Pricing at the Task Order Level

Weno2 said:

Is this the first acquisition considering this "innovative" method?

No.

Department of Commerce established a multiple award GWACS termed COMMITS NexGen in 2005.  The contracts contained no prices with pricing determined at the task order level.   No special waiver was needed.

When I worked for the Department of Treasury over 15 years ago, we had a MATOC where no pricing was established at the base contract level. Instead the various vendors were awarded contracts with a percentage of mark-up for each category of services they provided.

D.

On 11/28/2022 at 10:54 AM, Weno2 said:

The latest Alliant 3 (currently in draft RFP form) is not setting prices at the base K level - only at the task order (TO) level.  

Is this the first acquisition considering this "innovative" method?  I believe it's been discussed here before.

Is this something other contracting offices should consider implementing, or did GSA get a special waiver for trying this "innovative" method?

Prices aren’t required to be set at the base contract level for Multiple Award contracts under FAR 16.5.

See, for instance (since at least 1 July 2006 version of FAR):

“16.505 Ordering. 

…(b) Orders under multiple-award contracts—

…(3) Pricing orders. If the contract did not establish the price for the supply or service, the contracting officer must establish prices for each order using the policies and methods in subpart 15.4.”

I don’t remember when, but there was legislation years ago (after the 1998 FAR version)  to delete a requirement to establish prices in multiple award ID/IQ base contracts if price competition will be used to establish prices for orders.

I no longer have copies of the FAR or DFARS between July 1998 and July 2006.

Serious question: Assuming that adequate competition is obtained, the contractor T.O. proposals would not be subject to TINA, correct?

Second question: Who pays for the proposal prep costs?

here_2_help said:

Assuming that adequate competition is obtained, the contractor T.O. proposals would not be subject to TINA, correct?

If there is adequate price competition for a task order, then the order will be exempt from the requirement to submit certified cost or pricing data.

here_2_help said:

Who pays for the proposal prep costs?

That will depend on the terms of the task order contract.

here_2_help said:

Second question: Who pays for the proposal prep costs?

Assuming that contract holders aren’t required by the contract to submit a task order proposal (fair OPPORTUNITY to submit a proposal), I believe that the rules recently discussed in another thread would dictate that the costs to compete would not be directly payable and that the contractors are responsible for their costs (unless the contract terms specifically state otherwise).

I think this methodology was a reaction to the widespread realization that the "GSA direct labor rates determined to be fair and reasonable at award of the MATOC" were anything but.  DoD sank the ship by explicitly stating they weren't, and therefore DoD COs were not allowed to consider them as such. The rest is history.

REA'n Maker said:

I think this methodology was a reaction to the widespread realization that the "GSA direct labor rates determined to be fair and reasonable at award of the MATOC" were anything but.  DoD sank the ship by explicitly stating they weren't, and therefore DoD COs were not allowed to consider them as such. The rest is history.

Perhaps - but it could also have been established to allow pricing at the task order level , partially due to the fact that there are many construction ID/IQ’s.

It is highly impractical, if not impossible to set fixed prices at the contract level for construction task orders, due to material cost fluctuations , project specific material fluctuations and site conditions, subcontractor market conditions, local market conditions,  size and length of job considerations, etc., etc., etc.

By the way- I agree with DoD’s assessment.

REA'n Maker said:

I think this methodology was a reaction to the widespread realization that the "GSA direct labor rates determined to be fair and reasonable at award of the MATOC" were anything but.  DoD sank the ship by explicitly stating they weren't, and therefore DoD COs were not allowed to consider them as such. The rest is history.

Not defending GSA but this reaction by DoD was just dumb.  GSA contracts are based upon offerers providing prices for performance ranging from very small dollar value (maybe $2500) to very large.  GSA always said ordering agencies are free, and should, negotiate based upon specific circumstances.  That’s because pricing in Schedule contracts is “one size fits all” and agencies need to seek lower prices when appropriate.  But some COs just accepted Schedule prices for large value orders without seeking price reductions.

So instead of DoD insisting COs do that, they said don’t use GSA and avoid the 0.75% user fee.  That meant COs did open market contracts whoever the SAT was exceeded and spent months instead of weeks doing a procurement.

formerfed said:

But some COs just accepted Schedule prices for large value orders without seeking price reductions

And that is a problem. Just based upon following this Forum since it started, I think “some” means “many”.

joel hoffman said:

And that is a problem. Just based upon following this Forum since it started, I think “some” means “many”.

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