Scenario: Multiple Award Task Order contracts for construction. 2 large businesses and 1 HUBZone/SDB are recipients of the contracts.

Issue: According to FAR 19.11 certain SDB firms get 10% price adjustment (assume applicable for this scenario) and according to FAR 19.13 HUBZone firms also receive 10% price adjustment. Being as there are 2 large business and one SDB/HUBZone, the large business proposals get 20% added to their prosals for work on these IDIQ's.

Problem: If this scenario is true its likely all the task orders will be awarded to the SDB/HUBZone firm and the program will receive serious impact because of adding 20% to the large business proposals, therefore paying more than they "really should".

The Question: Can you write a MATOC contract in which the price preference reflected in FAR 19 is not applicable? At first I thought the wording in FAR 19.1307(a)(3) would do it but now I think that is wrong. I think the reference to "all reasonable offers are accepted" is that you will be awarding more than one contract (I am inferring contract to be the same as task order).

Anybody have any guidance or other references to this that I can research?

Thanks

Anonymous  Posted on Thursday, December 04, 2003 - 03:40 pm:   

Frustrated--Are you sure that the two adjustments are cumulative? Wow! I didn't know that!

Frustrated  Posted on Thursday, December 04, 2003 - 03:44 pm:   

Anonymous;

Yes, see FAR 19.1307(d). Whats more significant here is when you apply that to a $20 million project. It's no wonder we are seeing a significant decrease in Large Businesses for our projects.

Anonymous  Posted on Thursday, December 04, 2003 - 04:05 pm:   

Are you getting satisfactory performance from your SDB/HUBZone? If yes, then seeing a significant decrease in awards to large businesses is a good thing. It's what Congress wants. Socio-economic progress and all that.

If a SDB/Hubzone bids $20M for a project, the 20% means that the HUBZone will win if the low large business bid is $16.7M. Does that make the $20M unreasonable? Not necessarily. In fact, perhaps we can say that since Congress set the 20%, they've determined that 20% above otherwise competitive prices from large businesses isn't unreasonable if we get SDBs and HUBZones to play. We all know that most JWOD items are more expensive than what we can get downtown, but their price is reasonable by decree of Congress! Yes, it hurts from a PM standpoint trying to get the most bang for the requiring activity for your buck, but in addition to meeting the requiring activity's need Congress also wants to help others. It's a cost of doing business.

Roy  Posted on Thursday, December 04, 2003 - 04:31 pm:

One of the key criteria in applying the price adjustment factors is that there must be full and open competition. I don't believe that competition between the three task order contractors is full and open competition, therefore using the price adjustment factors would not be appropriate. Also, applying these factors to the one HUBZone awardee to each task order would not provide a "fair opportunity" for the other two awardees. (See FAR FAR 16.505(b))

Frustrated  Posted on Thursday, December 04, 2003 - 04:32 pm:

Anonymous;

What I'm concerned with is the usefulness and purpose of the MATOC type contract. The SDB/HUBZone program is limiting competition.

Vern Edwards  Posted on Thursday, December 04, 2003 - 04:50 pm:

I assume that you are asking about the process in which you give MATOC contractors a fair opportunity to be considered for a task order in accordance with FAR § 16.505(b)(1). If so, why are you applying the HUBZone price evaluation preference? The HUBZone price evaluation preference does not apply to that process.

See FAR § 19.1307(a), which says that the price evaluation preference shall be used in "acquisitions conducted using full and open competition." The process in which MATOC contractors are given a fair opportunity to be considered for a task order is not an acquisition conducted using full and open competition.

Are there contrary instructions about this of which I am unaware?

anon  Posted on Thursday, December 04, 2003 - 05:00 pm:

Are you sure that the price evaluation preference applies to task orders? 19.1307 says that the preference "is used in acquisitions using full and open competition."