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joel hoffman

Member Since 07 Dec 2008
Offline Last Active Today, 04:38 PM

Topics I've Started

Offerors Need To Understand The Pricing Scheme And Any Caveats

24 April 2013 - 08:34 AM

See the Blog topic at http://www.wifcon.co.../#commentsStart

vecchia capra posted a comment on 22 April to which I replied. vecchia then replied to my comment. I have been unable to copy the three comments and am niot going to retype them here, verbatim. I know that the Webmaster has stated that he desires running commentary on Blog posts to be directed to the Forum, not in the Blogs.

The Blog article concerns the Court of Federal Claims Case No..09-865C, April 3, 2013, LAKESHORE ENGINEERING SERVICES, INC. vs. U.S. at http://www.uscfc.usc...SHORE040313.pdf

Lakeshore was the winner (loser?) of a Lowest-Priced, Technically Acceptable (LPTA) Job Order ID/IQ contract at Ft. Rucker, AL.in 2006. In 2009, the Contractor submitted a claim for losses allegedly incurred during the base and first option year, using the JOC contract pricing scheme. The contract pricing methods and associated risks are described in detail in the Decision.

Vecchia's last comment asked me what the benefit is of using such a scheme. I won't defend or condemn the pricing method or the details of the contract type. It was developed in the 1980's as a method to be able to quickly award a variety of task orders on a Single Award, Task Order Contract (SATOC) for minor construction, repairs, etc. Since there is no competition for task orders on a SATOC, it was necessary to streamline the individual task order negotiation process.

I understand that JOC contract has been widely used for Army Installations. The Air Force has widely used the "SABER" type contracts, which had some similarities to the JOC contracts.

Back in the mid 1990's I was assignerd to manage the source selection process for a couple of these type contracts. The price competition was extremely fierce with a bunch of proposers (perhaps 10 or more?). I was surprised to see that many of the proposed price coefficients to be applied to the bare unit prices in the estimating guides back then were less than 1.0 (something like .8 to .95 range).

I don't know for sure but do think I remember that the Army Installations made some awards themselves. The Installations often, if not commionly, administered the JOC contracts themselves. It required a specialized, trained staff to develop, manage, negotiate and administer task orders.

In the late 1990's, we were developing MATOC's as an alternative for some installations, due to complaints by industry and the Installations about problems with the JOC contracts, such as contractors' reluctance in performance of task orders due to high price risk, contractors having to maintain fixed staff, a wide variability in availability of funding to issue T.O's, etc.