joel hoffman

The evaluation boils down to Price by two vendors. One is high the other is low from the basis of the IGE. This is a FFP - Requirement type contract - Competitive acquisition - Performance Base - LPTA (Vern, you may say just award to the lowest if they are found Technically Acceptable - and Past Performance is low risk... - but it is not as simple as that...). There are CLINs for Hourly rates and some are Monthly - which are derivatives of the hourly rates x a 12 month time frame to evenly measure the workload on a monthly basis.

My guess is they have an exorbitantly high number on G&A, O/H, or Profit. - Hence why I need to know rates to be able to identify where the difference are between contractor's proposal and the IGE.

The lowest is significantly low to the point that we question if they can perform the job without risking their financial standing (i.e., would eventually not be able to perform as a result of cost constraints, among other reasons attributed to their low proposal).

You said that this is a competitive acquisition. Are you contemplating conducting discussions? If so, do you intend to explore or otherwise discuss your concerns with the two firms?

I am trying to find out if anyone knows of any authorizations other than 51.101 which permits the Government to allow a contractor to purchase items from Government Supply sources. As I read 51.101 the contract must be a cost-reimbursement or one under the Javits-Wagner O'Day Act or a contract that requires protection of security classified info. I have two cases that do not meet any of those requirements. First case involves an item in the JOC unit price book that is significantly under priced and the other involves a case where after award of the task order the contractor's supplier is saying they need the letter of authorization from the Government in order to provide the discounted price they quoted on. This contractor sent some "sample" letters they had been provided in the past and one of those authorized skateboard equipment connected to the Design/Build Skateboard Park contract. I am having trouble imagining how that one met the requirements of 51.101. All that being said I would very much like to help both of these contractors but so far have not found a way issue the requested letter. Any thoughts/solutions would be appreciated.

I don't know the answer to the specific question of how to authorize contractor purchases from government supply sources. In the event that the government cannot provide the required documentation, there may be an alternative available, assuming that this would justifiably be in the government's best interests. The government might be able to modify the task orders to obtain an equitable adjustment for the government to purchase the items from the sources and provide to the two contractors as government furnished materials.

You indicated that one contract is a JOC contract with an item that is significantly under priced, using the JOC unit price book and the contractor's coefficient. The contractor is contractually bound, I assume, to honor the price on a JOC job order. However, you want to help the contractor out, if possible. I'm assuming that the government could purchase the item and furnish it. However, this would involve some government cost and resources for the deduct modification and procurement efforts. As part of the concept of being in the government's best interests, would the portion of the equitable adjustment representing the contractor's indirect cost and other markups reasonably cover such government costs? What other benefit is there to the government? Would this set a precedent for future job orders? JOC contract pricing might be low for some items and high for others, which supposedly balance out. Why are you trying to help out? [Edit: Velhammer posted while I was formulating my post and he/she has a good point concerning allowing the contractor to obtain "materials" at a lower cost than its competitors.]

Does the other situation involve another contractor on a negotiated task order? Its supplier "quoted" a discounted price for an item. After award, the supplier says it needs "the letter of authorization from the Government in order to provide the discounted price they quoted on."

[EDIT: The following only applies if the task order price was negotiated between the parties.] In this case, was the government negotiator aware of the basis that the item was quoted on during negotiations? If so, it would seem that the government should have known whether or not the supplier could actually purchase the item from a government source. If it can't, could this be a case of "mutual mistake"? Would that serve as justification to change the requirement from contractor furnished to government furnished and delete it by equitable adjustment for a credit? [EDIT: The same concerns apply if this was a competitive task order.] [Wife unplugged the computer before I could finish my post]

Why do they have to send two people to Dubai to close out some subcontracts? It does not sound reasonable to me.

Actually, it's three people!

The prime needs the labor of 3 personnel to fly to Dubai and work for as long as it takes to close out the sub-contracts for our task order... It may be anal but I am going to extend the task order for the time period necessary with the approved [direct]labor cost and travel idenitified.

Sounds reasonable and then should not be problematic! I have one question. Do they need any help in Dubai? I used to travel there during Desert Shield/Storm. It is a neat place!

Geojeff, you said: "Sadly, the debate long ago took a turn towards the absurd. I work for an agency within the Department of Interior. DIAR 1436.209 expands on FAR 36.209 as follows:

"Approval to award a contract for construction to a firm or its subsidiaries that designed the project shall be made by the HCA only after discussion with Director, PAM, and with legal concurrence. The request for approval prepared by the CO shall include the reason(s) why award to the design firm is required; an analysis of the facts involving potential or actual organizational conflicts of interest, including benefits and detriments to the Government and the prospective contractor; and the measures which are to be taken to avoid, neutralize or mitigate conflicts of interest. A copy of the documentation shall be forwarded to PAM at the time of consultation."

This is not a problem, because in design-build the construction contract is awarded before the design-builder provides the design of the project, as I explained above. Thus, the firm has not "designed the project" before award of the design-build construction contract and 36.209 is meaningless in this context.

You went on to say that "The Fish and Wildlife Service, another agency within the Department, has awarded a multiple award task order contract (MATOC) for construction and design-build. From the "scope" paragraph in the MATOC ordering guide: "The objective of this contract is to provide comprehensive technical design-build and construction services for all bureaus within the Department of Interior. Task orders may require work including (but not limited to) investigations, analyses, studies, design0build, construction administration and management, NEPA, archaeological and historical compliance, and actual construction. Design services regulated by the Brooks Act are NOT included within the scope of the MATOC."

"The Department has taken the position and promulgated it to the bureaus that, before a design-build task order is competed/issued under the MATOC contract, the waiver described above in 1436.209 is required. I have already made all of the arguments against this position (I think), to no avail."

The scope of the cited MATOC is a bit problematic in that the type of services described may conflict with the statement that they will not be of the type regulated by the Brooks Act. While true that the Brooks Act doesn't apply to design-build, it may well apply to investigations, analyses and studies and possibly to NEPA and historical preservation efforts. Thus task orders for such activities may be improper for non A-E contracts. And if design-build or construction task order scopes are developed from the studies and investigations in those other task orders, then 36.209 may very well apply...

Thanks, Vern. To be less wordy, I didn't quote the six Hammurabi provisions which deal with responsibility for safety of design and construction. You quoted four of them. I will add the other two after I return to office from the car repair shop.

Engaged in an office debate. I am being told FAR 36.209 applies to design-build acquisitions.

I am interested in others' thoughts on this topic.

Does the debate concern whether or not FAR 36.209 prohibits the award of a design-build contract to a design firm as the prime or as a joint venture member? It does not, unless the firm prepared the design criteria and/or preliminary design in the design-build request for proposals. In that event, the firm would would likely have an unfair competitive advantage, since it has been intimately involved in the development of the government's functional and technical requirements.

The restriction in FAR 36.209 pre-dates Section 4105 of the Clinger-Cohen Act of 1996 (Public Law 104-106), which specifically authorizes the use of two-phase design-build procedures for construction contracting. D-B contracting is covered in FAR 36.102, 36.104 and 36.3 .

Here is what FAR 36.209 says:

"Construction Contracts With Architect-Engineer Firms.

No contract for the construction of a project shall be awarded to the firm that designed the project or its subsidiaries or affiliates, except with the approval of the head of the agency or authorized representative."

The words "shall be" indicate a future action to award a construction contract. The word "designed" is the past tense of design. Thus, the wording indicates that the project has been designed before the award of the construction contract. Here is another way of stating the restriction, using the active voice: "Do not award a construction contract to the firm or its subsidiaries or affiliates that designed the project , except with the approval of the head of the agency or authorized representative."

I think that it is clear that FAR doesn't specifically bar a design firm that didn't prepare the RFP design criteria or a preliminary design from being a subcontractor member of the design-build team. What unfair competitive advantage would a design entity that did not prepare the RFP have in the role of prime or joint venture partner that it wouldn't have as a subcontractor member of the design-build team?

Does FAR 36.209 really intend to protect the government or building occupants from professional conflicts of interest rather than unfair competitive advantage? The design-build concept of singular responsibility has been traced all the way back to the Code of Hammurabi (circa 1750 B.C.), with very drastic punitive measures being taken for the builder who also was responsible for the "design" of a building. Why would Congress be any less concerned with the builder being responsible for the design than with the designer being responsible for construction?

It strikes me that Joel's question has no simple answer and must be answered on a case-by-case basis depending on specific facts.

Thanks, Vern.

I recognize that my scenario differs from the original question. That scenario assumed incurring and charging direct costs to close out a contract or subcontracts after the period of performance, which seems to definitely be problematic.

I don't know if DCAA will review requests for reimbursement for your task order, but if it does, it appears that a DCAA auditor would not approve the request for reimbursement if the cost was incurred after the expiration date. That is not necessarily the end of the discussion, but it is certainly cause for pause.

When is a cost actually incurred? Is it when a subcontractor performs a required task under an existing sub contract within the required period of performance? Or is it when the sub subsequently invoices the prime for that work?

So as not to over complicate the scenario, I'm assuming that the sub's actual costs to account for its costs and to invoice the prime after completion of the direct effort would be included as overhead/G&A on the cost of the direct efforts rather than as additional direct costs incurred after the PoP.

It doesn't seem practical or right for the government to require subs to invoice primes prior to final completion. As an example of what can happen with early billing, our organization requires that we submit early time sheets for the last 2 full fiscal year pay periods plus any partial pay period that falls at the end of September. Not only do we have to account for all time but we have to charge exact hours to the correct fiscal work item. That invites all sorts of inaccuracies that usually have to be corrected after the fact. So, if the corrections are made after the fact, they are still charged back to the appropriate program. Why would that be a "newly incurred cost" any more than on a contract?

I think the key is in what you don't use--IE of any version. I think the answer is in testing different browsers. Apple's browser is claimed to work on PCs.

As a childhood friend of mine once told me, "Me no-know. Me no-tell. Me push button and it go like hell."

My next point is though, do you agree that we can use Options, but do not need a Justification for Inclusion of an Option or a D&F to exercise an option when executing construction contracts.

FAR 17.200 says the subpart does not apply to construction. Therefore 17.203 (use of options) 17.205 (documentation) and 17.207 (Exercise of Options) does not apply...

hutch, no I dont agree with you that we dont need justification to include options in contracts or to exercise certain options.

As this is agency specific policy, there is no further need to tie up WIFCON. It would be cleaner if you just contact me through email and I can relay what I find to you or provide you some contacts.

Joel:

What browser are you using? Is it MSFT? If so, are you using IE 7 or IE 8?

Bob, I use Mozilla Firefox. It doesn't have any DoD special access rights, VPN or anything.

Hutch, I will check with CT concerning your question in the morning. If you want me to email you, I'm in the USACE Global directory. Drop me a line and I will let you know. I have to check the acquisition letters and my. COE, KO friends. I really do have some

(Background Info: I don't work with IFB's. My comments below relate to competitive RFP's and task order competitions on Multiple Award Indefinite Delivery/Indefinite Quantity Contracts (MATOC's). My contract writing and bidding experience back in the 70's used bid items for "extra quantities" on unit-priced work that were fairly straight forward and which were systematically calculated to determine who had the lowest bid prices.)

I'll agree that the standard evaluation of options provisions don't perfectly fit construction. Unless there is some organizational policy requiring them, you don't need to.

The Corps doesn't use the Uniform Contract Format for construction contracting. We have 42 Districts and several centers who contract for construction. We primarily use the Construction Specifications Institute's (CSI) Masterformat. I can't vouch for every contracting office, however.

I've seen 52.217-4 -- Evaluation of Options Exercised at Time of Contract Award and 52.217-5 -- Evaluation of Options used in solicitations and task order competitions. That is what our contracting officers have been teaching in one of the Corps' classes that I'm involved with.

For task order competitions or for source selections, in lieu of using a provision, the evaluation of options language might alternatively be described in an Division 00 section containing the Evaluation Criteria and Basis of Award (a section comparable to the UCF's Section M). You must state how price will be evaluated in the solicitation or request for task order proposals. For trade-off or for the Lowest Priced Technically Acceptable Offer, there must be a way to determine the relative prices of the competing firms. Where yo do it depends upon your contract format.

For projects where there is a possibility of obtaining additional funding to award options not awarded with the contract, I have seen the 52.217-5 provision used or similar language in the Div 00 price evaluation criteria. The provision actually allows some latitude to consider other than the total of the base plus all options, if it isn't likely that enough funds will be made available by the using agency to award all options.

However, the contracting officers that I have dealt with generally don't want to stray from that formula for concern that it is less complicated and also that evaluating less than all options could be seen as manipulating the price evaluation to favor the selected firm. Being adverse to complicating the evaluation or to use methods prone to be protested, they are loath to stray away from formula evaluation schemes. They make the final decision, not me.

I certainly think that one could simply say that option prices will be evaluated, based upon the amount of funding expected to be available within the time frame reserved to award them or that the government will evaluate the most bang for the buck, etc. This is more appropriate when price is equally important as the non-price factors or when price is significantly more important than the non-price factors I have also seen wording when using the trade-off method to the effect that the government might skip options that it cannot afford and select others that are within the budget, otherwise still using the order of importance. When price is significantly less important than non-price, industry has told us that the extensive use of options seems contradictory and confusing to them.

Regardless, with the trade-off method, the government must justify in the comparison between offerors what additional benefits a higher comparative priced offer provides than a lower priced offer.

We state in the notes to the CLIN schedule that options are listed in their relative order of importance to the government.

When the government reserves the right to award options after initial contract award, we state in a Division 00 Section "Additional Contract Requirements" (Special Contract Requirements) how long after the award or after Notice to Proceed to award options. "The Government reserves the Right to exercise any or all of the options listed in the Contract Line Item Schedule no later than XX calendar days after (receipt of the Notice to Proceed) (contract award date). Vern's wording is fine too, assuming that one can reasonably predict a option award cut-off date during the task order competition or source selection.

If your organization has any policy on construction contracting options, I highly recommend that you check them out.

...ut now my question is, FAR 17.2 does not apply to construction, but does not PRECLUDE the use of options in construction. So one might use options for construction but not follow FAR 17 or use the applicable clauses, which is why simple narrative in the RFP stating how long the option is availabe to be exercised and how it will be evaluated is all that is required in a construction contract???

Hutch, I'd check to see what your organization's policies are concerning the use of options. We generally apply the principles of FAR 17.2 to the extent practicable. We use the evaluation of options clauses with an additional contract condition that describes the amount of time if any in which the government may exercise the option(s).

You wondered above if options are always used. With today's economy, they are probably used less often than in the past, although I personally think that some people don't know how not to use them. Like I said, they can be abused.

Edit: I pretty well agree with Vern's above post, except that we do generally use an evaluation of options clause. Some Districts might tailor them rather than include a standard clause.

I've dug around a little bit and can't find an answer to my question.

Is my reasoning incorrect? or is there a more appropriate way/acquisition strategy to include Options on Construction Contracts?

Options have been included in billions of dollars of construction projects for DoD for many years.

The Army Corps of Engineers uses options frequently on construction contracts, including fully designed and design-build contracts. We use them on Army and Air Force projects, civil works projects, construction for others. I'm pretty sure that the Navy uses them and I know that the Air Force must use them, too. The Air Force advocates extensive use of options on our projects with them. I imagine that we also use them on the Navy projects that the Corps is the agent for the Navy.

We typically include one of the Evaluation of Options Clauses in FAR 52.217 to describe how the government will evaluate the option prices.

We include CLINs for options listed in order of priority to the government. We describe the options in the Line Items, pretty much as you described.

Options are often used for government preferences for features better than the minimum required in the base contract statement of work, for something exceeding the minimum specified quality.

Options are also used when we aren't sure that we can obtain the full project scope within the budget. However, they aren't supposed to be used for "phishing" purposes - just to see what something may cost or just for nice to have desired features, unless there is a reasonable possibility that the government can afford them. Due to construction bidding climate and chronically under budgeted projects during the late 90's and early 2000's, the Army dictated that scope of the base bid be limited to 85% of the Programmed scope, with the remaining 15% designed and included as options for most Army MILCON projects.

We usually state a time period in which the government can unilaterally award the options, after award. The client may try to find more money after award to subsequently award as many options as possible. The only time that this wouldn't occur is in the rare instance where only options awarded with the contract award are being considered, such as really urgent, short project timeframes.

I will say this - the use of options is often abused and often confuses industry as to the government's true acquisition objectives...high quality? lowest prices? Most quantity for the dollar? Etc.

Good for you! I cannot.

Sorry, Bob. In addition to my home computer (Firefox is my Browser), I am also able to pull up the URL (the one that Randy Jewett provided in post #3 above) on my Blackberry.

Like Cajuncharlie said, That is too weird.

web-based is fine. Do you have the link?

As I said above, I can browse through the Guides on my home computer, without logging in with my CAC Card at : https://acc.dau.mil/CommunityBrowser.aspx?i...〈=en-US

Look on the right side of the page.

That is an https site. I suppose these are classified as super-secret documents now.

I am able to browse through the document from my home computer without logging in.

I'm not a commercial fisherman, but it just seemed to me that figuring out how not to lose a net is something that would be of some value to someone involved in that line of work.

That doesn't make acquiring a federal research contract to discover how to improve commercial fishing practices acquisition of a commercial item (or a commercial service).

According to FAR 15.403-4 the requirement for certified cost or pricing data does not apply when unrelated and separately priced changes for which certified cost or pricing data would not otherwise be required are included for administrative convenience in the same modification.

I am having difficulty in determining whether or not several change orders included in a modification are related or not. Does anyone know how I can determine if the change orders are related?

George, I think that it is based upon judgment but there may be something in agency guidance or a Decision somewhere. Here are some guidelines I have used over the years in the field as an ACO or as a negotiator and in my District and Division level contract admin oversite roles.

1) Are the changes separately priced, including their impacts on the unchanged work and time or schedule?

2) Do any of the changes impact the others such that they must be settled together or will they be (or were they) settled together in one agreement?

3) The scopes of work should generally be distinct and not intertwined.

4) Can they "stand alone" in scope and effect on the contract?

5) Generally, by including them in one mod "for administrative convenience", means to me that we settle them separately but just include them in one mod to save issuing separate mods. We may or may not negotiate them in the same meeting but still would settle them separately.

6) We keep the changes separate to the extent practical in the single modification file. We have distinct change numbers assigned to each.

7) We usually have separate RFP's and/or change order mods that initiate the changes, separate funding documents, and separate government estimates (if applicable) .

8) We segregate the pre-negotiation objectives by change (even if in the same document).

9) The changes may be negotiated in separate meetings or may be negotiated one at a time in the same meeting. There could be one consolidated price negotiation memorandum (if settled in the same meeting) or separate ones. At any rate the PNM would cover negotiation and settlement of each action separately. The adjusted quantities and prices will generally be combined in the mod in the single CLIN schedule in one or more CLIN's as applicable for administrative convenience.

10) If the scopes and descriptions of the changes had not been previously added earlier by change order mod, then they should be separately described in the SF30.

11) Bottom line rule of thumb is that each change keeps its own identity throughout the process and can be independently traced as to scope and adjustment or equitable adjustment to time and price, including impacts.

12 ) If they are lumped together in the settlement or if impacts must be lumped together to reach agreement on bottom line price and/or time, then they aren't independent, thus are interdependent, in my opinion.

Does that help?

After establishing the competitive range, I sent written discussion questions regarding the offerors weaknesses.

My plan after evaluation of the written responses, is to conduct oral discussions on those areas still not resolved...

Is there anything that precludes me from using this type of discussion method?

No. Discussions are open until you close them with a request for final offers. You certainly may combine oral with written discussions. As you indicated, a useful and important objective of discussions is to get to a meeting of the minds.

P.S. I mentioned warranties yesterday to my USG rep as a possible canard for our telecom lease issue and he tells me that now "warranty" is a dirty word in the contracts shop and to be avoided? He couldn't give me the details but it appeared that perhaps they were afraid warranties were being used to illegally prepay for services?

Wow, I wonder what they consider a "warranty" to entail. There is one thing to warranting the quality a product or service but providing preventive or other maintenance goes beyond my experiences with warranties. In my experience, that is a customer responsibility

Just a general note concerning the Army's new mandatory training on prevention of sexual harassment (and sexual assault). As a rehired annuitant, I just completed my training on "Sexual Harassment/Assault Response and Prevention" or "SHARP", which has replaced "Prevention of Sexual Harassment" or "POSH". This training heavily stresses the responsibility of every soldier and civilian employee to help prevent sexual harassment or sexual assault of other military or civilian members through intervention. It changes the focus of previous training from the responsibility of an employee or soldier as a potential victim or victim to everyone's responsibilities toward others. The Army's clear expectations are quite an eye opener. The training also taught me new perspectives of what many of us think of as common dating or situational behavior. This is behavior that many people might probably shrug off, might decide to just look the other way or might think that the victim can or should deal with it themselves.

The training, while primarily focusing on typical soldier on and off-duty activity, also included numerous situations involving a civilian employee who actively intervened with soldiers and/or civilian employees. The situations occurred both on and off-duty. And there were situations involving offensive and intimidating behavior by his boss toward a co-worker. Of course, the fact that the charachter is a retired Master Sgt. probably explained his off-duty, "beyond the call of duty" intervention techniques. But it makes one think about observed on or off-duty offensive behavior by Army (military or civilian) personnel or threats to fellow Army personnel.

While discussing the training with my sister-in-law and a friend last night, who have somewhat narrow or "traditional" views, it hit me how I had viewed various dating and social interaction situations before the training as "normal" or "tolerable", even if not considered good behavior.

Bottom line is that direct harassment or workplace situations where soldiers and employees are exposed to unwanted behavior by others or to situations where the workplace may become a "hotile environment" is not to be tolerated and those observing such activity have a duty to intervene, not just decide that it is the victim or intended victim's responsibility to resolve the situation.

This is not intended to answer the questions raised here but share my renewed and increased awareness that every (Army at least) employee has some responsibility to others in the workplace and the responsibility not to tolerate such behavior, whether it be by other government personnel or by government contractor personnel that interact with government personnel.

An excerpt from AR 600-20

Chapter 7?7. Techniques of dealing with sexual harassment

All soldiers and civilians have a responsibility to help resolve acts of sexual harassment. Examples of how to accomplish this follow:

a. Direct approach. Confront the harasser and tell him/her that the behavior is not appreciated, not welcomed and that it must stop. Stay focused on the behavior and its impact. Use common courtesy. Write down thoughts before approaching the individual involved.

b. Indirect approach. Send a letter to the harasser stating the facts, personal feelings about the inappropriate behavior and expected resolution.

c. Third party. Request assistance from another person. Ask someone else to talk to the harasser, to accompany the victim, or to intervene on behalf of the victim to resolve the conflict.

d. Chain of Command. Report the behavior to immediate supervisor or others in chain of command and ask for assistance in resolving the situation.

e. File a formal complaint. Details for filing an informal or formal complaint are included in Appendix E"

...The issue is simply can a prepaid telecom lease go beyond a TO's PoP?

...I also have a concern now that product warranties are similarly affected, ie. we purchased an extended manufacturer's warranty for a high failure/critical component, and of course, the warranty goes beyond the PoP.

Oldnavy, Does the issue concern service contractor efforts after the task order completion that would be reimbursable or otherwise payable?

Regarding your warranty concerns, in FFP construction contracts, extended warranties after the period of performance are common. There is no contractor payment for warranty responsibilities. Those are simply post acceptance responsibilities.

As for the lease, is there any reimbursable contractor involvement after the period of performance? You said that the lease itself was prepaid. I am assuming too that the government is still using the leased facility after the POP, but I might be wrong. If the facility is not being used, that would seem to be more related to the wisdom or folly of paying for something of no value (government waste) than the question of whether or not it can be done.

Of course, I realize there are differences between service and construction contracts.