Combining Uniform Commercial Code and FAR

[Darby8001]

Scenario: A local government (county or city) was given a federal grant to assist in the construction of a building. The amount of the grant will only fund approximately 20% of the project. The remaining 80% will be paid for by a DOD agency. The decision was made that the local government would be responsible for the initial site work and the construction of the slab while the DOD agency would be responsible for everything after that; erection of the building, etc?

The DOD is providing the 100% designed package for both efforts.

The DOD agency wants the same contractor to be responsible for both portions.

Question: How would we accomplish this without violating CICA?

My ideas thus far:

1. Have the county hand the funds over to the DOD agency for execution and administration of the contract, much like the COE does around the world.

Management shot this idea down as impossible without any real explanation and chocked it up to an unknown political reason.

2. Create one solicitation in which 2 awards will be created, one for the county, and the other for the DOD.

Initially this seems possible but I believe the local government would have to follow our FAR. I don?t really know the answer to this and if they would even be willing to do this. My understanding is they are governed by the UCC. Can we do one solicitation and combine FAR and UCC? I don?t think we can. However, I have dug through my various texts and I can?t qualify that statement.

3. Have the local government begin their portion and then the DOD agency can attempt a sole source by citing the authority at 6.302-1(a)(2), i.e. logical follow-on.

I think this would be a tough justification and not likely to be approved by the competition advocate. So I consider this a no go.

4. Abandon the requirement to have the same contractor do both portions of the work and have the local government proceed ahead with their portion and allow them to commence work and once their portion is nearing completion the DOD agency will start their requirement (i.e. solicitation, source selection, contract award, etc.).

I believe this is the best route. Since there seems to be a clean break in the work required by each side I personally don?t think that it is a requirement for us to use the same contractor. Also, I am not fond of us issuing a contract at the same time as the local government knowing that the site isn?t ready for the erection of the building and we don?t really know how long until the local government portion is complete (estimate is 6 ? 12 month before we could issue NTP).

Please let me know if I am off track somewhere or if I am missing a possibility.

Thanks in advance?

[Jacques]

Who will own the building when construction is complete?

[Darby8001]

Who will own the building when construction is complete?

Bear with me as the MOU between the two entities seem to be ever changing. As I understand it the county will own the building and the DOD will maintain it.

[Jacques]

Sorry if I'm asking irrelevant questions, but the GAO Red Book at chapter 13 discusses the limited circumstances in which federal appropriated funds may be used to make improvements to property not owned by the federal government. If this is not a DOD building, how is this an appropriate use of funds? Is this specified MILCON?

[joel hoffman]

Who will own the building when construction is complete?

My suggestion is to have the locals contract the work. However, they should either issue separate awards for the site work and for the building or segregate the work within the same solicitation. It will definitely save the locals a lot of money and a lot of grief.

In doing the latter, I'd require the site work to be completely segregated from the building work and utilities work within the 5 foot line of the building. Use local clauses, contract conditions, local wage rates (if applicable) and labor provisions for the locally funded portion. Use the Federal FAR clauses and labor rates for the DoD funded work. Also use 2 separate bid schedules.

When I was a consulting engineer in Wisconsin, our local community received a Farmers Home Administration development grant for some development work. On one project, we were able to segregate the part of the work that was locally funded from the FmHA funded scope. We combined the 2 projects within one solicitation but used local clauses and conditions and Wisconsin's prevailing wage rates for the local work. State mandated wage rates were lower than the DBA wage decision, for the local work. The local work was the same type work as the FmHA funded work.

For the FmHA work, we had to use the Federal contract clauses, wage rates and forms. We used separate bid schedules for the local and for the Federal work.

Guess what? The Federally funded work cost almost twice as much as the locally funded work. This was all civil work for constructing municipal streets, sidewalks and utilities, so all bid items on both bid schedules were unit-priced. We were able to match our other locally contracted unit prices for our locally funded (homeowner assessed) work. The Fed work was much more expensive (about double the locally funded work), but was in line with what I had experienced in the Air Force a couple of years before getting out into the private world. Any time we had federally funded projects, there were strings attached. We had to essentially use all the FAR construction clauses and DBA wage decisions for Federally funded work. The Fed funded projects ALWAYS cost more than similar private or municipal work.

The downside might be the schedule, if site work has to be performed prior to building work. However, the work itself is distinguishable, so I would think that it would be natural for different crews to be performing the site and the building work.

Therefore, I'd write in the combined contract a requirement to coordinate the 2 areas of work and that they could be performed concurrently, to keep the labor forces segregated between projects. Supervision is salaried, so that wouldn't be as much a problem.

For the separate contract approach, if schedule was critical, thus requiring concurrent work, I'd include requirements to coordinate and cooperate between the two concurrent contracts. I'd require the site grading and access to be ready and available for the building work to commence by some definite period or date.

It can be done. The trick is to write an effective contract or contracts to keep the separately funded work segregated.

I think that the worst approach would be to totally integrate the site and building work under the Federal contracting rules and regulations. That will most likely raise costs for the locally funded site work.

EDIT: I think I misread the scenario, so my recommended approaches may not be feasible.. I thought the funding was 20% local and 80% DoD. Sorry. Apparently all of the funding is federal money.

The locals probably can't contract for the 80% DoD share of the work, can they?

Also, If the grant is paying for the "local share", then the grantee may have to comply with Federal contracting rules and use D-B wage rates, etc., if they contract for the site work.

I don't know.

[joel hoffman]

Your option 4 appears to be feasible.

If this is for a relatively large building or involves substantial cost, it might be better to have the DoD award and administer the building contract. Let the locals handle the site work.

EDIT: I think I misread the scenario, so my previous recommended approaches may not be feasible..

Apparently all of the funding is federal money. Thus, the locals probably can't contract for the DoD share of the work, can they?

If the grant is paying for the "local share", then the grantee may have to comply with Federal contracting rules and use D-B wage rates, etc., if they contract for the site work

I don't know.

[Guest Vern Edwards]

The DOD agency wants the same contractor to be responsible for both portions.

Question: How would we accomplish this without violating CICA?

Here's how: Prepare an honest justification for other than full and open competition and get is approved. If you can't do that, then let the county contract for the site work and the slab and let DOD conduct a competition for the rest of the construction. Just because the "DOD agency" wants something doesn't mean they can have it under the law. I can't see any technical necessity for the same contractor to do both parts of the work. I had a building constructed on my property last summer. One contractor did the site work and built the foundation, another constructed the building. Came out fine.

[joel hoffman]

Here's how: Prepare an honest justification for other than full and open competition and get is approved. If you can't do that, then let the county contract for the site work and the slab and let DOD conduct a competition for the rest of the construction. Just because the "DOD agency" wants something doesn't mean they can have it under the law. I can't see any technical necessity for the same contractor to do both parts of the work. I had a building constructed on my property last summer. One contractor did the site work and built the foundation, another constructed the building. Came out fine.

I'd agree with using the latter approach. I don't know if the county has to use the FAR clauses and DBA wage rates when using a federal grant. I know that we used to with FmHA, though (1978 era). The Grant should spell out procurement requirements.

[Postaward]

I'd agree with using the latter approach. I don't know if the county has to use the FAR clauses and DBA wage rates when using a federal grant. I know that we used to with FmHA, though (1978 era). The Grant should spell out procurement requirements.

Is the grant just the way the funding or the instrument of the award. The FAR wouldn't apply if it is award document, correct?

[Guest carl r culham]

If DoD part is under $4 million consider 8(a) sole source and forget about any JOFOC and use the leverage to have a cooperative effort between county/city and DoD contract efforts. Heck maybe even the city/county has a way to reach out to the 8(a) so you have one contractor doing it all.

[Guest Vern Edwards]

The FAR would not apply to any contract awarded by a state or local government. Carl has a good thought, but you would need two contracts, even if both parts of the work are done by the same 8(a) firm. Even if the local government would be willing to completely submit itself to the FAR, it is likely that some contract clauses might have to be revised due to the differences in the government entities.

The question that needs to be asked is why the DOD agency wants both parts of the work done by the same firm. To what end? In any case, I don't understand what "leverage" would be obtained by having both parts of the work done by a single 8(a) firm or to what party the leverage would apply or why leverage is needed in order to have a cooperative relationship.

[Guest carl r culham]

Darby - My post noted that the DoD part must be under $4 million to make this work as a 8(a) sole source. I did not specify whether there would be one or two contracts. Both approaches might work. Maybe the city/county effort to use a sole source is less than that of the DoD. If so they could enter into a sole source with the same 8(a) that the DoD does then you have accomplished your goal of one contractor performing the entire effort. Or again the 'leverage" of 8(a) to make the outcome be the one you are looking for.

Noting Vern's comment about the FAR you would not have to have the same language in the contract but again the city/county may have ways to reach a firm on a sole source basis a lot easier than you. I would add that if you got to the point of discussing applying the FAR to both contracts it might just be that the city/county could if they wanted it to, nothing I know would prevent it. Heading this direction would complicate matters no doubt so a two contract approach seems better if the 8(a) sole source route for the DoD side is in the cards.

[Darby8001]

The DOD portion of the project is between 15-20 Mil. So it would not be within the non J&A direct 8(a) award threshold.

I share your opinions that there is no real legitimate reason to have the same firm for the county and DOD. I believe the reason behind the request is about perceived control. It seems the thought process is that if we share the same firm with the county then while they are performing the county's portion of the work then we will have some control. While you and I know this is not the case, the technical side of my team is not easily dissuaded from their preconceived notions.

The technical side of our team has a tendency to use their pay grades, which are far superior to that of the contracting office, to exert a certain amount of political pressure.

In short if their request doesn't break any specific law or regulation then why cant we figure out a way to do it.

Unfortunately I have no access to the county or the grant do to reasons unknown to me. So I am left racking my brain in an attempt to come up with a set of evaluation factors that will ensure both the county and DOD end up with the same contractor.

In the end I believe the contracting office will have to take a stance and dig in our heels on and weather the political storm that will follow.

[joel hoffman]

The DOD portion of the project is between 15-20 Mil. So it would not be within the non J&A direct 8(a) award threshold.

I share your opinions that there is no real legitimate reason to have the same firm for the county and DOD. I believe the reason behind the request is about perceived control. It seems the thought process is that if we share the same firm with the county then while they are performing the county's portion of the work then we will have some control. While you and I know this is not the case, the technical side of my team is not easily dissuaded from their preconceived notions.

The technical side of our team has a tendency to use their pay grades, which are far superior to that of the contracting office, to exert a certain amount of political pressure.

In short if their request doesn't break any specific law or regulation then why cant we figure out a way to do it.

Unfortunately I have no access to the county or the grant do to reasons unknown to me. So I am left racking my brain in an attempt to come up with a set of evaluation factors that will ensure both the county and DOD end up with the same contractor.

In the end I believe the contracting office will have to take a stance and dig in our heels on and weather the political storm that will follow.

WHOO! To Hell with pay grade issues. This isn't the way to run a railroad or a construction project! For any project ,especially for one of this magnitude, the entire project team including Contracting, PM, technical, the external county or city customer reps and counsel, if available, need to meet and discuss the best acquisition strategies and what is possible. You must have access to those non-federal partners or clients. Insist upon it.