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Hello, WifCon!

To begin, I have already engaged my agency’s OGC and they have no opinion on the matter at this time; we are exploring what other agencies are doing in possible similar situations. 

We have a sole source contractor that is refusing to explicitly fill out the representations related to Section 889 (i.e., FAR 52.204-24 or FAR 52.204-26) and that is unwilling to include the clause 52.204-25 in the contract. Rather, the contractor just states in an email that to the best of its knowledge, it is in compliance with Section 889 (thus not explicitly filling out a provision/representation) and that it will follow all applicable laws, statutes, etc. (thus not explicitly including the clause). I did not award the original contract, but the contractor refused many standard, federal government terms and conditions at the time of contract award (not registering in SAM, etc.); the agency had to acquiesce because of the sole source nature of the procurement. The agency needs the products/services offered by this sole source contractor and cannot afford a lapse in service; the upcoming option exercise is necessary.

Has ANYONE run into this situation at their agencies? Any recommendations on how to proceed? 

Thank you!

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What do you mean when you say your OGC has "no opinion"? Maybe you should ask them again? Ask them straight up if you can exercise the option -- it is a YES or NO question -- memorialize the answer in writing. Then, share the writing with your boss and seek his or her instructions -- hopefully, you have already engaged your boss.

Have you read FAR subpart 4.21? There are both exceptions and waivers that might be available to you. Your OGC attorneys should help you.

But, most importantly, what do you think based on your reading of FAR subpart 4.21? What is your opinion?

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16 hours ago, 2FARGone said:

Has ANYONE run into this situation at their agencies? Any recommendations on how to proceed?

Not with respect to this particular issue.

Three recommendations:

1. change the contractor's mind (escalate, if necessary), or

2. change your mind --- obtain a waiver IAW FAR 4.2104, or

3. say goodbye to the contractor.

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17 hours ago, 2FARGone said:

...the upcoming option exercise is necessary.

 

I would have expected that generally an option exercise retains the same terms and conditions as the base contract... is not a new contract...just new work being added to an existing base contract. Which would mean to me that I would not expect a clause or solicitation provision problem.  

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18 hours ago, 2FARGone said:

We have a sole source contractor that is refusing to explicitly fill out the representations related to Section 889 (i.e., FAR 52.204-24 or FAR 52.204-26) and that is unwilling to include the clause 52.204-25 in the contract.

I am confused by this statement.  The date of 52.204-25 is Oct 2020.  I have not checked to see if there was an earlier version, but if there was not, was your contract issued before the clause became effective?  If so, are you now trying to add the clause to the contract and the contractor is balking?  

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Neil and Retreadfed, please see 4.2102 Prohibitions. Applicable to options to extend contracts and to orders. Also discusses possible waivers - subject to conditions. The clause at 52.204-25 is required to be included.

https://www.acquisition.gov/far/subpart-4.21

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3 hours ago, Neil Roberts said:

I would have expected that generally an option exercise retains the same terms and conditions as the base contract... is not a new contract...just new work being added to an existing base contract. Which would mean to me that I would not expect a clause or solicitation provision problem.  

Read FAR Subpart 4.21, especially 4.2102(c) and 4.2105(b).

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Thanks, Vern and Joel. Tough situation. It is not clear if the OP, 2FarGone, or Agency can determine without input from the contractor, whether covered/prohibited telecom is or is not involved. Seems like that would help the waiver process.  

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@Retreadfed Retread, I don't think it matters, because FAR 4.2105(b) says:

Quote

(b) The contracting officer shall insert the clause at 52.204-25, Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment, in all solicitations and contracts.

It does not exclude contracts for commercial items. And contracts for commercial items are not among the exceptions in FAR 4.2102(b).

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@Retreadfed See 85 Fed. Reg. 42665, July 14, 2020, Interim Rule, Federal Acquisition Regulation: Prohibition on Contracting With Entities Using Certain Telecommunications and Video Surveillance Services or Equipment, at 42673:

Quote

The FAR Council has determined that it is in the best interest of the Government to apply the rule to contracts at or below the SAT and for the acquisition of commercial items. The Administrator for Federal Procurement Policy has determined that it is in the best interest of the Government to apply this rule to contracts for the acquisition of COTS items.

 

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On 2/27/2021 at 4:02 PM, 2FARGone said:

The agency needs the products/services offered by this sole source contractor and cannot afford a lapse in service; the upcoming option exercise is necessary.

I just have to say as this thread continues to unwind...........really!   And my really is based on my experiences as a CO and full acknowledgement of FAR 6.302!

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2 hours ago, Vern Edwards said:

Retread, I don't think it matters,

Vern, it may matter in the context of 2FARgone's question.  One of his/her concern's is the contractor's refusal to agree to accept 52.204-25 in the contract.  If the contract is for commercial items, the contract should contain FAR 52.212-5.  The Aug 2019 version of that clause contains the Aug 2019 version of 52.204-25.  If 52.212-5 is in the contract and included 52.204-25, there would be no reason to include 52.204-25 as a separate clause.  On the other hand, if the contract is not for commercial items, but was awarded prior to 52.204-25 becoming effective, we have the situation where the government is trying to add the clause to a contract already in existence.  This implicates FAR 1.108(d).

We don't know what the contract is for so we don't know if the prohibitions in 4.2102 apply to this particular contract.

As for 52.204-24 and -26, those are solicitation provisions.  I don't see where they come into play in regard to the exercise of an option.

In short, there are several relevant questions that we don't know the answer to.

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Retread,

So if the contract is for commercial items the clause may already be in the contract. Okay, got it. And if not, then the clause must be added. Right?

Then you said: 

22 minutes ago, Retreadfed said:

On the other hand, if the contract is not for commercial items, but was awarded prior to 52.204-25 becoming effective, we have the situation where the government is trying to add the clause to a contract already in existence.  This implicates FAR 1.108(d).

I don't understand what you mean. What is the implication?

 

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16 hours ago, Retreadfed said:

...On the other hand, if the contract is not for commercial items, but was awarded prior to 52.204-25 becoming effective, we have the situation where the government is trying to add the clause to a contract already in existence.  This implicates FAR 1.108(d).

We don't know what the contract is for so we don't know if the prohibitions in 4.2102 apply to this particular contract.

As for 52.204-24 and -26, those are solicitation provisions.  I don't see where they come into play in regard to the exercise of an option.

In short, there are several relevant questions that we don't know the answer to.

Retreadfed, the original post regards an option. The statutory prohibitions implemented in 4.2102(a) apply to awarding extensions or options for additional services/supplies and/or time. If a contractor won’t agree to those terms and no exception applies, I read it as-  the government can’t extend the contract or order additional services/supplies.

As for 1.108(d), perhaps you overlooked “Unless otherwise specified-” :

      “ (d)  Application of FAR changes to solicitations and contracts. Unless otherwise specified-

Edited by joel hoffman
Corrected numbering of FAR reference
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9 hours ago, Vern Edwards said:

I apologize for being thick about this, but what are you saying?

Most everyone is tied up with regard to FAR Part 4.   What about FAR Part 6, most specifically 6.302-1 authority requires a contractor to be responsible.  What is the authority under which the sole source was justified?   I would even offer that the remaining authorities when read in concert with the FAR at Part 9 require a contractor to be responsible.    

My post was a apparent failed attempt ( thicker than you) to consider the contractors refusal with other parts of the FAR.   In my view "responsibility" could be questioned even though I have not researched the matter beyond  my thoughts.   I even wonder if the refusal could be considered a matter of responsiveness?  

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The OP asked if any of us has faced a situation similar to the one that he's facing. The closest that I've come is a situation in which a sole source refused to provide certified cost or pricing data. In that case, we got a a waiver.

Anybody else?

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2 hours ago, Vern Edwards said:

Anybody else?

Yes and no.  Yes in the 8(a) world where I spent 15 years.  Never sought a waiver but I hope all will understand why.   No, to my recollection, in the other 25 years of my career. 

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2 hours ago, Vern Edwards said:

Anybody else?

My agency had a few similar experiences.  The facts of your action and your agency's position may dictate additional actions that you may need to take.

In our case, each of our experiences with contractor refusals concerned actions that were outside of the U.S., where the vendor is the telecommunications monopoly provider and directly owned/controlled by a foreign government.  In those cases, through the interventions of multiple people, we were finally able to obtain vendor representations in response to 52.204-24(d)(1) and (2), as well as sub-para. (e) supplemental disclosures sufficient to enable our requiring activities to conduct the analyses necessary to support Determinations to apply FAR 4.2102 exceptions (different from Waivers).

A vendor's reluctance to disclose information under the Section 889 related FAR provisions/clauses could be cultural barrier, if dealing with a foreign vendor.  Unfortunately, neither Section 889 nor its implementation in the FAR cares; and you cannot assume the vendor's response.  The fact is, you need to obtain their representation (whether affirmative or negative) to both what they are provided 889(a)(1)(A) and what they are using 889(a)(1)(B) or you cannot move forward with determining whether an affirmative response (will provide/does use) will impact the ability to award.  

Additionally, you need to check your agency's guidance on 889.  At DoD, there are a few DPC Memoranda relative to 889 (see e.g., DPC Memoranda from 13 Aug 2019 & 23 Jul 2020).  Additionally, your OGC or HCA office should be able to advise you if there are any current and applicable Director of National Intelligence Section 889 Memoranda relative to your action (e.g., class-type waivers).

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On 2/28/2021 at 1:55 PM, Retreadfed said:

I am confused by this statement.  The date of 52.204-25 is Oct 2020.  I have not checked to see if there was an earlier version, but if there was not, was your contract issued before the clause became effective?  If so, are you now trying to add the clause to the contract and the contractor is balking?  

There have been multiple versions of the section 889-related provisions/clauses since August 2019, when Section 889(a)(1)(A) (prohibition on acquiring covered equipment) went active.  The current versions of 52.204-24 (OCT 2020), 52.204-25 (AUG 2020), and 52.204-26 (OCT 2020), are merely the latest.  Depending on the Agency, incorporation of the current versions into existing contracts (e.g., prior to an option exercise) could be mandatory.  At DoD, the 23 Jul 2020 DPC Memorandum, Implementation of the Section 889(a)(1)(B) Prohibition on Contracting with Entities Using Certain Telecommunications and Video Surveillance Services or Equipment, specifically requires the modification of existing contracts to include these provisions/clauses for purposes of covering down on Section 889(a)(1)(B) (prohibition on contractor use of covered equipment) that went active in Aug 2020. 

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18 hours ago, Vern Edwards said:

I don't understand what you mean. What is the implication?

FAR 1.108(d) says in part "Contracting officers may, at their discretion, include the changes in any existing contract with appropriate consideration."  If the contract was awarded before 52.204-25 became effective and the agency wants to add the clause now, it seems to me that the contractor may be entitled to receive "appropriate consideration."

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