No-Cost Agreements and CICA/Competition

One experience I've had with this is for the base newspaper. We received a weekly paper and the contractor recouped his costs and O&P through advertisements. We did structure it like any other contract, minus the payment clauses; so I wouldn't agree the FAR doesn't apply (unless you truly mean agreement like a co-operative agreement). We also computed the approximate value of the consideration from advertising and the estimated production/delivery costs. I don't remember the figures, but we synopsized the requirement like any other competitive acquisition. Our old official travel contracts were also structured the same way, where the contractor obtained consideration in the form of discounts from the airlines.

Thanks for the response. To give a little more detail, the no-cost agreement I am contemplating is to establish industry days – where the vendor would do all the coordination/execution of the industry day & charge a fee to keep for themselves.

Please see this answer below – regarding FAR and competition – from GAO FAQs (link included). My question is in relation to a civilian agency.

How do the federal procurement laws apply to an agency’s use of a no-cost

contract?

Statutory requirements for competition, such as the Competition in Contracting

Act (CICA), apply to procurements by federal agencies for property or services.

10 U.S.C. § 2303; 41 U.S.C. § 253. Thus, as a threshold matter, to be subject to

these requirements, the agency must be acquiring property or services.

Determining whether competition requirements apply to a particular procurement for a no-cost contract for property or services will depend on the agency involved.

CICA does not apply to no-cost contracts of military agencies, see 10 U.S.C.

§ 2303; Century 21—AAIM Realty, Inc., B-246760, Apr. 3, 1992, 92-1 CPD ¶ 345;

Gino Morena Enterprises, B-224235, Feb. 5, 1987, 87-1 CPD ¶121, but it does apply

to no-cost contracts of civilian agencies. See 41 U.S.C. § 253; Gourmet

Distributors, B-259083, Mar. 6, 1995, 95-1 CPD ¶ 130. Federal Acquisition

Regulation (FAR) requirements apply only to acquisitions by the government of

supplies or services with appropriated funds. Fidelity and Casualty Co. of New

York, B-281281, Jan. 21, 1999, 99-1 CPD ¶ 16; FAR, 48 C.F.R. §§ 1.104, 2.101.

Consequently, the FAR does not apply to no-cost procurements conducted by

either a defense or civilian agency.

http://www.gao.gov/special.pubs/appforum2008/nocostcontracts.pdf

Sounds like a concessionnaire contract to me. Haven't fooled with those in many years, since the days following the "khaki mafia" scandals when the procurement shop took over many non-appropriated fund procurement functions from the military clubs.

I would caution you to have your agency legal counsel look at the proposed arrangement and ask them to opine on whether there might be any issues under Antideficiency Act. Would any part of your Industry Day constitute an impermissible voluntary service? or, be a gratuitous service that could be perceived as an improper augmentation of an appropriation?

MBrown – thanks for your comment. Legal has reviewed it and it is not an issue for the Anti-Deficiency Act. Per GAO “If an agency enters into a no-cost contract that permits the vendor to provide a service for which the agency’s appropriation is not otherwise legally available, the no-cost contract would not violate the Anti-Deficiency Act’s voluntary services prohibition because the agency incurs no financial liability.”

My main concern with establishing a no-cost agreement is whether or not I have to compete it. And, if I do have to compete it, since cost is not a factor, how will I evaluate if all are technically acceptable?

deen:

It seems like you answered your own question about whether you have to compete the requirement in post #3. The language you cited says that CICA applies to no-cost contracts for civilian agencies. I'm not convinced that cost cannot be a factor. True, your agency is not paying the cost; but the participants (I assume the vendors that attend) will. It isn't unreasonable to conclude that a higher fee would result in lower participation.

By the way, thanks for an informative post. Proof, yet again, that just because it has been done that way in the past, that it isn't necessarily correct.