides that a contracting officer “shall obtain competition to the maximum extent practicable.” Section 49.402–6(b) of the FAR further provides that if, as here, the repurchase is for a quantity not over the undelivered quantity, the contracting officer may “use any terms and acquisition methods deemed appropriate for the repurchase.”

While recognizing, as a general rule, that the statutes and regulations governing regular procurements are not strictly applicable where the government seeks cover after default, also called reprocurement or repurchase, our Office will review such a procurement to determine whether the contracting agency acted reasonably under the circumstances. Derm–Buro, Inc., B–400558, Dec. 11, 2008, 2008 CPD ¶226 at 2; Adaptive Concepts, Inc., B–243304, June 25, 1991, 91–1 CPD ¶605 at 3. In this context, our Office has concluded that it is reasonable to award a reprocurement contract to the next lowest-priced, qualified firm under the original solicitation at its original price, provided the time span between the original competition and the default is relatively short, and there is a continuing need for the services. Adaptive Concepts, Inc., supra; DCX, Inc., B–232692, Jan. 23, 1989, 89–1 CPD ¶55 at 3. Under such circumstances, an agency reasonably can view the responses received under the original solicitation as an acceptable measure of what competition would bring, sufficient to satisfy the requirement of FAR §49.402–6(b) for competition to the maximum extent practicable. Maersk Line, Limited, B–410445, B–410445.2, Dec. 29, 2014, 2015 CPD ¶16 at 4–5; International Tech. Corp., B–250377.5, Aug. 18, 1993, 93–2 CPD ¶102 at 3.

Matter of: Aerosage, LLC, B-416200 (July 6, 2018)

The COFC has said:

Quote

FAR 14.101 does not bar a procuring agency from returning to an earlier stage of the sealed bidding process if the agency is unable to proceed under an awarded contract. In fact, once a procuring agency terminates a contract awarded through the sealed bidding process, there appear to be no legal obstacles preventing the agency from seeking to revive earlier bids. See, e.g., Performance Textiles, Inc., B–256895, 94–2 CPD ¶ 65 (Comp.Gen. Aug. 8, 1994) (holding, when a contract is terminated for default, “that it is reasonable to award a repurchase contract to the next low responsive, responsible bidder on the original solicitation at its original bid price provided that there is a relatively short time span between the original competition and the default and there is a continuing need for the items”); V & Z Heating Corp., B–224725, 86–2 CPD ¶ 472 (Comp. Gen. Oct. 20, 1986) (holding that a procuring agency may permit a second-low bidder to revive its expired bid after terminating the contract awarded to the lowest bidder for the submission of an inadequate bid guarantee, so long as it “would not compromise the integrity of the competitive bidding system” to do so); Architectural Window Sys., Inc., B–213799, 84–1 CPD ¶ 326 (Comp.Gen. Mar. 19, 1984) (holding that a procuring agency could, after awarding a contract, seek to revive a withdrawn bid upon determining that the withdrawal of the bid was based on its erroneous interpretation of the IFB); Ubique, Ltd., DOTCAB No. 71–28, 72–1 BCA ¶ 9340 (noting that the procuring agency, after terminating the originally awarded contract for default, awarded a new contract to the second-low bidder after asking the second-low bidder to extend its bid acceptance period); see also Rice Servs., Ltd. v. United States, 25 Cl.Ct. 366, 368 (1992) (holding that the integrity of the competitive acquisition process is not compromised when a procuring agency asks all offerors to revive their proposals after the expiration of the acceptance period); TCA Reservations, Inc., B–218615, 85–2 CPD ¶ 163 (Comp.Gen. Aug. 13, 1985) (“[A] bidder may extend its acceptance period, and thus revive its expired bid, where it offered the acceptance period required by the IFB, and revival of the bid would not compromise the integrity of the competitive bidding process.”).

Coastal Envtl. Grp., Inc. v. United States, 118 Fed. Cl. 1, 12–13 (2014)

What would your office's draft provision accomplish? It seems to me that the draft provision is more restrictive than the current rules as interpreted by the GAO and the COFC. 

 

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