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Option not Exercised on Time - Now What? Does BAA change the response?

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16 minutes ago, ji20874 said:

All frogs must know that there are many contracts (and contract actions) that are exempt from CICA.  So, maybe it would be better to say that CICA “requires full and open competition for SOME new work or work that is outside the scope of the original contract...”  Is the BAA process one of the exceptions to CICA?

PepeTheFrog does not think that your suggested paraphrasing is accurate. CICA requires full and open competition through the use of competitive procedures unless there is an exception (listed in CICA) or there is a different statutory authorization, for example, "Other Transactions" under 10 USC 2371. CICA is "the default," unless you can find statutory authority to not use CICA. 

CICA also expressly names the FAR to implement what "competitive procedures" means. The BAA process is listed as a competitive procedure at FAR 6.102(d)(2). The BAA process is not an "exception to CICA." The BAA process is a competitive procedure available to fulfill the requirement for full and open competition (i.e. CICA).

What is your point? Are you referring to this language in subsection (c): "(B) to establish or maintain an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center"?

 

CICA

 

"§253. Competition requirements

(a) Procurement through full and open competition; competitive procedures

(1) Except as provided in subsections (b), (c), and (g) of this section and except in the case of procurement procedures otherwise expressly authorized by statute, an executive agency in conducting a procurement for property or services-

(A) shall obtain full and open competition through the use of competitive procedures in accordance with the requirements of this title and the Federal Acquisition Regulation; and

(B) shall use the competitive procedure or combination of competitive procedures that is best suited under the circumstances of the procurement."

 

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35 minutes ago, PepeTheFrog said:

CICA is "the default," unless you can find statutory authority to not use CICA. 

Right.  That’s why adding “some” made your sentence more correct.

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Pepe, my point is that you stated "when you "agree bilaterally to a modification to re-establish" - What contract are you modifying? There is no contract. As stated, "the contract expired in January." There is no modification possible. It's a legal fiction. You need a new contract, not a modification to something that doesn't exist. Isn't this "modification" effectively a new contract?"  What is your authority for saying that an expired contract, as you define it, is not capable of being modified?

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12 hours ago, Retreadfed said:

What contract are you modifying? There is no contract. As stated, "the contract expired in January." There is no modification possible. It's a legal fiction.

  You can modify a contract after its POP has expired.  It’s not uncommon, nor improper, to do this for late invoices.

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19 hours ago, PepeTheFrog said:

First, when you "agree bilaterally to a modification to re-establish" - What contract are you modifying? There is no contract.

Of course there is a contract. Just because the contract has expired, does not mean it does not exist.  I recently dealt with a contractor claim filed 4 years after the end of the contract.  I would have loved to have told the contractor that there was no contract.

Have the rights and responsibilities of the parties changed under that contract?  Absolutely.  That is why the option cannot be unilaterally exercised.  But the contract still exists.

The issue is not whether the contract exists, but whether there is authority to modify the contract to allow the parties to exercise the option.

19 hours ago, PepeTheFrog said:

As stated, "the contract expired in January." There is no modification possible. It's a legal fiction. You need a new contract, not a modification to something that doesn't exist. Isn't this "modification" effectively a new contract?

Yes, this is exactly my point.  I literally said, “my suggestion for modifying the contract to exercise the option is a legal fiction.  In reality, the KO is awarding a new contract for the work.”

19 hours ago, PepeTheFrog said:

Under this theory, the agency can tack on an unlimited number of bilateral modifications to the original award, as long as the period for submissions of proposals for the BAA is open. In other words, the agency can perform this shortcut indefinitely, over and over, using the same contractor/performer. Does anyone dispute that consequence? If you can do it once, you can do it twice. Does that not seem like a problem, and something that demonstrates why this shortcut violates the spirit and law of CICA?

It does not make sense to add an unlimited number of bilateral modifications on to an existing contract because when you start adding work that is not already covered by the underlying contract, then you need to make sure you have evaluated the proposed work, modified the SOW, included any applicable clauses that are needed, etc.  You are not saving yourself any work and are potentially making the contract documents more confusing.  In addition, by extending the contract you might inadvertently revive or extend the period to file a claim.  I can think of many reasons why you would not want to continually add work to a contract or revive an expired contract via a BAA award.  But those are administrative concerns, not CICA violations.

Fortunately, modifying the contract to exercise the lapsed option does not implicate those problems.  The work was already proposed and evaluated.  The terms and conditions have already been agreed upon.  My proposed solution is premised on several prerequisites including “1) the BAA allows for a direct award of a contract,” and “2) the work could otherwise be awarded as a new contract under the BAA…”  As you noted above, a BAA award is not an exception to CICA, it is full and open competition. (See FAR 6.102(d)(2)(1).)

Why would a direct award of a contract via modification of an expired contract be a violation of CICA, if a direct award of a stand-alone contract for that same work would not?  CICA governs the “competition,” it does not mandate the format of the contract award.

19 hours ago, PepeTheFrog said:

PepeTheFrog understands that a modification is easier to execute than a new contract. That saves some time. But what about the other work of "awarding against the BAA," which includes the non-contracting side of the agency? What about the peer or scientific technical review?

The peer/scientific review already happened when you awarded the contract.  Get a memo from the technical office saying the previous evaluation and selection decision has not changed.

19 hours ago, PepeTheFrog said:

Does that happen each time you use this fanciful theory or shortcut?

Yes.

19 hours ago, PepeTheFrog said:

Is it really saving you that much time?

That is up to the contracting officer to decide.  But we are not talking about adding work that requires a new SOW and clauses along with a new technical submission and evaluation.  We are addressing a situation in which the evaluation has already been conducted, all the terms and conditions have already been agreed to by both parties and the same work is still needed.  In that situation, every KO I have worked with has preferred to modify an existing contract rather than start from scratch.

19 hours ago, PepeTheFrog said:

Are you saying this entire shortcut happens in the contracting office, and skips the program office review?

No.  Hopefully, the contracting officer is never exercising an option, modifying a contract, or awarding a contract without involving the requiring activity/program office in some way.

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Thanks to all for responding. PepeTheFrog now understands and agrees with all the frogs who are saying that the form of the contractual agreement should not matter (i.e. new contract award versus modification to an existing or expired contract) as long as the underlying work it contemplates does or does not violate CICA. 

14 hours ago, Retreadfed said:

What is your authority for saying that an expired contract, as you define it, is not capable of being modified?

PepeTheFrog's point is not that it cannot be done, but that by focusing on the new work as essentially a new contract, the issues of CICA are clearer. PepeTheFrog was driving at the opposite stance of what Lionel Hutz explained well, which is that "if a direct award of a stand-alone contract would violate CICA, why would a direct award of a contract via modification of an expired contract not violate CICA?":

1 hour ago, Lionel Hutz said:

Why would a direct award of a contract via modification of an expired contract be a violation of CICA, if a direct award of a stand-alone contract for that same work would not?  CICA governs the “competition,” it does not mandate the format of the contract award.

Well said. PepeTheFrog agrees that this should be the focus of the analysis, not the form of the contract (new contract versus modification), but rather the substance of the new work (or work within the scope of the original contract).

2 hours ago, jwomack said:

You can modify a contract after its POP has expired.  It’s not uncommon, nor improper, to do this for late invoices.

PepeTheFrog said this, not Retreadfed. Retreadfed agrees with you, jwomack. Retreadfed was quoting PepeTheFrog.

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May be worth clarifying what contract expiration means because contracts don't have universally defined expiration dates. Contracts have delivery dates, completion dates, periods of performance, and ordering periods. Contracts can be physically complete, discharged, and closed out. At what point, if any, are modifications unallowable?

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17 hours ago, Jamaal Valentine said:

At what point, if any, are modifications unallowable?

It depends to a large degree on what clauses are in the contract and whether they survive contract closeout.  A prime example is the ability to revoke acceptance  due to a latent defect under the fixed price supply Inspection clause.  This right is open ended. 

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So, let's say that for a service contract, an option is exercised "late" during the option's own period of performance.

For instance, Option II from 15 Oct 2018 to 14 Oct 2019 is exercised on 29 Oct 2018.

Would one set retroactively set the effective date to 15 Oct, or set effective date to 29 Oct?

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2 hours ago, Sunstrider said:

So, let's say that for a service contract, an option is exercised "late" during the option's own period of performance.

For instance, Option II from 15 Oct 2018 to 14 Oct 2019 is exercised on 29 Oct 2018.

Would one set retroactively set the effective date to 15 Oct, or set effective date to 29 Oct?

Have you read FAR 43.101

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15 hours ago, Sunstrider said:

So, let's say that for a service contract, an option is exercised "late" during the option's own period of performance.

For instance, Option II from 15 Oct 2018 to 14 Oct 2019 is exercised on 29 Oct 2018.

Would one set retroactively set the effective date to 15 Oct, or set effective date to 29 Oct?

What do you mean by “is exercised ‘late’ during the option’s own period of performance”?

An option can be “exercised” later than originally provided in the contract only if the parties mutually agreed to an extension of the period during which the government can “exercise” the option.  

Otherwise, it would have to be a supplemental agreement (bilateral mod), not “exercising an option”  (unilateral mod). 

Are you indicating in your example that the mod is issued to add the work during ongoing performance of the optional work? 

Which brings up a question in my mind in the instant case.  The OP indicated that the work was added during the sixth month (June) after it should have started (January)  but appeared to say that it will be finished when originally contemplated (December). The OP also indicated that there would be lack of continuity of those personnel performing the work if it was re-competed. 

Could it be that the contractor was working for over five months without a mod to put it on contract?  Or was the period of performance shortened upon issuance to match the apparent original completion date?  

Either way would involve possible additional issues.

If you start something five months late but mutually agree to complete the effort by the original “period of performance completion date” (?) , it would necessarily be a modified effort, not as originally solicited and competed. 

if the contractor worked for five months without funding or contractual authority in order to retain the workforce, then other hmmm  Issues may be involved. 

Maybe I misunderstood the scenario. 

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