Travel Pricing Structure on FSS RFQ

Ask your legal genius what they make of FAR 52.212-4, Alternate 1, a required contract clause in T&M contracts for commercial items. Paragraph (i)(ii)(D)(1) states:

(1) Other Direct Costs. The Government will reimburse the Contractor on the basis of actual cost for the following, provided such costs comply with the requirements in paragraph (i)(1)(ii)( B ) of this clause: [insert each element of other direct costs (e.g., travel, computer usage charges, etc. Insert ?None? if no reimbursement for other direct costs will be provided. If this is an indefinite delivery contract, the Contracting Officer may insert ?Each order must list separately the elements of other direct charge(s) for that order or, if no reimbursement for other direct costs will be provided, insert ?None?.?]

[bold added].

Ask your legal genius what they make of FAR 52.212-4, Alternate 1, a required contract clause in T&M contracts for commercial items. Paragraph (i)(ii)(D)(1) states:

[bold added].

Well we are procuring on a FFP basis. The contractors are quoting FFP for task and deliverables. They aren't giving firm fixed hourly rates, they are using their schedule rates to price our deliverables. So I don't think I can go back to him on 52.21204 which applies to T&M.

On the other hand, does that open a whole new can of worms on how we are asking contractors to price these task orders?

I guess my main issue is legal saying that one reimbursable CLIN renders the entire action non-commercial.

I guess my main issue is legal saying that one reimbursable CLIN renders the entire action non-commercial.

Contracting123,

Your legal counselor is wrong. A reimbursable CLIN does not make a contract a cost-reimbursement contract nor does it make it noncommercial. The fact that FAR 52.212-4, Alt. I, provides for the reimbursement of other direct costs and indirect expenses proves this, as this clause is used in contracts that are not cost-reimbursement contracts and that are for commercial services.

The fact that FAR 52.212-4, Alt. I, provides for the reimbursement of other direct costs and indirect expenses proves this, as this clause is used in contracts that are not cost-reimbursement contracts and that are for commercial services.

Thanks Don Acquisition. I'm hesitant to use the Alt 1 of 52.212-4 in the debate with legal on this issue because it only applies to T&M or LH contracts. I see what your saying about how this shows you can have a reimbursable CLIN on a commercial contract, but I can see legal's response now -- "only if it's T&M or LH."

I am not yet convinced the lawyer is wrong.

It does appear to me that if travel is considered commercial then travel should be contracted for on a fixed price basis.

I think GSA treats travel as an open market item that is not on their contract.

If you have a contract that has fixed priced items and cost reimbursable items then you have a mixed contract type (FP&M?). Doesn't sound right.

The fact that FAR 52.212-4, Alt. I, provides for the reimbursement of other direct costs and indirect expenses proves this, as this clause is used in contracts that are not cost-reimbursement contracts and that are for commercial services.

Don,

FYI: FAR 52.212-4 Alt I has not yet been modified into Federal Supply Schedule contracts. It has been in process for around 3 years now I think under FSS Mass Mod number FX48.

Whynot,

If Contracting123's lawyer is telling him (or her) that you can't have a cost-reimbursable CLIN on a commercial contract, then he (or she) is wrong.

It does appear to me that if travel is considered commercial then travel should be contracted for on a fixed price basis.

If you have a contract that has fixed priced items and cost reimbursable items then you have a mixed contract type (FP&M?). Doesn't sound right.

Maybe you can chalk this up to naivete from me being new to the contracting workforce (5 yrs) but why would any steward of taxpayer funds be willing to price "estimated" travel on a FFP basis? The bottom line as I see it, is that pricing the unknown and estimated travel as FFP will more often than not result in a loss to the Government.

Also - what's wrong with having a mixed contract type? If it accomplishes the necessary tasks, with minimal risk to the Gov't, and is not explicitly prohibited, then it's appropriate - isn't it? Keep in mind, the only item I want to make reimbursable is travel - nothing else.

Please note: The obvious answer of "your program office needs to more clearly and definitively define their travel requirements" (which I myself would be tempted to respond to this question with - and I'm surprised I haven't rec'd yet) won't help in this situation.

I truly appreciate the continued responses and dialogue concerning this issue.

I posted a message to this yesterday and I messed up saving it, but this is what I pretty much said:

As your lawyers to show some evidence or case history on their position. If you look at the thousands of contracts and solicitations on FEDBIZOPPS and the other sites, nearly every professional service and technical assistance contract and/or solicitation has cost reimbursable CLIN(s). If those are wrong, then why are ONLY your legal folks up on that?

Second, if you require that contractors propose travel cost for a whole year or multiple years, you will end up with contractors quoting the highest costs, at the worst travel days and times, plus adding a contingency factor to those costs. It becomes a gamble; will the contractor win or lose? And the contractors control the odds by how much they propose. Does the Government really want to become a travel cost casino?

Ask the attorneys to submit to the same rules. Ask them to propose their travel budget for the next 1-5 years and if they are wrong on the low side, they have to pay the extra costs out of pocket. Of course if their proposals are way high, the Goverment will come after them for the excess profits. If they are not willing to play that game, then why should we expect contractors to do so?

One thing that many offices fail to remember is that attorneys are advisors, not Contracting Officers. If they provide silly and erroneous advice, then we should thank them for their time and go do the right thing anyway. That is what senior Contracting Officers, Supervisors and ultimately the HCA is for, making the decisions that attorneys never face. I would get my duckies in a row, take that evidence and findings to my supervisor and recommend that the Legal office's advice be disregarded.

Lastly, if Legal is so dead set against a fixed price contract with reimburseable CLINS, then simply set your contract up with a travel CLIN under the following terms:

FAR 16.206 Fixed-ceiling-price contracts with retroactive price redetermination.

16.206-1 Description.

A fixed-ceiling-price contract with retroactive price redetermination provides for?

(a) A fixed ceiling price; and

( Retroactive price redetermination within the ceiling after completion of the contract.

If your counsel is telling you that you must contract for travel on a lump sum or some unit cost basis for indeterminate amount or places of travel, that is dumb! If you are an 1102, you are supposed to be the business expert, right?

Nothing really convincing has been put forward to defeat the lawyer's position - other than a lot of inertia. The reference to 16.206-1 is clearly limited to research and development contracts less than $100,000.

It is also wrong to think that proposing/negotiating travel on a fixed price basis will likely end up costing more.

Some thoughts -

I think Don has complicated the matter by discussing FAR 12 clauses since this is a FSS order unless the FAR Part 12 clauses are in the parent contract. C-FSS-370 is your reference.

Clearly your legal counsel is being hardnosed as including one order line item in the order that is paid on a basis of actual costs does not make the whole of the order a "Cost Reimbursement" order. So what happens if you issue the order even if legal states it is not legally sufficient? Remember you are the CO and the legal counsel is simply that, legal counsel.

How about this for a clause in the order if you need a work around - For the purposes of this Order CLIN XXXX shall be priced on a fixed price basis at $1.00. The Government acknowledges that travel costs may exceed this CLIN and the Government will modify the order appropriately based on actual costs incurred under the Order on a monthly basis.

Stupid suggestion? Yes about as stupid as the legal counsel advice to you.

I think you are wrong.

Travel is open market and is not covered by FAR Part 8.

The logic is stunningly simple:

Commercial items must be Fixed Price.

Travel is Commercial.

Therefore, Travel must be Fixed Price.

I think you are wrong.

Travel is open market and is not covered by FAR Part 8.

The logic is stunningly simple:

Commercial items must be Fixed Price.

Travel is Commercial.

Therefore, Travel must be Fixed Price.

Whynot,

"It is also wrong to think that proposing/negotiating travel on a fixed price basis will likely end up costing more. "

Perhaps it is wrong to state the above as a blanket statement, I grant you that. However, in this office, historical record has shown, over several contracts, that money has been lost due to travel previously being priced FFP.

Whynot,

Can you please use your stunningly simple logic to address C-FSS-370 where it is stated that travel costs are reimbursable or can be priced as a fixed item? I see no "shall" in that clause.

The lawyer says the clause is descriptive (nonrestrictive).

Stunning logic (part 2)

Statute (commercial acquisition) trumps regulation.

Here is another position.

Travel is ODC.

From GSA website.

Other Direct Costs

Other Direct Costs (ODCs) are charges in direct support of a service. They are commercial items. To the extent possible, all anticipated ODCs associated with performance and within the scope of the GSA Schedule contract should be offered and have an established contract price. Other Direct Costs must not be the primary purpose of the task order.

Travel is Open Market.

From GSA website.

Open Market Items

The Federal Acquisition Regulation (FAR) has been amended to incorporate policies that address the handling of open market items.

Note: Open market items are also known as incidental items, noncontract items, non-Schedule items, and items not on a GSA Schedule contract.

In accordance with FAR 8.402(f), for administrative convenience, an ordering activity contracting officer may add items not on the GSA Schedule (Multiple Award Schedule) contract?i.e., open market items?to a GSA Schedule Blanket Purchase Agreement (BPA) or an individual task or delivery order only if?

All applicable acquisition regulations pertaining to the purchase of the items not on the GSA Schedule contract have been followed (e.g., publicizing (FAR Part 5), competition requirements (FAR Part 6), acquisition of commercial items (FAR Part 12), contracting methods (FAR Parts 13, 14, and 15), and small business programs (FAR Part 19));

The ordering activity contracting officer has determined the prices for the items not on the GSA Schedule contract are fair and reasonable;

The items are clearly labeled on the order as items not on the GSA Schedule contract; and

All clauses applicable to items not on the GSA Schedule contract are included in the order.

Whynot,

So you are in agreement with the lawyer that you cannot reimburse travel costs under a commercial contract? If so, then you are wrong, too.

Carl,

The premise of the lawyer's argument is that you cannot reimburse travel costs under a commercial contract. Part 12 is relevant because it disproves that premise. The lawyer needs to come up with a better argument to support his (or her) position.

The logic is stunningly simple:

Commercial items must be Fixed Price.

Travel is Commercial.

Therefore, Travel must be Fixed Price.

Really? Commercial items must be fixed-price? What do you make of FAR 52.212-4, Alt. I?

The Federal Acquisition Regulation (FAR) has been amended to incorporate policies that address the handling of open market items.

Note: Open market items are also known as incidental items, noncontract items, non-Schedule items, and items not on a GSA Schedule contract.

In accordance with FAR 8.402(f), for administrative convenience, an ordering activity contracting officer may add items not on the GSA Schedule (Multiple Award Schedule) contract?i.e., open market items?to a GSA Schedule Blanket Purchase Agreement (BPA) or an individual task or delivery order only if?

All applicable acquisition regulations pertaining to the purchase of the items not on the GSA Schedule contract have been followed (e.g., publicizing (FAR Part 5), competition requirements (FAR Part 6), acquisition of commercial items (FAR Part 12), contracting methods (FAR Parts 13, 14, and 15), and small business programs (FAR Part 19));

The ordering activity contracting officer has determined the prices for the items not on the GSA Schedule contract are fair and reasonable;

The items are clearly labeled on the order as items not on the GSA Schedule contract; and

All clauses applicable to items not on the GSA Schedule contract are included in the order.

This is exactly what you do with the order - add travel costs on a reimbursable basis on a separate open market CLIN.

The lawyer really has things messed up and doesn't understand GSA Schedules. The OP is simply following the GSA Schedule contract ordering provision. The order ends up with one of more CLINS citing items ordered under the GSA Schedule contract. It also contains an open market CLIN related to travel. To the extent that any other clauses are needed with that CLIN, they are included as well.

DON - see FAR 12.207. I agree that T&M can now be used for commercial services under certain restrictions. We seem to be mixing and matching features of various contract types to come up with a contract variant that is not described in the regulations - (FP & M).

I would assume that if you are using 12.207 to support travel reimbursable under T&M then in our hybrid mixed contract construct that the T&M restrictions would need to come along with it - can't cherry pick.

Whynot,

Do you have any case law regarding your position? I have authored, signed and seen literally thousands of contract actions that were fixed price with reimbursable travel CLINs. If you look at FEDBIZOPPS right now you will see solicitations with that same CLIN structure. What you are saying in effect is that you are right while thousands of others are wrong.

Your position seems to say "let's shoot ourselves in the foot with a plainly dumb interpretation of the law". The contractor AND the Government cannot accurately forecast travel costs, yet you insist that both we and the contractor do exactly that. That position also intidicates that the contractor should propose and the Government analyse with knowledge the same unknowable information. I disagree with that, and so does every office and organization I have worked with.

If other offices do not think that way, I am very, very pleased I have not worked with those organizations as they are a sign that our Government is intent on suicide by stupidity.

Your position is unconvincing.

Find me case law that ever relied on the position - this is the way it is done because this is way it always has been done.

I am reminded of an example provided to me by a teacher in a business class.

A company manufactured white walled tires. When they shipped them to stores many of the white walls often got marked up and scratched in transit and the stores ended sending them back. The company wanted a way to reduce this costly damage. Their experts and outside consultants came up with various ways to protect the tires during shipping ? all at a cost. A newbie came up with the answer ? stop making white walled tires, nobody is buying them anymore. The company switched to manufacturing black wall tires.

Your premise that travel can not be fixed price, and if you do, it will cost you more is not a given. Competition, the enormous reduction in administration costs to industry and government might very well result in a windfall savings to everyone. At the very least it will be compliant with law.

Carl had a very good post on this topic in another related thread here:

/legacy/reg/702d556aa0829a37.html

Just thought I would add info from GSA-FSS regarding MOBIS orders. Providing as I believe it is appropriate to use as reference the requirements GSA regarding ordering under FSS as well as the specific FSS contract language. Using the MOBIS as example only with the thought that 2589 should be referring to their specific GSA contract on the matter as well the appropriate ordering instructions an agency must use for whatever GSA-FSS is being used.

Specifics from MOBIS contract clause C-FSS-370

(B ) Travel: The Contractor may be required to travel in performance of orders issued under this

contract. Allowable travel and per diem charges are governed by Pub .L. 99-234 and FAR Part 31, and

are reimbursable by the ordering agency or can be priced as a fixed price item on orders placed under

the Multiple Award Schedule. Travel in performance of a task order will only be reimbursable to the

extent authorized by the ordering agency. The Industrial Funding Fee does NOT apply to travel and per

diem charges.

And

From the MOBIS Ordering FAQ found on GSA's website. http://www.gsa.gov/Portal/gsa/ep/contentVi...GSA_OVERVIEW#11

14. How do I handle Other Direct Costs (ODC) at the Task Order level?

For administrative convenience, non-contract items may be added to the BPA or the individual task order if the items are clearly labeled as such, applicable acquisition regulations have been followed, and price reasonableness has been determined for the items. The MOBIS solicitation offers specific instruction as relates to transportation and per diem costs billed by the contractor: Costs incurred for transportation and per diem (lodging, meals and incidental expenses) will be billed in accordance with the regulatory implementation of Public Law 99-234, FAR 31.205-46 Travel Costs, and the contractor's cost accounting system. These costs are directly reimbursable by the ordering agency. (a ) The contractor shall notify the ordering agency, in writing, of the requirement for reimbursement of transportation and per diem expenses, prior to acceptance of the order. This notification shall include a "not to exceed" estimate of these proposed costs. Any applicable indirect costs associated with the transportation and per diem expenses will be charged at a rate negotiated prior to the using agency's delivery order. Contractors shall be reimbursed only for incurred costs at or below the "not to exceed." (b ) Costs for transportation, lodging, meals, and incidental expenses incurred by contractor personnel on official company business are allowable subject to the limitations contained in FAR 31.205-46, Travel Costs. (c ) Reimbursements for costs that are not specified in this solicitation, or in any contract or task order resulting from this solicitation, are not allowed. It is GSA policy NOT to allow a charge of profit or fee on reimbursable items. Travel in performance of a task order will only be reimbursable to the extent authorized by the ordering agency.

Whynot,

Unconvincing? You can lead a horse to water but you cannot make him drink. Methinks that applies in this case.

I cannot find case law for something that HAS NOT been found illegal. Proving a negative is impossible, which is why I asked for you to show a case where a reimbursable CLIN was found to be impermissible.

Here is something that I DID find:

"RFP price schedule included a contract line item number (CLIN) for each of the specified 36 labor categories required under the contract along with an estimate of the total hours of work (and overtime) for each CLIN. The offeror was to propose a fixed hourly burdened labor rate for each CLIN, which was to include direct labor cost, as well as fringe benefits, overhead, general and administrative (G&A) expenses, and "all other charges against the contract (unless otherwise [provided for])." The RFP required that the contractor furnish the necessary tools and equipment, including designated computer equipment and software, necessary to perform the contract statement of work (SOW). The RFP also contained for each contract year 3 CLINs for direct costs not included in the labor rates: (1) materials, (2) travel, and (3) per diem, and designated "[n]ot to exceed" amounts for each CLIN of (1) $200,000, (2) $75,000, and (3) $75,000, respectively.[1] In the proposal instructions, these designated amounts were reaffirmed as those to be utilized in determining the total evaluated price, except that the costs for travel and per diem were added together and set forth as $150,000 in "other direct costs." The RFP also provided the following instructions to offerors for submitting cost proposals: ..."

Trandes Corporation File: B-256975.3 Date: October 25, 1994 *REDACTED VERSION[*] http://redbook.gao.gov/11/fl0051197.php

If the GAO looked at and wrote down information about the reimbursable CLINS, do you think they might have said "Whoa, they can't do that!" if adding a reimbursable CLIN was inappropriate. If you read that case, you will see that did not happen.

A second case is exactly the same, the GAO noticed the reimbursable CLINs, wrote about them, yet did not issue a ruling that they were illegal:

"The RFP, issued on May 18, 1994, contemplated the award of a requirements contract with a 3-year base ordering period and two 1-year options. The majority of the RFP contract line item numbers (CLIN) called for fixed prices, a few items (e.g., travel) were cost reimbursable, and certain site specific requirements (e.g., installation and ancillary equipment) were to be negotiated after award. For these latter items, such as CLIN 24 (installation), and CLIN 25 (ancillary equipment), offerors were to propose pre-priced conversion factors (based upon the offeror's direct and indirect costs, such as support labor hours, rates, factors, overheads, and profit) for application to the direct material, base labor hours, and ancillary equipment required for site specific installations, to be determined and negotiated after award on an individual delivery order basis."

L.K. Comstock, Inc. and Liebert Federal Systems, Inc. File: B-261711.5; B-261711.6 Date: December 14, 1995 * REDACTED DECISION http://redbook.gao.gov/11/fl0050207.php

And on another note, I could not even begin to make sense of your last paragraph. Perhaps you say that even if we do lose a ton of money, at least we are compliant with the law. That my friend is suicide by stupidity.

I am interested in Vbus' post. Nothing in Pub. L. 99-234 addresses contract type. Makes sense under T&M.

Is there anything in the redbook after the Federal Streamlining Act was implemented?

This forum has a long history of not being enthralled by GSA interpretations and actions.

In the referenced VBus post - the GSA clause, C-FSS-370 references Public Law 99-234 and FAR 31.205-46. Makes it all look and sound proper. The GSA clause does not implement the public law. The lawyer says it is descriptive.

The purpose of this thread was to look at C-FSS-370 and see if it was proper. VBus post is good for the additional references to Public Law 99-234 and FAR 31.205-46 for further avenues of discussion. I think will be fruitful.

Referencing C-FSS-370 for purposes of resolving the issue is circular.

Whynot,

Is the thing that's bothering you mixing two contract types? You said

If you have a contract that has fixed priced items and cost reimbursable items then you have a mixed contract type (FP&M?). Doesn't sound right.

and

We seem to be mixing and matching features of various contract types to come up with a contract variant that is not described in the regulations - (FP & M).

If that's it, using more than one type in a single contract is done frequently. For example, preparing a requirements document is fixed price. Then developing a system using the requirements document is T&M or CR.

In this case, the order under the contractors' GSA Schedule is fixed price with an open market item for cost reimbursable travel.

Whynot,

Is the thing that's bothering you mixing two contract types? You said

and

If that's it, using more than one type in a single contract is done frequently. For example, preparing a requirements document is fixed price. Then developing a system using the requirements document is T&M or CR.

In this case, the order under the contractors' GSA Schedule is fixed price with an open market item for cost reimbursable travel.

I concur with your premise (whether the issue is contract type, or rote interpretation of commerciality), and GSA has not done themselves, nor us, any favors with their ambiguous guidance on the subject. I've worked at two agencies, one DOD, one non-DOD, where the policy and pervialing orthodoxy has been to consider travel incidental - typically under a FFP labor/performance task order - and to reimburse it at cost with a reduced burden and no fee. I don't believe that any of us stand to benefit from a more conservative interpretation, especially given the fluctuations we've seen in airline ticket prices this year. The MAS program is dealing with enough issues related to it's services program and I'm inclined to let business logic drive the matter.

Contracting123 wrote:

My contracting shop is working on several program/project management support type RFQ's, which we procure via FAR pt. 8.405-2, FFP… For many of these solicitations the program office was not able to sufficiently gauge the exact amount of travel that would be required… We then asked contractors to give us a NTE price quote for travel, which we would reimburse after travel took place… Our legal dept. has advised us that we cannot do this, referencing FAR 16.301-3b which states that the use of cost reimbursement contracts is prohibited for the acquisition of commerical items. When I pointed to C-FSS-370 in the base GSA contract which states travel costs are reimbursable by the ordering agency or can be priced as a fixed item, I'm told the clause is only descriptive (and I'm not sure what is meant by that.) Legal has advised that travel should be priced FFP…

Interesting discussion.

Don said that legal is wrong and pointed to 52.212-4, Alt. 1. That clause is inapplicable, and I think he knows that now, but he continues to insist that the lawyer is wrong, without saying on what basis. Whynot asks for case law. Dwgerard suggests that cost-reimbursement can’t be wrong, since thousands have done it.

Joel says the lawyer is dumb, but doesn't say why. Carl tries to be sensible, but is brushed off by whynot. Whynot now thinks the logic is “stunningly simple”-- travel simply must be fixed price. Don says whynot is wrong, but doesn’t say why.

Formerfed says that you have to add travel as an open-market, reimburseable CLIN, and says the lawyer has messed things up. He makes no mention of this from GSA:

According to Federal Acquisition Regulation 8.402(f), for administrative convenience, Open Market, or incidental, items may be included on a task or delivery order issued under a Federal Supply Schedule contract under the following conditions: All applicable acquisition regulations pertaining to the purchase of the items not on the Federal Supply Schedule have been followed (e.g., publicizing (Part 5), competition requirements (Part 6), acquisition of commercial items (Part 12), contracting methods (Parts 13, 14, and 15), and small business programs (Part 19))…

Note that FAR 12.104(a) and ( say that contracts for commercial items may be FFP, FFP with EPA, or T&M/L-H. It says nothing about FFP with cost-reimbursement. He also ignores FAR 12.104(e):

Use of any contract type other than those authorized by this subpart to acquire commercial items is prohibited.

Whynot returns to tell Don that you can’t mix or match FFP with T&M under FAR Part 12. Vbus offers some helpful information, but is ignored. Now dwgerard wants case law. Whynot counters by demanding case law from dwgerard. Dwgerard suggests that whynot is a dumb horse and hits him over the head with case law from the Red Book. (God, save us from the jailhouse lawyers.) Whynot sees Vbus and thinks it might be love. He then has a delayed reaction to the Red Book bombardment and announces that the purpose of the thread is to assess the validity of GSA clause C-FSS-370. He apparently isn't in love with Vbus after all.

Formerfed is back with the idea of combining contract types.

Marine1 enters the fray. But instead of throwing punches, our Marine tries to reason with the fighters.

Here’s my take:

1. Does FAR Part 12 apply to orders against GSA schedules?

Answer: Yes and no. The relationship between GSA schedules and FAR Part 12 has been an issue for many years. Remember, GSA was allowing the placement of T&M orders against GSA schedules long before the express statutory authorization. See the 2002 article, “OMB squares off with lawmaker, agencies over GSA schedule policy,” in Government Executive: http://www.govexec.com/dailyfed/0702/070302p1.htm.

Also see the GAO’s June 2009 report on the use of T&M contracts for the acquisition of commercial items under the MAS program, in which it reported:

The vast majority of reported obligations for commercial services acquired through T&M contracts went through GSA’s schedules program from February 2007 to December 2008, but the FAR Part 12 D&F requirement has not been applied to the use of schedule contracts…

* * *

GSA policy officials told us that the statutory authority that created the schedules program is unique and allows the administrator the flexibility to decide what procedures to apply to the schedules program.

http://www.gao.gov/new.items/d09579.pdf. Ahh, Flexibility. It's a good thing.

2. So, what does GSA say about travel? If travel is considered an “other direct cost,” then GSA says:

Other Direct Costs (ODCs) are charges in direct support of a service. They are commercial items. To the extent possible, all anticipated ODCs associated with performance and within the scope of the GSA Schedule contract should be offered and have an established contract price. Other Direct Costs must not be the primary purpose of the task order.

http://www.gsa.gov/Portal/gsa/ep/channelVi...hannelId=-24738

Note how that language hedges with “should.” It does not expressly authorize agencies to pay for travel on a cost-reimbursement basis.

If you look at some GSA schedule RFPs, like FCXB-F4-020002-B Refresh: 8, for Financial and Business Solutions, you’ll find that many for services include this clause: C-FSS-370 CONTRACTOR TASKS / SPECIAL REQUIREMENTS (NOV 2003), which says, in part:

( Travel: The Contractor may be required to travel in performance of orders issued under this contract. Allowable travel and per diem charges are governed by Pub .L. 99-234 and FAR Part 31, and are reimbursable by the ordering agency or can be priced as a fixed price item on orders placed under the Multiple Award Schedule. Travel in performance of a task order will only be reimbursable to the extent authorized by the ordering agency. The Industrial Funding Fee does NOT apply to travel and per diem charges.

The clause tells the contractor what could happen. In and of itself, it does not authorize an agency to pay for travel on a cost-reimbursement basis. That's what the lawyer meant when he/she said that the language is merely descriptive.

I have been unable to find any clear statement on the matter from GSA. It seems clear to me that GSA is letting each agency decide what it wants to do and is providing a mechanism with C-FSS-370. The lawyer isn't wrong. The problem is that he's acting like a lawyer.

I’m lining up with our Marine. There is no “answer” to this question. There is only what you can and will do as a practical matter. Why not (no pun intended) say that travel will be priced on a fixed-price basis through order-by-order agreement on the location and duration of anticipated travel, subject to adjustment? If more or less travel is needed, then mod the order. I did that for years under small R&D contracts, and it worked fine. You can also price travel on a fixed-unit-price-by-day basis, to include airfare. That takes some negotiating, but it can be done if you've got the skills. (Of course, creative fixed pricing and negotiation are lost skills in today's contracting.) You can negotiate a plus/minus unit price adjustment clause, too. Of course, information technology has made issuance of a mod a nightmare. There is entirely too much pricing of travel on a cost-reimbursement basis, but if I couldn’t it any other way, then I would make travel a cost-reimbursement/no fee line item. Period.

It looks like the problem is the lawyer, who, as Carl indicated, is being a stinker--oops, I meant stickler.

Contracting123, you can argue with the lawyer, give in, find a creative solution, or, if there is no other way, kill him. Your call. Let us know what you decide.

Vern's post is a good summation of how this thread has gone so far, but it hit me while I was reading it that it reminds me of another debate I saw in both print and acted out on video. It was some of the debates in the pre-revolution Continental Congress over negotiating with the King over his decrees as they applied to colonies. In that light, figure out which representative each of us represents from that august body, and it gets even more interesting.

Picture Vern's last sentence and you can see the decision point that led to the Declaration of Independence in this thread!

"Joel says the lawyer is dumb, but doesn't say why. " I never said that "the lawyer is dumb". The lawyer may be brilliant

However, the idea that you must contract a fixed amount for for travel, if the travel requirements or locations are indeterminate is dumb, in my opinion. I believe you need to be prudent and find a smart way to control travel costs, while relieving either party of unreasonable, unknown risks.

The lawyer's argument appears, from the first post, to be that any cost reimbursement line item would make the contract type a cost reimbursable type contract, no matter how small the item is. "Our legal dept. has advised us that we cannot do this, referencing FAR 16.301-3b which states that the use of cost reimbursement contracts is prohibited for the acquisition of commerical items. My argument is that having one CLIN as reimbursable should not make the entire contract cost-reimbursable. Their response is that having one cost-reimbursable CLIN would cause the entire action to be a non-commercial contract because commercial contracts can only be FFP/FFP with EPA/T&M."

If our contracting system is that rigid, we are in big trouble. Reminds me of the inability of the leadership of a certain county to adjust to changing situations in WWII, which helped defeat them. The same thinking persisted in the 1980's, while I worked and lived there. "That can't happen because the rule says this..." Talk about Lemmings (e.g., 80 car pileups on the (freeway), because something that "couldn't happen" if everyone following immediately behind each other at 140 kmph follows the rules, happened)! The unthinkable alternatives often weren't considered. The US, on the other hand, was usually able to change course when necessary...

Don said that legal is wrong and pointed to 52.212-4, Alt. 1. That clause is inapplicable, and I think he knows that now, but he continues to insist that the lawyer is wrong, without saying on what basis.

Don says whynot is wrong, but doesn?t say why.

Vern is mistaken--Don did say why in the fourth post of this thread.

The lawyer said that Contracting123 couldn't reimburse travel costs under a commercial contract and justified his/her position by referencing FAR 16.301-3( b ), which states that cost-reimbursement contracts can't be used to acquire commercial items. The lawyer's response assumes that reimbursing travel costs would mean that the contract would necessarily be a cost-reimbursement contract. That is wrong. FAR 52.212-4, Alt. I, is applicable because it is a counterexample to the lawyer's belief that reimbursement of travel costs makes a contract a cost-reimbursement contract.

The lawyer's position, that travel costs cannot be reimbursed under the specific GSA contract in question, may be justified. However, the lawyer hasn't provided a good justification.

Vern owes Don an apology for making false accusations.

Here is what Joel said:

If your counsel is telling you that you must contract for travel on a lump sum or some unit cost basis for indeterminate amount or places of travel, that is dumb!

That speaks for itself. As for Don:

Vern is mistaken--Don did say why in the fourth post of this thread.

The lawyer said that Contracting123 couldn't reimburse travel costs under a commercial contract and justified his/her position by referencing FAR 16.301-3( b ), which states that cost-reimbursement contracts can't be used to acquire commercial items. The lawyer's response assumes that reimbursing travel costs would mean that the contract would necessarily be a cost-reimbursement contract. That is wrong. FAR 52.212-4, Alt. I, is applicable because it is a counterexample to the lawyer's belief that reimbursement of travel costs makes a contract a cost-reimbursement contract.

The lawyer's position, that travel costs cannot be reimbursed under the specific GSA contract in question, may be justified. However, the lawyer hasn't provided a good justification.

The lawyer was not wrong.

Vern owes Don an apology for making false accusations.

Vern owes Don no such thing. This is what Don said:

Your legal counselor is wrong. A reimbursable CLIN does not make a contract a cost-reimbursement contract nor does it make it noncommercial. The fact that FAR 52.212-4, Alt. I, provides for the reimbursement of other direct costs and indirect expenses proves this, as this clause is used in contracts that are not cost-reimbursement contracts and that are for commercial services.

This is what Vern said:

Don said that legal is wrong and pointed to 52.212-4, Alt. 1. That clause is inapplicable, and I think he knows that now, but he continues to insist that the lawyer is wrong, without saying on what basis.

Vern sticks by that. A contract that includes a fixed-price CLIN and a cost-reimbursement CLIN is a combination fixed-price/cost-reimbursement contract. The contract must include all clauses applicable to cost-reimbursement contracts for whatever is covered by the CLIN. In this case, it would be services. I agree with the lawyer that the inclusion of a cost-reimbursement CLIN would make the contract cost-reimbursement to that extent. I don't believe for a minute that the lawyer meant that inclusion of a cost-reimbursement CLIN would make the entire contract cost-reimbursement. I won't believe it until I hear it from the lawyer himself.

FAR 52.212-4, Alt. 1, is for use in T&M contracts. T&M contracts are sui generis. They are not combinations of fixed-price and cost-reimbursement. You don't have to have a set of fixed-price clauses and cost-reimbursement clauses. You have one clause that covers the whole shebang.

Don has not proven that the lawyer is wrong. All Don proved was that when buying commercial items you can use a time-and-materials contract. Don did not prove that you can use a fixed-price contract with a cost-reimbursement line item.

A contracting officer who cannot figure out how to deal with this should burn his warrant.

Vern,

You continue to be careless in your responses, and your last post borders on rambling.

You wrote:

I agree with the lawyer that the inclusion of a cost-reimbursement CLIN would make the contract cost-reimbursement to that extent. I don't believe for a minute that the lawyer meant that inclusion of a cost-reimbursement CLIN would make the entire contract cost-reimbursement. I won't believe it until I hear it from the lawyer himself.

Regardless of what you'll believe, we are going on what Contracting123 told us. The response that he got from his/her lawyer strongly suggests that he/she believed that a contract that provides for reimbursement of travel costs would make that contract a cost reimbursement contract. That is, and continues to be, wrong.

FAR 52.212-4, Alt. 1, is for use in T&M contracts. T&M contracts are sui generis. They are not combinations of fixed-price and cost-reimbursement. You don't have to have a set of fixed-price clauses and cost-reimbursement clauses. You have one clause that covers the whole shebang.

You're exactly right. However, absolutely nobody is debating that point.

Don has not proven that the lawyer is wrong. All Don proved was that when buying commercial items you can use a time-and-materials contract. Don did not prove that you can use a fixed-price contract with a cost-reimbursement line item.

Maybe Don did not prove that you can use a fixed-price contract with a cost-reimbursement line item, because Don did not try to prove such a thing. Don pointed out an error in Contracting123's lawyer's reasoning and explained why it was wrong. Vern wants to make believe that the lawyer didn't say that and argue about something that Don didn't say. Don finds this tiring.

A contracting officer who cannot figure out how to deal with this should burn his warrant.

Whatever.

BTW, you misquoted me in your post. I never wrote "the lawyer was not wrong" in my post.

Don:

I did misquote you. You did not say that the lawyer is not wrong. You said the opposite. I'm sorry.

Here is what Contracting123 said about the lawyer's argument:

My argument is that having one CLIN as reimbursable should not make the entire contract cost-reimbursable. Their response is that having one cost-reimbursable CLIN would cause the entire action to be a non-commercial contract because commercial contracts can only be FFP/FFP with EPA/T&M.

In his next post, he said:

I guess my main issue is legal saying that one reimbursable CLIN renders the entire action non-commercial.

To which you responded:

Your legal counselor is wrong. A reimbursable CLIN does not make a contract a cost-reimbursement contract nor does it make it noncommercial.

Well, Contracting123 did not say that the lawyer said that a C-R CLIN would make the entire contract C-R. That was your characterization of what the lawyer said. According to Contracting123, the lawyer said that using a cost-reimbursement CLIN in a fixed-price commercial items contract would make the contract noncommercial. I agree.

In your latest post, you said:

Regardless of what you'll believe, we are going on what Contracting123 told us. The response that he got from his/her lawyer strongly suggests that he/she believed that a contract that provides for reimbursement of travel costs would make that contract a cost reimbursement contract. That is, and continues to be, wrong.

Emphasis added. Uhh, I don't think so. Contracting123 did not tell us that the lawyer said a C-R CLIN would make the entire contract C-R.

Now you say:

Maybe Don did not prove that you can use a fixed-price contract with a cost-reimbursement line item, because Don did not try to prove such a thing. Don pointed out an error in Contracting123's lawyer's reasoning and explained why it was wrong.

It looks like what you tried to prove is that the lawyer was wrong in something that the lawyer did not say.

Previously, you said:

If Contracting123's lawyer is telling him (or her) that you can't have a cost-reimbursable CLIN on a commercial contract, then he (or she) is wrong.

Prove it. The lawyer didn't say you can't reimburse costs under a T&M contract for commercial items. That wasn't the issue before the lawyer.

Later, you said:

The premise of the lawyer's argument is that you cannot reimburse travel costs under a commercial contract. Part 12 is relevant because it disproves that premise.

How does Part 12 disprove that premise? The lawyer didn't say you can't have a commercial T&M contract. Contracting123 rightly expressed doubts about your argument based on 52.212-4 Alt. 1 when he wrote earlier:

Thanks Don Acquisition. I'm hesitant to use the Alt 1 of 52.212-4 in the debate with legal on this issue because it only applies to T&M or LH contracts. I see what your saying about how this shows you can have a reimbursable CLIN on a commercial contract, but I can see legal's response now -- "only if it's T&M or LH."

The lawyer was telling Contracting123 that he could not have a C-R CLIN in a fixed-price commercial item contract. I was justified in thinking that you were arguing that you can, since that is what Contracting123 was asking about. Now I am not sure what you tried to prove, or are trying to prove. All you have in fact proven is that a CO can use a T&M contract to buy commercial items--a fact, true, but one that has no bearing on Contracting123's problem or on what his lawyer said. I have no idea why you think that your irrelevant fact makes the "genius" lawyer wrong. As Carl said, you merely complicated the discussion by bringing up the irrelevant alternate to 52.212-4. I would add that you needlessly did so.

Now, as for rambling, I have been known to do that in recent years. My excuse is my advanced age. I have no thoughts about what your excuse might be. If anybody owes anybody an apology, you owe one to the lawyer.

If this is about hurt feelings, then I apologize, since we're friends. But I don't want to argue anymore about who said what about what. The thread is getting too long for that. If you still have a point to make about C-R line items in FFP commercial item contracts, then make it and we can go from there.

Vern,

I don't want to argue anymore, either. However, I take issue with how you have misrepresented my argument. As such, I feel the need to set the record straight.

When you quoted from Contracting123's post, you left out the part that I took issue with. Here is the relevant portion of Contracting123's conversation with his lawyer:

We then asked contractors to give us a NTE price quote for travel, which we would reimburse after travel took place (of course we need to fund the task order appropriately, thus the NTE reimbursable CLIN).

Our legal dept. has advised us that we cannot do this, referencing FAR 16.301-3b which states that the use of cost reimbursement contracts is prohibited for the acquisition of commerical items.

The legal dept.'s comment wouldn't make much sense unless they thought that reimbursing travel would make a contract a cost-reimbursement contract. That's how I interpreted it. That's how Carl interpreted it. That's how joel interpreted it.

Now you like syllogisms, right? What would you say if a student presented this syllogism?

Major Premise: A contract that provides for the reimbursement of travel costs is a cost-reimbursement contract.

Minor Premise: The proposed contract will provide for the reimbursement of travel costs.

Conclusion: Therefore, the proposed contract will be a cost-reimbursement contract.

Hopefully, you would tell the student that his/her major premise was wrong. Perhaps you would provide a counterexample to demonstrate why the major premise was wrong. Well, that is what I did.

You obviously misunderstood and jumped to the conclusion that I was arguing that Contracting123 could do what he/she wanted to do--reimburse travel costs under the specific GSA schedule in question. I purposely stayed out of that part of the discussion because I don't know the answer.

You wrote:

It looks like what you tried to prove is that the lawyer was wrong in something that the lawyer did not say.

and then:

The lawyer was telling Contracting123 that he could not have a C-R CLIN in a fixed-price commercial item contract. I was justified in thinking that you were arguing that you can, since that is what Contracting123 was asking about.

Interesting. It looks like what you tried to prove is that I was wrong in something I did not say.

I'm glad that you no longer want to argue about who said what about what--you're not very good at it. You're much better when you stick to the subject.

As far as having C-R line items in FFP commercial contracts, I do not think that the current rules of FAR Part 12 allow for such a thing. I noticed these types of questions popping up shortly after the use of T&M contracts became permissible for acquiring commercial items. To allow for such an arrangement, the payment clause of FAR 52.212-4 would have to be tailored. However, FAR Part 12 prohibits the tailoring of the payment clause. I don't know how GSA deals with this.

Ahh, so you're i_nferring_ what the lawyer meant. Interesting, given that you said:

Regardless of what you'll believe, we are going on what Contracting123 told us.

Well, he didn't tell us that his lawyer thought a C-R CLIN would make the entire contract C-R.

Your syllogism is perfect. It is valid and it is true. The lawyer is right that a C-R CLIN would have been a C-R contract, and FAR prohibits use of a C-R contract to buy commercial items. The C-R CLIN would not have been the entire contract, since there would have been a fixed-price CLIN also. But when you write a contract with two CLINs, one fixed-price and one C-R, you have two contracts combined into one, because each CLIN stands alone. See DFARS 204.7103-1(a).

I didn't misrepresent your argument. You are confused about your argument--either that, or you're trying to get out from under it. You made the lawyer out to be an ass ("genius lawyer") for no dammed good reason. You tried to show that she was wrong by relying on FAR 52.212-4, Alt. 1. Well, the lawyer wasn't wrong. You were wrong. If you in fact argued what you now claim to have argued, then you were wasting everyone's time, all to prove that the lawyer was a fool. Well, the lawyer wasn't a fool. When whynot tried to point out that the lawyer was making sense, you retorted with a strong affirmation of your position.

If Contracting123's lawyer is telling him (or her) that you can't have a cost-reimbursable CLIN on a commercial contract, then he (or she) is wrong.

If you were referring to a T&M contract, then your attempt at demonstrating the lawyer's foolishness is turned on its head. If you have been misunderstood, then it's your fault.

Now, you're wasting my time. You should have accepted my apology and moved on.

Gee, Vern, you're right. The lawyer was right and I was wrong. If a contract provides for the reimbursement of travel costs, it must be a cost-reimbursement contract. Since you can't use a cost-reimbursement contract to acquire commercial items, then a commercial contract can't provide for the reimbursement of travel costs. I didn't get it until your last post.

I can't believe how thick-headed I was--how embarassing!! Boy, you really put me in my place! That'll teach me to take on the master.

Contracting123,

Please apologize to your lawyer for me. It seems that I made him/her out to be an ass when the real ass was me.

After all of this, the problem remains how to price travel. To the extent that any of it can be determinable, you could establish unit prices. To the extent that it isn't determinable, I'd go along with Vern's original advice:

"I?m lining up with our Marine. There is no ?answer? to this question. There is only what you can and will do as a practical matter. Why not (no pun intended) say that travel will be priced on a fixed-price basis through order-by-order agreement on the location and duration of anticipated travel, subject to adjustment? If more or less travel is needed, then mod the order. I did that for years under small R&D contracts, and it worked fine. You can also price travel on a fixed-unit-price-by-day basis, to include airfare. That takes some negotiating, but it can be done if you've got the skills. (Of course, creative fixed pricing and negotiation are lost skills in today's contracting.) You can negotiate a plus/minus unit price adjustment clause, too. Of course, information technology has made issuance of a mod a nightmare. There is entirely too much pricing of travel on a cost-reimbursement basis, but if I couldn?t it any other way, then I would make travel a cost-reimbursement/no fee line item. Period."

Why? FFP is not appropriate for circumstances where price or scope isn't determinable and where attempting to establish a FFP for an indeterminable item would place undue risk on one or both parties. Indeed, if "time and material" contract type is allowed under 12.207 (bee), with great caution and subject to the restrictions therein, the FAR apparently provides the possibility of pricing indeterminant incidental items/ODC on a commercial contract, including travel using other than fixed pricing.

The FSS clause discussed above (C-FSS-370 CONTRACTOR TASKS / SPECIAL REQUIREMENTS or something like it) is apparently in the Base ID/IQ FSS schedule contract. As I read it, this clause does not definitely restrict pricing of travel to fixed price, if it isn't feasible to do so. If there were no alternative to fixed pricing of travel, the clause would say so. If there were no alternative to 12.207(a), there would be no paragraph (bee), allowing Time and Materials contracting. Travel can be a component of Time and Materials.

It seems that the lawyer is, in effect, either saying that you cant use the FSS Schedule contract or he/she is saying you must use FFP to contract for travel costs, which you indicated are an indeterminant service. That is my problem with what the lawyer says. He/she seems to be urging you to do something that could be contrary to good business practice or that is inappropriate for fixed price contracting.

There has to be a way to price travel - if it is indeterminant - other than on a lump sum or unit priced basis and the FSS contract seems to provide for that exception in the C-FSS-370 clause. I wouldn't kill the lawyer, but I would ask them what solution they would recommend to price an indeterminant,incidental travel cost item.

I'm no master. Not even close. Ralph Nash is a master. John Cibinic was a master. I want to be a master, but I might not live long enough. I might not have the brains.

Moving on...

Travel has several components:

1. Number of trips

2. Destination(s) and method(s) of travel

3. Duration and per day food and lodging

4. Number of people

Using those components (did I miss any?), you can develop a fixed-price formula for trips. Each component can be a travel CLIN subline item. It won't be precise. Sometimes the government will pay more than the actual cost, sometimes it will pay less. If you're worried about that you can write a travel price adjustment clause.

It's a lot of trouble, yes, and it seems to make more sense to simply reimburse the travel costs. But if you decide to go with cost reimbursement, how far are you going to go? What clause(s) will you use? You'll have to write a C-R CLIN and you'll need some clause to stipulate the terms of reimbursement. Are you going to tailor the payment provision of FAR 52.212-4, despite prohibiting regulations at FAR 12.302(?

Yes, yes--it all defies common sense, but this is government contracting and common sense must survive its encounter with laws and regulations. How far are you going to go to apply what seems to you to be common sense, and what will seem to others to be a statutory and/or regulatory violation? Are you ready with a good explanation for why what you did was not a violation of the rules?

We have gotten very lazy with the pricing of project travel. Cost-reimbursement seems so convenient. Once upon a time, we priced travel for some projects on a fixed-price basis. We can still do it for some jobs. It seems like a lot of trouble, but it needn't be, with a little thought.

The technical people have gotten to the point that they don't want to think anything through--they want the contracts written to allow them to proceed without any planning and advanced decision-making whatsoever. Do we always have to go along? Is it really impossible to estimate travel? Do we really have no idea when trips will be necessary, how many people are going, and how long they're going to be there? Are we really unable to come up with creative ways to do things within the rules? Does the government really have to take all travel-related cost risk?

Having said all of this, it appears that GSA is willing to allow COs to write orders against its commercial item contracts that provide for reimbursement of travel at cost as an ODC. That being the case, it seems to me that there is an argument for doing so under GSA contracts. A call to a GSA schedule CO might show a safe way through the regulatory labyrinth without encountering a legal Minotaur.

The contracts are for "program/project management support type" services. From the business management side of the house, there may be practical problems with pricing travel as a lump sum item on such contracts. I'm assuming in some cases that the contract doesn't state the amount of travel or number of trips required.

If the contract does state an estimated or assumed amount of travel, then we may have to micromanage the line item; if the number of trips isn't necessary, do we initiate a credit change? Obviously, if the number exceeds the estimate, we'd have to do something to increase funding, regardless of the type of contract pricing mechanism.

Who determines how much travel is necessary?

The natural inclination of a contractor, if the risk is now on the contractor to control costs, is to stay within the budget. If the Contractor decides whether or not a trip is necessary or how many can go and how long the employees can stay to support the client, the client will have little control and may not be satisfied with the level of on-site services provided.

If it is a mutual decision, the Contractor may reluctant to send people any more than minimally necessary.

If it is the Government's perogative to ask for on-site representation, can the Contractor argue that the trip isn't necessary or send the B team instead of the best (assuming they are paid more than the B Team)? How does the Government determine what is a reasonable number of trips to demand (request, require, etc.) and how would the Contractor respond?

Unit-pricing of what can be determinable can help alleviate these practical problems. However, I would think that it would be much more practical for the Government and or the Government/Contractor team to manage the amount of travel within a budget, that can be easily adjusted to fit the actual needs of the program. The Government could request the Contractor's presence, the Contractor could suggest or request trips or the team could mutually determine what presence is necessary.

As to the practical aspect of reimbursements, Government employees have traveled for years, being reimbursed on the JTR basis. If travel were based upon FFP, the Contractor still has to manage its budget and account for expenses, so the administrative costs aren't much lower, than submitting reimbursement invoices. I suppose the government voucher review process would be more complicated, but probably not that much. The reviewer can do sample full blown reviews and could used simpler reviews in between. When JTR or similar limits are imposed on travel costs under a reimbursable/no fee arrangement, there is a natural inclination for the Contractor to control costs.

Yes, I am aware that the Contractor's overall performance may reflect how well it cooperated on sending the troops out to support the client.

I am still bothered by one fact set out in the original question that seems to have been overlooked ? the original subject was an order under a FSS contract. Noting this I am still confused by how this thread has progressed even though I understand many of the conclusion s reached. So here is what is bothering me.

First, is the language of C-FSS-370 prescriptive? I say it is. Why? The clause is in a contract not simply instructions on a GSA website. As a clause it specifically allows travel charges if travel is incurred and requires that travel charges are reimbursable if the Government and the Vendor elect not to make travel a fixed price item. Further allowable charges, as reimbursed at cost, must be in accord with PL 99-234 and FAR Part 31. In effect I argue that travel, when charges are based on reimbursement not fixed priced, is therefore ?priced? and is not an incidental or open market item. My conclusion is that C-FSS-370 with regards to travel is really a payment clause not a pricing clause.

I do agree that travel could instead be a fixed priced item but my read of the clause suggests that the doing so is an elective ? ?or can be? rather than the preferred - ?are reimbursable by the ordering agency?.

I am still bothered by one fact set out in the original question that seems to have been overlooked – the original subject was an order under a FSS contract. Noting this I am still confused by how this thread has progressed even though I understand many of the conclusion s reached. So here is what is bothering me.

First, is the language of C-FSS-370 prescriptive? I say it is. Why? The clause is in a contract not simply instructions on a GSA website. As a clause it specifically allows travel charges if travel is incurred and requires that travel charges are reimbursable if the Government and the Vendor elect not to make travel a fixed price item. Further allowable charges, as reimbursed at cost, must be in accord with PL 99-234 and FAR Part 31. In effect I argue that travel, when charges are based on reimbursement not fixed priced, is therefore “priced” and is not an incidental or open market item. My conclusion is that C-FSS-370 with regards to travel is really a payment clause not a pricing clause.

I do agree that travel could instead be a fixed priced item but my read of the clause suggests that the doing so is an elective – “or can be” rather than the preferred - “are reimbursable by the ordering agency”.

Carl, I admit that I'm no expert on FSS contracts or task orders. I believe that this is a base FSS contract clause, which describes overall contract terms that have to be refined or framed within individual orders. It appears to say that order terms for travel under the contract might be established as either fixed price or some type of reimbursable arrangement. I think I indicated that in my post yesterday.

When I write ID/IQ contracts, some clauses prescribe specific terms and conditions applicable to all task orders, while others frame or outline terms of various options that might be applicable to individual orders. Does this one do that? I don't think it is prescriptive. It merely indicates what is allowable under individual orders, which must describe the specific requirements.

Having said all of this, it appears that GSA is willing to allow COs to write orders against its commercial item contracts that provide for reimbursement of travel at cost as an ODC. That being the case, it seems to me that there is an argument for doing so under GSA contracts. A call to a GSA schedule CO might show a safe way through the regulatory labyrinth without encountering a legal Minotaur.

I suspect GSA's position evolved from their old philosophy and policy and the current is a blend from that and commercial contract principles. For years, GSA said delivery orders against their contract must only contain items that are part of the contract. Other items customers need (now called ODC's and incidentals) can be included must be annotated as not being part of the actual order. For example, they suggested adding "open market" by those items. From GSA's perspective, ordering activites were writing the equivaent of two seperate transaction - one against the contract and another with the same contractor for open market items.

I am inclined to agree with Carl. GSA wrote the contract, not the ordering agency. If GSA says that an agency can compensate the contractor for travel by cost reimbursement, then why not? However, as I wrote earlier, the clause simply tells the contractor what might happen. Perhaps GSA is leaving it up to the ordering agency to decide what to do. The best way to get clarification is to call the GSA contracting officer. We could discuss this until the cows come home without resolution. In any case, Contracting123 has to deal with the lawyer, who needs some kind of argument to the effect that the ordering agency would not be breaking the rules.

Joel: If the work is a project, then the parties ought to be able to get together on a tentative travel schedule, subject to change based on events. But what is happening throughout government is that agency technical personnel aren't planning much of anything. Have a problem? Let's have a meeting. Right now. Hop on a plane. Nine times out of ten the meeting doesn't resolve anything. COs should play a forcing function. PLAN, dammit, and state in the SOW what trips are planned. If things change, change the SOW and make an equitable adjustment. OH, NO! That's too much trouble. We can't do it! Let's cost reimburse, instead.

I am inclined to agree with Carl. GSA wrote the contract, not the ordering agency. If GSA says that an agency can compensate the contractor for travel by cost reimbursement, then why not? However, as I wrote earlier, the clause simply tells the contractor what might happen. Perhaps GSA is leaving it up to the ordering agency to decide what to do. The best way to get clarification is to call the GSA contracting officer. We could discuss this until the cows come home without resolution. In any case, Contracting123 has to deal with the lawyer, who needs some kind of argument to the effect that the ordering agency would not be breaking the rules.

Joel: If the work is a project, then the parties ought to be able to get together on a tentative travel schedule, subject to change based on events. But what is happening throughout government is that agency technical personnel aren't planning much of anything. Have a problem? Let's have a meeting. Right now. Hop on a plane. Nine times out of ten the meeting doesn't resolve anything. COs should play a forcing function. PLAN, dammit, and state in the SOW what trips are planned. If things change, change the SOW and make an equitable adjustment. OH, NO! That's too much trouble. We can't do it! Let's cost reimburse, instead.

Vern, I don't disagree with you. The Government should be able to estimate certain travel for individual projects. But, since (at least DOD) must compete orders, I doubt if there would be much, if any, joint planning or individual negotiations prior to the order.

But, since (at least DOD) must compete orders, I doubt if there would be much, if any, joint planning or individual negotiations prior to the order.

Why not? What's to prevent it? Not FAR. If the procurement is for a project, then the CO should tell the technical folks to either come up with a tentative trip schedule or get the hell out of his office and take the SOW with them. But today's COs can't/won't do that. They don't know how. Neither do their bosses. And the technical people, despite goodness knows how many classes in project management, don't know how to plan and manage a project. So they wan't to T&M and cost-reimburse as much as they can. And contracting lets them get away with it.

If some of those project managers had me for a contracting officer, you can damn well bet there would be a trip schedule in the SOW.

I think it goes back to the fact that the order is for professional services that used to be known as personal services. The employee is treated the same as if he were a government employee, works next to governement employees and travels at a moments notice just like Government employees. There is no way to know what travel is needed or to where. We always make the the travel reimbursable and specifically state they are to use the FTR/JTR for maximum charges. Without that statement they can follow corporate policy that may include business class for every flight.

I think it goes back to the fact that the order is for professional services that used to be known as personal services. The employee is treated the same as if he were a government employee, works next to governement employees and travels at a moments notice just like Government employees. There is no way to know what travel is needed or to where. We always make the the travel reimbursable and specifically state they are to use the FTR/JTR for maximum charges. Without that statement they can follow corporate policy that may include business class for every flight.

Boof, are you referring to Contractor 123's acquisition or one of yours?

I had dinner tonight with someone who handles IT support services for a large federal agency. I described this thread and the reaction was shock. The person wanted to know who in his right mind would make travel cost-reimbursement. The discussion went something like this:

"Cost-reimbursement? Who wants to check all those receipts? Who has time for that? Hotel rate--okay. Taxes--okay. Porn movie--not okay. Bar tab--not okay. Hi Honey call--okay, but not for 64 minutes, and on and on."

"So--how do you handle travel?"

"Set unit prices. They have to travel from, say, Pittsburgh to Boise. Airfare between $600 and $400, depending on advance notice. We set it at $500. So what if you pay a little too much for airfare from time to time. It all evens out. Big deal on a $1 million IT project. You'd spend that much checking receipts. Per diem is fixed. Just set the applicable rate invoice per trip per day. Estimate the number of trips/duration for funding purposes and if you need more fund it. You'd have to do that for cost-reimbursement. Really--anybody who makes travel cost reimbursement must have a lot of spare time on their hands. That's a no-brainer. Do people really make travel cost-reimbursement?"

I guess it's all a matter of perspective.

I had dinner tonight with someone who handles IT support services for a large federal agency. I described this thread and the reaction was shock. The person wanted to know who in his right mind would make travel cost-reimbursement. The discussion went something like this:

"Cost-reimbursement? Who wants to check all those receipts? Who has time for that? Hotel rate--okay. Taxes--okay. Porn movie--not okay. Bar tab--not okay. Hi Honey call--okay, but not for 64 minutes, and on and on."

"So--how do you handle travel?"

"Set unit prices. They have to travel from, say, Pittsburgh to Boise. Airfare between $600 and $400, depending on advance notice. We set it at $500. So what if you pay a little too much for airfare from time to time. It all evens out. Big deal on a $1 million IT project. You'd spend that much checking receipts. Per diem is fixed. Just set the applicable rate invoice per trip per day. Estimate the number of trips/duration for funding purposes and if you need more fund it. You'd have to do that for cost-reimbursement. Really--anybody who makes travel cost reimbursement must have a lot of spare time on their hands. That's a no-brainer. Do people really make travel cost-reimbursement?"

I guess it's all a matter of perspective.

I guess it is a matter of perspective. Does the government set the unit prices? Who is the "we" in "We set it at $500"? Since DOD can't normally just pick one FSS contractor to negotiate an order with (not counting sole source 8(a)), how do you make all these great detailed arrangements in a competitive ordering situation? By the way, somebody has to review and agree with quantities for all those great unit priced items in the invoices, too, unless "We" just skip that step in contract administration.

"You'd spend that much checking receipts". Give me a break! The DCAA doesn't even check every receipt for crying out loud. They use sampling techniques. I've yet to see one of our 1102's track every receipt. I'm not even sure that they check math in receipts.

I guess it is a matter of perspective. Does the government set the unit prices? Who is the "we" in "We set it at $500"? Since DOD can't normally just pick one FSS contractor to negotiate an order with (not counting sole source 8(a)), how do you make all these great detailed arrangements in a competitive ordering situation? By the way, somebody has to review and agree with quantities for all those great unit priced items in the invoices, too, unless "We" just skip that step in contract administration.

"We" is the CO and the contractor--in negotiations. The contractor proposes the travel unit prices and the parties negotiate to agreement.

You say: "Since DOD can't normally just pick one FSS contractor to negotiate an order with... ." Why not? DOD can pick one contractor to negotiate with when competing an FSS order. Nothing in DFARS Subpart 208.4 (or in DFARS 216.5) precludes that. The discussion rules in FAR Part 15 don't apply to such transactions. You don't have to establish a competitive range and conduct discussions with all in the range. You ask for offers, consider each, select one for final negotiations, then work out the details. Tell prospective offerors what you're going to do and explain that FAR Part 15 doesn't apply.

Do you think you have to apply Part 15 to everything?!

"You'd spend that much checking receipts". Give me a break! The DCAA doesn't even check every receipt for crying out loud. They use sampling techniques. I've yet to see one of our 1102's track every receipt. I'm not even sure that they check math in receipts.

In some organizations, travel receipts under a separate travel CLIN are checked by the COTR, not an auditor or an 1102. COs don't always apply the Allowable Cost or Payment clause to the travel CLIN and they don't always include the Audit and Records clause.

Considering the whole of the thread including my posts my head continues to spin. In the end I have conclude that I would change my initial post and in retrospect my response to Contracting 123 would have been as follows ?

?Contracting 123 ? Try this logic on your legal counsel.

While an order under a FSS contract (inclusive of IDIQs in general) is concluded to be a contract (wifcon.com/discus/messages/8522/9575.html?1225840698) it is a contract written under the authority of the FSS contract not the FAR. Therefore FAR Part 16 does not apply nor does FAR Part 12 (and now FAR Part 15), the terms and allowances of the master FSS contract apply. Master contract clause C-FSS-370 allows for travel to be item that may reimbursed or it may be a fixed priced item but the election to do so is completely within the authorities of the master FSS contract and the parties to the order and again not within the authorities of FAR 12, 15, or 16. Further as the FSS contract Clause C-FSS-370 allows travel expenses the travel expense item is not an open market item but an allowable item of any resulting order and again FAR does not apply the master FSS contract does. I would note that by the specifics of Clause C-FSS-370 FAR Part 31, along with PL 99-234, would apply because the clause says it governs in determining the travel reimbursement.

If this logic fails I suggest the following idea for a clause in the order if you need a work around - For the purposes of this Order CLIN XXXX shall be priced on a fixed price basis at $1.00. The Government acknowledges that travel costs may exceed this CLIN and the Government will modify the order appropriately based on actual costs incurred under the Order on a monthly basis. ?

When I pointed to C-FSS-370 in the base GSA contract which states travel costs are reimbursable by the ordering agency or can be priced as a fixed item, I'm told the clause is only descriptive (and I'm not sure what is meant by that.)

Contracting123,

Which payment clauses are in the base GSA contract? FAR 52.212-4 and 52.212-4, Alt. I? A GSA-specific payment clause? Anything else?

"We" is the CO and the contractor--in negotiations. The contractor proposes the travel unit prices and the parties negotiate to agreement.

You say: "Since DOD can't normally just pick one FSS contractor to negotiate an order with... ." Why not? DOD can pick one contractor to negotiate with when competing an FSS order. Nothing in DFARS Subpart 208.4 (or in DFARS 216.5) precludes that. The discussion rules in FAR Part 15 don't apply to such transactions. You don't have to establish a competitive range and conduct discussions with all in the range. You ask for offers, consider each, select one for final negotiations, then work out the details. Tell prospective offerors what you're going to do and explain that FAR Part 15 doesn't apply.

Do you think you have to apply Part 15 to everything?!

Vern, Part 15 doesn't apply to everything. I never said that it does. DFARS 208.405-70 applies to FSS orders, implementing Section 803 of the Defense Authorization Act for FY2002. Paragraph (3)(bee) says that each order exceeding $100,000 shall be placed on a competitive basis, unless the requirement is waived per the exceptions in FAR 8.405-6. DFARS says to make the notice of intent to purchase the service to as many schedule contractors as practicable. It says to reasonably ensure that offers will be received from at least three contractors that can fulfill the requirements. It also says that at least three offers should be received from contractors who can fulfill the requirement, unless the KO can document that, through reasonable efforts to find other firms, no other firms that could fulfill the requirement could be identified...

I admitted that I'm no expert on FSS orders, but for orders exceeding $100,000 looks like DoD agencies must try to compete orders. How practical is it to negotiate unit prices for travel with multiple firms?

For orders under $100k, I wonder how much travel would be involved, anyway. It might not be enough to fool with on a unit priced basis, considering that it might have to be modified later. Or sure, if you're dealing with one firm, go ahead and negotiate unit prices if you want to. Heck, it isn't that darned difficult to review a couple of travel invoices on a small order, anyway.

My reference to DCAA was merely to explain that professional auditors don't even scour every piece of paper and review in detail every line in proposals or invoices. They use sampling techniques. If the so called experts don't go to that detail on the big buck acquisitions, does a voucher examiner have to on every voucher that includes travel? Besides, I sure as heck can speed read a hotel bill to see what was in it, if I had to.

"We" is the CO and the contractor--in negotiations. The contractor proposes the travel unit prices and the parties negotiate to agreement.

You say: "Since DOD can't normally just pick one FSS contractor to negotiate an order with... ." Why not? DOD can pick one contractor to negotiate with when competing an FSS order. Nothing in DFARS Subpart 208.4 (or in DFARS 216.5) precludes that. The discussion rules in FAR Part 15 don't apply to such transactions. You don't have to establish a competitive range and conduct discussions with all in the range. You ask for offers, consider each, select one for final negotiations, then work out the details. Tell prospective offerors what you're going to do and explain that FAR Part 15 doesn't apply.

Do you think you have to apply Part 15 to everything?!

Aha, I see your point about picking one firm to negotiate final prices with!

Edit: Let me think about that for awhile. Seems funny that we go to all these lengths to tie down all pricing to FFP for some unknown reason (we say "because it is required". But why is it required? Because congress is worried about costs?) , then we pick one firm to negotiate with. Could that indicate, hey pricing might not be so important, qualifications or something else might be more important than the miniscule details of pricing that we seem to be insistent about? Just seems contradictory to worry about tying down all pricing details if price isn't that important. If price were really so important that we have to even fix travel costs, why not discuss final price with more than one firm?

Aha, I see your point about picking one firm to negotiate final prices with!

Edit: Let me think about that for awhile. Seems funny that we go to all these lengths to tie down all pricing to FFP for some unknown reason (we say "because it is required". But why is it required? Because congress is worried about costs?) , then we pick one firm to negotiate with. Could that indicate, hey pricing might not be so important, qualifications or something else might be more important than the miniscule details of pricing that we seem to be insistent about? Just seems contradictory to worry about tying down all pricing details if price isn't that important. If price were really so important that we have to even fix travel costs, why not discuss final price with more than one firm?

The requirement to consider price comes from (1) CICA via GAO case law now embodied in FAR 15.304--price must be a substantial factor and (2) DFARS 216.505-70(d). CICA does not apply to orders placed against existing contracts. The requirement to conduct discussions with offerors in a competitive range originated with TINA. Now it applies to competitions conducted under CICA. CICA does not apply to orders issued against existing contracts.

See my article: "Competitive Processes in Government Contracting: The FAR Part 15 Process Model and Process Inefficiency" (2003) /legacy/reg/a5f88d4bdacf44e9.html. Keep in mind that it's more than six years old.

The requirement to consider price comes from (1) CICA via GAO case law now embodied in FAR 15.304--price must be a substantial factor and (2) DFARS 216.505-70(d). CICA does not apply to orders placed against existing contracts. The requirement to conduct discussions with offerors in a competitive range originated with TINA. Now it applies to competitions conducted under CICA. CICA does not apply to orders issued against existing contracts.

See my article: "Competitive Processes in Government Contracting: The FAR Part 15 Process Model and Process Inefficiency" (2003) /legacy/reg/a5f88d4bdacf44e9.html. Keep in mind that it's more than six years old.

Yes, I understand all that. The light bulb that turned on concerned a supposed great need or statutory requirement to tie down every little facet of travel as a fixed price, supposedly because FFP is a better deal for the government or something. Then, we might well pick the best firm, with little regard for the best overall price. Next we should negotiate travel details to maybe save a few bucks. Gee, is overall price important or not important? Or is only tying down the travel cost so important? Makes me chuckle at what seems to be ironic. Oh, but it is a "no-brainer", isn't it...

Yes, I understand all that. The light bulb that turned on concerned a supposed great need or statutory requirement to tie down every little facet of travel as a fixed price, supposedly because FFP is a better deal for the government or something. Then, we might well pick the best firm, with little regard for the best overall price. Next we should negotiate travel details to maybe save a few bucks. Gee, is overall price important or not important? Or is only tying down the travel cost so important? Makes me chuckle at what seems to be ironic. Oh, but it is a "no-brainer", isn't it...

Joel, I'm sorry, but I don't entirely understand what you've said.

What I would do is instruct the competitors to propose travel rates based on specified travel in the SOW (subject to adjustment after award based on actual travel): air fare per destination, per diem per destination, whatever else. I would then calculate total travel for each competitor and factor that into my overall price evaluation and pick a winner. Then, if necessary, I would negotiate a better deal with the selectee one-on-one. (Better air fare, etc.) Travel would be priced at firm-fixed unit prices, flights, days at site, etc. Its' really very simple and it's not a new approach.

Vern, that makes more sense to me.

What I would do is instruct the competitors to propose travel rates based on specified travel in the SOW (subject to adjustment after award based on actual travel): air fare per destination, per diem per destination, whatever else. I would then calculate total travel for each competitor and factor that into my overall price evaluation and pick a winner. Then, if necessary, I would negotiate a better deal with the selectee one-on-one. (Better air fare, etc.) Travel would be priced at firm-fixed unit prices, flights, days at site, etc. Its' really very simple and it's not a new approach

So at the end, a simple solution to what was a complicated problem. It might take a little bit more work upfront to pick out anticipated destinations and durations but that's minimal. Compare that work to the Government's administrative time and expense validating receipts with what's billed on a cost reimbursement type.

This is the 64th post in this thread. My first post was No. 29. I had ignored the thread until then, because I thought the topic was stupid. I only posted when I saw who was participating and realized that the thread had become a jailhouse lawyer session with no end in site. All of the posts until then had focused on the legal issue. A chronicle of wasted time. No one proposed a simple (and long-used) fixed-price alternative to cost-reimbursement for travel until I did. And what happened then? Did anyone say: Give us some details. How would that work? Nope. All of the whiners and would-be legal eagles have gone on to other things. Except for Joel, they haven't asked any questions or made any comment.

In his first post, Post No. 11 in the thread, Joel said this:

If your counsel is telling you that you must contract for travel on a lump sum or some unit cost basis for indeterminate amount or places of travel, that is dumb! If you are an 1102, you are supposed to be the business expert, right?

Emphasis added. Well, the lawyer was not dumb. And the answer to Joel's question is: Right---supposed to be, but wasn't.

Vern,

As one of the lead whiners, I feel compelled to reply.

I think that your proposal is fine. However, let's assume that Contracting123, for whatever reason, cannot price travel on a FFP basis for his proposed task order. Before saying that he is out of luck, I think we need to know what payment clauses are in the specific GSA contract that he wants to place an order against, which is why I asked him/her.

However, he/she probably stopped reading a long time ago.

Vern,

As one of the lead whiners, I feel compelled to reply.

I think that your proposal is fine. However, let's assume that Contracting123, for whatever reason, cannot price travel on a FFP basis for his proposed task order. Before saying that he is out of luck, I think we need to know what payment clauses are in the specific GSA contract that he wants to place an order against, which is why I asked him/her.

He may have stopped reading. Whether he has or not, I'm not interested in his answer. In his place, I wouldn't have wasted five minutes arguing with the lawyer over the issue. The issue wouldn't even have come up. I would have figured out a way to fix-price travel, and I wouldn't have accepted any We can't estimate it crap from the technical folks. It probably would not have occurred to me to cost-reimburse it.

A good CO is never out of luck, unless he's out of know-how.

I always thought of everyone in this forum as a jailhouse lawyer, including Vern. There is nothing finer then when a jailhouse lawyer beats the real lawyer. Not much satisfaction though in one jailhouse lawyer taking on another jailhouse lawyer ? the real lawyers will only laugh at us. We need to stick together, and above all no whining and never apologize.

Lawyers need to fear WIFCON.

For the forum rules I propose we should add no whining, no apologies and no real lawyers allowed.

For the forum rules I propose we should add no whining, no apologies and no real lawyers allowed.

Agree with the first two rules, not the last. We have some really good participants that are lawyers.

Aw, quit whining, y'all. For the time being, the First. Amendment allows folks to speak their mind. Even though this is a private forum, I would hope that it wouldn't be THAT restrictive.

Aw, y'all quit whining about whining.

A person's opinion is often based upon their perspective. The progream that I retired from a couple of years ago required management and advisory services at many locations over a period of years. There was no way to reasonably estimate number of trips or even when or where travel would be required. In addition, we sometimes travelled from one TDY location to another. We even ended up traveling to various contractor home or division offices.

The original post indicated that travel seemed to be indeterminent in nature. That was my perspective. Vern makes a good point that what seems to be indeterminent may just be laziness on the part of the customer...

I am a businessman who operates on a strictly fixed-price basis. I and my colleagues must travel all over the world. I set my prices at the beginning of each year with no specific idea of how often I will have to travel or where I'll have to go, yet I can predict within reason. If an agency or company offered to reimburse me for travel, as many have, I would refuse. Why? Because I don't want to be bothered with making copies of receipts and sending them off to someone for judgment. If someone were to question what I paid for a hotel room, or that I hired a limo instead of taking a taxi, I would become homicidal. As for my prices--they are very competitive. I haven't raised my prices in five years.

Airline travel prices do not vary all that much and are pretty predictable, despite headlines to the contrary. Hotel rates vary within a predictable range. I know what I'll have to pay for the kind of room that I want in New York, San Francisco, Singapore, Bahrain, and Paris. Daily expense are very predictable. I have long found that by the end of a year I come out pretty much even. I don't make money on travel and I don't lose any. Many large corporations have written agreements with airlines and hotel chains about ticket prices and room rates. Their expenses are very predictable. (A relative of mine used to negotiate the agreements for IBM.) Even if a program is going to run for years and travel will be to many locations, it's not hard to fix-price it. You negotiate a travel rate schedule and update it as needed.

I tell the people who travel for me not to stay in cheap places. To hell with government per diem rates. I don't even know what they are. That doesn't mean that i want them to stay at the Ritz in Paris, but I don't want them to stay in some dive where the air conditioning doesn't work and traffic noise keeps them awake all night. I don't worry about what they pay for meals. I'm not concerned with what movies they watch. I ask for an itemization of travel costs, which they send by email, but I never ask for receipts. I find that they appreciate this and are frugal.

In the overwhelming number of cases, it simply is not necessary to pay for travel on a cost-reimbursement basis. You can always estimate travel. ALWAYS. Will it turn out as estimated? Maybe not. Probably not? Adjust!

The problem with government people is that most of them have never been business people. They have no idea how to cost or price in the commercial world. Business advisors? Please.

As a CO, unless travel were expected to run to at least $1 million, there is no way I'd cost-reimburse it. I doubt I'd cost-reimburse it then.

Vous avez dit ?a sarcastiquement, mais bien dit.