Reading and Intrepreting the FAR and its Supplements Correctly

[CaptJax]

Thank you all so much for your previous insightful comments on past posts.  I have another question. I feel I don't perhaps understand how to interpret regs without reading too much in to it. I provided the below example of my thought process.  I heard people say start by reading the regs backwards. So if you work for Army, you should begin your read with the AFARS, DFARS, then FAR because an agency can make regulations more stringent as well as specific procedures and requirements. The what to do is in the agency regs. My way of thinking is that the higher reg is more overarching, and bounds the subordinate agency to operate with those bounds, but can make the regs as stringent provided that the additional requirements and procedures do not supersede the superior agency.  If the FAR makes an exception to a requirement, such as FFP contracts do not require a contract type justification, then that breaks out of the regulation requirement at the FAR level, and where the DFARS and AFARS supplements that FAR part, because I have an exception, those supplemental regulations are not applicable by my way of thinking. I'm not sure if its overthinking to include why the FAR would take exception as a means to show a requirement, such as a D&F, is not applicable. 

Here is my specific example scenario,   I'm doing an IFB FFP construction for a routine dredge. Do I need a contract type D&F for this and all actions?

Reading the regs backwards you will find AFARS 5116.102-90

Contracting officers must document the rationale for selection of the contract type, to include consideration of the associated risks, in the contract file. The supporting documentation may be located in the contract type justification, a separate determination and findings, memorandum for record, or other appropriate document.

   Follow the procedures at AFARS PGI 5116.102-90-1

   for selecting contract type.

   See AFARS PGI 5116.102-90-2

   for guidance on using the Pricing website.

My Analysis

The FFP contract type is at the lowest risk contract vehicle available. I believe there is an exception at FAR 16.103(d)(2) item (ii) FFP other than those for Major Systems or Research Development projects. The exception says to me this FAR part and all of its supplements (DFARS and AFARS) no longer apply.  Although the language reads to be all encompassing for all contracts in the AFARS; however, the higher reg says it is not applicable. I further evidence that be scrolling down to AFARS 5116.2 – Fixed Price Contracts, only FFP-economic price adjustments are noted there, that does a carry higher risk than a FFP, and therefore does require a justification. The AFARS is silent about FFP. I take it that the AFARS intent is to have documentation in file concerning the selection of those specific contract types it discusses because the FAR as excepted out the other contract types addressed in FAR 16.  The intent and purpose is to make us consider and document the file about the risk level. A FFP is the standard default; if I am not going off the standard and lowest risk, why does that need to be documented and the risk considered?

If one read the AFARS first, one would say you need a D&F or some form of documentation listed in AFARS 5116.102-90-1, but if you read from the FAR and drill down maybe one would say there is a FFP exception.  Is it wrong to say because there is a FAR exception, then the corresponding AFARS part is not applicable? Or can the AFARS add a requirement despite the exception?  I understand an agency can make it more stringent, but does overriding exceptions exceed the authority of an agency to supplement regulations? To me reading the regs backwards is like interpreting them in a vacuum, but I may not be understanding what the agency's are allowed to do or how to properly research it. I feel I'm reading too much into amongst my colleagues. 

 

 

[joel hoffman]

Is this a FFP, unit-priced dredging project with estimated quantities?

At any rate, I suggest looking at FAR Part 14.103. 

[C Culham]

20 hours ago, CaptJax said:

Do I need a contract type D&F for this and all actions?

My thinking per my read of the FAR, DFARS, AFFARS.

First to "this" action.   No D&F required.  Two thoughts.  You have placed to much emphasis on D&F.  By my read a CO determines the documentation required to support contract type by a full read of the FAR, DFAR, and AFAR in those related sections dealing with "Policies" (emphasis added) or in other words 16.102, 216.102 and 5116.102.  A full read, especially, a read of FAR 16.102(a) says you must use FFP or FP w/economic adjustment if doing an IFB.  Nothing in the DFAR or AFAR changes this.  So by my view one should read forward versus backward as you note.  Read the FAR, read the DFAR, read the AFAR and read any related agency policy document.   In this case and if me I  would simply quote the FAR as to why FFP is being used.  Done no D&F. 

"All actions"  I hope the above paints the picture for you that in each case of contract type the required documentation may be different so in some specific cases a D&F may be required.  Here I will note that in your thinking you morphed to FAR 16.103.  Is not the title - "Negotiating Contract Type"?  So what does the DFAR 216.103 and AFAR 5116.103 say?  Do these hints help you and give you thought about reading "backwards" as you suggest versus reading forward so to speak?

Hope my thoughts help. 

[CaptJax]

Agree, but I have often heard, even high ranking folks, that one should read them in reverse order AFARS, DFARS, and FAR. I wanted something on WIFCON to show this is potentially a dangerous interpretation approach. My oversight folks returned by file, copied the AFARS reference, and said your D&F for contract type is missing.  I included a D&F. It appears the method of reading it backwards was employed here, because the AFARS language read in a vacuum is clear you need D&F or some kind of contract type documentation.  The IFB requiring a FFP or FFP w/ economic price adjustment and no D&F or risk justification fits very well together in reading and understanding the purpose the FAR, DFARS, and AFARS. 

[CaptJax]

18 hours ago, joel hoffman said:

Is this a FFP, unit-priced dredging project with estimated quantities?

At any rate, I suggest looking at FAR Part 14.103. 

Hi Joel, it is a FFP, unit-priced estimated quantities. FAR 14.103 fits together with my analysis where you only need to justify if you have elevated risk.

[C Culham]

1 hour ago, CaptJax said:

My oversight folks returned by file, copied the AFARS reference, and said your D&F for contract type is missing. 

I would have returned their communication, advised them no D&F is required per the FAR and further would have suggested that they read FAR 1.701, DFARS 201.7 (lol) and AFARS 5101.7.  Then I would have asked, if they still believe a D&F is required to please cite where it states in the AFARS that a D&F is specifically required, in lieu of some other type of documentation,  for having a FFP pricing scheme for an IFB for construction and by whom that supposed D&F is to be signed by.  I might have gone even further to refer them to the definitions of "may" found in FAR 2.101, DFARS 202.101 (lol)  and AFARS 5102.101 (lol)  and then asked them does not the FAR definition apply if its meaning is not supplemented by the DFARS and AFARS.

Emphasis added - 

22 hours ago, CaptJax said:

The supporting documentation may be located in

And for good measure I would throw in a suggestion that they read FAR 1.3, DFARS 201.3 and AFARS 5101.3 as well.

But again that is just me!

[C Culham]

26 minutes ago, CaptJax said:

where you only need to justify if you have elevated risk.

Again just a thought.   Why?  If you are talking about your specific example there is no elevated risk issue as policy has directed you to use FFP or FP with economic adjustment a contract type that is the very least risk.  Elevated risk comes in when you are negotiating (remember the citation is 16.3 not 16.2)!  And in my view get away from "justify" as well as one could possibly do a "memorandum to the file" in some cases, could they not?     It seems you are falling into the same trap that your oversight folks are already in!!!!  

[CaptJax]

20 minutes ago, C Culham said:

Again just a thought.   Why?  If you are talking about your specific example there is no elevated risk issue as policy has directed you to use FFP or FP with economic adjustment a contract type that is the very least risk.  Elevated risk comes in when you are negotiating (remember the citation is 16.3 not 16.2)!  And in my view get away from "justify" as well as one could possibly do a "memorandum to the file" in some cases, could they not?     It seems you are falling into the same trap that your oversight folks are already in!!!!  

I just interpret it as an elevated risk justification in negotiating contract type based on the contracts called out and the contract types the regs are silent, it looks to be purposely omitted by exceptions cited at FAR 16.103(d)(2) because the risk is at the lowest level to the Government. Instead of me trying to make inferences based on as to why it says and does not say certain things; is there some places where FAR notes are kept where it discusses it. I know the FAR is composed of laws broken down to specific areas that pertains to acquisitions, but then it reads disjointed, I'm looking for something a bit more compelling than just what I think based on interpretation; if you are not a CO or policy hawk that and about $3.50 might get you a cup of coffee at Starbucks. This could boil down to interpretation and CO discretion where its a gray area and could go either way or by risk tolerance such as I feel safer with the D&F in the file than not.

[C Culham]

1 hour ago, CaptJax said:

I feel safer with the D&F in the file than not.

I hope you do not apply your "feel" as a general rule.  Or, even as an interpretation of regs.  Why?  For me I am still troubled by the narrow read of the AFARS direction.   I believe it should be read in the full context of the FAR, DFARS, AFARS and even Army policy.  By example I do not see any requirement for a D&F when using a FFP contract in any of the aforementioned references.  Specifically, see the discussions noted in the FAR, DFARS, and AFARS for FFP contracts.  Where does it say a D&F is required like for example where the AFARS provides of a D&F for Incentive Contracts.   As to policy what about the "ARMY CONTRACTING COMMAND DESK BOOK" it appears silent on the D&F need as well.

Wanting something solid in writing?  Why isn't this FAR regulatory direction which is not supplemented by DFARS and AFARS your standing order? "Rather, absence of direction should be interpreted as permitting the Team to innovate and use sound business judgment that is otherwise consistent with law and within the limits of their authority."  Reference - FAR 1.102-5(e).

Think!  Is it not sound business judgement and consistent with regulation and law to not do a D&F for a FFP contract dor dredging when using sealed bid?   Do not complicate the acquisition system it is already bad enough when it is imperative (shall) that a D&F is needed.

I appreciate the discussion but I think I am done as I think you know my position.

[joel hoffman]

Is the bottom line for the “oversight” folks that you must document your acquisition planning decision on selection of contract type using a Determination and Findings to justify why you have selected an IFB for a routine dredging project (instead of just documenting your decision in the contract file)?

Does a D&F require higher level approval?

 

[uva383]

I can’t find the thread at the moment but I’m sure with some creative searching you will. Vern posted about it a few years ago within wifcon. Just because the regulations say a contracting officer must “determine” or make a “determination” does not mean that a D&F needs to be prepared. A D&F is a specific document whose format is outlined in Part 1. When the contracting officer has to determine something and the regulations don’t say a D&F needs to be prepared, it simply means the contracting officer must document contemporaneously the rationale for the decision he/she has made.

in your specific case, it would appear that you have to document why you chose the contract type that you did, but it doesn’t have to be in a D&F format outlined in Part 1. 

[Jamaal Valentine]

2 hours ago, uva383 said:

I can’t find the thread at the moment but I’m sure with some creative searching you will. Vern posted about it a few years ago within wifcon.

Are you referencing this?

See also

 

[uva383]

Yes thank you Jamaal. That’s the thread.