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I am working on a follow on IDIQ for general support services ( not Advisory and Assistance Service or IT) and historically like the current generation the Base IDIQ had a 5 year base and no options with TO's awarded with a one year base and 4 one year options. 

My thought process right now is why don't we do a 5 year base+ one  5 year option and to be compliant with the FAR when it comes to the TO's to then re-compete the TO's as needed for the option period and perhaps not exercise the option for underperforming contractors and have an open season to bring on new contractors as needed to compete. I don't think for the TO's we could have a similar structure and that they would need to be rec-competed? 

Currently and in the past, planning would commence towards the end of year 3 and I think it would be save immense resources if we could save a lot time with the scenario I outlined above. 

The value for 5 years is about 700 MM, so with the option period I outlined it would have a value of over a billion and thus require more oversight and sign offs ( which some people would rather avoid).

 

Thoughts? Any examples of similar IDIQ's with such a structure? 

Thanks! 

 

 

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  • DCDOD2020 changed the title to IDIQ For Services 5 YR Base + one 5 Year Option
13 hours ago, DCDOD2020 said:

My thought process right now is why don't we do a 5 year base+ one  5 year option and to be compliant with the FAR when it comes to the TO's to then re-compete the TO's as needed for the option period and perhaps not exercise the option for underperforming contractors and have an open season to bring on new contractors as needed to compete.

MATOC madness.

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2 hours ago, Vern Edwards said:

MATOC madness.

The concept has gone wild.  Much is the work covered in these vehicles is on GSA Schedule.  All someone has to do is pick a few promising companies (need to plan on getting at least three responses for most actions) and send an RFQ.  Evaluate and select.  If prices seem high, negotiate.  That’s it.  Compare that to vehicles like Navy SeaPort with 2,000 contractors for 23 functional areas.  I see see dozens of responses with fair opportunity. 

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17 hours ago, DCDOD2020 said:

The value for 5 years is about 700 MM, so with the option period I outlined it would have a value of over a billion and thus require more oversight and sign offs ( which some people would rather avoid).

Select the contract type and duration that will best meet the needs of government. Forget about the price tag and how it relates to additional oversight. If you produce good work, you should welcome more scrutiny. 

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I agree, however I have PM is risk averse and would rather not trying anything new, but instead do it the old fashioned way. It’s frustrating, but I do have a supportive boss, and he reminds me, the Contracting office decides the contract type not the PMO. 
 

Also, someone said FAR part 22 might forbid my proposed plan, but I think they are confused with a  straight 10 year contract vice what I have spelled. 

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On 6/15/2021 at 3:22 PM, DCDOD2020 said:

The value for 5 years is about 700 MM, so with the option period I outlined it would have a value of over a billion

 So what is the minimum guarantee?   Is it growing with the anticipated increase in base period?  Does the PM office have adequate funds to obligate the minimum at award of the parent IDIQ with the anticipated increase in base period?

 

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18 hours ago, DCDOD2020 said:

Also, someone said FAR part 22 might forbid my proposed plan, but I think they are confused with a  straight 10 year contract vice what I have spelled.

Your proposed plan is not a new idea. Assuming that you are DoD, see DFARS 217.204(e)(i):

Quote

 

Notwithstanding FAR 17.204(e), the ordering period of a task order or delivery order contract (including a contract for information technology) awarded by DoD pursuant to 10 U.S.C. 2304a—

                    (A)  May be for any period up to 5 years;

                    (B)  May be subsequently extended for one or more successive periods in accordance with an option provided in the contract or a modification of the contract; and

                    (C)  Shall not exceed 10 years unless the head of the agency determines in writing that exceptional circumstances require a longer ordering period.

 

 

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23 hours ago, Don Mansfield said:

Your proposed plan is not a new idea. Assuming that you are DoD, see DFARS 217.204(e)(i):

 

So on my reading e(i)(A) says you can’t have a base period exceeding 5 years, and e(i)(B) and (C) I read as saying that you can have a options, however the sum of the base period of the IDIQ and the option period can’t exceed 10 years? Thus, my idea isn’t in contradiction to it?

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1 hour ago, DCDOD2020 said:

What’s the MATOC?

Multiple Award Task Order Contract. A multiple award IDIQ contract for services, including construction. See the definition of Multiple Award Contract in FAR 2.101, entry (2).

A SATOC is a Single Award Task Order Contract.

For an example of usage see: Obsidian Solutions Group LLC, GAO B-417134, March 1, 2019. https://www.gao.gov/assets/b-417134%2Cb-417134.2.pdf

See also:

https://www.anamarinc.com/blog-frontpage/entry/idiq-explained

https://apps.dtic.mil/sti/pdfs/ADA579715.pdf

https://info.ksiadvantage.com/blog/an-introductory-guide-to-multiple-award-task-order-contracts-matocs

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3 hours ago, DCDOD2020 said:

 

So on my reading e(i)(A) says you can’t have a base period exceeding 5 years, and e(i)(B) and (C) I read as saying that you can have a options, however the sum of the base period of the IDIQ and the option period can’t exceed 10 years? Thus, my idea isn’t in contradiction to it?

No, it's not. What you're proposing is compliant.

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On 6/15/2021 at 3:22 PM, DCDOD2020 said:

I am working on a follow on IDIQ for general support services ( not Advisory and Assistance Service or IT) and historically like the current generation the Base IDIQ had a 5 year base and no options with TO's awarded with a one year base and 4 one year options. 

My thought process right now is why don't we do a 5 year base+ one  5 year option and to be compliant with the FAR when it comes to the TO's to then re-compete the TO's as needed for the option period and perhaps not exercise the option for underperforming contractors and have an open season to bring on new contractors as needed to compete. I don't think for the TO's we could have a similar structure and that they would need to be rec-competed? 

Currently and in the past, planning would commence towards the end of year 3 and I think it would be save immense resources if we could save a lot time with the scenario I outlined above. 

The value for 5 years is about 700 MM, so with the option period I outlined it would have a value of over a billion and thus require more oversight and sign offs ( which some people would rather avoid).

Thoughts? ... 

Have we responded adequately? If so, then I have a thought in the form of a question:

Why does the OP want a five-year contract with a five-year extension option for "general support services"? Why such an extended contract?

Is that strategy based on the nature of the prospective requirement(s), or is it because the agency wants to put off having to conduct a new source selection for as long as possible? If the former, what is it about the requirement that suggests 5+5 makes sense?

Ten years is a very, very long time in today's world. A lot can change in ten years. A lot is going to change. To give you an idea: I just went through the first 42 clauses and provisions in FAR Subpart 52.2, from 52.202-1 through 52.204-26. Guess how many are dated before 2011. The answer is nine. Thirty-three of those clauses are dated 2011 or later. Eleven are dated 2017 or later.

Some of those provisions and clauses are new and address important congressional or presidential policies. I'm not sure how the others have changed or whether the changes are significant.

Does the OP's strategy include updating the contract to incorporate new policies and procedures, especially those mandated by statute or executive order, such as 52.203-18, 52.203-19, 52.204-23, 52.204-24, and 52.204-25. Is the OP going to include a clause allowing the CO to impose a new FAR contract clause in return for a price adjustment?

What are the policy implications of a contract with a prospective life of ten years? Might such contracts hamper the implementation of new national policies?

Why establish and commit to such a lengthy relationship? What's the reason? What are the implications? What are the pros and cons?

Is a five-year contract with a five-year extension option a wise acquisition strategy? Is it in the best interests of the government? If so, why? If not, why not?

I think we have responded to the OP. If so, can we use this thread to teach people about strategic acquisition thinking? Or should we just wait for the next minor-league question?

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To that I’ll add the practice of adding new contractors and eliminating others is time consuming and resource intensive.  It takes a lot of thought to devise the approach and implement.  An “open season” is really a new solicitation with evaluation of offers, perhaps conducting discussions, and making source selection decisions.  Removing nonperforming contractors can also be challenging.  

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On 6/19/2021 at 5:48 AM, Vern Edwards said:

Is a five-year contract with a five-year extension option a wise acquisition strategy? Is it in the best interests of the government? If so, why? If not, why not?

Pros.  Time is saved in the extensive efforts of new source selection processes and administrative processes that go along with efforts of a new procurement on a more often basis than 5 + 5 for such a high value need ($150 million per year).  General labor services implies the lions share of the price of the contract is labor.   As general labor and anticipating that SCA applies the governments interest (price again) is protected through the economic adjustment clauses for SCA.   For the +5 best interest as a decision point is covered by the guiding principles of the FAR regarding exercise of options.  A contract of such length also establishes a relationship with a contractor that would assist in ongoing matters relating to contract administration (quality, timeliness, etc) and avoids churn related to continuity of services where contract/option length is shorter.   As to changing times (updated/new clauses, national policy) whether a commercial item acquisition or not the tools for addressing the times are included in the contract.

Cons.  A changing workforce always brings with it a new spin on an old idea.  PM office, acquisition office, your name it some one will question whether the wheel being used is adequate.  Likewise, passing the baton from one to another on the government side creates potential havoc for the contractor.   Today they have a great group on the government side to deal with tomorrow they do not.  Consideration should be given to changes on the contractor side as well.  Who the contractor is today may not be the same as tomorrow.

My takeaways - The best interests of the government can be met with such a contract but there is a lot of due diligence beyond the question posed by the OP.  Market research is key to addressing many of the pros and cons to come up with the acquisition strategy that best fits.  And, as noted a contract that carries with it the tools to adequately manage and administer such a contract over such a long period.  

PS - While my personal procurement needs are not affected by the socio-economic turmoil like Federal government acquisition is, I always think about me.   It seems a long term association with a vehicle repair shop, housekeeper, banker,  lawn maintenance, elder care provider,  plumber, accountant, farrier, tire shop, etc. for those things I need fairly often seems to serve my interests a lot better than constantly having to try a new one  each time.   

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Carl brings up some points to consider also.  I personally feel five years is the longest most contracts for general support services should run.  The OP never responded to my question about whether the services are covered by GSA Schedule.  If they are, it’s crazy to do a new contract.  Also agencies have to do is identify a group of companies they want to solicit and involve enough to ensure at least three responses.  Quick and easy for both initial award and recompetition later. 

Occasionally there is an advantage engaging in a long term agreement with quality suppliers.  If that’s the case, use of an award term provision can provide benefits.  If the contractor does things like maintain/improve quality, timeliness, performance, etc. for things that are important to program needs, an award term provision where the contractor earns additional periods of performance might be good.  The downside is it’s tough to identify and measure key elements that clearly benefit the government as well as the time and effort involved in assessment.  I’m suggesting something like this instead of a 5 year base + a 5 year option.  

 

 

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17 minutes ago, formerfed said:

GSA Schedule.

I tried different wording to note this especially considering your previous post in the thread.  I do not disagree and wonder like you.   Especially since the FSS are IDIQ's for long term as well.   The effort for over the SAT is a little more complex than implied yet is easy peasy compared to a full on FAR part 15 procurement from my view.   Heck I even wondered what the value of a TO under the OP's situation is worth, how many are issued, etc. etc.   Complex and complicated no doubt but yet Vern has raised some very important considerations.  

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On 6/20/2021 at 12:38 PM, formerfed said:

Carl brings up some points to consider also.  I personally feel five years is the longest most contracts for general support services should run.  The OP never responded to my question about whether the services are covered by GSA Schedule.  If they are, it’s crazy to do a new contract.  Also agencies have to do is identify a group of companies they want to solicit and involve enough to ensure at least three responses.  Quick and easy for both initial award and recompetition later. 

Occasionally there is an advantage engaging in a long term agreement with quality suppliers.  If that’s the case, use of an award term provision can provide benefits.  If the contractor does things like maintain/improve quality, timeliness, performance, etc. for things that are important to program needs, an award term provision where the contractor earns additional periods of performance might be good.  The downside is it’s tough to identify and measure key elements that clearly benefit the government as well as the time and effort involved in assessment.  I’m suggesting something like this instead of a 5 year base + a 5 year option.  

 

 

In theory yes, there is a GSA medium available, but that decision is way above my pay grade with it being leaderships  prerogative to have our own in house program. 
 

Some of the downsides of the 5+5, is with respect to labor rates and economic price adjustments . I think you’d have to have a way to address the situation of rates not reflecting market conditions in say year 6. Heck, we even have that issue now in our 5 year IDIQ, with some labor categories, where all IDIQ holders have said “our rates are no longer in sync with the market so therefore we can’t submit an offer for a new TO requirement” (year 4 of 5). Management wasn’t interested in re-opening rates to address the specific issue. We then punted it to the open market/GSA buy team. 
 

I had come from working on supply IDIQ and we’d have items and pricing and would have language that pricing was to remain fixed for a minimum of 12 months after award and then after that the price couldn’t go up higher than a certain percentage  under the EPA with supporting info. Where  I work now we don’t reassess  rates even if market conditions change significantly-instead leadership tells our customers “go to GSA” which begs the question , why not use GSA for the whole program. I don’t have an answer, but again that’s above my pay grade and involves office politics and the like. 

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@DCDOD2020 Thanks for the explanation and background.  We can see where you are coming from now.

Contracting in future using labor rates will be challenging.  Who knows what the long term outcome will be but many experts forecast higher amounts from possible inflation and more leveraged positions by labor.  

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