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FAR 22.1006: Solicitation provisions and contract clauses.

Comptroller General - Key Excerpts

With regard to the evaluation of DCSI's proposal, BSLS specifically asserts that DCSI achieved its low pricing by improperly classifying some positions under certain CBA [collective bargaining agreement] job classifications--accountant, vehicle dispatcher, and commercial driver's license (CDL) driver--rather than under the higher-wage CBA classifications of fuels accountant and fuels technician. BSLS argues that, under the terms of CBA, the fuels accountant and fuels technician classifications are the appropriate classifications, and contends that DLA should have upwardly adjusted DCSI's proposed price, downgraded its technical rating, or found its proposal unacceptable. BSLS asserts that DCSI's proposal of, for example, CDL drivers, rather than fuels technicians, indicates that DCSI's proposed employees do not meet the personnel qualifications and experience requirements of the RFP.

In response, DLA points out that, while it reviewed the resumes and qualifications of proposed key personnel, as well as the offerors' fuels operation management and support plans and staffing approaches, in order to ensure that offerors had sufficient staffing and understood the nature and scope of the work required, it was not required under the RFP to review proposals for compliance with the job classification and wage rate terms of the SCA [Service Contract Act] or CBA. Rather, the RFP required each offeror to submit a statement of compliance with the SCA and CBA. RFP at 14. Accordingly, DLA did not solicit position description or labor rate information from offerors, and contends that it reasonably accepted and relied upon the offerors' acknowledgements that their proposals were in compliance.

We agree. First, with respect to BSLS's argument that DLA should have adjusted DCSI's price, where, as here, the RFP provides for the award of a fixed-price contract, the contracting agency may not adjust offerors' prices for purposes of evaluation. Federal Acquisition Regulation sect. 15.404-1(d)(3); Powersolv, Inc., B-402534, B-402534.2, June 1, 2010, 2010 CPD para. 206 at 12. Similarly, given that the RFP here does not specifically call for a price realism analysis, the agency was not required to perform a detailed price analysis. See SAGE Sys. Techs., LLC, B-310155, Nov. 29, 2007, 2007 CPD para. 219 at 3. In any event, below-cost offers are not prohibited, see Group GPS Multimedia, B-310716, Jan. 22, 2008, 2008 CPD para. 34 at 4, and even where an offeror bases its prices on labor rates lower than those specified in accordance with the SCA, the firm is eligible for award if it does not take exception to the SCA requirements. K.G., Inc., B-281948, May 10, 1999, 99-1 CPD para. 91 at 3. The record here shows that DCSI took no exception to the SCA and CBA requirements. Accordingly, DCSI will be required to perform the specified fuels services in compliance with the terms of the RFP, including compensation of its employees at the required rates, at the price that it proposed. Group GPS Multimedia, supra.  (Bering Straits Logistics Services, LLC, B-403799; B-403799.3, December 15, 2010)  (pdf)

Comptroller General - Listing of Decisions

For the Government For the Protester
Bering Straits Logistics Services, LLC, B-403799; B-403799.3, December 15, 2010  (pdf)  

Court of Federal Claims - Key Excerpts

iii. The Service Contract Act of 1965 and FAR 22.1006

Plaintiff alleges that the New TASC RFP violates the Service Contract Act of 1965 ("SCA") and FAR 22.1006 by failing to incorporate the required and applicable clauses at FAR 52.222-41 and 52.222-43. Conversely, defendant argues that the New TASC RFP is not subject to the SCA because the principal purpose of the procurement is to acquire a sophisticated, integrated system, not to furnish services.

The SCA requires that every procurement or contract valued in excess of $2,500.00, entered into with the United States for the principal purpose of furnishing services through the use of service employees, contain provisions specifying the wages to be paid and the fringe benefits to be furnished to various classes of service employees. 41 U.S.C. § 351(a)(1)-(2) (2009). Where the SCA applies to a procurement, FAR 22.10006 further provides that the contracting officer must insert two specific provisions into the solicitation. See 48 C.F.R. § 22.1006. Whether the SCA applies to a particular contract or solicitation is initially determined by the contracting agency; however, “[i]f there is any question or doubt as to the application of the SCA to a particular procurement, the agency is required to obtain DOL’s views.” Ne. Military Sales, Inc., 2002 Comp. Gen. Proc. Dec. P195, at *5 (Nov. 20, 2002)(citing FAR § 22.1003-7); Ameriko, Inc., 96-1 Comp. Gen. Proc. Dec. P176, at *5 (Mar. 18, 1996)(citing Dynalectron Corp., 65 Comp. Gen. 290 (1986)). Nonetheless, “[w]here a procuring agency does not believe that a proposed contract is subject to the SCA, there is no duty to notify DOL or include the SCA provisions in the solicitation.” Id. at *7 n.1 (citing Tenavision, Inc., 88-2 Comp. Gen. Proc. Dec. P114 at *2 (Aug. 8, 1988)). The court will refrain from reviewing a DOL determination as to whether the SCA applies to a particular contract; the court may nevertheless review the reasonableness of the contracting agency’s decision as to “whether DOL’s views should have been solicited.” Id.

Here, defendant reasonably determined that the SCA did not apply to the New TASC RFP; its failure to incorporate the required provisions of the FAR into the solicitation consequently violates neither the SCA, nor FAR 22.10006. The New TASC RFP describes defendant’s need for a “proven, integrated financial, asset and acquisition management system solution with the accompanying program management, change management and integration services to implement and sustain the proposed solution.” Admin. R., 09-113C, at 000815. At first glance, as well as after a more detailed inquiry, it appears that the primary purpose of the contract is to provide an integrated system solution, with the secondary purpose of acquiring services to implement and sustain that solution. Defendant confirms that the principal purpose of the New TASC RFP is “to acquire a sophisticated, integrated system,” and that the services necessary to implement that system are merely incidental to the performance of the contract. Def.’s Mot. for J. on the Admin. R. at 34. Plaintiff asserts nothing that contradicts this notion. Additionally, defendant informed the Court at oral argument that DOL has confirmed defendant’s conclusion that the SCA does not apply to the New TASC RFP. Tr. (Apr. 7, 2009) at 36:5-7. For all of these reasons, the Court finds nothing unreasonable about defendant’s decision not to include the SCA clauses, and therefore finds no violation of the SCA or FAR 22.10006.  (Savantage Financial Services, Inc., v. U. S., No. 08-21C & 09-113C, April 15, 2009) (pdf)

U. S. Court of Federal Claims - Listing of Decisions

For the Government For the Protester
Savantage Financial Services, Inc., v. U. S., No. 08-21C & 09-113C, April 15, 2009 (pdf)  


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