Services Ordering Solutions

Multiple Award Schedule contracts are evaluated and awarded as commercial-type (FAR Part 12) acquisitions with all the clauses required for commercial contracts.  As commercial Schedule contracts, their orders can be of any type permitted for commercial acquisition and not prohibited by the Schedule contract.  (For example, Cost-Type contracts are not one of the permitted commercial Part 12 acquisition types.  You cannot do those tasks under the Schedule contracts.)

1. What does the FAR say?

FAR 12.207 says there are four, and only four, specified permissible contract types for the acquisition of commercial items.  This means there are no more than those four types of permissible Schedule task orders:

Firm Fixed Price (FFP)
Fixed Price with Economic Price Adjustment (FP w/ EPA)
Time and Material (T&M)
Labor Hour (LH)

In addition, FAR 12.207(d) says: "(d) The contract types authorized by this subpart may be used in conjunction with an award fee and performance or delivery incentives when the award fee or incentive is based solely on factors other than cost (see 16.202-1 and 16.203-1). "

Note that the referenced 16.202-1 is the description of "Firm-Fixed Price Contracts" and includes: "The contracting officer may use a firm-fixed-price contract in conjunction with an award-fee incentive (see 16.404) and performance or delivery incentives (see 16.402-2 and 16.402-3) when the award fee or incentive is based solely on factors other than cost. The contract type remains firm-fixed-price when used with these incentives."  Notice that this doesn't specifically extend to the FAR 16.204 Fixed-Price Incentive (FPI) contracts.

The referenced 16.203-1 is the description of "Fixed-Price Contracts with Economic Price Adjustment" and includes:"(b) The contracting officer may use a fixed-price contract with economic price adjustment in conjunction with an award-fee incentive (see 16.404) and performance or delivery incentives (see 16.402-2 and 16.402-3) when the award fee or incentive is based solely on factors other than cost. The contract type remains fixed-price with economic price adjustment when used with these incentives."

FAR 12.207(e) states: "(e) Use of any contract type other than those authorized by this subpart to acquire commercial items is prohibited."

2. What do the Schedule contracts say?

Performance incentives are handled in the same way regardless of Schedule.  This means that Schedule 874 MOBIS handles the issue of performance incentives just like Schedule 871 PES or Schedule 70 IT.  The Schedule contracts include the identical following clause, which does not contradict the FAR:

I-FSS-60 PERFORMANCE INCENTIVES (APR 2000)
(a) Performance incentives may be agreed upon between the contractor and the ordering office on individual orders or Blanket Purchase Agreements under this contract in accordance with this clause.
(b) The ordering office must establish a maximum performance incentive price for these services and/or total solutions, on individual orders or Blanket Purchase Agreements.
(c) Incentives should be designed to relate results achieved by the contractor to specified targets. To the maximum extent practicable, ordering offices shall consider establishing incentives where performance is critical to the agency’s mission and incentives are likely to motivate the contractor. Incentives shall be based on objectively measurable tasks.

3. Is a Firm Fixed Price task order including performance incentives a permissible type of Schedule task order?

Yes!

The PERFORMANCE INCENTIVES contract clause permits them and the FAR authorizes those performance incentives as long as they are based on factors other than cost.

This means that you can incentivize Schedule contractors for meeting/exceeding measured and evaluated performance measures tied to you PWS requirements.

(Similarly, there isn't anything to prohibit FP w/EPA, T&M, or LH task orders with similar performance incentives based on factors other than cost.)

4. Is a “Fixed-Price Incentive”(FPI)-type order permissible under the Schedules program?

Not if those performance incentives are based on any factor tied to cost.  By definition (FAR 16.204), contracts in the FPI family are based on adjusting profit and establishing the final contract price based upon a formula relating final negotiated cost to total target cost.  FAR 16.402-1 notes that "(a) Most incentive contracts include only cost incentives...No incentive contract may provide for other incentives without also providing a cost incentive (or constraint)."   A task order meeting the FPI-type definition, which includes a cost-based incentive in order to be called FPI, is not an appropriate use of the GSA Multiple Award Schedules.  An FPI order (with a cost-based performance incentive factor, by definition) is not a permitted type of contract for the acquisition of commercial services of the type found on the Schedule contracts.

Dave Clemens
[Remember what the Blog Policy says: “The views expressed on Services Ordering Solutions are those of the individual bloggers.  These views and posted comments do not necessarily reflect the views of GSA or the Government.”]
Originally posted on June 4, 2009 at:
http://www.schedulesolutions.net

Dave Clemens, 6/26/09
[Remember what the Blog Policy says: “The views expressed on Services Ordering Solutions are those of the individual bloggers.  These views and posted comments do not necessarily reflect the views of GSA or the Government.”]
Originally posted on January 7, 2009 at
http://www.schedulesolutions.net

1. Here is how to find clauses  already in the Schedule contracts. That's important because you want to ensure your order doesn't conflict with the Schedule contract terms. (You also don't need to put clauses in your order that are already in the Schedule contract.)

2. As you read the Schedule contract clauses, you will notice that the Schedule contracts contain the typical required FAR Part 12 clauses used for larger commercial contracts, including some clauses for IDIQ contracts.  The contracts also contain GSA and FAS clauses, mostly dealing with the administration of the Schedule contract and generally having very little impact on ordering.) The Schedule contracts are written for use by all Federal agencies and contain no clauses from any agency's FAR Supplement.  

3. Nothing in the FAR or in the Schedule contract prohibits ordering agencies from adding non-conflicting clauses from the FAR or from their agency FAR Supplements.  In fact, the MAS Desk Reference states:

- [page 28, top] "While GSA will not alter the terms and conditions of a Schedule contract in violation of CICA, nor alter the scope of a contract to meet an individual ordering activity's unique needs, an ordering activity may add terms to an order that do not conflict with the Schedule contract terms and conditions."
- [page 39, middle], ensure the following information is included in the order's RFQ] "Other pertinent information - such as agency-specific provisions and clauses that do not conflict with the Schedule contract clauses."
- [page 41, top] "Any additional requirements included in a Schedule order must not conflict with the scope of the Schedule contract.  Remember, orders must be for commercial items or services with the purview of Part 12, not just within the scope of a particular Schedule contract, to remain within scope."

4. In accordance with FAR 1.102(d) ordering activities may assume that since the practice of adding non-conflicting clauses to Schedule orders is not addressed in the FAR, nor prohibited by law, Executive orders, or regulation, that the practice is a permissible exercise of authority if in the best interest of the government.

5. Specifically for Schedule orders, FAR 8.404(b) states "The contracting officer, when placing an order or establishing a BPA, is responsible for applying the regulatory and statutory requirements applicable to the agency for which the order is placed or the BPA is established."  Those agency requirements are typically found in a clause matrix in the agency's FAR Supplement, with columns representing different types of contract actions (sometimes with threshold dollar amounts) and rows for clauses, some clauses being required for certain types of acquisitions with other clauses optional for certain procurement situations.  There are some “regulatory and statutory requirements applicable to the agency” that cannot be enforced without a clause.

6.  Ordering agencies are specifically authorized and directed to include clauses applicable to non-Schedule items when those items are mixed with Schedule items on Schedule orders. FAR 8.402(f) directs ordering agencies to ensure "all clauses applicable to items not on the GSA Schedule contract are included in the order."  Of course, there is nothing in the FAR limiting this task order clause authority only to the non-Schedule items on an order.

7. The GSA Schedule Contracting Officer has adopted a minimalist philosophy when it comes to adding FAR or GSA clauses where the inclusion of the clause is "as required" for a particular procurement situation.  The GSA CO (who has no knowledge of the particular requirements in an ordering agency's PWS) simply doesn't know if an ordering agency will need a particular situational clause.  The Schedule contract cannot and does not include clauses necessary for every possible agency requirement.  For example, maybe an ordering agency will be providing government-furnished property, material, or information to a Schedule contractor on a particular task order.  But the standardized Schedule contracts don't include FAR 52.245-1 "Government Property" or another property clause required for that possible situation. The Ordering Officer is responsible for protecting the Government's interests and for complying with all agency regulations.  There are many situations where that responsibility cannot be met without including a situational "as required" FAR or agency clause - - a clause for which the GSA Schedule contract CO cannot have reasonably foreseen the need. For example, options are permitted on task orders.  But how could an ordering agency exercise that authority without an options clause in the order (something like FAR 52.217-8 "Option to Extend Services")?  The options clause in the Schedule contract (providing for a base period of five years and up to three option period of five years each) is not useful for task orders and by its own terms applies only to the Schedule contract and not to any orders. Similarly, FAR and agency supplement clauses related to task order funding don't appear in the Schedule contracts.  (Why would they?) If an ordering activity needs a clause like FAR 52.232-18 "Availability of Funds," it's not going to get there unless the ordering activity includes it in the task order RFQ.

8.  When we say "non-conflicting clause", we mean:

a. An added FAR or agency clause that doesn't contradict a Schedule contract clause.  For example, terminations (for the government's convenience or for cause) are covered in the clause FAR 52.212-4, included in all Schedule contracts.  As a result, there is no authority for an ordering agency to include clauses like the non-commercial FAR 52.249-4 "Terminations for Convenience of the Government (Services)" because it contradicts a Schedule contract clause.  Another example of a subject covered in that same FAR clause is "changes."  An ordering authority would therefore be without authority to include a clause like FAR 52.243-3 "Changes - Time and Materials or Labor Hours" in a Schedule order.  These types of conflicts are most commonly seen in the inclusion of clauses contradicting the multiple subjects covered by the contract clause FAR 52.212-4.

b. An added FAR or agency clause without a usage limiting it to non-commercial acquisitions or where the clause usage doesn't prohibit the clause in a commercial acquisition.  For example, the clause FAR 52.223-6 "Drug Free Workplace" has a clause usage stating that it shall not be used in commercial acquisitions.  As a result, there is no authority for an ordering activity to include that clause in a Schedule order. (Remember that FAR 12.503 includes a list of statutes and Executive orders not applicable to commercial acquisitions.) Similarly, general (typically FAR Part 12) prohibitions regarding the inherent conflict with commercial acquisition and a general clause subject will deprive ordering agencies of clause authority in that broad subject area.

c. An added FAR or agency clause that is consistent with customary commercial practice (or for which a waiver has been granted).  In accordance with FAR 12.302, you will want to ensure that any clause you add (or where you tailor a FAR or agency clause in a way not in conflict with a Schedule contract clause) is supported with either (a) documentation in the order file showing that the language is consistent with customary commercial practice or (b) a waiver.  These waivers are not granted by the GSA Contracting Officer, but through the approval chain of the ordering activity.

d. Adding a clause typically addressed at an IDIQ's contract level, particularly those related to contract-level pricing.  For example, an ordering agency has no authority to add the clauses relating to the Service Contract Act to its MOBIS Schedule 874 task order/BPA, as none of the MOBIS Schedule contracts include the Service Contract Act clauses.  That is an example of a Schedule-wide decision relating to contract pricing.  (In contrast, Schedule contracts within the 899 Environmental Services and 874V Logistics Worldwide Schedules include the SCA clauses already, so there would be no need to add those clauses to an order since they are already in the all the contracts for those Schedules.)  Opportunities for this general type of conflict are usually rare.  If in doubt on these special situations, contact your GSA Schedule contract CO.  (To find the e-mail address and phone number for the GSA CO responsible for any particular GSA contract, go to GSA eLibrary and type in the contract number or contractor name in the search text box.)

9. Everything I said about "clauses" above also applies to FAR Part 52 (and your agency FAR supplement) "provisions" included in the RFQ for your Schedule task order/BPA.

Dave Clemens, 6/26/2009 updated 8/31/2009
[Remember what the Blog Policy says: “The views expressed on Services Ordering Solutions are those of the individual bloggers.  These views and posted comments do not necessarily reflect the views of GSA or the Government.”]
Originally posted on January 16, 2009 at
http://www.schedulesolutions.net

1. Nothing in the FAR or in the Schedule contracts treats options on Schedule task orders any differently than options on other (non-Schedule) contract actions.  The clauses in the Schedule contracts address the options on the Schedule contract (I-FSS-163 “Option to Extend the Term of the Contract (Evergreen)”), but those terms have nothing to do with options on orders.  Ordering agencies are certainly free to add non-conflicting clauses (see today's blog post on that subject) that would apply to their orders (e.g., FAR 52.217-9 “Option to Extend the Term of the Contract”).

2. GSA recognizes that ordering agencies may have reasons to include options on their task orders.  GSA has established a web page entitled “Options on Orders” which states that task order options may be “exercised” [not merely awarded or included] as long as “the [order’s] options do not extend beyond the period of the Schedule contract, including option year periods.”  (Identical language appears on Page 22 of the Multiple Award Schedules Desk Reference.) That period of the Schedule contract inclusive of its option periods is therefore the entire prospective period of performance and not merely the current (five-year) period of performance.  The period of performance for Schedule contract purposes is Schedule option periods merely “included” rather than Schedule option periods “exercised.”  (It is important to distinguish here between the two types of “options” mentioned at the GSA Options on Orders web page: task order options that may be exercised and Schedule contract options that need not be exercised, merely “included” when talking about an inclusive period of performance.)

3. The Schedule contracts contain the clause FAR 52.216-22 Indefinite Quantity (Deviation). Paragraph (d) of that contract clause reads:

“(d)  Any order issued during the effective period of this contract and not completed within that period shall be completed by the Contractor within the time specified in the order. The contract shall govern the Contractor’s and Government’s rights and obligations with respect to that order to the same extent as if the order were completed during the contract’s effective period.”

Notice that the clause talks about when the order was “issued,” meaning awarded.  Exercising an option is not issuing an order and exercising an option therefore need not occur (in contrast to a new award) during the effective period of the contract.  As long as the order was issued when the contract was still effective, it continues to run for its own full period of performance, regardless of what happens to the Schedule contract.

4. If a task order includes options, then that task order “shall state the period with within which the option may be exercised.  The period may extend beyond the contract completion date for service contracts.”  FAR 17.204(b),(d).  Nothing in FAR SubPart 17.2 requires that an IDIQ contract be still in effect as a condition for exercising a task order’s option.  If fact, it is the order’s option that controls the order’s performance.  Why else would FAR SubPart 17.2 permit an order option to extend beyond the contract’s completion date unless that order option could then be exercised?  An option that cannot be exercised is certainly useless.

5. A Schedule contract can cease to exist in a number of ways.  It can be canceled by GSA or by the contractor with 30-days notice to either party in accordance with the contract clause “Cancellation,” GSAR 552.238-73.  It can be terminated by GSA for cause or for the Government’s convenience under the authority of FAR 52.212-4 (l) and (m). In addition, GSA may, as described in contract clause I-FSS-163, decline to exercise its unilateral right to continue performance under an option for another five years of performance.  None of these GSA contract post-award situations modifies any task orders, requires Ordering Officers to modify any task orders, restricts the exercise of Ordering Officer discretion in the modification of existing orders, or relieves contractors of their obligation to continue performing on any task orders - - even task orders where the performance is extended by order options.

6. Where contract actions are in the best interest of the government and are not specifically prohibited by law or regulation, contracting officers broadly construe their authority.  FAR 1.102(d) states: “In exercising initiative, Government members of the Acquisition Team may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR, nor prohibited by law (statute or case law), Executive order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority.”

7. Guided by this FAR philosophy, Schedules ordering authority is typically construed broadly in the absence of specific prohibitions.  In the absence of specific prohibitions in law, regulation, policy, or Schedules ordering procedures, GSA has traditionally deferred to the reasonable discretion of Ordering Officers where doubt or ambiguity exists.  Resolving close policy decisions in favor of the ordering activity’s reasonable discretion has served GSA and the Schedules program well.

8. There is a public policy interest in requiring contractors to continue performance on agency task orders in order to prevent interruption of services even where the Schedule contract, for whatever reason, no longer exists.  There are some who believe, contrary to the clear language of paragraph (d) of the Schedules contracts' Indefinite Quantity clause, that a contractor might even stop work, effectively ignoring the Ordering Officer’s exercise of a task order option where the Schedule contract had expired.  Such a view would certainly not be in the best interest of the Government as the Indefinite Quantity clause properly acts as a check on such an adverse impact of, for example, the Schedules’ liberal Cancellation clause.  It is hard to imaging how allowing a contractor to unilaterally walk away from its Schedule contract with 30 days notice and then to ignore task order performance extended by an option (“because the contract no longer exists”) somehow protects the government’s interest in uninterrupted performance as expressed in the contract’s Indefinite Quantity clause.

9. It has consistently been the positition of many GSA Contracting Officers (including this one) that a task order once awarded incorporates the terms and conditions of the underlying contract and becomes a stand alone contract of its own.  This means that if you award a task order with options, you can continue to exercise the options unilaterally and the contractor is obliged to perform or be in default.

10. If there was any ever any doubt on GSA’s intent and position regarding the permissible exercise of order options even where the Schedule contract no longer exists, that doubt was removed by the January 26, 2009 Federal Register announcement (74 Fed. Reg. 4632) on planned changes to GSA’s own FAR Supplement:

GSAR 552.238-99 Task Order Period of Performance

The term for each order placed under the basic contract shall be specified in the individual order.  Under no circumstances may an order be placed under the basic contract if the basic contract has expired, or has been terminated or canceled by the government.  No orders may exceed ten (10) years, inclusive of options, from the date that the order is placed; however, no orders may extend more than five (5) years after the expiration of the basic contract.  Priced order options, if included in the initial evaluation and issuance of the orders, may be exercised after the expiration date of the basic contract.  Notwithstanding anything to the contrary in this clause, a multiyear order placed under the basic contract must be consistent with FAR Subpart 17.1 and any applicable funding restrictions.

11. Summary:

    There is no statutory, regulatory, or contract clause authority for telling ordering agencies that continued order-option performance on their task orders is contingent on GSA's exercise of the Schedule contract option. Similarly, there is no authority for treating multi-year orders with options as contractually distinguished from optionless multi-year orders (when no such distinction in the FAR exists) since options are merely modifications to orders and not "new" procurements.

    Nothing prevents an ordering agency from including options extending beyond the current five-year period of Schedule contract performance and (here is the part where Schedule orders differ from Schedule BPAs) nothing prevents an ordering agency from exercising those previously awarded task order options even where the GSA Schedule contract no longer exists. Unfortunately, some people (including even still a few in GSA) suggest that ordering agencies need to structure their order’s period of performance and option periods to match each five-year period of contract performance in order to preclude working on a task order (even an option-extended order) beyond the expiration of the Schedule contract.  That particular agency behavior would be exactly what paragraph (d) of the Indefinite Quantity clause says is not required.  Contractor performance on the order, which would be inclusive of previously evaluated order options to continue performance, is not contingent on the existence of the Schedule contract.  Schedule orders are issued under the authority of the contract and FAR SubPart 8.4, but they are not (unlike BPAs) dependent for their very existence on the simultaneous existence of the Schedule contract throughout the order's own entire period of performance.  That is what the sense and purpose of the contract’s Indefinite Quantity clause is all about.  The contract clause becomes meaningless under a contrary interpretation.

There is nothing in the FAR or in the Schedule contracts restricting an ordering activity’s flexibility as to the timing of periods of performance or of task order option exercises.  The Indefinite Quantity contract clause acts as GSA’s assurance to ordering activities that there is nothing that GSA or the contractor could do (or decline to do) to the Schedule contract that can pull the rug out from under the ordering agency with respect to contractor performance in accordance with the order, including any options exercised on that order.  Without such an assurance, would ordering activities even use the Schedules since the continued existence of the Schedule contract is entirely outside their control?  That clear organizational message from GSA to ordering agencies has, unfortunately, been muddled in the past.  It’s got to the point where GSAM 538 will now need to unequivocally state the position that I have always maintained: “Priced order options, if included in the initial evaluation and issuance of the orders, may be exercised after the expiration date of the basic contract.”

Questions

A. Can a Task Order include options?

Yes. A task order options clause is an example of non-conflicting clause. See the GSA “Options on Orders” web page, with particular attention to the fourth bullet which specifically permits order options to be exercised (not merely included) as long as those order options “do not extend beyond the maximum period of the Schedule contract, including option year periods.”  Note that there is nothing specifically requiring the Schedule contract to exist for every day of task order performance. The proposed GSAR 538 rewrite appears to remove all doubt as to GSA's position.

B. Can any of those Task Order option periods, at the time of Task Order award, extend beyond the current (five-year) period of performance shown on GSA eLibrary?

Yes. Agencies are not required to make their Task Order option periods match the option periods of the Schedule contract or to make their Task Order option exercise contingent upon the exercise of the Schedule contract options.  That’s the practical impact of the Schedule contract’s Indefinite Quantity clause. Task order performance can continue to run based on the task order’s own period of performance rather than the Schedule contract’s period of performance, which would include options.  For example, an Ordering Officer checks GSA eLibrary and determines that eight months remain in the current Schedule contract’s period of performance.  Some ordering activities incorrectly believe they can only award a task order with an eight-month initial period of performance.  That belief is contrary to the Indefinite Quantity contract clause.  

C. Is there anything in the FAR, Schedule contract, or case law prohibiting an ordering agency from exercising a task order’s option if the Schedule contract has been terminated, canceled, or a Schedule contract option not exercised?

No. There is no such prohibition, limitation, or qualification of an ordering officer’s reasonable exercise of discretion.  That means that an order could include option exercise points (even outside the current five-year period) and there is nothing in the FAR or in the Schedule contract to preclude the exercise of those task order options. GSA’s planned changes to GSAR 552.538-16, as published in the Federal Register, make it very clear that options on task orders can be exercised, even in the absence of a current and effective Schedule contract: “Priced order options, if included in the initial evaluation and issuance of the order, may be exercised after the expiration date of the basic contract.”

D. If a GSA Schedule contract is canceled/terminated/option not exercised and an ordering agency then exercises their task order’s option, can a contractor properly stop all work at the start of the new order option period by claiming the Ordering Officer had no authority to exercise an order option when the Schedule contract no longer existed?

No. A contractor cannot properly stop work if the ordering agency has exercised the task order option. That is exactly the type of situation paragraph (d) of the Indefinite Quantity clause is designed to prevent.  The intent of the clause is to protect ordering agencies from having services interrupted as a result of anything the contractor (and remember that contractor’s permissive unilateral contract cancellation right) or the GSA CO might do or fail to do.  The Indefinite Quantity clause specifically obliges contractors to continue performance in accordance with the order’s period of performance (which might include later-exercised options) rather than the Schedule contract’s new period of performance.

E. Are these answers different if talking about the exercise of options on Schedule BPAs (as opposed to order options) if the Schedule contract no longer exists?

Yes. BPAs, unlike Schedule orders, are not contracts themselves.  The BPA award (or BPA option exercise) is not a contract action and therefore needs to have a Schedule contract for its continued existence.  Courts and GAO have consistently distinguished orders (themselves contracts, including some consideration) from BPAs (not contracts, lacking mutuality of consideration).  See the discussion elsewhere on this blogsite today regarding the difference between BPAs and contract actions (which includes Schedule orders).

The sense of the FAR makes it clear that the existence of Schedule BPAs is tied to the existence of their governing Schedule contract.  Why else would one of the four actions for the annual BPA review required by FAR 8.405-3(d) be to “determine whether the schedule contract, upon which the BPA was established, is still in effect?”

Dave Clemens, 6/26/2009
[Remember what the Blog Policy says: “The views expressed on Services Ordering Solutions are those of the individual bloggers.  These views and posted comments do not necessarily reflect the views of GSA or the Government.”]
Orignially posted on March 6, 2009 at:
http://www.schedulesolutions.net

Summary: A BPA (whether a Part 13 BPA or a SubPart 8.4 BPA) is not a contract because it neither obligates funds not requires placement of any orders against it.  Instead, it is an understanding (sometimes referred to as a “vehicle” or “agreement” in regulations, court, and review board cases) between an ordering agency and a contractor that allows the agency to place future orders more quickly by identifying terms and conditions applying to those orders, a description of the supplies or services to be provided, and methods for issuing and pricing each order. The government is not obligated to place any orders.  Either party may cancel a BPA at any time.  The award of a BPA lacks mutuality of consideration. However, circumstances may transform a BPA into a binding obligation, that is, an enforceable contract. An enforceable contract exists when the ordering agency places an order against the BPA and the contractor accepts it (either by signature or by commencing performance). When an order is issued under the BPA and the BPA-holder agrees to provide the service, then that individual order becomes a binding contract between the parties and both parties are then bound to all the terms and conditions in the BPA for that order.  The result is that a BPA is a flexible simplified method of procurement for filling anticipated repetitive requirements that is itself somewhat protest-resistant - - at least until that first order is placed.

[for the purpose of business size] 13 C.F.R. §121.404 (g) (vi): “A Blanket Purchase Agreement (BPA) is not a contract. Goods and services are acquired under a BPA when an order is issued. Thus, a concern's size may not be determined based on its size at the time of a response to a solicitation for a BPA.”

[for the purpose of the requirement to be registered in CCR: “Prospective contractors shall be registered in the CCR database prior to award of a contract or agreement...”] 48 C.F.R. § 4.1101 defines “agreement” as “basic agreement, basic ordering agreement, or blanket purchase agreement.”

The Federal Acquisitions Regulations (FAR) System "prescribes policies and procedures for establishing and using basic agreements and basic ordering agreements." 48 C.F.R. § 16.701. Both "basic agreements" and "basic ordering agreements" contain "contract clauses applying to future contracts between the parties during [the] term [of the contract]." 48 C.F.R. §§ 16.702(a), 16.703(a).

Almar Indus., Inc. v. United States, 16 Cl.Ct. 243 (1989).

Fay Zhengxing v. United States, 71 Cl.Ct. 732 (2006).

Labat-Anderson, Inc v. United States & JHM Research and Development Inc., __Cl.Ct.___ (2001), No. 01-350C, Wilson, J.

Modern Systems Technology Corp v. United States, 24 Cl.Ct. 360 (1991) aff’d 979 F.2d 200 (1992).

Boehringer Mannheim Corp., B-279238, May 21, 1998.

Canon USA, Inc., B-311254.2, June 10, 2008.

Logan LLC, B-294974.6, December 1, 2006.

Dave Clemens, 6/26/2009
[Remember what the Blog Policy says: “The views expressed on Services Ordering Solutions are those of the individual bloggers.  These views and posted comments do not necessarily reflect the views of GSA or the Government.”]
Originally posted on January 22, 2009 at:
http://www.schedulesolutions.net

 There is nothing in the FAR or in any of the Schedule contracts that provides a blanket prohibition (or even a broad general limitation) on protests against Schedule orders.  In this regard, all GSA Schedules are the same.  However, the answer is different when it comes to GSA GWACs (among other MAC and task & delivery order contracts) where FAR 16.505(a)(9) there narrows the permissible grounds for order protests to only those alleging an increase in scope, period, or maximum value. But (like the rest of FAR 16.505 incidentally), that Federal Acquisition Streamlining Act (FASA) "protest Teflon" in FAR 16.505(a)(9) does NOT apply to orders against GSA Multiple Award Schedules. Idea International v. U.S., 74 Fed. Cl 129 (2006).  In Idea International, the Court adopted the long-held GAO position that the FASA limitation on protest grounds does not apply to Schedule orders. (Here is a good summary of the Idea International case from the Coalition for Government Procurement. Here is a case discussion webinar from the McKenna Long law firm** and here is an article on on that same case from the Ackerman Senterfitt firm.  Schedule contracts behave like IDIQs in many respects.  But that doesn't mean they are true IDIQs or “task or delivery order contracts” or “multiple award contracts” in the FASA or FAR 16.505 sense of those terms.  And even where the issue of the protestability of Schedule orders had been in doubt before Idea International, FAR 16.505(a)(9) has never really helped ordering agencies when it came to Schedule BPA awards.  That's because BPAs are not "orders" themselves and agencies have more discretion in award of BPAs. Labatt-Anderson Inc., B-287081, Apr. 16, 2001; Labatt-Anderson Inc. v. U.S., 50 Fed. Cl. 99 (2001); Systems Plus, Inc., B-297215 et al., Dec. 16, 2005. (See also the separate blogsite discussion today on why Schedule BPAs are not [unlike the BPA orders] contract actions for most FAR purposes.)

 Can a disappointed contractor file a protest? Of course.  Will the protest be sustained?  That depends on the facts and whether the company has standing as an “interested party” to protest award of that Schedule order.  Generally, an agency's decision to use a Schedule acquisition strategy as opposed to an open-market (non-Schedule) strategy is not grounds for a protest and a protesting firm must hold a GSA Schedule.  A company without a GSA Schedule contract typically has no standing as an interested party to protest award of a Schedule order.  CHE Consulting, Inc. v. U.S., 47 Fed. Cl. 331 (2000); Advanced Business Systems, B-237728, Mar. 16, 1990; Sales Resources Consultants Inc., B-284943, B-284943.2, June 9, 2000; FitNet Purchasing Alliance, B-309911, Nov. 2, 2007.  Even a Schedule contractor that doesn’t have an item meeting an agency’s need has been held to not be an “interested party” in a protest.  Draeger Safety, Inc., B-285366 et al., Aug. 23, 2000.  However, there are some exceptions to the general rule if the protester claims the Schedule order doesn’t meet the ordering agency’s actual requirements or alleges that the items ordered are outside the scope of particular MAS contract.  Intelligent Decisions, Inc., B-274626, B-274626.3, Dec. 23, 1996, May 15, 1997; Marvin J. Perry & Associates, B-277684, Nov. 4, 1997. Of course, if you include open-market incidental (non-Schedule) items on your orders under FAR 8.502(f), you may have just expanded the order’s protestability to include non-Schedule contractors.  But, overall, most Schedule orders are somewhat less susceptible to a sustained protest because the universe of potential protesters is typically smaller.

 Because of the foregoing, particularly due to the typical narrowing of standing to only those with Schedule contracts, and due to the simplification of the Schedules ordering process (less to go wrong in the first place), there appears to be a general tendency for Schedule orders to have fewer sustained protests than open-market (non-Schedule) contracts/orders.  

 Of course, all this assumes the ordering agency is not making their Schedule order procurement look like a FAR Part 15 procurement but is instead taking full advantage of the streamlining offered by FAR SubPart 8.4.  An ordering activity using the Schedules is doubly hurting itself by not keeping it simple: (1) they unnecessarily increase procurement lead-lead time and order complexity and, (2) they also make themselves more vulnerable to protests.  Recall that FAR 8.404(a) says that nothing in FAR Part 15 applies to Schedule orders.  Ellsworth Associates, Inc. v U.S., 45 Fed. Cl. 388 (1999); KPMG Consulting, B-290716, Sept. 23, 2002; OSI Collection Services, B-286597.3 et al., June 12, 2001.  However, courts and boards have consistently held that where agencies inappropriately make their Schedule order procedures look like Part 15 procurements (thereby disregarding the simplified FAR 8.4 procedures), they will be held on protest to those more rigorous FAR Part 15 standards.  Computer Products, Inc., B-284702, May 24, 2000; Digital Systems Group, Inc., B-286931 et al., Mar. 7, 2001; Uniband Inc., B-289305, Feb. 8, 2002.

 For example, an ordering activity would not want to call any "brief explanation for the basis for the award decision" (FAR 8.405-2(d)) a "debriefing" (which is a FAR SubPart 15.5 term and not a Schedule order term).  Because Schedule order unsuccessful quoters are not entitled to a "debriefing", they have one less available way in which to stay performance by the new awardee, since Part 15’s "within five days of a debriefing" avenue doesn't apply to Schedules orders.  That means that if Schedule order protesters want to stay order performance, they have to protest within ten days of award of the order (which is strictly construed - - and not within ten days of when they learned of the order award.)

 A GSA Schedule contractor certainly can protest award of a Schedule order placed against that Schedule to the agency issuing that order, to GAO, or to the Court of Federal Claims.  Note here that the GSA Schedule contract PCO has nothing to do with Schedule order protests or other disputes not relating to the Schedule contract terms and conditions (FAR 8.406-6(b)) - - issues rarely relevant to something the Ordering Officer has done or failed to do.  Whether the protestor is likely to prevail on the merits of the protest is another matter and will turn on the facts, the issues (including standing to protest), the protest forum, and the applicable case law.

Managing Schedule Order Protest Risk: On What Grounds Are Protests Typically Filed Against Schedule Orders?
(For a complete discussion, see Chapter 10 in GSA Schedule Handbook (2008-2009 Ed.) by John W. Chierichella & Jonathan S. Aronie, Thomson-West, 2008, 503 pp.

1. Schedule contractor with the “right” Schedule protests order to a Schedule contractor on the “wrong” Schedule.
A sustained “wrong Schedule” protest like REEP, Inc., (B-290665, Sept. 17, 2002) demonstrates why Schedule scope determination is so important.  If you aren’t sure about which Schedule to use, ask a GSA Contracting Officer for assistance.  There are plenty of cases where requesting scope determination assistance from a GSA CO was noted with approval in support of an ordering activity’s position. See also DSD Laboratories, Inc. v. U.S., 46 Fed. Cl. 467 (2000); Lockmasters Security Institute, Inc., B-299456, May 21, 2007; Computer Universal Inc., B-291890, April 8, 2003.

2. Ordering activities who say they will evaluate quotes one way and then disregard what their RFQ says about evaluation.  
Just as in non-Schedule procurements, failure to adhere to stated evaluation criteria is a productive area for sustained protests.  For example, describing a best value evaluation in the RFQ and then awarding the order to the low-cost, technically-acceptable quoting contractor resulting in a sustained Schedule order protest in Computer Products, Inc., B-284702, May 24, 2000.

3. Failure to follow Part 15 procedures completely when an ordering agency picked some Part 15 procedures (none of which don’t apply to Schedule procurements)
As shown in the cases cited above, when agencies do things like conducting Part 15-style “debriefings” and “discussions,” GAO and the Courts review the agency actions against the standards applicable to Part 15 procurements. Labat-Anderson Inc., B-287081 et al., Apr 16, 2000; OSI Collection Services, Inc., B-286597.3, June 12, 2001; KPMG Consulting, B-290716, Sept. 23, 2002.

4. Failing to solicit a particular Schedule contractor.
In general, this is not an area where sustained protests are likely.  When an agency solicits quotes from at least three contractors, it is not required to solicit a quote from the incumbent FSS contractor.  Allmond & Co., B-298946, Jan. 9, 2007.  In addition, if the ordering officer determines that only one Schedule contractor can meet its requirements (see FAR 8.405-6), then the agency is not required to solicit quotes from other Schedule contractors.  Card Tech. Corp., B-275385 et al., Feb. 18, 1997; Delta Int’l, Inc., B-284364.2, May 11, 2000; Computer Universal, Inc., B-291890 et al., April 8, 2003.

5. Using Schedule orders to procure open market incidental items not on a Schedule contract without following all procurement regulations applicable to the open market items.
Agency ordering officers make their Schedule orders vulnerable to sustained protest when non-Schedule items totaling over the micropurchase threshold are procured as if Schedule procurements but without following FAR 8.402(f) procedures.  Agencies that use the Schedules to procure non-Schedule items without adhering to the competition requirements of CICA are risking a sustained protest. T-L-C Systems, B-285687.2, Sept. 29, 2000; American Systems Consulting, Inc., B-294644, Dec. 13, 2004.

6. Order evaluation irregularities, especially past performance.
Just as in non-Schedule procurements, protests can be sustained when ordering agencies unreasonably evaluate attributes like past performance.  For example, the mechanical evaluation of past performance scores that is unfair to non-incumbents over incumbents (or vice versa) or any to one contractor can certainly increase the risk of a sustained protest.  See OSI Collection Services, Inc., B-286597.3 et al., June 12, 2001.

Dave Clemens, 6/26/09
[Remember what the Blog Policy says: “The views expressed on Services Ordering Solutions are those of the individual bloggers.  These views and posted comments do not necessarily reflect the views of GSA or the Government.”]
Originally posted on March 9, 2009 at:
http://www.schedulesolutions.net.

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**Minor observation on the McKenna Long slides:  I don’t think there is a case law consensus on the issue regarding the second bullet on Page 20 of the McKenna Long webinar, regarding one particular judge's discomfort with a Schedule order subcontractor who was not itself a Schedule holder.  While subcontracting (as opposed to Schedule Teaming) cannot be used by a Schedule contractor to expand the scope of what that contractor was awarded by GSA, there is no law, regulation, or contract language requiring subcontractors to also hold GSA Schedule contracts.  The GSA websites do a good job on the issue of distinguishing between Schedule Contractor Teaming Arrangements (where all team members must hold a Schedule) and subcontracting (where the sub need not have a Schedule contract, but any sub’s labor categories must either be matched to the prime’s labor categories or treated as open market labor under FAR 8.402(f).)  I think everything else in the McKenna Long webinar presentation is pretty noncontroversial. DC