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apsofacto

The Purpose of this Contract Is . . .

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There are times in a man's life when he has to look hard in the mirror, spit mouthwash at his own reflection, and decide for himself whether or not something is a cardinal change. 

We have learned on the message boards over the years there is now hard and fast rule for determining this answer, there is just a judgement of whether or not the instant change to the SOW, the contract price, or the schedule deviates from the original purpose of the contract.

I have found myself adding these types of sentences to SOWs as both cardinal-change-battlespace-preparation. (Also seems useful to describe what the higher-rank folks think this Contract is for):

Quote

1. The purpose of this Contract is to provide all provide all unarmed security guard services for the Haughton T. McWhackadoodle Airforce Base.

Quote

2. The purpose of this Contract is to provide all necessary engineering services to support the Pennington B. Bottomtoothe Aqueduct project.

Quote

3. The purpose of this Contract is to provide all necessary resources to create, implement and maintain the Environmental Protection Agency's (EPA's) Sludge Accretion Database (SAD).

These are fictional examples, but you are welcome to google.

Example 1 is vulnerable to price increases (e.g. security is ramped up after a security event).  Example 2 is vulnerable to both price and period of performance increases if the construction phase of the project drags on.  Example 3 could be vulnerable to all three: price, period of performance and scope changes.

Is this a waste of time?  Is it accomplishing my goal of cardinal change battlespace preparation?  Or is this sort of thing just superfluous?

 

 

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I do the same thing -- I think those statements can be very important.

The enemy in these battles is usually not the contractor or a prospective protester -- the enemy is almost always Government reviewers in the process.

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Thanks, Ji, I'll continue then.  Appreciate your insight about the Government reviewers. 

Anyone-

I seem to spend a lot of time reviewing SOWs lately, and I don't think I'm the only one.  This seems like a challenging area for beginners so please feel free to post any advice as a comment or as a new post.  Folks will be interested.  I'll do another one about Background sections later. 

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apsofacto, to accomplish your battle goals, you should also consider crafting language in the solicitation. The GAO will consider both the "scope of the contract" and the "scope of the competition." Scope of the contract is familiar to most. Scope of the competition is the ignored factor which deals with the solicitation and what is communicates to potential offerors. 

A more narrow and precise solicitation gives less wiggle room for modifications. A broad and sweeping solicitation, that describes a very large potential area of work (scope) gives more wiggle room for modifications.

So, consider using your tactics in the solicitation, not just the contract. 

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3 hours ago, apsofacto said:

there is now hard and fast rule for determining this answer, there is just a judgement of whether or not the instant change to the SOW, the contract price, or the schedule deviates from the original purpose of the contract

For ammunition with your battles with supervisors, consider the same factors that the GAO considers. 

Is this modification reasonably contemplated by the competition (solicitation, scope of the competition) and the contract itself (scope of the contract)?

Is there a material difference between what was contemplated and the actual modification?

Did the solicitation adequately advise offerors of the potential for this change?

Could this modification be reasonably anticipated under the Changes clause or some other language in the contract?

Each scope analysis is highly fact-specific.

Factors: materiality, type of work (services, supply...time and PoP changes matter much more to a services contract), performance period, actual difference in price, contract type, requirement, solicitation, contract, past procurements

Here's the GAO copy pasta they use, over and over again:

“…consider whether the solicitation for the original
contract adequately advised offerors of the potential
for the type of changes found in the modification, and
thus whether the modification would have materially
changed the field of competition.”


“Thus a broad original competition may validate a
broader range of later modifications without further
bid procedures.”

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4 hours ago, PepeTheFrog said:

A broad and sweeping solicitation, that describes a very large potential area of work (scope) gives more wiggle room for modifications.

Can you think of any areas in the solicitation other than the scope?  Q&As not incorporated into the solicitation leap to mind as a possibility. 

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Is the matter of discussion of "cardinal change" a GAO issue at all?

I would suggest that GAO references to same are used as a comparative reference not a doctrine with regard to protests.  Pepe has it closer where "scope of competition" is where they go. "Cardinal Change" is a doctrine used by boards and courts with regard to matters in dispute about breach of contract..   

From the Contract Attorneys Deskbook of 2014 "Out-of-Scope (“Cardinal”) Change – A contract change that is not within the general scope of the original contract in terms of type and amount of work, period of performance, and manner of performance."  Note the "and".   No legal expert here but by my read of all kinds of resources a cardinal change is so profound that it is the cause for a contractor to refuse to do the work not a matter of basis for protest.

https://www.gao.gov/assets/690/683966.pdf states this (more GAO pasta to consider) -

"To assess whether a contract is so substantially changed by the modification that the original and modified contracts are essentially and materially different, we consider such factors as the extent of any changes in the type of work, performance period, and costs between the modification and the original contract, as well as whether the original solicitation adequately advised offerors of the potential for the change or whether the change was the type that reasonably could have been anticipated, and whether the modification materially changed the field of competition for the requirement."

 

 

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10 hours ago, C Culham said:

No legal expert here but by my read of all kinds of resources a cardinal change is so profound that it is the cause for a contractor to refuse to do the work not a matter of basis for protest.

If you have a "scope of the contract" problem, the contractor may or may not comply. Contractors generally like more money for more work.

The incumbent contractor is not your risk factor. The other contractors or potential offerors are the risk. If they find out that the government modified a contract for work that could be found to be out of scope, and therefore a cardinal change, they might have a valid basis for the protest. Once they protest, that's where the "scope of the competition" analysis by GAO comes in.

The other contractors could gain GAO jurisdiction for a bid protest by saying (a) the modification was new work, not within scope; (b) the new work was not competed, and was instead effectuated via sole-source, albeit in a modification; (c) there was no J&A (or the J&A was defective or inadequate-- although it's tough to fight a J&A) or any other reason to go sole-source; and (d) therefore, the modification was a violation of the Competition in Contracting Act, which requires full and open competition unless there is an exception, etc.

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Thanks C,

Cannot speak for the others, but I always gravitate toward GAO because their decisions are just so much easier to read, and I know how to use their search engine.  Not the best reasons! 

However, I have noticed they weigh in on this one contract admin issue on the occasion when a disappointed firm sees a contract modification they do not like on a contract they lost (as with your example).  I remember seeing this more with contract mods that add a chunk of work, so its nice to read your example because it is new to me.

I thought this passage from your link was also worth reading:

Quote

In our view, the agency did not improperly relax the specifications because the original nature and purpose of the solicitation and contract has not been changed by modification P00004. The capabilities and missions of the 7-person I-CRC and 15-person I-CAC set forth in the solicitation and contract remain the same after the modification to the contract. The changes to the purchase descriptions of the boats and motors are relatively minor when viewed against the entirety of all of the contract specifications and performance requirements. Defense Systems Group; Warren Pumps, Inc.; Dresser Indus., Inc., B-240295 et al., 1990 U.S. Comp. Gen. LEXIS 1182, Nov. 6, 1990 (protest denied where modifications involved substantial cost and affect first article test requirements, delivery schedule, and performance specification but did not change the nature and purpose of the original contract).

There may have been a different outcome had the Contractor floated up this bad-boy for first article testing- would have been one Valhalluva big change to the original contract specs and performance requirements:

Capture.PNG.d0859ec3086ff270847bad7143fa2791.PNG

 

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16 hours ago, apsofacto said:

Can you think of any areas in the solicitation other than the scope?  Q&As not incorporated into the solicitation leap to mind as a possibility. 

All of it. Think beyond your conception of the word "scope." You're thinking about a section in a contract or solicitation that you call "scope." That's not going to save you. You can't just use magic words.

Don't think of your "scope" section. Instead, think about the scope analysis, which is case-by-case, and relies on specific facts.

You can write the best "scope" section in the world, and the GAO or some other analyst could find that whatever actions you took were not within the scope of the contract and/or competition.

Your "scope" section is helpful, but the scope analysis will consider much more than your "scope" section of magic words. Think substance over form.

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11 hours ago, PepeTheFrog said:

The incumbent contractor is not your risk factor.

Pepe - Are you saying not a risk factor at all? Or, greater risk with regard to the others?  And, in either case what is your reference?  

As this is the beginners area it would be beneficial if you could add a little substance (reference).

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C Culham, 

PepeTheFrog thought the text after your quotation, which you did not quote, made it clear that the "risk factor" referred to bid protests:

On 3/6/2019 at 9:16 AM, PepeTheFrog said:

The incumbent contractor is not your risk factor. The other contractors or potential offerors are the risk. If they find out that the government modified a contract for work that could be found to be out of scope, and therefore a cardinal change, they might have a valid basis for the protest. Once they protest, that's where the "scope of the competition" analysis by GAO comes in.

The other contractors could gain GAO jurisdiction for a bid protest by saying (a) the modification was new work, not within scope; (b) the new work was not competed, and was instead effectuated via sole-source, albeit in a modification; (c) there was no J&A (or the J&A was defective or inadequate-- although it's tough to fight a J&A) or any other reason to go sole-source; and (d) therefore, the modification was a violation of the Competition in Contracting Act, which requires full and open competition unless there is an exception, etc.

Allow PepeTheFrog to elaborate:

The incumbent contractor is not a risk factor for a bid protest triggered by providing sole-source work via modification. The incumbent contractor will not protest the award of work to itself.

Contractors like to receive new work. It's generally good for business. They may, however, refuse to perform the work if the money isn't adequate or if the work is not appealing for some reason. That is a type of risk, but not bid protest risk. In such a case, the incumbent contractor may refuse to perform the work and say it is a cardinal change, out of scope, breach of contract. But there will be no bid protest from the incumbent contractor.

Bid protest risk comes from sources other than the incumbent contractor. Bid protest risk comes from the other competitors, who are upset that the government awarded "new work" (out of scope work) on a sole source basis via modification.

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