Source: http://www.wifcon.com/discussion/index.php?/topic/4572-option-not-exercised-on-time-now-what-does-baa-change-the-response/&tab=comments
Timestamp: 2019-12-11 08:20:09
Document Index: 552448171

Matched Legal Cases: ['art 6', 'art 6', 'art 6', 'art 6', 'art 15', 'art 15', 'art 6', 'art 6']

Option not Exercised on Time - Now What? Does BAA change the response? - Contract Administration - The Wifcon Forums and Blogs
25 minutes ago, CharterParty said:
The BAA is covered by FAR Part 6:
(a) Sealed bids.
(b) Competitive proposals.
(c) Combination of competitive procedures.
FAR Part 6 Competition requirements do not apply to contract modifications, including the exercise of priced options that were evaluated as part of the initial competition:
Since the BAA is covered by FAR Part 6 and since the option was not exercised, you are not providing for Full and Open Competition if you create a mod to extend the period of performance. The principle set forth in Vern Edwards’ GAO case cite remains valid - Washington National Arena Limited Partner﻿ship, B-219136﻿, OCT 22, 1985, and it applies to BAAs. Thus, you must comply with FAR Subpart 6.3 and must write a J&A.
PepeTheFrog agrees with @napolik's analysis.
A more pressing question is:
If an agency violates CICA by awarding "new work" without full and open competition under the guise of a bilateral modification, can they get away with it? Who will find out about it? Who will care enough to actually protest?
In large source selections under FAR Part 15, there is usually a well-defined pool of potential contractors. Some of them are keenly aware of and closely monitor their competitors. In that scenario, it's more difficult for agency to get away with it. The competitors will find out about the improper modification through publicized award notices, FPDS, or loose-lipped gossipers or braggarts at the local drinking hole. Such competitors will care enough to actually protest.
However, in the BAA research and development environment, things are quite different. Although the companies can be considered to be competing against each other, they do not compete directly. The companies are not evaluated against a common statement of work and are not specifically "traded off" against one another. The pool of potential contractors is not well-defined and often numerous and unorganized, consisting of many unrelated companies or research organizations. They don't pay as much attention to each other. Even if they find out about the improper modification, would they care enough to actually protest? For what end? It's not like a FAR Part 15, distinct service requirement where a competitor can swoop in and perform the work instead. In research and development, each approach is unique and it's not feasible to substitute one contractor for another.
Therefore, there is less practical risk in cheating the CICA system via improper modification within the BAA research and development scenario.
The work does not fall into the category of "the work covered by the modification would otherwise be subject to the statutory requirements for competition".
Is the work described in the option you failed to exercise?
Also, FYI, see this DAU Ask A Professor discussion of failure to exercise BAA option: https://www.dau.mil/aap/pages/qdetails.aspx?cgiSubjectAreaID=28&cgiQuestionID=113891https://www.dau.mil/aap/pages/qdetails.aspx?cgiSubjectAreaID=28&amp;cgiQuestionID=113891
17 hours ago, napolik said:
I wouldnt bet my career on what Ask a Professor says. Yesterday I scanned back through the past 11 years of questions and answers in a certain contracting area and was thoroughly unimpressed. A number of the answers are incorrect or only partially correct.
The referenced AAP question specifically addressed whether the government could “exercise the option” late. Exercising an option is a unilateral right of the government. It didn’t address the possibility of a bilateral agreement to award the “option” at the stated price.
The answer said that the government can’t “exercise the option” late, which answered the question. It also mentioned extending the period of performance for “no other reason than waiting for funding”, in order to avoid another source selection, to which it was stated would be an attempt to circumvent CICA. It wasn’t clear whether that meant bilaterally or unilaterally.
Since other readers will review and may try to apply AAP answers to their specific needs and questions, the answer should provide specific context and should properly frame the question, for context.
I agree with your observations on Ask A Professor. I answered the question raised by the Sig. CP, and I provided the reference as an aside because he cited Ask a Prof in his initial post and because it addressed a BAA.
I believe the Professor did address the issue of using a bilateral mod to provide the support contained in the unexercised option:
I sympathize with your frustration with the slow funding process and the inability to award an option on time. Unfortunately, you can not award an option after the contract period of performance has expired. CLIN 001 has expired and CLIN 002 is no longer available because the Gov't could not exercise it without needed funding. Your references are at FAR 17.204 Contracts (b) The contract shall state the period within which the option may be exercised You did this with your CLINs/Section F and 52.217-9 "Option to Extend the Term of the Contract" According to this clause and fill-in, the Gov't had the capablity to exercise the option within 10 days of the end of CLIN 001.
Starting all over again with a source selection or a sole source justification is very resource intensive and of course it is likely that we will not get the same employees.
What is your response to his question - "Is such a modification an abuse of the Agency's authority and outside the regulations?"?
My response is that I don’t think that it is an abuse of authority or outside of the law.
I believe the poster indicated that the period of performance would not exceed the originally intended period. At any rate, it appears that the scope of work in the pre-priced (competed) option was originally contemplated by the parties, if both parties are in agreement and if the government goes through the steps that are normally required in FAR 17.2 before exercising an option, then go for a bilateral modification.
Ah, did the parties agree to continue performance in time to avoid a signifant break in performance? Was there continuity of performance? I may be missing something key here.
If they are continuing performance has there already been a mod to add the services in the option? It isn’t clear to me if or how that actually occurred.
If you are adding to the contract via a mod the work described in the unexercised option, you will be thwarted if you don't do a J&A and if a firm protests your actions.
But, PepeTheFrog may be able to dissuade the R&D competitors from protesting!
Assuming, arguendo, that the unexercised option becomes "new work" if the Government subsequently decides to purchase it, I am not convinced that a J&A is needed to turn on the option CLIN by contract modification -- I understand what others are saying, and I agree with them so long as the original contract was based on FAR 6.102(a), (b), or (c). However, your contract was based on (d)(2) (BAA).
For contracts covered by FAR Part 6, we may add "new work" to an existing contract as long as we comply with the competition requirements of FAR Part 6 -- competitive proposals are not required for work resulting from a BAA, so as long as your proposed modification (to turn on an option) is covered by FAR 6.102(d)(2), you don't need a J&A to justify not being covered by (a), (b), or (c).
In a normal, non-BAA contract, the "new work" would have to be covered by FAR 6.102(a), (b), or (c), or you would need a J&A. But you're under (d)(2), not (a), (b), or (c).
Would it be any cleaner if the bilateral mod was only an agreement to extend the period for exercising the option? Same work. Same price.
Would it be any cleaner if the bilateral mod was only an agreement to extend the period for exercising the option?
Joel, are you contending that the time for exercising the option could be changed after the period for exercise of the option had passed (expired)?
Every contract awarded under a BAA is sole-source for purposes of negotiating terms and conditions, including price -- but we treat it as a competitive procedure, and I understand why we do.
It is permissible to add "new work" to a contract by bilateral contract modification. Sometimes, a J&A will be needed.
If I don't need [to show that I departed from CICA but received the required, statutory approval, AKA "J&A"] for an initial contract [that satisfies CICA], then I don't need [to show that I departed from CICA but received the required, statutory approval, AKA "J&A"] to add "new work" [that does not satisfy CICA].
This doesn't make sense and doesn't follow logically. Consider the following.
Yes, the award of the contract pursuant to the BAA for R&D satisfies CICA. Everyone agrees. But you're saying that gives the contracting officer a free pass to tack on an indefinite amount of "new work" in the form of "modifications" that was not evaluated as part of the original BAA solicitation process.
Sure, the contracting officer can make a new award, against the BAA, using the BAA procedures. That new award can fulfill whatever you wanted to accomplish using the "modification." That would be doing this "the hard way." Is that what you're driving at?
But if you want to do this the "easy way," by skipping the full BAA procedures, and instead awarding the "new work" in the form of a "modification," the purpose of the J&A (justification for the use of other than full and open competition) is essentially to confess that you skipped the BAA procedures (which would satisfy CICA).
The words "based on a BAA" are not magic words that satisfy CICA. When you use those words to describe the contract award, it means you followed the BAA procedures. The BAA procedures are not likely to include language that says "The Government is free to add unlimited work via bilateral modification following initial awards." So, when you say the "new work" is "based on a BAA," you have done nothing to satisfy CICA or the procedures of the BAA. Does that make sense?