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Skyward IT Solutions, LLC, B‑421105.2 - Incorporating Professional Compensation Evaluation into MAS TOs


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Has anyone read the recently released GAO decision - Skyward IT Solutions, LLC, B‑421105.2 decision? It seems like GAO is incorporating FAR 52.222‑46 into MAS TOs issued under certain SINs.  This may be news to a lot of COs using schedules.

“As an initial matter, there is no dispute that the RFQ itself does not include FAR provision 52.222‑46. The RFQ advised vendors, however, that the task order would be issued pursuant to “the applicable terms and conditions” of the GSA MAS SIN 54151S contract vehicle. RFQ amend. 2 at 1. As a procurement for IT professional services for a substantial number of professional employees, FAR provision 52.222‑46 is applicable to the GSA MAS contract here and all three vendors evaluated in phase 2 have FAR provision 52.222‑46 included in their contract terms for GSA MAS SIN 54151S…

We disagree with the agency to the extent it argues FAR provision 52.222‑46 was not incorporated into the RFQ…

[T]he RFQ provides that the task order will be issued pursuant to applicable terms from the GSA MAS contract, which includes FAR provision 52.222‑46. Accordingly, we find that the agency should have evaluated quotations in accordance with FAR provision 52.222‑46 because it was part of the vendors’ MAS contracts and incorporated into the solicitation.”

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On 5/4/2023 at 10:15 PM, Pepperwood said:

This may be news to a lot of COs using schedules.

Why?

FAR 22.1103 states:

Quote

All professional employees shall be compensated fairly and properly. Accordingly, the contracting officer shall insert the provision at 52.222-46, Evaluation of Compensation for Professional Employees, in solicitations for negotiated contracts when the contract amount is expected to exceed $750,000 and services are to be provided which will require meaningful numbers of professional employees. This provision requires that offerors submit for evaluation a total compensation plan setting forth proposed salaries and fringe benefits for professional employees working on the contract. Supporting information will include data, such as recognized national and regional compensation surveys and studies of professional, public and private organizations, used in establishing the total compensation structure. Plans indicating unrealistically low professional employee compensation may be assessed adversely as one of the factors considered in making an award.

That seems clear. GSA MAS orders are "negotiated contracts." Perhaps GSA has not notified non-FAR readers that the provision must be inserted in solicitations for quotes when buying professional services under MAS contracts.

Maybe GSA claims it did the analysis when it awarded the contract, so it is not necessary when placing orderss. But that seems unlikely.

 

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On 5/4/2023 at 10:15 PM, Pepperwood said:

This may be news to a lot of COs using schedules.

I also wonder why?   After all if a CO (and their legal counsel) would do due diligence he/she would know that FAR 52.216-18 is in the the MAS contract and the clause states in part -

(b) All delivery orders or task orders are subject to the terms and conditions of this contract. In the event of conflict between a delivery order or task order and this contract, the contract shall control.

In my read of the decision GAO missed this important part and I would suggest their statement in one part of their decision be reworded as such (in bold) -

As an initial matter, there is no dispute that the RFQ itself does not include FAR provision 52.222‑46. The RFQ advised vendors, however, that the task order would be issued pursuant to “the applicable terms and conditions” of the GSA MAS SIN 54151S contract vehicle.  RFQ amend. 2 at 1. Additionally, the GSA MAS contract vehicle includes FAR 52.216-18.  As a procurement for IT professional services for a substantial number of professional employees, FAR provision 52.222‑46 is applicable to the GSA MAS contract here and all three vendors evaluated in phase 2 have FAR provision 52.222‑46 included in their contract terms for GSA MAS SIN 54151S.[13] and the clause is extended to a RFQ for Task Orders pursuant to 52.216-18.

 

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The decision says that the provision at FAR 52.222-46 is applicable to the contract. However, by definition, a provision is "a term or condition used only in solicitations and applying only before contract award." Is the GAO saying that provisions included in the original IDIQ solicitation apply to task order solicitations by operation of FAR 52.216-18? If so, should task order solicitations include reps and certs?

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28 minutes ago, Don Mansfield said:

Is the GAO saying

No, @C Culham is saying that.  His post is his own rewording of page 12 of the decision, not a quote from GAO.

But the case the GAO encountered of a CO not inserting the right (or any) provisions into a task order solicitation is a problem that happens all too often, I find.  All you policy reviewers out there should hold your COs to the DAU Clause and Provision Matrix on their task order solicitations.  Use judgment to disregard the ones that are N/A.

These nitty-gritty details are what we lose when we use GWACs and the MAS.  We throw out the baby (good contract formation) with the bath water (regs that need streamlined) when we rely on these empire-building COs to make swathes of the FAR N/A.  Take care of your requirements, folks.  They are your babies.

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2 hours ago, Voyager said:

No, @C Culham is saying that.

Yes I did sorry for the confusion.

Yet 52.222-46 is in the awarded MAS and therefore provision or not it would seem that with 52.216-18  in the awarded MAS as well it would seem it rules. 52.222-46 in the awarded contract is afterall a "term and condition" is it not? But I do get the point of provision/clause.

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I’m not sure if GAO got it right.  GSA ensured FAR 52.222-46 was complied with at the contract award level.  The awarded labor category rates should reflect that even though discounted.  So why should an ordering agency be concerned?

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8 hours ago, Don Mansfield said:

Is the GAO saying that provisions included in the original IDIQ solicitation apply to task order solicitations by operation of FAR 52.216-18? If so, should task order solicitations include reps and certs?

By a straightforward reading of the definition of "contract" in FAR Part 2, and of FAR 15.000,  an order against a GSA MAS contract is a "negotiated contract." According to FAR 22.1103, COs must insert FAR 52.222-46 in solicitations for negotiated contract. Thus, they must insert it in solicitations for orders against MAS contracts for professional services.

GSA MAS contracts are IDIQ contracts, and we ordinarily don't think of issuing solicitations for orders. But the procedures for using MAS contracts entail the preparation and issuance of solicitations prior to the issuance of orders requiring a statement of work. See FAR 8.405-2(c).

In my opinion, it would be impossible for GSA to apply FAR 52.222-46 when awarding MAS contracts, because those contracts do not describe specific work, so the evaluation of professional employee compensation would not be practicable or meaningful at the time of contract award. It must be done prior to issuance of an order requiring a statement of work for professional services.

As strange as it sounds, it is the outcome of a complex regulatory scheme that has not been thought through.

Please forgive any typos.

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19 minutes ago, Vern Edwards said:

As strange as it sounds, it is the outcome of a complex regulatory scheme that has not been thought through.

Agreed.

2 hours ago, formerfed said:

I’m not sure if GAO got it right.  GSA ensured FAR 52.222-46 was complied with at the contract award level.  The awarded labor category rates should reflect that even though discounted.  So why should an ordering agency be concerned?

I am not sure  how GSA sees it.   While not authoritative such as a policy or regulation there is the following from the "GSA Multiple Award Schedule Ordering Guide".   Link https://www.gsa.gov/cdnstatic/MAS_Ordering_Quick_Reference_Guide_FINAL_508.pdf

OCOs may order, as ancillary support, any labor typically found in the Department of Labor’s “Service Contract Act Directory of Occupations” if this labor is deemed necessary to deliver a total mission solution integrated across professional disciplines and/or the enterprise. In this situation, it is the responsibility of the OCO to ensure the SCA is properly applied and administered to any non-Schedule labor categories.

Yet when I look at one of the contractors price lists I see this -

"XXXXXXX has read and acknowledges the requirements pertaining to the Service Contract Labor Standards, formerly the Service Contract Act (SCA), pursuant to clauses 52.222-41, 52.222-42, 52.222-43, and 52.222-49, but is not offering any labor categories/services that are covered by the Department of Labor Directory of Service Occupations. XXXXX understands its obligations to compensate its employees in accordance with the prevailing wage determination for any work performed by any of its employees under a resultant contract or task order placed against the contract for services covered by the Service Contract Act."

There are 45 priced labor categories listed with just this one contractor the very first being - "Administration/Clerical (Junior)" 

So as a user of the particular schedule and contractor am I to believe that GSA has applied 52.222-46 to all 45 categories and to the remaining 4,846 contractors listed for 54151S Information Technology Professional Services!!!

I yield to Vern's foregoing comment quoted comment (along with the foregoing post by Voyager).

 

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10 hours ago, C Culham said:

So as a user of the particular schedule and contractor am I to believe that GSA has applied 52.222-46 to all 45 categories and to the remaining 4,846 contractors listed for 54151S Information Technology Professional Services!!!

I yield to Vern's foregoing comment quoted comment (along with the foregoing post by Voyager).

 

GSA does some review of 52.222-46 compliance with all applicable Schedule offers.  This is from an offeror information template for the Professional Services Schedule

Quote

The Offeror must submit a Professional Compensation Plan in accordance with clause 52.222-46 Evaluation of Compensation for Professional Employees. Individual compensation disclosure is not required. Submission of the general compensation practices printed in the Offeror’s employee handbook is often sufficient.  Comment:  While individual compensation disclosure is not required, salary ranges for proposed professional positions should be identified e.g. if your company has ten Consultants, we would expect to see a salary range that includes the lowest salary to the highest salary.

In reality I doubt the GSA CO gets into much detail but that’s beside the point.  My thinking is GSA has 52.222-46 in the Schedule solicitation.  They receive offerors, evaluate and award contracts for various labor categories at fixed until rates.  Those rates should include professional compensation compliance already.  So individual COs at the task order level don’t need to solicit additional information.

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1 hour ago, formerfed said:

So individual COs at the task order level don’t need to solicit additional information.

@formerfedI think that if a CO issues a solicitation for a professional services task order under a multiple-award task order contract, the plain language of FAR 22.1103 and FR 52.222-46 require evaluation of professional employee compensation. I don't think it matters that the agency evaluated it during the competition for the underlying IDIQ contract if each order is for a unique task.

According to the GAO:

Quote

The purpose of FAR provision 52.222–46-Evaluation of Compensation for Professional Employees is to evaluate whether offerors will obtain and keep the quality of professional services needed for adequate contract performance, and to evaluate whether offerors understand the nature of the work to be performed. MicroTechnologies, LLC, B–413091.4, Feb. 3, 2017, 2017 CPD ¶48 at 8. In the context of a fixed-price labor hour contract, our Office has noted that this FAR provision anticipates an evaluation of whether an offeror understands the contract's requirements, and has offered a compensation plan appropriate for those requirements-in effect, a price realism evaluation regarding an offeror's proposed compensation. Apptis Inc., B–403249, B–403249.3, Sept. 30, 2010, 2010 CPD ¶237 at 9. 

Obsidian Solutions Group, LLCB- 416343, August 8, 2018.

How do you make that evaluation for a basic MATOC contract against which various agencies will issue various orders for various work at various times and places? To do so would make a mockery of the rule.

It appears that at least some agencies agree.

See:

Apogee Engineering, LLC, B- 419108, December 16, 2020 (GSA's OASIS contract)

NCI Information Systems, Inc., B- 417805.5, March 12, 2020 (Army's Responsive Strategic Sourcing for Services contract)

Target Media Mid Atlantic, Inc., B- 412468.6, December 6, 2016 (Navy's SEAPORT contract)

MicroTechnologies, LLC, B- 413091, August 11, 2016 (NETCENTS–2 contract)

The rule at FAR 22.1103/FAR 52.222-46 is a classic example of a rule written long ago (1978) that is ill-adapted for today's acquisitions. GSA's MAS guidance does not appear to address the issue. (I couldn't find it, but the GSA's MAS rules are labyrinthian.) The GAO seems to agree with me. Unfortunately, they did not explain their reasoning in the Skyward decision. I base my position on a plain language reading of the FAR. If you disagree, you should explain your reasoning based on the FAR.

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18 minutes ago, Vern Edwards said:

I think that if a CO issues a solicitation for a professional services task order under a multiple-award task order contract, the plain language of FAR 22.1103 and FR 52.222-46 require evaluation of professional employee compensation.

Vern,

I don't think you are saying that all applicable provisions should be included in a task order solicitation, but how does one know that this provision should go in task order solicitations and not other provisions that are prescribed for use "in solicitations" (based on the language of the FAR)? 

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20 minutes ago, Don Mansfield said:

I don't think you are saying that all applicable provisions should be included in a task order solicitation, but how does one know that this provision should go in task order solicitations and not other provisions that are prescribed for use "in solicitations" (based on the language of the FAR)? 

No, I didn't say "all."

I'm talking about a specific case. In this case FAR 22.1103 says:

Quote

[T]he contracting officer shall insert the provision at 52.222-46, Evaluation of Compensation for Professional Employees, in solicitations for negotiated contracts when the contract amount is expected to exceed $750,000 and services are to be provided which will require meaningful numbers of professional employees.

Emphasis added. That strikes me as being as clear as can be. A task order is a negotiated contract, by official definition.

It might seem incongruous to some to apply it to a task order solicitation, but the rule is not obscure in any way. And its inclusion would implement the policy as intended. We're seeing task orders worth hundreds of millions of dollars.

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It doesn’t surprise me that GSA doesn’t appropriately cover the requirements of FAR 22.1103 in their MAS contracts for services. As Vern said, how can it be evaluated for the basic MATOC?

It can’t. It has to be done at the task order level. GSA should structure their contracts so that it is clear to ordering agencies to evaluate it, when applicable.

Including a Provision in schedule contracts without any instructions on its applicability to orders or to specifically evaluate compensation of professional employees for orders doesn’t make sense to me.

But, at least since the days of David Drabkin, who was the GSA Deputy Associate Administrator, Office of Acquisition, it seems that the GSA sometimes plays “loosey-goosey” with regulations, to “simplify” and maximize the use of the GSA schedules. 

I remember Deidre Lee, former Director of Defense Procurement and Acquisition Policy and Drabkin providing widely differing philosophies during an advanced DAU, DAWIA class that I attended in Washington D.C. back in the late 1990’s.

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As an example of GSA’s sometimes phantom claims of success, WIFCON Home Page readers may remember this May 2, 2023 article concerning a recent GSA Inspector General audit of GSA’s Transactional Data Reporting (TDR) Pilot Evaluation Plan and Metrics Version 2.0, entitled: 

“GSA’s Fiscal Year 2020 Transactional Data Reporting Pilot Evaluation Provides an Inaccurate Assessment of the Program”

https://www.gsaig.gov/content/gsas-fiscal-year-2020-transactional-data-reporting-pilot-evaluation-provides-inaccurate

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1 hour ago, Vern Edwards said:

It might seem incongruous to some to apply it to a task order solicitation, but the rule is not obscure in any way. And its inclusion would implement the policy as intended. We're seeing task orders worth hundreds of millions of dollars.

The thing that puzzles me about professional compensation evaluation at the task order level is what does an offeror submit that’s differs from their original contract submission?  Furthermore task order ordering offices don’t see any breakdown of price rates.  What do they evaluate?  Say two offeror propose the same rate of $150 per hour for a labor category.  One offeror pays employees $100 an hour with $25 work of additional benefits/compensation.  Another pays employees $75 an hour with $50 of added compensation.  But the offeror task order proposals just shows loaded rates.  So to the task order CO it appears one offeror provides double the added compensation.  

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24 minutes ago, formerfed said:

The thing that puzzles me about professional compensation evaluation at the task order level is what does an offeror submit that’s differs from their original contract submission?  Furthermore task order ordering offices don’t see any breakdown of price rates.  What do they evaluate?  Say two offeror propose the same rate of $150 per hour for a labor category.  One offeror pays employees $100 an hour with $25 work of additional benefits/compensation.  Another pays employees $75 an hour with $50 of added compensation.  But the offeror task order proposals just shows loaded rates.  So to the task order CO it appears one offeror provides double the added compensation.  

Formerfed, please re-read the Provision at 52.222.46. The evaluation is of the compensation plan rather than focusing on the proposed contract rates. The concerns relate to recruitment and retention of qualified professional employees for the work, which,  in many cases may be follow on contracts for the same or similar services.

In that event, adequate compensation to retain existing employees is often important… 

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🤣 Well, I can see that I have evolved.

Carl, you have the memory of an elephant.

Frankly, I don't see how 52.222-46 can be applied during a competition for the award of a MATOC for varying services requirements. It has to be done when soliciting for individual task orders if it's to be effective.

The rule was established by OFPP in 1978, long before FASA and the emergence of MATOCs as important contracting devices.

But here's something even more interesting. I don't know of any standard clause that requires the contractor to actually pay professional employees in accordance with its professional employee compensation plan after award. Have I missed it?

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