ji20874

If the proposed change is for something that falls within the Changes clause of your contract ( FAR 52.243-2 Changes -- Cost-Reimbursement ? ), you can issue a change order and increase the funds obligated on the contract. The contractor will perform and will give you notice when its costs approach the obligated amount. If the proposed change is somethine else, the Changes clause doesn't give you unilateral modification authority. Based on your posting, I cannot discern which of the above applies.

civ_1102, Oh, and you should be aware that your quotation "a competitive range to the greatest number that will permit an efficient competition among the most highly rated proposals" comes from the end of FAR 15.306 ( c ) ( 2 ) -- you can do this only if your solicitation document complied with the rest of 15.306 ( c ) ( 2 ); namely, only if your solicitation notified potential offerors that the competitive range might be limited for purposes of efficiency.

civ_1102, The answer to Vern's question is key to answering your question. Saying you're using FAR Part 12 doesn't tell us whether you're using commercial item procedures (FAR Part 12) in conjunction with simplified acquisition procedures (FAR Part 13), sealed bid procedures (FAR Part 14), or negotiated procedures (FAR Part 15). See FAR 12.102 ( b ). You did mention RFP. but RFPs are allowed under both FAR Part 13 and FAR Part 15. So the answer to your question hinges on whether you are using FAR Part 13 or FAR Part 15. If Part 13, then no, you do not need to establish a competitive range, but you can if you want to. See FAR 13.106-2 ( b ) ( 3 ). If Part 15, then yes, you do. If the latter, your competitive range can include all offerors. See FAR 15.306 ( c ).

apologies for typos... ji

When you use the term "evaluation creiteria", I understand you to mean a criterion for use in a trade-off process to select a best-value offeror. In this light, I recommend against using security clearance as a trade-off criterion -- either your acquisition requires a security clearance, or it doesn't -- but it is difficult for me to see how this ( a ) represents a key area of importance and emphasis to be cosidered in the source selection decision; or ( b ) supports meaningful comparison and discrimination between and among competing proposals ( see FAR 15.304 ). If you're doing low-price technically acceptable, you can state that possession of a security clearance at the time work begins ( or at the time proposals are submitted? ) is a requirement which an offeror either meets or does not meet. Yes/no. Pass/fail. I hope this is helpful. ji

It would have been better if the original acquisition had clearly been based on the premise that the winner would be the sole provider of the products for the next ten years, let's say, as part of an agency standardization program -- if that was indeed the agency's intention. At this point, a class J&A for the next ___ years would be a solution to allow time for a new competition. Individual J&As, year-after-year, seem to make a mockery of the system. The contractor only competitively won one acquisition, and that for a limited scope. Talk about the camel's nose under the tent. Often, contracting officers are organizationally weak -- but the advice from others to rigorously address the future competition is right on. The organization's competition advocate should be of some use -- this case is exactly why they exist. ji

Here_2_help, Thanks! I'm familiar with progress payments based on cost and the normal liquidation rate of 80%. Using your thoughts, with PBPs adding up to 90% of total cost, then a 90% liquidation rate is right. Sounds good to me.

mskitty, You've read here that ( 1 ) you can negotiate price only when circumstances suggest doing so is appropriate, ( 2 ) you can legally but such is unethical, and ( 3 ) you cannot. What have you decided?

I looked in several agency FAR supplements, but found no answer -- I hope someone here can help me. I'm preparing an acquisition using performance-based payments -- the solicitation will include the provision at FAR 52.232-28 Invitation to Propose Performance-Based Payments and the resulting contract will include the clause at FAR 52.232-32 Performance-Based Payments. The acquisition is for an Environmental Impact Statement (EIS), so the work is not severable. We don't want to pay progress payments based on incurred costs because of the administrative trouble of monitoring contractor costs, but we are willing to make fixed milestone payments using performance-based payments. FAR 32.1004 allows us to make performance-based payments on either a whole contract basis or on a deliverable item basis. We have only one deliverable item (the final EIS), although there are several milestones to getting to the final EIS, so the whole contract basis seems right. FAR 32.1004 ( d ) says "[t]he contracting officer shall specify the liquidation rate . . . in the contract." I looked at several agency FAR supplements to see if agencies have established liquidation rates, but I haven't found any. Does anyone in WIFCON have experience in this matter and can recommend a liquidation rate? Total contract amount will be about $2 Million, with maybe ten milestones over a two-year period.

mskitty, Are you talking about quotations under FAR Part 13 or proposals under FAR Part 15 (including the LPTA process)? For simplified acquisitions under FAR Part 13, yes, you can negotiate price and nothing else -- even prices that seem reasonable may still be negotiated downwards. It need not be a general rule that you always negotiate price and nothing else, but you can when circumstances warrant -- and in your case, it is okay to ( a ) tell each of a few of the lowest-price quoters that you appreciate its quotation but its price is too high to allow for an award; and ( b ) invite it to sharpen its pencil and give you new a lower price. Just be fair. You might succeed in getting the price you can afford to pay. You might not. For LPTA proposals under FAR Part 15, the same idea applies. Just be fair. Negotiations in a Part 15 environment allow for bargaining and may apply to price and nothing else. I differ with Jacques in this matter. Yes, a competitive range is for the purpose of allowing discussions (negotiations) and proposal revisions, and it is okay if the only matter negotiated is price and the proposal revisions affect only price.

If you are "draft[ing] the contract at formation," why not draft a contract with the so-called sub-contractor? It seems strange to want to draft a contract with a so-called prime contractor, with instructions in the contract for the prime contractor to give way to a so-called subcontractor during the course of contract performance.

If your letter contract was done by letter, then yes, your definitizing contract can be bilaterally formed on a SF-33, SF-1447, or SF-1449 (or SF-1442 for a construction contract). The best answers come from asking questions...

Both amounts ( a ) and ( b ) can go into the definitizing document. Or, do a bilateral definitizing document for ( a ) and a separate unilateral contract modification for ( b ). Here, ( a ) is the agreed-upon definitized price and ( b ) is the amount obligated in incremental funding. If the program office does not intend to provide additional funding, then you need to renegotiate ( a ) and the work scope down to match ( b ). If the program office intends to provide the remainder of the funding later and your contract allows for incremental funding, all is well. If your letter contract was done in SF-33/SF-1447/SF-1449 format, then your definitizing document can be a SF-30 modification. If your letter contract was done by letter (where would this idea come from?), then your definitizing document can be a SF-33/SF-1447/SF-1449. ji

You'll have to follow your company's rules on including clauses in your company's subcontracts. Personally, I have never liked the idea of self-deleting clauses, and I try to craft solicitations and contracts with the right clauses. To me, including the fixed-price, cost-reimbursement, and time-and-materials changes clauses (FAR 52.243-1, -2, and -3, respectively) in a contract that only contains fixed-price line items (under a notion that the cost-reimbursement and time-and-materials clauses don't apply and are therefore self-deleting) is sloppy workmanship. I don't think the FAR has a definition of self-deleting. Rather, the FAR instructs contracting officers to select the right clause for their acquisitions. ji

Granted that the desired work is out of the general scope of the existing task order, but is within the general scope of the multiple-award contracts. First approach: Maybe your multiple-award task order contracts themselves will have language describing placement of orders and modification of existing orders. There might be language regarding no-opportunity-to-compete for circumstances when a particular contractor is already on the worksite (to avoid confusion and conflicts). If not, you might still be able to add the work to the existing task order if you can justify a sole-source action using FAR 16.505( b )( 2 ) as your authority. Or FAR 6.302-1. Or FAR 13.106-1( b ). Or FAR 8.405-6. Well, maybe not 8.405-6 for your case, but I wanted to include it for completeness. You probably won't find anything that says you cannot add the work in this particular case. Rather, you can look for and you might find something that allows you to do so -- but not finding anything, then you will likely conclude that competition is required. A counter-question for you: You said you issue task orders on a rotational basis -- but FAR 16.505( b )( 1 ) seems to establish a general rule that every multiple-award contractor have a fair opportunity to compete for each task order over $3,000 -- how do you justify issuing task orders on a rotational basis?

I think I understand both sides... The GAO has had its opinion for a long time, and then OMB and DOJ have their differing opinion, and in March "the U.S. Court of Federal Claims ruled that the HUBZone statute creates a mandatory preference that takes precedence over other small business programs, codifying an earlier decision by the Government Accountability Office (GAO)" (from Acquisition Solutions)... What is a contracting officer to do? A contracting officer shouldn't feel a need to research and justify and beg for a FAR deviation for something that is clearly executive branch policy, and yet a contracting officer should act under some authority. Vern asserts the current executive branch policy is sufficient. I agree. I work for the President (albeit indirectly) -- so does every other federal executive branch contracting officer. If the GAO sustains a protest against me when I do a SDVOSB set-aside instead of a HUBZone set-aside, that's fine. Then it will become an agency decision whether to follow the GAO guidance in the protest decision. But for the time being, I don't think GAO is sustaining these protests, in light of the confusion. And yet I'm also sympathetic to the notion that agency heads and HCAs should issue guidance to the contracting officers in their organizations. In my agency (Forest Service), there has been no direction from the top. I'm free to do whatever I want with my acquisitions, and I'm expected to act prudently and to be able to defend my actions if questioned. I can responsibly handle that professional discretion. Any contracting officer who is not able to responsibly exercise that discretion should simply ask his or her supervisor in contracting channels for instructions, and then follow those instructions -- whatever they are. If the supervisor says parity, then parity is the answer. If the supervisor says HUBZone always, then that is the answer. [For me, I'm not going to ask my supervisor because I feel I can responsibly handle the matter myself.] But certainly we don't want to clog up the pipes with thousands of individual deviation requests, all separately researched and differently justified. And surely we don't want every agency head or HCA to issue separately written class deviations (perhaps with differing conclusions).

It sounds like your firm has a competitively-awarded firm-fixed-price contract, so you probably don't have to worry about DCAA auditors. FAR 44.302( a ) tell us such contracts do not trigger contractor purchasing system reviews. A company with an approved purchasing system probably has internal policies and practices that provide for efficiency and effectiveness in spending Government funds on subcontracts. You don't mention whether ( i ) your firm has an approved purchasing system; or ( ii ) whether your proposed subcontract is firm-fixed-price. If the answer to ( i ) is yes, FAR 44.201-1( a ) suggests your proposed subcontract probably doesn't require the contracting officer's consent. But if the answer to ( i ) is no, and the answer to ( ii ) is yes, and the total value of your prime contract is less than $14 Million, FAR 44.202-1( b )( 2 )( i ) suggests you will require the contracting officer's consent for your proposed subcontract. If the answer to ( i ) is no and the answer to ( ii ) is no, FAR 44.202-1( b )( 1 ) suggests you will need the contracting officer's consent for your proposed subcontract. There are other permutations or combinations you can consider. My point is that the competition requirements of FAR Parts 6 and 13 are generally aimed at prime contracts rather than subcontracts. Rules for subcontract competition are often a product of a firm's purchasing system processes. You don't tell us what FAR requirement you are satisfying when you "bid out any procurement over $2500" -- I am not aware of any FAR requirement for for subcontracts under competitively-awarded firm-fixed-price prime contracts. But a DCAA auditor doing a purchasing system review, a DCMA ACO reviewing a payment request on a cost-reimbursement or similar contract, or a contracting officer considering a consent to subcontract matter would be interested in a firm's approach to subcontract competition. I hope this is helpful. ji

Clarifying questions: ( a ) Commercial items? Or no? ( b ) Estimated annual amount?

Krazy KO, The citation you provided above likely will not be helpful in a discussion with the contracting officer -- the parity language was proposed, but it did not pass the Congress. Language that was proposed but did not pass should not be relied on as authoritative. ji

The contracting officer might be working from his or her experience, and there is value to real experience. The mere fact that two HUBZone small businesses responded to market research with a promise to submit a proposal does not necessarily create an expectation of receiving reasonably-priced proposals from two or more responsible HUBZone small businesses. But if the acquisition goes forward as a regular small business set-aside, and two or more responsible HUBZone small businesses do indeed submit reasonably-priced proposals, then for the next acquisition in the near future one might conclude that such an expectation as required by FAR 19.1305 ( b ) might exist [or substitute another preference program if desired]. I would support the contracting officer's decision and wait and see what the results are, and apply the results in the next similar acquisition.

And paragraph ( l ) of the clause at FAR 52.232-22 provides for the fixed fee settlement. I wouldn't use the words "stop work" in the context of a Government decision not to allot sufficient funds to allow completion of the work. Those words make me think of invoking the clause at FAR 52.242-15 Stop-Work Order (with Alt. 1) as the operative clause instead of the clause at FAR 52.232-22 Limitation of Funds. Indeed, in a Limitation of Funds situation, the contracting officer doesn't have to say anything at all, and if he or she does, it should probably be phrased as sharing with the contractor the likelihood (or definite decision, as the facts may be) that additional funds will not be allotted to the incrementally-funded cost-reimbursement contract. In otherwise identical situations under an incrementally-funded cost-reimbursement contract, a stop work order and a notice that no further funds will be allotted may properly spark two entirely different responses by the contractor.

FAR 16.505 ( b ) ( 3 ) seems to allow for a task order contract which does not firmly establish the prices, allowing prices for each order to be established at the time of order issuance. If you're asking if an IDIQ contract could include maximum prices which cannot be exceeded during task order "fair opportunity to be considered" scenarios, I'm not aware of any prohibition on such a practice. We do it in my office. We include language in the schedule that the contractor may offer lower prices during task order competitions or negotiations. ji

Sorry -- my [open parenthesis] b [close parenthesis] and my my [open parenthesis] c [close parenthesis] were turned into something else by the automatic editor. How about if I write it with spaces: FAR 16.601 ( b ) ( 1 ) and ( c ) ( 2 )... ji

I tend to discern that you're a contractor employee, and you make mention of T&M subcontracts. You're right that FAR 16.601((1) and ©(2) seem to suggest that federal prime T&M contracts should have fixed hourly rates (not floating ceiling rates). But your question seems to be about subcontracts. Are you talking about subcontracts to federal prime contracts? ji

ashleyh, I like Brian's approach -- do what is best for your organization -- if your FFP services contract specifies monthly invoicing, then it's monthly invoicing unless you decide there is a benefit to your organization to entertain a change proposal (including consideration) from the contractor. But please don't go to twice-a-month invoicing just because the contractor wants it. The contractor should have other mechanisms to finance its operations. Perhaps your contract is based on monthly items (such as an annual need described in the contract's schedule as 12 MONTHS, where each month's service is severable). In this case, your contract probably includes the Payments clause at FAR 52.232-1 without any progress payments or other contract financing clauses. In this case, you pay for each completed month and your contract has no authority for progress or other contract financing payments -- and this is probably the right answer and should be left alone. Maybe all of the competitors in the original acquisition proposed with an understanding that progress or other contract financing payments would not be available. If other competitors had known that contract financing would be available, they might have proposed differently and one of them might have ended up as the successful offeror. After all, contract financing is a real cost that every prudent contractor has to bear, and the Government's carrying of that real cost should result in a lower proposed contract price. So if you do give the contractor some contract financing arrangement after award, please be sure to obtain an appropriate price reduction or other consideration to reflect the contractor's lower costs and the Government's increased administrative and financial burden. ji