Q and A 2-24-09.doc

IA-TAC III

SOLICITATION HSFEHQ-09-R-0037

QUESTIONS: We request your clarification on the intentions of the government for this contract as it relates to the commercial terms of the contract and subsequent task orders.

Section B indicates there will be both Fixed-Price elements and Cost Plus Fixed Fee elements. Section B.2 further indicates that, “The total fixed price of this contract is the total of Phase-In on a one time basis and Readiness for sixty (60)months.” This tells us that only Phase-In and Readiness will be on a fixed price basis. Sections G and H further provide evidence that the task orders will be executed on a Cost Plus Fixed Fee basis. Section I states, “This is a FFP/T&M/LH contract;” yet, it also implies that Cost-Reimbursement line items will be used. Section K requests certification of cost data and cost accounting systems, implying cost contracts or task orders will be used. Section L states, “… four (4) separate (single award) IDIQ hybrid contracts which consists of Firm Fixed Price (FFP), Time and Materials (T&M/LH) Contract Line Items Numbers (CLINs) to be awarded…” Yet, the attached IA-TAC III CLIN Table and Bid Sheet only has FFP and TM/LH type line items. The instructions in Section L for preparing the cost proposal request information that is normally associated with CPFF type of contracts and specifically mentions, “applicable to Cost-Reimbursement portion of the contract.”

As you can see there is considerable confusion regarding the government intention. The government has also ably pointed out that, “because of the often and many unknowns that are associated with disaster and catastrophic events, it is impossible to estimate with a great deal of certainty the actual scope and quantities of any of the tasks and services for this requirement.” With this amount of uncertainty and inability to adequately define the scope and quantities of any tasks, and looking at the guidance in the FAR, it leads one to believe that the use of FFP CLINs is not the intention of the government. When there is so much uncertainty in defining the scope and quantities of any tasks at the start of a contract using FFP commercials terms, the courts have found the contracts to be invalid, which also leads us to believe it is not the government’s intention to request FFP CLINs at this time. As such, we can only conclude that the attached IA-TAC III CLIN Table and Bid Sheet is only being used as an exercise to determine if the bidders have an understanding of the scope of work associated with each CLIN by how much they think it will cost to perform the services. We also conclude that the escalation factors being requested are only for the purposes of developing a general understanding of what the market place thinks will be prices in the future for developing future budget requests. We do not see that the Table is anticipated to be used for pricing any future task orders under the contract, since the scope and quantities are not known.

We do think it is the government’s intention to use all of the above mentioned contract terms during the course of the contract, but when they are appropriate to be used. For example the use of CPFF during the Pre-authorization Notice phase described in Section G.7, is appropriate and is the type of commercial term described in the section. T&M/LH tasking makes sense for the staff supplementation tasks described in the SOW (Section C) such as participating in the Mission Planning Team. FFP is appropriate for Community Site Construction after the Design is complete and the scope and quantities are clearly defined. The Design, obviously, makes sense to be performed on a CPFF basis due to the many stakehoders that need to be satisfied.

Your plan to have four single award ID/IQ contracts provides you with many resources to assist you in managing these many contract financial terms. For example a disaster occurs in Alpha sector, the government now has the resources of the remaining sectors available to assist in the preparation of “government” check estimates and to assist in the managing and oversight of the many different contract terms. We applaud this ingenuity in increasing and supplementing your existing staff with the virtual staff you have at your disposal via the remaining sector contracts at minimal cost to the government. The use of the resources of all of the remaining contractors or the random selection use of one contractor prevents any type of gaming of the system. Your plan has a lot of merit.

We would appreciate your clarification on the contract commercial terms as soon as possible so that we can know how to prepare our proposal.

a) ANSWER: Section B indicates there will be both Fixed-Price elements and Cost Plus Fixed Fee elements: There will be Firm Fixed-price, T&M, Labor Hours, and Cost reimbursable CLINs.

b) ANSWER: Section B.2 further indicates that, “The total fixed price of this contract is the total of Phase-In on a one time basis and Readiness for sixty (60) months.” This tells us that only Phase-In and Readiness will be on a fixed price basis. The Phase-In and Readiness costs will be under a Firm Fixed-price CLIN.

c. ANSWER: Sections G and H further provide evidence that the task orders will be executed on a Cost Plus Fixed Fee basis. Section I states, “This is a FFP/T&M/LH contract;” yet, it also implies that Cost-Reimbursement line items will be used. Section K requests certification of cost data and cost accounting systems, implying cost contracts or task orders will be used. Section L states, “… four (4) separate (single award) IDIQ hybrid contracts which consists of Firm Fixed Price (FFP), Time and Materials (T&M/LH) Contract Line Items Numbers (CLINs) to be awarded…” Yet, the attached IA-TAC III CLIN Table and Bid Sheet only has FFP and TM/LH type line items. The instructions in Section L for preparing the cost proposal request information that is normally associated with CPFF type of contracts and specifically mentions, “applicable to Cost-Reimbursement portion of the contract:: Contracts awarded from this solicitation will be hybrids contracts with firm Fixed-price, T&M, Labor hours, and Cost reimbursable CLINs. Although there are no cost reimbursable CLINs provided in the CLIN list, the Governments foresees possibilities where such task order type may provide the best approach to issuing task orders, especially in the early initial phase of an emergency such as a natural disaster or catastrophic event. Therefore, any awarded contract for this requirement will contain the provisions and clauses necessary for issuing cost reimbursable task orders.

e. ANSWER: With this amount of uncertainty and inability to adequately define the scope and quantities of any tasks, and looking at the guidance in the FAR, it leads one to believe that the use of FFP CLINs is not the intention of the government. As such, we can only conclude that the attached IA-TAC III CLIN Table and Bid Sheet is only being used as an exercise to determine if the bidders have an understanding of the scope of work associated with each CLIN by how much they think it will cost to perform the services: As stated in answers a and b above the Government will use Firm Fixed-price CLINs as well as T&M, Labor hour and Cost reimbursable CLINs to issue task orders for this requirement. Although, the quantities are estimations for bid purposes, the loaded labor rates, Firm Fixed-prices per CLIN unit of issue, negotiated and audited indirect costs, fringe, G&A, profit/fee, ODCs, and any proposed cost for equipment and supplies, if approved and accepted by the Government will be included as permanent cost in the contract.

f. ANSWER: We also conclude that the escalation factors being requested are only for the purposes of developing a general understanding of what the market place thinks will be prices in the future for developing future budget requests. We do not see that the Table is anticipated to be used for pricing any future task orders under the contract, since the scope and quantities are not known: Contractors shall provide the actual percentage that is being applied to escalate the cost/price for each of the option periods in an awarded contract and subsequent task order.