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  • Question

    Is it possible to award a sustainment services type contract with ceiling to accommodate known unknowns even if your current POMed workload is less that you want your ceiling for? What can I do to convince my CO this is the right thing to do?


    Answer

    Without knowing all of the facts, I’ll keep this at a high level.
     
    The only way you can convince your contracting officer to have a higher ceiling amount is to build a better business case!  It must include an analysis on the probability the “known workload” will increase to $700M.  It must also show that the workload increase will be of the same “work effort” as the current workload (i.e. skill set, materials, equipment, technology, etc.).  Finally, it should show a cost benefit analysis of avoiding another major source selection.
     
    The Defense Acquisition Guide (DAG), Chapter 3 may be of help in developing the business case.
     
    See, your contracting officer is following the rules they were taught to follow.  They are only allowed to contract for known requirements.  When the requirements are not firmly known, ceiling limits must be reasonable.  In addition, competition requirements and contract lengths also prevent contracting officers from awarding contracts with excessive ceiling amounts to account for future contingencies.
     
    In addition, your contracting officer may be doing you a favor and helping you to protect your budget.  Depending on the contract type (you said yours would have many different types-were assuming line items), the contractor has no incentive to control costs except the ceiling price!
     
    Also, there are other considerations involving appropriations law which may be driving your contracting officer’s decision (e.g. bona fide need, etc.).
     
    Finally, don’t be overly alarmed; there is always the possibility that if your workload does in fact increase sooner rather than later, your contract can be modified to increase the ceiling.  This will be fact dependent and require, at minimum, a scope determination.  And… at that time you will have a lot more insight and fidelity into how the contractor is performing, how and what they are incurring costs on, etc. and be in a fairly good negotiation situation.


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