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    I am developing an RFP to solicit proposals to award an A&AS task order using GSA. I was structuring the TO to have a 12 month base year and 2 12-month options--also including the 6-month option to extend services per FAR 52.217-8. The 6-month option is planned to be an option period on my contract to exercise under the reasons for this clause (i.e. protest against award of follow-on and need to continue current contract). So, this makes my task order, if I exercise all 6 months at the end of contract life, a 42 month task order. I was told, based on the memo, my TO cannot exceed 36 months including the use of the 6-month option under 52.217-8. They are defining "single-award contract action" as applying to my TO award. I do not believe my TO falls under the definition of a "Single-award contract action." My research defines "single-award contract action" as a single award IDIQ or a requirements contract--which are contract vehicles that are used as ordering tools (FAR 16.500). "Single award contract action" is not a TO award or a "C" contract award--but I am told these are also defined as "single-award contract actions" as this term is used in the DPAP memo dated 14 Sep 2010. Please clarify this use of "Single award contract action" in this memo.


    1. The references quoted below in pertinent part are applicable to this response.

    A. FAR 2.101
    “Contract” means a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing. In addition to bilateral instruments, contracts include (but are not limited to) awards and notices of awards; job orders or task letters issued under basic ordering agreements; letter contracts; orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance; and bilateral contract modifications.

    B. Federal Register /Vol. 75, No. 235 /Wednesday, December 8, 2010 /Rules and Regulations
    Defense Federal Acquisition Regulation Supplement; Restrictions on the Use of Mandatory Arbitration Agreements (DFARS Case 2010–D004), Final Rule effective December 8, 2010

    I. Background
    The public comment period for the interim rule closed July 19, 2010. Four respondents submitted comments to the interim rule. A discussion of the comments and the changes made to the rule as a result of those comments is provided below.

    5. Applicability to task or delivery orders. [page 76296]
    One respondent recommended that the language at 222.7401(a), Policy, delete the reference to task or delivery orders and bilateral modifications adding new work.

    Response: DoD does not agree. In accordance with FAR 2.101, a contract includes all types of commitments that obligate the Government to an expenditure of appropriated funds. Task orders and delivery orders obligate funding, and if they utilize funds appropriated or otherwise made available by the DoD Appropriations Act for Fiscal Year 2010 that are in excess of $1 million, the section 8116 restriction would apply.

    C. GAO Decision, Delex Systems, Inc., B-400403, October 8, 2008 [page 8]

    In our view, the legal question is whether the Rule of Two, which by its terms applies to “any acquisition over $100,000,” FAR § 19.502-2(b), applies to individually competed task or delivery orders under multiple-award contracts. We conclude that it does, because, at least for purposes of this analysis, those orders are properly viewed as “acquisitions.” We have previously concluded that a delivery order placed under an ID/IQ contract is, itself, a “contract,” at least for some purposes, see FAR § 2.101, and contracts are covered by the definition of “acquisition” in FAR § 2.101. Letters to the Air Force and Army concerning Valenzuela Engineering, Inc., 98-1 CPD ¶ 51 (Letter to the Air Force at n.1).

    D. DoD AT&L Memorandum for Acquisition Professionals dated Sep 14, 2010 for Acquisition Professionals.pdf
    Subject: Better Buying Power: Guidance for Obtaining Greater Efficiency and Productivity in Defense Spending – Improve Tradecraft in Services Acquisition

    Enhance competition by requiring more frequent re-competes of knowledge based services. [p.12]
    To improve competition in services, I will require the military departments and DoD components to review the length of time that services contracts remain in effect before re-competition occurs. Single-award contract actions should be limited to three years (including options) unless, by exception, it is fully justified for longer periods by the senior manager for services. Contract length should be appropriate for the activity performed. Knowledge-based services readily meet the three-year limit.

    E. DoD AT&L Memorandum for Secretaries of the Military Departments, Directors of the Defense Agencies dated Nov 3, 2010
    Subject: Implementation Directive for Better Buying Power - Obtaining Greater Efficiency and Productivity in Defense Spending – Improve Tradecraft in Services Acquisition

    Enhance competition by requiring more frequent re-competes of knowledge-based services: [p. 5-6]
    By January 31, 2011, you will conduct a review of the length of time knowledge-based services contracts within your agency or component are scheduled to remain in effect before re-competition occurs and report the results to me. Single-award actions should normally be limited to three years (including options). I specifically exempt Federally Funded Research and Development Center (FFRDC) contracts and University Affiliated Research Center (UARC) contracts from this three-year policy given the strategic, long-term nature of their contracts and their unique relationship with the Department. By March 1, 2011, you will provide me with a plan to bring knowledge-based services contracts within your agency or component into closer compliance with the three-year general limitation.

    F. DAU Service Acquisition Mall – Knowledge Based Services (A&AS)

    Knowledge Based Services, commonly referred to as Advisory and Assistance Services (A&AS), relates to tasks that require the application of detailed processes or technical knowledge. A&AS pertains to the details provided under contract by nongovernmental sources to support or improve organizational policy development, decision-making, management and administration, program and/or project management and administration, or research and development (R&D) activities.

    2. First, please be advised that we disagree with the underlying premise of this inquiry that task orders (TOs) are not contracts (i.e., “Single award contract action" is not a TO award”).  As defined in FAR 2.101, a contract includes all types of commitments that obligate the Government to an expenditure of appropriated funds, which would include “orders”. As indicated in reference 1B above, the DAR Council has unequivocally stated that the definition of “contract” in FAR 2.101 includes task and delivery orders because these vehicles obligate funding. Furthermore, as described in reference 1C above, the GAO has also interpreted the definition of “contract” in FAR 2.101 to include task orders because they are properly viewed as individual “acquisitions” and are contracts in and of themselves.

    3. Therefore, based on the definition of a “contract” as set forth in FAR 2.101 as interpreted by the DAR Council and the GAO, the “award” of any task order represents a contract action. Consequently, even if competitive procedures under GSA’s Federal Supply Schedule program as authorized by FAR Subpart 8.4 are being used, we conclude that the award any resultant task order with options for Advisory and Assistance Services (A&AS) as described in this inquiry to only one of the competing Federal Supply Schedule contractors would constitute a “single award contract action”.

    4. Based on the above, the DoD policy as described in both references 1D and 1E regarding single award contract actions most certainly does apply to the contemplated use of a “task order with options” under the GSA Supply Schedule program to acquire the Advisory and Assistance Services in question. Therefore, pursuant to these DoD policy letters, we recommend that the contracting office either (1) limit the maximum performance period (i.e., base year, option years and the FAR 52.217-8 option extension) of this task order to no more than three years or (2) obtain a waiver that is fully justified for any longer period of time from the cognizant “senior manager” in accordance with your Service’s implementation procedures.

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