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We are waiting to be awarded our next Option Year on our government contract.   Do we have to go back to all our subs and do competitive bidding again?   I didn't think we had to since we competitively bid them on the initial proposal and award....

Thanks,

Jo A Brown 

 

 

 

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Does "initial proposal and award" mean the base contract and all the options?? How much time has elapsed since the initial contract award? I would have expected your company to have already issued awards to subcontractors that included the base period work and all option work, if any, that was included in the prime contract initial award. That way, all your company would need to do is exercise the option. Could you please clarify?    

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They awarded an IDIQ and each option year is a separate Task Order.  The subs that we have had on contract all submitted their rates for the option years out, so I can't understand why we would have to competitively compete each subcontractor each option year?

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Still not clear to me. Does the contract from the Government include a price and SOW for each option year? How many option years are included and priced in the Government contract your company signed? What is the date the Government contract was awarded? Does the Government contract include FAR  and/or DFARs or some other Agency clauses? Did your company submit cost or pricing data and sign a certified cost or pricing certificate? Was this for the base period work and all the option years? Did your company submit a small business subcontracting plan to the Government? Did the small business plan include the base period work only or did it include all the option years? Did your subcontractors submit similar cost or pricing data/certificates to your company?  Is your company subject to a periodic Contractor Purchasing System Review? Does your company have an approved Purchasing System?

There is just too much info missing for me to understand what is going on contractually and compliance wise with respect to regulatory and contractual requirements. Maybe someone else can provide you guidance with just the information you have given. It is hoped my prompting of more information above gives you a sense that it a simple yes or no answer may not be the best answer. 

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1 hour ago, JoABrown said:

We are waiting to be awarded our next Option Year on our government contract.   Do we have to go back to all our subs and do competitive bidding again?   I didn't think we had to since we competitively bid them on the initial proposal and award....

Thanks,

Jo A Brown 

 

 

 

Are you asking because the government told you that you must recompete your subcontracts?  You didn’t explain why you are asking the question (or I missed it)..  Thanks 

 

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Does the contract from the Government include a price and SOW for each option year? - Yes.   How many option years are included and priced in the Government contract your company signed - 10 years  What is the date the Government contract was awarded 2012 Does the Government contract include FAR  and/or DFARs or some other Agency clauses? Yes Did your company submit cost or pricing data and sign a certified cost or pricing certificate? Yes  Was this for the base period work and all the option years?  Yes Did your company submit a small business subcontracting plan to the Government? Yes Did the small business plan include the base period work only or did it include all the option years? All option years  Did your subcontractors submit similar cost or pricing data/certificates to your company?  Subs are FFP.   Is your company subject to a periodic Contractor Purchasing System Review? Does your company have an approved Purchasing System?  Yes.  We just finished and passed our CPSR. 

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Has a Government official (such as the contracting officer) told you that you need to get new competitive bids from your subs? 

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No they have not.  The team here have been doing it for the past few years because they thought they had to, but I'm not able to figure out why.  In my past experience, I did not have to do market research, RFPs, etc., for option year pricing since all that was done prior to award.  

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JoABrown, congratulations to you and your company on an approved system!

Based solely on your specific response above, and having no other facts, I see nothing that would cause me to believe the Government has any contract or regulatory right to require your company to competitively bid subcontractors for an option year exercised by the Government via Task Order. The Government option appears to have been fully priced with a complete SOW in 2012. However, it is not clear what your company practice has been each year since the 2013 option year. All 10 year options should have already been included in subcontractor purchase contracts, and if that were done, there would be no question about obtaining new bids. None would be obtained because obtaining new bids would be in breach of contract with the subcontract. What has your company practice been since 2013 with respect to subcontracts? Has it issued separate purchase contracts to each subcontractor each year? Has the price in such subcontracts been the same as the price that was included in your companies current cost or pricing data to the Government in 2012, or has your company been obtaining different pricing from that subcontractor each year and definitizing a lower price?

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  If your company's prime contract is FFP, obtaining new subcontract bids each year is a risky financial practice. Supposing the subcontract market price was significantly higher each year than the price for the outer years that was bid in 2012? What if a subcontractor for the required work can no longer be easily found 10 years later? Potential breach of contract with your customer. Also, that practice does not seem to enhance subcontractor relations. Finally, issuing a new purchase contract would require compliance with the approved system, potentially submitting revise subcontracting plans, obtaining new representations and certifications, etc.
  

 

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Do we have to go back to all our subs and do competitive bidding again

  1. To what end?  Are you actually going to throw a sub off the contract based on their re-bid?
  2. What does your subcontract agreement say about options?
  3. Did you include the quals of your sub(s) in your proposal/quote?

I would be worried about creating the impression in the client's mind that the prime was pulling a bait-and-switch, i.e., it looks  kind of sneaky.

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I am assuming that your priced option year contract prices are FFP.  If so, the contract prices should not be subject to adjustment solely due to yohur actual cost experience, unless there was a change in the contract terms and conditions and/or technical requirements/scope of the work.

Am I a correct in assuming that the contract prices have not been adjusted each option year to reflect re-competing subs?  If not,  then there is no contractual requirement to do this. It then appears that your company is either bid shopping to get better subs’ pricing or there may be other legitimate reasons, such as replacing poor performers, for example. 

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