No Cost Cafeteria Contract

[Oja]

 

I have a no cost type cafeteria contract that is a five (5) years (base) with two (2) five (5) year options, which is typical for all the Cafeteria requirements I aw across board.

My question is, what is the legal authority for a cafeteria contract exceeding five years. It has been suggested to me to make the contract as award term because of my question.

However, my research of other cafeteria requirements does not show this language. Rather what makes sense to me because of my research is  that cafeteria/concession contracts are not Federal procurement contracts in that we are not directly receiving goods or services. We are authorizing a privilege; therefore, the statutory and/or regulatory requirements governing procurement contracts are not applicable. 

Where exactly is this authority cited or am I off the mark completely. Thanks

[Retreadfed]

Is this contract under the Randolph-Shepard Act?

[ji20874]

You don’t need an authority.  It sounds like you already have a contract with a potential life of 15 years.

Let anyone who objects provide the authority that prohibits anything over 5 years.  Then, investigate to see if that cited authority actually applies in your case.  If not, ignore the input.

The FAR does not apply to no-cost contracts, or concessionaire contracts.

[Oja]

Yes. Certain parts like the coffee shops and concession stands will  be given to them through direct negotiations per 34 CFR § 395.33(d).

 

[Neil Roberts]

45 minutes ago, ji20874 said:

The FAR does not apply to no-cost contracts, or concessionaire contracts.

Ji, do you mean there are no provisions in FAR whatsoever that apply to such contracts? Seems like a very broad brush. Not saying you are wrong. Just, in my mind, without further research, I imagine where something like the anti-deficiency FAR requirements might not apply, for example, but what about other things like competition, subcontracting requirements, discrimination certifications and requirements, etc. Could you elaborate or provide a cite? Thanks.

Edited December 5, 2019 by Neil Roberts
spelling of "not"

[Oja]

I found this online, it's from GAO Q&A a long time ago. I don't know if the link will work. But, I have pasted the relevant section below. The summary of it is that CICA rules apply because it is a procurement carried out by a federal agency. However, the FAR does not apply because no appropriated funds are used (no cost contact). So, the advise of using award term to justify the 15 year term is incorrect.

https://www.gao.gov › special.pubs › appforum2008 › nocostcontracts

 

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[Retreadfed]

4 hours ago, Neil Roberts said:

Could you elaborate or provide a cite?

Look at the definition of contract in 2.101.

[ji20874]

You found a good document, and Retreadfed is also pointing in exactly the right direction.  The GAO has made it clear a number of times that the FAR does not apply to no-cost contracts, although CICA does apply to them.  

[Retreadfed]

18 hours ago, Oja said:

Certain parts like the coffee shops and concession stands will  be given to them through direct negotiations per 34 CFR § 395.33(d).

If this is a no cost cafeteria concession contract, why is the whole contract not awarded in this way?

[Oja]

I am not sure if I am answering the question right. But my thinking is that the Randolph-Sheppard Act is not part of FAR, so it will still apply to concession and cafeteria contracts. There are numerous case law to show that it does. 

 

[Retreadfed]

I'll rephrase my question, why is the entire contract not being awarded through direct negotiations with the blind vendor?

[formerfed]

6 hours ago, Retreadfed said:

I'll rephrase my question, why is the entire contract not being awarded through direct negotiations with the blind vendor?

I’m not speaking for Oja but cafeteria operations require big investments, especially getting trained and experienced workers.  A blind vendor would almost have to be in large scale food servicing in Oja’s area to assume cafeteria contract operations on a government facility.  

[Neil Roberts]

I think GAO, Ji, Oja, and myself seem to agree that there are federal statutes that may apply even if the FAR implementation of them may not apply in this case. I contend they should not be automatically excluded from application just because FAR may not apply.  Oja's research did not seem to turn up a lot of deep analysis. My example: Is it ok to award a "no cost" contract to a debarred company that openly discriminates in the workplace and defend that action my alleging that those concepts do not apply because the contractor does not have a FAR contract and is therefore not a federal contractor?

[ji20874]

3 hours ago, Neil Roberts said:

I think GAO, Ji, Oja, and myself seem to agree that there are federal statutes that may apply even if the FAR implementation of them may not apply in this case. I contend they should not be automatically excluded from application just because FAR may not apply.  

Right.

3 hours ago, Neil Roberts said:

My example: Is it ok to award a "no cost" contract to a debarred company that openly discriminates in the workplace and defend that action my alleging that those concepts do not apply because the contractor does not have a FAR contract and is therefore not a federal contractor?

The Excluded Parties list reaches far beyond (or, in other words, is not limited to) FAR-based contracts.

[Neil Roberts]

I am surprised it looks to me that the government acquisition process does not seem to include a process that makes it clear what statutory requirements apply to the solicitation/award even when FAR is not applicable.

Edited December 15, 2019 by Neil Roberts
added "not"

[Retreadfed]

On ‎12‎/‎6‎/‎2019 at 5:31 PM, formerfed said:

A blind vendor would almost have to be in large scale food servicing in Oja’s area to assume cafeteria contract operations on a government facility.  

The blind vendor gets the contract, but subcontracts out most of the work.  One of the biggest scams we have going today is the operation of DoD dining facilities, which are considered cafeterias, by blind vendors, but with the contract being awarded to the cognizant state licensing agency.

[Oja]

What he said. In most cases, the blind cannot operate the facilities by themselves and subcontract to large companies which defeats the purpose. 

[Retreadfed]

Oja, and don't forget the SLAS which get a piece of the pie.

[Oja]

On 12/6/2019 at 2:28 PM, Retreadfed said:

I'll rephrase my question, why is the entire contract not being awarded through direct negotiations with the blind vendor?

 34 CFR § 395.33 - Operation of cafeterias by blind vendors”  addresses  this matter. 

34 CFR § 395.33(d) in particular says the government may afford priority to State Licencing Agency (SLA) by going into direct negotiations, however, it’s conditional on the basis that; it’s at a reasonable cost and the food is of a high quality comparable to that currently provided employees. The issue of direct negotiation is not compulsory because of the word “may”. Therefore, we may choose not to negotiate directly or choose to negotiate directly on those aspects of the contract we know they can perform well.

34 CFR § 395.33(b) states that they shall be invited to respond to solicitations for offers when a cafeteria contract is contemplated by the appropriate property managing department, agency, or instrumentality. This will be done as well, they will be invited to bid with other offeror.

I am looking forward to any additional guidance you may have for why cafeteria contracts are all beyond 5 years and if the argument that since it's a no cost contract, it's therefore not bound by the rules of FAR suffices. 

[Oja]

On 12/6/2019 at 5:31 PM, formerfed said:

I’m not speaking for Oja but cafeteria operations require big investments, especially getting trained and experienced workers.  A blind vendor would almost have to be in large scale food servicing in Oja’s area to assume cafeteria contract operations on a government facility.  

This too, they can't do it.

[ji20874]

Oja,

Why do you think a five-year limitation applies no-cost cafeteria contracts?  Please do not cite the FAR in your answer, as the FAR does not apply to no-cost contracts.

A longer contract period may provide more stability for the operator -- this maybe especially important if the operator is providing opportunities for the blind or severely disabled.

p.s.  Although nothing in the FAR applies to no-cost contracts, there are some statutes mentioned in the FAR that have reach beyond FAR contracts.  CICA has already been mentioned.  Your solicitation under 34 CFR 395.33(b) will not be subject to the FAR, since you contemplate a no-cost contract.

p.p.s.  If we're talking about Randolph-Sheppard, the federal agency doesn't award a contract at all, right?  My understanding has been that the agency enters into an agreement with the state licensing agency, and that the SLA then arranges for the work to be accomplished. 

[Retreadfed]

On ‎12‎/‎9‎/‎2019 at 11:42 PM, ji20874 said:

If we're talking about Randolph-Sheppard, the federal agency doesn't award a contract at all, right?

I wont speak for other agencies, but DoD dining facilities are considered cafeterias for RSA purposes.  Generally, DoD issues an RFP for dining facility operations under the FAR and allows the SLA to compete.  The SLA is given a preference in the competition if it is in the "competitive range."  The contract is awarded to the SLA, which usually has a management agreement with a commercial organization that will do the actual work although the blind vendor gets a piece of the action for doing little or nothing.

[Oja]

18 hours ago, ji20874 said:

Oja,

Why do you think a five-year limitation applies no-cost cafeteria contracts?  Please do not cite the FAR in your answer, as the FAR does not apply to no-cost contracts.

A longer contract period may provide more stability for the operator -- this maybe especially important if the operator is providing opportunities for the blind or severely disabled.

p.s.  Although nothing in the FAR applies to no-cost contracts, there are some statutes mentioned in the FAR that have reach beyond FAR contracts.  CICA has already been mentioned.  Your solicitation under 34 CFR 395.33(b) will not be subject to the FAR, since you contemplate a no-cost contract.

p.p.s.  If we're talking about Randolph-Sheppard, the federal agency doesn't award a contract at all, right?  My understanding has been that the agency enters into an agreement with the state licensing agency, and that the SLA then arranges for the work to be accomplished. 

I never said it did. In fact, the question in my original thread was seeking guidance to the question "what is the legal authority for a cafeteria contract exceeding five years"? 

For Randolph-Sheppard Act, you can either go into direct negotiations or award a contract. I already explained above.  

[Oja]

This was my first time posting and I joined literally the day I posted. Thanks for all the questions and comments. This has been very engaging. 

[Oja]

2 hours ago, Retreadfed said:

I wont speak for other agencies, but DoD dining facilities are considered contracts for RSA purposes.  Generally, DoD issues an RFP for dining facility operations under the FAR and allows the SLA to compete.  The SLA is given a preference in the competition if it is in the "competitive range."  The contract is awarded to the SLA, which usually has a management agreement with a commercial organization that will do the actual work although the blind vendor gets a piece of the action for doing little or nothing.

That's interesting that you mentioned that. I looked up a couple of cafeteria solicitations on FBO today and saw a mix bag of different things. For the most part, most of them had FAR -Like Clauses like the termination clauses and option to extend, etc without referencing the FAR. While some other requirement had the FAR mentioned outright.