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napolik

Scope of the Competition

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I am attempting to convert contract types from T&M and FFP LOE to FFP or cost reimbursement. My client offers the opinion that a change of contract type is within the scope of the original competition. Thus, the shift in contract type can be accomplished without a new competition. After re-reading this post -http://www.wifcon.com/discussion/index.php?showtopic=65 - and the GAO decisions in DOR Biodefense Inc. and Emergent BioSolutions - B-296358.3 and B-296358.4, I believe that the shift in contract type is outside the scope of the competition, but I am not certain.

Does anyone have any case law to support or refute my belief?

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Guest Vern Edwards
I am attempting to convert contract types from T&M and FFP LOE to FFP or cost reimbursement. My client offers the opinion that a change of contract type is within the scope of the original competition. Thus, the shift in contract type can be accomplished without a new competition. After re-reading this post -http://www.wifcon.com/discussion/index.php?showtopic=65 - and the GAO decisions in DOR Biodefense Inc. and Emergent BioSolutions - B-296358.3 and B-296358.4, I believe that the shift in contract type is outside the scope of the competition, but I am not certain.

Does anyone have any case law to support or refute my belief?

I do not know of any case law about whether change in contract type is a change in the scope of the competition. However, based on recent GAO decisions, I think it likely that they would think that such a change is a change in scope, especially if the contract is relatively new.

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Would you change your mind if the negotiated FFP varies from the T&M maximum price or from the price of the FFP LOE?

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I agree with your client but I have no case law to support that position.

I think as long as the only change is contract type and the type of work, costs, and performance period remains unchanged, it can be accomplished without new competition or justified as sole source.

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T&M contracting requires a vendor to have a certain accounting system capability in order to properly perform - under FFP, such accounting capabilties are not required. Therefore, it is possible that a vendor did not bid on the original contract because it was not FFP.

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Guest Vern Edwards
Would you change your mind if the negotiated FFP varies from the T&M maximum price or from the price of the FFP LOE?

No.

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Would you change your mind if the negotiated FFP varies from the T&M maximum price or from the price of the FFP LOE?

How much will it vary from the original prices as competed (order of magnitude)?

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A minimum of plus or minus 10%.

When changing contract SOWs from LOE to FFP, I expect to introduce performance measures that do not exist in the current SOW. These measures could drive the prices up or down.

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As a side note, many agencies are renegotiating existing cost reimbursement and T&M contracts to FFP types as part of thir plans to reduce "high risk" contracts. Several plan to introduce performance metrics and incentives as you are doing. This is to comply with OMB's direction and reduce these types of contracts by 10%.

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As a side note, many agencies are renegotiating existing cost reimbursement and T&M contracts to FFP types as part of thir plans to reduce "high risk" contracts. Several plan to introduce performance metrics and incentives as you are doing. This is to comply with OMB's direction and reduce these types of contracts by 10%.

My agency is attempting to do the same because of the new initiatives in the Obama administration. However, we have decided that it would only make sense to make these conversions if the contracts were sole sourced to 8(a)s.

I raised this very questions a while back about converting contract types and was given guidance that doing so may be construed as a cardinal change because the the contractor would have to change the way they manage it from their end. Changing it from CR to FFP one would think it would be less of a management burdon.

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Guest Vern Edwards

napolik:

Why not ask GAO for a advance opinion? You would be doing a great service.

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I called GAO. After explaining the circumstances to the GAO rep and asking how I could obtain an advance opinion on the matter, I was told that GAO reps will caucus on the subject. The GAO rep will contact me in a day or two.

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I called GAO. After explaining the circumstances to the GAO rep and asking how I could obtain an advance opinion on the matter, I was told that GAO reps will caucus on the subject. The GAO rep will contact me in a day or two.

Please keep us all abreast of the GAO's advance opinion

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napolik

Have they called you back yet? This issue is coming up again in my agency. Many KOs here are struggeling to understand how in the world we are to convert LOE T&M CR types over to FFP when the original contracts were competed. I said earlier that the decision to do these conversions were to be made only to SS 8(a)s...I was wrong. We are attempting to do as many as possible.

Please keep us informed.

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I spoke with the GAO rep who understands well the significance of the issue. He said that the GAO attorneys are still looking at the issue and that he expects an answer in another day or two.

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I spoke with the GAO rep who understands well the significance of the issue. He said that the GAO attorneys are still looking at the issue and that he expects an answer in another day or two.

The GAO "informal" opinion is that a shift in contract type is outside the scope of the competition. Since GAO no longer issues "advance opinions" on protest issues, only appropriations issues, we will not receive a definitive opinion until GAO receives and decides a protest on this point.

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Guest Vern Edwards
The GAO "informal" opinion is that a shift in contract type is outside the scope of the competition. Since GAO no longer issues "advance opinions" on protest issues, only appropriations issues, we will not receive a definitive opinion until GAO receives and decides a protest on this point.

The informal opinion is consistent with GAO case law. However, "scope of competition" protests after award exceed GAO's statutory protest jurisdiction and are unwarranted intrusions into executive branch managerial prerogatives. An agency should reject the GAO's decisional findings and recommendations in such a protest unless the facts are that (1) the agency knew during a competition that it was likely to make a material change in the contract after award that is not authorized by a contract clause or (2) the change comes so soon after award that it raises reasonable doubts about the integrity of the competition that was held. Such changes should not be permitted except in extraordinary circumstances.

If the government wants to change contract type from one under which it bears significant cost risk to one under which it would bear less risk, the change is in the best interests of the government, and the change was not anticipated during the competition for the contract, then the government should be able to negotiate the change without conducting a new competition.

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Most likely, a protest on this involves a recent award. Otherwise an unsuccessful offeror either won't know or care about a contract type being re-negotiated. So assuming all offerors proposed and were evaluated on the same contract type and the agency re-negotiated the contract type with the successful offeror shortly after award, I can see how that is viewed as outside the scope of the competition.

However, if some time has passed (say at the end of option year two of a contract with a base and four option years), I don't see that as the same situation. The parties could agree it's mutually benefical to change the contract type for a variety of reasons. This likely wouldn't have any basis for the original source selection and so many things would have changed during that time anyway.

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Guest Vern Edwards

Clarification: If a "scope of competition" protest alleges a new procurement, i.e., a change in specification so drastic as to fundamentally alter the nature of what is being bought or an increase in quantity, then I think the protest falls within GAO jurisdiction. But I do not think that a change in contract terms that does not alter the nature or increase the quantity of the thing being bought falls within GAO jurisdiction, even though GAO may assert jurisdiction under CICA. GAO has sometimes taken an expansive view of its protest authority.

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This information will be brought to the next meeting to discuss how to go about performing this task. I'm sure it will have a big impact on which contracts we decide to finally convert...if any!

Thanks!

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