Anyone have documentation to explain the meaning of fair opportunity for task orders under IDIQ contracts?

By Wayne Hinton on Thursday, November 29, 2001 - 06:08 pm:

FAR 16.505(b) may help, at least in part, answer your question.

By Abacus on Friday, November 30, 2001 - 04:53 pm:

SeaPort, the Naval Sea Systems Command's portal for procurement of professional support services under multiple award contracts, defines "fair opportunity to compete" and permitted exceptions at http://www.seaport.navy.mil/main/sell/planning.html

By Anonymous on Saturday, December 01, 2001 - 08:41 am:

Fair opportunity is normally a competitive process used after award of a multiple award IDIQ contracts. The successful awardees are to be permitted to compete on the task orders and allowed a fair opportunity to compete for those task orders.

There are several exceptions as to when the competition is required. 1) when a second task order is a logical follow-on to a previously competed task 2) to award the minimum guarantee 3) 4) etc. All the exceptions are explained at FAR Part 16.505.

The solicitation should identify the procedures for establishing the competitive process for awarding the task orders. Although a number of agencies "rotate" the award process on the task orders, the FAR indicates an allocation or preference system should not be used. This would mean that "rotating" task order awards would be an "allocation" type systems and "setting-aside specific task order requirements for small businesses or 8-a's" or awarding to contractors within a specific geographic location should not be done. This is indicative of a preference system.

All awardees should be given a "fair opportunity to compete" on the task orders. The procedures and award criteria for task order award should be included in solicitation. Exceptions during the task order competition is limited to the criteria established in FAR.

One thing I would suggest is limiting the number of initial contract awards. I worked at one agency where we had awarded 15 contracts. It became very cumbersome to do the task order competition with each of the 15 on every task order. Quite frequently we tried to make the task orders fit into one of the four exceptions, but would document the file as to why the exception applied. The documentation was not extensive - a short memo to file explaining the reason for not providing the "fair opportunity" to satisfy the IGs and the GAO that reviews the agency's compliance.

By bob antonio on Wednesday, February 13, 2002 - 09:01 am:

For task orders under multiple award indefinite quantity contracts, FAR 16.505 (b) (1) (ii) provides this statement.

"the contracting officer need not contact each of the multiple awardees under the contract before selecting an order awardee if the contracting officer has information available to ensure that each awardee is provided a fair opportunity to be considered for each order."

Short of clairvoyance on the part of the contracting officer and multiple awardees, does anyone know how a multiple awardee would learn about a task order if it was not contacted?

I am having some difficulty interpreting farspeak this morning.

By John Ford on Wednesday, February 13, 2002 - 11:06 am:

Bob, just a question, but why are you concerned about one of the contractor's learning about the task order?

By bob antonio on Wednesday, February 13, 2002 - 12:08 pm:

John:

Federal law (specifically the Federal Acqusition Streamlining Act) requires multiple awardees to be given a "fair opportunity to be considered for each order" unless one of the exceptions can be justified.

The Federal Acquisition Regulation repeats much of the law but adds the words I noted. To be given a fair opportunity to receive an award on every task order, it would seem that each multiple awardee would need to know that a task order is going to be awarded. I have no personal interest in seeing that contractors are notified.

I am not sure if you were touching on bid protests under FASA's task order sections. As you know, the Comptroller General's bid protest function generally cannot hear protests on task orders under FASA. However, the Comptroller General's analysts can review federal programs to ensure that they are implemented in accordance with the Congress' intent. As a result, the Comptroller General's analysts can question every aspect of a task order.

By Anon2U on Wednesday, February 13, 2002 - 09:20 pm:

I believe I heard that the FAR council is working on a FAR rule that says all must be notified (even on GSA multiple award schedules of which there might be 200 awardees). The thinking is that the CO will have to post it in Fedbizopps in some fashion and that would constitute notification. Details are being worked out. This was mandated to DoD in the 2002 appropriations bill.

Another option in the appropriations bill is to get 3 proposals (not ask 3, actually get 3)but since there would not be a guarantee that 3 would be received and waste more time doing it over, it is not thought to be a good option.

By bob antonio on Thursday, February 14, 2002 - 05:25 am:

Anon2u:

Thanks. I still have to review that section. Fortunately, the webmaster here added a special analysis of that Act with its conference report.

It is always possible that the Defense authorization language will filter through to the Federal Acquisition Regulation some day.

By Eric Ottinger on Thursday, February 14, 2002 - 12:27 pm:

Anon2U,

As far as I know, the 3 proposals recieved rule is now the law for DoD.

http://www.fcw.com/fcw/articles/2001/1112/news-dod-11-12-01.asp

If some of our Anon's would be so kind. I would be curious to find out how this is working.

Eric

By bob antonio on Thursday, February 14, 2002 - 12:44 pm:

Eric:

That is a news article prepared prior to the conference report. The actual law and its legislative history is below.

http://www.wifcon.com/dodauth02.htm

By bob antonio on Thursday, February 14, 2002 - 01:37 pm:

I took a quick look at section 803 and here are my initial impressions. A MAC now can be either a MAC or a MAS. The FAR Councils should distinguish one from the other as a MAC-MAC vs. a MAC-MAS. Of course, if a firm has a MAC and a MAS for the same service, I feel the FAR Council should distinguish this situation by referring to it as a BIG MAC-MAS.

Now, those MAC-MAC contractors can all expect a "fair notice" of any impending task order. Let us assume that a MAC-MAC contractor receives a fair notice and let us call the MAC-MAC contractor's response a "fair response." So, the MAC-MAC contractor who submits a fair response under the fair notice is to receive a "fair opportunity" for award. The contracting officer will determine the fairest response of them all for award of the TO. No sweat.

Now, on to the MAC-MAS contracts. Things are a little different here. Unlike the MAC-MACs, the fair notice under the MAC-MAS is only a "fair as pracicable notice" (whatever practicable means). Of course, when a fair as practicable notice is used in lieu of a fair notice that would be used under a MAC-MAC procurement, the contracting officer cannot make an award unless offers were received from 3 qualified contractors. Under a MAC-MAS, the contracting officer is not required to obtain the 3 offers when using the fair as practicable notice procedure if the contracting officer will sign a document stating "no additional qualified contractors were able to be identified despite reasonable efforts to do so." Now, if the contracting officer signs such a statement, all the second-guessers in the known universe will take a crack at it.

I will read it tomorrow and see if I come up with something different. However, I do think there should be something different for a BIG MAC-MAS.

By John Ford on Thursday, February 14, 2002 - 06:24 pm:

For those who are interested, the DAR Council has opened a case on this. It is 2001-D017. The contract placement committee has been tasked with drafting the rule and its report is due on Feb. 20. For the time being, it looks like the FAR Council will punt on this and we will have two systems in place instead of one. Way to go Congress. So much for the guiding principles of acquisition reform of streamlining and simplification.

By Vern Edwards on Monday, February 18, 2002 - 10:45 am:

The task order contract (IDIQ contract for services) has long been a device for getting around the requirement for competition and avoiding time-consuming and labor-intensive source selections. Under an IDIQ contract for supplies an agency fully specifies the supplies and negotiates fixed unit prices at the time of contract award, but defers ordering. But under a task order contract with a broadly-worded statement of work and hourly labor rates an agency can defer the specification and pricing of tasks, as well as ordering. It thus can hire a contractor to undertake a variety of tasks on an ad hoc basis without having to conduct a source selection or justify sole source procurement each time. In a world of impractical rules, it is a wonderfully practical tool. But it was just this absence of ex ante task specification and pricing that bothered critics and led them to prompt Congress to enact the statutory preference for multiple awards and the requirement for “a fair opportunity to be considered.” Ironically, it was the attempt to regulate the task order contract that brought it widespread attention and led to excessive use.

I have long argued that a fair opportunity to be considered is different than an opportunity to compete. People and organizations make many purchases in which they do not solicit competitive bids or offers, but consider information about products and services that is available in the marketplace. A pool of multiple awardees is like a mini-marketplace and contracting officers could develop and maintain dossiers about the awardees that could be the basis for considering them without costly task order proposals and mini-source selections. Is head-to-head, task-specific competition always essential in order to obtain best value? I don’t think so, unless contracting officers are essentially incompetent. The process of soliciting competitive offers takes time and costs money. Sometimes it takes more time and costs more money than it saves.

It was inevitable that the multiple award/fair opportunity policy would lead to dissatisfaction on all sides. Agencies have included too many firms in multiple award pools and some of the awardees have done better than others. Also, contracting officers have conducted needlessly costly mini-source selections in order to comply with the fair opportunity requirement. The result is that some contractors have spent a lot of bid and proposal money--to win a contract in the first place and then to compete for task orders--with little to show for it. Those firms and their advocates think that the solution is to make the fair opportunity to be considered a formal opportunity to compete, and thus we have Sec. 803 of the FY2002 DOD authorization act. Will the new rules result in more even distribution of task orders among multiple awardees? Will it yield better value? Will it bring justice? I doubt it, but it will certainly make issuing task orders more costly and time-consuming.

Task order contracts wouldn’t be so appealing if it weren’t for the inefficiencies and costs associated with full and open competition and source selection under FAR Part 15. The new rules about task order contracts in Sec. 803--rules which almost certainly will be applied to the civilian agencies in time--will increase contractor bid and proposal costs and agency administrative costs. Whether the benefits will exceed those costs is a question that will never be answered, because our measurement-obsessed government managers almost never measure such things.

We have half-baked policy analysis, general bone-headedness, and unimaginative implementation to thank for this.

By Vern Edwards on Tuesday, February 19, 2002 - 10:28 am:

Bob:

I'm not sure that I understand the thrust of your analysis of Sec. 803. I agree with John that the new law creates two systems with regard to orders in excess of $100,000--one for DOD and another for everybody else. It is clear to me that the new law does not apply to agencies outside of DOD.

To provide one illustration of the two systems: FAR 8.404(b)(2) lets contracting officers place orders against GSA schedule contracts by using GSA Advantage or by "reviewing" the price lists and catalogs of three schedule contractors. But Sec. 803(b)(2) requires DOD to provide a "fair notice" and solicit "offers." If we interpret that literally, it means that DOD contracting officers must do more than other contracting officers in order to place orders in excess of $100,000 against a GSA schedule. Unless I have misinterpreted the new law, this strikes me as a significant development in DOD contracting, especially considering the fact that a $100,001 order is not very big.

Also, I can't help but think that the requirement to solicit offers will, in and of itself, cause contracting officers to use more formal and complex solicitation and evaluation procedures.

By bob antonio on Tuesday, February 19, 2002 - 11:18 am:

Vern:

I was looking at how Section 803 applies to the agencies' Indefinite Delivery Indefinite Quantity task order contracts and not the Multiple Award Schedules (MAS). However, I think you are right about the MAS. It seems that this thing has its greatest impact on DoD's use of the MAS and not IDIQs. I wonder what the repercussions will be for GSA and its schedules.

Section 803 defines a multiple award contract as (1) a Multiple Award Schedule, (2) a MAC-IDIQ, and (3) any other IDIQ with multiple awards awarded by a "head of a Federal agency." The definition includes more items than it appears were intended by the rest of the section. The same situation exists for "defense agencies" since it is not used in the section. I suspect that the definitions were taken from another proposal and not the one that ended up as Section 803.

I too believe this thing is meant to apply only to DoD but I believe it is imprecise due to the definitions.

Also, on the DoD's IDIQ contracts there appears to be two thresholds now -- $2,500 from FASA and $100,000 from Section 803. I did not see Section 803 changing the FASA requirement (I did not check to make sure that $2,500 is in FASA by I seem to remember it). I don't think this threshold will do much for IDIQ contracts if I am reading it right.

If you look at the conference report, you will see that the House added an amendment during conference that appears to have been adopted (note the $50,000 and $100,000 figures). The amendment probably was not thought through.

Of course, I may be reading it incorrectly.

By bob antonio on Tuesday, February 19, 2002 - 11:56 am:

Vern:

I think I may be looking at this incorrectly.

If we assume that DoD contracting officers are doing the ordering under a multiple award contract as defined by section 803, then the definitions would fit. The definitions would cover any IDIQ- multiple award contract that DoD uses whether awarded by DoD or another agency.

There is one other thing. That is the following section from FASA's ordering procedures.

"Multiple Award Contracts. -

When multiple task or delivery order contracts are awarded under section 2304a(d)(1)(B) or 2304b(e) of this title, all contractors awarded such contracts shall be provided a fair opportunity to be considered, pursuant to procedures set forth in the contracts, for each task or delivery order in excess of $2,500 that is to be issued under any of the contracts unless"

The above is the Title 10 version of Task ordering from FASA. The one below from Title 41 is similar

"(b) Multiple award contracts

When multiple contracts are awarded under section 253h(d)(1)(B) or 253i(e) of this title, all contractors awarded such contracts shall be provided a fair opportunity to be considered, pursuant to procedures set forth in the contracts, for each task or delivery order in excess of $2,500 that is to be issued under any of the contracts unless"

Considering the provision from Title 41 that covers "pursuant to procedures set forth in the contracts" then, depending on the specificity of the instructions that a civilian agency places in the contracts, there may be a difference in some cases between a civilian agency's contract instructions and the new section 803 procedures.

I am just trying to consider all possible meanings of this thing.

By Vern Edwards on Tuesday, February 19, 2002 - 12:39 pm:

Bob:

I think Sec. 803 trumps "procedures set forth in the contract." Sec. 803(b)(2) requires "fair notice" and "a fair opportunity to make an offer." It applies to all orders in excess of $100,000 that are issued against multiple award IDIQ contracts--unless the contracting officer waives the requirement in accordance with Sec. 803(b)(1)--whether the contract was entered into before or after the effective date of the DFARS implementation. DOD contracting officers will have to provide notice and solicit offers whether the contract requires them to do so or not.

By bob antonio on Tuesday, February 19, 2002 - 02:04 pm:

Vern:

I did not see any statement in section 803 that said it replaces or amends a section of the current Title 10 code. Even at that, the DFARS could be changed to make sure that Defense IDIQ contracts contain procedures similar to those that are required by section 803. However without some type of change in the FAR (and any change may be annoying), the civilian version of FASA encoded under Title 41 will remain unaffected.

So I think that a DoD contracting officer using a civilian agency MAC-IDIQ subject to the Economy Act or a GWAC through the GWAC procedures, would have to make sure that the ordering procedures in the civilian agency contract are consistent with section 803 before using it. These are the types of questions that the two FAR Councils need to consider. They ultimately will need to figure this out. I'm just speculating.

You touched on another issue. Section 803 now introduces the word "competition" formally into the IDIQ realm. Before it was "fair opportunity" only. No one knew what that was but we all think we know what competition means. Now it seems that DoD may have the higher level term "competition" with "fair notice" and "fair opportunity" as subordinate and required terms.

These little things are what will drive people crazy.