Award T&M 8(a) Sole Source Comercial Contract Using 13.5 Procedures

Well, Subpart 13.5 is in (is part of) Part 13, isn't it? Here is an idea: There is nothing unclear about 12.207( b )(1)(i)(A).

Wait I am confused so help me understand.

How does FAR Subpart 13.5 and FAR Subpart 12.2 even apply? As noted it in the original post the procurement is an “8(a) SOLE SOURCE” or at least an 8(a) so is not the FAR Subpart that is ruling FAR 19.8?

My view - The need for a sole source justification per FAR Subpart 13.5 is not required, FAR Subpart 6.302-5 applies and that is it. I do not see any reference to it in Subpart 13.5.

With regard to FAR Subpart 12.2 I see only reference to FAR Subpart 19.5 nothing about FAR Subpart 19.8? To me the thresholds in FAR Subpart 19.8 regarding when a competitive 8(a) is or is not required is the key and as such would be the determining factor as to whether the requirement is sole source 8(a) or competitive 8(a).

Based on the above I would be interested in the conclusions that prompted the initial question as to why any discussion about competition, sole source justification, etc. is needed.

Bottom Line,

the whole idea of Part 12 Commercial Item acquisitions is to take advantage of best practices in the private sector.

"Cost reimbursement" is not a best practice from the private sector. It's just not. It is generally prohibited for Part 12 acquisitions. I think that's what Vern was getting at.

HE_1102 can do whaever he wants, but I interpret the FAR to prohibit "a T&M, 8(a) sole source, commercial contract using 13.5 procedures." Take the Commercial Item stuff out and he'll be fine.

Brian - Okay now I remember and will leave it at that...../threads/2118-award-t-m-8-a-sole-source-comercial-contract-using-13-5-procedures

Here's how I tend to look at it--

If someone wants to use FAR Part 12 (in conjunction with FAR Part 13, 14, or 15, of course), he or she follows the FAR Part 12 rules. That means FFP as a general rule (FAR 12.207( a )), or T&M only if it is competitive (FAR 12.207( b )).

If one wants T&M and non-competitive, he or she buys it using FAR Part 13, 14, or 15 without FAR Part 12.

But what if the item is a commercial item? Then the CO must use Part 12. See FAR 12.102(a). It's not a matter of wanting or not wanting to use it. I saw no exception for 8(a) procurements.

if it is a Commercial Item, and FAR 12.102(a) sez it's gotta be a CI acquisiton, then make it FFP, or competitive.

So many choices.

Here's a neat trick I see used from time to time:

post it on Fedbid, but mislabel it in fbo.

You can still make it T&M.

Nobody even looks, except the preferred vendor, and

VOILA! you got only one bid, from the preferred vendor,

but it was competed.

Sorry all I messed my last post . Let me see if I can get this right now.

Here is the reference WIFCON thread that I intended to post. /threads/140-far-12-207-b-1-i-b-non-sequitor

I think that there is a conflict between FAR 12.207( b )(1)(i) and Subpart 19.8. The statute that authorizes the use of T&M contracts for commercial items, 41 U.S.C. 3307, says, at (e)(4)(A):

(iii) subject to subparagraph ( b ), authority for use of a time-and- materials or labor-hour contract for the procurement of commercial services that are commonly sold to the general public through those contracts and are purchased by the procuring agency on a competitive basis.

The FAR councils turned that into this:

(1) A time-and-materials contract or labor-hour contract (see Subpart 16.6) may be used for the acquisition of commercial services when—

(i) The service is acquired under a contract awarded using—

(A) Competitive procedures (e.g., the procedures in 6.102, the set-aside procedures in Subpart 19.5, or competition conducted in accordance with Part 13);

( B ) The procedures for other than full and open competition in 6.3 provided the agency receives offers that satisfy the Government’s expressed requirement from two or more responsible offerors;

I find all of that to be ambiguous in light of FAR 12.102(a) and Subpart 19.8, and I don't see how the FAR councils have the authority to limit the applicability of the 8(a) program, so I would award an 8(a), sole source, T&M contract for commercial items in accordance with FAR Subpart 19.8 and 6.302-5 and let the chips fall where they may. I wouldn't engage in the rigamarole that brian described. If my bosses told me that I couldn't do it, then I wouldn't do it.

Others can agonize over it as they see fit.

Vern - You stated in your last post "I wouldn't engage in the rigamarole that Carl described." Could you please let me know what post I did this in. I am not usually one that promotes rigamarole so I would like to reconsider what I might of said.

Thanks

Carl

Here's a neat trick I see used from time to time:

post it on Fedbid, but mislabel it in fbo.

You can still make it T&M.

Nobody even looks, except the preferred vendor, and

VOILA! you got only one bid, from the preferred vendor,

but it was competed.

I said you described it. I didn't say you promoted it or recommended it. I presume that you wouldn't do anything like that.

Vern - That post was by brian NOT ME! Could you edit your posts atrtributing it to me please. Thanks in advance for doing so.

PS - Just to add I do not advocate brian's thought. To do so fosters something other than a trust relationship.

You're right. Done. I apologize for the mistake.

But what if the item is a commercial item? Then the CO must use Part 12. See FAR 12.102(a). It's not a matter of wanting or not wanting to use it. I saw no exception for 8(a) procurements.

Sorry for being a little late to the conversation. I, too, have found quite a few instances were FAR Part 12 and FAR Subpart 19.8 conflict. For a written commercial item 8(a) acquisition over the SAT, what form would one use?

FAR Section 12.204, Solicitation/contract form:

"(a) The contracting officer shall use the Standard Form 1449, Solicitation/Contract/Order for Commercial Items, if (1) the acquisition is expected to exceed the simplified acquisition threshold; (2) a paper solicitation or contract is being issued; and (3) procedures at 12.603 are not being used."

FAR Subsection 19.811-1, Sole Source:

"The contracting officer shall use the Standard Form 26 as the award for, except for construction contracts, in which case the Standard Form 1442 shall be used as required in 36.701(a)."

FAR Subsection 19.811-2, Competitive:

"The contract will be prepared in accordance with 14.408-1(d), except that appropriate blocks on the Standard Form 26 or 1442 will be asterisked and a continuation sheet appended as a tripartite agreement..."

FAR 12.102(c ):

"Contracts for the acquisition of commercial items are subject to the policies in other parts of the FAR. When a policy in another part of the FAR is inconsistent with a policy in this part, this part 12 shall take precedence for the acquisition of commercial items."

Good catch! But that might not stick. The 8(a) Program is statutory. I don't think that's true of the precedence rule, but I'm not sure.

Notwithstanding FAR 12.102(c ), I agree that the FAR cannot (or at least should not) conflict with statute. Of note, 12.102(c ) does not say Part 12 takes precedent over statute. Only that it takes precedent over other parts of the FAR.

If I understand legalese correctly, this Red Book excerpt (page 3-16) shows that regulations conflictling with statute are considered null.

It is a fundamental proposition that agency regulations are bound by the limits of the agency’s statutory and organic authority. An often quoted statement of the principle appears in the Supreme Court’s decision in Manhattan General Equipment Co. v. Commissioner of Internal Revenue, 297 U.S. 129, 134 (1936):

"The power of an administrative officer or board to administer a federal statute and to prescribe rules and regulations to that end is not the power to make law—for no such power can be delegated by Congress—but the power to adopt regulations to carry into effect the will of Congress as expressed by the statute. A regulation which does not do this, but operates to create a rule out of harmony with the statute, is a mere nullity."

I find all of that to be ambiguous in light of FAR 12.102(a) and Subpart 19.8, and I don't see how the FAR councils have the authority to limit the applicability of the 8(a) program, so I would award an 8(a), sole source, T&M contract for commercial items in accordance with FAR Subpart 19.8 and 6.302-5 and let the chips fall where they may. I wouldn't engage in the rigamarole that brian described. If my bosses told me that I couldn't do it, then I wouldn't do it.

Others can agonize over it as they see fit.

Alternatively, one could argue that FAR 12.102( a ) does not apply to 8( a ) contracts pursuant to FAR 12.102( e )(5). Given that FAR 52.212-5 does not include any of the required 8( a ) clauses, there is some support for this argument.

Don,

you might be misreading the meaning of "directly" in FAR 12.102( e )(5).

I think it means that one Agency contracts with another agency, as in an "Interagency Agreement," and the second agency directly provides the goods or services.

In an 8(a) contract, the SBA does not provide the goods or services directly, but relies on their 8(a) subcontractor to do that.

brian,

An interagency agreement is not a contract. "Acquisition" is acquiring by contract.

Don,

you might be misreading the meaning of "directly" in FAR 12.102( e )(5).

I think it means that one Agency contracts with another agency, as in an "Interagency Agreement," and the second agency directly provides the goods or services.

In an 8(a) contract, the SBA does not provide the goods or services directly, but relies on their 8(a) subcontractor to do that.

Brian, take a look at FAR 19.800(a) (emphasis added):

(a) Section 8(a) of the Small Business Act (15 U.S.C. 637(a)) established a program that authorizes the Small Business Administration (SBA) to enter into all types of contracts with other agencies and let subcontracts for performing those contracts to firms eligible for program participation. The SBA’s subcontractors are referred to as “8(a) contractors.”

Don's argument is good one. However, many agencies have partnership agreements with the SBA that include specific instructions for agency's to follow when issuing contracts under the 8(a) Program. Under some of these partnership agreements, it delegates to agencies the authority to enter into a direct award with the 8(a) Contractor. Consequently, FAR Clauses prescribed at FAR Subsection 19.811-3 are not included. This delegation is pursuant to FAR 19.800(f):

When SBA has delegated its 8(a) Program contract execution authority to an agency, the contracting officer must refer to its agency supplement or other policy directives for appropriate guidance.

In the case of a delegation of authority, I do not think that FAR 12.102(e)(5) would apply because the agency would directly make the award to the 8(a) contractor, not the SBA.

What do you make of this FAR council response under FAC 2005-15?

Comment: Clarify whether competitive procedures means ``full and open competition'' or ``limited competition'' when the competition is conducted with as many sources as practicable under one of the authorities listed in FAR 6.302.

Response: Sole source commercial T&M/LH contracts are not authorized. Commercial T&M/LH contracts may be awarded under the statutory authorities that permit contracting without providing for full and open competition. When these authorities are used, contracting officers are required to solicit offers from as many potential sources as is practicable under the circumstances. Nothing in this rule requires ``full and open'' competition.

metteec,

I don't know about other agencies, but under the DoD-SBA Partnership Agreement the SBA remains the prime contractor when a direct award is made. The fact that agencies can make a direct award has no effect on the contractual relationship. See DFARS 219.800(a).

metteec,

I don't know about other agencies, but under the DoD-SBA Partnership Agreement the SBA remains the prime contractor when a direct award is made. The fact that agencies can make a direct award has no effect on the contractual relationship. See DFARS 219.800(a).

Don, you are correct. I dug out my agency's PA from the basement and it reads:

"SBA delegates to the agency for re-delegation to all warranted agency contracting officers, its authority under section 8(a)(1)(A) of the Act to enter into 8(a) prime contracts, and its authority under section 8(a)(1)( of the Act to arrange for the performance of such procurement contracts by 8(a) participants. In accordance with 13 C.F.R 124.501(a), SBA delegates its 8(a) contract execution function."

At that point I stopped reading (whoops). After your post, I read a a few pages further and found:

"SBA remains the prime contractor on all 8(a) contracts and the 8(a) Participant remains the SBA's subcontractor."

Well I disappeared from this discussion due to some other commitments and have some thoughts about the continuing discussion.

Minor thing but noting FAR 12.102(e)(5) and FAR 52.212-5 clause does have some merit as Don points out when considered with the fact that the SF-1449 was amended in 2012 to include a box for “8(a)” Block 10, “This Acquisition is”.

FAC 2005-15 (noted in Blitz’s post and the previous WIFCON discussion link that I provided) is important. It bears repeating and states “Commercial T&M/LH contracts may be awarded under the statutory authorities that permit contracting without providing for full and open competition.” Or stated another way FAR 12.207((1)(i)(A) does not say “full and open competition” it says “competitive procedures” . “Competitive procedures” is not defined in FAR Part 2 nor any where else in the FAR by my read. FAR Subpart 6.2 defines “competition after exclusion of sources” or per FAR 6.2, 8(a), and HUBZone, SDVOSB, EDWOSB and set asides for local business during a major disaster or emergency for that matter, is a type of "competitive procedure".

parsing FAR 12.102(e )(5 ), it says to me that Part 12 shall not apply to the acquisition of commercial items directly from another Federal agency.

To me, an 8(a ) kt is not the same as acquiring items directly from another Federal agency.

As they are the Prime, and pass every aspect of performance through to the 8(a) sub, whatever is acquired through an 8(a) kt is only indirectly acquired from SBA.

in my view.

brian - In concluding our your view have you considered a full read of FAR 6.302-5 and the wording contained therein which states "acquisition be made through another agency...".

brian,

What would be an example of an acquisition of commercial items directly from another Federal agency?

Don has posed an interesting question that if posed to me I would answer as follows.

An example of a commercial item bought by one Federal agency from another is product(s) found in the GSA Global Supply Catalog and there are others (ref: FAR 8.002(a)(1)(v)). However while the item(s) might meet the FAR definition of commercial item the products from the referenced Catalog are not purchased using FAR Part 12 procedures, nor FAR Part 8 for that matter, by the Federal agency procuring them, but a procedures developed pursuant to other regulations.

In answering it does bring me back full circle to the full discussion of this thread regarding 8(a) and I suggest the FAR wording is conflicted. On this note I would only refer to Vern’s post #10 in this thread which seems to make the most sense.