@ShaunaMSACM I am really late with this yet in promising some thoughts I have decided to post away.  I tried applying my old experience/habit as a internal process reviewer as I read through the solicitation.

• What a challenging and interesting acquisition.
• Structured as the agency did in the solicitation it did not result in commercial services contract.   As noted no FAR part 12 clauses, use of the SF-33 as the cover document and incorporation of clauses that generally apply to other than commercial services. The references to commercial found throughout the solicitation for the most part apply to subcontracts.  Without in depth market research on my part but in a very simple view, if me, I might have deferred to a commercial service contract based on the the paragraphs (1), (1)(i) and (1)(ii) of the FAR part 2 definition of "Commercial service"  but acknowledge such a conclusion could be debated.  Maybe an anomaly like construction when it comes to applying the FAR? 
• The challenge appears to then to have created a dilemma in how to describe the parent contract and task orders in FPDS reporting.  At face have it look like a duck but when reporting it is not, confusing.  A catch all phrase buried within the what are probably millions of words of the contract that says  "Supplies/services ordered by MARAD are considered commercial items unless otherwise stated on the TO."  adds to the confusion.   You have a parent IDIQ that is not commercial, carries no FAR part 12 clauses, but then you have task orders that are?  This seems especially confusing when you consider the FAR 52.216-1 clause as stated in the solicitation and its paragraph (b) that reverts a conflict to the wording to the parent contract. 
• The inclusion of clause 52.213-4 is mind boogling as well.  Was intent to have it apply to some task orders?    I note this as the 52.213-4 clause does address inspection, termination matters and warranty yet there are other clauses in the parent that address these same matters.  And then trying to wrestle with the aforementioned clause 52.216-1 again.

I appreciate the look see.   It is interesting and I guess in the end it might not be so much letting the confusions stand in the way of making such a anomally work within the contract as written.

Thank you!  This contract has been very challenging and I find myself scratching my head sometimes. I greatly appreciate your insight and guidance!

On 10/15/2024 at 7:45 AM, C Culham said:

Structured as the agency did in the solicitation it did not result in [Part 12]* commercial services contract.

*Added by me. 
Perhaps the reason for not using a Part 12/13 Commercial Services format here are the prohibitions at FAR 16.301-3 (b) and FAR 12.207 (a) against using such format for acquisition of commercial products or services priced as cost reimbursement.

I mentioned the FAR 12.207 (a) prohibition early on in this thread but it wasn’t acknowledged or challenged. Instead, everyone here seems to wonder why it isn’t structured as a Part 12/13 commercial item contract.

 16.301-3 (b)  “The use of cost-reimbursement contracts is prohibited for the acquisition of commercial products and commercial services (see  parts  2 and  12)“

“12.207 Contract type.

(a) Except as provided in paragraph (b)* of this section, agencies shall use firm-fixed-price contracts or fixed-price contracts with economic price adjustment for the acquisition of commercial products or commercial services.”
* discusses conditions for use of  time and materials contracts for acquiring commercial items and services.

As another example, most of the products commonly incorporated into most construction contract building or horizontal utility projects are “commercial” products (as opposed to Federal Spec specific items for instance). There used to be “Federal Specifications” (FEDSPECs) and/or Military Specs (MILSPECs) for almost anything back in the day before commercial specs were widely standardized**. That doesn’t make a construction contract a commercial product or services acquisition, because of many other factors that affect the cost or price of the acquisition.

So why can’t you have a service contract for such services when the Part 12 formats aren’t applicable due to the type of pricing used.? Yes, you can use a non Part 12 service contract for cost reimbursable services. Non Part 12 service contracts were used for decades before Part 12 was developed. Part 12 commercial item contracts accommodate simpler means to acquire common industry standard products and services (when priced as FFP or certain T&M) , as opposed to requiring government specific,  specified products and services.

** I remember reviewing product submittals for toilet partitions that had specific Federal Specifications or Military Specs, comprising several pages of detail. Heck, there were FED or MIL specs for screws and nails, even!  We also had Federal Specs for almost any kind of soil tests, Portland Cement Concrete, Asphalt Cement and Coal Tar Cement paving materials and mixtures, density testing services and many other services. Now the industry standard specs are usually adequate.

 

 

 

1 hour ago, joel hoffman said:

So why can’t you have a service contract for such services when the Part 12 formats aren’t applicable due to the type of pricing used.? Such contracts were used for decades before Part 12 was developed. Part 12 commercial item contracts accommodate simpler means to acquire common industry standard products and services - as opposed to government specific specified products and services.

Well you can but by FAR definition and application such a contract is not for "commercial services".  The quick reference is FAR 12.102(a).

Further it seems the FPDS supports this view.  Reference excerpt from The FPDS Government Users Manual at section 4.11.11  "This designates whether the solicitation used the special requirements for the acquisition of commercial items or other supplies or services authorized to use commercial item procedures intended to more closely resemble those customarily used in the commercial marketplace as defined by FAR Part 12. Select the appropriate value from the drop down menu. See Data Dictionary Element 10H Use Case for appropriate data entry requirements. 61 ..."

Your thoughts provoked a new thought of my own as I do understand the dilemma so to speak.  Maybe the CO should have sought a one time deviation for the action so they could not only call it a duck as he/she has apparently done but format the parent contract and its Task Orders as ducks?

Considering the further information posted by Vern Edwards it seems a deviation would have been an easy sell to the agency head.   Of course dependent on a fact that cost contracts are not preclude by the statute that caused the addition of FAR part 12, something I did not research.

Too late now!

 

52 minutes ago, C Culham said:

f course dependent on a fact that cost contracts are not preclude by the statute that caused the addition of FAR part 12, something I did not research.

The use of cost reimbursement contracts to acquire commercial products/services is prohibited by statute.

Carl, sorry, I should have clearly stated that,  yes- you can use a non- Part 12 service contract to acquire cost reimbursable services of the type that would otherwise be “commercial services” if priced as FFP.

1 hour ago, Retreadfed said:

The use of cost reimbursement contracts to acquire commercial products/services is prohibited by statute.

Citation?

44 minutes ago, C Culham said:

Citation?

41 U.S.C. 3307(e)(4)

49 minutes ago, Retreadfed said:

41 U.S.C. 3307(e)(4)

Thank you

3 hours ago, joel hoffman said:

Carl, sorry, I should have clearly stated that,  yes- you can use a non- Part 12 service contract to acquire cost reimbursable services of the type that would otherwise be “commercial services” if priced as FFP.

Joel, how do you square this statement with FAR 12.102 particularly (a) and (b)?

4 hours ago, C Culham said:

Your thoughts provoked a new thought of my own as I do understand the dilemma so to speak.  Maybe the CO should have sought a one time deviation for the action so they could not only call it a duck as he/she has apparently done but format the parent contract and its Task Orders as ducks?

Considering the further information posted by Vern Edwards it seems a deviation would have been an easy sell to the agency head.   Of course dependent on a fact that cost contracts are not preclude by the statute that caused the addition of FAR part 12, something I did not research.

 

I just learned something new - I didn't know that a one time deviation was an option! Who would have thought that a contract like this one was even possible for that matter?  It definitely keeps me on my toes 😉

31 minutes ago, Retreadfed said:

Joel, how do you square this statement with FAR 12.102 particularly (a) and (b)?

As I previously said, it’s  not a commercial product or commercial service contract under FAR Part 12. Then, FAR Part 12 isn’t applicable to the contract described herein.

The services are of the type that would otherwise be “commercial services” if priced as FFP.

Screenshot from the Parent contract in FPDS.  

One more screenshot from the Parent contract in FPDS:

 

 

This is how the IDIQ level CLINs are structured

Thanks, Shauna. It appears to be inappropriate and/or contradictory. 

It also says that it is Performance Based Service acquisition (50% or more is PBA) Do you know which line items are applicable? 

Also said it was competitive, Best Value Tradeoff with four offers but Cost or Pricing Data were required??? 

 

16 hours ago, ShaunaMSACM said:

I just learned something new - I didn't know that a one time deviation was an option! Who would have thought that a contract like this one was even possible for that matter?  It definitely keeps me on my toes 😉

A deviation here from applicable law isn’t an option. Anything is “possible” if the acquisition team ignores the Administrative Regulations and statutes.

20 hours ago, Retreadfed said:

The use of cost reimbursement contracts to acquire commercial products/services is prohibited by statute.

The next questions are:

1. Can the agency legally issue cost reimbursement task orders for commercial products or services under this contract?

2. Can the contractor legally issue cost reimbursement subcontracts that would bind the government to reimburse the prime on a cost plus subcontract basis?

My answers would be apparently, no. I found no contradictions or exceptions to the prohibition in DFARs, either, if this is a DoD agency acquisition..  

18 hours ago, Retreadfed said:

41 U.S.C. 3307(e)(4)

Edited October 17, 20241 yr by joel hoffman
Added my comments to the quotes.

@ShaunaMSACM  My apologies for bringing deviation into the discussion for this instant matter.   I am in agreement it would not work as Federal Acquisition Streamlining Act (referenced USC already provided) provides the exception to use of cost type contracts.

 

Now to @joel hoffman

15 hours ago, joel hoffman said:

if this is a DoD agency acquisition..  

First things first but in reverse order.   This is US DOT Maritime Administration.

15 hours ago, joel hoffman said:

2. Can the contractor legally issue cost reimbursement subcontracts that would bind the government to reimburse the prime on a cost plus subcontract basis?

You then provide a hard "No" to your own question.   As a hard and fast rule under the contract represented how so?  

31 minutes ago, C Culham said:

@ShaunaMSACM  My apologies for bringing deviation into the discussion for this instant matter.   I am in agreement it would not work as Federal Acquisition Streamlining Act (referenced USC already provided) provides the exception to use of cost type contracts.

My misunderstanding - sorry!

53 minutes ago, C Culham said:

@ShaunaMSACM  My apologies for bringing deviation into the discussion for this instant matter.   I am in agreement it would not work as Federal Acquisition Streamlining Act (referenced USC already provided) provides the exception to use of cost type contracts.

 

Now to @joel hoffman

First things first but in reverse order.   This is US DOT Maritime Administration.

You then provide a hard "No" to your own question.   As a hard and fast rule under the contract represented how so?  

Because the government would be purchasing commercial products or services using cost reimbursable pricing passed through the prime level to the government. 

2 hours ago, joel hoffman said:

Because the government would be purchasing commercial products or services using cost reimbursable pricing passed through the prime level to the government. 

What prohibits this although it would be stupid to enter into a cost reimbursement subcontract under an FFP prime contract.

4 hours ago, joel hoffman said:

Because the government would be purchasing commercial products or services using cost reimbursable pricing passed through the prime level to the government. 

Joel, would this be applicable?

201.104 Applicability.
(a) Applicable statutes, the FAR, 48 CFR chapter 1, and the TAR, in this chapter, apply to all
acquisitions within the Department unless otherwise specifically excluded by statute, the FAR, or the
TAR.
(b) The following order of precedence applies to resolve any question of applicability concerning an
acquisition regulation or a procedure found within the TAR, or the TAM which comprises the
Department's internal operating procedures and guidance—
(1) U.S. Statutes;
(2) The FAR;
(3) The TAR;
(4) DOT Orders; and
(5) The TAM.
(c) The Maritime Administration may depart from the requirements of the FAR and TAR as
authorized by 40 U.S.C. 113(e)(15), but shall adhere to those regulations to the maximum extent
practicable. Deviations from the FAR or TAR requirements shall be documented according to
Maritime Administration procedures or in each contract file, as appropriate.
 

 

@joel hoffman @Neil Roberts

First, I am not so sure the statement by Joel that follows in quotes is an appropriate statement.  I hate to see folks be left with the thought that a cost subcontract by a prime holding a commercial service contract can not be done.

"Because the government would be purchasing commercial products or services using cost reimbursable pricing passed through the prime level to the government."

Reference the following WIFCON thread.  As noted from its discussion a cost subcontract could be appropriate under a commercial service prime contract.  The very reason I questioned Joel's hard no.

As to the "find" by Neil I would have to study it a little further but it does bring in new information, especially the US Code referenced in the quote, that might have allowed for the parent IDIQ to be done as is with both FFP and cost CLINS and still fit the definition of "commercial services" and more closely follow FAR part 12.   Please note I said "might".

As it goes I am resigned to think that the government was challenged and created a procurement the best they could and the OP in winning the contract now better understands the challenge and anomalies and together with the government do the best they both can with the contract vehicle in hand. 

The discussion is great for the future! 

 

 

15 minutes ago, C Culham said:

As to the "find" by Neil I would have to study it a little further but it does bring in new information, especially the US Code referenced in the quote, that might have allowed for the parent IDIQ to be done as is with both FFP and cost CLINS and still fit the definition of "commercial services"

I have looked at that Code section and can find nothing in it that relates to using cost reimbursement contracts to acquire commercial products/services.

15 hours ago, C Culham said:

@joel hoffman @Neil Roberts

As it goes I am resigned to think that the government was challenged and created a procurement the best they could and the OP in winning the contract now better understands the challenge and anomalies and together with the government do the best they both can with the contract vehicle in hand. 

Carl, you just beat me to it.  I started to post something similar.

The SOW and overall objectives of this effort are clearer once someone takes the time to read and understand.   A shortcut on what’s involved is looking at the CLIN descriptions.  I think the problem we all had here arises from a lack of clarity on the overall objectives and what you concluded by saying “the government was challenged and created a procurement the best they could.”  This seems like the contracting people not really understanding technically what’s needed and vice versa.

There are probably several ways to structure this contract and likely none are perfect.  The issue really is about how to contractually acquire commercial vessels and support services and make it fit within contracting boundaries.  If the solicitation provided a better explanation upfront, it would be easier to grasp.  Also explaining the rational for both fixed price and cost reimbursable orders is beneficial along with grouping associated applicability of clauses - these clauses are applicable to FFP orders and these clauses are applicable to cost reimbursement orders. In the most simplistic terms, the government is acquiring marine vessels through a contractor and requires a variety of support services including maintenance, repairs, and alterations.  What’s needed is a clear strategy that best communicates and accomplishes that for both government and industry.  This example falls a little short in understanding at least.