Acquiring ServicesUsing Multiple Award InstrumentsUnder Section 803DFARS Case 2001-D017 25 October 2002Defense Acquisition University

OverviewPurposeProblemAbbreviations DefinedBackgroundSection 803Final Rule 2001-D017

PurposeTo understand the changes in policies and procedures for the award of task orders for services in excess of $100,000 as a result of Section 803 of Public Law 107-107

The ProblemCongress believes that the Department of Defense is not following Congressional intent with respect to competition in the awarding of task orders for services using multiple award instruments

AcronymsFSS Federal Supply ScheduleMAS Multiple Award SchedulesMAC Multi-Agency ContractGWAC Government-Wide Acquisition ContractIDIQ Indefinite Delivery/Indefinite Quantity BPA Blanket Purchasing AgreementBOA Basic Ordering Agreement

Background A History Since FASAFASA permitted task orders using multiple award instrumentsLaw requires all multiple award contractors be given Fair Opportunity to compete for task ordersOnly 5 specific exceptions to Fair Opportunity

Agency's need is of such unusual urgency that providing an opportunity to all awardees would result in unacceptable delays [FAR 16.505(b)(2)]Only one source is capable of responding due to the unique or specialized nature of the work [FAR 16.505(b)(2)]The new work is a logical follow-on to an existing task order where contractors were given a fair opportunity to be considered [FAR 16.505(b)(2)]The order must be placed with a particular contractor in order to satisfy a minimum guarantee. [FAR 16.505(b)(2)]There is a statute that authorizes or requires purchase from a particular source.FAIR OPPORTUNITY EXCEPTIONS

GAO/NSIAD-98-215 Acquisition Reform: Multiple-award Contracting at Six Federal Organizations Letter Report, 09/30/98Audit Interest Items1) Whether federal agencies provided a fair opportunity for contractors to receive orders under multiple-award contracts2) How service fees assessed on interagency orders compared with agencies costs to process such orders3) If multiple-award contracts affected federal contracting opportunities for small businesses

GAO/NSIAD-98-215Letter Report, 09/30/98Findings: - short cuts were taken relative to competition. One organizations procedures did not require ordering officials to report to the contracting officer whether all contractors had been considered for an order. In another organization, the GAO found that it normally identified a preferred contractor when announcing plans to place orders for information technology services on its multiple-award contracts.

Congressional InterestThe National Defense Authorization Act for Fiscal Year 1999 (Pub. L. 105-261) The act addressed the misuse and abuse of Task Order contracts, Multiple Award Contracts for services and Federal Supply Schedules by establishing better control of orders placed under multiple award contract instruments

DoD Policy Action DFARS Revision March 25, 1999Added Paragraph 217.500(b) to remind contracting personnel that all purchases over $2,500 made for DoD by another agency, including orders under an agency task or delivery order contract, are subject to the Economy Act, IAW Section 814 of Public Law 105-261 unless the agency is identified by statute as an agent for the rest of the Government.

DoDIG Report No. 99-116DoD Use of Multiple Award Task Order Contracts April 2, 1999Findings

78 percent of delivery orders for products were awarded competitively to the low bidder

However, the award of task orders for services were not consistent with statutory requirements

DoDIG Report No. 99-116Task orders were awarded without regard to price even though price was not a substantial factor in the initial contract. As a result, 36 of 58 task orders were awarded to higher-priced contractors66 of 124 sole-source task orders were awarded without providing other contractors a fair opportunity to be considered. Only eight of those 66 orders had valid justification for sole-source award

Director of Defense Procurement Eleanor Spector Letter of April 30, 1999 Use Multiple Award Contracts only when all contractors are generally capable of performing all the proposed work. Use the follow-on exception only when all contractors were given a fair opportunity to be considered for the initial order.

Eleanor Spector Letter of April 30, 1999 3. Price must be one of the decision elements for award of the task order. It is part of the best value decision where both price and technical quality must be considered.4. Document the file when applying an exception to fair opportunity or when placing orders with other than the low price offeror. 5. Exercise care when reporting contracting actions since the DoDIG noted the unreliability of data relative to orders under multiple award task order arrangements.

Each military department to select 10 Multiple Award Contracts for services for further review relative to:

Number of contracts awarded for the requirementType of services Number of competitive orders issuedNumber of offers for each potential orderNumber of orders placed with fair opportunity to be considered but no separate opportunity providedHow often each of the four exceptions to fair opportunity were used Director of Defense Procurement Eleanor Spector Letter of July 20, 1999

Eleanor Spector Letter of July 20, 1999 The requested information became available on a routine basis via the DD Form 350 beginning Oct 1, 2000.CONCLUSION

The competition rate was worse than first projected

Reviewed 15 contracting activities and programoffices managing 105 contracts for services DoDIG Report No. D-2000-100Contracts for Professional, Administrative,and Management Support Services March 10, 2000

Relevant FindingsInadequate competitionFailure to award multiple-award contractsRecommendationContracts for services that exceed the statutory requirements should be converted to multiple-award contracts.DoDIG Report No. D-2000-100

GAO/NSIAD-00-56 Letter Report, 03/20/2000Audit Interest Items

Whether contractors were provided a fair opportunity to be considered for the contemplated work The extent of competition realized Determine how clearly ordering offices specified the tasks to be performed or property to be delivered under the orders

GAO/NSIAD-00-56 Letter Report, 03/20/2000Findings

Many of the 22 large orders were awarded without competing proposals Agencies made frequent inappropriate use of the statutory exceptions to the fair opportunity requirementContractors told GAO that if program officials were interested in receiving competing proposals, then more outreach activities should be conducted

GAO/NSIAD-00-56 Letter Report, 03/20/2000Contractors frequently did not submit proposals when provided an opportunity to do soIn 16 of 22 cases representing about $444 million out of $553 million only one proposal was received, and it came from the incumbent contractorWork descriptions for most orders defined tasks broadly and did not establish fixed prices for the workSeveral broadly defined orders were later defined by sole-source work orders

Congressional InterestThe National Defense Authorization Act for Fiscal Year 2000 (Pub. L. 106-65) Subsections 804(a) and 804(b)The act addressed the misuse and abuse of Task Order contracts, Multiple Award Contracts for services and Federal Supply Schedules by establishing better control of orders placed under multiple award contract instruments

FAR Case 99-014 April 25, 2000 Promulgated in response to Public Law 106-65FAR 16.5 was modified to address how to properly plan for, compete, and administer multiple award task or delivery order contractsClarifies what contracting officers must consider when deciding if a multiple award contract is appropriateRequires that all awardees be given a fair opportunity to compete on every task or delivery order placed under multiple-award contracts unless a specific exception applies

FAR Case 99-014 April 25, 2000 When placing orders, the contracting officer should consider: The scope and complexity of the contract requirementThe expected duration and frequency of task or delivery ordersThe mix of resources a contractor must have to perform expected task or delivery order requirementsThe ability to maintain competition among the awardees throughout the contracts period of performance

FAR Case 99-014 April 25, 2000 Requires contracting officers to document their decision on whether or not to use a multiple award contract in the acquisition plan or contract fileEmphasizes the use of performance based statements of workProvides guidance on how to develop tailored order placement proceduresRequires that cost or price be considered as one of the factors when placing an order Requires contracting officers to establish prices for each order that was not priced under the basic contract using the policies and methods in Subpart 15.4Requires contracting officers to document the order placement rationale and price in the contract file

FAC 2001-09FAR Case 99-303

Provides additional regulatory guidance resulting from Pub. L. 106-65Provide definitions and specific policies on the appropriate use of Government-wide acquisition contracts (GWACs), and Multi-agency contracts (MACs). Task and Delivery Order Contracts

Multiple Award Contracts for Services September 30, 2001Findings

Reviewed 423 task orders (FY 2000 2001)The services and DFAS competed between 18% and 26% of their respective task orders Of the competed orders, only 69 percent received more than 1 response. Many offices cited contracting officer discretion as the reason they did not compete the orders (NOTE-- this is NOT a legitimate exception)DoDIG Report No. D-2001-189

Recommendations

Change the FAR to require that all awardees be given the opportunity to be considered on ALL task orders unless there is a valid and signed exception (D&F).The Under Secretary should direct program offices and requiring activities to stop designating sources on at least 75% of orders.Provide remedial training and track compliance thru metrics. Remind COs to assess suitability of the work for multiple awards in acquisition planning and have the senior contracting officials or the ombudsman sign exceptions. Remind COs that the logical follow on exception only applies to work on the instant contract. DoDIG Report No. D-2001-189

Section 803Section 803 of P.L. 107-107 requires DoD to issue DFARS policy requiring competition in the purchase of services under multiple award contracts.

Section 803FSS OrdersOver $100,000The CO must EITHER

Issue the notice to as many schedule holders as practicable, consistent with market research appropriate to the circumstances, to reasonably ensure that proposals will be received from at least 3 sources that offer the required work

OR

Contact all schedule holders that offer the required work by informing them of the opportunity for award

Market research is key. COs must understandwhich schedule contractors can do the work.

Section 803FSS OrdersOver $100,000If less than 3 proposals are received, the CO must document why reasonable efforts would not result in more offers. COs have discretion, but it is linked to good market research.

The only exceptions to fair opportunity are the 5 exceptions specified under FASA

Section 803Contracts Other than FSS over $100,000All awardees that offer the required work must be provide a copy of the description of work, the basis upon which the contracting officer will make the selection, and given the opportunity to submit a proposal . The CO must consider all proposals submitted.The only exceptions to fair opportunity are the 4 exceptions specified under FASA and any statute authorizing or directing a particular source

Final Rule 2001-D017 DFARS ChangesImplementing Section 803Modifies 208.404 Ordering Procedures for Optional Use Schedules

PART 208Required Sources of Supplies and ServicesSUBPART 208.4Federal Supply Schedules

Final Rule 2001-D017FAR 8.404(b)(2) addresses orders exceeding the micro-purchase threshold but not exceeding the maximum order threshold.

The DFARS change states that the procedures at FAR 8.404(b)(2) regarding review of catalogs or pricelists of at least three schedule contractors do not apply to orders for services exceeding $100,000. Instead, use the procedures at 208.404-70.

Final Rule 2001-D017FAR 8.404(b)(3) Orders exceeding the maximum order threshold.

(i) For orders for services exceeding $100,000, use the procedures at 208.404-70 in addition to the procedures at FAR 8.404(b)(3)(i).FAR 8.404(b)(7) Documentation. For orders for services exceeding $100,000, use the procedures at 208.404-70 in addition to the procedures at FAR 8.404(b)(7).]

Final Rule 2001-D017DFARS 208.404-70 Additional ordering procedures for services

(a) This subsection(1) Implements Section 803 of the National Defense Authorization Act for Fiscal Year 2002 (Pub. L. 107-107); and

(2) Also applies to orders placed by non-DoD agencies on behalf of DoD.

Final Rule 2001-D017(b) Each order for services exceeding $100,000 shall be placed on a competitive basis in accordance with paragraph (c) of this subsection, unless the contracting officer waives this requirement on the basis of a written determination that(1) One of the circumstances described at FAR 16.505(b)(2)(i) through (iii) applies to the order; or(2) A statute expressly authorizes or requires that the purchase be made from a specified source.

Final Rule 2001-D017 (c) An order for services exceeding $100,000 is placed on a competitive basis only if the contracting officer provides a fair notice of the intent to make the purchase, including a description of the work the contractor shall perform and the basis upon which the contracting officer will make the selection, to

Final Rule 2001-D017(1) As many schedule contractors as practicable, consistent with market research appropriate to the circumstances, to reasonably ensure that offers will be received from at least three contractors that can fulfill the work requirements, and the contracting officer (i)(A) Receives offers from at least three contractors that can fulfill the work requirements; or (B) Determines in writing that no additional contractors that can fulfill the work requirements could be identified despite reasonable efforts to do so; (documentation should clearly explain efforts made to obtain offers form at least three contractors); and (ii) Ensures all offers received are fairly considered; or

Final Rule 2001-D017(2) All contractors offering the required services under the applicable multiple award schedule, and affords all contractors responding to the notice a fair opportunity to submit an offer and have that offer fairly considered. Posting of a request for quotations on the General Services Administration's electronic quote system, "e-Buy" (www.gsaAdvantage.gov), is one medium for providing fair notice to all contractors as required by this paragraph (c).

Final Rule 2001-D017

(d) Single and multiple blanket purchase agreements (BPAs) may be established against Federal Supply Schedules (See FAR 8.404(b)(4)) if the contracting officer(1) Follows the procedures in paragraphs (b) and (c) of this subsection; and

Final Rule 2001-D017(2)(i) For a single BPA, defines the individual tasks to be performed; or (ii) For multiple BPAs, forwards the statement of work and the selection criteria to all multiple BPA holders before placing orders; and (3) Reviews established BPAs no less than annually to determine whether the BPA still represents the best value.

Final Rule 2001-D017

(e) Orders placed against Federal Supply Schedules may be credited toward the ordering agencys small business goals (see FAR 8.404(b)(6)).]

Final Rule 2001-D017 DFARS ChangesImplementing Section 803Modifies Subpart 216.5 Indefinite Delivery Contracts

PART 216Types of Contracts

Final Rule 2001-D017[216.501-1 Definition.Multiple award contract, as used in this subpart, means(1) A multiple award task order contract entered into in accordance with FAR 16.504(c); or(2) Any other indefinite delivery, indefinite quantity contract that an agency enters into with two or more sources under the same solicitation.]

Final Rule 2001-D017216.505-70 Orders for services under multiple award contracts.(a) This subsection(1) Implements Section 803 of the National Defense Authorization Act for Fiscal Year 2002 (Pub. L. 107-107); (2) Applies to orders for services exceeding $100,000 placed under multiple award contracts, instead of the procedures at FAR 16.505(b)(1) and (2) (see Subpart 208.4 for procedures applicable to orders placed against Federal Supply Schedules).

Final Rule 2001-D017

(3) Also applies to orders placed by non-DoD agencies on behalf of DoD; and (4) Does not apply to orders for architect-engineer services, which shall be placed in accordance with the procedures in FAR Subpart 36.6.

Final Rule 2001-D017(b) Each order for services exceeding $100,000 shall be placed on a competitive basis in accordance with paragraph (c) of this subsection, unless the contracting officer waives this requirement on the basis of a written determination that(1) One of the circumstances described at FAR 16.505(b)(2)(i) through (iv) applies to the order; or(2) A statute expressly authorizes or requires that the purchase be made from a specified source.

Final Rule 2001-D017(c) An order for services exceeding $100,000 is placed on a competitive basis only if the contracting officer(1) Provides a fair notice of the intent to make the purchase, including a description of the work the contractor shall perform and the basis upon which the contracting officer will make the selection, to all contractors offering the required services under the multiple award contract; and(2) Affords all contractors responding to the notice a fair opportunity to submit an offer and have that offer fairly considered.

Final Rule 2001-D017(d) When using the procedures in this subsection

(1) The contracting officer should keep contractor submission requirements to a minimum;

(2) The contracting officer may use streamlined procedures, including oral presentations;

Final Rule 2001-D017(3) The competition requirements in FAR Part 6 and the policies in FAR Subpart 15.3 do not apply to the ordering process, but the contracting officer shall consider price or cost under each order as one of the factors in the selection decision; and (4) The contracting officer should consider past performance on earlier orders under the contract, including quality, timeliness, and cost control.]

SummarySection 803 addresses task orders over $100,000 for servicesPolicy has changedEmphasis is on increasing competitionWhen in doubt provide all qualified contractors the opportunity to be considered for award

Questions?melissa.rider@saalt.army.mil

PURPOSE: The purpose of this briefing is to inform you of a legislative and a regulatory change in the way that we acquire services using various contracting/ordering instruments. Section 803 of P.L. 107-107, National Defense Authorization Act for Fiscal Year 2002 is the law that requires changes to the way that we acquire services using multiple award instruments. DFARS Case 2001-D017 implements this legislation by amending the DFARS. BACKGROUND: Sections 1004 and 1504 of Public Law 103-355, Federal Acquisition Streamlining Act (FASA), established the authority for awarding multiple award task order contracts for services and delivery order contracts for supplies. The law requires that all contractors awarded multiple award contracts be provided a fair opportunity to be considered for each task or delivery order over $2,500. The law permitted (and Congress has repeatedly emphasized) only 4 specific exceptions to what it described as fair opportunity to be considered in addition to statutory authorization or requirement to purchase from a particular source. PROBLEM: Since the passage of the FASA, Congress determined through General Accounting Office (GAO) and Department of Defense Inspector General (DoDIG) audits that holders of multiple award contracts were not being given a fair opportunity to compete for service contracts and that in general, statutory requirements for competition were being followed. Despite previous legislative attempts as well as Department of Defense, Director of Defense Procurement attempts at corrective action, the problem continued to exist and grow. As a result of abuse and misuse of these contract/ordering instruments for services and the failure to obtain competition, Congress passed Section 803 legislation requiring corrective action. Congress message is clear - Use these convenient tools correctly, or expect more Congressional interest and oversight, an/or lose of the tools altogether.SECTION 803, FINAL RULE 2001-D017 AND ORDERING PROCEUDRES: The balance of the briefing will review the legislation, the final rule changing the Defense Federal Acquisition Regulation Supplement (DFARS) and proper use of contract/ordering instruments for services, under the new law and regulatory guidance.Beginning with FASA (where multiple award task and delivery contracts were first authorized), Congress intent has been for competitive pressures to prevail throughout the life of such contracts. Therefore market forces would operate to ensure the Government get good prices for high quality supplies or services and excellent contractor performance.

They have looked at agencies experiences in implementing multiple ward task and delivery order contracts through this lens.Here are the acronyms I will use in this briefing.Sections 1004 and 1504 of Public Law 103-355 (FASA) established the authority for awarding multiple award task order contracts for services and delivery order contracts for supplies. The law requires that all contractors awarded MACs shall be provided a fair opportunity to be considered for each task or delivery order over $2,500. While the law says that ordering procedures should be tailored to each contract, the law permitted only 4 specific exceptions to what it described as fair opportunity to be considered (or competitive procedures). An additional exception is where a statute authorizes or requires purchase from a particular source.. Congress has repeatedly emphasized its intent that those are the ONLY exceptions in several authorization acts since FASA was passed.Here are the four statutory exceptions to the fair opportunity process.Senior Leadership Challenge.new ways of doing business (emphasis on more commercial-like)improved critical thinking.smart acquisition business decisionsThe ink was barely dry on the FAR implementation rules for multiple award task and delivery order contracts before the audits and investigations began---First came the General Accounting Office, which investigated practices at 6 agencies, including DISA.

The audit found that there were two significant problems with the fair opportunity process.

The problems identified signaled that the agencies were not ensuring the competitive pressures that Congress envisioned were realized.Therefore, Congress reminded us of their intent in a law. First, they addressed the mistaken notion that some had that multiple award task and delivery order contracts were somehow exempt from the Economy Act. Part of the confusion arose because GWACs properly established under the authority in the Clinger-Cohen Act and blessed by OMB are not subject to the Economy Act.

Here is the legal impact of their reminder--Section 814 of Pub L. 105-261 extended the coverage of Section 844 of Pub L 103-160 to task and delivery order contracts--

SEC. 844. DEPARTMENT OF DEFENSE PURCHASES THROUGH OTHER AGENCIES.(a) REGULATIONS REQUIRED- Not later than six months after the date of the enactment of this Act, the Secretary of Defense shall prescribe regulations governing the exercise by the Department of Defense of the authority under section 1535 of title 31, United States Code, [The Economy Act] to purchase goods and services under contracts entered into or administered by another agency.(b) CONTENT OF REGULATIONS- The regulations prescribed pursuant to subsection (a) shall--(1) require that each purchase described in subsection (a) be approved in advance by a contracting officer of the Department of Defense with authority to contract for the goods or services to be purchased or by another official in a position specifically designated by regulation to approve such purchase;(2) provide that such a purchase of goods or services may be made only if--(A) the purchase is appropriately made under a contract that the agency filling the purchase order entered into, before the purchase order, in order to meet the requirements of such agency for the same or similar goods or services;(B) the agency filling the purchase order is better qualified to enter into or administer the contract for such goods or services by reason of capabilities or expertise that is not available within the Department;(C) the agency or unit filling the order is specifically authorized by law or regulations to purchase such goods or services on behalf of other agencies; or(D) the purchase is authorized by an Executive order or a revision to the Federal Acquisition Regulation setting forth specific additional circumstances in which purchases referred to in subsection (a) are authorized;(3) prohibit any such purchase under a contract or other agreement entered into or administered by an agency not covered by the provisions of chapter 137 of title 10, United States Code, or title III of the Federal Property and Administrative Services Act of 1949 and not covered by the Federal Acquisition Regulation unless the purchase is approved in advance by the Senior Acquisition Executive responsible for purchasing by the ordering agency or unit; and(4) prohibit any payment to the agency filling a purchase order of any fee that exceeds the actual cost or, if the actual cost is not known, the estimated cost of entering into and administering the contract or other agreement under which the order is filled.(c) MONITORING SYSTEM REQUIRED- The Secretary of Defense shall ensure that, not later than one year after the date of the enactment of this Act, systems of the Department of Defense for collecting and evaluating procurement data are capable of collecting and evaluating appropriate data on procurements conducted under the regulations prescribed pursuant to subsection (a).(d) TERMINATION- This section shall cease to be effective one year after the date on which final regulations prescribed pursuant to subsection (a) take effect.

And here is how the requirement was implemented in the FAR.The DoD Inspector General did not want to be left out and embarked on its own set of investigations. It found that we had a relatively good rate of competition (we followed the spirit of the fair opportunity rules from FASA well), but were weak when it came to documentation and award procedures. You still need to do proper price analysis before awarding a task or delivery order.

Documentation must be in the file to describe why one of the exception applies if you are awarding a sole source order.In response to the audit, Mrs. Spector, the then Director of Defense Procurement, issued a memo to the filed, reminding all of us to tighten up on procedures--

In the acquisition planning process for the original award;- 5. And in the award process for task and delivery orders.We found that we did not have adequate data to refute the GAO or IG finding, so we asked the field to do a survey to provide initial data on how we were doing regarding properly awarding task and delivery orders.As soon as possible, we also amended the reporting instructions for actions over $25,000 to provide better data across the board.

Unfortunately, the news we got through the better data was not as we had hoped the competition rate was poor.The 2000 audit found more of the same:105 contract actions were examined at 15 activities. Every contract action had one or more of the following problems: Did not use prior history to define requirements, Inadequate Government cost estimates, Cursory technical reviews, Inadequate competition, Failure to award multiple-award contracts, Inadequate price negotiation memorandums, Inadequate contract surveillance, orLack of cost control.

So Congress expressed its intent again, in another law

SEC. 804. GUIDANCE ON USE OF TASK ORDER AND DELIVERY ORDER CONTRACTS.(a) GUIDANCE IN THE FEDERAL ACQUISITION REGULATION- Not later than 180 days after the date of the enactment of this Act, the Federal Acquisition Regulation issued in accordance with sections 6 and 25 of the Office of Federal Procurement Policy Act (41 U.S.C. 405 and 421) shall be revised to provide guidance to agencies on the appropriate use of task order and delivery order contracts in accordance with sections 2304a through 2304d of title 10, United States Code, and sections 303H through 303K of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253h through 253k).(b) CONTENT OF GUIDANCE- The regulations issued pursuant to subsection (a) shall, at a minimum, provide the following:(1) Specific guidance on the appropriate use of governmentwide and other multiagency contracts entered into in accordance with the provisions of law referred to in that subsection.(2) Specific guidance on steps that agencies should take in entering into and administering multiple award task order and delivery order contracts to ensure compliance with--(A) the requirement in section 5122 of the Clinger-Cohen Act (40 U.S.C. 1422) for capital planning and investment control in purchases of information technology products and services;(B) the requirement in section 2304c(b) of title 10, United States Code, and section 303J(b) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253j(b)) to ensure that all contractors are afforded a fair opportunity to be considered for the award of task orders and delivery orders; and(C) the requirement in section 2304c(c) of title 10, United States Code, and section 303J(c) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253j(c)) for a statement of work in each task order or delivery order issued that clearly specifies all tasks to be performed or property to be delivered under the order.(c) GSA FEDERAL SUPPLY SCHEDULES PROGRAM- The Administrator for Federal Procurement Policy shall consult with the Administrator of General Services to assess the effectiveness of the multiple awards schedule program of the General Services Administration referred to in section 309(b)(3) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 259(b)(3)) that is administered as the Federal Supply Schedules program. The assessment shall include examination of the following:(1) The administration of the program by the Administrator of General Services.(2) The ordering and program practices followed by Federal customer agencies in using schedules established under the program.(d) GAO REPORT- Not later than one year after the date on which the regulations required by subsection (a) are published in the Federal Register, the Comptroller General shall submit to Congress an evaluation of--(1) executive agency compliance with the regulations; and(2) conformance of the regulations with existing law, together with any recommendations that the Comptroller General considers appropriate.

The April 25, 2000 FAR Case fleshes out what procedures should be used to plan for, compete and award a task or delivery order contract and what procedures should be used to place orders under the contract.The rule:--Clarifies what contracting officers must consider when deciding if a multiple award contract is appropriate, --Requires that all awardees be given a fair opportunity to compete on every task or delivery order placed under multiple-award contracts, unless one of the four statutory exceptions applies, and--Emphasizes key things the contracting officer should consider when placing orders including streamlined procedures, such as:*The scope and complexity of the contract requirement; the expected duration and frequency of task or delivery orders; *The mix of resources a contractor must have to perform expected task or delivery order requirements; and *The ability to maintain competition among the awardees throughout the contracts period of performance;--Requires contracting officers to document their decision on whether or not to use a multiple award contract in the acquisition plan or contract file; --Emphasizes the use of performance based statements of work; --Provides guidance on how to develop tailored order placement procedures; --Requires that cost or price be considered as one of the factors in each order placement decision;--Requires contracting officers to establish prices for each order that was not priced under the basic contract using the policies and methods in Subpart 15.4; and--Requires contracting officers to document the order placement rationale and price in the contract file.

The pending rule also provides regulatory guidance to implement Subsections 804(a) and (b) of the National Defense Authorization Act for Fiscal Year 2000 (Pub. L. 106-65), and is expected to provide definitions and specific policies on the appropriate use of Government-wide acquisition contracts (GWACs), and Multi-agency contracts (MACs).

The 2001 audit was another nail in the coffin!The DoDIG reviewed 423 task orders issued in FY 2000 and 2001 and discovered a very troubling finding relative to fair opportunity to be considered (competed). as reflected below:Army competed 26 percent (136)Navy competed 18 percent (104)AF competed 21 percent (121)DFAS competed 23 percent (13)Defense Micro Electronics Agency competed 0 percent (49)Equally troubling were these additional findings:Of the competed orders, only 69 percent received more than 1 response.Many offices cited contracting officer discretion as the reason they did not compete the orders. THIS IS NOT A LEGITIMATE EXCEPTION TO FAIR OPPORTUNITY TO BE CONSIDERED (COMPETITION)!!!!Competition had decreased in the 2 years since the previous audit.

Wow, that was a lot of context!!! Now, lets get to the reason why you are all here what are we going to do about the new restrictions on buys of services over $100,000?

Section 803 applies to all buys for DoD, no matter who ultimately spends the money. If it is DoD money, the restrictions follow it.

Section 803 applies to all individual purchases over $100,000 for services. The only statutory exception we could identify is A&E services that are purchased following Brooks Act procedures. No other statute requires more specific acquisition processes (than those in Section 803).The contracting officer must issue the notice to as many schedule holders as practicable and that will reasonably ensure that at least proposals are received from at least 3 schedule holders who are capable of doing the work for consideration for award. Market research should be conducted to verify how many schedule holders are interested in the opportunity and how many are likely to respond (the CO must at least review the schedule contracts to determine which schedule holders can perform the required work).; or

The contracting officer must forward all schedule holders a notice of intent to make a purchase (by informing them of the opportunity for award, for example, by pushing a message out to inform them of the opportunity or posting the opportunity on a central Federal website (that GSA is developing)).

If the contracting officer receives less than 3 proposals, the CO must document (in the contract file) why reasonable efforts would not result in more offers. The contracting officer may make an award at this point, (if they have a good explanation for example, that proper market research was conducted). Straight face rule applies here!!!

The CO must perform an evaluation/ market research of catalogs and price lists, to identify which schedule holders perform the required work because the forms the universe for applying Section 803 procedures.

Exceptions to the fair opportunity rule must be documented in the contract file, with supporting rationale, and are as follows:(a) The agency need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays;(b) Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized;(c) The order must be issued on a sole-source basis in the interest of economy and efficiency as a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order; (d) It is necessary to place an order to satisfy a minimum guarantee; or(e) There is a statute that authorizes or requires purchase from a particular source.

If the order is for services over $100,000, the contracting officer must contact all schedule holder/awardees that are capable of doing the work. (This is yet another reason to cull the field when awarding multiple award task or delivery order contracts.)

Use market research to determine what schedule holder/awardees can perform the required work (for instance, by reading the contracts to determine what each awardee has bid to do).

Reminders on required business practices for placing orders under this type of contract

Individual orders must clearly describe all services to be performed or supplies to be delivered. Orders must be within the scope, performance period, and maximum value of the contract.

Performance-based work statements must be used to the maximum extent practicable, if the contract is for services.

Orders may be placed (and contractors notified of opportunities) by using any medium specified in the contract.

Although competition requirements for orders is not like that used for the solicitation and award, the contracting officer must follow placement procedures and provide each awardee a fair opportunity to be considered for each order. This procedure should consider price or cost under each order as one of the factors in the order placement decision. Additionally, the Contracting Officer should consider past performance on earlier orders, including quality, timeliness and cost control.

Document any exceptions to fair opportunity and the award decision rationale in the file.

The only exceptions to fair opportunity to be considered are those in FASA--(1) The agency need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays;(2) Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized;(3) The order must be issued on a sole-source basis in the interest of economy and efficiency as a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order; or(4) It is necessary to place an order to satisfy a minimum guarantee. (5) There is a statute that authorizes or requires purchase from a particular source.

Note to DAU we cant insert the rule language until OIRA approves it still arguing at this point.