By Eric Ottinger on Thursday, October 31, 2002 - 02:05 pm:

Linda,

I probably missed the issue that you have in mind. However, I don't agree that the "level of detail" should be proportional to the size of the procurement.
If anything, I would say that large dollar J&A's, which go to high levels for approval, should be more concise and to the point.

If there is a strong justification for a sole source, it shouldn't be difficult to justify the sole source with a few concise paragraphs.

All and all, this is a typical example of bureaucrat-think.

My advice is generally that if the customer cannot justify the sole source with a couple of concise paragraphs, the justification is probably shakey.

Eric

By formerfed on Thursday, October 31, 2002 - 03:00 pm:

Linda,

I see several things wrong. First of all, a requirement for sole source parts such a specific make and model, even if it is part of a competition, is restrictive and requires a J&A. Of course, I'm excluding brand name of equal type specs. Next, a J&A is not specifically required for purchases under FAR 13 unless the test authority for commercial items is being used. The fact that the source is a small business isn't relevant (second sentence of the answer). The situation might be different than the answer provided concerning 8(a)s (third sentence) depending upon the dollar value.

By Vern Edwards on Thursday, October 31, 2002 - 03:28 pm:

Linda:

The "professor" said: "Even if using FAR Part 13 procedures a J&A is required for sole source."

That's not quite true. A J&A is not required for a sole source acquisition conducted under FAR Part 13, except for sole source acquisitions conducted under FAR Subpart 13.5 that exceed $100,000.

A J&A is a specific kind of document, described in FAR § 6.303. FAR Part 6 does not apply to simplified acquisitions. See FAR §§ 6.001(a) and 13.501(a). FAR § 13.106-1(b) says that in a simplified acquisition a contracting officer may solicit from only one source when he or she deems it to be necessary. It does not require a J&A. FAR § 13.501(a)(2) requires a justification and approval for sole source acquisitions, but only for those in excess of $100,000.

By Eric Ottinger on Thursday, October 31, 2002 - 04:01 pm:

The question asked whether the entire award would be considered sole source or competitive if 100% of the requirement is awarded to a single contractor because one third of the requirement is sole source.

The professor said:

"If the solicitation is a combination of competitive and non-competitive items and the predominance of the items are competitive I would consider that it is a competed requirement."

I don't believe any part of the requirement is competitive unless it is actually competed.

Eric

By Linda Koone on Monday, November 04, 2002 - 08:13 am:

I stumbled on the Q/A because I was searching for an answer to a question related to CICA and whether CICA is dictated by simplified acquisition procedures or the simplified acquisition threshold. I was just surprised at some of the comments in the 'Professor's' , particularly the statement about J&A's being required when using FAR Part 6 procedures.

I never found an answer to my question. Maybe someone here can help.

If I issue an RFQ on a sole source basis and subsequently make an award against the sole source contractor's BOA, is this procurement subject to CICA? RFQs are SAP, BOAs are not.

The FAR exempts SAP from Part 6. The statute mentions both SAP and SAT.

Anyone know the definitive answer to this?

Thanks.

By cm on Monday, November 04, 2002 - 09:07 am:

It depends on dollar amount....if below 100k document the purchase order file...if over 100k but a commercial item you write a J&A format document but it is not considered a part 6 J&A ,rather a 13.5 action--which means approval levels may be different. (Thats commercial up to $5m)Above $5m revert to Part 6.

By Vern Edwards on Monday, November 04, 2002 - 09:32 am:

Linda:

The answer, for DOD, is in 10 U.S.C. § 2304(g). [Civilian agencies are covered by 41 U.S.C. 253(g).] 10 U.S.C. § 2304(a)(1) requires full and open competition, but with some exceptions, and cites paragraph (g) as one of them. Paragraph (g)((3) says that agencies only need to promote competition to the maximum extent practicable when using simplified procedures.

See: GMA Cover Corporation, B-288,018, Aug. 17, 2001; Bosco Contracting, Inc., B-270,366, March 4, 1996; and Gateway Cable Co., 65 Comp. Gen. 854 (1986). The GAO cites both CICA and FASA as statutory sources for the exemption of simplified acquisitions from the requirement to obtain full and open competition.

By formerfed on Monday, November 04, 2002 - 09:42 am:

Linda,

Is your question related to an order placed under a BOA, in essence, becomes a contract? Therefore an RFQ issued under SAP is exempt from FAR part 6, but the resulting BOA orders (contracts) aren't.

By Vern Edwards on Monday, November 04, 2002 - 09:56 am:

Linda:

Just to elaborate, CICA (10 U.S.C. § 2304 and 41 U.S.C. § 453), as amended by FASA, requires agencies to obtain full and open competition "through the use of competitive procedures." CICA describes only two competitive procedures: sealed bidding and "competitive proposals" [see 10 U.S.C. § 2304(a)(2)]. It mentions 10 U.S.C. §§ 2304(b), (c) and (g) as exceptions to that requirement. The first exception, subsection (b), is full and open competition after the exclusion of a source. The second, subsection (c), is other than other than full and open competition. The third, subsection (g), is acquisitions below the simplified acquisition thresholds of $100,000 and $5 million for commercial items.

The statutory requirement for a J&A is in 10 U.S.C. § 2304(f). It requires a J&A when an agency uses "other than competitive procedures," i.e., other than sealed bidding or competitive proposals to obtain full and open competition. Since the statute does not require agencies to use "competitive procedures" when making simplified acquistions, there is no need to prepare a J&A to justify using other than competitive acquisitions.

By cm on Monday, November 04, 2002 - 10:05 am:

To All
What meaning does 13.501 (a) have?

By Vern Edwards on Monday, November 04, 2002 - 10:11 am:

Linda:

A basic ordering agreement (BOA) is not a contract and the issuance of a BOA is not a "procurement" within the meaning of CICA. CICA does not apply to the establishment of BOAs; CICA applies to the issuance of orders against BOAs--see FAR § 16.703(d)(1)(i).. There is no such thing as issuing an RFQ for the establishment of a BOA on "a sole source basis," because the establishment of a BOA does not procure anything.

If you place an order against a BOA on a sole source basis, and if the order exceeds the simplified acquisition threshold, then you must comply with FAR § 6.303. If the order is at or below the simplified acquisition threshold, then FAR § 6.303 does not apply.

By Linda Koone on Monday, November 04, 2002 - 12:04 pm:

Vern:

To clarify my question, I am referring to the placement of an order against an existing BOA after sending out an RFQ for a requirement.

Does CICA exempt requirements below the simplified acquisition threshold (SAT), or does it exempt requirements that are below the SAT and are solicited/awarded using simplified acquisition procedures (SAP)?

I’ve read GMA Cover Corporation and Information Ventures, Inc (B-290785) and both decisions link the CICA exception to use of simplified acquisition procedures, not necessarily the threshold. The FAR links it directly to SAP.

Formerfed:

Yes. The issue is that the requirement was solicited using SAP, but awarded under a procedure not identified in Part 13 as a SAP.

By Vern Edwards on Monday, November 04, 2002 - 12:36 pm:

Linda:

FAR § 6.001(a) exempts procurements "awarded using simplified acquisition procedures" from the requirements of FAR Part 6; it does not exempt all procurements at or below the simplified acquisition threshold. FAR § 2.101 defines simplified acquisition procedures as "the methods described in Part 13 for making purchases of supplies or services."

You said that you began with an RFQ issued pursuant to FAR Part 13, but that you made the award on an order against a BOA. The question is: what procedure did you use to award the contract?

I say that an order against a BOA is an instrument of award, not an award procedure. I say that if you followed the procedures in FAR Subpart 13.1 to solicit and evaluate quotes and choose the contractor, then you used a simplified acquisition procedure, even if the instrument of award was an order against a BOA instead of a purchase order.

The language in FAR Part 13 is very confusing. Subpart 13.1 is entitled, Procedures, but it does not discuss award instruments, such as purchase orders. Subpart 13.2 is entitled, Simplified Acquisition Methods, and that is where the FAR discusses purchase cards, purchase orders, calls against BPAs, imprest funds and third party drafts, and SF44. I say that those are award instruments or devices, not award procedures.

So, I say that if you used the procedures in FAR Subpart 13.1 for soliciting and evaluating quotes or offers and choosing the contractor, then FAR Part 6 does not apply.

However, what clauses are in your BOA? Are they clauses appropriate to acquisitions at or below the SAP, or do they apply to procurements of larger value? I don't think the answer affects the answer to your question, but it raises interesting questions of its own.

By Linda Koone on Monday, November 04, 2002 - 01:17 pm:

Vern:

The BOA recognizes that orders may be issued at various dollar values and includes clauses covering procurements below and above the SAT. Caveats are included to indicate which clauses apply at various dollar thresholds.

I hadn't looked closely at the definition of SAP, combined with the titles for Subpart 13.1 and 13.2. That really confuses things. Can I just mention again how well written the regulations are?

Thanks for your input.

By Vern Edwards on Monday, November 04, 2002 - 01:39 pm:

Linda:

Your welcome to my input, but did it answer your question to your satisfaction?

Yes, FAR Part 13 is very badly written and it confuses many people. There is no excuse for it, really.

Vern

By Linda Koone on Monday, November 04, 2002 - 02:04 pm:

Vern:

Yes, in that you provided an objective opinion on the issue. I'm not sure there is one answer due to the lack of clarity in the regulations. But sometimes one can be too close to an issue to see it objectively. Just wanted to make sure that I, or should I say we, weren't overlooking anything.

Thanks again.

By Anonymous on Monday, November 04, 2002 - 06:12 pm:

No wonder it's mumbo-jumbo. Part13 has been piecemealed with all the evolution, revolution, devolution, deviation, etc.!!!

By Linda Koone on Tuesday, November 05, 2002 - 08:16 am:

cm:

Is your question about 13.501(a) rhetorical?

By Steve Aronson on Monday, November 25, 2002 - 05:02 pm:

Linda,

I'm not sure I agree with Vern although I understand the hairs he split to arrive at his answer. My initial gut reaction was that BOAs are outside FAR Part 13, therefore they are not exempt from the CICA requirements of FAR Part 6. On further reflection I think my answer is still that you need a J&A but for deeper reasons.

The exception to FAR Part 6 J&A requirements when using Simplified Acquisition Procedures reflects the fact that Full and Open competition need not be sought for smaller dollar acquisitions and expedited procedures may be used; DOD extended this to $5,000,000 for commercial items.

You didn't state whether the requirement was over or under $100K but if over $100K and using FAR 13.5 you have by definition classed the acquistion as a commercial acquisition. Therefore you must operate under FAR Part 12 in conjunction with FAR Part 13 (and, using Vern's logic, FAR Part 16 for the instrument). In any case, FAR part 12 implements policy by explicitly limiting the terms and conditions that may be incorported in contracts for commercial items absent specific waivers. Unless the BOA includes terms and conditions which are self-deleting for commercial item orders, the BOA shouldn't be used for commercial items. If the items are not commercial items SAP procedures aren't being used over $100,000.

I think the key misnomer, however, is the assumption that because you are using an RFQ, you are following SAP procedures. SAP procedures are a combination of procedures that involve expedited processes combined with a level of competition below "Full & Open". An RFQ is a request for a "quotation" rather than a request for a proposal which, if accepted, forms a binding contract. In the case of a non-competitive BOA order, terms and conditions of the ordering process, as well as terms and conditions of the resulting contract should an order be issued, form the BOA. I suspect the BOA has a provision that allows for unilateral orders to be issued which become binding if not rejected within a reasonable time (usually 30 days). In that case, all you need to establish the contract is agreement on price and delivery for items covered under the BOA. Therefore, you are using an "RFQ" to obtain that information because an RFP is not necessary, but you are not using SAP. FAR part 6 applies and a J&A is required before entering negotiations.

By Vern Edwards on Tuesday, November 26, 2002 - 09:12 am:

Steve:

I agree that if you are not using SAP, then you must comply with CICA (FAR Part 6), unless otherwise exempt. I also agree that the use of an RFQ is not, in and of itself, a simplified acquisition procedure.

However, I have one comment about something that you said, which was: "I suspect the BOA has a provision that allows for unilateral orders to be issued which become binding if not rejected within a reasonable time (usually 30 days)."

In my opinion, in order to be binding any such provision must be supported by consideration, and if supported by such consideration then what you have is a contract of some kind, not a BOA.

Also, I think that the law frowns on attempts to construe acceptance of an offer (i.e., acceptance of an order against a BOA) based on the silence of the offeree. I'm not sure that a provision which makes an order binding based on the silence of the supplier is enforceable. Do you know of any cases in which a board or a court has enforced such a provision?

By Steve Aronson on Tuesday, November 26, 2002 - 10:56 am:

Vern,

I do not know of any instances where such a provision has been at issue, much less ruled on by GAO or a court. Probably because the provision had been agreed to up front by the contractor when signing the BOA, later challenges have been rare. After all, the contractor had signed the BOA in order to facilitate receiving future business; refusing an order would then be rejecting such business.

I cited the likelihood of such a provision based on familiarity with NAVICP BOAs. As far as consideration, it would be comparable to SAP in that unilateral purchase orders are issued based on RFQs with a binding contract being formed based on performance.

My main poiint for Linda is there was no anticipation of competition in her proposed actions. She wasn't using SAP procedures. The RFQ was used to obtain the information necessary to issue a BOA order. Contract formation was based on issuing a non-competitive BOA order. I don't see how this takes you out of FAR Part 6 CICA requirements.

By Vern Edwards on Tuesday, November 26, 2002 - 11:50 am:

Steve:

I agree with you on your main point for Linda.

With respect to the notion of BOA orders becoming binding if not rejected by the supplier within 30 days, I don't know what to think. As a practical matter, I think you're right -- the supplier would want the order and wouldn't want to contest it. On the other hand, how could the order be binding without agreement on price and without consideration?

But these are side issues. We agree on your answer to Linda.

By Linda Koone on Wednesday, November 27, 2002 - 07:46 am:

Steve:

In looking at my previous posts, I realize that I didn't make it clear that I was specifically asking the question with respect to procurements that are less than $100K.

By Steve Aronson on Wednesday, November 27, 2002 - 09:26 am:

Linda,

Same answer applies over $25K. The fact that you are using an RFQ to obtain the information necessary to issue a non-competitive BOA order doesn't make it SAP. You need a J&A.

By Steve Aronson on Wednesday, November 27, 2002 - 10:18 am:

Vern/Linda,

Further on the side issue of when a BOA order becomes a binding contract. FAR 16.703(c)(1)(iv) - see below - explicitly contemplates non-rejection of an order as a basis for establishing a binding contract, provided such process is delineated in the BOA to which both parties have previously agreed. Since the BOA itself is an Agreement, not a contract, consideration is not an issue of the BOA itself. It is merely a prior agreement as to how the parties will conduct business within the scope of the BOA should they in fact conduct such business in the future.

The consideration at the order level is the promise of payment for supplies provided/services performed with advance agreement on how prices will be determined, how delivery will be established, how orders will be issued, and other terms and conditions. That's how I read it.

(c) Limitations. A basic ordering agreement shall not state or imply any agreement by the Government to place future contracts or orders with the contractor or be used in any manner to restrict competition.

(1) Each basic ordering agreement shall --

(i) Describe the method for determining prices to be paid to the contractor for the supplies or services;

(ii) Include delivery terms and conditions or specify how they will be determined;

(iii) List one or more Government activities authorized to issue orders under the agreement;

(iv) Specify the point at which each order becomes a binding contract (e.g., issuance of the order, acceptance of the order in a specified manner, or failure to reject the order within a specified number of days);

By Linda Koone on Wednesday, November 27, 2002 - 11:15 am:

Steve:

I'm not sure what you are saying and what the distinction of $25K is.

Please clarify your position in this situation:

I have a sole source (or limited competitive) requirement estimated at $50K and I solicit via RFQ (after documenting the need to restrict competition). The company responds to the RFQ with price/delivery... The company has a BOA with our activity.

Are you saying that I need a J&A regardless if I make the award against the BOA or if I award a purchase order? Or are you saying that if I choose to use the BOA as the award vehicle, that is the only instance in which I would need a J&A? And if so, why?

By Vern Edwards on Wednesday, November 27, 2002 - 12:21 pm:

Steve:

Yes, FAR says what you say it says. But so what?

Just for the sake of discussion, suppose that an agency has a BOA with Ajax Company, which says that an order will become binding if not rejected in writing within X days of receipt by the contractor. Suppose further that the agency issued a hand-delivered order against the BOA calling for delivery of supplies not later than 15 days after receipt of the order--all in accordance with the BOA terms. Now suppose that on X+16 days the contracting officer calls the contractor to check its progress and the contractor says: (1) that it doesn't want the order because it considers the BOA pricing scheme to be out of date, (2) that it didn't ship, and (3) that it isn't going to ship.

The contracting officer responds that the contractor must comply with the order because it didn't reject the order within the deadline. The contractor responds by saying that a BOA is not a contract, citing FAR § 16.703(a)(3), and that its silence cannot be construed as acceptance an order. The contractor acknowledges the terms of the BOA, but says that those terms are not binding and that it is going to ignore them unless it accepts an order.

The contracting officer decides to terminate the order for default and seek the excess costs of reprocurement and other damages from the contractor.

What binds the parties in this instance? If the BOA is not a contract, then how can the contracting officer enforce a term of the BOA, to wit, that failure to reject constitutes acceptance? I understand that there is consideration to bind the parties once an order has been accepted--the exchange or promises--but what consideration binds the parties to the term of the BOA itself?

By the way, I don't know how a court or board would decide this, although I have some ideas. I could only find two board cases in which the phrase "failure to reject the order" appears, but they do not address this issue. I discussed this question with Prof. Ralph Nash yesterday, who agreed that as a general rule silence cannot be construed as acceptance, but he couldn't recall any case in which this kind of thing had come up. I did a very little reading and found that silence can operate as an acceptance in special circumstances, and it may be that the term of a BOA is a special circumstance, I don't know.

I also understand that my example may not be very realistic; contractors like BOAs because they are a source of business and they aren't likely to reject many orders. I am using the example for discussion purposes only.

I'm only pursuing this with you because I think it's an interesting question and because you've shown interest in pursuing the matter further. I don't want to be accused of making a pointless argument. Okay? So if you want to drop it, just say so.

By Steve Aronson on Wednesday, November 27, 2002 - 03:27 pm:

Linda,

If you issue a BOA order you need a J&A. If you issue a non-competitive purchase order you need a "sole source justification" to FAR Part 13 standards but not a J&A IAW FAR 6.3

Vern

Not sure where to take it from here. I cannot fault your logic. My point was that (perhaps naively) since the FAR explicitly contemplates the scenario as a potentially inherent part of a BOA relationship, the issue must have been explored and decided in favor of the arrangement on some basis. As I said, perhaps naively.

Again, I am not surprised at a lack of case law. Price/delivery tend to be agreed upon via RFQ and back-and-forth "discussions" before the confirming order is issued. Orders are unilateral for convenience IAW prior agreement and don't become an issue because there is no reason for the contractor to "reject by silence" when he has already agreed to accept by silence and can reject by notification.

If a KO ever suspects it may become an issue, h/she can always issue a bilateral order requiring written acceptance.

By Linda Koone on Sunday, December 01, 2002 - 03:16 pm:

Steve:

Can you explain your rationale or the distinction?Why does the selection of the BOA as the award vehicle require a J&A if it's not required for a purchase order?

Thanks