joel hoffman

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.

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.

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.

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.

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.

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.

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

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).

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?

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.

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

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.

To make a long story shorter, from said website... "What geographical areas are covered under the SCA? The SCA applies to all work performed within the United States. For purposes of the SCA, the term "United States" includes any State, the District of Columbia, Puerto Rico, the Virgin Islands, Outer Continental Shelf lands as defined in the Outer Continental Shelf Lands Act, American Samoa, Guam, Wake Island, Johnston Island, and the Commonwealth of the Northern Mariana Islands. The SCA does not apply to work performed in any other territory under the jurisdiction of the United States or any United States base or possession within a foreign country. Also, the SCA does not apply to work performed on ships operating in international or foreign waters. If a portion of the contract services is performed within the United States and a portion is performed outside the United States, the SCA applies to the portion performed in the United States."

Sorry, but I edited my last post above, while you were posting number 11 above...

If your firm is trying to extricate itself from the contract option, I think that avenue would be the best approach - especially since the answers to your questions depend upon the specific facts of your situation. Good luck.

Edited: So as not to have to read the mind of the questioner, is the real question here "can we simply use price-only as the basis for competing task orders under FAR Subpart 16.5, therefore not be required to use price and other factors, as described in 15.3?" Or does the questioner simply want to know if and how other organizations simplify task order competitions in comparison with a source selection for a new contract, using the procedures in FAR 15.3? If not either of those choices, what exactly do you want to know? The question, as stated, could result in people investing time providing answers all over the spectrum. It depends upon the purpose and objectives of the task order competition as to how to simplify it versus source selection competition for a stand alone contract.

GovCon, I can confirm the contract requirements but can not necessarily explain the reason behind logic. And yes, at first it seems like inconsistent treatment of the concept of recovery of G&A to have to guess at the magnitude of future SCA increases. On the other hand, when initially pricing out year work on a FFP contract, a firm has to predict or guess at what the future G&A rates will be, anyway. We usually don't know for sure either the denominator or numerator used to calculate future year G&A rates, right? So, in bidding/proposing prices for an FFP contract that includes out year pricing, one must decide what to use for future G&A markups. One might use a current G&A rate, which may be based upon current or past accounting information and/or trends - or one can use whatever rate they think will be high or low enough to be competitive. No offense intended but, perhaps as an accountant, you are trying to get to precise in the whole G&A pricing for FFP contracts with future year option pricing. As an engineer who has negotiated contracts, changes and claims for years, I have tended to try to fit everything into neat formula pricing scenarios, whereas often contractors must use their best business judgement and approximate what to use in a FFP pricing scenario, which involves some risk. Regarding the second issue, assuming that your client flowed down the clause in its subcontracts, if the sub has additional G&A expense due to the contract requirement, it is charged with knowing the contract requirements and should have reflected the additional expense in its proposal to your client for the contract or task order. . Then your client should not have to pay additional G&A to the sub for the SCA wage rate modification. If your client was aware of the pricing mechanism in the clause, it should have protected itself from such additional costs from the subcontractor that weren't already reflected in its pricing for the out years. No offense but it would seem that a prime on a service contract with out year pricing should become familiar with the pricing mechanisms and restrictions for SCA wage adjustments applied to option year pricing before award.

Yep, we might as well wait for Con to add anything he/she deems pertinent.

Vern, I think that Con has expressed two concerns: 1) Con says that the Clause doesn't allow the Contractor to allocate overhead and G&A to the cost delta for the SCA wage adjustment, so it would have had to increase its markups in the initial contract pricing for the outyear options in order to recover those costs. 2) I believe Con says that a sub is charging the prime for its cost to process the mods plus overhead for the increased wages. Note that if the prime has passed down the clause at FAR 52.222-43 in its subcontracts, the subs probably dont have any more right to charge the prime such costs than the prime has the right to charge the government for those costs.

Okay, to answer that, see this from 13.003 -- Policy. "(a) Agencies shall use simplified acquisition procedures to the maximum extent practicable for all purchases of supplies or services not exceeding the simplified acquisition threshold (including purchases at or below the micro-purchase threshold)."... Part 13 was around long before "commercial item" coverage was added in 1997. In my January 1996 version of FAR, 13.5 covers "Purchase Orders" and there is no mention of commercial items in 13.000

ERS, Please advise what you aren't clear about in FAR 13.000, thanks. Breaking down the scope of the Part: 13.000 -- Scope of Part. "This part prescribes policies and procedures for the acquisition of supplies and services, including construction, research and development, and commercial items, the aggregate amount of which does not exceed the simplified acquisition threshold (see 2.101)"... ..."Subpart 13.5 provides special authority for acquisitions of commercial items exceeding the simplified acquisition threshold but not exceeding $6.5 million ($12 million for acquisitions as described in 13.500(e)), including options."... ..."See part 12 for policies applicable to the acquisition of commercial items exceeding the micro-purchase threshold."... ..."See 36.602-5 for simplified procedures to be used when acquiring architect-engineer services." Is it in the wording of "supplies and services"? Do you think it doesn't include those types of supplies and services less than the simplified acquisition threshold that are not commercial items?

Vern, your scenario is incorrect. Dene explained in post #5 that somewhere along the line there was a "design change" that reduced the number of widgets from 200 to 116 with no explanation of how that was implemented. Now the remaining 116 have been deleted and Dene thinks the government is due a credit for all 200 widgets. We know they haven't been "provided". We don't know if they are commercial products that can be resold if already purchased or produced, if they were produced or not produced by the contractor or if they were purchased or not purchased. We dont know if they are severable items or not. What, if any or how much credit is due depends upon a lot of information that is lacking. Dene needs to fully understand the scope of the deletion, tracing back from how the contract required 200 widgets to 0, now.