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FAR 16.504(c)(1)(ii)(D) interpretation


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#1 woops85

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Posted 13 January 2010 - 09:16 AM

All - Running into an issue with conflicts in interpretation of new FAR language.

16.504 Indefinite Quantity Contracts
( c) Multiple award preference
(1) No task or delivery order contract in an amount estimated to exceed $100 million (including all options) may be awarded to a single source unless the head of the agency determines in writing that?
(i) The task or delivery orders expected under the contract are so integrally related that only a single source can reasonably perform the work;
(ii) The contract provides only for firm-fixed price (see 16.202) task or delivery orders for?
(A) Products for which unit prices are established in the contract; or
(B) Services for which prices are established in the contract for the specific tasks to be performed;
(iii) Only one source is qualified and capable of performing the work at a reasonable price to the Government; or
(iv) It is necessary in the public interest to award the contract to a single source due to exceptional circumstances.
(2) The head of the agency must notify Congress within 30 days after any determination under paragraph ?(1)(ii)(D)(1)(iv) of this section.
(3) The requirement for a determination for a single award contract greater than $100 million applies in addition to the requirements of Subpart 6.3.

I work in an Assisted Acquisition shop and our clients are being told by their contracting shops that this language means they cannot award a Task Order under a GWAC/IDIQ valued at over $100M without the head of their agency approval. We disagree and say this language applies to the award of a new contract vehicle, not the task/delivery orders under the previously awarded vehicle - esp since you can't have an IDIQ under an IDIQ. Have tried the argument that if it applied to the award of task/delivery orders, language would have gone in FAR 16.505 Ordering. Since clients have to get their contracting shop to sign off on the acquisition strategy before we can proceed, many are saying let's just shorten the projected POP (from 5 to 3 years say) so we're below the threshold. Of course, then they are facing a new procurement every 3 years because not willing to try to convince "the powers that be" that the interpretation is wrong. DFARS is silent and I can't find any DoD or Army level policy memo that possesses this interpretation.

Looking for either something that says their interpretation is right or other potential ways to argue the point.

#2 Vbus

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Posted 13 January 2010 - 09:46 AM

Woops85,

Before this topic gets going, I think you've mis-copied your citation:

FAR 16.504 Indefinite-quantity contracts.
...
(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.
--(ii )(A ) The contracting officer must determine whether multiple awards are appropriate as part of acquisition planning. The contracting officer must avoid situations in which awardees specialize exclusively in one or a few areas within the statement of work, thus creating the likelihood that orders in those areas will be awarded on a sole-source basis; however, each awardee need not be capable of performing every requirement as well as any other awardee under the contracts. The contracting officer should consider the following when determining the number of contracts to be awarded:
----(1 ) The scope and complexity of the contract requirement.
----(2 ) The expected duration and frequency of task or delivery orders.
----(3 ) The mix of resources a contractor must have to perform expected task or delivery order requirements.
----(4 ) The ability to maintain competition among the awardees throughout the contracts? period of performance.
---(B ) The contracting officer must not use the multiple award approach if?
----(1 ) Only one contractor is capable of providing performance at the level of quality required because the supplies or services are unique or highly specialized;
----(2 ) Based on the contracting officer?s knowledge of the market, more favorable terms and conditions, including pricing, will be provided if a single award is made;
----(3 ) The expected cost of administration of multiple contracts outweighs the expected benefits of making multiple awards;
----(4 ) The projected task orders are so integrally related that only a single contractor can reasonably perform the work;
----(5 ) The total estimated value of the contract is less than the simplified acquisition threshold; or
----(6 ) Multiple awards would not be in the best interests of the Government.
---(C ) The contracting officer must document the decision whether or not to use multiple awards in the acquisition plan or contract file. The contracting officer may determine that a class of acquisitions is not appropriate for multiple awards (see Subpart 1.7).
---(D )
----(1 ) No task or delivery order contract in an amount estimated to exceed $100 million (including all options) may be awarded to a single source unless the head of the agency determines in writing that?
-----(i ) The task or delivery orders expected under the contract are so integrally related that only a single source can reasonably perform the work;
-----(ii ) The contract provides only for firm-fixed price (see 16.202) task or delivery orders for?
------(A ) Products for which unit prices are established in the contract; or
------(B ) Services for which prices are established in the contract for the specific tasks to be performed;
-----(iii ) Only one source is qualified and capable of performing the work at a reasonable price to the Government; or
-----(iv ) It is necessary in the public interest to award the contract to a single source due to exceptional circumstances.
----(2 ) The head of the agency must notify Congress within 30 days after any determination under paragraph (c )(1 )(ii )(D )(1 )(iv ) of this section.
----(3 ) The requirement for a determination for a single award contract greater than $100 million applies in addition to the requirements of Subpart 6.3.


[hyphens added]

#3 Vern Edwards

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Posted 13 January 2010 - 09:48 AM

The FAR passage that you cited clearly applies to the award of an IDIQ contract and not to the issuance of orders under a contract. I don't see how anyone could interpret it any other way. It's straightforward. Perhaps the policy is unique to the agency and appears in a FAR supplement or policy letter.

By the way, although it's in your heading, you cut and pasted the FAR so as to lose part of the citation. The passage you quoted appears at FAR 16.504( c)(1)(ii)(D).

#4 Navy_Contracting_4

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Posted 13 January 2010 - 09:52 AM

All - Running into an issue with conflicts in interpretation of new FAR language.

16.504 Indefinite Quantity Contracts
( c ) Multiple award preference
(1) No task or delivery order contract in an amount estimated to exceed $100 million (including all options) may be awarded to a single source unless the head of the agency determines in writing that?
(i) The task or delivery orders expected under the contract are so integrally related that only a single source can reasonably perform the work;
(ii) The contract provides only for firm-fixed price (see 16.202) task or delivery orders for?
(A) Products for which unit prices are established in the contract; or
(B ) Services for which prices are established in the contract for the specific tasks to be performed;
(iii) Only one source is qualified and capable of performing the work at a reasonable price to the Government; or
(iv) It is necessary in the public interest to award the contract to a single source due to exceptional circumstances.
(2) The head of the agency must notify Congress within 30 days after any determination under paragraph ?(1)(ii)(D)(1)(iv) of this section.
(3) The requirement for a determination for a single award contract greater than $100 million applies in addition to the requirements of Subpart 6.3.

I work in an Assisted Acquisition shop and our clients are being told by their contracting shops that this language means they cannot award a Task Order under a GWAC/IDIQ valued at over $100M without the head of their agency approval. We disagree and say this language applies to the award of a new contract vehicle, not the task/delivery orders under the previously awarded vehicle - esp since you can't have an IDIQ under an IDIQ. Have tried the argument that if it applied to the award of task/delivery orders, language would have gone in FAR 16.505 Ordering. Since clients have to get their contracting shop to sign off on the acquisition strategy before we can proceed, many are saying let's just shorten the projected POP (from 5 to 3 years say) so we're below the threshold. Of course, then they are facing a new procurement every 3 years because not willing to try to convince "the powers that be" that the interpretation is wrong. DFARS is silent and I can't find any DoD or Army level policy memo that possesses this interpretation.

Looking for either something that says their interpretation is right or other potential ways to argue the point.

You won't find anything saying their interpretation is right, because it isn't. And I doubt you will find a DoD or Army policy memo saying " 'task or delivery order contract' means contract, and not orders under a contract." An interpretation that this applies to orders makes no sense. How can you issue a mulltiple award order?

#5 Vern Edwards

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Posted 13 January 2010 - 09:56 AM

How can you issue a mulltiple award order?


Don't underestimate the radical nihilism of a modern contracting office.

#6 woops85

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Posted 13 January 2010 - 09:59 AM

Thanks on the cite correction. It changed my ( B ) into a (B) and when I went back and changed the smiley back into letters I dropped off the subparagraph heading of D altogether - my bad ;) I still forget to adjust spacing on the things with parens, etc that get changed into other things - like the copyright symbol

My problem is that I totally agree that their interpretation makes no sense but I need to convince them of that. That's what will make me pull out my hair

#7 napolik

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Posted 13 January 2010 - 10:41 AM

Woops,

Are you planning to place orders exceeding $100 million under one of your existing contracts that exceeds $100 million? If so, did you award your contract to a single or to multiple contractors?

#8 Whynot

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Posted 13 January 2010 - 10:56 AM

Maybe you can look at FAR Case 2008-006 Enhanced Competition for Task and Delivery Order Contracts--Section 843 of the Fiscal Year 2008 National Defense Authorization Act and FAC 2005-27 for some background on why the change was made to this FAR and in so doing find some references that would provide clarification to your COs to its proper interpretation.

#9 Whynot

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Posted 13 January 2010 - 11:11 AM

Also, this forum has concluded that a task order is a contract as defined under FAR 2.101, and is considered to be a "negotiated prime contract" for purposes of FAR Part 15.4.

#10 woops85

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Posted 13 January 2010 - 01:40 PM

napolik - New task order under existing multiple award IDIQ. Both are DoD clients, specifically Army but are dealing with different Army contracting shops for purposes of getting approval to use non-DoD shop. Not pertinent but both shops have told respective clients they don't have capacity to support the procurement so that's not part of the equation.
Client A - order value is $30M annually and they want 5 years but are considering 3 because of this interpretation.
Client B - order value is $45M annually and they only want 3 years because work is in Afghanistan and hopefully we'll be out of there in 3 years.
Both targeted IDIQs have ceiling value over $1B and were multiple award (Client A = ITES-2S, client B = Alliant)

WhyNot - Both procurements would be done under FAR Part 16, not 15. I'll look at the FAC - thanks

#11 napolik

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Posted 13 January 2010 - 03:53 PM

napolik - New task order under existing multiple award IDIQ. Both are DoD clients, specifically Army but are dealing with different Army contracting shops for purposes of getting approval to use non-DoD shop. Not pertinent but both shops have told respective clients they don't have capacity to support the procurement so that's not part of the equation.
Client A - order value is $30M annually and they want 5 years but are considering 3 because of this interpretation.
Client B - order value is $45M annually and they only want 3 years because work is in Afghanistan and hopefully we'll be out of there in 3 years.
Both targeted IDIQs have ceiling value over $1B and were multiple award (Client A = ITES-2S, client B = Alliant)

WhyNot - Both procurements would be done under FAR Part 16, not 15. I'll look at the FAC - thanks


Have you told the Army folks that your contract is a multiple award, not a single award?

Are you competing the Client A and B orders among the multiple contract holders?

#12 bob7947

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Posted 13 January 2010 - 08:36 PM

Have you told the Army folks that your contract is a multiple award, not a single award?

Are you competing the Client A and B orders among the multiple contract holders?



When you use a citation, (a), (b), ( c), ©, (d), etc. turn off "enable emoticons" and "enable signature." Unfortunately, if you use ©, instead of ( c), you can see what happens. (Courtesy of Vern.)

I'm trying to see what else this does before I turn it in to the software publisher.

#13 woops85

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Posted 15 January 2010 - 12:45 PM

Have you told the Army folks that your contract is a multiple award, not a single award?

Are you competing the Client A and B orders among the multiple contract holders?


Both will be competitive procurements and that's clearly written into the Acquisition Strategy and in the approval document. ITES-2S is an Army ID/IQ that we can order off of and the office giving Client A the interpretation is the PCO for the vehicle so one would think they know it's a multiple award IDIQ. B) Alliant was also multiple award (59 primes)

#14 napolik

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Posted 15 January 2010 - 01:12 PM

Both will be competitive procurements and that's clearly written into the Acquisition Strategy and in the approval document. ITES-2S is an Army ID/IQ that we can order off of and the office giving Client A the interpretation is the PCO for the vehicle so one would think they know it's a multiple award IDIQ. :lol: Alliant was also multiple award (59 primes)


Let me suggest that you point out in writing that the placement of the order complies with FAR 16.504 becuase the basic contract and the task orders were, or are to be, competed. Also, I suggest you make it easy for the Army to comply with the following DFARS provision:

Quote

217.7802 Policy.

(a) A DoD acquisition official may place an order, make a purchase, or otherwise acquire supplies or services for DoD in excess of the simplified acquisition threshold through a non-DoD agency in any fiscal year only if the head of the non-DoD agency has certified that the non-DoD agency will comply with defense procurement requirements for the fiscal year.

(1) This limitation shall not apply to the acquisition of supplies and services during any fiscal year for which there is in effect a written determination of the Under Secretary of Defense for Acquisition, Technology, and Logistics, that it is necessary in the interest of DoD to acquire supplies and services through the non-DoD agency during the fiscal year. A written determination with respect to a non-DoD agency shall apply to any category of acquisitions through the non-DoD agency that is specified in the determination.

(2) Non-DoD agency certifications and additional information are available at http://www.acq.osd.m...cquisition.html

Unquote

If your agency has made the certification, send copies to the Army POCs. This may help them overcome any resistance to the use of an Interagency Agreement.

#15 formerfed

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Posted 15 January 2010 - 01:23 PM

Both will be competitive procurements and that's clearly written into the Acquisition Strategy and in the approval document. ITES-2S is an Army ID/IQ that we can order off of and the office giving Client A the interpretation is the PCO for the vehicle so one would think they know it's a multiple award IDIQ. :lol: Alliant was also multiple award (59 primes)


Okay, I see the logic now. You didn't say the contract vehicles were GWACS.

I don't agree with the Army PCO but I see their position. I think it's something like this - The Army put ITES-2S in place as did GSA with Alliant. They are multiple award programs for a wide variety of needs, mostly of other agencies and essentially are ordering vehicles for the rest of government. As such, the resulting task orders are almost like new requirements and the ordering agency must decide on whether a single or multiple task order awards are most suitable for their needs.

#16 woops85

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Posted 19 January 2010 - 01:40 PM

Formerfed - Thanks. The hardest part of this has been trying to figure out their thinking. Anyone know where I can take a course in mind reading?




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