FAR 12 vs. FAR 8

Interesting, but I would also point out that GSA Schedule contracts include the commercial clauses (52.212-3, 4, and 5). What additional clauses is your colleague recommending including? It is GSA's goal to make the ordering process simpler and more expedient than when using open market procedures.

Actually they want to include the 52,212-1-5 on GSA orders. I argue they are alreay included in the master contract, but the response I get is "How do you know". Is there anything in the FAR that says 8 stands alone?

A quick glance through FAR part 8, I don't believe there is anything that prevents you from using FAR part 12 (13-15 and 19 do not apply except in certain circumstances for FSS), but there is nothing that mandates that you must use FAR Part 12 either. As desperado mentioned, GSA Schedule contracts already include clauses 52.212-3, 4 and 5. However, GSA uses there own system for ordering, so I don't see why you would include 52.212-1 unless you wanted something specifically from that clause that is not included, or differs from the GSA instructions.

I would ask the same question, what in FAR 52.212-1 does your colleague want? The purpose of GSA is to make commercial items available Government wide to purchase in a streamlined set of procedures. As with anything the FAR is silent on, I would use your best judgement given the specific acquisition you have.

You are using Part 8. The parent contract was awarded using Part 12.

Think of it this way, if you had a regular IDIQ your efforts under it would be under the basic guidelines of the FAR but any order issued is not under FAR 12, 13, 14 or 15 it is under the terms and conditions of the IDIQ contract. Your solicitation effort for an order, your evaluation (normally fair opportunity), etc. follow the rules set by the parent contract.

Now comparing to a FSS contract some of the rules for using have been codified in the CFR as FAR Part 8 so that agencies follow the same basic processes. So for FSS it is FAR Part 8, and the parent FSS contract that dictate your efforts. There is no FAR 12, 13, 14, or 15.

Oh, forgot how you can see the terms, conditions and clause of a FSS.

By example if you went here to look at contractors for Temporary Services – Temporary Staffing, Category 736

http://www.gsaelibrary.gsa.gov/ElibMain/scheduleList.do?catid=519&famid=34&sched=yes

you would see a big box that says “Federal Buyers View Contract Clauses”. Once you click on the box you are taken to a list of all contractors under 736. Across the top the headings for the listed contractors are “Contractor” and “Clauses”. If you click on the “View” and/or “Exceptions” for each contractor in the “Clauses” column you will see the clauses in each of their individual FSS contracts.

And yes FAR 52.212-1 is in the couple of contracts I quickly looked at. Can not guarantee it is in all but my bet is that it is.

Ok. I've heard everything you've said. In my debate I was dancing all around what we've said here. One last question.

Is there a benefit to using 12 with 8 for routine GSA/FSS orders?

Yes, confusion and in my opinion you would be doing it wrong!

Solicit and place the order using FAR Part 8 and GSA instructions on how to use FSS found here –

http://www.gsa.gov/portal/category/100623

Note - Some links on this site donot work. I suspect GSA is updating based on recent revisions to the FAR.

In making a GSA purchase is there authorization we must use FAR Part 12 along with FAR Part 8 for a GSA purchase? I feel using 12 with 8, at the least, is inappropriate is there a silver bullet that tells us 8 stands alone for GSA/FSS purchases? Thanks

Those are the two questions that you asked.

Answer 1 = No.

Answer 2 = Yes. 8.404, 8.405, 8.405-1, 8.405-2.

To get into the weeds. I would revisit FAR 12.102( b ) and 12.203. You use Part 13, 14, or 15 in conjuction with Part 12 (because Part 12 does not have any) for policies and procedures for solicitation, evaluation, and award. FAR Part 8 has its own policies and procedures for solicitation, evaluation, and award. 8.405 tells you how to place FSS orders. That is why you do not use procedures from Parts 13, 14, or 15 in Part 8. As C Culham has already stated, you are placing an order against an existing contract.

I've always had a problem with the FSS contracts in so far that when the solicitation is amended, the contracts are mass modified to reflect the deleted, added and changed clauses. However, the solicitation and resultant mass modification happens every so often; therefore, the contracts tend to lag behind the current FAR. With that said, wouldn't it behoove the OCO to review the current solicitation and contract and add the current FAR clauses into it even if that means adding the current 52.212-4 in the task order solicitation? Also, there are times when the FSS contract does not contain every clause that is applicable to the OCO's procurement (data rights, options, DFARs, etc.).

I've always had a problem with the FSS contracts in so far that when the solicitation is amended, the contracts are mass modified to reflect the deleted, added and changed clauses. However, the solicitation and resultant mass modification happens every so often; therefore, the contracts tend to lag behind the current FAR. With that said, wouldn't it behoove the OCO to review the current solicitation and contract and add the current FAR clauses into it even if that means adding the current 52.212-4 in the task order solicitation? Also, there are times when the FSS contract does not contain every clause that is applicable to the OCO's procurement (data rights, options, DFARs, etc.).

You are correct that GSA Schedule contracts will lag when it comes to new clauses (as do most IDIQ-type contracts). The current policy is that the Schedule contracts be refreshed at least semi-annually.

In regards to the second part of your question, an ordering activity may add any clause to their RFQ and resultant DO/TO as long as it does not conflict with clauses already in the Schedule contract. This makes it easy for DoD agencies to add the DFARS clauses where needed, as an example.

Followup to the FAR 12/FAR 8 question ... If an agency wants to use FAR 8.4 the GSA FSS Schedule, but they are acquiring services priced at hourly rates (labor hour) and not FFP tasks, does the requirement at FAR 12.207 to do a D&F justifying the use of a T&M or labor hour contract type apply? Or can we assume that GSA already executed this D&F?

Followup to the FAR 12/FAR 8 question ... If an agency wants to use FAR 8.4 the GSA FSS Schedule, but they are acquiring services priced at hourly rates (labor hour) and not FFP tasks, does the requirement at FAR 12.207 to do a D&F justifying the use of a T&M or labor hour contract type apply? Or can we assume that GSA already executed this D&F?

If you are doing a buy under FAR Part 8, the policies and procedures of FAR Part 12 do not apply, but you must still prepare a D&F for a labor hour contract.

First, take a look at FAR 12.102, Applicability. Specifically, look at paragraph (b ):

(b )Contracting officers shall use the policies in this part in conjunction with the policies and procedures for solicitation, evaluation and award prescribed in Part 13, Simplified Acquisition Procedures; Part 14, Sealed Bidding; or Part 15, Contracting by Negotiation, as appropriate for the particular acquisition.

Note that this does not mention FAR Part 8.

Also, take a look at FAR 8.402(f ) and (f )(1 ):

For administrative convenience, an ordering activity contracting officer may add items not on the Federal Supply Schedule (also referred to as open market items) to a Federal Supply Schedule blanket purchase agreement (BPA) or an individual task or delivery order only if--

(1) 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));

This subparagraph is telling you that FAR 12 regulations apply to FAR 8 only if you are not buying an item that is on the Schedule.

Regarding a D&F for use of a labor hour contract, see the first 3 subparagraphs of FAR 8.404 (h )93 )(ii ):

(i) A time-and-materials or labor-hour order may be used for the acquisition of commercial services only when it is not possible at the time of placing the order to estimate accurately the extent or duration of the work or to anticipate costs with any reasonable degree of confidence.

(ii) Prior to the issuance of a time-and-materials or labor-hour order, the contracting officer shall—

(A) Execute a determination and findings (D&F) for the order, in accordance with paragraph (h)(3)(iii) of this section that a fixed-price order is not suitable;

(B ) Include a ceiling price in the order that the contractor exceeds at its own risk; and

(C ) When the total performance period, including options, is more than three years, the D&F prepared in accordance with this paragraph shall be signed by the contracting officer and approved by the head of the contracting activity prior to the execution of the base period.

(iii) The D&F required by paragraph (h)(3)(ii)(A) of this section shall contain sufficient facts and rationale to justify that a fixed-price order is not suitable. At a minimum, the D&F shall—

(A) Include a description of the market research conducted (see 8.404© and 10.002(e));

(B ) Establish that it is not possible at the time of placing the order to accurately estimate the extent or duration of the work or anticipate costs with any reasonable degree of confidence;

© Establish that the current requirement has been structured to maximize the use of fixed-price orders (e.g., by limiting the value or length of the time-and-materials/labor-hour order; or, establishing fixed prices for portions of the requirement) on future acquisitions for the same or similar requirements; and

(D) Describe actions to maximize the use of fixed-price orders on future acquisitions for the same requirements.

Thanks, Napolik!

Recently Judge Williams at COFC issued a decision, CGI Federal, Inc. v. United States, COFC No. 14-355C, Aug. 22, 2014, where she found that FAR Part 12 does NOT apply to FAR 8.4 unless the FAR expressly says it does in specific situations:

https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2014cv0355-45-0

I hope you don't think Judge Williams was right, because she was dead wrong.

What's interesting is Judge Williams may have more experience than any judge with GSA. She was an administrative law judge with the GSBCA for 14 years.

I'm confused by the decision and don't see the rational. It doesn't make sense from what I read.

She followed pretty much the same rationale as the GAO in the earlier decision, Health Data Insights, Inc.; CGI Federal, Inc., B-409409, April 23, 2014:

We disagree with the protesters that CMS was required to follow FAR Part 12 procedures, including those concerning the tailoring of solicitations or contracts, when it ordered the recovery audit services off of a GSA schedule contract. In this regard, FAR Part 12 identifies policies and procedures for the acquisition of commercial items, and contracting officers are instructed to use Part 12 procedures in conjunction with those prescribed in FAR Parts 13 (simplified acquisition procedures), 14 (sealed bidding), or 15 (contracting by negotiation), as appropriate for the particular acquisition. FAR §§ 12.102( b ), 12.203. FAR Part 12 does not mandate its use in connection with FAR Subpart 8.4 procurements, like the acquisition here. Instead, agencies are required to use the procedures detailed in FAR Subpart 8.4 when placing orders (or establishing a blanket purchase agreement (BPA)) against a GSA schedule contract.11 FAR § 8.405. Moreover, FAR Subpart 8.4 does not require agencies to issue a waiver before including terms or conditions that are inconsistent with customary commercial practice in a solicitation.12 Accordingly, because FAR Part 12 procedures do not apply to orders being placed against the FSS, and CMS was not required to issue a waiver before including any provisions in the solicitations that were inconsistent with customary commercial practices, the protesters arguments in this regard do not provide a basis to sustain the protest. [Footnote omitted.]

The GAO was wrong, too.

Here is a hypothetical kit kat for thought:

If Judge Williams' interpretation of FAR Part 12 not applying to FAR Subpart 8.4, to which authority does a Contracting Officer modify a GSA Federal Supply Schedule Task Order for commercial items? Let's assume that there are no commercial item clauses in the contract. What authority would you cite in Block 13 of the SF-30?

What type of modification?

Thanks Don. In this hypothetical example, the modification is to change the Task Order's terms and conditions. Further, those changes would have a substantive affect on the rights of both parties.

Let me guess. You think that FAR 52.212-4( c ) would have to be cited in block 13C, but since your hypothetical contract would not have FAR 52.212-4( c ) there would be no "authority" to cite. As such, you would not have any authority to modify the contract. Is that what you think?

Aren't all GSA schedule contracts for commercial items? See FAR 38.101( a ).

As I understand it, GSA already complies with FAR Part 12 when it awards schedule contracts,and the clause at FAR 52.212-4 is included in every schedule contract.

What the court said has nothing to do with the acquisition for the schedule contract -- rather, the court spoke only to acquisitions for orders under schedule contracts. In that context, the decision makes sense to me -- a contracting officer trying to place an order under a schedule contract needs to pay attention to FAR Subpart 8.4, not FAR Part 12.

Don, I would not go as far to say the Contracting Officer would have no authority to modify the contract. FAR 52.212-4© provides express authority to modify the contract. The Contracting Officer could still modify the contract by operation of law; supplemental agreements are deeply rooted in common law. But Block 13 of the SF-30 requires the Contracting Officer to state an authority, and I am curious what others would put there.

What the court said has nothing to do with the acquisition for the schedule contract -- rather, the court spoke only to acquisitions for orders under schedule contracts. In that context, the decision makes sense to me -- a contracting officer trying to place an order under a schedule contract needs to pay attention to FAR Subpart 8.4, not FAR Part 12.

That does not make sense to me. So a GSA CO must comply with the Part 12 limitations on clause tailoring when awarding a schedule contract, but a contracting officer subsequently issuing an order under the same contract can tailor the clauses in any way that he or she sees fit. What sense does that make? How does that serve the goals of FASA and the overarching policy of encouraging commercial companies to do business with the government by sticking to commercial terms?

The COFC's and the GAO's decisions in that regard are nonsensical. They permit a result that subverts one of the basic objectives of the FASA statute and make an oxymoron out of the term "FSS contract". That approach to regulatory interpretation is nothing less than perverse.

FAR 52.212-4© provides express authority to modify the contract.

metteec,

I don't know why you think that. All FAR 52.212-4( c ) says is:

Changes. Changes in the terms and conditions of this contract may be made only by written agreement of the parties.

This paragraph just specifies that changes to terms and conditions must be bilateral and be in written form. This is not a grant of authority. If the paragraph were not in a contract, it would have no effect on the parties' ability to modify the contract bilaterally.

I don't think it makes sense to cite a contract clause as an authority for executing a bilateral modification, unless the bilateral modification makes a negotiated adjustment pursuant to a contract clause. In that case, the citation of the clause communicates that new consideration is not required. I have also seen the applicable exception to CICA cited as an authority when a bilateral modification adds new work, which is consistent with other forms used for awarding contracts. In all other cases, it doesn't really make sense to cite an authority. Some modifications cite "mutual agreement of the parties", which is perfectly fine.

People spend a lot of time worrying about what to cite in block 13 of the SF 30, but it is of little consequence. I know of no case where a bilateral modification was deemed invalid because the contracting officer cited the wrong "authority" in block 13C.

A person who would spend a lot of time fretting over what to put in block 13 of SF 30 or posting a question about it at Wifcon should not be given anything else to think about. It would overload their circuits.

Starting at post 15 in this thread, there is discussion of a COFC case regarding the applicability of FAR Part 12 to orders placed under FAR Subpart 8.4. The Court of Appeals for the Federal Circuit just reversed the COFC decision: /legacy/a/eea1fe77c21321ee.pdf.

Quote

B. Whether the 2014 RFQ Payment Terms Violate FAR Part 12.

The 2014 RFQs being challenged here were issued pursuant to the Financial and Business Solutions Schedule, an underlying FSS contract. The Court of Federal Claims found, and neither party disputes, that the services solicited in the 2014 RFQs are commercial items and that the revised payment terms therein are inconsistent with customary commercial practice. Opinion and Order at 9, 19; see Oral Argument 37:45-41:45. We affirm these undisputed fact findings.5 Thus, the only issue is whether FAR Part 12’s proscription against terms that are inconsistent with customary commercial practice applies to the 2014 RFQs. If it applies, the payment terms are in violation.

Before the Court of Federal Claims, the government does not appear to have disputed that FAR Part 12’s proscription against terms inconsistent with customary commercial practice applies to solicitations for the underlying FSS contracts themselves. Opinion and Order at 12. However, the government argued that FAR Part 12’s proscription does not apply to orders made pursuant to the existing FSS contracts. The Court of Federal Claims agreed. Opinion and Order at 19-22. It reasoned that FAR Subpart 8.4, which governs the FSS program, does not expressly state that FAR Part 12 applies to orders made pursuant to an existing FSS contract. Opinion and Order at 20. It similarly found that FAR Part 12 does not expressly state that its provisions apply to such orders. Opinion and Order at 20-21. We review the Court of Federal Claims interpretation of the applicable regulations de novo. Abbott Labs. v. United States, 573 F.3d 1327, 1330 (Fed. Cir. 2009).

We conclude that FAR Part 12’s proscription against terms inconsistent with customary commercial practice applies to the 2014 RFQs and therefore that the RFQs violate that proscription.6 On a general level, FAR Part 12 applies to the 2014 RFQs because it makes clear that it “shall be used for the acquisition of [commercial items].” 48 C.F.R. § 12.102(a). The 2014 RFQs meet the broad definition of an “acquisition” under FAR:

Acquisition begins at the point when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract.

Id. § 2.101. More specifically, FAR § 12.302( c)’s proscription against any “solicitations or contracts” including terms “inconsistent with customary commercial practice”7 applies to the 2014 RFQs because the RFQs are a “solicitation” and the resulting order is a “contract” as those terms are defined by FAR. FAR expressly defines a solicitation to include requests for proposals: “Solicitation means any request to submit offers or quotations to the Government. . . . Solicitations under negotiated procedures are called ‘requests for proposals.’” Id. § 2.101 (emphasis added). Similarly, FAR defines a “contract” as including orders: “[C]ontracts include (but are not limited to) awards and notices of awards; job orders or task letters issued under basic ordering agreements; letter contracts; orders, such as purchase orders . . . .” Id. (emphasis added). FAR § 12.302( c) thus applies, on its face, to the 2014 RFQs.

The government and the Court of Federal Claims are correct that FAR Subpart 8.4 does not explicitly state that FAR Part 12 applies to orders made pursuant to existing FSS contracts. We conclude, however, that FAR Part 12 applies to this situation expressly by its terms. To the extent there is any perceived inconsistency between FAR Subpart 8.4 and FAR Part 12, FAR Part 12 controls. 48 C.F.R. § 12.102( c) (“When a policy in another part of this chapter is inconsistent with a policy in this part, this part 12 shall take precedence.”).

Unquote