Types of Contract Confusion

[joel hoffman]

I agree with Don’s suggestion, although the QA reviewer may still object to the FFP aspect. 
 

I’m curious, who will be the intended user/customer for the ID/IQ? It it pretty clear that all orders would be FFP?  I.E., is there a possibility of orders that would include time and materials or labor hour services?  If no, I’d suggest explaining that in your ACQ Plan. 

20 hours ago, Boogie_Down said:

Will do.  Thank you.

Edited September 2, 2022 by joel hoffman
Added a question concerning possibility of T&M and/or LH services

[ji20874]

It is a pitiful and sorry state of affairs in a contracting office when a contracting officer MUST make a change to satisfy a staff reviewer, in order for the package to continue its progress.  Ideally, and professionally, when a contracting officer disagrees with a staff reviewer's comment, the file should go forward for the approver to make the call.

Boogie, if you believe you are right, why don't you approach the approver and ask for his or her decision on the matter?

[C Culham]

13 hours ago, ji20874 said:

It is a pitiful

The guiding principles of the FAR gone array especially with regard to the ideal of acquisition "team".

Not sure of the OPs agency but I found this in DFARS that supports in my view that contract type and pricing are separate identifiers.  I sure would like to get my hands on the OPs policy or whatever regarding AP review/approval.

For indefinite delivery indefinite quantity (IDIQ) contracts that will establish pricing terms that apply to orders, use the total maximum dollar value for purposes of the peer review threshold. IDIQ contracts that will not establish pricing terms in the basic contract are not subject to peer review, but individual orders that exceed the threshold are subject to peer review.

 

[formerfed]

We aren’t giving the OP very good advice here.  It’s the Beginner's section.  For starters, most reviewers have that job because their management respects their knowledge and experience.  They are expected to ensure a document submitted for approval meets management expectations.  In short, they know what gets through and what doesn’t.  This shouldn’t be a battle between the OP and the reviewer.  I’m pretty sure the reviewer is just doing their job which most likely is what the management expects and wants.

An IDIQ type contract doesn’t neatly fall into one of the two categories as Don and Carl stated.  Rather they lead to orders priced a certain way.  Most offices within the government would label what the OP describes as an IDIQ contract with firm fixed price task orders issued.

As far as what clauses the contract writing system produces, the OP shouldn’t just rely on calling it a fixed price contract.  An IDIQ contract has clauses applicable to it as well.  Those need added too. 

[ji20874]

2 hours ago, formerfed said:

This shouldn’t be a battle between the OP and the reviewer.

No one is talking about a battle.  There should always be room for professional dialogue, and a reviewer should never hold a file hostage.  I do not share your confidence that reviewers, as a rule, are experts.  I also believe any approving official should be willing to engage and give guidance.

[joel hoffman]

4 hours ago, formerfed said:

Most offices within the government would label what the OP describes as an IDIQ contract with firm fixed price task orders issued.

Perhaps “a [multiple][single] award (as applicable) IDIQ” with firm fixed-price task orders. 🙂

[Boogie_Down]

On 9/1/2022 at 3:57 PM, joel hoffman said:

Boogie what is the BC? Sorry for not knowing. DC = Director of Contracting, right? 

Sorry, BC is Branch Chief.

[Boogie_Down]

On 9/1/2022 at 2:28 PM, Voyager said:

Then again, if this is entirely Firm-Fixed Price, your CO’s boss could approve, depending on your agency supplement’s implementation of FAR 7.103(j):

https://www.ecfr.gov/current/title-48/chapter-1/subchapter-B/part-7/subpart-7.1#p-7.103(j)

Thanks.  My agency has added more levels of approval.

[Boogie_Down]

On 9/1/2022 at 4:10 PM, joel hoffman said:

I agree with Don’s suggestion, although the QA reviewer may still object to the FFP aspect. 
 

I’m curious, who will be the intended user/customer for the ID/IQ? It it pretty clear that all orders would be FFP?  I.E., is there a possibility of orders that would include time and materials or labor hour services?  If no, I’d suggest explaining that in your ACQ Plan. 

It is definitely a FFP, no chance of any other types.

[Boogie_Down]

On 9/1/2022 at 7:26 PM, ji20874 said:

It is a pitiful and sorry state of affairs in a contracting office when a contracting officer MUST make a change to satisfy a staff reviewer, in order for the package to continue its progress.  Ideally, and professionally, when a contracting officer disagrees with a staff reviewer's comment, the file should go forward for the approver to make the call.

Boogie, if you believe you are right, why don't you approach the approver and ask for his or her decision on the matter?

I did.  My Branch Chief and Division Chief had already approved and signed.  The QA reviewer is next before it goes to the HCA.  HCA will not look at it without all signatures and approvals of other members.

[Vern Edwards]

On 8/31/2022 at 11:58 AM, Boogie_Down said:

My question is, am I interpreting the contract type correctly?  Is stating a firm fixed price IDIQ contract correct?  Or is the QA reviewer correct in that it's only an IDIQ with no mention of fixed price?

I think the QA reviewer is being bone headed. But, that said, it's an entry in an acquisition plan. In my experience, the main purpose of an AP is to get approval to initiate the contract formation process. 

Besides, since FFP is the preferred pricing arrangement, and since the contract will be FFP, the fact that the contract will be IDIQ may be more significant.

Most of the people who have responded to your OP seems to sympathize with you, but it appears that the QA has more go power than you.

My advice is to just do what you gotta do to get the plan signed and then get on with the process.

[Vern Edwards]

On 8/31/2022 at 11:58 AM, Boogie_Down said:

My question is, am I interpreting the contract type correctly?  Is stating a firm fixed price IDIQ contract correct?  Or is the QA reviewer correct in that it's only an IDIQ with no mention of fixed price?

I think the QA reviewer is being bone headed. But, that said, it's an entry in an acquisition plan. In my experience, the main purpose of an AP is to get approval to initiate the contract formation process. This is not an issue I would bother about.

Besides, since FFP is the preferred pricing arrangement, and since the contract will be FFP, the fact that the contract will be IDIQ may be more significant.

Most of the people who have responded to your opening post seem to agree with you, but it appears that the QA has more bureaucratic go-power than you.

So my advice is to put this behind you and just do what you gotta do to get the plan signed so you can get on with the process.

[Witty_Username]

On 9/2/2022 at 2:15 PM, joel hoffman said:

Perhaps “a [multiple][single] award (as applicable) IDIQ” with firm fixed-price task orders."

One additional piece of information related to contract type that might be necessary to explain to approvers/reviewers is whether firm-fixed task orders will be based on unit prices established in the base contract or will be competitively established under fair opportunity (multiple award) or negotiated (single award). That piece of information has a significant impact on the actual future operation of the contract.

 

So maybe “a [multiple][single] award IDIQ with firm fixed-price task orders [issued under fair opportunity/issued based on fixed unit prices/negotiated at the task order level]."

[C Culham]

27 minutes ago, Witty_Username said:

will be competitively established under fair opportunity

I take exception to this.   Fair Opportunity is an order placement process not a competition.

[Boogie_Down]

17 hours ago, Vern Edwards said:

I think the QA reviewer is being bone headed. But, that said, it's an entry in an acquisition plan. In my experience, the main purpose of an AP is to get approval to initiate the contract formation process. 

Besides, since FFP is the preferred pricing arrangement, and since the contract will be FFP, the fact that the contract will be IDIQ may be more significant.

Most of the people who have responded to your OP seems to sympathize with you, but it appears that the QA has more go power than you.

My advice is to just do what you gotta do to get the plan signed and then get on with the process.

Thanks.  I did just that.  On to the next thing.

[Vern Edwards]

👍

[Witty_Username]

6 hours ago, C Culham said:

Fair Opportunity is an order placement process not a competition.

I was specifically referring to how the price would be established for the order as something an acquisition plan reviewer might be interested in knowing. Since 16.505(b)(3) (I believe, that is a difficult citation to figure out) says If the contract did not establish the price for the supply or service, the contracting officer must establish prices for each order using the policies and methods in subpart 15.4 I thought it was reasonable to summarize the 15.404-1(b)(2(i) method of Comparison of proposed prices received in response to the solicitation as "competition."  

But now I do see that 16.505(b)(1)(iii)(A) actually says Each order exceeding the simplified acquisition threshold shall be placed on a competitive basis so it seems like it would be ok to refer to the fair opportunity process as a competition.

[C Culham]

2 hours ago, Witty_Username said:

the contracting officer must establish prices for each order using the policies and methods in subpart 15.4 

Pricing policy not an order placement guiding principle from my view.   

Buried in FAR 16 regarding fair opportunity ordering....

 The contracting officer may exercise broad discretion in developing appropriate order placement procedures. The contracting officer should keep submission requirements to a minimum. Contracting officers may use streamlined procedures, including oral presentations. If the order does not exceed the simplified acquisition threshold, the contracting officer need not contact each of the multiple awardees under the contract before selecting an order awardee if the contracting officer has information available to ensure that each awardee is provided a fair opportunity to be considered for each order. The competition requirements in part 6 and the policies in subpart 15.3 do not apply to the ordering process.

 I just think in terms of the FAR.  I realize a general definition makes sense. To me it is not competing orders it is giving folks a fair opportunity for consideration for award of the order.

[joel hoffman]

Carl said this above: ”To me it is not competing orders it is giving folks a fair opportunity for consideration for award of the order.”

Actually, see this under 16.505 (b)(1) (iii):

“(iii) Orders exceeding the simplified acquisition threshold.

(A) Each order exceeding the simplified acquisition threshold shall be placed on a competitive basis in accordance with paragraph (b)(1)(iii)(B) ** of this section, unless supported by a written determination that one of the circumstances described at 16.505(b)(2)(i) applies to the order and the requirement is waived on the basis of a justification that is prepared in accordance with 16.505(b)(2)(ii)(B);

(** Fair Opportunity)

[C Culham]

45 minutes ago, joel hoffman said:

(** Fair Opportunity)

So maybe Witty's statement should have been. 

 "One additional piece of information related to contract type that might be necessary to explain to approvers/reviewers is whether firm-fixed task orders will be based on unit prices established in the base contract or will be competitively established under fair opportunity (multiple award) or negotiated (single award). That piece of information has a significant impact on the actual future operation of the contract."

[Vern Edwards]

On 9/8/2022 at 5:52 AM, C Culham said:

I take exception to this.   Fair Opportunity is an order placement process not a competition.

 

16 hours ago, C Culham said:

Buried in FAR 16 regarding fair opportunity ordering....

 The contracting officer may exercise broad discretion in developing appropriate order placement procedures. The contracting officer should keep submission requirements to a minimum. Contracting officers may use streamlined procedures, including oral presentations. If the order does not exceed the simplified acquisition threshold, the contracting officer need not contact each of the multiple awardees under the contract before selecting an order awardee if the contracting officer has information available to ensure that each awardee is provided a fair opportunity to be considered for each order. The competition requirements in part 6 and the policies in subpart 15.3 do not apply to the ordering process.

 I just think in terms of the FAR.  I realize a general definition makes sense. To me it is not competing orders it is giving folks a fair opportunity for consideration for award of the order.

The GAO considers the "fair opportunity" process to be a kind of competition, but not a CICA competition. See Adams Communication & Engineering Technology, Inc., GAO B-419052, Dec. 3, 2020:

Quote

When conducting a competition under FAR 16.505, agencies are required to provide contract holders with a “fair opportunity” to be considered for task or delivery orders. FAR 16.505(b)(1). While FAR 16.505 does not establish specific requirements regarding the conduct of discussions under a task or delivery order competition, exchanges occurring with contract holders of multiple award contracts in a FAR 16.505 procurement, like other aspects of such a procurement, must be fair. 

The GAO has said the same in several other decisions., e.g., IBM Corp., GAO B-417664, Sept. 18, 2019:

Quote

Task order competitions are subject to the provisions of section 16.505 of the Federal Acquisition Regulation (FAR), which requires agencies to provide awardees of a multiple-award contract a fair opportunity to be considered for each order, but specifically states that “the policies in [FAR] Subpart 15.3 do not apply to the ordering process.” FAR § 16.505(b)(1)(ii). Section 16.505 of the FAR requires agencies to develop placement procedures that will provide each awardee a fair opportunity to be considered for each order, and to include such procedures in the solicitation and the contract.

But I understand where Carl is coming from. I think "to be considered" does not sound like the kinds of active competitions we think of when we read elsewhere in FAR. See, for instance, FAR 16.505(b)(1)(ii):

Quote

The contracting officer may exercise broad discretion in developing appropriate order placement procedures. The contracting officer should keep submission requirements to a minimum. Contracting officers may use streamlined procedures, including oral presentations. If the order does not exceed the simplified acquisition threshold, the contracting officer need not contact each of the multiple awardees under the contract before selecting an order awardee if the contracting officer has information available to ensure that each awardee is provided a fair opportunity to be considered for each order. The competition requirements in part 6 and the policies in subpart 15.3 do not apply to the ordering process. 

Inconsistent terminology is the bane of our business.

 

[joel hoffman]

I only have my iPhone today so can’t look up if and when the MATOC fair opportunity process was added to the 16.5, Ordering.

However, when I transferred to Steve Feldman’s Corps of Engineers Division in 1997, an often used practice there was akin to “share the wealth” and spreading the task orders between pool members. My previous organization, Mobile District, also often used that method.

The order process now requires (except for the exceptions) competition, using “fair opportunity” procedures.