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8 hours ago, C Culham said:

To your latest suggestion "tailoring" of 52.216-21 by my read is not allowed, unless of course one were to follow the FAR deviation process.

Carl - My plan here, if I were to use the "alternating order" approach, would be to borrow the 52.216-21 Alt. III language, tailor it accordingly, and put it somewhere in the PWS. So it wouldn't be a clause per se, but it would be a defined ordering procedure that contract awardees agree to.

8 hours ago, C Culham said:

However to simply have a need for the garbage service and to ensure redundancy risk you create a partial set-aside with the true intent that actually one contract could handle the whole affair seems a hollow determination in my view. 

I don't understand this. There is no risk of a bait-and-switch on the part of the Government because we would have a contract defining how orders are distributed. If the Government doesn't follow that, it's in breach.

When we talk about the allowability of the "alternating order" requirements contracts, we're really talking about whether that's sufficient consideration, right? There's no mandate that I see in the FAR that would prevent me from doing this. To the contrary, there seem to be specific loopholes carved out, despite the intent stated at 16.503(a). So this seems to be a case of "the FAR doesn't say I can't." Now, I'm not extremely well versed in the concept of illusory promises, but logically if the FAR is providing a specific means of splitting orders under Alt. III, the drafters must think this arrangement passes muster. 

8 hours ago, C Culham said:

Maybe for the "split" (really two awarded) requirement contracts you ought to tell it like it is - the promise ought to be for contract 2 that if contractor 1 cannot perform the work then contractor 2 gets the work until such time as contractor 1 can perform the work. 

This looks like a clear illusory promise to Contractor 2. There is no promise that any work will go to them, even if requirements arise. 

 

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58 minutes ago, FrankJon said:

 

9 hours ago, C Culham said:

Maybe for the "split" (really two awarded) requirement contracts you ought to tell it like it is - the promise ought to be for contract 2 that if contractor 1 cannot perform the work then contractor 2 gets the work until such time as contractor 1 can perform the work. 

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This looks like a clear illusory promise to Contractor 2. There is no promise that any work will go to them, even if requirements arise. 

FrankJon, I think so, too.

And it would be administratively burdensome to determine and inform contractor 1 that it can’t perform the work to be assigned to contractor 2 and to determine, document and inform the contractors at the point that #1 can again perform the work. Looks like a possible source of contention.

If you can do this, you certainly ought to be able to pre-establish a split and method of allocation at the two contract formation(s). If potential contractors object, they could protest the terms of the solicitation and you’ll find out whether it is acceptable or not.

I think that you may have to show that there is a reasonable need to award two contracts rather than one. Also, that, if there is a significant difference in prices (cost to the government) between the two contracts, how that is in the best interest of the government to split the work between a lower and higher cost contractor, if the need could be satisfied by using a single contractor. 

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I still say there is no need to "pre-establish a split and method of allocation at the two contract formation(s)."  And, there is no need to pre-divide the work into two "distinct portions" pre-award.  The apportionment (half to one, half to the other) can be done post-award on an order-by-order basis, as illustrated by the Alt. III text.  

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1 hour ago, FrankJon said:

Carl - My plan here, if I were to use the "alternating order" approach, would be to borrow the 52.216-21 Alt. III language, tailor it accordingly, and put it somewhere in the PWS. So it wouldn't be a clause per se, but it would be a defined ordering procedure that contract awardees agree to.

10 hours ago, C Culham said:

Understand and just on this point alone it makes sense.

 

1 hour ago, FrankJon said:

I don't understand this.

So by this Forum the contract has been determined not to be a multiple award, correct?   By this Forum it has been suggested to do a partial set aside to solve the dilemma, correct?   So to do so I would suggest that simply saying we need to do a partial to afford us having two contracts is not an adequate determination of the SB set aside but I will leave that to you and your read of FAR Part 19.   Additionally I hope the solicitation states that as required by the FAR - "identify which portion or portions are set aside and not set aside."  Again the alternating order approach does not in my view, especially if the alternating orders would have different quantities.

1 hour ago, FrankJon said:

This looks like a clear illusory promise to Contractor 2. There is no promise that any work will go to them, even if requirements arise. 

Its not illusory if you tell the truth and truth is you want a second contractor on a contract in case the first contractor can not perform and this occurs the second contractor will get the work.  That is you clear intent, not pounding the square peg into the round hole of "partial set aside" or adjusting -21 to make the deal or even squeezing the deal into Alt III as it reads.   A requirements contract by its own right does not promise one bit of work but if work is needed the government will use the contractor.

Here I will admit there are lots of unknowns that would help my contentions.  Specifically has the agency contracted for this need before?  If so how many times has a contractor failed in the past to help establish estimated quantities for the the second contract?  Or, is it new concept and new contracts where you are guessing about quantities on one contract and guessing on the failure of a contractor to develop the second contract?  And if so why aren't other procurement strategies available to plug the hole if the first contractor does not or fails to perform like T4D, claims, sole source, etc. etc.    And the list goes on.

As I noted in a previous post I too cannot point to an exacting citation that says can not do it, rather I just have the concerns noted.  In part, these concerns stem from the the related contract IDIQ and the reasoning industry, to which the Government agreed, created fair opportunity.   While the discussion of multiple award was clarified here in Forum it is a guess and not a test of the instant procurement.  Any bets by anyone based on "alternating orders" where the GAO might stand.  I got my feelings expressed here in on where they might.   Noting again IDIQ which I agree is not Requirements but it is clear that GAO and the FAR has settled on the fact that alternating orders under an IDIQ is not an appropriate so I question they would think it right under a Requirements.

Finally a possible suggestion beyond what I have provided here.   Send the "facts" to GAO for an advance determination and see what they say.  The primary fact being we just want two requirements contracts for the same work and we want to alternate orders between the two contractors and see what they say.

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4 hours ago, C Culham said:

Its not illusory if you tell the truth and truth is you want a second contractor on a contract in case the first contractor can not perform and this occurs the second contractor will get the work.  That is you[r] clear intent...

I do not think that is the original poster's intent.  I think the intent is to split the requirement with each of two contractors getting half.  Having two contractors provides some safety cushion for the agency.  And I don't think the original poster intends to do a partial set-aside to get two contractors, but simply to adapt that approach.

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35 minutes ago, ji20874 said:

I do not think that is the original poster's intent.  I think the intent is to split the requirement with each of two contractors getting half.  Having two contractors provides some safety cushion for the agency.  And I don't think the original poster intends to do a partial set-aside to get two contractors, but simply to adapt that approach.

Correct. We would like to have between two and four contractors performing a relatively even amount of work. No set-aside.

I just ran to the office to grab my reference books. I’ll post some long-form quotes on this topic when I get home. 
 

 

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1 hour ago, FrankJon said:

Correct. We would like to have between two and four contractors performing a relatively even amount of work. No set-aside.

This has gotten very complicated.  You are just awarding two or more contracts for a proportional and approximately equal amount of work.  You place orders to ensure that equal distribution.  Just write that simple ordering procedure as others had said in the solicitation/contract.  My advice is just go ahead and do it.  It’s becoming unnecessarily confusing and complex. 

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These terms from The Government Contracts Reference Book (4th Ed.) were touched upon in a previous Wifcon post, but for posterity I'll flesh them out a bit more here and add emphasis and edits as appropriate to the topic.

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REQUIREMENTS CONTRACT [Starts with FAR definition.] The contractor is legally bound to such a contract because the government's promise to buy its requirements constitutes consideration. [More language from the FAR.] In spite of the definition that requirements contracts call for purchasing all of an agency's requirement from a single contractor, such contracts have been used to purchase all supplies and services in excess of those that can be provided by a government activity or to purchase a stated percentage of the activity's requirements.

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REQUIREMENTS-TYPE CONTRACTS Two or more contracts that provide that all actual purchase requirements of designated government activities for specific supplies or services during a specified contract period will be obtained from the holders of these contracts. . . . These contracts are not described in the FAR but have been recognized by the courts. (226 F.3d 1329 (Fed. Cir. 2000)). The provide an effective way to obtain commitments from a group of contractors when the government has a recurring need for supplies or services that can be furnished by a large number of contractors.

The second definition is particularly interesting, though most of the references date back at least 20 years so I don't know whether they'll be persuasive. Regardless I still plan to look into them.

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Formation of Government Contracts (4th Ed.) also provides a wealth of information on this topic. Most pertinent, on pg. 1347 it states:

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The FAR does not address the potential advantages of dividing requirements between contractors without using set-aside techniques. However, there is no prohibition of such practice, and it is clear that the government might benefit in some circumstances by dividing a requirement geographically, mathematically, or by prescribing the mode of competition to be used in selecting the contractor for each requirement. Dividing the requirement and issuing two or more requirements contracts would also meet the statutory preference for multiple task order or delivery order contracts.

I have to think about how "prescribing the mode of competition to be used" would work in this context.

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15 hours ago, FrankJon said:

I have to think about how "prescribing the mode of competition to be used" would work in this context.

Thank you for the additional information.  You comment as quoted above is as you note important as I have tried to explain.   

 

15 hours ago, FrankJon said:

Dividing the requirement and issuing two or more requirements contracts would also meet the statutory preference for multiple task order or delivery order contracts.

So the concept of "split" as discussed versus multiple is an issue as well to pay attention to.

 

Thanks again.....

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16 hours ago, formerfed said:

 It’s becoming unnecessarily confusing and complex. 

The way of the contracting world in my view.   I have not made it so, I have just referred to guiding principles that make it so.  And yes the OP could probably just do it, and everything would be smooth sailing but in the off chance, and depending on the need what is the detriment if stormy seas are encountered where doing right by the guiding principles would have prevented the storm.  Lots of complexity to consider for what is best.

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1 hour ago, C Culham said:

The way of the contracting world in my view.   I have not made it so, I have just referred to guiding principles that make it so.  And yes the OP could probably just do it, and everything would be smooth sailing but in the off chance, and depending on the need what is the detriment if stormy seas are encountered where doing right by the guiding principles would have prevented the storm.  Lots of complexity to consider for what is best.

Agree. This is a DOD service contract that could be worth $10B over 10 years. I won’t be able to “just do” anything. This is only the first thorny issue in a long process. 

I genuinely appreciate the many reasoned perspectives I received on this topic. 

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FrankJon, I wish you well.  However, as I learn more (as you share more as the thread develops), my enthusiasm wanes a little.  At the first, I was sort of thinking you were imagining two contractors, but now were talking about four.  And at the first, I was not thinking about a billion dollars a year.  Are you thinking  25-25-25-25 split in the work among the four contractors, with task or delivery orders assigned by the agency without any further competition at the task order level?

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That’s a potential outcome being discussed, possibly with prospective price redetermination. As I said earlier, one of the fundamental constraints is that the unpredictability, volume, and relentless occurrence of requirements doesn’t lend itself to the fair opportunity process, at least not in a way that I’ve seen and would feel comfortable with.  

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FrankJon, would you believe me if I told you that you could fair opportunity without creating a solicitation?  Remember, the requirement for fair opportunity is that all multiple-award contractors have a fair opportunity to be considered -- that's all.  Unfortunately, we seem to have turned that into a Part 15 source selection.  But FAR 16.505 only requires a "notice," not a solicitation or RFTOP or whatever you call it, and even then only for order opportunities over the SAT.

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23 minutes ago, FrankJon said:

That’s a potential outcome being discussed, possibly with prospective price redetermination. As I said earlier, one of the fundamental constraints is that the unpredictability, volume, and relentless occurrence of requirements doesn’t lend itself to the fair opportunity process, at least not in a way that I’ve seen and would feel comfortable with.  

1. What would be the value of a typical order?

2. Is the acquisition for a commercial item?

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6 minutes ago, FrankJon said:

1. Over the SAT, under $6M.

2. Yes, the CIG has deemed it commercial.

Why not a competitive multiple-award BPA? You can rotate purchases among the awardees. You don't even have to deal with the fair opportunity process. 

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FAR part 13 does not explicitly discuss competitive awards of multiple BPAs or purchases made thereunder. However, the Government Accountability Office (GAO) denied a protest against the Drug Enforcement Agency’s (DEA’s) use of this procedure in Logan LLC, Comp. Gen. COMP. GEN. DEC. B-294974.6, December 1, 2006. After competing the award of multiple BPAs, the DEA planned to rotate purchases among the multiple BPA holders instead of conducting competitions. The protestor argued that the rotation procedure failed to meet the competition standard of FAR 13.104 (i.e., “competition to the maximum extent practicable”). The GAO disagreed—

“In this case, DEA complied with the statutory requirement to obtain maximum practicable competition when it established the BPAs for these small purchases. Under these circumstances, there is no requirement that DEA compete among the BPA holders each individual purchase order subsequently issued under the BPAs.” [Internal citation omitted].

Note that the limit for purchases under BPAs for commercial items is $7 million (or $13 million under certain conditions) (FAR 13.303-5(b)(2)). While there is no monetary limit for orders under a multiple-award contract, there are competition requirements at FAR 16.505(b) (i.e., “fair opportunity”) that begin for orders above $3,500 and become increasingly more burdensome depending on the value of the order. By comparison, the rotation procedure is comparatively simpler.

 

 

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2 minutes ago, Don Mansfield said:

Why not a competitive multiple-award BPA? You can rotate purchases among the awardees. You don't even have to deal with the fair opportunity process. 

 

That's interesting, Don. Do you have a reference for that text?

I'll certainly add this to my list of approaches to research. But initially I'm not seeing the advantage of this over the "multiple/split award" requirements approach in terms of application. 

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26 minutes ago, FrankJon said:

But initially I'm not seeing the advantage of this over the "multiple/split award" requirements approach in terms of application. 

I am.

Think of four FAR part 13 commercial item BPAs commercial items.  Each purchase under the BPAs can be up to $7,000,000 (see FAR 13.303-5(b)(1)), and your clauses and approval thresholds will be based on $7 million (not $1 billion, or $250 million).  Based on the case Don cited, you can do one synopsis up front to establish the BPAs and then you do not have to do further synopses for individual purchases.  

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41 minutes ago, FrankJon said:

That's interesting, Don. Do you have a reference for that text?

Here you go: https://donacquisition.com/blog/10-blog/23-13-reasons-why-sap-is-simpler

7 minutes ago, ji20874 said:

Based on the case Don cited, you can do one synopsis up front to establish the BPAs and then you do not have to do further synopses for individual purchases.

Would you cite the exception at FAR 5.202(a)(11)?

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The proposed contract action is made under the terms of an existing contract that was previously synopsized in sufficient detail to comply with the requirements of 5.207 with respect to the current proposed contract action.

If so, how would you respond to someone saying that the exception only applies to contracts, not BPAs. 

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Some more basic questions.  Why did you start out with requirements contracts?  What’s the rational over just IDIQ?  How difficult is it to put a simple order selection process in place?  What criteria differentiates companies if you did multiple awards?  Certainly with $1 Billion annually and the stated need for redundancy, some consideration should be given to this. Back to the original plan of two companies, what would be the reasoning to give 50% of the work to a higher price company?  Are the services available from any existing contract vehicles like GSA?

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19 minutes ago, formerfed said:

 Why did you start out with requirements contracts?  What’s the rational over just IDIQ?

I didn't "start out" my research by posting to Wifcon. An IDIQ was of course one of the first approaches I looked at. I went down the requirements path because the customer seeks multiple awards and providing fair opportunity every day may not be feasible.

23 minutes ago, formerfed said:

How difficult is it to put a simple order selection process in place?  What criteria differentiates companies if you did multiple awards?

The factors would probably not be difficult. Past performance and price. But the contract would require a dedicated KO to compete and cut orders (literally) every day, and often more than once per day. My office may not be able to support that. (Now, if we could accumulate orders as with a BPA and cut one order per month to pay for them, that seems feasible. I haven't looked into that.)

29 minutes ago, formerfed said:

Back to the original plan of two companies, what would be the reasoning to give 50% of the work to a higher price company?

Redundancy. And coverage of excess requirements that one contractor cannot perform alone under a given order.

50 minutes ago, formerfed said:

Are the services available from any existing contract vehicles like GSA?

Yes, we think so, but our contract type may not be appropriate (we'll likely need FP-EPA or FP-PPR). And the same ordering difficulties would exist as mentioned above.

 

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