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Two questions:

1. When the government makes "multiple awards" pursuant to FAR 16.505(c)(1), is it---

     (A) awarding a single contract with multiple parties, each of which is severally liable or

     (B) establishing a pool of multiple separate contracts with the same terms?

2. As a practical matter, does it make a difference?

These are not "trick" questions. I am trying to answer them for myself and want to see what others think.

 

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5 hours ago, Vern Edwards said:

Two questions:

1. When the government makes "multiple awards" pursuant to FAR 16.505(c)(1), is it---

     (A) awarding a single contract with multiple parties, each of which is severally liable or

     (B) establishing a pool of multiple separate contracts with the same terms?

2. As a practical matter, does it make a difference?

These are not "trick" questions. I am trying to answer them for myself and want to see what others think.

 

Does each award to a pool member have a separate contract number. If so, (B) applies. If no, then it would seem that (A) applies. As a practical matter,  I would thank it is administratively difficult, if not impossible to have one contract and one contract number with multiple contractors when dealing with contracting software programs, databases, keeping track of separate funding,  DFAS, segregating writing and tracking correspondence, performance evaluations. etc. 

I don’t know the answer but highly suspect that each pool member has a unique contract number.

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Ok: “

“16.504  

...(c) Multiple award preference-

(1)Planning the acquisition.(i) Except for indefinite-quantity contracts for advisory and assistance services as provided in paragraph (c)(2) of this section, the contracting officer must, to the maximum extent practicable, give preference to making multiple awards of indefinite-quantity contracts under a single solicitation for the same or similar supplies or services to two or more sources.”

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@joel hoffman We know from treatises on the law of contracts that the term contract refers to both the agreement between the parties and the document that memorializes the agreement. See Black's Law Dictionary, 11th ed.:

Quote

contract n. (14c) 1. An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law <a binding contract>. 2. The writing that sets forth such an agreement...

Perhaps different contract numbers reflect the fact that a single agreement with multiple severally liable parties is memorialized in separate documents, not that the separate documents memorialize separate contracts. Separate documents are necessary for administrative purposes.

The reason I'm think about this is the case of CE.ai, Inc., GAO B-418676, July 28, 2020, which was about a MATOC in which 15 awards had been made. In that case the GAO described an interesting fact:

Quote

The maximum value of the SETI contract is $7.5 billion... As relevant here, under the SETI contract the total value of all cost-reimbursement CLINs was capped at $75 million per contract period... At award, the total contract value was distributed equally among awardees, but the agency was was permitted to later "reallocate the capacity amongst the contract holders, if necessary."

 Emphasis added.

Why would they need to reallocate the cap among awardees if each of the contracts were a separate agreement? The GAO seems to describe the contract as a single agreement among multiple parties.

 

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Vern, I found and posted 16.504 (c) while you were composing the above post.  

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One solicitation but multiple contracts awarded. 

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7 minutes ago, Vern Edwards said:

@joel hoffman We know from treatises on the law of contracts that the term contract refers to both the agreement between the parties and the document that memorializes the agreement. See Black's Law Dictionary, 11th ed.:

Perhaps different contract numbers reflect the fact that a single agreement with multiple severally liable parties is memorialized in separate documents, not that the separate documents memorialize separate contracts. Separate documents are necessary for administrative purposes.

The reason I'm think about this is the case of CE.ai, Inc., GAO B-418676, July 28, 2020, which was about a MATOC in which 15 awards had been made. In that case the GAO described an interesting fact:

 Emphasis added.

Why would they need to reallocate the cap among awardees if each of the contracts were a separate agreement? The GAO seems to describe the contract as a single agreement among multiple parties.

 

I don’t know how many they awarded but each contract could have had provisions for coordination between contracts... or perhaps each CLIN was for an individual contractor? 

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"If the order does not exceed the simplified acquisition threshold, the contracting officer need not contact each of the multiple awardees under the contract [singular] before selecting an order awardee if the contracting officer has information available to ensure that each awardee is provided a fair opportunity to be considered for each order."

16.505(b)(1)(ii)

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2 minutes ago, joel hoffman said:

I don’t know how many they awarded but each contract could have had provisions for coordination between contracts... or perhaps each CLIN was for an individual contractor? 

The contract could have had provisions for coordination among the contractors.

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3 minutes ago, Vern Edwards said:

One contract, multiple contract documents.

Awfully complex contract admin if they do it that way.

At any rate, as we have said before, the FAR is often ambiguous or poorly coordinated. 

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Just now, joel hoffman said:

Awfully complex contract admin if they do it that way.

Why do you say that? If the contracts were separate, wouldn't reallocation require separate contract mods? Seems to me that one contract would be simpler.

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11 minutes ago, Vern Edwards said:

The contract could have had provisions for coordination among the contractors.

Yes. With a separate CLIN for each contractor, perhaps. That might be what the  case language was referring to.

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Maybe.

I'm just tinkering with an idea, because of something that came up in a meeting the other day. You're probably right, multiple separate contracts. But I wonder if anyone in policy or if any MATOC COs think about this kind of thing.

Nah.

Thanks for your input. Nobody else seems to have any thoughts. 

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7 minutes ago, Vern Edwards said:

Why do you say that? If the contracts were separate, wouldn't reallocation require separate contract mods? Seems to me that one contract would be simpler.

I’m thinking along the lines of databases - tying multiple, separate contractors under one contract number seems unwieldy for contract admin and referencing later.

So, it can be done either way I suspect

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Multiple contracts that are interrelated. The contracts I’m thinking of are entered into with two or more sources pursuant to the same solicitation; share a maximum total value and similar terms (e.g., fair opportunity/competition, minimum guarantees).

 I’m sure it could make a difference if I think about it.

*I dislike FAR 2.101’s definition of multiple-award contract, but think it’s an indicator that people aren’t really thinking about what these contract arrangements really are.

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FAR 2.101 defines multiple award contract as follows:

      Multiple-award contract means a contract that is—

           (1) A Multiple Award Schedule contract issued by GSA (e.g., GSA Schedule Contract) or agencies granted Multiple Award Schedule contract authority by GSA (e.g., Department of Veterans Affairs) as described in FAR part  38;

           (2) A multiple-award task-order or delivery-order contract issued in accordance with FAR subpart 16.5, including Governmentwide acquisition contracts; or

           (3) Any other indefinite-delivery, indefinite-quantity contract entered into with two or more sources pursuant to the same solicitation.

 

I do not think it answers the question, but it is interesting that paragraph (3) calls out a contract [not contracts] with two or more sources.

Is the "Any other" language from paragraph (3) meant to imply that the FAR 16 contracts referenced paragraph (2) are also a single contracts? i.e., a Multiple-award contract is a single contract with multiple sources and the distinction is whether it is awarded under subpart 16.5 or any other authority.

Or, is "Any other" meant to distinguish between multiple contracts awarded under 16.5 (in accordance with the language cited by Joel), and single contracts with multiple sources under other authority?

I could see an argument either way.  In either case, it seems a single contract with multiple sources is contemplated by the FAR.

(Edit: I apologize.  I am re-reading this and I did not articulate my thoughts very well.  But it is Friday evening, and I'm too tired to rewrite it.  Oh well.)

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@Lionel Hutz I agree that the language in FAR seems to contemplate one contract with multiple parties. I just wish I were confident that the people who wrote the FAR chose their words thoughtfully and with specific intent.

No one I have spoken to has felt confident in their opinion.

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I don’t think that it matters if you can make either method (one contract or multiple contracts) work. 

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3 minutes ago, joel hoffman said:

I don’t think that it matters if you can make either method (one contract or multiple contracts) work. 

Important points are simply that there is one solicitation and multiple awards (= awards made to multiple firms). 

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If we are going to discuss FAR concerns, the FAR Subpart 4.16 prescribes policies and procedures for assigning unique Procurement Instrument Identifiers (PIID) for each solicitation, contract, agreement, or order and related procurement instrument. Each multiple-award contract is given a unique PIID. The PIID policies and procedures, in practice, don’t align with the single contract concept at FAR 16.505(b)(1)(ii) and FAR 2.101’s definition of multiple-award contract.

 What would the contract arrangement be if it wasn’t FAR-based?

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4 hours ago, joel hoffman said:

Important points are simply that there is one solicitation and multiple awards (= awards made to multiple firms). 

No, it's not that simple, Joel. There are potential legal and administrative issues that I thought might be of interest to professionals. That's why I asked my first question. But now I'm done with the topic.

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Yes I understand now. An Order is the individual contract action or instrument under the base ID/IQ contract between the government and a pool member contractor.

I can see why there could be a maximum contract limit for the ID/IQ contract and a separate max limit for each contract holder. Each pool member has a guaranteed minimum amount of the single ID/IQ max limit.

Click! Light bulb on.  

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7 hours ago, Vern Edwards said:

But now I'm done with the topic.

Well shoot.   But I will express my opinion anyways.   Not a flippant thought either.   I think it depends and can be (A) or (B).  The FAR holds some legal parameters in its guiding principles but isn't the contract the legal document?   So the contract can be anything the parties to the contract(s) want it to be within the parameters of the FAR.  As we know in the FAR guiding principles if something is not prevented by law, EO, etc. it is ok.   So noting the cited case  an agency decided make the multiple award contract what it wanted it to be, closely associated to (B) and there is no prevention of doing so in the FAR.   Another agency may want theirs to be more closely associated to (A).

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