Don Mansfield

Another interesting thing about the OMB memo is that it assumes that agencies have been following, and will now continue to follow, SBA's regulations regarding parity between the HUBZone and SDVOSB programs: There is no acknowledgement that the FAR gives priority to HUBZone set-asides over SDVOSB set-asides and sole source actions. This raises the question: If a contracting officer intended to ignore the HUBZone priority in the FAR, wouldn't they be required to obtain approval of a FAR deviation?

You are a Government contracting officer and you are negotiating a cost-plus-fixed-fee contract for research work and have come to an agreement with the contractor on the following elements of his cost proposal: Estimated Cost (excluding FCCOM): $1,000,000 Facilities Capital Cost of Money (FCCOM): $ 10,000 What is the statutory maximum fee (in dollars) that you can agree to under this contract? A. $150,000 B. $151,500 Here is a relevant excerpt from FAR 15.404-4( c ) that may help you answer the question:

Try requesting it through the agency's FOIA office.

VA Junior CO, The terms "Fixed-price", "cost-reimbursement", "time-and-materials", etc. are used to describe a contract's pricing arrangement. The terms "definite quantity", "requirements" and "indefinite quantity" are used to describe a contract's delivery arrangement. A contract's delivery arrangement and its pricing arrangement are two different, unrelated, aspects of the contract. Let's say you have a baseball. The baseball is white. The baseball is round. Both are true statements about the baseball, but they describe different aspects of the baseball--one statement describes its color, the other its shape. So, you could have a contract with a fixed-price pricing arrangement and an indefinite delivery arrangement (i.e., Definite quantity, requirements, IDIQ) and you could have another contract with a fixed-price pricing arrangement and a definite delivery arrangement. This would be like having one round ball that was white and another round ball that was black.

NptAcq, Why do you say that the estimates were faulty? Did the estimator fail to consider reasonably available information when making the estimates? Did they miscalculate something? Or is it more accurate to say that the costs turned out to be higher than what the Government reasonably expected them to be when they made the estimate?

Vern, Part of the reconsideration states the following: Are you saying that GAO should defer to an implementing agency's interpretation of a statute even if that interpretation is unreasonable?

Desparado, What mistake do you think the GAO made?

RIR, You should know that such practices (recording obligations for changes based on the mere anticipation of changes) violate the Recording Statute (31 USC 1501). I suggest you read the following DoD IG reports: http://www.dodig.mil/Audit/reports/fy09/09-025.pdf http://www.dodig.mil/Audit/reports/fy08/08-083.pdf

TAP, Under the FSS program, GSA awards indefinite quantity contracts (FAR 38.101(a)). The consideration in such contracts is the Government's promise to order a minimum quantity in exchange for the contractor's promise to deliver the supplies or perform the services when ordered to by the Government up to the contract maximum (assuming orders are placed in accordance with the Ordering, Indefinite Quantity, and Order Limtations clauses). The contractor also promises to abide by the terms and conditions of the contract. According to Carl Culham, a frequent contributor to this forum, the following clause is contained in a number of FSS contracts: I'll quote Vern to explain the consideration in this arrangement:

TAP, You are doing the same thing the GAO did--asserting that, in general, BPAs are not contracts and supporting your assertion by referencing things that are true about FAR Part 13 BPAs, but not necessarily true about FAR Part 8 BPAs. Have you been paying attention to this thread? If you think that FAR Part 8 BPAs are not contracts, per se, then please explain the contractual elements that they lack. I recommend that you read the thread that I referenced in my initial post.

So the original contract obligates funds for change orders that haven't been issued yet? Let me guess, you are contracting for ship repair?

I don't understand the question. How could a change order be "processed under Part 15"?

This decision reminds me of another GAO decision earlier this year where they said that, as a general proposition, a delivery order was not binding--it was just an offer by the Government that the contractor was free to reject. To support this assertion, they cited an earlier decision that dealt with the legal effect of purchase orders--there was no mention of delivery orders. I wrote about this in my blog. I don't know what's going on at GAO, but citing decisions that do not stand for the proposition being asserted is unacceptable.

The GAO just issued a decision stating that BPAs under FSS contracts are not contracts. See AINS, Inc. Here's the relevant excerpt: I remembered having this debate on Wifcon last year. Here's the thread: http://www.wifcon.com/discus/messages/8523/9699.html Did the GAO get it right?

1. Does the contract provide for a price adjustment in this situation? 2. If the estimates turned out to be too high, would the Government be entitled to a price reduction?

There seems to be a closely held belief by some in the Federal contracting community that the FAR requires the contracting officer to perform a price analysis before awarding any contract. CON 111 used to contain the following statements: A number of my colleagues, both practitioners and instructors, would agree with those statements. Further, I have had a number of students pre-programmed by their contracting offices to believe that price analysis is always required. What does the FAR say? Subparagraphs a(2) and a(3) of FAR 15.404-1 discuss the requirements for the performance of price and cost analysis: Note that a(2) qualifies the requirement for price analysis with the language "when cost or pricing data are not required." To interpret a(2) to mean that price analysis is always required would render meaningless the qualifying language in the statement ("when cost or pricing data are not required"). Such an interpretation would be inconsistent with the fundamental principle that statutes and regulations must be read and interpreted as a whole, thereby giving effect to all provisions. See Waste Mgmt. of North Am., B-225551, B-225553, Apr. 24, 1987, 87-1 CPD ? 435 at 5. Subparagraph a(3) sets forth the requirement for performing cost analysis (i.e., when cost or pricing data are required) and contains the statement that "Price analysis should be used to verify that the overall price offered is fair and reasonable." Does this statement require price analysis when cost or pricing data are required? To answer this, we need to review the definitions of "should" and "shall" in FAR 2.101: Thus, when cost or pricing data are required, the contracting officer is 1) required to perform cost analysis and 2) expected to perform price analysis unless it's inappropriate for a particular circumstance. That's different than stating that the contracting officer must perform both price and cost analysis when cost or pricing data are required. The implicit acknowledgement that price analysis could be inappropriate in a particular circumstance (and thus, not required) contradicts the assertion that price analysis is always required. Why the Confusion? I'm not sure why some folks think that price analysis is always required. Perhaps they haven't read the FAR carefully. I recently had my students read subparagraphs a(2) and a(3) and asked them whether it was true or false that price analysis was always required. They were split about 50% true 50% false. When I had the students who answered "False" re-read a(2) and a(3), I was able to get the split to about 15% true 80% false and 5% I don't know. I can live with that. A more likely reason behind the existence of this myth is that an uncomfortably large number of people in our field do not know what the FAR says because they do not read it. Instead, they are guided by, and they repeat, rumors.

FAR uses the word "quoters." For example, FAR 13.106-1(a)(2) states: You can tailor FAR 52.212-1 to change "offerors" to "quoters" if you like.

My point is that FAR does not require a price analysis in every acquisition. Whether or not it's a good idea to perform price analysis in every acquisition is another matter. When cost or pricing data are required, I think that one should perform price analysis for the reasons you cited (and because the FAR says so). However, we need to recognize that there may be situations where we simply do not have information adequate to perform a price analysis. In such situations, the FAR permits the contracting officer to forego price analysis.

Boof, Where in the FAR does it say that HUBZone set-asides "trump" 8(a)? FAR 19.800(e) actually states:

TAP, I don't think that such an order would be binding. What you describe seems more like a purchase order than a task or delivery order.

TAP, I don't think an order that did not contain a price or quantity (minimum information required by FAR 16.505(a)(6)) would be binding unless the contractor agreed to accept such orders in the contract. For example, I have seen IDIQ contracts that contain a special clause whereby the contractor agrees to accept undefinitized orders.

Aronson, I got a kick out of your post. After years of industry snapping up the best and brightest from the Government's ranks, the pendulum seems to swinging the other way. Expect the current trend to continue for another 5-10 years. Then, we'll start hearing how the size of Government is too big and that we should be outsourcing more acquisition positions.

Vern, I don't think that 8(a) has priority over the other programs the way that HUBZone set-asides do--it's more of a "soft" priority. 8(a) is not mandatory, but I think it is more than discretionary. If an agency ignored the possibility of offering an acquisition under the 8(a) program and went forward with a small business set-aside, they better have a good reason due to the language in FAR 19.800(e). "Should consider" is more than "may consider." It's not like the relationship between SDVOSB set-asides and SB set-asides, where the CO has complete discretion to choose either one--that's parity. Regarding the "shall" in 19.5, I think we need to interpret that in a way where there is no conflict with 19.800(e). The only way to do that would be to say that the "shall" applies only after the agency has complied with FAR 19.800(e). Otherwise, FAR 19.800(e) would be meaningless.

WARNING: OMB issued a memorandum on July 10 directing executive agencies to temporarily disregard the two GAO decisions discussed below until a full review can be conducted. Until such a review is conducted, do not use the table. Depending on your point of view, two recent GAO decisions have either clarified or muddied our understanding of the rules pertaining to the order of priority for small business programs. In International Program Group, Inc., B-400278; B-400308, September 19, 2008, the GAO held that HUBZone set-asides take precedence over service-disabled veteran-owned small business (SDVOSB) set-asides and SDVOSB sole sources (a highly criticized decision). In Mission Critical Solutions, B-401057, May 4, 2009, the GAO held that HUBZone set-asides take precedence over the 8(a) program. In both cases, the GAO sought, and disagreed with, the SBA's interpretation of the relevant statutes. Based on these two decisions, and the current rules that in FAR Part 19, I have created a table to assist in determining the order of priority for small business programs. Instructions and relevant references are provided in the table. The table assumes that the acquisition exceeds the simplified acquisition threshold. Take a look and let me know if you have any questions or comments.

Regardless of who you solicit, are all responsible offerors permitted to compete?