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The “Fair Opportunity” Requirements of IDIQ Contracts

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  1. The “Fair Opportunity” Requirements of IDIQ Contracts Breakout Session #1205 James S. Phillips, Esq., Centre Consulting, Inc. Barbara S. Kinosky, Esq., Centre Consulting, Inc. April 8, 2009 9:45-11:15am

  2. IDIQ Contracts What is an IDIQ contract?

  3. IDIQ Contracts How does it differ from a GSA Schedule? 3

  4. IDIQ Contract Publication Rules The Contracting Officer does not have to synopsize orders under IDIQ contracts unless funds provided by the Recovery Act are being used. Orders funded in whole or in part by Recovery Act funds must be published at FedBizOps “for information purposes.” FAR Subpart 16.505

  5. Ordering Procedures Orders must: Clearly describe all services or products to be delivered Be within scope of the contract Be issued within the period of performance Be within the maximum value of the contract

  6. Ordering Procedures There is a preference for performance-based acquisitions to the maximum extent practicable. This only applies to orders for services.

  7. Ordering Procedures Special rule for IT and related services: “consider use of modular contracting to reduce risk” FAR Subpart 39.103

  8. Ordering Procedures Orders must contain the following information: Date of the order Contract/order number Item number and quantity Delivery/performance schedule Place of delivery Special packing/shipping instructions Accounting and appreciation data Method of payment if not specified in contract

  9. Ordering Procedures Practice Note!Orders placed under task/delivery contracts awarded by another agency, i.e., a GWAC or multi-agency contract, are not exempt from development of acquisition plans.

  10. Special Requirements Special requirements for architect/engineer multi-agency contracts: Use award procedures at FAR Subpart 36.6

  11. Competition The standard for competition in task/delivery orders is “Fair Opportunity.”

  12. Competition Congress provided for competition on the use of task order and delivery order contracts in section 804 of the National Defense Authorization Act for FY 2000. The Act mandated changes to FAR Part 16 to ensure that all contractors be afforded a “Fair Opportunity” for consideration of award of task/delivery orders.

  13. “Fair Opportunity” Despite “Fair Opportunity” requirements, problems continued: Waivers to competition requirements easily granted GAO studies confirmed continued lack of competition Out of scope orders and broad statements of work

  14. “Fair Opportunity” Congress once again enters the picture with the DOD Authorization Act of FY 2008.

  15. Competition Requirements Competition Requirements for orders under Multiple Award Contracts: Fair Opportunity: Section 843 of 2008 DOD Authorization Act

  16. New Rules New Rules on Competition and Award of Task/Delivery Orders Under IDIQ Contracts.

  17. New Rules Applicable to both DOD and civilian agencies.

  18. New Rules No task or delivery order contract in an amount estimated to exceed $100,000,000 (including all options) may be awarded to a single source unless the head of the agency determines in writing that: The task or delivery orders expected under the contract are so integrally related that only a single source can reasonably perform the work; The contract provides only for firm, fixed price task orders or delivery orders for Products for which unit prices are established in the contract or Services for which prices are established in the contract Only one source is qualified and capable of performing the work at a reasonable price to the Government; or Because of exceptional circumstances, it is necessary in the public interest to award the contract to a single source. The head of the agency shall notify Congress within 30 days after any determination under subparagraph (A)(iv). Section 843 (b)(1) (amending 41 USCA § 253 h(d)) imposes the same limitation on the civilian agencies. 10 USCA § 2304 a(d)

  19. Enhanced Competition Enhanced Competition” For Orders Greater Than $5 Million Enhanced Competition for Orders in Excess of $5 million – In the case of a task or delivery order in excess of $5 million, the requirement to provide all contractors a fair opportunity to be considered under subsection (b) is not met unless all such contractors are provided a minimum: Notice of task or delivery order that includes a clear statement of the agency’s requirements; A reasonable period of time to provide a proposal in response to the notice; Disclosure of the significant factors and subfactors, including cost or price, that the agency expects to consider in evaluating such proposals, and their relative importance; In the case of an award that is to be made on a best value basis, a written statement documenting the basis for the award and the relative importance of quality and price or cost factors; and An opportunity for a post-award debriefing consistent with the requirements of section 2305 (b)(5) of this title. Section 843 (b)(2) (amending 41 USCA § 253 j(d)) applies the same rule to the civilian agencies.

  20. Enhanced Competition Competition Guide for Task and Delivery Order Contracts Under FY 2008 Law

  21. Enhanced Competition Interim FAR Rule (FAC 2005-027) Enhanced Competition for Orders The rule imposes requirements for increased competition for task and deliver orders valued at more than $5 million placed against multiple award contracts by requiring all awardees to be given a fair opportunity to be considered for each other. All awardees are to be provided, at a minimum: A reasonable notice of the order with a clear statement of requirements A reasonable response period Disclosure of the significant evaluation factors and subfactors, where the award is made on a best value basis A statement documenting the basis for award and the relative importance of quality and price or cost factors An opportunity for a post award debriefing

  22. Enhanced Competition Interim FAR Rule Limitation on single award TO/DO contracts valued at more than $100 million, no such contract may be awarded to a single source unless the agency head determines in writing that: The task or delivery orders expected under the contract are so integrally related that only a single source can reasonably perform the work; The contract provides only for firm-fixed price task or delivery orders; Only one source is qualified and capable of performing the work at a reasonable price to the government; or It is in the public’s interest to award the contract to a single source dues to exceptional circumstances.

  23. Competition Requirements Competition requirements for TO/DO contracts are already implemented at the Defense Department as of May 27, 2008.

  24. Special Recovery Act Requirements Practice Note Recently enacted Recovery Act contains strong preference that all contracts and orders awarded using Recovery Act funds must be both competitive and firm fixed priced! All contract awards using Recovery Act funds that are not both competitively awarded and fixed priced shall be posted to FedBizOps together with an explanation of the rational for either not pursuing competition or not making a fixed price award.

  25. Recent GAO Decisions of Interest Delex SystemsB-400403, October 8, 2008 GAO ruled that the issuance of a task order under a non Schedule (FAR Part 16) IDIQ contract is an acquisition subject to small business set aside evaluations and the so-called “Rule of Two” The “Rule of Two” requires contracting officers to set-aside acquisitions for products in excess of $100,000 for small businesses if there is a reasonable expectation that: at least two responsible small business concerns will submit offers; and the award will be made at fair market price.

  26. Recent GAO Decisions of Interest Impact of Delex Systems Decision may lead to less competition for task order awards since only small businesses will be able to compete for certain work. Negates a major benefit of using ID/IQ contracts since agencies will now be forced to conduct a more intensive pre-solicitation analysis to ensure compliance with small business requirements.

  27. Other Task Order Protest Decisions International Program Group, B-400278; B-400308, Sept. 19, 2008 GAO holds that agencies must give first priority to HUB-Zone small business set-aside when implementing small business program requirements under FAR 16 task order awards.

  28. Recent GAO Protest Rulings Impacting IDIQ Competitions

  29. Other Task Order Protest Decisions Triple Canopy, B-310566.4, Oct. 30, 2008 GAO essentially extends FAR Part 15 requirements to FAR 16 task order competitions. As with Delex, decision will require agencies to expend far more effort and resources conducting task order competitions.

  30. The “Fair Opportunity” Requirements of IDIQ Contracts Questions?

  31. The “Fair Opportunity” Requirements of IDIQ Contracts Thank You! jphillips@centreconsult.com bkinosky@centreconsult.com