FAR 1.108© begins:

Dollar thresholds. Unless otherwise specified, a specific dollar threshold for the purpose of applicability is the final anticipated dollar value of the action, including the dollar value of all options.

It's been brought to my attention that the word "final" is subject to at least two interpretations. Under one, it refers to the result (e.g., final price). Under the other, it refers to the last chronological moment that one can "anticipate" a price.

What is (are) the source(s) of those interpretations? Are they judicial, administrative (GAO or BCA), or just word of mouth?

Also, there are several purposes of application, some pre-contractual, some contractual.

21 minutes ago, Vern Edwards said:

What is (are) the source(s) of those interpretations? Are they judicial, administrative (GAO or BCA), or just word of mouth?

Also, there are several purposes of application, some pre-contractual, some contractual.

Vern - 1102s and acquisition attorneys. I've been unable to find any holdings or scholarly discussion on this convention.

You're correct about the pre- and post-award purposes. I'll modify the second option to state: "chronologically the last-occurring upon determining the award or modification price, as appropriate."

The first choice seems to cover most situations. The second, after adding “chronologically,” adds a post award dimension which some might consider as overthinking an issue.

16 hours ago, formerfed said:

The first choice seems to cover most situations. The second, after adding “chronologically,” adds a post award dimension which some might consider as overthinking an issue.

How about the pre-award dimension? Take the following discussion, and in particular the exchange between @ricroy and @joel hoffman :

Suppose the CO finds that the threshold isn’t “otherwise specified” and FAR 1.108© applies.

Would the applicable SAP threshold be determined prospectively based on a reasonably considered IGCE (Option 1), or retroactively based on the final anticipated award price (Option 2)?

2 hours ago, FrankJon said:

Would the applicable SAP threshold be determined prospectively based on a reasonably considered IGCE (Option 1), or retroactively based on the final anticipated award price (Option 2)?

I think you are veering from a discussion of "final" to a discussion of "anticipated." Whose anticipation are we talking about and at what time must it exist? In your scenario, suppose the contractor anticipates that the work will exceed the SAT and proposes accordingly recommending changes to the terms of the proposed contract to reflect its anticipated price. How does 1.108(c) play here?

Other than when an overrun of estimated quantities (where permitted under the contract) occurs, what is the substantive difference between “a price upon performance completion” and “the last-occurring upon establishing the award or modification price”.

Both [bracketed] scenarios appear to address a post award scenario…

Deciding to award an option and/or make other modifications that affect the final performance price would both seem to be considerations after award…

Edited August 14Aug 14 by joel hoffman
Clarified that the scenarios, with [bracketed] descriptions appear to be similar.

Deleted

Wouldn't the full statement of (c) help sort this matter out.

"Dollar thresholds. Unless otherwise specified, a specific dollar threshold for the purpose of applicability is the final anticipated dollar value of the action, including the dollar value of all options. If the action establishes a maximum quantity of supplies or services to be acquired or establishes a ceiling price or establishes the final price to be based on future events, the final anticipated dollar value must be the highest final priced alternative to the Government, including the dollar value of all options."

This said one could then read the paragraph like this could they not (emphasis added)?

"Dollar thresholds. Unless otherwise specified, a specific dollar threshold for the purpose of applicability is the final anticipated dollar value of the action, including the dollar value of all options. If the action establishes the final price to be based on future events, the final anticipated dollar value must be the highest final priced alternative to the Government, including the dollar value of all options.

1 hour ago, joel hoffman said:

Other than when an overrun of estimated quantities (where permitted under the contract) occurs, what is the substantive difference between “a price upon performance completion” and “the last-occurring upon establishing the award or modification price”.

Both [bracketed] scenarios appear to address a post award scenario…

Deciding to award an option and/or make other modifications that affect the final performance price would both seem to be considerations after award…

Joel - The distinction I'm attempting to drive at (perhaps less clearly than I'd hoped) is whether you believe "final" describes the sum quantity of the "dollar value" or the moment that the dollar value is "anticipated."

If it describes the sum quantity, then the dollar value can be "anticipated" at any time in determining the applicability of thresholds (e.g., upon creation of a reasonably considered IGCE). Using SAP as an example, the CO would determine that SAP applies early in the planning process, and this wouldn't change even if proposed prices exceed the applicable threshold (unless the anticipated dollar value were later deemed unreasonable).

Conversely, if it describes a moment in time, then one must wait until the last time that the price is anticipated (i.e., upon establishing or negotiating the price) to determine the applicability of thresholds. Using the SAP example again, SAP could only apply if the established award price is below the applicable threshold; prior anticipated dollar values would be irrelevant.

1 hour ago, C Culham said:

Wouldn't the full statement of (c) help sort this matter out.

"Dollar thresholds. Unless otherwise specified, a specific dollar threshold for the purpose of applicability is the final anticipated dollar value of the action, including the dollar value of all options. If the action establishes a maximum quantity of supplies or services to be acquired or establishes a ceiling price or establishes the final price to be based on future events, the final anticipated dollar value must be the highest final priced alternative to the Government, including the dollar value of all options."

This said one could then read the paragraph like this could they not (emphasis added)?

"Dollar thresholds. Unless otherwise specified, a specific dollar threshold for the purpose of applicability is the final anticipated dollar value of the action, including the dollar value of all options. If the action establishes the final price to be based on future events, the final anticipated dollar value must be the highest final priced alternative to the Government, including the dollar value of all options.

Carl - Can you clarify what you mean?

I read the second sentence to apply to specific contract types and delivery arrangements (e.g., indefinite-delivery contracts, T&M, etc.). I believe it elaborates on the first sentence only when the specific conditions apply.

2 hours ago, Retreadfed said:

I think you are veering from a discussion of "final" to a discussion of "anticipated." Whose anticipation are we talking about and at what time must it exist? In your scenario, suppose the contractor anticipates that the work will exceed the SAT and proposes accordingly recommending changes to the terms of the proposed contract to reflect its anticipated price. How does 1.108(c) play here?

Retread - I don't think I am, although it's challenging to talk about one without the other here. If "final" means "total," then the CO can anticipate the cost early in the acquisition to determine which thresholds apply. If "final" means "last," then it means the CO must wait until the award or modification price is established to determine which thresholds apply.

To answer your question, I believe the CO should take into account any credible information in determining the anticipated cost. But ultimately it's the CO's decision to make.

3 hours ago, C Culham said:

... the final anticipated dollar value must be the highest final priced alternative to the Government, including the dollar value of all options.

I've always been confused by that (bolded) word. What alternatives are available other than the contract action in hand?

Why not just consider the previous thread that you referenced above? It discussed what to do “when you determine” that the price has or will exceed the SAP .

I was addressing the two alternative answers to the poll, which appear to be essentially the same.

2 hours ago, FrankJon said:

Carl - Can you clarify what you mean?

First - Light Bulb! And I think it might help. Now 1.108 is 1.107 in the rewrite and states this...

"(c) Dollar thresholds.

(1) Unless otherwise specified, a specific dollar threshold is the final anticipated dollar value of the action, including the dollar value of all options.

(2) The final anticipated dollar value must be the highest final priced alternative to the Government, including the dollar value of all options, if the action establishes—

(i) A maximum quantity of supplies or services to be acquired;

(ii) A ceiling price; or

(iii) The final price to be based on future events."

To your question I do not read it as applying to specific actions I read it as applicable across all.

2 hours ago, FrankJon said:

I believe it elaborates on the first sentence only when the specific conditions apply.

And one of those conditions could be "The final price to be based on future events." (Rememeber the "or").

In the end interpreted as some 1102's and acquisition attorneys seem to be doing.

From your point of view and the discussion here so much for the rewrite making it all easier!!!!! Oh boy!

16 hours ago, C Culham said:

And one of those conditions could be "The final price to be based on future events." (Rememeber the "or").

Carl - This language is not a catch-all. It would be inaccurate to say that all remaining actions that don’t meet the first two categories “establish the final price to be based on future events.” A BPA is an example of something that could fall within this category but not the first two.

16 hours ago, C Culham said:

In the end interpreted as some 1102's and acquisition attorneys seem to be doing.

What is your interpretation of the poll question? I don’t think I’m following.

17 hours ago, joel hoffman said:

Why not just consider the previous thread that you referenced above?

Joel - Because that’s not the question I’m asking. That’s an example I offered.

You and @ricroy came to opposite conclusions about the effect of the cited convention on the question posed in that post. I encountered a similar situation recently in my professional life. Why is that?

21 hours ago, joel hoffman said:

Both [bracketed] scenarios appear to address a post award scenario…

The first use describes the dollar value.

The second use addresses the moment of anticipation.

It’s a subtle, but I believe meaningful, difference in how one interprets this convention.

12 hours ago, FrankJon said:

A BPA is an example of something that could fall within this category but not the first two.

Let me offer an example I have made simple to illustrate. Non-Commercial product, need anticipated at less that $250k over the time. FAR Part 13 BPA is utilized. And I am suggesting FAR part 13 because to possibly push the need to GSA FSS the need would have to be a commercial product. Now let me pose that the need for same is estimated to be $1million over time, are you saying that the anticipated need would still allow the BPA to be done under FAR part 13? Or in other words does the application of (c) come into play or not? I think so.

12 hours ago, FrankJon said:

What is your interpretation of the poll question?

I believe the poll questions of FAR 1.108(c) (now for like 30 agencies FAR 1.107(c)) do not take in to account that (c) provides broad discreation on which 1102s and acquisition attorneys are basing their view and honestly can not argue with such interpretation based on the full wording of the FAR citation.