FAC 2005-48 & ID contracts under Subpart 19.10

After scanning the FAC in question, it looks like the authority to award task orders under Subpart 19.10 is gone as of the end of the month.

While looking around at the references, it struck me that there would not be a reasonable expectation that a "demonstration program" would last forever, and this one seems to have had a rather long life, considering that it was based on the Business Opportunity Development Reform Act of 1988.

So, what to do? T for C? Or cop out: just not solicit any more work under the IDIQs and let them expire?

It would make sense, at least to me, to deal with it now, be forthright with your contractors, and work with them to close out a contract while it's fresh, rather than letting it wither on the vine and working closeout when all your institutional recollection of the contract is gone.

With reference Delex Sys., Inc., B-400403 I want to pose some thoughts to enhance the discussion.

My read is that the competition intended is among only those contractors on a specific IDIQ multiple award. With this in mind if you have IDIQ that that was solicited full and open and you ended up with no small businesses on it, then there are no small businesses available to receive the award therefore you cannot set aside the procurement for SBs or apply the "Rule of Two". However if you do have SB's in the IDIQ mix then you must reserve the procurement for the pool of SB's if need is under $150K and consider Rule of Two if need is over $150K.

What would add confusion are further details of your procurement and the concept of IDIQ's themselves. They are not a mandatory use so one might argue if you have only LB's on them you cannot even get to their use at all. I would offer that if your decision to do full and open was not solely based on FAR 19.10 but more detailed market research that supported that there were not adequate SB's in the market to fill all your needs, and the solicitation proved it where no SB?s got on the IDIQ contract, you might have adequate grounds to continue their use.

In the end you have raised a very interesting question that carries great risk of being the first test case(s) for GAO protest. Worth the risk to continue with the IDIQs? Your choice the way I see it? To the mention of T4C such action would only be appropriate in my view for those contractors on the IDIQ that have not received the guaranteed minimum in TO awards. Do not forget that the no cost settlement route might be an option as well.

One of the problems is that under 19.10 I didn't consider SB set asides, as 19.10 allowed unrestricted procurments over the ESB reserve amount. So we went out unrestricted. I going off memory but I believe we had many SB's (some submitted as JV's and using teaming arrangements) that submitted SF-330's but they didn't make the most highly qualified list. From my experience most large A&E firms have an advantage over SB firms becuase they have more resources and broader capabilities (IMHO). So while SB firms may be capable to perform the work, they may not be able to surpass their LB counterparts in experience and capablity (at least on paper).

I don't think this change will have a big effect on the other DIGs, like construction, but for A&E it may have some far reaching changes. The work load of the SB A&E community should significantly increase (IMHO).

alex - Not to get to far into the weeds here but it seems your last comments are making conclusions that you could only make from actual evaluation of SF-330's. Suggest not to over think but to work thorugh the matter in a logical step process. Why did I do a full and open? How does this affect the new statute? Etc? Etc?

If an IDIQ contract was awarded in compliance with the laws and regulations then in effect, and if a new requirement is within the scope of that contract, then the requirement need not be competed except as required by FAR Subpart 16.5, which is about competition restricted to awardees of multiple award IDIQ contracts. See FAR 6.001(e) and (f). See also FAR 5.202(a)(6) and (11). If the work need not be competed, then it need not be set-aside under 19.5. There is no need to revisit the set-aside issue for work that is within the scope of a legally awarded contract.

This is a non-issue.

If an IDIQ contract was awarded in compliance with the laws and regulations then in effect, and if a new requirement is within the scope of that contract, then the requirement need not be competed except as required by FAR Subpart 16.5, which is about competition restricted to awardees of multiple award IDIQ contracts. See FAR 6.001(e) and (f). See also FAR 5.202(a)(6) and (11). If the work need not be competed, then it need not be set-aside under 19.5. There is no need to revisit the set-aside issue for work that is within the scope of a legally awarded contract.

Vern,

Consider LBM, Inc., Comp. Gen. Dec. B-290682, 2002 CPD ? 157.

Nevertheless, the Army argues that FAR Sec. 19.502-2( (the so-called "rule of two") does not apply to task orders issued under FAR Subpart 16.5, but only to acquisitions under FAR Parts 13, 14, and 15. See Army Response to SBA Report (Aug. 2, 2002) at 4-7. In the agency's view, FAR Sec. 19.502-2 only applies "in the contract formation part of the acquisition process," and not to "a post-award ordering action."

[...]

We find unpersuasive the Army's arguments, which mischaracterize the protest as a challenge to the proposed award of a task order under the existing LOGJAMSS contracts. As explained above, LBM's challenge is to the agency's acquisition planning in deciding to transfer the Fort Polk motor pool transportation services to LOGJAMSS without considering applicable law and regulation pertaining to small businesses.

Also, contrary to the Army's arguments, we believe that FAR Sec. 19.502-2( applies to the Army's acquisition of the motor pool services at Fort Polk. By its express terms, FAR Sec. 19.502-2( states that "the rule of two" is applicable to "any acquisition over $100,000." Acquisition is defined by the FAR to mean:

the acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. Acquisition begins at the point when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract. FAR Sec. 2.101.

Under this broad definition, the agency's purchasing the Fort Polk motor pool services by contract with appropriated funds is an "acquisition," subject to FAR Sec. 19.502-2(, regardless of the fact that the agency anticipated acquiring those services through their transfer to the LOGJAMSS scope of work. See Valenzuela Eng'g, Inc., supra (Letter to the Acting Sec'y of the Air Force, Jan. 26, 1998, at 2-3 n.1). Had the agency complied with the requirements of FAR Sec. 19.502-2(, it might have concluded that the LOGJAMSS contracts were not the appropriate vehicle for this acquisition. Whatever the outcome of the FAR Sec. 19.502-2( analysis, though, the agency's intent to use a task order under LOGJAMSS as the contract vehicle did not eliminate the legal requirement that the agency undertake that analysis.

I think that this would be an issue. In the past alexreb didn't have to consider small business set-asides because they were under the Comp Demo Program. Now he (or she) does.

If LBM decision applies then it is a "legal requirement" for a CO to consider ALL acquisitions under 19.502-2(.

This issue doesn't appear to be clear cut by any means, my PCR is under the opinion that we should be able to continue awarding task orders under our current contracts (by-passing 19.502-2( determination). But he also mentioned that we should consider letting our contracts expire and going out for new awards.

If LBM decision applies then it is a "legal requirement" for a CO to consider ALL acquisitions under 19.502-2(.

This issue doesn't appear to be clear cut by any means, my PCR is under the opinion that we should be able to continue awarding task orders under our current contracts (by-passing 19.502-2( determination). But he also mentioned that we should consider letting our contracts expire and going out for new awards.

alexreb,

What is your PCR basing their opinion on?

He didn't provide any references. I just asked for his opinion.

Don:

You are guilty of a very selective or careless reading of the LBM decision, which was rendered in light of a very specific set of facts. In that case, motor pool services at Fort Polk had been acquired as a small business set-aside for 10 years.

Transportation motor pool services, including among other things dispatching and operating vehicles and minor maintenance, have been performed exclusively by small businesses, including LBM, under small business set-asides at Fort Polk over the last 10 years. The most recent contract for these services was awarded to another small business concern in 1997 and expired on July 31, 2002 (after the date this protest was filed).

The Army then decided that instead of conducting another small business set-aside for the follow-on contract, it would order the work under a large task order contract for logistics services (LOGJAMSS).

The contracting officer estimated that the Fort Polk motor pool services requirement would be approximately $10 million for the total 5-year performance period. This is in contrast to the more than a quarter of a billion dollars that has already been ordered under the LOGJAMSS contracts.

Footnote and file references omitted.

The GAO objected to the "transfer" (GAO's word) of the work to a very large task order contract with a "broad and vague" workstatement.

We have recognized that the increasing use of ID/IQ contracts with very broad and often vague statements of work may place an unreasonable burden upon potential offerors, who may be required to guess as to whether particular work, for which they are interested in competing, will be acquired under a particular ID/IQ contract. See Valenzuela Eng?g, Inc., B-277979, Dec. 9, 1997, 98-1 CPD ? 51 (Letter to the Acting Sec?y of the Army, Jan. 26, 1998, at 2). This burden may be particularly problematic for small businesses... In sum, we find, given the breadth and vagueness of the LOGJAMSS scope of work and given that the Fort Polk motor pool services had previously been exclusively set- aside for small businesses, that LBM cannot reasonably be viewed as on notice that the Army would transfer this work to LOGJAMSS without consideration of FAR ? 19.502-2(.

None of the facts in LBM pertain in alexreb's case, which is clearly distinguishable. The work had not been previously awarded to small businesses. In fact, set-aside for small businesses had been prohibited. Thus, alexreb is not transferring work that had previously been acquired under small business set-aside to a different contract that had not been set aside. We have not heard that alexreb's statement of work is "broad and vague," encompassing many different kinds of work, as was the case in LBM. His contract is for A-E services. The GAO did not rule that COs must always consider small business set-asides before acquiring work under a contract that had been awarded for the work in question. They applied that requirement in the LBM decision in light of a very specific set of facts, which do not pertain in alexreb's case. Anyway, this is a typical GAO decision in which GAO was seeking justice and bent law and regulation to its purposes.

Alexreb--get on with your work and quit worrying about this. You have gotten mainly idle speculation here. I got this from a friend at DAU today:

A lot of the feedback we're getting from program managers/project officers about their contracting support, beyond just that they are new and inexperienced, is that they are too timid, afraid of their own shadows, and, ultimately, almost paralyzed. As one example, on a mission assistance effort we did for PEO Soldier, one program manager complained about the contracting officer refusing to allow him to do one-on-ones with potential offerors as part of market research, even though it is specifically allowed by the FAR. We hear over and over again about contracting officers afraid of protests, and how much time they take trying to make their source selections ?protest proof.? [Good luck on that one.] They are, of course, ignorant of, or chose to ignore, the minimal statistical likelihood that they will be involved in a protest, much less lose one. By the way, part of the feedback I get is that some of this fear may be inculcated by novice DoD attorneys with even less acquisition experience than the contracting officers.

Don't be a classic case.

Vern,

The facts of the case are irrelevant to GAO's major premise, which is that the rule of two applies to all acquisitions, regardless of whether the agency plans to use an IDIQ contract or not. The use of FAR 16.5 to place an order does not insulate an agency from having to comply with the rule of two. To assume that the GAO would interpret the rule differently if given a different set of facts is unreasonable.

The facts of the case are irrelevant? Nonsense.

Let me ask you:

Is it your position that an agency must first decide whether to set a purchase aside for separate small business competition before it can issue a task or delivery order for the work against an IDIQ contract, and that the agency may not use the IDIQ contract, but must conduct a separate competition as a small business set-aside if two small businesses are able to perform, even if the purchase is within the scope of the IDIQ contract?

If that is your position, do you believe that it holds true even if the agency needs to issue an order so that it can buy the contract minimum, and that an agency can be prevented from ordering the minimum accordingly?

If that is not your position, what is your position?

Vern,

In holding that the rule of two applied even when an agency intended to use FAR Subpart 16.5, the only relevant fact of the LBM case was that the Army was conducting an acquisition. They didn't limit their interpretation of FAR 19.502-2( to cases where an agency is "transferring" a requirement that had traditionally been set-aside to an IDIQ with a vague statement of work. Here it is again:

Also, contrary to the Army's arguments, we believe that FAR Sec. 19.502-2( applies to the Army's acquisition of the motor pool services at Fort Polk. By its express terms, FAR Sec. 19.502-2( states that "the rule of two" is applicable to "any acquisition over $100,000." Acquisition is defined by the FAR to mean:

the acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. Acquisition begins at the point when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract. FAR Sec. 2.101.

Under this broad definition, the agency's purchasing the Fort Polk motor pool services by contract with appropriated funds is an "acquisition," subject to FAR Sec. 19.502-2(, regardless of the fact that the agency anticipated acquiring those services through their transfer to the LOGJAMSS scope of work. See Valenzuela Eng'g, Inc., supra (Letter to the Acting Sec'y of the Air Force, Jan. 26, 1998, at 2-3 n.1). Had the agency complied with the requirements of FAR Sec. 19.502-2(, it might have concluded that the LOGJAMSS contracts were not the appropriate vehicle for this acquisition. Whatever the outcome of the FAR Sec. 19.502-2( analysis, though, the agency's intent to use a task order under LOGJAMSS as the contract vehicle did not eliminate the legal requirement that the agency undertake that analysis.

As to your question...

Is it your position that an agency must first decide whether to set a purchase aside for separate small business competition before it can issue a task or delivery order for the work against an IDIQ contract, and that the agency may not use the IDIQ contract, but must conduct a separate competition as a small business set-aside if two small businesses are able to perform, even if the purchase is within the scope of the IDIQ contract?

It depends. If, at the time of the solicitation for the IDIQ contract, small business concerns were reasonably aware that the types of supplies or services contemplated by the particular task or delivery would be types of supplies or services ordered under the IDIQ contract, then an agency need not consider that requirement for a small business set-aside (assuming they considered the rule of two when soliciting offers for the IDIQ contract). In this case, a protest of the agency's decision to issue a task or delivery order would be untimely. However, if, at the time of solicitation for the IDIQ contract, small business concerns would not have reasonably been aware that the types of supplies or services contemplated by the particular task or delivery would be the types of supplies or services ordered under the contract, then the agency would have to consider the requirement for a small business set-aside. Such was the case in LBM.

You contradict yourself by saying that the only relevant fact is that the agency was conducting an acquisition and then saying:

It depends. If, at the time of the solicitation for the IDIQ contract, small business concerns were reasonably aware that the types of supplies or services contemplated by the particular task or delivery would be types of supplies or services ordered under the IDIQ contract, then an agency need not consider that requirement for a small business set-aside (assuming they considered the rule of two when soliciting offers for the IDIQ contract).

First you say that the only relevant fact is whether the agency is conducting an acquisition, then you say that the application of the rule of two depends on the awareness of small businesses when proposals for the IDIQ contract were solicited. Those positions are inconsistent.

In LBM the GAO found that the protester could not have known at the time of the solicitation for the task order contract that the services would be transferred to that contract, because at the time of the award of the task order contract the work in question was being done and had been done by small businesses under contracts that had been set aside. It was the transfer of work to the previously awarded task order contract that could not have been anticipated and that triggered FAR 19.502-2(:

It was only at the point that the agency decided to withdraw the Fort Polk motor pool services from the small business set-aside program and to transfer them to the LOGJAMSS contracts that the analysis required by applicable regulations, that is, as discussed below, FAR ? 19.502-2(, became relevant.

Subsequent to LBM, in Specialty Marine, Inc., B-293871, June 17, 2004, 2004 CPD ? 130, the GAO said:

[W]e view the protest as a challenge to the inclusion of the work under the ID/IQ contracts, in essence, a challenge to the scope of the underlying ID/IQ solicitation, an issue that is within our bid protest jurisdiction. See LBM, Inc., B-290682, Sept. 18, 2002, 2002 CPD ? 157 at 4.

Emphasis added.

In short, LBM was a challenge to the transfer of the work, which could not have been contemplated when proposals for the task order contract were solicited. The transfer was thus outside the scope of the task order contract competition. It was a "new work" acquisition that was subject to the rule of two. Facts do matter. It is new work acquisitions that are subject to the rule of two. The GAO did not hold that work within the scope of an existing IDIQ contract is subject to the rule. The position you took in your previous post, which was that the rule of two applied even to within scope work, would have rendered IDIQ contracts pointless. Two small businesses could submit proposals for an IDIQ contract and not be selected and then force separate set-asides for work within the scope of the very contract for which they were not selected. Absurd.

axelreb's situation is distinguishable from that in LBM. The work that he wants to order was contemplated for the IDIQ contract at the time of solicitation and is within the scope of that competition and contract, and thus is not subject to the rule of two. The elimination of FAR 19.10 is without effect on that contract.

Following the thread I have changed my mind where if I were alex I would terminate the contracts and start new. Why?

By example if an IDIQ contract was awarded under a statute that allowed selection of A-E contractors based on price and during the term of that contract the statute changes where the Brooks Act became reality appropriate course would be to terminate the IDIQ's and start new.

So spinning back to the FAR 19.10 the contracts should terminated in light of new legislation. The statute change that eliminates FAR 19.10 is not a scope issue it a legislative action that must be considered. Amending is not appropriate because as alex has noted a SB set aside was not even considered for the original contracts in light of 19.10. Yes it was a full and open competition where SB's did try to play but could not compete against the LB's and suggests the prime reason the demo program has been removed.

Now the "law" if you will, by removal of the demo program, is that a SB set aside must be considered for all A-E procurements. An IDIQ is not a mandatory source. Further a task order is a standalone contract action. As such a CO must make a decision regarding the SB set aside ?law? because no longer does FAR 19.10 exist that in essence allowed the CO to quickly and almost automatically get to a full and open and in effect to the tool of the IDIQ that was advertised as full and open.

Summarized an A-E procurement is now subject to the either mandatory SB set aside or the ?Rule of Two?, in this instant matter the use of the IDIQ does allow for this statutory consideration for any new procurements that would be accomplished by task order and therefore is not an appropriate tool to be used.

This is amazing to me. In the long history of government contracts, within-scope acquisitions have not been subject to the rules that apply to "new work" acquisitions, and statutes have not been applied retroactively to legally awarded contracts unless the statute or regulation expressly provides otherwise. Now we have a DAU professor and an experienced hand seeking to overturn longstanding practice. At least in the case of the DAU professor I know where he has been coming from⎯misreading of a single GAO decision. But in Carl?s case I just don?t get it:

The statute change that eliminates FAR 19.10 is not a scope issue it a legislative action that must be considered.

[sic.]

Huh? A new statute applies to work that is within the scope of a legally awarded contract that predated the statute? Since when? Such a notion if actually applied would destabilize the entire acquisition system.

Don?s earlier notion, that the rule of two applies to all acquisitions, even within scope orders against legally awarded contracts, would eliminate the rationale for IDIQ contracts and make them untenable. In a conversation he even maintained that if two small businesses could do the work, then the agency could not issue an order against the contract even to buy the minimum. Maybe he still thinks that, I'm not sure.

Excuse me, but this is lunacy. If axelreb's office wants to terminate the contract so that they can make more small business awards, that's okay. But it they want to terminate the contract because they think that the elimination of FAR 19.10 requires that they do so, that's not okay. That's wrong. The background statement to that change in FAR says it is not a significant action, and it says nothing about no longer ordering against existing contracts.

Vern,

I didn't contradict myself--you misunderstood. I'll try to be more clear. According to LBM, the rule of two applies to acquisitions regardless of whether the agency intends to issue a task or delivery order under an IDIQ contract. Period. If an agency wishes to place an order under an IDIQ contract for work that could have reasonably been contemplated by small business concerns at the time of solicitation of the IDIQ contract, then they need not reconsider that work for a small business set-aside assuming they complied with FAR 19.502-2( in awarding the IDIQ contract. They would have complied with FAR 19.502-2( for all future task and delivery orders that could have been reasonably contemplated by small business concerns at the time of the IDIQ solicitation. The GAO would dismiss as untimely a protest against such a task order on the grounds that it should be set aside for small business.

On the other hand, if the agency wishes to place an order that could not have reasonably been contemplated by small business concerns at the time of the IDIQ solicitation, then they would have to consider that work for a set-aside before placing the order. Such orders could still be within the scope of the IDIQ contract. In LBM, there is no indication that the motor pool services were outside the scope of the contract. Given the description of the LOGJAMMS statement of work as "broad" and "vague", it probably was within the scope of the contract. As such, I don't accept your contention that an agency need not worry about the rule of two if the order it contemplates is within the scope of the contract. If you meant "scope of the task order contract competition" when you wrote "scope of the contract", then your position would be more acceptable.

In any event, I wouldn't tell alexreb that he has nothing to worry about--we don't know how broad the scope of his IDIQ contract is. When the Comp Demo program was in effect, alexreb didn't have to worry about a small business protesting a task or delivery under his contract on the basis that it was never considered for a small business set-aside. Such a protest would have been moot. Now that the Comp Demo program is no longer in effect, he has to worry about these types of protests. This is not a nonissue.

I did not misunderstand you and you did contradict yourself. Your self-contradiction is obvious in your prior post. Moreover, you have significantly changed your position since your earlier posts and our telephone conversation last night.

This is what you said earlier in this thread:

The facts of the case are irrelevant to GAO's major premise, which is that the rule of two applies to all acquisitions, regardless of whether the agency plans to use an IDIQ contract or not. The use of FAR 16.5 to place an order does not insulate an agency from having to comply with the rule of two. To assume that the GAO would interpret the rule differently if given a different set of facts is unreasonable.

What you are saying now is that if the rule of two applies only if the agency had not conducted the appropriate 19.502-2( analysis before soliciting proposals for the contract--i.e., it applies to within scope task orders only if the agency did not comply with the rules when awarding the contract. (In order to be legally awarded the rule of two analysis must have been performed and the rule complied with at the time of solicitation of proposals for the contract.) In short, the legality of the award of the contract is a pertinent fact issue, and so facts are relevant, and the rule of two does not apply to all acquisitions, since it does not apply when the facts are that a task order (an acquisition) is (1) within scope and (2) under a legally awarded contract.

Facts in LBM were clearly relevant to the outcome. In LBM work that had been procured under a small business set aside was transferred to a task order contract that clearly did not contemplate inclusion of that work when proposals were solicited and the contract awarded. That is why the rule of two was applied. Anyone reading this thread can read that decision and see that for themselves.

(As for scope of competition v. scope of the contract, let me ask you: Can work be within the scope of a contract if it was not within the scope of the competition for that contract? Can work that is outside the scope of a contract have been within the scope of the competition for that contract?)

This is what I said to axelreb in my first post in this thread:

If an IDIQ contract was awarded in compliance with the laws and regulations then in effect, and if a new requirement is within the scope of that contract, then the requirement need not be competed except as required by FAR Subpart 16.5, which is about competition restricted to awardees of multiple award IDIQ contracts. See FAR 6.001(e) and (f). See also FAR 5.202(a)(6) and (11). If the work need not be competed, then it need not be set-aside under 19.5. There is no need to revisit the set-aside issue for work that is within the scope of a legally awarded contract.

I still say that. And if those conditions are met and I were axelreb's boss I would tell him/her to get the hell off Wifcon Forum and get on with issuing orders.

Vern,

There is nothing contradictory in what I wrote and I have not changed my position since my first post. If you expect me to continue to defend myself against your accusations, then I'm sorry to disappoint you. My position was clearly stated in my last post. Anybody reading that post would understand my position. You are choosing to misunderstand me at this point--I have no patience for that. Too bad, it could have been a good discussion.

Regarding "scope of the competition" and "scope of the contract", there are situations where they do not overlap. See Administration of Government Contracts, Fourth Edition, p. 388

Admittedly I have provided no references to support my view. There are none as I suspect Vern would have laid them on us already. All referenced support to arguements do not address the instant issue and unless alex continues to use the IDIQ and a SB takes exception through protest there will not be a reference. Further I would note any reference would have to support that for an elective use procurement method such as a non-mandatory IDIQ that a CO can use that method even though it does not meet current statute and regulation regarding set asides.

Clarified further the IDIQ in alex's hand is legal, but to otherwise use it now to secure new A-E service requirement would not be proper for any procurement under $150K and and any over $150K where there are two or more SB's available to do the work. Furthered by example. I have an IDIQ that says I can use delivery orders to buy steel from Timbucktoo but a new statute is put in place to say steel in Timbucktoo is no longer to be used for government projects. I sure the heck would not use it to buy steel for a new project I would use other procurement types and methods available to me!

Also would note that partial support is offered that it is okay for alex to continue because the FAR (Council I suppose) says it is not a significant change then therefore must not be.

My conclusion is that alex has raised a very legit question that everyone did not consider, even the FAR!

Don,

I don't misunderstand you. I understand you perfectly. I think you've been playing dodgeball. This was your original position:

The facts of the [LBM] case are irrelevant to GAO's major premise, which is that the rule of two applies to all acquisitions, regardless of whether the agency plans to use an IDIQ contract or not.

I took that to mean, as you know from our conversation last night, that if an agency wants to place an order against an IDIQ contract it must first determine whether two small businesses can do the work and, if they can, the agency cannot place the order but must conduct a separate competition set aside for small businesses. If that was not your intention, then I did misunderstand you. But I don't think I did. We spent at least a half hour debating that last night and we went over it several times.

Your current position, as I understand it, is that the facts of the LBM case are relevant and the rule of two does not apply to an acquisition in the form of a within scope order if the agency complied with that rule before issuing the solicitation for the IDIQ contract. If that is your current position, which is what I told axelreb a day or so ago, then you and I now agree and any further conversation would be a waste of time.

If you keep saying that the facts in LBM do not matter, and the rule of two applies to all acquisitions, and that COs must make a rule of two determination for each and every within scope task order contemplated under an IDIQ contract, then we disagree, and the readers of this thread can read that case and arrive at their own conclusions.

Clarified further the IDIQ in alex's hand is legal, but to otherwise use it now to secure new A-E service requirement would not be proper for any procurement under $150K and and any over $150K where there are two or more SB's available to do the work. Furthered by example. I have an IDIQ that says I can use delivery orders to buy steel from Timbucktoo but a new statute is put in place to say steel in Timbucktoo is no longer to be used for government projects. I sure the heck would not use it to buy steel for a new project I would use other procurement types and methods available to me!

***

My conclusion is that alex has raised a very legit question that everyone did not consider, even the FAR!

Carl: You make a good point about the prohibition against buying steel from Timbuktu. But I think that's different. I think that clearly applies to all acquisitions, within scope and out of scope: Don't buy anything from Timbuktu.

I think the rule of two, which is an acquisition planning rule, applies to future "new work" acquisitions, and I think the FAR council does, too, which is why they didn't say anything about it. But there is an easy way to find out. If you look at FAC 48, Item I, you'll find the name of the procurement analyst responsible for that change and his phone number. Call him for clarification.

It is difficult to fault Carl's logic, and more difficult to understand why this thread has moved to discussions of distinctions without differences, in tangents so far removed from the intent of the demonstration program and the reasons for its repeal.

The first stated purpose of the demonstration program was to assess the ability of small businesses to compete successfully for designated kinds of work without set-asides. (Tangent: At least in the case of this IDIQ, they could not.) Other purposes included enhanced set-asides in targeted categories of work as detemined by agencies, and measuring the extent of awards to emerging small businesses while establishing a new kind of set-aside for these businesses. (FAR 19.003)

The demonstration program was repealed by a law that expressed the will of the Congress, and expressed it fairly clearly, in order to give small businesses a better shot at competing for awards of new work. This from the Senate Finance Committee: "Removes the red tape and closes loopholes that too often put government work into the hands of multinational corporations instead of Main Street businesses." Here is what the SBA had to say: "The law eliminates the ?Competitiveness Demonstration? program, which limited opportunities for small contractors in 11 industries where they excel, such as construction, landscaping and pest control."

The effective date was set and reached, so the repeal is now in effect.

What is the effect of the repeal? It would not make sense to terminate ongoing delivery or task order work, but it seems clear that for any new work, the demonstration program is officially over.

The authority to award new work under a contract vehicle created under the repealed demonstration program would seem to be directly contrary to the expressed will of Congress. (No more steel from Timbucktoo.)

To do otherwise would not pass the red-face test. Imagine being called to testify in front of a congressional committee and being asked to explain why you awarded new work under a repealed program. All the finely nuanced arguments in the world would not sound reasonable, mainly because they aren't, imho.

By your logic, every new law upturns contracts awarded prior to the enactment of the law.

• When the Truth in Negotiations Act was passed in 1962, no one said we could not continue to issue orders against IDIQ contracts awarded prior to its enactment and without having obtained cost or pricing data or that we couldn't exercise options to extend such contracts.

• When the Competition in Contracting Act was enacted in 1984, no one said we could no longer issue orders against IDIQ contracts awarded without full and open competition prior to the enactment of the law. No one said that we could not exercise options to extend such contracts.

• When the Federal Acquisition Streamlining Act was enacted in 1994, no one said that we could not continue to order items that were commercial under IDIQ contracts awarded without commercial terms and conditions prior to FASA's enactment, or exercise options to buy more or extend such contracts. And no one said we could not place orders against contracts for which past performance had not been an evaluation factor.

• When Clinger-Cohen was enacted, no one said we could no longer issue orders against IT contracts awarded prior to its enactment.

I could go on and on. The Competitiveness program prohibited set-asides in certain industries. It was effective until repealed. Why would its repeal affect contracts awarded earlier pursuant to its terms? Why are you arguing that the repeal is retroactive and invalidates legally awarded contracts that predate it? Did the repeal statute make it retroactive? The new FAR regulations do not make it retroactive. Where do you get that "expressed will of Congress" business as applied to previously awarded contracts? Where did Congress say we can no longer use such contracts? Did you find that in a House or Senate report? In a committee hearing? The Congressional Register? Where?

Some of you guys pull stuff out of empty air and would use whatever it is to topple the entire procurement process. It's frightening. I would have no trouble explaining to Congress my continuing to issue orders against contracts awarded prior to the repeal. If they gave me a hard time I would tell them that if that had wanted to invalidate validly awarded contracts they should have said so.

The authority to award new work under a contract vehicle created under the repealed demonstration program would seem to be directly contrary to the expressed will of Congress. (No more steel from Timbucktoo.)

To do otherwise would not pass the red-face test. Imagine being called to testify in front of a congressional committee and being asked to explain why you awarded new work under a repealed program. All the finely nuanced arguments in the world would not sound reasonable, mainly because they aren't, imho.

Why can you not use contracts awarded prior to the repeal? What has directed the non-use of existing contracts?

See FAR 1.108(d):

Quote

(d) Application of FAR changes to solicitations and contracts. Unless otherwise specified ?

(1) FAR changes apply to solicitations issued on or after the effective date of the change;

(2) Contracting officers may, at their discretion, include the FAR changes in solicitations issued before the effective date, provided award of the resulting contract(s) occurs on or after the effective date; and

(3) Contracting officers may, at their discretion, include the changes in any existing contract with appropriate consideration.

Unquote

What has specified non-use of existing contracts?

Vern,

My post #18 was crystal clear on my position. I'll try one last time.

1. The rule of two applies to task and delivery orders, because task and delivery orders are acquisitions. This has been my position from the start. In LBM, the GAO rejected a number of the Army's arguments. One such argument was that the rule of two did not apply to task and delivery orders. In determining that the rule of two applied to the motor pool services, the only fact that mattered was that procurement of the motor pool services at issue was an "acquisition." The issue of the "transfer" was important in determining if the protest was within the GAO's protest jurisdiction. It had nothing to do with whether the rule of two applied to the work.

2. An agency can apply the rule of two to task or delivery orders either before award or after award (that is, if they failed to comply before award, they must do so after award--not that they have a choice of complying before or after). An agency can comply FAR 19.502-2( for all future task and delivery orders under an IDIQ contract if a) they considered set-asides in the planning phase of the IDIQ solicitation and the solicitation reasonably described the work contemplated by the particular task or delivery order. If, after award, the agency intends to issue a task or delivery order and cannot meet conditions (a) and (, then they must apply the rule of two to the task or delivery order at that time.

Validity, and use or non-use, of existing contracts are not the point.

We are talking about not soliciting or awarding any new task orders under the old, repealed program.

It's that simple.

I disagree with your first point.

I disagree with your second point.

We know each other and we both know the conversation is over at this point.

I'm content to let interested individuals reach their own conclusions.

Peace.

Validity, and use or non-use, of existing contracts are not the point.

We are talking about not soliciting or awarding any new task orders under the old, repealed program.

It's that simple.

I'll tell you what's simple: You're wrong. We are talking about issuing or not issuing within-scope task orders under validly awarded contracts.

If you look at FAC 48, Item I, you'll find the name of the procurement analyst responsible for that change and his phone number. Call him for clarification.

Good advice Vern. I am going to choose to text him while I am driving as my IDIQ contract issued on Oct 2, 2009 has not been amended yet to prevent such an act. Hope I do not get in an accident when I do and have to explain an accident while doing Government business that was a result of my texting and doing so just happens to be contrary to a EO. I am sure they will just let it slide as the contract I have includeds texting in its original scope!

PS - Apologies to all for the distraction but I could not resist a volley back as I grow tired of purposeful digs intended, in my personal view, to derail respectable debate.

Carl:

Allow me to put your mind to rest. The policy about texting does not prohibit contractor employees from doing it. See FAR 52.223-18. So you would have nothing to explain if you were to crash, which I hope you don't. Moreover, it applies only to contracts resulting from solicitations issued on or after September 29, 2010, about a year after the E.O. See 75 FR 60264. Agencies are not required or authorized to force the policy on contractors whose contracts resulted from solicitations issued before that date. So you are good to go, Dude, unless your company agreed to the addition of the clause in return for consideration. So text away. Don't sweat the E.O. But pull over while you text. I'm still expecting that beer at a future Pendleton Roundup and want you to be around to buy it.

By the way, unlike the elimination of FAR 19.10 in FAC 2005-48, which is not a significant regulatory action, the texting "ban" is a significant regulatory action. Go figure. And to think that because of an insignificant regulatory action some of you want to terminate existing contracts or not issue orders against them, when the government does not require that be done because of a significant regulatory action. No wonder the workforce thinks it's overworked.

Oops! That last bit was a purposeful dig, wasn't it? Sorry. Somehow, though, I don't think it will derail you or anybody else. You guys have been more than holding your own. I feel positively ganged up on. Thanks, napolik, for your support.

As promised your beer is waiting.

I left a voice message with the procurement analyst listed in FAC 2005-48 to contact me about this issue. I've followed this "debate" with interest from the sideline and believe both sides have merit. Which ever position I choose, I should have plenty of ammunition to back up my reasoning. Great discussion. I'll post Mr. Morgan's comments when he returns my call.

alexreb, take a look at DFARS 219.502-1(2), limiting the application of the "Rule of Two" policy in certain A-E contexts. It says:

Do not set aside acquisitions for?

...

(2) Architect-engineer services for military construction or family housing projects of $350,000 or more (10 U.S.C. 2855), including indefinite delivery and indefinite quantity contracts if the value of all anticipated orders is expected to total $350,000 or more.

(emphasis added).

It may help you avoid altogether LBM, its recon, Delex, and Datamaxx.

I have not checked out Jacque's advice, but it's certainly worth looking into. However, I want to talk about LBM. If you read it carefully, it was a protest against the acquisition of out-of-scope work under an IDIQ contract. Work that was out of the scope of the competition for the contract or that is out of the scope of the contract itself cannot be ordered under the contract without a J&A. Here is what the GAO said on page 4 of the LBM decision (pdf version):

LBM is not challenging the proposed issuance of a task order for these services, but is raising the question of whether work that had been previously set aside exclusively for small businesses could be transferred to LOGJAMSS, without regard to the Federal Acquisition Regulation (FAR) ? 19.502-2( requirements pertaining to small business set-asides. This is a challenge to the terms of the underlying LOGJAMSS solicitation and is within our bid protest jurisdiction... It was only at the point that the agency decided to withdraw the Fort Polk motor pool services from the small business set-aside program and to transfer them to the LOGJAMSS contracts that the analysis required by applicable regulations, that is, as discussed below, FAR ? 19.502-2(, became relevant.

In other words, LBM was protesting that the motor pool work was not within the scope of the competition for the IDIQ contract. It was being withdrawn from a set-aside and "transferred" to that contract. Since the motor pool work was out of scope, the agency had to conduct a Rule of Two analysis (FAR 19.502-2() before it could issue a task order.

In both LBM and Datamaxx (B-400582, December 18, 2008), the latter of which was mentioned by Jacques, the GAO complained about vague and overly broad work statements in some IDIQ contracts. Don made the point that since the statement of work was broad the motor pool work could be within the scope of the contract, even if not within the scope of the competition. That doesn't make much sense to me, because in order to determine whether the work is within the scope of a competition the first place the GAO must look would be the statement of work. If it's in the SOW then it must be within the scope of the competition. But there is another argument, which is that if the SOW is vague, then there may be no way to determine whether or not given work is within its scope, and if you cannot determine that it is, then you should determine that it's not. I think that is what GAO did in LBM. It determined that given the vagueness of the contract SOW:

LBM cannot reasonably be viewed as on notice that the Army would transfer the work to [the IDIQ contract] without consideration of FAR 19.202-2(.

What is important to me is that everyone understand that LBM and Datamaxx do not stand for the proposition that an agency must conduct a rule of two analysis after the award of an IDIQ contract but before issuance of task orders that were within the scope of the competition for that contract and that are within the scope of the contract itself, assuming that the contract was awarded in compliance with applicable law and regulations, including FAR 19.202-2(. A rule of two analysis need be performed only for out of scope task orders or if the CO did not comply with FAR 19.202-2( before issuing the solicitation for the contract.

Delex is another matter. It stands for the proposition that the rule of two continues to operate within a multiple award IDIQ contract when at least two of the awardees are small businesses. The GAO did not hold that the Rule of Two applied with respect to small businesses who are not among the awardees. Scope was not an issue in Delex.

I must add this: GAO decisions are not "case law" in the same sense as decisions of the federal courts. Unlike the decisions of other administrative tribunals, such as the boards of contract appeals and the SBA Office of Hearings and Appeals, GAO decisions are not binding on anybody and are not "law" at all in any meaningful sense. They are merely non-judicial, non-binding opinions. They have effect only to the extent that the Executive Branch chooses to go along with them. Although I think that the GAO decided rightly in LBM, I think its explanation for its decision was dreadful and misleading. I think GAO's decision in Delex was simply wrong, and I wish that the agency in that case had told GAO to get lost. Yes, a protester can then go to the Court of Federal Claims, but that court does not always agree with GAO. Last December I was on a panel with Judge Wolski of the court, Ralph White of the GAO, and Professor Ralph Nash in which we focussed on the differences between GAO and the court. However, agency contracting officials are intimidated and reluctant to reject GAO recommendations. I understand why, but I wish they would gird their loins more often. Maybe their successors among the new generation will have more guts.

As for the retroactive effect of the cancellation of the Competitiveness program and the deletion of FAR Subpart 19.10, that is a separate issue. Some here say that the cancellation of that program affects future task orders issued against contracts that were legally awarded while the program was in effect, which would effectively invalidate such contracts. LBM has no bearing on that argument. If that argument is correct, if the statutory cancellation is retroactive in effect, then its advocates do not need LBM. For those who think that a new Rule of Two analysis must be made even for within scope orders, and that since the Competitiveness program has been cancelled new orders might have to be set aside in a new procurement, LBM does not help them.

In both LBM and Datamaxx (B-400582, December 18, 2008), the latter of which was mentioned by Jacques, the GAO complained about vague and overly broad work statements in some IDIQ contracts. Don made the point that since the statement of work was broad the motor pool work could be within the scope of the contract, even if not within the scope of the competition. That doesn't make much sense to me, because in order to determine whether the work is within the scope of a competition the first place the GAO must look would be the statement of work. If it's in the SOW then it must be within the scope of the competition. But there is another argument, which is that if the SOW is vague, then there may be no way to determine whether or not given work is within its scope, and if you cannot determine that it is, then you should determine that it's not. I think that is what GAO did in LBM. It determined that given the vagueness of the contract SOW:

Vern,

I think that is a fair description of our disagreement. I read LBM as a counterexample to your contention that FAR 19.502-2 does not apply to task and delivery orders that are within the scope of a validly awarded contract. I think that the work for the motor pool services, while outside the scope of the competition, was probably within the scope of the contract. I know you disagree-no need to discuss further.

What is important to me is that everyone understand that LBM and Datamaxx do not stand for the proposition that an agency must conduct a rule of two analysis after the award of an IDIQ contract but before issuance of task orders that were within the scope of the competition for that contract and that are within the scope of the contract itself, assuming that the contract was awarded in compliance with applicable law and regulations, including FAR 19.202-2(. A rule of two analysis need be performed only for out of scope task orders or if the CO did not comply with FAR 19.202-2( before issuing the solicitation for the contract.

Agreed. Assuming you mean FAR 19.502-2( and the "scope" you are referring to in your last sentence is "scope of the competition."

Lastly, if alexreb's agency is not willing to tell the GAO to pound sand with respect to Delex and if there are two or more small business concerns under his multiple-award IDIQ contract, then he now must consider setting aside task orders for competition among small business awardees before opening up the competition to all awardees.

I'll tell you what's simple: You're wrong. We are talking about issuing or not issuing within-scope task orders under validly awarded contracts.

The issue is more like limiting competition in solicitations for new requirements by using MATOCs awarded under a repealed demonstration program, when one of the major reasons for the repeal was the limitation of competition.

Thinking it's OK to use the limited competitive environment of these MATOCs, that were established under a demonstration program that was repealed because it limited competion, to solicit and award new work, defies common sense as far as I can see. The message was clear: limiting competition for any new work under the MATOCs is no longer allowed.

The rest sounds like quibbling about distinctions that do not make a difference, but rather than be so blunt as to reciprocally say you're wrong, let me elevate the tone and just say that I disagree on how to solicit and award new requirements in the context of these laws and their implementing regulations.

Hi Don.

Yes, I meant 19.502-2(, not 19.202-2(. And I will agree to "scope of the competition" on grounds that work might be within the scope of the contract but outside the scope of the competition. We should make clear, however, that we agree that if the work is outside the scope of the contract, a rule of two analysis is necessary (and a J&A).

As to your point about LBM, I don't disagree with your scope of competition vs. contract analysis. There are two arguments: (1) that vagueness should be read to include and (2) that vagueness should be read to exclude. I was just making a case for the second argument--that if the SOW is vague then you cannot prove the point that the work is in or out so it's out.

Vern

Hi Don.

Yes, I meant 19.502-2(, not 19.202-2(. And I will agree to "scope of the competition" on grounds that work might be within the scope of the contract but outside the scope of the competition. We should make clear, however, that we agree that if the work is outside the scope of the contract, a rule of two analysis is necessary (and a J&A).

We agree.

Cajuncharlie:

What's wrong with telling someone they're wrong? You're not one of those politically correct or super sensitive types, are you? You can tell me I'm wrong. I won't be upset. Some of my best friends tell me that when we're arguing about this stuff. And a lot of them aren't so nice as to say, "You're wrong." They say something more like, "You're full of ----, Edwards." It's worse if we're drinking. If you say I'm wrong I'll just argue back if you don't make your case. Since we're not friends, I won't tell you you're full of, well, you know. If I think you're right I'll say "You were right and I was wrong." I've done it here more than once.

Not this time, however. You're still wrong. (In my opinion. There. Does that help?)

The requirement is not "new" if it is within the scope of the competition for the contract and the contract itself. Only out of scope work is "new work." It would be very unusual, almost unheard of, for Congress to enact legislation that would invalidate a validly awarded contract. If they planned to do that I think that they would say so, if not in the statute itself, then in the legislative history. Right now, all you've got going for you is your common sense. Good luck with that.

Flatly stating that somebody is wrong is not how I was brought up, especially in a discussion of complex matters with numerous factors that leave room for experienced professionals to reach different conclusions. I make no claim to political correctness, and do not consider myself overly sensitive, but I do try to maintain a certain standard of business courtesy. For example, normally there is no way I would "refuse" in writing to do something, but would "decline" and soften the blow rather than escalate tensions and exaggerate differences needlessly.

Also I avoid argumentum ad hominem criticism of the person rather than the argument, and any statements that border on it. Unfortunately that kind of thing appears to be all too common in this forum. Often newcomers are dealt with more harshly than necessary. This gives the impression of being more interested in using a display of the depth and breadth of grasp of the specialized body of knowledge of our profession to score points, in a negative way, off those who are trying to learn, rather than helping them in a positive way. Challenging people to think and to use the resources at hand is one thing; tearing them to pieces in the process is quite another. It's a matter of respect and manners, which in the end count for more than people think.

Defining "new" in terms of scope rather than calendar seems odd. What I consider "new" in this context would be a requirement that arose (the complete, valid, requisition with any and all required information and attachments arrived in the procurement shop, ready for action) after the effective date of the repeal of the ("old") demonstration program.

Whether such a new requirement would have been within scope, if the program under which task orders were to be issued had not been repealed, seems moot, but that's hard to argue, as few others in this forum have your experience with statutes and legislative history related to procurement or acquisition.

If the law saying no more steel from Timbucktoo (or, reductio ad absurdum, no more cost-plus-percentage-of-cost contracts) failed to say that it applied to future task orders under validly awarded existing contracts, and the legislative history similarly contained no such statement, it's therefore OK to keep buying Timbucktoo steel from our cost+% vendor to fill every new requisition that arrives and is within the scope of the original competition and contract, then our disagreement has been pinpointed.

Oh, and I do bring my common sense to work every day, and use it, along with contract language and professional reference material, to try to avoid being carried away by a flood of finely nuanced arguments that might blur the basic difference between right and wrong.

Defining "new" in terms of scope rather than calendar seems odd. What I consider "new" in this context would be a requirement that arose (the complete, valid, requisition with any and all required information and attachments arrived in the procurement shop, ready for action) after the effective date of the repeal of the ("old") demonstration program... Oh, and I do bring my common sense to work every day, and use it, along with contract language and professional reference material, to try to avoid being carried away by a flood of finely nuanced arguments that might blur the basic difference between right and wrong.

Cajuncharlie:

Maybe defining new in terms of scope seems odd to you because you don't have enough knowledge and experience in Government contracts. Here are some sample quotes from various sources. Note the range of time covered by the quotes.

Appellant also contends that this was clearly a repair and replacement contract and that the notes on the drawings stated only that existing roof systems should be removed and replaced. Since the buildings did not have existing separate metal fascia covers it argues that this was new work beyond the scope of the contract.

States Roofing and Metal Co., Inc., ASBCA 16265, 72-1 BCA ? 9453.

CONTRACT MODIFICATION WHICH SUBSTITUTES DIESEL FOR GASOLINE ENGINES, THEREBY INCREASING UNIT PRICE BY 29 PERCENT, SUBSTANTIALLY EXTENDING TIME FOR DELIVERY, AND RESULTING IN OTHER SIGNIFICANT CHANGES TO ORIGINAL CONTRACT REQUIREMENTS, IS OUTSIDE SCOPE OF ORIGINAL CONTRACT, AND GOVERNMENT'S NEW REQUIREMENTS SHOULD HAVE BEEN OBTAINED THROUGH COMPETITION. GENERAL ACCOUNTING OFFICE RECOMMENDS THAT AGENCY CONSIDER PRACTICABILITY OF TERMINATING CONTRACT FOR CONVENIENCE OF GOVERNMENT AND COMPETITIVELY SOLICITING ITS REQUIREMENT FOR DIESEL HEATERS.

Capitalization in original. American Air Filter Co., 57 Comp. Gen. 285, B-188408, 78-1 CPD ? 136.

In its initial protest, SMS contested the SBA's decision not to study the impact that setting aside the entire requirement under the 8(a) program would have on that firm, the incumbent small business contractor for part of the support services required. The SBA did not perform an adverse impact study because the Navy had determined that the procurement involved ?new work? and the policy of the SBA, which accepted that determination, is not to perform an impact study in such a situation. We noted that while SMS previously performed some of the work that would be required under the proposed contract, the services SMS provided were limited in scope and, in terms of cost, represented only a fraction ($273,900) of the total estimated annual cost of the entire requirement ($1,661,898). We had no reason to question the determination that there had been a material expansion of the prior requirement in terms of the scope and nature of the services and that the proposed contract therefore represented new work. We concluded by noting that there was no showing of fraud or bad faith on the part of Navy or SBA officials warranting a review of the SBA's determination that an impact study was not required.

Support Management Services , Inc. ? Request for Reconsideration, B-229583, June 9, 1988, 88-1 CPD ? 547.

In Loral Electronic Systems the GAO relied on case law from the Court of Claims. These GAO decisions interpreted the Changes clause term ?within the general scope of the contract? to decide whether the Changes clause could be properly used to procure new work instead of procuring the item pursuant to the procedures for new procurements.

Nash and Feldman, Government Contract Changes, ? 3:8 (2009).

When a modification adds work, there is the possibility that the work to be added is outside the scope of the original contract--i.e., new work--and should be the subject of a new competition.

The Nash & Cibinic Report, ?Postscript: Deductive Changes Outside the Scope of the Contract,? October 2005, 19 N&CR ? 48.

Issuing an order exceeding the original contract's scope period or maximum value improperly avoids competition. ?New? work must be solicited anew, subject to full and open competition. At the ?ordering? stage, a third party who believes that an order is beyond the original vehicle's scope can challenge the order at the GAO or U.S. Court of Federal Claims (COFC). [FN143] Absent review of out-of-scope orders, an agency could use multiple award task orders as a subterfuge for awarding completely new or different work, thus skirting a competitive procurement.

Benjamin, "Multiple Award Task and Delivery Order Contracts: Expanding Protest Grounds and Other Heresies," Public Contract Law Journal, Spring 2002, 31 Pubconlj 429.

The only other area where agencies lost a high percentage of protests--four out of nine--involved challenges to procurements as being outside of the scope of the original contract. The losing protests were all under broad contracts where agencies were trying to stretch the scope of the basic contract to cover new work.

The Nash & Cibinic Report, ?Protests to the Comptroller General: What are they about?? May 1998, 12 N&CR ? 27.

If you are to carry out your responsibility for maintaining control of the scope of the contract, you must prevent the Govt's technical personnel from introducing unauthorized or unfunded new work.

Michelman, Elements of Contract Administration, 84-10 BRPapers 1 (1984).

Finally, there is this:

ON FEBRUARY 23, 1971, BY PRESIDENTIAL PROCLAMATION, THE DAVIS-BACON ACT WAS SUSPENDED. THE SUSPENSION WAS REVOKED BY PRESIDENTIAL PROCLAMATION ON MARCH 29, 1971. WORK REQUEST AMENDMENT A00024 FOR THE CONSTRUCTION OF THE SOFTBALL ATHLETIC FIELD WAS EXECUTED BY THE CONTRACTING OFFICER ON MARCH 29, 1971, WITH AN EFFECTIVE DATE OF APRIL 1, 1971. THE AMENDMENT STATED THAT THE CONTRACTOR WAS NOT REQUIRED TO COMPLY WITH THE DAVIS-BACON ACT. INSTRUCTIONS ISSUED BY HEADQUARTERS, USAF, ON MARCH 30, 1971, ADVISED THAT SOLICITATIONS FOR CONSTRUCTION IN EXCESS OF $2,000 AND AMENDMENTS TO CONTRACTS, INVOLVING NEW WORK OUTSIDE THE SCOPE OF THE CONTRACTS, ISSUED ON OR AFTER MARCH 30, MUST CONTAIN THE DAVIS-BACON ACT PROVISIONS. IN LIGHT OF THE FACT THAT THE WORK REQUEST AMENDMENT WAS ISSUED DURING THE PERIOD THAT THE DAVIS-BACON ACT WAS SUSPENDED WE AGREE WITH THE DETERMINATION THAT THIS PROJECT WAS NOT COVERED BY THE ACT.

Capitalization in original. D.E. Clarke, B-126824, Oct. 17, 1974, 74-2 CPD ? 212.

Those are only a few of the many quotes I could have provided. I could have provided a quote from an 1853 court decision, but I thought it would be overkill.

As you can see, there is a long and widely accepted tradition of defining "new work" in terms of the scope of the contract. Work outside of scope is new work and must be competed under the rules in effect or covered by a J&A, while within scope work is not subject to the rules that apply to new acquisitions, e.g., synopsis and CICA. Experience, research. facts, and knowledge trump common sense. Until you have a better premise than your common sense, you, Cajuncharlie, are wrong. You avoided finely nuanced argument, but you let yourself be carried away by common sense and inadequate research. Anyway, now, defining new work in terms of scope won't seem so odd to you.

If you work in a contracting office, it is no small thing to discard a legally awarded contract and conduct new competitions based on someone's uninformed common sense. In this thread,you have argued for just that on no stronger ground than what seems right to you. It takes time and costs money to award new contracts. Your advice to axelreb in Post #2, apparently unsupported by anything other than your common sense, can be described only as reckless.

By the way, if you want to see what a real ad hominem attack looks like, read Washington Post opinion columnist Charles Krauthammer's remark about New York Times columnist Paul Krugman in today's (Jan 12) column in The Washington Post.

Vern, you have proved my point about abusing others unnecessarily.

I haven't abused you, Charlie. I have told you that you are wrong, I have said why, and I have said that I think you are wrong because you do not know enough. I have also said that your advice was reckless. If you think that's abuse then you are too sensitive. The appropriate response from you would have been to demonstrate that I am wrong. When you disappeared for almost ten days I thought you were researching the issue. I overestimated you. It appears that you were moping.

Anyone who cannot take being told in no uncertain terms that he or she is wrong should live alone by a woodland pond and pick flowers, collect butterflies, watch birds, and write dreamy poetry that is not for publication until 100 years after their death.

I haven't abused you, Charlie. I have told you that you are wrong, I have said why, and I have said that I think you are wrong because you do not know enough. I have also said that your advice was reckless. If you think that's abuse then you are too sensitive. The appropriate response from you would have been to demonstrate that I am wrong. When you disappeared for almost ten days I thought you were researching the issue. I overestimated you. It appears that you were moping.

Anyone who cannot take being told in no uncertain terms that he or she is wrong should live alone by a woodland pond and pick flowers, collect butterflies, watch birds, and write dreamy poetry that is not for publication until 100 years after their death.

Hey, Charlie - join the club! I suggest that you grow thicker skin, like me. I've got callouses...

Years ago, I posted something like this as the first rule of the original forum.

"1. No personal attacks on another individual user. Personal attacks DO NOT include a disagreement with another poster's views. Users understand that professional disagreement and professional argument are a part of the learning process. Personal attacks include such things as calling a poster ignorant, unprofessional, etc. These posts will be removed as soon as they are seen."

************

Early in this thread there was a disagreement between two posters. I'm sure everyone learned something from the posts that passed between them. Its a nice way to handle a disagreement.

A little later, one poster told another that his position was wrong. Saying someone is wrong is a direct way of communicating. In my view, there is nothing abusive about telling one that they are wrong. Of course, if someone said I am wrong, and I believe I'm correct, I am going to defend my position with facts, figures, examples, precedent, laws, etc. If I cannot, I probably am wrong.

I'm not satisfied that this thread is complete so I will reopen it.

If I get the gist of the current argument, one position is that a Requirement under a program that has been abolished by law cannot be aquired under an IDIQ contract that currently exists. I find that appealing but show me the proof. The other position is that the original IDIQ contract can be used. I find that appealing too but show me an example of a program that was killed by law and an existing IDIQ contract was used to buy things under the program. Now, if I have the gist of it wrong, remember, I'm just a retired dumb auditor. Plus, its after midnight.

What we have in this case is a program that applied to the formation of contracts that was terminated after an IDIQ contract was legally formed under its provisions while it was still in effect. There is no indication in the repeal statute itself or in its legislative history, or in the implementing regulation, to the effect that it was to apply retroactively to contracts that were legally awarded while the program was in effect or that it was to be applied to prohibit the ordering of within-scope work under such contracts. The standard FAR rule about application of regulatory changes to solicitations and contracts, FAR 1.108(d), provides as follows:

(d) Application of FAR changes to solicitations and contracts. Unless otherwise specified?

(1) FAR changes apply to solicitations issued on or after the effective date of the change;

(2) Contracting officers may, at their discretion, include the FAR changes in solicitations issued before the effective date, provided award of the resulting contract(s) occurs on or after the effective date; and

(3) Contracting officers may, at their discretion, include the changes in any existing contract with appropriate consideration.

It is well established in acquisition law and practice, as I demonstrated in an earlier post, that within-scope work is not "new work" and that rules about contract formation apply only to new work.

Earlier, I provided the name and contact information for the FAR council official who handled the FAR case implementing the program repeal. To the best of my knowledge, no one has contacted him. If I were a CO I would not bother, since, based on my knowledge and experience, the program repeal does not have retroactive effect. So as far as I am concerned, the burden is on the people who share the opposing opinion to make their case. To be frank, in the real world, if the FAR council official were to offer an opinion that differed from mine I would not accept it as gospel until I saw it officially in writing. The reason is that given the administrative effort associated with awarding the existing contract, and the effort that would be entailed in awarding a new one, I would be unwilling to discard it without a strong official statement in support of the opposition. However, I would acknowledge that the opinion of an official of the FAR council would weigh in their favor, especially if he provided persuasive rationale.

bob - For consideration.

As expressed by my example of Timbucktoo but now more specific to the question at hand. Admittedly some of my conclusions have changed but one paramount one remains - the IDIQ cannot be used for the requirement because it is "new".

The full example - A new requirement is submitted to me as a CO. In either my detailed analysis of available sources, inclusive of applying FAR Part 8 and FAR Part 10, or in the routine quick assessment of same I determine that the need can be procured through commercial sources (FAR 8.002(a)(2)(iv)) and by application of FAR 10.001, inclusive of 10.001(a)(2)(v), I then determine whether the requirement must be set aside in accord with FAR 19.502-2. In doing so I determine that the based on value it must be because it is less than $150K or is over and the "Rule of Two" applies. Noting this I then look at available methods and types of contracts. In this evaluation I determine that I have the full array of methods and types of procurement available yet one method only has large businesses available and that method is by case law definition not mandatory. Noting this it is excluded from my choices because per FAR 19.5 a new requirement "must" be set aside if under the $150K threshold or the rule of two applies. I then look to all other available methods and types and settle on a full and open competition, after exclusion of sources, that utilizes one of three methods (RFQ, IFB, or RFP) and results in either a fixed priced or cost reimbursement contract.

In the above process and in the specific case of this thread certain facts are true. The need is a new requirement. FAR 19.10 no longer exists. A task order against a IDIQ is a contract. The existing IDIQ, while legal as it stands, is not an appropriate type of contract and therefore method for the new requirement as it does not provide for the required small business participation.

The conclusion. The IDIQ is legal and need not be changed to comply to new law but as an available procurement type for a 'new" requirement it cannot be used as it does not have any small businesses within its awardees.

Further applying the above to the case at hand charlie created a possible tool to save effort for future new requirements, yet charlie was thrown a curve ball when the demonstration program was done away with by Congress making charlie's tool ineffective and out of date. So what does charlie do with the tool? He could let is languish or T4C it, with either alternative raising its own debate but clearly one fact remains it is not a viable tool to be used if the dollar value of the future needs and/ or the market research for the future needs determines that small business set aside is required for all new requirements that it was intended for.

Carl:

The linchpin of your argument is the term ?new requirement.? I have searched the United States Code, the Code of Federal Regulations, and the GAO decisions for a definition of ?new requirement? and found only one, in 13 CFR 124.504( c)(1)(ii)(D), which is applicable only to the 8(a) program. So unless there is an applicable official definition that I missed, you must tell us what you mean by that term.

The term ?new requirement? is ambiguous, and its meaning is not obvious from the context. For instance, it could mean a requirement that has newly emerged from new circumstances (e.g., a new military threat), or one that the requiring activity has had for some time but for which it has not had funds for an acquisition and has not submitted to the CO under requisition, or it could mean a particular instance of a recurring requirement. Is an option to extend the term of a service contract a new requirement? Is a change order adding a feature to a product specification or a task to a statement of work a new requirement? We need a definition.

Please define ?new requirement? for the purposes of your argument.

Assuming that the definition you give us is unambiguous, I?m sure you know that unless it?s an applicable official definition my next question will be why we should accept the one that you give us.

Bob:

You wrote: "how me an example of a program that was killed by law and an existing IDIQ contract was used to buy things under the program."

That would be hard to do without knowing about specific contracts and what happened. However, when the labor surplus area rules were removed from FAR I cannot recall anyone taking the position that IDIQ contracts awarded under that program could no longer be used. I have searched for news in that regard and could not find any.

Carl's proposition, if I understand it rightly, is that "new requirements" are subject to current rules and that contracts for such requirements that predate the current rules can no longer be used. Did the introduction of the service-disabled veterans program invalidate pre-existing IDIQ contracts? We can think of many new rules that have taken effect without anyone arguing that IDIQ contracts awarded before the new rules took effect can no longer be used. For example, no one argued after FASA that IDIQ contracts for items newly considered commercial could no longer be used. That is just one example.

Carl's Timbuktu argument is an unintentional red herring. (He introduced it in good faith, not intending to mislead.) He has not produced any specific statutory language for consideration, so I will ignore any argument based on that example. I never should have responded to it in the first place.

Vern's argument seems to build on an analogy. The major premise of the analogy is undoubtedly true. Any convincing argument would need to explain why the analogy is not appropriate. I personally think the analogy is appropriate, though I do think that any CO needs to at least consider FAR 19.502-2(d) in deciding whether to continue to issue orders. See my post on Topic #715. Delex does not apply to the facts of this thread, as no small business (much less two) holds a IDIQ.

Carl's focus on the requirement is certainly similar to the GAO's rationale in LBM in finding jurisdiction, but I personally don't buy it. We have no reason to believe the scope of this IDIQ is so vague and broad as to make LBM even remotely on point. We have no facts to suggest this is a situation where the agency's initial acquisition planning for the basic did not contemplate work exactly like that planned for a future delivery order.

I would rely on FAR 1.108(d). In the absence of clear language in either the statute or the implementing regulation specifying otherwise, the elimination of FAR 19.10 for future contracts does not mean that the basic is unavailable. If the agency didn't meet its small business goals last year, then it might be a closer question, but again, we've no suggestion of that.

So everyone will understand the state of the debate:

My argument is that the repeal affects only work that is not within the scope of the competition and the contract. The repeal does not affect work that is within-scope. Thus, the agency can continue to issue within-scope orders against the IDIQ contract. I rely on the following:

1. Long-standing law and tradition in government contracting that within-scope work is not governed by the rules for new (out of scope) work. See, e.g., FAR 5.202(a)(6) and (a)(11), and 6.001(e) and (f). See also Post #37 in this thread.

2. FAR 1.108(d).

3. The fact that many, many IDIQ contracts are awarded pursuant to laws and regulations that change after award, and I am not aware of any law, regulation, policy, or holding to the effect that a such a post-award change renders such contracts no longer viable.

(An agency can decide to voluntarily forego further use of the contract for its own reasons, but that is another matter.)

Carl's argument is that the repeal affects all "new requirements" and that orders can no longer be issued against the IDIQ contract. However, he has not defined "new requirements" and he has not stated the basis for his proposition except to say it follows from the fact that the contract was awarded under a program that has since been repealed. I am awaiting Carl's response to my request for his definition of "new requirement."

"New requirement" defined as a normal meaning of a procurement need that is being newly considered. A definition supported by longstanding use that is verified by the fact that in wifcon.com alone there are approximately 770 uses of the term to extend this normal meaning. The referrences in wifcon range from use in policy and statute citations to many discussion board topics. This longstanding use is only being challenged now as supported by the fact that in the 770 references noted the term has never been challenged in this normal meaning use. New Requirement is exactly what it means.

Again my arguement because Vern misrepresents it.

Yes A-E work is within the scope of the contract. While the contract purpose gave consideration to new requirements the agency might have but could not otherwise estimate for a stand alone contract there still is the fact that there is a statutory requirement that the contract does not meet and that is any requirement, whether covered by the scope of the this non-mandatory contract or not, must be considered in light of FAR 19.5 and the cancellation of FAR 19.10.

The Timbucktoo example is not a red herring and is directly on point to this arguement.

Carl:

I reject your definition of "new requirement" ("normal meaning") as absurdly ambiguous.

I reject Wifcon as a basis for establishing "longstanding use." Statute, regulation, case law, and professional literature are the only reliable bases for establishing longstanding use.

If I misstated your argument it was inadvertent. I restated it just so you would have a chance to correct me. I did not intentionally misrepresent your argument.

The Timbuktu example is not an example at all. An example would be based on actual statutory and regulatory language.

Finally, the following sentence, to the extent that it is coherent, is a classic example of circular reasoning:

While the contract purpose gave consideration to new requirements the agency might have but could not otherwise estimate for a stand alone contract there still is the fact that there is a statutory requirement that the contract does not meet and that is any requirement, whether covered by the scope of the this non-mandatory contract or not, must be considered in light of FAR 19.5 and the cancellation of FAR 19.10.

If that is the best you can do by way of argument, then there is absolutely nothing for us to talk about. Frankly, I am disappointed. I expected better from you. Had I known that this was coming I wouldn't have bothered responding to your post. You believe what you believe and others are welcome to follow you.

"New requirement" defined as a normal meaning of a procurement need that is being newly considered. A definition supported by longstanding use that is verified by the fact that in wifcon.com alone there are approximately 770 uses of the term to extend this normal meaning. The referrences in wifcon range from use in policy and statute citations to many discussion board topics. This longstanding use is only being challenged now as supported by the fact that in the 770 references noted the term has never been challenged in this normal meaning use. New Requirement is exactly what it means.

Again my arguement because Vern misrepresents it.

Yes A-E work is within the scope of the contract. While the contract purpose gave consideration to new requirements the agency might have but could not otherwise estimate for a stand alone contract there still is the fact that there is a statutory requirement that the contract does not meet and that is any requirement, whether covered by the scope of the this non-mandatory contract or not, must be considered in light of FAR 19.5 and the cancellation of FAR 19.10.

The Timbucktoo example is not a red herring and is directly on point to this arguement.

Carl,

Are you saying that if the "new requirement" was within the scope of a requirements contract, then the rule of two analysis would not be required? I ask because you keep stressing the nonmandatory nature of an IDIQ contract.

Vern - Your comments regarding the rejection of my definition boarders as usual on your own failure to read coherently my post and do your own research of my cited examples. You simply easily brush them aside as boorish without listening to reason and reading.

Specifically I stated that the 770 references in wifcon.com do include statute read my post! Example of one specific reference to "new requirement" is in the National Defense Act of 2006. /legacy/reg/913ff3b18f321587.html Other references are found in GAO Protests, here /legacy/reg/32dfea7c49953bb0.html and here /legacy/reg/36b41d22d5d3573b.html .

I suggest you quit making a red herring out of term that is widely used.

As to your reference that FAR Part 1.108(d) is a significant support to your argument I suggest you have read more into the citation than intended by the FAR Council. Specifically when the final rule was stated the FAR Council made this comment in the Federal Register. Reminder a task order or delivery order is a new contract.

"The final rule amends FAR Parts 1 and 52 to enhance a common

understanding of how the FAR is drafted. The final rule adds FAR 1.108 and amends 1.105-2, 52.101, 52.104, 52.105, and 52.200 to reflect

current FAR drafting conventions.

DoD, GSA, and NASA published a proposed rule in the Federal

Register on January 26, 2000 (65 FR 4346). Three respondents provided

public comments. The Councils considered all the comments in the

development of the final rule. The final rule revises the proposed rule

as follows:

FAR 1.108(d)(2) to clarify that contracting officers must

not award or modify contracts to include the FAR change until the

effective date of the FAR change."

Don - Yes and in such a case I would adopt the argument that Vern is attempting to apply to an IDIQ.

Perhaps stating it a different way would help.

Pub. L. 100-656, the law that initially created the demonstration program, in sec. 711? & (d), defined the program's term and application. The program applied "to contract solicitations for the procurement of services in industry groups designated in section 717." When originally enacted, the demonstration program had a set expiration, but the program was extended indefinitely with Pub. L. 105-135, sec. 401. Both term and application are required to understand the scope of the program. As the program applies to "contract solicitations," a contract awarded against a solicitation issued within the program's term would be within the scope of the program and would remain so even after the expiration of the term of the program.

Absent clear language to the contrary (either in the statute or regulation implementing the program, or in the statute or regulation repealing the program), the repeal of the program with Pub. L. 111-240, sec. 1335, would not retroactively apply to existing "contracts" or "procurements." In reading sec. 1335, I found nothing to suggest repeal was intended to apply to existing contracts. FAR Case 2011-005 also didn't contain any language suggesting such an intent. The FAR drafters certainly know how to describe the effect of a rule change with delivery orders in mind. Consider FAR Case 1999-607 (FAC 97-27) (April 25, 2001), discussed in 43 GC ? 262. In fact, the continued presence of FAR 19.505-2(d) can be read to suggest no retroactive effect (though that is probably giving the drafters too much credit).

Carl writes, "Reminder a task order or delivery order is a new contract." It isn't entirely clear what he means by this, but if he is suggesting that this definition somehow limits the ability to issue orders within scope of an existing basic contract, he's going to need more than FAR Part 2 to get him there. Any interpretation of the word, "contract" must be made in context. Here, we're interpreting is Pub. L. 100-656 as implemented (the statute creating the Competitiveness Demonstration Program).

As the focus of the Competitiveness Program is on whether competition for a contract should be unrestricted or whether it should be limited to small business, the focus shouldn't be on the definition of contract in Part 2, but on whether the issuance of the next task order is within scope or would require a new competition. As that ground has already been covered quite thoroughly, I won't revisit it.

I looked for anything I could suggesting a task order was a new contract for any purpose, and the only thing I could find was LB&B Assocs., Inc. v. U.S., 68 Fed.Cl. 765 (2005), 48 GC ? 11. In interpreting an SBA reg, it suggests, at least for purposes of requiring a small business certification, an order may be a new contract. The decision is discussed in Shager, 2005 Procurement Review, 06-2 Briefing Papers 1, 26 (Jan. 2006). I'm not sure it's on point, and I'm certainly not sure it was correctly decided.

(For some background on the significance of whether a task order is a contract, see Donald Mansfield (aka Don Acquisition), Task and Delivery Orders: Are They "Contracts"?, 24 N&CR ? 50 (Oct. 2010) or his blog. I would suggest that the manner in which FAR Part 2 defines "contract"--inasmuch as it actually does--is intended to be a broad as possible, to avoid folks from limiting the applicability of a given mandate in the FAR by construing that mandate's use of the word, "contract" narrowly. The vehicle used to capture a change in the parties' obligations--be it a new contract, a modification, an order--should not be confused with the obligation. When the FAR uses the word "contract" in the sense of "obligation," the choice of vehicle doesn't defeat applicability.)

Carl:

Here is your definition:

New requirement" defined as a normal meaning of a procurement need that is being newly considered."

I presume that "newly" equates to "never before", so that a new requirement is a procurement need that was "never before" considered.

Now, I am not trying to misrepresent you. I am trying to understand you. If "newly" does not mean "never before," don't come back all pissy about being misrepresented. Now, proceeding on the basis of "never before," let's test your definition for clarity.

==========

Test 1: Suppose that we work in a contracting office for an Air Force base and that the base civil engineer has a number of construction projects that have been on his shelf since before the repeal of the Small Business Competitive Demonstration Program. He has never submitted any of them to the contracting office for acquisition because he has not had the funds. The contracting officer knows that there are some such projects, but does not know the details of any of them. He knows only that the civil engineer is waiting for funds, assuming they ever come. The contracting office has an IDIQ task order contract for just such construction projects, awarded through open competition before the repeal; however, the repeal has now taken effect. Now suppose that the base civil engineer obtains enough "fallout" funds for one of the projects, $500,000, and submits an acquisition request to the contracting office for issuance of a task order for the project.

Is that project a "new requirement," i.e., one that has "never before been considered," such that it can no longer be the subject of a task order under the IDIQ contract? The CO knew that there were such projects on the shelf, that's why he awarded the IDIQ contract, but did not know any specifics of the one in question. He had not even heard of it. Does "newly considered" mean never before considered by the agency or never before considered by the contracting office? Is it newly considered because the contracting office has not seen it before, or has it already been considered because it has been lying on the base civil engineer's shelf for some time and the IDIQ contract was awarded with such projects in mind? And what constitutes being "considered"? What kind of thoughts are involved in consideration? Whose thoughts? What if the CO had known about the project in detail before the repeal and discussed the use of the IDIQ contract with the civil engineer. Would that constitute having been considered, even if no requisition had been submitted to the contracting office?

==========

==========

Test 2: Suppose that we have a $5 million construction contract in place that was awarded through open competition while the Demonstration Program was in effect and that construction is underway. The repeal is now effective. A change in policy that occurred after repeal requires the addition of a feature to the project that was not included in the contract specifications and drawings. The base civil engineer received a communication from HQ changing the number of restrooms needed in facilities of a certain size. The current specifications and drawings call for one restroom in the facility, but the agency now must add a second restroom. The addition is unquestionably within the scope of the contract and will cost $200,000. The need for the second restroom was not discussed during acquisition planning, because the policy at that time called for only one restroom.

Is the addition of the second restroom a "new requirement," even though it is within scope? If so, does that mean that the CO cannot issue a change order to add the restroom to the specs and drawings?

==========

I don't expect you to respond to those tests. In fact, I hope you don't. I'm not seeking a meeting of the minds with you anymore. I just want other readers to have something to think about when evaluating your argument, such as it is.

Now, I'm not going to go into a lot of detail about your 770 Wifcon usages. However, I did check the three links you provided in your last post. Did you read all 770 before relying on them? Here is how "new requirement" reads on the Wifcon page to which your third link </legacy/reg/36b41d22d5d3573b.html took me. It is from a decision of the Court of Federal Claims:

Precedent does not support plaintiff?s argument that an agency must go through a separate evaluation process when considering whether to implement the GAO?s recommendation. In the normal course of events, agencies fully implement GAO recommendations, and the ?fail[ure]? of an agency ?to implement fully the recommendations? of the GAO is so serious that a report of this ?failure? must be submitted to Congress. 31 U.S.C. ? 3554((3), (e)(1) (2009). Neither Honeywell nor Centech nor any other binding case mentions a separate evaluation requirement. In fact, the only two cases to mention this requirement are the two cited above?IMS, Services, where the requirement allegedly appeared in dicta, and the recent SP Systems that rejected the existence of any such requirement. Finding that such a requirement exists would be at odds with our path of review in cases such as this one; as discussed above, this Court reviews the rationality of an implemented GAO recommendation because that decision ?constitutes the very reason(s) for the agency action.? Grunley Walsh Int?l, LLC. v. United States, 78 Fed. Cl. 35, 44 (2007). Furthermore, the administrative record in this case contains numerous documents and emails discussing the GAO decision and whether to implement it or waive the conflicts. This Court will not rely on challenged dicta in a nonprecedential, fifteen-year-old case to forge a new requirement.

Emphasis on "new requirement" added. That's the only mention of "new requirement" I found on that page. Criminy, Carl. That doesn't have anything to do with what we're talking about. Ouod erat demonstrandum: Your reliance on your 770 Wifcon usages is absurd. Goodness, you could have at least been more careful in choosing the links.

Finally, your discussion of FAR 1.108(d) is meaningless. It boils down to nothing more than that FAR 1.108(d) means what it says.

Vern - How do your tests fair with this reference - http://www.whitehouse.gov/omb/circulars_a0...ech_correction/ ?

What wifcon supports to me is that there are individuals that use the term ?new requirement? to describe something being procured with the term self defined (normal meaning) by its use in the discussion thread or specific document. I might add that you ought to take a swing through FedBizOpps and you will find the same occurrences. Beat me up all you want to about my use of the term but it is very clear to me that I meant something actually purchased under the IDIQ because in reality nothing is contracted for in the IDIQ except a "right" to do so through the use of a minimum. Plain meaning of "new" whether you want to add "requirement", "procurement", "contract", "purchase", ?task order? etc. and then argue about it.

Now to further specifics with regard to your tests.

Test 1 - So I guess what you are also saying here is that if the IDIQ allowed steel from Timbucktoo because the anticipated "shelf" projects had needs for Timbucktoo steel and in the interim a statute was repealed that allowed Timbucktoo steel into the US you would purchase the "shelf" project if it continued to require Timbucktoo steel?

I hope you answer this question with a Yes or a No as I too want the readers to have something to evaluate your argument other than the smoke and mirrors you continue to use in arguing "new requirement".

Test 2 - This example is not useful to the instant question being argued in this thread.

For this thread I am done responding to YOUR posts.

Carl's link is to OMB Circular A-76, which has nothing whatsoever to do with what we are talking about. In any case, here is the definition of "new requirement" from A-76, Acronyms and Definitions:

New Requirement. An agency?s newly established need for a commercial product or service that is not performed by (1) the agency with government personnel; (2) a fee-for-service agreement with a public reimbursable source; or (3) a contract with the private sector. An activity that is performed by the agency and is reengineered, reorganized, modernized, upgraded, expanded, or changed to become more efficient, but still essentially provides the same service, is not considered a new requirement. New ways of performing existing work are not new requirements.

That definition applies when an agency must make a contracting out decision. (By the way, that definition is deeply flawed, in that it uses a derivative of the term to be defined in the definition itself -- "newly." This violates one of the fundamental rules of definition. See Copi and Cohen, Introduction to Logic, 13th ed., p. 107, Rule 2. Such mistakes are common in FAR definitions.)

Carl claims that other people use "new requirement" the way he does. Fine, I don't doubt that, but that's not the issue. The issue at this point is what he means by the term, and I say his definition is ambiguous. That's why I posed the test questions, to show that his definition could be interpreted in more than one way, and to give him an opportunity to clear things up. Carl's responses to the test questions speak for themselves. He refuses to clear up what he means by showing us how his usage would apply in various cases.

If Carl would clear up his definition, he might find that we do not really differ all that much, and that we might be able to reach a meeting of the minds. Moreover, he might find that he has hit upon an important issue worth pursuing. Don Acquisition and I discussed that on the phone yesterday evening. If he saw the test questions as a way to clear things up, and not to trip him up, we might reach a common understanding. Too bad. If he were willing to THINK, we might be able to get somewhere.

Vern - Your comments regarding the rejection of my definition boarders as usual on your own failure to read coherently my post and do your own research of my cited examples. You simply easily brush them aside as boorish without listening to reason and reading.

Specifically I stated that the 770 references in wifcon.com do include statute read my post! Example of one specific reference to "new requirement" is in the National Defense Act of 2006. /legacy/reg/913ff3b18f321587.html Other references are found in GAO Protests, here /legacy/reg/32dfea7c49953bb0.html and here /legacy/reg/36b41d22d5d3573b.html .

I suggest you quit making a red herring out of term that is widely used.

As to your reference that FAR Part 1.108(d) is a significant support to your argument I suggest you have read more into the citation than intended by the FAR Council. Specifically when the final rule was stated the FAR Council made this comment in the Federal Register. Reminder a task order or delivery order is a new contract.

"The final rule amends FAR Parts 1 and 52 to enhance a common

understanding of how the FAR is drafted. The final rule adds FAR 1.108 and amends 1.105-2, 52.101, 52.104, 52.105, and 52.200 to reflect

current FAR drafting conventions.

DoD, GSA, and NASA published a proposed rule in the Federal

Register on January 26, 2000 (65 FR 4346). Three respondents provided

public comments. The Councils considered all the comments in the

development of the final rule. The final rule revises the proposed rule

as follows:

FAR 1.108(d)(2) to clarify that contracting officers must

not award or modify contracts to include the FAR change until the

effective date of the FAR change."

Don - Yes and in such a case I would adopt the argument that Vern is attempting to apply to an IDIQ.

Carl, please take this as a constructive suggestion. Think before you post and make sure your posts are clear and concise. I have been trying to follow your logic but have a hard time doing so based on the structure of your posts. Sometimes, I just get lost trying to follow what your are saying.

Having said that, I think I am beginning to understand your position, but need clarification on some points. First, is your position based on (a) a change in statute, ( a change in the FAR or © both? Second, is it your position that the rule of two should be considered only before issuance of orders under an IDIQ contracts that are not mandatory for use? Finally, is it your position that the rule of two should be considered before issuing an order under an IDIQ contract if the minimum order amount under that contract has been met? Put another way, the rule of two would not apply if the minimum order amount has not been ordered yet?

Re - Thanks for the comment, I will give a shot.

As to your questions answered in the order you have stated.

Yes, statute that results in a change to FAR.

Yes, as noted in my response to Don, where I would have a different view regarding a "requirements" contract.

Hmmm, had to think about this one just a little. My answer would be based on how the minimum is stated. If just in a dollar amount I would say you must apply the rule of two as you could simply pay the dollar amount. If the minimum was stated in the terms of services such as number of hours or the like, then I would say you would have to accomplish the minimum before moving to the rule of two.

So all readers understand my position please review this thread in total because I have used "new requirement" just as Vern Edwards did in his very first post to this thread. In fact his post was the place that the term "new requirement' was first used. I have thought about the question as first raised a lot and converse to what Vern says, if he were to THINK and be reasonable he might agree that he has come around to a thinking that is in alignment with my very first post.

To save you all from looking back here is Verns post of Jan 6, 2011 and I quote with bold added (interesting that this "non-issue" has generated significant discussion)-

"If an IDIQ contract was awarded in compliance with the laws and regulations then in effect, and if a new requirement is within the scope of that contract, then the requirement need not be competed except as required by FAR Subpart 16.5, which is about competition restricted to awardees of multiple award IDIQ contracts. See FAR 6.001(e) and (f). See also FAR 5.202(a)(6) and (11). If the work need not be competed, then it need not be set-aside under 19.5. There is no need to revisit the set-aside issue for work that is within the scope of a legally awarded contract.

This is a non-issue."

Singer & Singer, in 1A Sutherland on Statutes and Statutory Construction (7th ed.), at ? 23:35, "Effect of repeal-vested rights," notes the following:

However, a right which has become vested does not depend upon...the statute under which it was acquired. It has an independent existence. Consequently, repeal of a statute...from which it originated does not erase a vested right and it remains enforceable without regard to repeal. To become vested, a right must be a contract right, a property right, or a right arising from a transaction in the nature of a contract which has become perfected to the degree that it does not depend on the continued existence of a statute.

Accord, CJS Statutes s 593 ("The repeal of a statute does not operate to impair or otherwise affect rights which have been vested or accrued while the statute was in force. This rule is applicable to rights acquired under contracts....").

Here, the vested right is the government's--namely, to issue task orders under the terms of the existing basic contract. We're once again back full circle. A contract action after repeal is not affected by repeal if that action is within scope of the preexisting contract--e.g., if the government can unilaterally require performance.

As the vested right is the government's, it could easily decide not to take advantage of it. So far as I can tell from the FAR Case, nothing suggests an overarching government policy to do so.

I've tried to understand how Carl distinguishes an IDIQ contract from a requirements one and I can't find a principled basis for the distinction. It doesn't seem to have anything to do with the rules surrounding the legal effect of repeal. While both parties have rights under a requirements contract, Carl's analysis seems to ignore the government's contractual right under the IDIQ. If a task order issued against an IDIQ contract is a "new contract" (Carl's Posts #16 & #58), it isn't clear why a task order issued against a requirements contract wouldn't be. (Perhaps his concern is specific to the Rule of Two?)

Carl seems to think that I disagree with his definition of "new requirement." I do not, because I don't know what it is. I know what I mean by it, but I don't know what Carl means. His first use of "new requirement" is in Post #50. Read all my posts thereafter. I have never said that his definition is wrong. I have said only that it is ambiguous.

I have been trying to find out what Carl means by "new requirement" so I can understand his argument. He said he means it as I do. I don't know how he knows that, since I have never explained what I mean by it. Here is what I said, in Post #6:

f a new requirement is within the scope of that contract, then the requirement need not be competed except as required by FAR Subpart 16.5....

I'm a contracts guy. To me, a "new requirement" is a new procurement request (requisition, purchase request). ("We got a bunch of new requirements today.") But a new requisition is not necessarily for new work. "New work," as I use it and as the boards, the GAO, and experts in government contracting have used it for many, many years, is work that is out-of-scope. See Post #43. A new requisition can be for within-scope work or for new work. Why is this important? Because I say that if a "new requirement" (new procurement request) is for within-scope work, not "new work," then it is not subject to the Rule of Two. Law, regulation, and tradition are on my side, as I have shown.

If it's true that Carl uses "new requirement" the same way that I do, and if he thinks that all new requirements (new procurement requests) are subject to the Rule of Two if they are being considered for order under IDIQ contracts (not requirements contracts), then I think he is demonstrably wrong. But if he defines "new requirement" differently, then perhaps we do not irreconcilably disagree. I do not think he meant it the way I do, which means there is hope. But I don't know.

I've aggravated Carl, so instead of working to understand one another he is dodging the ball by responding to questions with questions. I wish he'd settle down and try to work this out like the reasonable man I think he really is. I think he's on to something important that ought to be discussed (it was hinted at in the exchanges between Don and me), but we're not going to get to it this way. Too bad, because since Don and I recognized what we think the real issue is, I have been kind of excited.

Jacques--I think I now understand why Carl (apparently) limits his rule to IDIQ contracts, but I don't think he does, not clearly anyway. And if what I think is bothering him is what in fact is bothering him, then he and I may be on the same page. But he'll either figure it out or he won't.

Carl,

I'm having the same problem with your argument as Jacques:

I've tried to understand how Carl distinguishes an IDIQ contract from a requirements one and I can't find a principled basis for the distinction. It doesn't seem to have anything to do with the rules surrounding the legal effect of repeal. While both parties have rights under a requirements contract, Carl's analysis seems to ignore the government's contractual right under the IDIQ. If a task order issued against an IDIQ contract is a "new contract" (Carl's Posts #16 & #58), it isn't clear why a task order issued against a requirements contract wouldn't be. (Perhaps his concern is specific to the Rule of Two?)

The repeal of the statute either applies to future orders or it doesn't--it has nothing to do with whether the underlying contract is IDIQ or requirements. If the repeal applied, an agency with an IDIQ contract would have to stop issuing orders under the contract or terminate it (if they hadn't met the minimum). If the agency had a requirements contract, they would have to terminate it.

To be persuasive, I think you need an actual example to support your argument--a decision, a statement of policy, something. Your argument is logical, but your premise seems too made up.

-Don

With reference to Post # 46, since the content discussion has moved along so much, this post is about tone rather than content. It appears that others share this view, and our host has weighed in.

My absence was not due to moping, but a combination of factors: snowed at work with too many half-days (12 out of 24), preparing to move (in my time "off"), and finally wondering why I bother to post here when abuse continues, even in posts which deny that they are abusive.

Please think about "piling on" and "unnecessary roughness." Please consider whether calling somebody (anybody) "too sensitive," speculating that somebody is "moping," and especially your last paragraph, add any real value to the discussion or just gratuitous sarcasm (abuse). Please consider whether the post cited above discusses the issues at hand or goes directly to personalities in an "I'm OK; you're not OK" kind of transactional analysis.

The sermon I preached about manners fell upon deaf ears, so I won't preach about a related subject: respect.

So if the good folks on this forum do not see me posting much, it's not that I'm avoiding debate, which I find stimulating, or moping, which is not how I am. It's because it's no fun to go into a debate expecting civil treatment and instead getting abuse. Who needs it?

Oh, cajuncharlie. I don't think it's bad manners to tell someone that they are wrong. But I will take your comments to heart about calling you too sensitive and saying that you are moping. I apologize for saying those things. I do not apologize for saying that you were wrong.

All: I think that what is bothering Carl, and the reason he restricts his principle to IDIQ contracts, is the fact that so many such contracts contain very broad statements of work,so broad that it's hard to say that any work is out of scope. That's the problem mentioned by the GAO in LBM and in it's famous "Valenzuela" letter. I think that's a legitimate concern, but the legitimacy of that concern does not support Carl's argument, and his application of his principle is inconsistent, which is what is bothering Don and Jacques.

Carl's concerns, if I have them right, are legitimate and warrant action by the FAR councils. (Good luck with that.) But the way to address them is to say that if an IDIQ or requirements contract is so broadly written that prospective offerors could not reasonably be expected to know that specific work would be covered in the future, then the work is out of scope, is new work, and is subject to competition, synopsis, and set aside. Thus, a broad statement of work should be interpreted restrictively, rather than broadly. That approach retains the within-scope vs. "new work" distinction and principle that is well-established in law and regulation, eliminates the inconsistency in Carl's application, and solves what I think is a real problem. That, I think, is how GAO should have handled LBM.

Carl... To be persuasive, I think you need an actual example to support your argument--a decision, a statement of policy, something. Your argument is logical, but your premise seems too made up.

-Don

Don:

I'm surprised to see you say that Carl's argument is logical. A logical argument includes a major premise, a minor premise, and a conclusion that follows from the premises.

All men are mortal.

Socrates is a man.

Therefore, Socrates is mortal.

An argument is valid, i.e., logical, when, if the premises are true the conclusion must be true. An argument is true when, if the premises are true the conclusion must be true, and, in fact, the premises are true.

Carl has presented us with a conclusion: the repeal of the statute prevents further use of the IDIQ contract. Fine, but what are his premises?

Carl's conclusion is perhaps appealing to some, but it is not logical, because he has not articulated clear premises from which his conclusion follows. Only when we have a valid argument can we proceed to determine if the argument is true.

I do, however, think that Carl's comments point to a genuine problem with all task and delivery order contracts -- which include both IDIQ and requirements contracts -- that ought to be addressed. It may also point to problems with the exercise of some contract extension options.

Aah, Wikipedia...

Joel:

One of my favorites: Zegarelli, Logic for Dummies (2006). I keep it on my nightstand.

But the Wiki entries for logic and syllogism are very good.

Vern,

I understand Carl's primary argument as follows:

Major Premise: The repeal of a law affects all future requirements under nonmandatory contracts.

Minor Premises: 1. alexreb's contract is a nonmandatory contract.

2. The Small Business Comp Demo Program has been repealed.

Conclusion: Therefore, the repeal of the Comp Demo program will affect future requirements under alexreb's contract.

That's logical, but his major premise is questionable. He has not proven that to be true. His argument for that, at this point, seems to go as follows:

Major Premise: ?

Minor Premise: ?

Conclusion: Therefore, the repeal of a law affects all future requirements under nonmandatory contracts.

That argument is not logical.

Don:

That makes sense.

Might "all future (new) requirements" be construed to include options under any type of contract?

Suppose that we awarded a contract to a large business for one year of services when the Competitiveness Demonstration Program was in effect and that the contract includes an option to extend for another year. Exercise of an option is not mandatory. Under Carl's major premise, as you state it, wouldn't we be prohibited from exercising the option after the repeal?

Under Carl's major premise, as you state it, wouldn't we be prohibited from exercising the option after the repeal?

Yes.

Wow; what a lot of very technical and detailed discussion.

Syllogistic arguments aside, I just don't see how the U.S. Congress would intend to completely throw efficiency to the winds in the case of an already established IDIQ that was awarded under the previous authority. Especially since Pub. L. 111-240 was designed to help small businesses. Congress just doesn't apparently want the program used anymore "in the acquisition process" as reflected in Sec 1335 of the law.

If CICA was reworked to no longer allow logical follow on contracts for DoD, NASA, and the Coast Guard, and was silent to the treatment of existing contracts, who in their right mind would then go out and terminate / not exercise options on those contracts? Especially in today's environment of scarcity of resources?

As a matter of practicality and common sense, I would continue to operate as normal, and be on the diligent lookout information that indicated to me that some decision has been made that what I am doing is not legally supportable.

And I don't care if someone tells me that I'm wrong, since it's far better to be wrong and find the path to being correct, than to be afraid to act decisively and in a manner consistent with common sense and reasonable interpretation.

Whether the exercise of an option resulted in a "new contract" for purposes of changes in the law used to be a closer question than it appears today, though the result could easily hinge on the specific language of the statute or its implementation. It seems that following International Business Investments, Inc. v. U.S., 21 Cl.Ct. 79 (1990), courts, relying on 1A Corbin on Contracts, s 264, will treat the exercise of an option as a new contract only where the option was either the exclusive or primary purpose of the original contract. Contrast some older decisions referencing CJS Contracts s 449. See generally Nash & Cibinic, Options: They Seem To Be Many-Splendored Things, 10 N&CR ? 60 (Oct. 1990) (discussing the various treatments of an option as either a new contract or part of the original contract under CICA, protest jurisdiction, Prompt Payment Act (written before the decision discussed above), and Service Contract Act).

Edit: In the commercial context, for sale of goods, the Uniform Commercial Code s 2-612 envisions "installment contracts" which appear similar to indefinite delivery contracts. Under UCC s 2-612, the overarching contract calling for periodic performances is considered a unitary contract. It would be interesting to see whether there are any court decisions as whether a change in the law applies prospectively to deliveries under an existing installment contract.

Don - I am working on a response to your earlier question posed to me. With regard to your most recent post I would offer that you have applied my premise to a different situation and all things being different in contracting one premise applied to one procurement does not make it automatically apply to another. My argument in part all along where I have agreed that my premise would not apply to a "requirements" contract. I submit that it would not in a stand alone contract contract either. For what it is worth I "may", by FAR Part 17.207(e)(2), consider the effects on small businesses but I do not have to, so in fact if I decided as a CO not to extend the option as a result of cancellation of FAR 19.10 I could.

Sixth Wifcon Reg:

You're right. Welcome aboard.

Vern

Don ? Per the information of the thread inclusive of my conclusions

FACTS: ?Several? IDIQ contracts for A-E services awarded as ?multiple? year contracts or in other words awarded with options. All are awarded to large businesses awarded under the authority of the Demonstration Program ? archived ref: FAR 19.10 ? with intent to award work only above the ESB set-aside threshold of $50K.

QUESTION: Can these contracts now be used for requirements above the micro-purchase level up to the SAT and for those above the SAT as well due the cancellation of FAR Part 19.10?

ANSWER: No, as based on the following.

In evaluating the requirements newly being considered for the several IDIQs FAR Part 10.001 requires agencies to develop appropriate market research for ?new requirement documents? (Ref: FAR Part 10.001(a)(2)(i)) and for acquisitions over the SAT (Ref: FAR Part 10.001(a)(2)(ii)). As a task order (aka ?contrac? per FAR 2.101) under an IDIQ for A-E services under the instant example is either providing a ?new requirements document? or is above the SAT or both, market research is required. Further if the new requirement document is for a non-commercial item (service) and a task/delivery order is anticipated then the same market research is required (ref: FAR 10.001.(a)(2)(v)). In all these required cases existing market research if conducted within 18 months before award of a task order can be used but only if the information is ?current, accurate, and relevant? (ref: FAR Part 10.002((1)). It is noted here that deletion of FAR 19.10 makes the previous market research information less than current.

Further this market research is to be specific to the item being acquired and ?should include? ?the requirements of any laws and regulations unique to the item being acquired? (ref: FAR 10.002((1)(iv)) and size and status of potential sources (ref; FAR 10.002.((1)(vii)). By deletion of FAR 19.10 through statutory action changes the considerations of status of potential sources.

The market research then ?shall? be used to determine the extent of competition and such competition shall not be restrictive unless satisfying agency needs or as authorized by law (ref: FAR 11.002(a)(ii)).

FAR 19.5 then provides, in the absence of FAR 19.10, that an ?acquisition? shall be set aside when circumstances in FAR 19.502-2 exist (ref; FAR 19.502-1). FAR 2.101 defines an ?acquisition? as ?the acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. Acquisition begins at the point when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract.?

Briefly stated FAR 19.502-2 requires the reservation of an acquisition for small business if between the micro-purchase level and the SAT or if above the SAT where it is determined that offers from two or more responsible small businesses will be received.

Further consideration is given to FAR Part 16.504 regarding Indefinite-quantity contracts where it is concluded but not specifically stated that an IDIQ contract is only mandatory for use by the government up to the stated minimum (ref: FAR 16.504(a)(1)). After accomplishing this minimum it becomes, in my words, the unilateral right of the government to determine whether the IDIQ should be utilized or not.

With regard to the issue of scope I have offered the example of steel from Timbucktoo. This example has been dismissed as not applicable for no defined reason. I would offer that law is the same whether it deals with steel or the statutory requirement to consider an acquisition for small business participation.

Additionally with regard to scope the issue is scope of competition and not scope of work.

While at the time the IDIQ was competed appropriately, a follow-on need whether defined as ?new requirements documents? and/or a ?acquisition?, after accomplishment of the minimum, may well be within the scope of work but are not now within the scope of the competition as other requirements of FAR, as supported by their statutory requirements, require market research, determination of extent of competition, and in the end consideration for small business set aside. If the IDIQ cannot satisfy the ?reservation? requirement nor the ?rule of two? requirement the work essentially falls outside the IDIQ?s scope and other means must be used for the ?new requirement document? and/or ?acquisition?.

Conclusion ? After the Government satisfies the minimum under the several multiple year contracts the requirements of FAR 10, 11 and 19, the latter specific to small business participation, must be considered and applied as appropriate with regard to ?new requirements documents? and/or an ?acquisition?. In effect these FAR directives render the IDIQ contracts as not appropriate means of a type of contract in satisfying the new requirements and acquisitions and should therefore not be utilized.

Note ? An argument has been offered within the thread is provided by example of a standalone contract which I conclude to be an example that is not pertinent to the issue. I would not terminate a standalone contract in light of the deletion of FAR 19.10 because the existing standalone contract is neither a new requirements document and/or an acquisition. It is clear to me that definition of acquisition clearly includes modification (?contract administration?) and it would be appropriate to continue to modify (exercise of option) the work. Factually I also conclude the scope of the competition cannot change because it has already occurred. This is not true for a new requirement document and/or acquisition under an IDIQ after the minimum has been accomplished as by definition of FAR Part 10 and FAR Part 19 scope of competition must be determined. In light of these conclusions I have never offered that the IDIQ?s must be terminated, I only offered that it would seem appropriate to do so, if the minimum has been accomplished, as it is clear to me that the IDIQs would most likely not be used. The alternative is of course to let them sit as is and never use them.

Postscript ? The contention of ?right? or ?wrong? with regard to the arguments in this thread seem to me to be a two way door where for those that have characterized me as being ?wrong? in effect make me ?right? in their own words.

Oh. So now FAR Part 10 is the key to it all.

Here is an alternative argument:

MAJOR PREMISE: There is no requirement to apply the Rule of Two to an acquisition when there is no requirement to compete the acquisition.

[Prospective "acquisitions" that are within the scope of IDIQ contracts awarded pursuant to FAR Part 6 are exempt from further competition except among multiple awardees. See FAR 6.001(e) and (f). That exemption is statutory for task orders under IDIQ contracts. See, e.g., 10 USC 2304c(a). [Task orders are also exempt from synopsis as otherwise would be required by the Small Business Act, 15 USC 637(e). See 10 USC 2304c(a)(1).] If there is no requirement to compete an acquisition, it follows that there is no requirement to seek offers from two or more firms. Yet in order to set an acquisition aside for small businesses there must be competition from two or more small business firms. So -- no requirement for competition, no requirement to set aside. (Delex applies the Rule of Two to acquisitions competed under multiple award IDIQ contracts and limits set asides to small business awardees.)]

MINOR PREMISE: The IDIQ contracts were awarded pursuant to FAR Part 6 and the prospective acquisitions are within-scope, thus, the CO is not required to obtain further competition except among multiple awardees.

CONCLUSION: The Rule of Two does not apply to the prospective acquisitions, except among multiple awardees, so repeal of the Small Business Competitiveness Demonstration Program does not prevent continued use of the IDIQ contracts.

The readers can decide which argument makes more sense: this one or the newest one from Carl.

Vern, thanks for taking the time to see this through. I see your latest assumes this is not a multiple award IDIQ, while Carl seems to assume this is a multiple award IDIQ.

I should probably have the common sense to let this thread speak for itself, but I won't.

Carl, I thought that what you were going to answer is why repeal of Subpart 19.10 would be effective for delivery orders issued after repeal against contracts awarded prior to repeal. Instead, it appears your analysis assumes the repeal applies retroactively. From this, you conclude (at least in the multiple award IDIQ context), the Rule of Two may apply.

If I am following your argument, we are forced to revisit the Rule of Two, despite the fact that all contractors holding an IDIQ are large, by virtue of the requirement to conduct market research prior to the award of a delivery order.

First, for all the reasons already stated, I can't assume that repeal applies retroactively; which your argument assumes. In addition, consider BearingPoint, Inc. v. U.S., 77 Fed.Cl. 189 (2007), 49 GC ? 248 (FAR change giving ordering activity authority to terminate for default made effective between award of the basic contract and the issuance of an order did not apply to the order, relying on FAR 1.108 and the fact the change would require a change in the terms and conditions of the contract that could only be made by written agreement of the parties).

Second, it isn't obvious to me that the market research required prior to the issuance of a delivery order, absent retroactive application and some affirmative duty to revisit the field of potential sources, would require revisiting the field of potential sources. Your analysis seems to hinge on your reading of FAR 10.002((1)(vii). It says, "Market research involves obtaining information specific to the item being acquired and should include...size and status of potential sources." From this, you find (create?) a requirement to revisit a set-aside determination each time a delivery order is issued. [Edit: By this, I mean consider a field of potential sources larger than those eligible to compete for the delivery order.] I'm skeptical. FAR 10.001(a)(2) list out the points when market research must be conducted. The market research required--appropriate to the circumstances--preceding the issuance of a delivery order is to consider whether a commercial item is available to meet the government's requirements. FAR 10.001(a)(2)(v).

Carl, if this were a single award IDIQ, would your result be the same?

Jacques:

The issue is whether an IDIQ contract awarded before the repeal remains viable after the repeal. Under my argument it makes no difference whether the IDIQ contract is single award or multiple award. The contract remains viable. However, if it's multiple award, and if there are two or more small businesses among the awardees, and if you would respect the Delex decision (which I would not), then the contract remains viable, but the Rule of Two would apply among the multiple awardees.

As for Carl's latest, Part 10 requires market research and that's all it requires. It does not require that within-scope work be treated as new work if there are two small businesses that are not among the awardees.

Jacques - Yes to your question and just for the record I have assumed nothing about the example, Cajun stated there were several IDIQ contracts and I simply stated same.

I am not depending on FAR Pat 10 I am depending on the fact that any IDIQ is not mandatory after the minimum is met. Seems my answers throughout this thread would pinpoint this contention but there are some that want to section out issues just to defend their own position. Understood.

At the risk at taking this thread completely off track I believe I have from memory and my limited ability to do research (no Westlaw etc.) come up with a better analogy that has not been mentioned as of yet. No doubt I will continue to bear the brunt of brow beating and less than complimentary comments but I am simply interested in the debate.

So here I go..............

Consider Federal Supply Schedules that function much like an IDIQ. In June of 2004 the language of the FAR was changed, without statutory support, to allow agencies using the FSS to forgo small business restriction or set-aside (ref: FAC-2001-24). By my limited read the FAR Council simply believed it was the best thing to do even though there were comments to the contrary. I offer this example as by my recollection, prior to FAC 2001-24, small business participation was implied as necessary and the FAC changed this implication.

Followed three years later by GAO Protest B-309911. In this protest the protester was found not to be an interested party and the details of the protest were never addressed. It seems they appealed but I cannot find the follow-on results. The protest was against the failure of the agency to set aside the FSS procurement for small business. Again the protest was dismissed as the protester was not an interested party but what I found interesting in the read of the protest was the following comment by GAO -

"During the course of this protest, we sought the views of both the GSA, which administers the FSS program, and the Small Business Administration, as well as the Army. The submissions made clear that these agencies do not agree about how the set-aside requirements of the Small Business Act, 15 U.S.C. sect. 644(j) (2000), apply to orders placed against the FSS."

I find the comparison to the arguments in this thread to be interestingly similar - no agreement.

Again in my very rural abilities to search regarding appeals etc. I could find nothing. Maybe there is more and will watch intently for what folks might post.

Otherwise, I an satisfied with my participation in this thread and I am resigned to just waiting to watch for a GAO decision exactly on point, undoubtedly inclusive of any input from SB

Carl, thank you. The discussion was interesting (at least to me).

Jacques - Yes to your question and just for the record I have assumed nothing about the example, Cajun stated there were several IDIQ contracts and I simply stated same.

I am not depending on FAR Pat 10 I am depending on the fact that any IDIQ is not mandatory after the minimum is met. Seems my answers throughout this thread would pinpoint this contention but there are some that want to section out issues just to defend their own position. Understood.

At the risk at taking this thread completely off track I believe I have from memory and my limited ability to do research (no Westlaw etc.) come up with a better analogy that has not been mentioned as of yet. No doubt I will continue to bear the brunt of brow beating and less than complimentary comments but I am simply interested in the debate.

So here I go..............

Consider Federal Supply Schedules that function much like an IDIQ. In June of 2004 the language of the FAR was changed, without statutory support, to allow agencies using the FSS to forgo small business restriction or set-aside (ref: FAC-2001-24). By my limited read the FAR Council simply believed it was the best thing to do even though there were comments to the contrary. I offer this example as by my recollection, prior to FAC 2001-24, small business participation was implied as necessary and the FAC changed this implication.

Followed three years later by GAO Protest B-309911. In this protest the protester was found not to be an interested party and the details of the protest were never addressed. It seems they appealed but I cannot find the follow-on results. The protest was against the failure of the agency to set aside the FSS procurement for small business. Again the protest was dismissed as the protester was not an interested party but what I found interesting in the read of the protest was the following comment by GAO -

"During the course of this protest, we sought the views of both the GSA, which administers the FSS program, and the Small Business Administration, as well as the Army. The submissions made clear that these agencies do not agree about how the set-aside requirements of the Small Business Act, 15 U.S.C. sect. 644(j) (2000), apply to orders placed against the FSS."

I find the comparison to the arguments in this thread to be interestingly similar - no agreement.

Again in my very rural abilities to search regarding appeals etc. I could find nothing. Maybe there is more and will watch intently for what folks might post.

Otherwise, I an satisfied with my participation in this thread and I am resigned to just waiting to watch for a GAO decision exactly on point, undoubtedly inclusive of any input from SB

The applicability of FAR 19 to FAR 8 is clearly a different issue from those that have been volleyed about in this thread. While I am reluctant to discuss yet another one in this thread, I am compelled to point out that GAO has stated clearly that FAR 19 does not require contracting officers to apply the rule of two to procurements conducted under FAR Part 8.

Quote

Nothing in the Small Business Act suggests or requires that the Rule of Two--which is set forth in the regulations that implement that Act (but is not found in the Act itself), see Delex Sys., Inc., B-400403, Oct. 8, 2008, 2008 CPD para. 181 at 6-7--takes precedence over the FSS program. To the contrary, and as noted above, the implementing regulations for the small business set-aside program and the FSS program expressly provide that set-aside requirements for the program do not apply to FSS buys. See FAR sections 8.404(a), 19.502-1(, 38.101(e). Accordingly, we conclude that the Small Business Act and its implementing regulations do not impose a requirement on agencies to first evaluate whether a solicitation should be set-aside for small businesses before purchasing the goods or services through the FSS program.

Unquote

See Edmond Computer Company; Edmond Scientific Company, B-402863; B-402864, August 25, 2010.

Carl now brings up FAC 2001-24, which may be found at 69 FR 34231, June 18, 2004, Item V. He apparently thinks that something in it supports his contentions about the applicability of the Rule of Two to task order contracts awarded during the Small Business Competitiveness Demonstration Program. That FAC was published following a proposed rule published at 68 FR 19294, April 18, 2003. The stated purpose of the proposed rule was to ?strengthen? procedures for establishing blanket purchase agreements under FSS contracts. In another place the rules was said to ?clarify? procedures for establishing BPAs. Among other things, the proposed rule stated the intention to add the following language to FAR:

(a) General. Parts 13, except 13.303-2( c)(3), 15, and 19 do not apply to orders placed against Federal Supply Schedules (see 8.404-5). Orders and Blanket Purchase Agreements placed against a Multiple Award Schedule (MAS), using the procedures in this subpart, are considered to be issued using full and open competition (see 6.102(d)(3)). Therefore, when establishing a Blanket Purchase Agreement or placing orders under Federal Supply Schedules using the procedures of 8.404, ordering offices need not seek further competition, synopsize the requirement, or consider small business programs.

The proposed rule included the following statement:

This is not a significant regulatory action and, therefore, was not subject to review under Section 6( of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

According to the background statement in FAC 2001-24, the following were among the purposes of the final rule:

Clarifies that competition shall not be sought outside the Federal Supply Schedules? , and

Adds additional language to allow for consideration of socio-economic status when identifying the potential competitors for an order? .

There was no mention of changing policy about the applicability of the Rule of Two. However, among the comments discussed by the councils, I found the following:

1. Comment: Ordering offices need not seek further competition. Several respondents stated that the phrase ?Ordering offices shall not seek further competition? is confusing or misleading. In addition, the requirement that agencies need not seek further competition, synopsize the requirement, or consider small business programs when placing orders or issuing Blanket Purchase Agreements under the schedule ordering procedures did not seem fair.

Councils' response: Partially concur. The Councils determined that although the language was clear, an additional explanation would be added. The Councils clarified the language at 8.404(a) to indicate that ordering activities need not seek competition outside of the Federal Supply Schedules. Agencies must follow the procedures of Subpart 8.4 to ensure compliance with the requirement for full and open competition as implemented under the Multiple Award Schedules program.

* * *

6. Comment: Small business. Several respondents raised concerns regarding the ability of agencies to focus their consideration of contractors and their competitions for orders on small businesses. In particular, the Federal Office of Small Disadvantaged Business Utilization (OSDBU) Directors Interagency Council commented that the rule of two should apply to schedule orders and that all orders between $2,500 and $100,000 be restricted to small businesses. In addition, another respondent stated that the language regarding the applicability of Part 19 of the FAR needed to be clarified. Another respondent suggested that a 10 percent price evaluation advantage be given to small businesses when agencies are placing orders.

Councils' response: The Councils do not concur with the comment that the rule of two should apply to orders under the schedules program. Further, the Councils do not concur with the suggestion that all orders under $100,000 be set-aside for small business. The Councils concluded that these suggestions would fundamentally alter the schedules program in terms of the efficiency and effectiveness of the overall program by increasing the administrative burden on agencies without having demonstrated that the changes would, in fact, benefit small business over the long term. In addition, the basic statutory authority for the program provides that contracts and orders be open to all sources. Creating a set-aside for all such orders would be inconsistent with the program's basic operating authorities. In addition, the Councils, for the same general reasons, do not agree with the request for a 10 percent evaluation preference for small business.

However, the Councils did examine ways in which the rule could foster even greater small business participation than that which already exists. The Councils added language at FAR 8.405-5( that provides that ?Ordering activities may consider socio-economic status when identifying contractor(s) for consideration or competition for award of an order or BPA.? This language provides the flexibility for agencies to conduct their market research focusing on small business concerns and providing them greater opportunity to compete for orders.

The Councils also clarified the language at FAR 8.405-5(a) regarding the applicability of FAR Part 19 and added language that reminds agencies that when reporting an order for purposes of credit towards their socio-economic goals, the ordering agency may only take credit if the awardee meets the size standard that corresponds to the work performed.

Thus, Carl's "analogy" fails. FAC 2001-24 did not change the policy about the applicability of the Rule of Two to FSS contracts. It clarified existing policy. It is a waste of peoples' time to dredge things up "from memory" that have not been scrutinized carefully and verified.

As for the protest Carl mentions -- it was FitNet Purchasing Alliance, B-309911, 2007 CPF ? 201, November 2, 2007. It was not reconsidered by GAO nor was the protest filed with the Court of Federal Claims.

FitNet was preceded by Information Ventures, Inc., B-291952, 2003 CPD ? 101, May 14, 2003, which preceded FAR 2001-24 by more than a year. The GAO's digest of that decision reads as follows:

Protest that agency improperly canceled presolicitation notice of intent to procure services under small business set-aside solicitation in order to instead solicit quotations from Federal Supply Schedule (FSS) vendors is denied, where agency reasonably determined that such services were available under the FSS; agencies need not consider small business programs when purchasing from the FSS.

In the text of the decision, you can find the following:

Information Ventures argues that the agency's purchase from the FSS is contrary to public policy and, specifically, that it violates Federal Acquisition Regulation (FAR) ? 19.502-2( (the so-called ?rule of two?). That provision generally requires an agency to set aside acquisitions for small businesses where there is a reasonable expectation of receiving fair market price offers from at least two responsible small business concerns. Protester's Comments, Mar. 20, 2003, at 4.

This argument is without merit. There is no applicable statute or regulation that required the agency to set the requirement here aside for small businesses in lieu of purchasing from FSS vendors. Indeed, FAR ? 8.404(a) provides that:

... when placing orders under Federal Supply Schedules, ordering offices need not seek further competition, synopsize the requirement, make a separate determination of fair and reasonable pricing, or consider small business programs . . . .

This provision obviates the need for agencies to apply small business set-aside procedures where, as here, they are purchasing from the FSS. Nat'l Office Sys., Inc., B-274785, Jan. 6, 1997, 97-1 CPD ? 12 at 3. Thus, there was nothing improper in the agency's not setting this requirement aside for small businesses.

Information Ventures was cited favorably this year by the U.S. Court of Federal Claims in footnote 7 of K-Lak Corp, v. U.S., 93 Fed. Cl. 749 (2010):

The court notes, however, that to the extent the court decides that the Air Force's decision to procure credit reports via the FSS rather than using an 8(a) procurement was justified, K-LAK, a non-FSS contractor, would lack standing to challenge any particular orders from Equifax or other FSS providers. See Info. Ventures, 2003 WL 21089149 (no statute or regulation required the agency to consider small businesses in lieu of purchasing from the FSS); In re FitNet Purchasing Alliance, B-309911, 2007 CPD ? 201, 2007 WL 3257012 (Comp.Gen.2007) (?Given that the decision was made to procure via the FSS, FitNet, which does not hold an FSS contract, is not an interested party to protest the terms of the solicitation.? (internal citation removed)).

As I have already pointed out, like FAR 8.404(a) for FSS contracts, 10 USC 2304c(a) states that agencies need not seek further competition when placing within-scope orders against task order contracts.

Finally, no one has ignored Carl?s assertion that his principle applies only to nonmandatory contracts. In fact, that assertion has been mentioned several times by persons seeking to understand his reasoning in that regard. I even went so far as to posit my own theory for his reasoning. (Post #71) To the best of my recollection, he has never clearly explained his reasoning about that to anyone?s satisfaction (with emphasis on "clearly"), which is why Jacques and Don have kept asking him about it. He simply keeps saying it, over and over and over again. I see no point in bringing it up again.

FYI--I left a telephone voice message with the FAR Case representative on 1/7/11, but to date have received no response. I also followed that up with an email request for his opinion (1/12/11), but received no reply. The email provided him a link to this discussion for purpose of showing the different interpretations/opinions regarding this matter.

Great in depth discussion. As I said earlier, I think which ever way I go I'll have a lot of ammo to back up my position (more than enough).