SOLICITATION_QA_POSTING_10182012.pdf

1 FEMA – Q/A Solicitation HSFE80‐12‐R‐0033 – 10/18/12 posting

Housing Inspection Services

Questions and Answers

Solicitation HSFE80‐12‐R‐0033 (Responses in red)

1. Section B, B.4 CONSIDERATION AND PAYMENT, page B‐2 In addition to profit, a contractor’s fee may include costs that are not reimbursable to cover risks, financing, etc. Is a proposal that includes a fee considered an exception? Submit proposal in accordance with FAR part 31

2. Section B, B.4 CONSIDERATION AND PAYMENT, page B‐2 In addition to profit, a contractor’s fee may include costs that are not reimbursable to cover risks, financing, etc.

Would a proposal that includes a fee be considered as non‐compliant? Submit proposal in accordance with FAR part 31

3. Section B, B.7 ISSUING TASK ORDERS, page B‐4 The solicitation states that “transition may be invoiced upon completion of transition.” Would the Government please confirm that the contractor will not be able to invoice for any transition‐related activities until the completion of the 90‐day phase‐in period? Contractors may invoice monthly.

4. Section B, B.8 PRICE SCHEDULE INSTRUCTIONS, page B‐5 How does FEMA reconcile the duties described in the Generalist 2 category (housing inspector and QC inspector) which FEMA has indicated is a SCA category (see response below) from the same duties that will need to be performed by the “Professional Inspector” designation that FEMA has indicated applies to the housing inspector and QC inspector? Labor category, Generalist 2 has been removed. Inspector is no longer considered a Professional series. See Wage determination number 2000‐0127, Revision 17.

5. Section B, B.8 PRICE SCHEDULE INSTRUCTIONS, page B‐5 The solicitation states that the fixed inspection rate is “only loaded with the inspector wages, administrative support, quality control and profit.” In the draft solicitation Q&A, FEMA was asked the following regarding inspector wages:

Will inspectors be subject to a Service Contract Act hourly rate? If yes, would FEMA please provide the rate? Yes, Wage determination number 2000‐0127, Revision 17.

FEMA’s published answer was:

Response: No. the Generalist Labor Categories will be subject to the SCA. (See correction above)

Per FAR Subpart 22.11—Professional Employee Compensation, “professional employees” are used to denote

“members of those professions having a recognized status based upon acquiring professional knowledge through prolonged study. Examples … include accountancy, actuarial computation, architecture, dentistry, engineering, law, medicine, nursing, pharmacy, the sciences … To be a professional employee, a person must not only be a professional but must be involved essentially in discharging professional duties.” Would FEMA please provide the requirements for professional knowledge that qualifies inspector staff as professional employees? If no professional‐level education is required, would FEMA please confirm that inspectors are considered as hourly employees subject to the Service Contract Act and Fair Labor Standards Act and should be priced as such?

Will FEMA please provide the SCA rate for the Generalist categories? Attachment 23 was added to the Solicitation

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6. Section B, B.8 PRICE SCHEDULE INSTRUCTIONS, page B‐5 If the Generalists rates are not available, what rates should the contractor use so that they will not be liable for any shortfall if the DOL provides a higher rate? The offerer is expected to propose rate for the categories and duties described to meet and comply with the DOL rate, see Attachment 23.

7. Section B, B.8 PRICE SCHEDULE INSTRUCTIONS, page B‐5 If the DOL provides a higher rate than the contractor proposes in their proposal, will FEMA allow the contractor to re‐price the rate(s) to the DOL supplied rate? No, the offerer is expected to research the DOL rate and be in compliance.

8. Section G, G.2 ORDERING PROCEDURES, (g), (2.b), page G‐3 There is a 5% withholding and retainer on the cost reimbursable CLINs. Would the Government please explain how a for‐profit organization can justify deductions against items where there is not an opportunity to earn a profit, i.e., justify the risk if there is not a potential reward See revision in G.2b and reference FAR clause 52.216‐

9. Section G, G.2 ORDERING PROCEDURES, (g), (2.b), page G‐3 The solicitation states that “FEMA shall withhold a five (5%) percent retainer from the Operations Cost Reimbursable CLINs per year and a release of that retainer shall be based on the contractor’s annual QMS audit outcomes provided by the independent third party auditor as described by the PWS and approved by FEMA. Refer to Attachment 2 Performance Requirements Summary, Section 1 Quality Management System for instructions and withholding details.” While this is called a retainage, it works like a penalty (disincentive) and does not provide the contractor the opportunity to recoup the retainage. This disincentive would have to be paid out of contractor costs because there is no allowable fee for the penalties to be charged against. Will FEMA allow a fee to the Operations CLIN since a disincentive is applied to fee or profit and not to actual contract costs? See revision in G.2b and reference FAR clause 52.216‐11

10. Section H, H.2 TRANSITION, page H‐1 The solicitation also states that “the Contractor shall within two days [emphasis added], provide a security compliant implementation/management plan that describes how the contractor will perform the requirement, i.e., equipment management, staffing, processes and procedures to be implemented to fulfill all requirements of the HIS Inspections contract. Given the level of detail necessary to meet this requirement, all offerors would need to draft such plans after proposal submittal and prior to announcement of award. Unsuccessful offerors would have to consider this effort as marketing costs that cannot be recouped. For awardees, however, such work is a project deliverable and, as such, awardees should be able to invoice for this product. Will FEMA accept these as pre‐ contract costs and allow awardees to invoice for work required under the contract when it is work that has been completed prior to contract award? No

11. Section H, H.11 EMPLOYEE/INDEPENDENT CONTRACTORS and INSPECTOR COMPENSATION, page H‐4

FEMA pays its field inspectors and field QC inspectors between a GS‐11 Step 3 and a GS‐11 Step 5. Should the contractor use this compensation range for their field inspectors and field QC inspectors? The offeror shall determine the rates necessary to successfully meet the requirements.

12. Section I, I.2 NOTICE OF CONTRACT CLAUSES INCORPORATED BY REFERENCE, 52.216‐11, page I‐2

The solicitation incorporates FAR Clause 52.216‐11 Cost Contract—No Fee by reference. In the Q&A published on the draft solicitation, the following questions were asked about cost sharing:

Does FEMA contemplate requiring contractor to share in the cost of some services? If so, cost share TOS be required to be bid or risk penalty if two consecutive Cost Share TOs are not bid?

Response: FEMA does not anticipate cost sharing and

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Are contractors prohibited from earning fee to cover risk on Cost Reimbursable CLINS including Operations? If FEMA intends to prohibit fee on cost reimbursable work, does it still intend to also include Cost Share requirements? Not sure if this is consistent with FAR 52.216‐11 Cost Contract—No Fee. ‐As prescribed in 16.307(e), insert the clause in solicitations and contracts when a cost‐reimbursement contract is contemplated that provides no fee and is not a cost‐ sharing contract.

Response: Offerors shall propose in accordance with FAR Part 31

However, the Q&A also states that a number of project‐related costs are not chargeable to FEMA, from which it may be inferred that this is a de facto cost sharing contract. A few examples from the Q&A include:

Inspectors who are available for deployment must register with the Contractor Deployment Database system monthly via a toll‐free number or the web to let the Contractor know whether or not the inspector is available for deployment. Question: Where will this cost be charged?

Response: Offerors shall propose costs based on their approach using the CLINS listed in Section B. All allowable costs shall be in accordance with FAR Part 31.

If current inspectors need to be re‐adjudicated, will incumbent contractors receive funding to process these and other associated administrative functions?

Response: FEMA will process re‐adjudication.

The costs that the Government states cannot be charged to the contract appear to meet the definition of FAR 2.101 which states “Cost sharing means an explicit arrangement under which the contractor bears some of the burden of reasonable, allocable, and allowable contract cost.” Would the Government confirm that FAR clause 52.216‐11 Cost Contract No Fee was inserted in error and will be removed from any resulting contract, allowing offerors to recoup costs that are required for effective contract performance? FAR Clause 52.216‐11 is applicable to the solicitation. All allowable costs shall be proposed in accordance with FAR Part 31.

13. Section I, I.2 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE, FAR 52.216‐11 Cost Contract—No Fee, page I‐1

Does the FAR 52.216‐11 Cost Contract—No Fee clause preclude the contractor from charging a fee for direct labor (Attachment 17 only indicates labor fringe and labor overhead)? Costs shall be reimbursable in accordance with FAR Part 31. Attachment 17 has been revised.

14. Section I, I.2 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE, FAR 52.216‐11 Cost

With the very heavy QASP disincentive schedule and the lack of any fee for Direct Labor, the contractor could work for the entire year while attaining no profit from their work. Is this FEMA’s intention? No. Costs shall be reimbursable in accordance with FAR Part 31. Attachment 17 has been revised.

15. Section I, I.2 NOTICE LISTING CONTRACT CLAUSES INCORPORATED BY REFERENCE, FAR 52.216‐11 Cost

If the FAR 52.216‐11 Cost Contract—No Fee clause precludes the contractor from charging a fee for direct labor, is it FEMA’s intention that the only place the contractor can earn any profit and recover otherwise unbillable costs is from what is earned from the performance of inspections? If not, would the Government please provide a list of other areas that can a fee be included? Costs shall be reimbursable in accordance with FAR Part 31. Attachment 17 has been revised.

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16. Attachment 15, PERFORMANCE REQUIREMENTS SUMMARY MATRIX, pages 1 through 4 The Performance Requirements Summary Matrix indicates a maximum incentive of 2.25% and a maximum disincentive of 40%. Potential outcomes for both risks and rewards heavily favor the Government, but Government practice has always recommended a balance between incentives and disincentives. In addition, FAR 16.401 describes incentives as a way of “relating the amount of profit or fee payable under the contract to the contractor’s performance,” with a key objective of “Establishing reasonable and attainable targets that are clearly communicated to the contractor.”

Since the only area of the contract where contractors are allowed to apply fee is the inspections CLIN, would the Government confirm that the 2.25% incentive and 40% disincentive apply only to the fee that is included in the offeror’s per inspection cost?

The imbalance between the 2.25% incentive and 40% disincentive does not appear reasonable in two ways: (1) it does not provide contractors a meaningful incentive, given the lack of ability to charge a fee on most of the CLINS, and (2) the contractor is putting 40% of what fee there is at risk. Would the Government consider revising the Performance Requirements Summary Matrix to create greater balance between the incentives/disincentives, for example, ±10‐15%, which may also achieve the added benefit of encouraging competition for this program?

FEMA expects the HIS contractor(s) to at least meet or exceed all Performance Requirements for a Task Order.

QASP production disincentives are unit specific. Offerors should review RFP E.3 Performance Evaluation and E.4 Quality Assurance Surveillance Plan.

17. Attachment 15, Performance Requirements Summary

Often times, once survivors have withdrawn from the program, it is difficult to reach them again as they do not answer the telephone or respond to messages because they have already withdrawn. Based on the 100% second verification of withdrawn reaffirmation by vendor and reported FEMA, it appears that the contractor may be penalized for items outside their control. Would the Government please reconsider the incentives and disincentives for Item 2.B – Withdrawn Inspections? It is FEMA’s intent for the offeror to be aggressive in completing inspections. FEMA identified the necessary steps to earn the full incentive which is within the offeror’s control. The 100% refers to the withdrawn validation process to contact the survivors.