Top 10 Problems with Problems with Multiple Award Task Order/Deliver Order IDIQ RFP s

Transcription

1 Top 10 Problems with Problems with Multiple Award Task Order/Deliver Order IDIQ RFP s

2 Top 10 Problems with Multiple Award Task Order/Deliver Order IDIQ RFP s Brian Greenberg, CPCM, Fellow Chief Operating Officer KES Incorporated Session #4, 2:25pm-2:55pm ET NCMA s 1st Task, Delivery Order, and Schedule Contracting Community of Practice - Virtual Conference Wednesday, March 31, :00pm - 4:00pm ET 1

3 Top 10 Problems with Multiple Award Task Order/Deliver Order IDIQ RFP s AGENDA To Bid or Not to Bid Contract Awards Section B - CLIN Structure Key Contract Clauses Proposal Instructions Evaluation Criteria Small Business Issues The Future of Navy Contracting Practices 2

4 To bid or not to bid, that is the question! BD says, This is a piece of cake. Everyone will get a contract. The RFP will require: 3 page Executive Summary No Technical Proposal No Sample Problems No Key Personnel 3 Past Performances Orals (Maybe) Labor Categories and Hours are specified I have 15 subcontractors lined up ready to be on our team Evaluation Criteria is Pass-Fail and price does not matter! 3

5 To bid or not to bid, that is the question! (cont d) General Questions: 1. How many awards will there be? 2. If there are multiple awards by size and socio-economic categories, what will the order of preference be for deciding the competitive category at the Task Order Level? 3. For Small Business Set-asides, does the Prime have to do 50% of the work? (Contract Level vs. Task Order Level) 4. Can I bid as both a Prime Contractor and a Subcontractor? a. To other Small Businesses b. To other Large Businesses? 5. Is this a bundling of existing contracts? If so which ones? 6. If I win, can I afford to do business development? 4

6 How Many Awards Will There Be? General Questions: 7. If this award is for new business, what is the projected budget by fiscal year? (Does the customer have any money?) 8. Do I have the Subcontracting Staff and Process in place to price and administer this contract? 9. If there is only going to be a single award do the RFP Section L proposal instructions and Section M evaluation criteria lend themselves to making a single award? 5

7 How Many Awards Will There Be? (cont d) EXAMPLE: GEOGRAPHICAL ZONES (Seaport-e) Offerors were requested to identify in Section B the geographical zone or zones for which they wish to be considered during the Task Order, Fair Consideration Process. After award of the multiple award contracts, task orders will be competed by the various ordering offices to meet project/program requirements. Each task will be competed in the applicable zone of performance. Offerors may only respond to solicitations for task orders in the Zones marked with an X in Section B. The following map identifies the seven zones: Northeast, National Capital, Mid-Atlantic, Gulf Coast, Midwest, Southwest, and Northwest. For work performed outside the fifty states, the zone in which the ordering activity is located shall be used. 6

8 How Many Awards Will There Be? (cont d) GEOGRAPHICAL ZONES (Continued) Questions: 1. Does the Prime have to currently being doing business in a Zone or do Subcontractors count? 2. Do I have to bid on all Zones or can I choose which Zones I want to propose on? 3. If initially, I as the Prime do not qualify for a Zone, can my contract be modified later to add additional zones? 7

9 CLIN Structure EXAMPLE: The contract will be a hybrid CPFF and FFP. CLINs x001- x005 are for FFP and CLINs x006-x010 are for CPFF. However, Attachment II-V Pricing Spreadsheets only have a single column to be priced. Questions: 1. The pricing of FFP rates and CFPP rates are different. At a minimum, the FFP rates include the fee and the CPFF rates do not include the fee. In addition, the cost factors for FFP and CPFF may be different because of the different risk levels between the contract types. How should the rates for FFP and CPFF be entered into the Attachment II-V Pricing Spreadsheets? 2. How do the CLINs tie to the Attachment II-V Pricing Spreadsheets? 8

10 CLIN Structure (cont d) EXAMPLE: The markup rate(s) entered on the Attachments I-VI spreadsheets will reflect MAXIMUM markup rate(s) that may be used by the resultant contractors when preparing both CPFF and FFP task order proposals for specific requirements. Questions: 1. Please define Mark-Up rates. Do you mean a fully burdened rate through Fee/Profit (i.e., Billing Rate), or do you meant the combined Overhead, G&A and Fee/Profit added to the Direct Labor rate? 2. Since only one rate is requested and since the FFP rate would include Profit, how is the offeror to present the Fixed Fee values for purposes of completing the CPFF CLIN ceiling values? 9

11 CLIN Structure (cont d) EXAMPLE: The contract will be a hybrid CPFF and FFP. Questions: 3. Would a contractor have to be audited and certified by DCAA to be able to submit CPFF pricing or would we only be able to submit FFP? 4. How will the ODC and Travel CLINS be handled under FFP Task Orders? 10

12 Contract Clauses: Task Order Administration What about Follow-on Task Orders? Do they have to be re-competed? EXAMPLE: Contracts will be awarded to multiple contractors and individual task order requirements will be competed among the multiple awardees by authorized ordering officers. Task orders will be performance-based and may be issued on either a firm fixed price (FFP) basis (which is the preferred type) or a cost plus fixed fee (CPFF) for no longer than one year. Following the one year period of performance, continuing requirements originally issued on a CPFF basis will be re-competed and are expected to be issued as firm fixed priced orders to the maximum extent feasible. Note for Ordering Offices: Detailed procedures are included in the Ordering Guide provided. Questions: 1. Why do follow-on orders need to be re-competed? 2. If a follow-on Order is to be FFP, won t this limit competition? 3. Wouldn t it be helpful for contractors to see the Ordering Guide? 11

13 Contract Clauses: Task Order Administration (cont d) Task Order Closeouts: EXAMPLE: The RFP allows for only 60 days for the contractor to execute a final invoice. Questions: 1. CPFF orders require a DCAA annual incurred cost audit before a final invoice can be issued. This process takes many years. Is 60 days after completion of a Task Order sufficient time to complete this process? 2. Since the Contract is to be administered by DCMA, how is the Contractor expected to comply with this clause? 12

14 Contract Clauses: Task Order Administration (cont d) Task Order Closeouts: EXAMPLE: EXPEDITING CONTRACT CLOSEOUT (Applicable at Task Order Level) (a) As part of the negotiated fixed price or total estimated amount of this contract, both the Government and the Contractor have agreed to waive any entitlement that otherwise might accrue to either party in any residual dollar amount of $500 or less at the time of final contract closeout. The term "residual dollar amount" shall include all money that would otherwise be owed to either party at the end of the contract, except that, amounts connected in any way with taxation, allegations of fraud and/or antitrust violations shall be excluded. For purposes of determining residual dollar amounts, offsets of money owed by one party against money that would otherwise be paid by that party may be considered to the extent permitted by law. (b) This agreement to waive entitlement to residual dollar amounts has been considered by both parties. It is agreed that the administrative costs for either party associated with collecting such small dollar amounts could exceed the amount to be recovered. 13

15 Contract Clauses: Maximum Fee Rates EXAMPLE: Maximum Fee Rate (for CPFF CLINS): Contractors shall propose a maximum Fee rate for Cost Plus Fixed Fee (CPFF) CLINS only at the basic contract level. Contractor compliance with the maximum fee rate is applicable to the task order and is based on the ratio of fixed fee to the estimated cost of the task order. A proposed fee for a task order quote/proposal that is higher than the maximum fee rate shall render the contractor s proposal unacceptable. Fee becomes a fixed dollar amount at the time of task order award and is subject to the provisions of the Level of Effort clause of the contract. The maximum fee rate on the basic contract is not applicable to actual performance of the task order. The Fixed Fee ratio for the CPFF CLINs will be established upon award of the basic contracts and set forth therein and may not be exceeded except when authorized by a modification to the Delivery/task order. The Fixed Fee shall not exceed the amount of fixed-fee to be allocated per labor dollar as set forth in this contract. In accordance with the clause entitled LEVEL OF EFFORT (COST REIMBURSABLE) (INDEFINITE DELIVERY CONTRACTS) when competing for task orders, the contractor may propose a lower fee than that which would ordinarily be allocated based on the number of hours or dollar amount of the individual task order. 14

16 Contract Clauses: Maximum Fee Rates (cont d) EXAMPLE: Maximum Fee Rate (for CPFF CLINS): Other Direct Costs No fee is allowed on Other Direct Costs, Travel Costs, or Subcontract Costs. Indirect cost elements such as G&A and material handling may be applied but may not include fee. Comments/Questions: 1. For purposes of setting the initial maximum Fixed Fee %, choose wisely. 2. No fee allowed on subcontractors? Does this include my subcontractors included with my initial proposal who are providing labor or is this applicable to incidental subcontractors needed to fulfill a task order requirement? 15

17 Contract Clauses: Pass-Through Rate Limitations EXAMPLE: The Contractor agrees that the maximum pass through rate that shall be charged against any and all line items under this contract shall not exceed *%. The maximum pass through rate is equal to the percentage above the price of the work paid to the Firm subcontracted to perform the work. Pass through includes all costs, indirect and direct, and fees applied to the subcontracted amount. The prime contractor may not apply any additional fees and burdens on pass through. Other than pass through, no additional costs, charges, indirect rates (such as overhead or G&A), or fees may be proposed or applied to subcontract costs. 16

18 Contract Clauses: Pass-Through Rate Limitations (cont d) Questions: 1. How are costs incurred by a division, subsidiary, or any other entity of the prime contractor to be treated? 2. Is the word fees intended to mean Fixed Fee or Award Fee? 3. Does this provision apply to FFP Task Orders? 4. Do the labor hours and costs associated with the Prime s technical oversight of the Subcontractor to be included in the Maximum Passthrough rate? 17

19 Contract Clauses: Guaranteed Savings Clause EXAMPLE: The Government anticipates this contract will be used primarily for the acquisition of repetitive, high-dollar value professional support services. Therefore, the Government is seeking contractors to identify business improvement processes, innovations, and cost saving initiatives to provide high quality services at a reduced cost to the Government. The Contractor agrees to the maximum extent practicable to reduce the price for services performed under each sequential year by at least: % Reductions from base period or price from previous year: Year 2 * % Year 3 * % 18

20 Contract Clauses: Guaranteed Savings Clause (cont d) EXAMPLE: Cont d In addition, the Contractor agrees to provide the Government with a volume discount. If the total value of all Task Orders funded within a calendar year exceeds $*, the Contractor will reduce the amount bid on all Task Orders issued in the next calendar year by *% from the price the Contractor would have otherwise bid for the work. Questions: 1. How will savings be measured? (There are too many variables in performing the same work from year to year. Providing services to the Government is not production line work.) 2. Providing Volume Discount on future work assumes that I will receive > or = to the same tasking next year. When Task Orders are in different cycles, how can that be estimated. Especially when all follow-on task orders are competed? 19

21 Contract Clauses: OCI issues EXAMPLE: NOTE: THIS CLAUSE WILL BE INVOKED IN DIFFERENT VARIATIONS AT THE TASK ORDER LEVEL, notwithstanding other language in this contract that gives this contract precedence when it conflicts with task orders, the task order version of organizational conflict of interest clause, if any, shall take precedence. (a) "Organizational Conflict of Interest" means that because of other activities or relationships with other persons, a person is unable or potentially unable to render impartial assistance or advice to the Government, or the person's objectivity in performing the contract work is or might be otherwise impaired, or a person has an unfair competitive advantage. "Person" as used herein includes Corporations, Partnerships, Joint Ventures, and other business enterprises. (b) The Contractor warrants that to the best of its knowledge and belief, and except as otherwise set forth in the contract, the Contractor does not have any organizational conflict of interest(s) as defined in paragraph (a). 20

22 Contract Clauses: OCI issues (cont d) EXAMPLE: (c) It is recognized that the effort to be performed by the Contractor under this contract may create a potential organizational conflict of interest on the instant contract or on a future acquisition. In order to avoid this potential conflict of interest, and at the same time to avoid prejudicing the best interest of the Government, the right of the Contractor to participate in future procurement of equipment and/or services that are the subject of any work under this contract shall be limited as described below in accordance with the requirements of FAR 9.5. (3) The prohibitions contained in subparagraphs (d)(1) and (d)(2) shall apply with equal force to any affiliate of the Contractor, any subcontractor, consultant, or employee of the Contractor, any joint venture involving the Contractor, any entity into or with which it may merge or affiliate, or any successor or assign of the Contractor. 21

23 Contract Clauses: OCI issues (cont d) EXAMPLE: (e) The Contractor further agrees that, during the performance of this contract and for a period of three years after completion of performance of this contract, the Contractor, any affiliate of the Contractor, any subcontractor, consultant, or employee of the Contractor, any joint venture involving the Contractor, any entity into or with which it may subsequently merge or affiliate, or any other successor or assign of the Contractor, shall not furnish to the United States Government, either as a prime contractor or as a subcontractor, or as a consultant to a prime contractor or subcontractor, any system, component or services which is the subject of the work to be performed under this contract. 22

24 Contract Clauses: OCI issues (cont d) Questions: 1. In paragraph (a) does the word Person also mean an individual employed by the company? Could an individual person hired from Company X who during their employment with Company X had an OCI, create an OCI for my company? 2. In paragraph (e) am I precluded from hiring an employee from Company X for 3 years after the completion of their task if Company X has an OCI with this contract? 23

25 Contract Clauses: Executive Order Executive Order 13495: Nondisplacement of Qualified Workers Under Service Contracts (1/30/2009) A. Coverage 1. Prime and Subcontracts 2. Covered by the Service Contract Act 3. Over $100,000 B. What is Required? 1. Covered contracts must contain a clause offering predecessor contract employees (except managerial and supervisory employees) a right of first refusal for positions for which they are qualified. Questions: 1. Does the RFP provide guidance for Compliance? 2. Will Task Orders provide for Phase-in/ Phase out activities? 24

26 Proposal Instructions 1. Cost Proposal Instructions: a. Do the cost proposal pricing instructions correlate with the CLIN structure? b. The RFP indicates this is solicitation is for Commercial Items. (SF 1449). Why do I have to provide detailed pricing backup? c. What pricing backup is needed from my subcontractors? If needed, then how is it to be delivered to the Contracting Officer? d. The attached Department of Labor Wage Determinations are not current, should we price the current DoL WD s or the ones provided in the RFP? 25

27 Proposal Instructions (cont d) EXAMPLE: The markup rate(s) entered on the Attachments I-VI spreadsheets will reflect MAXIMUM markup rate(s) that may be used by the resultant contractors when preparing both CPFF and FFP task order proposals for specific requirements. Questions: 1. Would it not be advantageous to have two sets of pricing sheets, one for CPFF and one for FFP? 2. Since the Maximum markup rate or Max Loaded rate includes the SCA Health and Welfare rate, and since this covers 54 SCA areas, how will the government provide for equitable adjustments to the contract price if any of the Health and Welfare rates are different when options are exercised? 3. If the SCA Labor or Health and Welfare rates change, will the contractor be allowed to make an equitable adjustment to the maximum labor category rates established in the contract? 26

28 Proposal Instructions (cont d) EXAMPLE: The contractor shall be responsible for obtaining any certifications and licenses that may be required for performance under this contract. Question: 1. Certifications IT certifications in particular can be costly. If the Government believes there will be certifications required, will the Government please identify said certifications? - How do we forecast costs into bid rates? 27

29 Evaluation Criteria EXAMPLE: M-307 EVALUATION CRITERIA AND BASIS FOR AWARD (BEST VALUE) (a) The contract resulting from this solicitation will be awarded to that responsible offeror whose offer conforming to the solicitation, is determined to provide the "best value" to the Government. Such offer may not necessarily be the proposal offering the lowest cost or receiving the highest technical rating. (b) A cost/technical trade-off analysis will be performed and a best value source selection decision will be made. (c) Using a 100 point scale, the ratings of the 3 factors are as follows: Oral Presentation: 60 Organizational Experience: 30 Past Performance: 10 (c) All evaluation factors other than cost and fee, when combined, are significantly more important than cost and fee 28

30 Evaluation Criteria (cont d) EXAMPLE: M-307 EVALUATION CRITERIA AND BASIS FOR AWARD (BEST VALUE) COMMENT: If this is Multiple Award Great! Everyone get s a contract, no one can protest and the winners get to beat each up bidding on $500K task orders. QUESTION: If this is a single award then how can the Government perform a best value analysis without a Management or Technical Proposal? 29

31 Small Business Compliance EXAMPLE: Business Support Program Agency Specific 1. Hybrid CPFF FFP IDIQ 2. Covers CONUS + Hawaii (Broken down into 4 Regions) 3. >200 Labor Categories (Both SCA and Exempt) 4. Total = 6 Million hours per year (Cumulative all 4 regions) 5. 4 Awards anticipated for each region 6. Prime can bid on one or any combination of regions 7. Prime must do 50% of the Work 8. The SF 1449, Block 10, indicates NAICS , Size Standard $13.5M Question: What is wrong with this picture? 30

32 Small Business Compliance (cont d) EXAMPLE: DHS EAGLE II Industry Briefing: Small business prime contracting opportunities 8(a) HUBZone SDVOSB SB (includes SB, non-8(a) SDB, VOSB, and WOSB) Small business subcontracting opportunities Small business subcontracting goals in solicitation for unrestricted portion DHS mentor-protégé program part of evaluation criteria in solicitation for unrestricted portion How many small business contract awards? Competition determines the final number. Estimate based on market research to date = 8 to 12 per category with 5 categories 40 to 60 small businesses total (DHS reserves the right for the final number to vary based on the competitive process) Task order competition by category for example, 8(a) firms compete against one another within the 8(a) category, etc. 31

33 Small Business Compliance (cont d) EXAMPLE: DHS EAGLE II Industry Briefing: Questions: 1.How many awards will there be? 2.If there are multiple awards by size and socio-economic categories, what will the order of preference be for deciding the competitive category at the Task Order Level? 3.For Small Business Set-asides, does the Prime have to do 50% of the work? (Contract Level vs. Task Order Level) 4.Can I bid as both a Prime Contractor and a Subcontractor? a. To other Small Businesses b. To other Large Businesses? 32

34 The Future of Navy Contracting Practices (8 June 2010 Stackley Memo) Focuses on: Competition Use of Cost Reimbursement Contracts Contract Incentives Compliance with Contract Requirements Preferred Suppliers 33

35 The Future of Navy Contracting Practices (8 June 2010 Stackley Memo) (cont d) COMPETITION the Navy s acquisition Costs are rising faster than our top line we need to change the way we do business to improve the affordability Competition is a powerful tool our procurements need to be structured to sustain competition important that we secure data rights we need to insure our prime contractors pursue competition control costs through competition contracting officers should use consent-to-subcontract clauses to ensure contractors are using competitive processes break out components from systems and procure them directly 34

36 The Future of Navy Contracting Practices (8 June 2010 Stackley Memo) (cont d) Use of Cost Reimbursement Contracts...Contracting Officers should not use cost reimbursement contracts unless the FAR criterion is met. To the extent.must use a cost reimbursement contract, they should structure fee arrangements in accordance with the principles discussed below. 35

37 The Future of Navy Contracting Practices (8 June 2010 Stackley Memo) (cont d) Contract Incentives...should be clear, measureable, reasonably achievable by the contractor and rationally related to the statement of work. they should prepare a performance measurement plan. incentives should be linked. to overall performance not just one aspect incentives should be aligned with achieving contractor results, not merely execution of contractor processes. incentives should be structured.contractor bears the risk of poor performance. CPAF contracts should have a base fee of zero percent consider the use of negative fees in CPIF contracts. 36

38 The Future of Navy Contracting Practices (8 June 2010 Stackley Memo) (cont d) Compliance with Contract Requirements hold the contractor accountable for supplying quality well after product acceptance document.decision whether or not to obtain a warranty 37

39 The Future of Navy Contracting Practices (8 June 2010 Stackley Memo) (cont d) Preferred Suppliers Cash flow, profit, contract terms and conditions.negotiate these key components contract by contract. As a result.the DoN loses an important opportunity to align industry s operating goals with the Departments contract performance expectations. By separate policy, the Department is establishing a preferred supplier program most favored supplier contract terms and conditions Once established the PM s and CO s can use the contract terms to establish the best possible business arrangement 38

40 The Future of Navy Contracting Practices (8 June 2010 Stackley Memo) (cont d) Questions: 1. How will this policy effect IDIQ Task Order contracts? 2. If the task is a SETA type task and I am not the incumbent, how do I propose a FFP? 3. How do Preferred Suppliers compete on an equal footing with all other Offerors? 4. How do Preferred Supplier most favored customer supplier clauses get implemented into the IDIQ contract? 5. Why is it that the Government can establish preferred suppliers but they want Prime contractors to compete everything? 6. How will the IDIQ contract implement contract incentives at the Task Order Level? 39