Can the current J&A be amended to incorporate the purchase of the equipment in question or will a new J&A be required?
Is there another contracting means in which the Government can purchase the equipment from the contractor?
1. The FAR references quoted below in pertinent part are applicable to this response.
FAR 2.101 – Definitions
“Sole source acquisition” means a contract for the purchase of supplies or services that is entered into or proposed to be entered into by an agency after soliciting and negotiating with only one source.
“Supplies” means all property
except land or interest in land. It includes … the alteration or installation
of any of the foregoing.
FAR 5.001 -- Definition
“Contract action,” as used in this part, means an action resulting in a contract, as defined in Subpart 2.1, including actions for additional supplies or services outside the existing contract scope
, but not including actions that are within the scope and under the terms of the existing contract,
such as contract modifications issued pursuant to the Changes clause, or funding and other administrative changes.
FAR 5.101 -- Methods of Disseminating Information
(a) As required by the Small Business Act, contracting officers must disseminate information on proposed contract actions as follows:
(1) For proposed contract actions expected to exceed $25,000, by synopsizing in the GPE (see 5.201).
FAR 5.201 -- General
(b)(1) For acquisitions of supplies and services, … the contracting officer must transmit a notice to the GPE, for each proposed --
(ii) Modification to an existing contract for additional supplies
or services that meets the threshold in 5.101(a)(1)
FAR 5.203 -- Publicizing and Response Time
(a) An agency must transmit a notice of proposed contract action to the GPE (see 5.201). All publicizing and response times are calculated based on the date of publication. The publication date is the date the notice appears on the GPE. The notice must be published at least 15 days before ... a proposed contract action the Government intends to solicit and negotiate with only one source under the authority of 6.302.
FAR 6.301 -- Policy
(c) Contracting without providing for full and open competition shall not
be justified on the basis of --
(2) Concerns related to the amount of funds available … to the agency or activity for the acquisition of supplies or services.
(d) When not providing for full and open competition, the contracting officer shall solicit offers from as many potential sources as is practicable under the circumstances.
FAR 6.302-1 -- Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements
(2) When the supplies or services required by the agency are available … from only one or a limited number of responsible sources, and no other
type of supplies or services will satisfy agency requirements, full and open competition need not be provided for.
(i) Supplies or services may be considered to be available from only one source if the source has submitted an unsolicited research proposal … .
(ii) Supplies may be deemed to be available only from
the original source in the case of a follow-on contract for the continued development or production of a major system or highly specialized equipment, including major components thereof, when it is likely that award to any other source would result in --
(A) Substantial duplication of cost to the Government that is not expected to be recovered through competition, or
(B) Unacceptable delays in fulfilling the agency’s requirements.
(2) For contracts awarded using this authority, the notices required by 5.201 shall have been published
and any bids, proposals, quotations, or capability statements must have been considered.
FAR 6.303-1 -- Requirements
(a) A contracting officer shall not
commence negotiations for a sole source contract … without providing for full and open competition unless the contracting officer --
(1) Justifies, if required in 6.302, the use of such actions in writing;
(2) Certifies the accuracy and completeness of the justification; and
(3) Obtains the approval required by 6.304.
FAR 6.305 -- Availability of the Justification
(a) The agency shall make publicly available the justification required by 6.303-1 … . [T]he justification shall be made publicly available within 14 days after contract award.
(d) The justifications shall be made publicly available –
(1) At the Government Point of Entry (GPE) www.fedbizopps.gov
2. As indicated by the facts described in this inquiry, the acquisition of “contractor-owned” equipment was not included in the existing contract. Therefore pursuant to the definition in FAR 5.001
, the purchase of this IS equipment via a contract modification would constitute a new “contract action” for the acquisition of additional supplies outside the existing contract scope. Because this contemplated purchase would represent a new contract action, our opinion is that the execution of a separate Justification and Approval (J&A) pursuant to FAR 6.303-1
would also be required.
3. This inquiry also states that: “The purchase amount of the equipment ($210k) will not exceed the contract ceiling.” This statement seems to imply that there are sufficient contract funds remaining that the customer desires to use to fund a contract modification for the purchase of this equipment. Please note that pursuant to FAR 6.301(c)(2)
, the fact that there may be excess funding to cover a new contract action can never be used to justify acquisition by “Other Than Full and Open Competition” (i.e., justifying a contract modification adding new work that is outside the scope of that existing contract).
4. Using a contract modification to add new work that is outside the scope of that contract constitutes a sole source acquisition as defined in FAR 2.101
quoted above, which in turn would require a J&A executed under the authority of FAR 6.302-1(a)(2)
quoted in pertinent part above. The authority described in FAR 6.302-1(a)(2)(i)
does not apply because this acquisition does not involve an unsolicited research proposal. The authority described in FAR 6.302-1(a)(2)(ii)
might apply if the information systems (IS) equipment in question involves “highly specialized equipment” that also meets the conditions stipulated in FAR 6.302-1(a)(2)(ii)(A)
or in FAR 6.302-1(a)(2)(ii)(B)
. If this IS equipment does not meet these conditions, then the authority described above justifying a sole source acquisition would not apply. (In that case, full and open competition may be the only viable approach.)
5.Also as described in FAR 5.101(a)(1)
and in FAR 5.201(b)(1)(ii)
, the contracting officer must transmit a notice to the GPE (i.e., http://www.fedbizopps.gov
) for this proposed contract action because it would represent a modification to an existing contract for additional supplies exceeding $25,000. Furthermore if sole source, then FAR 6.302-1(d)(2)
obliges the contracting officer to have published the notice required by FAR 5.201(b)(1)(ii)
in the GPE and then to consider any bids, proposals, quotations, or capability statements submitted in response to this notice from other potential suppliers.
6. Given the limited information provided in this inquiry and based on the analysis presented above, the contracting officer could attempt to process a new J&A for this contract action that is compliant with both the authority under FAR 6.302-1(a)(2)(ii)
and with the requirements of FAR 6.303-1(a)
which would authorize a contract modification for the acquisition of the incumbent contractor-owned IS equipment. Pursuant to FAR 5.201(b)(1)(ii)
and FAR 6.302-1(d)(2)
, the contracting officer must also simultaneously publish an appropriate notice of this proposed sole source contract action in the GPE for a period of 15 days pursuant to FAR 5.203(a)
. If no responses are received after this 15-day notice period, then the contracting officer could proceed with the contemplated contract modification authorized by a compliant J&A. Finally pursuant to FAR 6.305
, this J&A would be made available at the GPE within 14 days after award.
7. However if the notice in the GPE of this proposed sole source contract action should result in the submittal of capability statements from other responsible, potential suppliers, then the contracting officer should consider the use of full and open competition for this requirement (i.e., acquisition, including installation, of IS equipment in similar or better condition that that owned by the incumbent contractor). Or if the circumstances warrant, the contracting officer may restrict the competition for this requirement to a limited number of responsible sources in accordance with FAR 6.301(d)
and FAR 6.302-1(a)(2)
provided that this action is authorized by a compliant J&A. In either case, such competition could probably result in a lower cost to the customer than the $210K that is apparently being quoted by the incumbent contractor.