$0 Offer

Talk to your lawyer about the potential liability. Maybe he/she will say that an indemnity clause will suffice.

Definitely discuss this with your legal office. I don't think that the Government, as the source of polluted soil, can escape liability for contaminated soils under the Resource Conservation and Recovery Act (RCRA) but the environmental law experts in DoD should be able to tell you. Simply transferring polluted soil to another site - which then becomes polluted - may be worse than leaving it alone. If your lawyers don't know, make sure that they ask someone who does. 20 years ago or so, a high level civil service employee from Aberdeen Proving Grounds or Edgewood Arsenal told an audience at a conference how he and some others were criminally procescuted and convicted as felons under RCRA or other environmental laws - they spent time in prison. They were held responsible for not cleaning up leaking storage containers of hazardous waste or leaking process lines. I don't remember the details but they claimed that they didnt even know about the pollutants.

I'm not sure that you can simply waste contaminated soil on a military installation, either. If you move it, you might have to clean it up or haul it to a licensed hazardous waste disposal site. Serious stuff.

It may not be worth it, but the contract could require the contractor to remediate the soil removed and provide certification the soil was free from hazmat.

It is curious that a contractor would want potentially contaminated soil.

Suggestion:

permit the Ktr to excavate a location on base with clean soil;

let them place to potentially contaminated spoil in that hole and remove a corresponding amount off base.

Maybe pay them to place a liner in the empty hole, prior to backfill, just in case.

This looks like a good deal for everyone.

When discussing with legal counsel I would visit fiscal law with them as well. In my experience it might take special authority to exchange government owned property for services. Lots of issues such as the appraised value of the soil, etc. etc.

Suggestion:

permit the Ktr to excavate a location on base with clean soil;

let them place to potentially contaminated spoil in that hole and remove a corresponding amount off base.

Maybe pay them to place a liner in the empty hole, prior to backfill, just in case.

This looks like a good deal for everyone.

That won't work as described.

1. Did the government test this material for contamination?

2. Did you inform industry of the actual or potential contamination of the soils?

3. I'm highly certain from previous experience on excavations of contaminated soils that you can't simply excavate and dump contaminated soils elaswhere around the base. Brian's idea isnt legal - but confirm that with competent counsel.

4. I'm highly certain that you can't simply let a contractor or any party cart off contaminated soils from the base to be deposited somewhere else unless they are going to be taken to a licensed hardardous waste landfill or to a soil treatment facility. Don't think for a moment that simply getting somebody to indemnify the government or the persons responsible for providing contaminated soil will save the government from potenmtial liability.

5. The Government will not defend employees accused of violating criminal statutes - that I learned from the guys at Aberdeen/Edgewood, as described above. They had to hire their own attornies, even though they were acting in their official capacities.

6. Don't fool around - get competent (environmental) legal counsel on this!

Geez. Okay, so at least three of us have told TippHill to consult an attorney.

TippHill, in case you haven't got the message yet, here's the message: Don't accept the offer until you consult an attorney.

I'm curious as to what the agency is going to do with the soil from the trench if it pays a contractor to dig the trench. It seems like many of the same environmental issues would be present either way.

Contaminated soil is a common problem and it need not be a big deal if the parties anticipate encountering it. It can be treated and used as project fill or used or disposed of elsewhere.

what a blessing to have someone like Joel here to correct me.

I make lots of mistakes; far more tragic when one of my mistakes gets someone else in trouble.

thanks, brother.

Contaminated soil is a common problem and it need not be a big deal if the parties anticipate encountering it. It can be treated and used as project fill or used or disposed of elsewhere.

Vern, I generally agree with those statements. If the government is aware of or suspects contamination, it should inform proposers.

If the soil is contaminated, the contract should require treatment before being used or taken somewhere else; or it should require removal to a licensed landfill or be properly stored.

It may well become a big deal if it is simply removed and used elsewhere or simply disposed of. For instance, one cant just dump it in a hole on base.

The base needs to comply with statutes applicable to hazardous waste.

Joel:

I think that most military and civilian civil engineers know about the environmental laws and regulations and know how to properly handle excavated materials. I think that what we had here was a contracting person who wanted to know if it is okay to accept an offer seeking an exchange of something other than dollars in return for doing work. This horse is dead and is starting to rot, but you keep whacking it if you like.

Joel:

I think that most military and civilian civil engineers know about the environmental laws and regulations and know how to properly handle excavated materials.

That may be true but Tipphill stated "we are unsure of the condition of the soil and don't want to be liable for the unauthorized movement of any hazardous materials" and further stated "...the $0 priced offer is very attractive to the customer" and "Any advice would be appreciated."

It appears to me that "the customer" may not totally be aware of their responsibilities or the potential criminal and civil liabilities under the environmental laws and regulations. Otherwise, they would have tested the material and/or have described how to handle it and where to put it in their solicitation. And they might not have been so eager to simply allow the contractor to haul off the material That is the impression I was left with. Hopefully, Tiphill will heed the advice provided here.

I am aware of a local instance here in the Mobile area about 10-15 years ago where a trucking company dumped contaminated soil on a lot that was later used to construct a Motel. Once the contaminated was discovetred, the EPA went back to both the hauler and the original owners of the soil for damages and remediation. One cannot escape liability simply by getting the hauler to indemnify them of any liability.

Yeah. Whatever. I'm sure TippHIll is grateful for your guidance.

Our base has solicited offers to construct a trench around the flight line and runways in order to alleviate recurring flooding. One offeror submitted an offer of $0 with the conditoin that it be allowed to retain the removed soil. Since the trench will be dug in the vacinity of aircraft fuel and oil storage tanks we are unsure of the condition of the soil and don't want to be liable for the unauthorized movement of any hazardous materials. However, the $0 priced offer is very attractive to the customer. Any advice would be appreciated.

TippHill,

My only comment is that I don't think the contract you are contemplating would be an "acquisition" as defined in FAR 2.101, because you would not be using appropriated funds. This doesn't mean it can't be done--just that the FAR wouldn't apply to such a contract. Also, the contracting officer may not have the authority to enter into a contract not covered by the FAR.

Such arrangements are called "barter" contracts.

In Marketing & Management Information, Inc. v. U.S., 57 Fed. Cl. 665 (2003), the Court of Federal Claims held that a barter arrangement is not an acquisition as defined by FAR and that FAR does not apply to such an arrangement.

On the other hand, the GAO has held that the Federal Grant and Cooperative Agreements Act requires that agencies use a "procurement contract" for barter arrangements when certain conditions are met. See GAO B-406738, 2012 CPD para. 236.

"My only comment is that I don't think the contract you are contemplating would be an "acquisition" as defined in FAR 2.101, because you would not be using appropriated funds. This doesn't mean it can't be done--just that the FAR wouldn't apply to such a contract. Also, the contracting officer may not have the authority to enter into a contract not covered by the FAR."

Don, See B- 400058, B- 400058.3, 2009 CPD P 154, Matter of: Public Communications Services, Inc.

As a threshold matter, ICE contends that our Office lacks jurisdiction to hear this protest because the RFP anticipated award of concession-type contract. As discussed in detail below, we conclude that our Office has jurisdiction because this protest concerns the award of a contract for the procurement of services by a federal agency for the benefit of the government.

Under the Competition in Contracting Act of 1984 (CICA) and our Office's Bid Protest Regulations, we review protests concerning alleged violations of procurement statutes or regulations by federal agencies in the award or proposed award of contracts for procurement of goods and services, and solicitations leading to such awards.

31 U.S.C. §§ 3551

,

3552 (2000)

; Bid Protest Regulations,

4 C.F.R. § 21.1(a)

(2008). The parties do not dispute that this protest concerns a solicitation issued by ICE, a federal agency. Instead, ICE argues that the services being procured are for the benefit of detainees, not the government.

Our Office lacks jurisdiction to consider a protest challenging the award of a “pure” concession contract, that is, a no-cost contract that merely authorizes a concessionaire to provide goods or services to the public, as opposed to the government.

See

Great South Bay Marina, Inc.

, B-296335

, July 13, 2005,

2005 CPD ¶ 135 at 2

. We have long recognized, however, that some concession contracts are hybrids that require the delivery of goods and/or services to the government.

Id.

;

see

also

,

Shields & Dean Concessions, Inc.

, B-292901.2, B-292901.3,

Feb. 23, 2004,

2004 CPD ¶ 42,

recon.

denied

,

B-292901.4

, Mar. 19, 2004, 2004 CPD ¶ 71 (concessionaire required to provide maintenance, repair and other services for government facility as well as facility improvement valued at over $800,000);

Starfleet Marine Transp., Inc.

, B-290181

, July 5, 2002,

2002 CPD ¶ 113

(concessionaire for ferryboat services required to provide janitorial services for agency's docks and piers, equip ferries with public address systems for use by park rangers, and provide transportation for rangers). It has consistently been our Office's view that a mixed transaction that includes the delivery of goods or services of more than

de

minimis

value to the government is a contract for the procurement of property or services within the meaning of CICA.

Great South Bay

,

supra

;

Starfleet Marine

,

supra

, at 6.

*6 In determining whether the government will receive the requisite value from the goods or services provided in connection with a concession, our Office examines whether the transaction in question reduces the agency's workload, or whether the effort is somehow rendered, either directly or indirectly, in support of the agency's mission requirements.

Meyers Cos., Inc.

, B-275963

et al.

, Apr. 23, 1997,

97-1 CPD ¶ 148 at 4

. For example, we have found that a benefit was conferred to the government through a concession for haircuts for new Air Force recruits, because “the concession agreement is a contract for services under which the [agency] will satisfy its need to obtain initial haircuts for its recruits--which the agency insists is an important aspect of the training experience.”

Gino Morena Enters.

, Feb. 5, 1987, B-224235, 87-1 CPD ¶ 121 at 4

. Similarly, we have found that a benefit was conferred on the government through a concession for photocopy services at a U.S. District Court because the use of a concession-type contract aided the court's mission by reducing its workload and also providing a benefit to the public of more effective access to court records.

West Coast Copy, Inc.; Pacific Photocopy and Research Servs.

, B-254044, B-254044.2

, Nov. 16, 1993,

93-2 CPD ¶ 283 at 5-6;

see

also

,

New York Tel. Co.; New England Tel. & Tel. Co.; Bell Atlantic Network Servs., Inc.

, B-236023, B-236097

, Nov. 7, 1989,

89-2 CPD ¶ 435 at 2-3

(concession to provide pay phone services to employees and visitors at a General Services Administration facility was subject to GAO protest jurisdiction where the services were intended to satisfy agency mission needs).

wvanpup,

I didn't say that CICA wouldn't apply to the placement of the contract or that the GAO would not have jurisdiction to hear a protest relating to the contract. I just said that the FAR would not apply to the contract described by TippHill because it would not meet the definition of "acquisition" at FAR 2.101:

“Acquisition” means the acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. Acquisition begins at the point when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract.

[bold added].

Per FAR 1.104, the FAR applies to "acquisitions" as defined at FAR 2.101, except where expressly excluded.

wvanpup,

I didn't say that CICA wouldn't apply to the placement of the contract or that the GAO would not have jurisdiction to hear a protest relating to the contract. I just said that the FAR would not apply to the contract described by TippHill because it would not meet the definition of "acquisition" at FAR 2.101:

[bold added].

Per FAR 1.104, the FAR applies to "acquisitions" as defined at FAR 2.101, except where expressly excluded.

Don, for application of the FAR to DoD activities, don't hang your hat solely on the definition at FAR 1.104. See, for instance, DFARS 201.104 Applicability.

"The FAR and the Defense Federal Acquisition Regulation Supplement (DFARS) also apply to purchases and contracts by DoD contracting activities made in support of foreign military sales or North Atlantic Treaty Organization cooperative projects without regard to the nature or sources of funds obligated, unless otherwise specified in this regulation."

See SUBPART 225.73--ACQUISITIONS FOR FOREIGN MILITARY SALES and PGI 225.73 for implementation.

So - is it possible, since "It has consistently been [GAO's] view that a mixed transaction that includes the delivery of goods or services of more than de minimis value to the government is a contract for the procurement of property or services within the meaning of CICA", that such procurements are subject to the FAR?.

So - is it possible, since "It has consistently been [GAO's] view that a mixed transaction that includes the delivery of goods or services of more than de minimis value to the government is a contract for the procurement of property or services within the meaning of CICA", that such procurements are subject to the FAR?.

I don't read DFARS 201.104 as expanding coverage of the FAR/DFARS to contracts that do not involve the obligation of funds. I read it as expanding coverage of the FAR/DFARS to contracts using funds used for FMS or NATO cooperative projects that were not appropriated by Congress.

If the "such procurements" that you are referring to do not involve the obligation of appropriated funds, or funds used to support FMS or NATO cooperative projects, then those procurements would not be subject to the FAR/DFARS.

An acquisition can be covered by CICA and still not covered by the FAR.

The GAO has a frequently-asked questions document on no-cost contracts at http://www.gao.gov/special.pubs/appforum2008/nocostcontracts.pdf.

Don's only point was that the FAR, by its own terms, applies only to acquisitions, and that FAR 2.101 defines acquisitions as acquiring supplies or services (including contraction) with appropriated funds. Thus, a barter, no-cost contract is not an acquisition and FAR does not apply. As I pointed out above, the COFC has held that FAR does not apply to barter contracts. wvanpup confused the issues. Applicability of FAR to procurements has nothing to do with CICA or with GAO protest jurisdiction.

FAR 1.104 notwithstanding, agency heads can apply FAR to any procurement if they so desire, and agencies have applied FAR to barter contracts. See Reynolds Metals Co., GAO B-245718. 92-1 CPD para. 123, in which the GAO denied a protest against cancellation of an Invitation for Bids by the Defense Logistics Agency. The IFB had sought to award a barter contract using FAR Part 14. The agency rejected all bids that it received as unreasonable. Here's how GAO described the procurement:

Basically, the IFB contemplated a barter-type exchange where the government would furnish to the contractor definite quantities of ore to process into contractor-designated quantities of ingots. As compensation for the contractor's firm, fixed costs of processing (e.g., its costs for transporting and handling the ore from the various government sites to its refinery, its costs for borrowing money to finance its operations under this procurement, and its other related processing costs) and in exchange for the contractor's delivered quantity of ingots, the government would furnish the contractor with a predetermined quantity of ore for use in its own operations.

I don't read DFARS 201.104 as expanding coverage of the FAR/DFARS to contracts that do not involve the obligation of funds. I read it as expanding coverage of the FAR/DFARS to contracts using funds used for FMS or NATO cooperative projects that were not appropriated by Congress.

Don, I agree with you. My initial point was not to totally rely on the definition at 2.101 because there is at least one exception (at DFARS 201.104). For instance, I worked on a Defense program that was totally funded by the Saudi Government. The Saudis also funded all direct costs for the Corps of Engineers and its employees to manage the program.

If the "such procurements" that you are referring to do not involve the obligation of appropriated funds, or funds used to support FMS or NATO cooperative projects, then those procurements would not be subject to the FAR/DFARS.

I think that Don has introduced a twist into some type of procurement that is already underway in this case, which did not contemplate a barter arrangement. Only ONE of the firms proposed a barter arrangement with its offer. Does that now make the acquisition exempt from the FAR after proposals/offers/quotes were received?. I don't think so, here.

The firms responded to an RFP of some sort to perform a service (or construction?) to construct a trench around the flight line and runways in order to alleviate recurring flooding.

Some type of selection or award process is apparently underway. If the scenario is applicable under the procurement method being used , I believe that it would behoove the government to conduct discussions and introduce additional requirements if there is a good chance that the soil to be excavated is contaminated. The solicitation may also have to be amended to allow the excavated material to be removed from the base with certain conditions appluied to comply with RCRA or other applicable laws..

If this is other than an RFP, the current acquisition might have to be cancelled and fixed. We don't know what method is being used.

I personally believe that some action is required anyway - perhaps at least for soils in certain areas that may be associated with runoff from aviation fuel or lubricants. If some of the soil is contaminated (say around the aircraft parking apron areas), the government is not allowed to simply spread the contaminated soil or simply remove it to an unregulated area or simply allow it to be taken off-base for use on some other project without complying with RCRA.

We also don't know the impact on the $0 offer, if the government notifies the industry of the potential for contamination and/or allows it to be removed and/or requires additional measures to comply with RCRA.

Finally, debriefings might be required, depending upon the type of acquisition method being used.

I'm just guessing, but the firm offering a $0 cost to construct the ditches, probably just wants to use the excavated material on another project somewhere on or off the base. I'm guessing that it has little or no idea that at least some of the soils may be or are contaminated with fuels, lubricant or other regulated hazardous wastes or what the possible consequences of using such soils are.

The whole scenario looks a little strange to me. Unfortunately, having been a DoD civil engineer with previous Air Force base CE experience, experience as a consulting engineer and experience on many previous airfield and horizontal construction projects over the years, I am aware of all sorts of possible complications for such an effort. Excavating "a 'trench' around the flight line and runways" might violate DoD construction standards for airfield clearance and safety. It might well also kick in national and local stormwater pollution control run-off requirements under NEPA or other laws. If there are wetlands involved ("aleviating recurring flooding" is the apparent purpose), additional laws and regulations kick in. Then, the above mentioned RCRA or other laws and regulations concerning contaminated soils may be applicable.

Unfortunately, such seemingly simple projects often get military installations or private owners into deep trouble with regulatory agencies.

We don't know what type of acquisition method is being used or if any of the above mentioned complications are present. I am pretty sure that this began as some type of acquisition process under the FAR, where the installation "solicited offers" to "construct a trench around the flight line and runways in order to alleviate recurring flooding."

Mea culpa, to an extent. I was thinking of this acquisition, which started as a FAR solicitation but received the $0 offer, as opposed to an "RFP" seeking $0 offers (and perhaps, in effect, selling the soil). Having started as a FAR acquisition, if award can be made at $0, I think it continues as a FAR acquisition to the extent that FAR applies during contract administration.

Award the contract for $1.00.

Related Question:

Is a Technology Investment Agreement (TIA) -- as defined by Part 37 of the DoDGARS -- a contract or not?

It is defined by DCMA as a "non-procurement instrument" but that doesn't really answer my question. If it's a contract then my client needs to allocate indirect costs to it; but if not, then it does not.

Any answers?

Thanks

Contractual transaction, yes. "Contract" as defined at FAR 2.101, probably not. Where is the word "contract" being used?

In the sense that a contract has direct costs, whereas a TIA may be an agreement with respect to IR&D costs, which allocate to contracts.

H2H

help,

I assume that the word "contract" is being used in a regulation or something (i.e., whatever is telling you how to treat IR&D costs) and you're trying to interpret its meaning. Where, specifically, is the word being used? Are you trying to interpret its use at FAR 31.205-18?

According to the DOD Grant and Agreement Regulations, DOD 3210.6-R, a technology investment agreement is either a cooperative agreement or an other type of assistance transaction, i.e., an "other transaction," depending on its terms. See DODGAR 37.110 and Appendix B. Either way, it is not a contract as defined by FAR 2.101 and is not subject to FAR Part 31 and the Cost Accounting Standards. See DCAA Contract Audit Manual 14-909, especially 14.909.5c.

H2H, wouldn't a TIA be a cost objective regardless of whether it is a contract?

Vern & Don -- Thanks.

Retreadfed -- Yes, in the sense that an IR&D project is a cost objective. I was thinking about the TRW case (ASBCA No. 51530, 2002) where the court found that TRW's MOU with Odyssey was a contract not B&P. But on re-reading the case I see it dealt with B&P and not IR&D. And 31.205-18 expressly makes IR&D costs associated with cooperative agreements allowable IR&D.

So all is good. I was overthinking.

Thanks to all. Very helpful.

H2H

The problem of contaminated soil exists with or without a barter contract.

Has anyone yet advised to allow offerors a site visit to test the soil before offer? If not, has the government provided the results of a government conducted soil test? If neither, your issue is broader than whether or not a barter contract will fly: your issue is that you have not tested the soil.

Happy, I think Tipphill checked out of this thread long ago.