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Clarifying “Practical,” “Practicable,” TAs, and Alpha Contracting for SBIR Phase III SubK’s


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1) Assume that FAR 52.244-5, Competition in Subcontracting, is (will be) included in an upcoming GSA IDIQ Phase III SBIR contract, awarded to our small business, against which multiple Task Orders will be awarded.   The Phase III SBIR itself is not competed; the “competition” is considered to have occurred in Phases I and II.  Similarly, TOs awarded under the Ph III SBIR IDIQ are not competed; as they are customer – not SBIR – funded.  TO awards are made subject to Alpha Contracting rules, which allows for detailed negotiations with the end customer and GSA on scope, price, and technical approach prior to award.  (The use of Alpha contracting may or may not matter to the questions below.)

2) Assume further that our company’s intent is to establish a Contractor Purchasing System that would fulfill the requirements of DFARS 252.244-7000 et seq., and that this clause will be included either at the IDIQ level or for each TO.   We have neither an objection nor an impediment to implementing a purchasing system that would be compliant and pass a review, but we’re only now growing to the point where we need one.  And so we now have to understand the work required.

3) In the WIFCON post Teaming Agreements and the FAR (https://www.wifcon.com/discussion/index.php?/topic/682-teaming-agreements-and-the-far) Vern Edwards makes a point about the difference between “practical” and “practicable,” with respect to competing sub-contracts.   
    (a) It’s hard to discern a meaningful difference in definitions from Merriam-Webster.com. Some drill-downs into the difference are made at: 
        (i) Gramarist: “Think of practical as a synonym of useful, and practicable as a synonym of doable and feasible," and 
        (ii) Vocabulary.com: “Do you mean to say that a thing is sensible? Choose practical. Do you want to say it is possible? Choose practicable.”

However:
    (b) DFARS 244.305-71, Contract clause, indicates that both DFARS 252.244-7001, Contractor Purchasing System Administration, and FAR 52.244-5, Competition in Subcontracting, should be used in tandem (“Use the Contractor Purchasing System Administration basic clause … (a) … 252.244-7001 , Contractor Purchasing System Administration—Basic, in solicitations and contracts containing the clause at FAR 52.244-2, Subcontracts”).  And each uses a different word
        (i) DFARS  252.244-7001 (c) (7) indicates that a Contractor’s Purchasing System “Use competitive sourcing to the maximum extent practicable…” [“doable” or “possible,” according to the distinctions above]
        (ii) while FAR 52.244-5, Competition in Subcontracting, requires subcontractors (and suppliers) to be selected “on a competitive basis to the maximum practical extent.” [“useful” or “sensible,” again according to the distinctions above].

 

4)  So here’s my first set of questions:  Though there might be a difference in meaning, is there really a difference in intent?  Especially when these clauses are to be used in tandem?  If so, what would that difference be? And most importantly, can anyone discern what the intent of the paired clauses would be?  (Possible?  Or sensible?) 

 

5)  And then the second set: Does (could) the Alpha contracting process play a role in fulfilling either the practical or practicable competitive sourcing / competitive basis requirement(s)?  If we identify subcontractors and suppliers in our pre-award discussions, and then include those in our technical and/or price proposals, and those proposals are incorporated into the subsequent Task Orders, does that not fulfill the intent of either or both DFARS  252.244-7001 or  FAR 52.244-5?  (Not very SBIR-like, but if we propose to paint your hallways using Sherwin-Williams paint, do we have to still go out and get quotes from Benjamin Moore, Behr, and Valspar?  If we propose to set up your cloud using Amazon Web Services, then after award do we also have to get a quote for Microsoft Azure?  If Dell is my teaming partner – not via a CTA, but having set up a Teaming Agreement with them to target an opportunity with a prospective client who would fund a TO award – then do I need to get quotes for IBM and HP hardware?)

 

Thanks in advance for any help.  I have to admit to being a lurker on this forum for years, and those of you who've sustained these discussions and provided your insights and guidance have been wonderful mentors and teachers - thanks!!

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It appears to me that, in shades of distinction between “practicable” and “practical”, the former could relate to something that is doable or reasonably possible. The latter could relate to how sensible or pragmatic an action is.

Here are some Merriam Webster Synonyms for “doable”:

achievable

attainable

feasible

possible

practicable

realizable

viable

workable

Here are some synonyms for “pragmatic ”

practical 

realistic 

sensible 

logical 

rational

I’m merely speculating..,

 

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Joel, I agree with your understanding and "coloring out" the shades of nuance between the two words.  

Looking for anyone to weigh in on the importance of one over the other, especially if they're used together....

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19 hours ago, Drew said:

is there really a difference in intent?

Good mind exercise.   My thoughts right or wrong.   Practical is feasible.  Practicable limits what is feasible to that which is possible and suitable for the situation.

So in the context of the two clauses the FAR clause allows for anything feasible to gain competition.  The DFARs clause narrows  a purchasing system be suitable for the particular situation, DoD contracts.

In the alternative the FAR/DFAR drafters did not even consider the possible conflict and my thoughts expressed above are just a practicable response to the discussion. 

 

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Having been through the ringer last decade trying (from the DCMA side) to get a contractor's disapproved purchasing system to meet an acceptable corrective action plan, I suggest you answer your question 1 by writing a handbook section that lays out your company's thinking on the matter - and then be done with it.  In this way treat practicality like reasonableness, which is defined at FAR 31.201-3 with two succinct theoretical paragraphs that beg the practitioner to justify his/her actual practice with a memo that points back at this theory.  The memo simply has to make objective sense applying theory to the instant facts and circumstances.

With that done and over with, you really need to focus on the DFARS criteria surrounding your question 2.  I would be highly concerned about the CPSR team judging the adequacy of your cost and price analyses.  These are always where talks with my contractor broke down.  I will provide you a sample corrective action request from a document I kept, below.  Study very hard what is, in your market, an "adequate" cost analysis if you want to avoid being disapproved on these grounds:

Quote

Noncompliance Level III
Contractual Requirement:
DFARS 252.244-7001(c)(9), (10), and (11).

Contractor Procedure: Criteria defining an acceptable purchasing system not met; a lack of adequate cost/price analysis may result in higher costs to the Government.

Non-Compliance Description: Adequacy of Contractor Performance of Cost/Price Analysis: Contractor failed to perform and document adequate cost/price analysis for all applicable purchase transactions, modifications, and change orders.  The contractor failed to ensure that negotiations were complete and documented in accordance with FAR 15.406-3.  Specifically, documentation containing pre-negotiation objectives and post-negotiation objectives and documentation for how negotiations procedures lead to fair and reasonable cost or price.

 

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@C Culham: thank you for that rationale on the distinction b/w the two terms, "practical" and "practicable."  Frankly I'm going to assume that last surmise you offered is the likely historical reality- the authors just weren't looking at the different meanings of the terms.  The DFARS-being-narrower-than-FAR perspective is one we'll give some thought to.  I had been looking at it the other way around, that DFARS' "practicable" would be a higher bar to meet - that it would be more expansive.  But maybe we consider them the same, and then DFARS only applies to DoD contracts.

@WifWaf: you make some very practical (!) suggestions - thank you!  I think that "write the manual and be done with it," and "document the negotiations" (bringing into play FAR 1.406-3) are two suggestions that can keep us from chasing our tail on this.  I will pull the threads on "adequate cost/price analysis" and see if turning over those rocks yields any further questions.  But thanks for these initial thoughts!

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By the way, note that they are synonyms of each other. Both aspects - doable and sensible are important. 

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On 7/9/2023 at 7:43 AM, Drew said:

FAR 1.406-3

This is FAR 15.406-3, "Documenting the negotiation." See also:

On 7/6/2023 at 3:51 PM, Drew said:

Sherwin-Williams paint... Benjamin Moore, Behr, and Valspar... Amazon Web Services... Microsoft Azure... Dell...IBM and HP...

These sound like commercial products and services, in which case your reprieve is you generally get to use price analysis instead of cost analysis.  Again, my responses here are focused on what happens after you've competed your subcontract. 

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On 7/6/2023 at 12:51 PM, Drew said:

4)  So here’s my first set of questions:  Though there might be a difference in meaning, is there really a difference in intent?  Especially when these clauses are to be used in tandem?  If so, what would that difference be? And most importantly, can anyone discern what the intent of the paired clauses would be?  (Possible?  Or sensible?) 

For these two clauses, you may be able to discern potential intent for DFARS "pairing" the DFARS with the FAR clause by reading the Federal Register proposed and final regulatory history for -7001. Offhand, I would be surprised if the intent was to either intentionally confuse or clarify "maximum extent practicable" and "maximum practicable extent." Instead, I believe it may just have just been drafting preference or transposing confusion. 

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On 7/6/2023 at 12:51 PM, Drew said:

Does (could) the Alpha contracting process play a role in fulfilling either the practical or practicable competitive sourcing / competitive basis requirement(s)?  If we identify subcontractors and suppliers in our pre-award discussions, and then include those in our technical and/or price proposals, and those proposals are incorporated into the subsequent Task Orders, does that not fulfill the intent of either or both DFARS  252.244-7001 or  FAR 52.244-5?

  • To my knowledge, Alpha contracting does not change or delete applicable FAR or DFARS requirements. If yours does so in writing signed by a contracting officer, then you should expect your prime contract to be consistent with the absence or change of such requirements. You may request the Government contractually mandate your named suppliers/subcontractors, but I don't think that is going to happen. Rather, the normal expectation of your purchasing system is compliance with -7001 and -5. Thus, naming a particular suppliers should mean it was a supplier competitively selected or not competed with adequate justification. If you did not do so during the proposal/negotiation process, you should be doing so after award of the prime contract. Teaming agreements, which many times are not competed, need to be justified with adequate rationale for the exclusion of competition.      

 

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