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Type of Contract and Performance Period: Cost plus award fee (CPAF) services contract with IDIQ task orders. Contract has a 10 year base period and 5 one-year options. Background information: Contract includes the following:FAR 52.219-8 Utilization of Small Business Concerns (May 2004) FAR 52.219-9 Small Business Subcontracting Plan (July 2013), Alternate II (October 2001) with Deviation Contract includes a negotiated Small Business Subcontracting Plan Contractor is required to meet the 5 small business negotiated subcontracting goals Award Fee Evaluations: Annual award fee evaluations are performed Evaluation factors include Small Business Subcontracting Evaluation Factor, with 5% as part of the award fee score Award Fee Adjectival Ratings, percentages and definitions included the award fee plan are consistent with FAR subpart 16.401(e)(3) Contractor Performance Assessment Reporting System (CPARS): FAR subpart 42.1500 states "the fee amount paid to contractors should be reflective of the contractor's performance and the past performance evaluation should [b ]closely parallel and be consistent with the fee determinations”. FAR subpart 42.1503( B )(2)(v) states, "Evaluation factors for each assessment shall include, at a minimum... Small business subcontracting (as applicable, see Table 42-2)." FAR subpart 42.1503( B )(4) states, "The ratings and narratives must reflect the definitions in the tables 42-1 or 42-2 of this section." FAR subpart 42.1503(c )(2) states, "When the contract provides for award fee, the award fee-contract performance adjectival rating as described in 16.401(e)(3) shall be entered into CPARS.” Questions: When is the contractor required to meet the small business subcontracting goals, at the end of the 10 year base period or every year of the contract? If the contractor is not required to meet them annually, then how does the Government assess the contractor during the annual award fee evaluation? For example, say the Government gave the contractor the maximum 5% toward small business factor for years 1 through 9 of the base period, but at the end of year 10 the contractor never even met any of the goals, yet the Government paid maximum fee during the first 9 years. Is there a grey area for the Government to evaluate the contractor’s small business subcontracting goals? If the award fee plan only includes adjectival ratings, percentages and definitions consistent with 16.401(e)(3), and does not include those in FAR 42.1503, Table 42-2, then can the Government issue an adjective rating of Excellent or Very Good when the contractor has not even met or exceeded any of the goals? Table 42-2 “Exceptional” (Excellent) definition is for exceeding all statutory goals or goals as negotiated” Table 42-2 “Very Good” definition is for meeting all statutory goals or goals as negotiated If there is a grey area, then how can the Government provide one rating in the award fee evaluation report, in order to incentive the contractor, but provide a different (lower) rating in CPARS consistent with the definition under Table 42-2? FAR subpart 42.1500 states, “This subpart…does not apply to procedures…in determining fees under award…fee contracts.” (Grey area?) If the Government provided one adjectival rating in the award fee determination and then provided a different adjectival rating in CPARS, then the contractor would likely dispute this since CPARS is used for future source selection purposes. If the award fee report said one thing and CPARS said another, then it would not “[b ]closely parallel” and be consistent with the fee determination… If FAR subpart 42.1503©(2) states, "When the contract provides for award fee, the award fee-contract performance adjectival rating as described in 16.401(e)(3) shall be entered into CPARS”, then does the Government need to follow 42.1503(B )(2) and (B )(4), which points to Table 42-2 definitions? It seems more appropriate for the Government to follow Table 42-2, but provide the appropriate adjectival rating in the award fee plan (i.e., convert it from Table 42-2 to the award fee plan adjectival rating), which would help ensure the past performance evaluation closely parallels and is consistent with the fee determination.

Type of Contract and Performance Period: My question pertains to the deletion of some work on a cost plus award fee services contract. Contract has a 4 year base period and 2 one-year options. Background information includes: In accordance with contract clause FAR 52.242.15 “Stop Work”, a stop work order was issued for maintenance of facilities 6 months into year 2 of the contract. There is 2 years and 6 months remaining on the 4 year base period and 2 one-year options. In accordance with contract clause FAR 52.243-2 “Changes – Cost Reimbursement”, the contractor was requested and provided a cost proposal. Proposed costs include: (1) deletion of cost for work not yet performed, (2) actual costs incurred for work already performed, and (3) proposed minimal costs to tie up loose ends (closeout). For the deleted work not yet performed the contractor projects historical costs as the current estimate to complete the work. FAR Requirements: Table 15-2, Section III B, Change Orders, Modifications, and Claims, of FAR 15.408 specifies the format for an adequate change proposal. The instruction states to include the current estimates of what the cost would have been to complete the deleted work not yet performed (not the original proposal estimates), and the cost of deleted work already performed. Basically deletions (reductions in work) must be priced based on current estimates to complete the work. Therefore, proposals must be priced using current estimates for deleted and added work, rather than the amounts original proposed and negotiated. Other Considerations: The contract includes an estimate of total cost for the purpose of obligating funds and establishing a ceiling that the contractor cannot exceed (except at its own risk) without the approval of the contracting officer and includes the clause FAR 52.232-22 limitation of funds. Question: The contractor’s proposal for deleted work is less than the estimated cost included in the contract. Since the contract already includes the estimated cost for the out years (estimated cost/fee ceiling), then why would the Government not reduce those years for what was initially proposed which is incorporated as estimated costs under the contract? This seems to be a reasonable baseline to reduce the work based on what is priced in the contract. Otherwise if we accept the contractor’s proposal of the reduction of work they are entitled to the additional fee. Had the contractor’s estimate for the out years been more than the contracts estimated cost/fee, the Government would not reduce the estimated contract value that was never included in the estimated cost to begin with. It seems like the appropriate methodology to reduce the contract value would be to use the estimated contract cost for the year priced, less actuals, plus estimated cost to close out the work, and all other years be based on the estimated contract cost priced in the contract…