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Determination and Findings for Options


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I'm not familiar with the term "D&F report," but if you're asking whether the FAR 17.207 requirement for a written determination applies in these circumstances, I would say "Yes," as I could find no exception to FAR 17.207 for the circumstances you describe. As a matter of fact, I found no exceptions to FAR 17.207 at all.

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Guest Vern Edwards

A Determination and Findings (D&F) is a special form of documentation that is to be used only when expressly required. See FAR Subpart 1.7, "Determinations and Findings."

The FAR System makes no mention of any "Determination and Findings Report."

The FAR System makes no mention of a requirement for a determination and findings in connection with the exercise of a task order option under a GSA FSS contract.

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You might decide you need a determination under FAR 17.207( f ), but you do not need a Determination and Findings (D&F). It is a rookie GS-1102 who thinks every requirement in the FAR for a determination has to be a D&F.

At least, that's what I thought before I read FAR 1.702( b ) a few minutes ago. I regret seeing the use of "D&F" there.

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Guest Vern Edwards

FAR requires that COs make a lot of determinations, but FAR states only seven requirements for a determination and findings, three of them related to the use of T&M contracts:

6.202(1) - establishing and maintaining alternative sources

8.404(h)(3)(ii)(A) - use of T&M

12.207(1)(ii)(A) - use of T&M

16.601(d)(1) - use of T&M

17.502-2[c] - Economy Act

25.202 - Buy American, construction materials

25.1001 - waiver of right to examination of records

(I don't think I missed any.) None of those are in connection with the use or exercise of options.

There may be additional requirements for D&Fs in agency FAR supplements.

I don't understand why there should be any regret about FAR 1.702. All it says is that when a CO must prepare a D&F and an option is anticipated, the D&F must provide information about the option.

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I thought it was interesting that the FAR did not always have Subpart 1.7, Determination and Findings. When OFPP first issued the FAR in 1983, Part 1 only went to Subpart 1.6. The FAR did not include Subpart 1.7 until 1985. I am assuming that the reason for the change was because of the disparity in how agencies were documenting their determinations. I wish acquisition.gov included FACs going back before 1995. When I first started as a contract specialist long ago, I thought that most of the terms were common sense, but a determination and findings always seemed like a verbose way to ask the CO to document his or her decision. From my research, I have not seen the term D&F used outside of state and federal acquisition.

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FAR requires that COs make a lot of determinations, but FAR states only seven requirements for a determination and findings, three of them related to the use of T&M contracts:

6.202(1) - establishing and maintaining alternative sources

8.404(h)(3)(ii)(A) - use of T&M

12.207(1)(ii)(A) - use of T&M

16.601(d)(1) - use of T&M

17.502-2[c] - Economy Act

25.202 - Buy American, construction materials

25.1001 - waiver of right to examination of records

(I don't think I missed any.) None of those are in connection with the use or exercise of options.

There may be additional requirements for D&Fs in agency FAR supplements.

I don't understand why there should be any regret about FAR 1.702. All it says is that when a CO must prepare a D&F and an option is anticipated, the D&F must provide information about the option.

Vern,

Did you overlook FAR 16.401(d)'s requirement for a D&F for incentive and award-fee conracts, or did you intentionally exclude it for some reason?

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You might consider what GSA has to say about exercising options under a GSA FSS as well. Likewise as with any IDIQ, which some GSA Schedule contracts are, one would want to consider the terms and conditions of the contract and what it might say about the exercise of the option. In the end the FAR is is good reference for following some process to exercise an option but it would seem that what the contract dictates, as well as the entity administering that contract (in the case of this thread GSA) advises or requires.

By example here is what GSA says …..noting that it states no requirement for a D&F (Report) to address the provisos needed to exercise an option.

http://www.gsa.gov/portal/content/200369#options

Options on Orders Placed Against GSA Multiple Award Schedule (MAS) Contracts

Options may be included on orders placed against GSA Multiple Award Schedule (MAS) contracts, provided that the options are clearly stated in the requirement and are evaluated as part of the ordering activity's best value determination. Such options may be exercised on GSA Schedule contract orders, provided that:

  • Funds are available;

  • The requirement covered by the option fulfills an existing government need;

  • Prior to exercising an option, the ordering activity ensures that it is still in the government's best interest, i.e., that the option is the most advantageous method of fulfilling the government's need, price, and other factors considered; and

  • The options do not extend beyond the period of the Schedule contract, including option year periods.

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Guest Vern Edwards

Vern,

Did you overlook FAR 16.401(d)'s requirement for a D&F for incentive and award-fee conracts, or did you intentionally exclude it for some reason?

No reason. A screwup. I failed to type it into the list in my post by mistake. Thanks.

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Guest Vern Edwards

Is a Determination and Findings (D&F) report required to exercise an option for a task order under a GSA IDIQ contract under the simplified acquisition threshold ($150,000)?

A simple question. The answer from FAR is: No. Period. Whether some particular agencies might require it in their FAR supplements, I cannot say.

All determinations and findings include determinations, but not all determinations are determinations and findings.

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Guest Vern Edwards

I thought it was interesting that the FAR did not always have Subpart 1.7, Determination and Findings. When OFPP first issued the FAR in 1983, Part 1 only went to Subpart 1.6. The FAR did not include Subpart 1.7 until 1985. I am assuming that the reason for the change was because of the disparity in how agencies were documenting their determinations. I wish acquisition.gov included FACs going back before 1995. When I first started as a contract specialist long ago, I thought that most of the terms were common sense, but a determination and findings always seemed like a verbose way to ask the CO to document his or her decision. From my research, I have not seen the term D&F used outside of state and federal acquisition.

Prior to the enactment of the Competition in Contracting Act of 1984 (CICA), which came after the FAR took effect, both DOD and civilian agencies used D&Fs primarily in connection with justification to contract by negotiation instead of "formal advertising" (which we now call sealed bidding). You can see this requirement in the original version of FAR Subpart 15.3, which was entitled, "Determinations and Findings to Justify Negotiation":

SUBPART 15.3—DETERMINATIONS AND FINDINGS TO JUSTIFY NEGOTIATION

15.300 Scope of subpart.

This subpart prescribes policies and procedures for the use of determinations and findings (D&F's) to justify the use of negotiation in lieu of formal advertising. Requirements for D&F's for other actions can be found with the appropriate subject matter.

15.301 Definition.

“Determination and findings” (D&F) means a special form of written approval by an authorized official that is required by statute or regulation as a prerequisite to taking certain contracting actions. The “determination” is a conclusion or decision supported by the “findings.” The findings are statements of fact or rationale essential to support the determination and must cover each requirement of the statute or regulation.

15.302 General.

(a) A D&F is required to authorize use of certain statutory authorities for contracting by negotiation in lieu of formal advertising. Paragraph [c], “Limitations,” under the negotiation authorities described in Subpart 15.2 states whether a D&F is required (see also 15.307).

A D&F shall ordinarily be for an individual purchase or contract. Under the procedures described in 15.303, class D&F's may be executed for classes of purchases or contracts.

[c] The approval to negotiate granted by a D&F is restricted to the proposed acquisition(s) reasonably described in that D&F. D&F's may provide for a reasonable degree of flexibility, if such flexibility is not inconsistent with the negotiation authority involved. Furthermore, in the application of an approved D&F to a negotiation situation, reasonable variations in estimated quantities or prices are permitted, unless the D&F specifies otherwise.

(d) When an option is anticipated, the D&F shall state the approximate quantity to be awarded initially and the extent of the increase to be permitted by the option.

15.303 Class D&F's.

(a) A class D&F authorizes negotiation of classes of purchases or contracts. A class may consist of the same or related supplies or services, or require essentially identical justification under the same negotiation authority.

The findings in a class D&F shall fully support the use of the proposed negotiation authority either for the class of items as a whole or for each item.

[c] A class D&F shall be for a specified period, with the expiration date stated in the document.

(d) A class D&F shall not be construed to authorize negotiation of any purchase or contract within the class that feasibly and practicably could be accomplished through formal advertising.

15.304 Content.

Each D&F shall set forth enough facts and circumstances to clearly and convincingly justify the specific determination made and establish that the use of formal advertising would not be feasible or practicable. As a minimum, each D&F shall include, in the prescribed agency format, the following information:

(a) Identification of the agency and of the contracting activity, and specific identification of the document as a “Determination and Findings.”

Nature and/or description of the action being approved.

[c] Citation of the appropriate statute and/or regulation upon which the D&F is based (see Subpart 15.2).

(d) Findings that detail the particular circumstances, facts, or reasoning essential to support the determination. Necessary supporting documentation shall be obtained from appropriate requirements and technical personnel.

(e) A determination, based on the findings, that the proposed action is justified under the applicable statute or regulation.

(f) Expiration date of the D&F, if required (see 15.306).

(g) The signature of the official authorized to sign the D&F (see 15.307) and the date signed.

15.305 Supersession, modification, and cancellation.

(a) If a D&F is superseded by another D&F, that action shall not render invalid any action taken under the original D&F.

A modification of the D&F will not require cancellation of the solicitation if the D&F, as modified, supports negotiation under any applicable statutory authority.

[c] If a D&F is canceled, but the facts continue to support negotiation under a statutory authority for which a D&F is not required (see Subpart 15.2), cancellation of the solicitation is not required.

15.306 Expiration.

Expiration dates are required for class D&F's and are optional for individual D&F's. Authority to act under a D&F expires when it is exercised or on an expiration date specified in the document, whichever occurs first. When a request for proposal has been furnished to prospective offerors before the expiration date, the authority under the D&F will continue until award of the contract(s) resulting from that solicitation.

15.307 Signatory authority.

When a D&F is required, it shall be signed by the appropriate official in accordance with agency regulations before the solicitation is issued. Authority to sign and/or delegate signature authority for D&F's approving use of various negotiation authorities is as shown in Table 15-1. Under the applicable statutes, agency heads may not delegate their authority to sign D&F's except as shown in Table 15-1.

Table 15-1 omitted.

48 Fed. Reg. 42102, Parts 2 and 3 of 10, September 19, 1983.

The other major use for D&Fs was in connection with selection of contract types, such as cost-reimbursement, incentive, and time-and-materials. In connection with those, FAR 16.102(d) said: "No contract may be awarded before the execution of any determination and findings (D&F's) required by this part. Minimum requirements for the content of D&F's required by this part are substantially the same as those for the D&F's treated in 15.304."

CICA eliminated the need for D&Fs to justify contracting by negotiation and thus the need for FAR Subpart 15.3. FAR Subpart 1.7 was added after CICA. It was needed to explain the D&Fs still required elsewhere. Compare the original FAR Subpart 15.3 with today's FAR Subpart 1.7.

It's funny to think that when my generation is gone no one will know how and why things came to be the way they are.

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Guest Vern Edwards

From my research, I have not seen the term D&F used outside of state and federal acquisition.

The phrase "determination and findings" is widely used in legal writing and appears in several titles of the United States Code (16, 19, 29, 30, 41, 42, 45, 47, 49, and 50) and the Code of Federal Regulations (2, 7, 10, 11, 13, 14, 20, 25, 28, 29, 32, 48, and 49). It also appears in the laws of many states. See e.g., Title 31 of the Indiana Code, Article 34, "Juvenile Law," Sec. 7: "The court shall (1) make the determination and findings required by section 5 of this chapter...." I found it mentioned in 295 journal and law review articles. I found it in New York City municipal law about the exercise of eminent domain during economic development. I found it used in British law. Etc., etc.

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Guest Vern Edwards

You're welcome. You might be further interested to know that the first use of the term in the Federal Register was in connection with the Federal Crop Insurance Program in Title 7 of the CFR. 4 Fed. Reg. 379-03, January 20, 1939. On the same day the term was also used in connection with the determination of wage rates for persons employed in the planting and cultivation of sugar cane. Again in Title 7 of the CFR. 4 Fed. Reg. 381-01, January 20, 1939. The term was likely used long before that.

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Guest Vern Edwards

I think (but I'm not certain) that the only one that is statutory now is the one for the use of time-and-materials contracts to acquire commercial items. See 41 USC 3307(e)(4)(ii)(I).

One of the great boondoggles of my youth was hand-carrying our program office's request for Secretary of the Air Force approval of a class D&F to use exception 11 authority to negotiate R&D contracts. My first work-related trip to Washington DC. Entirely unnecessary.

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Vern, that is scary. Prior to CICA, there were 15 relatively vague exemptions that agencies could use to justify non-competitive negotiated procedures through a D&F. By 1980, approximately 80-percent of all contract actions were awarded using negotiated procedures rather than competitive procedures (Perlman, "Guarding the Government's Coffers: The Need for Competition Requirements to Safeguard Federal Government Procurement," Fordham Law Review 75, no. 6 [2007]). Out of those hundreds of thousands of procurements, I wonder how much time and money the government spent writing those D&Fs and getting them approved?

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Guest Vern Edwards

metteec:

You may have overreacted to the Fordham Law Review article. It was written by a law school student who didn’t know what she was talking about.

If you worked for DOD there were 17 authorities under which you could contract by negotiation, as follows, with FAR section references:

15.201 National emergency

15.202* Public exigency

15.203 Purchases under the small purchase limitation

15.204 Personal or professional services

15.205 Services of educational institutions

15.206 Purchases outside the United States

15.207* Medicines or medical supplies

15.208* Supplies purchases for authorized resale

15.209 Subsistence supplies

15.210* Impractical to secure competition by formal advertising

15.211** Experimental, developmental, or research work

15.212*** Purchases not to be publicly disclosed

15.213*** Technical equipment requiring standardization and interchangeability of parts

15.214** Negotiation after formal advertising

15.215 Otherwise authorized by law

15.216*** Technical or specialized supplies requiring substantial initial investment or extended period of preparation for manufacture

15.217*** Purchases in the interest of national defense and industrial mobilization

Only the ones marked by an asterisk required a D&F for an individual action. Only the ones marked by two or three asterisks required that the D&F for an individual action be signed at a level above the contracting officer. Only the ones marked by three asterisks required that the D&F be signed by the agency head without delegation.

The D&Fs that required agency head approval without delegation were a lot of work, but they were relatively rare. The rest took no time at all.

The authorities (not “exemptions”) were not especially vague, with the exception of 15.210. The rest were pretty well defined.

Overwhelmingly most negotiated acquisitions were “small purchases” ($25,000 or less) conducted under 15.203.

Moreover, all small business set-asides were negotiated acquisitions, under either 15.201 or 15.215, and were considered to be negotiated actions even if conducted using formal advertising (sealed bidding).

Most negotiated actions were competitive. However, high dollar value DOD actions, including contract modifications, were often noncompetitive, as they are today.

I won't say that things were better before CICA. The truth probably is that things were no worse than they are today. And the fact is that the spread of "best value" thinking since the enactment of CICA has probably resulted in competition that has not producing as much savings as had been hoped, especially when you consider the administrative costs being spent on proposal development and evaluation. Competition is not the cure-all that many think it is, and a pretty good argument can be made that competition has resulted in increased overall costs without concomitant improvements in quality. How do we know that price premiums have yielded better quality than we could have gotten by choosing a firm with lower prices even though it had lower "technical" scores?

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To answer the question, a "D&F" is not required, however a determination is required. I know it is incorrect, but for many contract specialists a "D&F" and a "Determination" are the same thing. Hopefully that thinking will change someday, but for now it's a very common misunderstanding.

As C Culham noted in post #11, one of GSA's requirement is that "Prior to exercising an option, the ordering activity ensures that it is still in the government's best interest, i.e., that the option is the most advantageous method of fulfilling the government's need, price, and other factors considered". That would need to be done via a determination. Not a "D&F", but a determination.

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