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    1. Is there authority that restricts contracts with UARCs to the type let by the sponsoring agency or allows deviation from that type? If so what is it. 2.The UARC management plan states, " The term average is defined as over the length of their contract(s), but not more than 5 years." What authority would allow a contract to go beyond 5 years. Is there an authority that would allow a contract for more that 5 years? If so what is it and who can approve a contract for more than 5 years.


    Answer

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

    FY10 DoD University Affiliated Research Center (UARC) Management Plan dated July 2010 (as issued under the Director of Defense Research and Engineering Memorandum dated 08 Aug 2010)
    B.  Applicability.
      2. College and University laboratories that receive sole source funds on average, exceeding $6 million annually under authority of 10 U.S.C. 2304(c)(3)(B), to establish or maintain an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center, and are designated UARCs by the Director, Defense Research and Engineering (DDR&E), are subject to this plan.  The term average is defined as over the length of their contract(s), but not more than 5 years.
      3. There exist college and university laboratories that receive sole source funds, but are not considered UARCs.  These fall under two categories:
       a. College or university laboratories that receive on average less than $6 million annually under the authority of 10 U.S.C. 2304(c)(3)(B) are not considered UARCs.
       b. College and university laboratories that receive sole source funds in excess of $6 million annually, but under authorities other than 10 U.S.C. 2304(c)(3)(B) are not considered UARCs.  DoD does not fund these institutions to establish or maintain an essential capability.  Rather, DoD uses these organizations because of other considerations. 

    C.  Definitions.
      1. UARC.  A UARC is an organization which has the following characteristics:
       a. It is a research organization within a university or college.
       c. It receives sole source (non-competitive) contract funding from DoD under the authority of 10 U.S.C. 2304(c)(3)(B) … .  It may also receive DoD funding under other authorities, or funding from other sources, which is therefore not subject to this plan.
       d. On average, it receives in excess of $6M annually from DoD of such sole source funds.
      2. Primary Sponsor.  One DoD Service or Agency formally designated as primary sponsor by the DDR&E for each UARC.  The primary sponsor works with Contracting Activities in implementing DoD’s UARC management  policies and procedures.
      3. Contracting Activity.  A Contracting Activity is a DoD component that awards a contract or contracts under the authority of 10 U.S.C. 2304(c)(3)(B) to a UARC. 
      4. Tasking Activity.  A Tasking Activity is the DoD entity that requires and funds the services of a UARC for performance of DoD specific work.

    D.  Policy
      4. UARCs are not restricted to providing support only in early science and technology (6.1 basic and 6.2 applied research) programs.  UARC core competencies may also be available to support advanced technical development and advanced component development and prototype engineering programs (6.3 and 6.4) when resources are available.

    E.  Responsibilities
      2. A UARC Primary Sponsor shall:  
      f. Review UARC contractual relationships for consistency with provisions of the Management Plan.
      h. Collaborate, as needed, with Tasking Activities and UARCs to define and prioritize UARC work in a manner that is responsive to overall DoD priorities.  A Primary Sponsor shall not reject work going to the UARC from other DoD organizations without sufficient cause.
      3. A Contracting Activity shall:
      a. Implement and ensure agency contracts are consistent with the UARC Management Plan.
      b. Ensure that all work performed under the authority of 10 U.S.C. 2304(c)(3)(B) is consistent with the UARC’s DoD mission and its core competencies.
      4. A Tasking Activity shall:
      d. Provide the Primary Sponsor and the Contracting Activity the rationale for selecting the UARC as the performer of choice for each task.
      e. Collaborate, as needed, with the UARC Primary Sponsor and the UARC to define and prioritize UARC work in a manner that is responsive to overall DoD priorities.
     
    F.  Procedures
      1. Contracts.  The instrument(s) under which the UARC performs DoD work pursuant to 10 U.S.C 2304(c)(3)(B) shall be a contract or contracts between the UARC and Contracting Activities, and will be subject to the principles and guidelines of this Management Plan and consistent with the appropriate sections of the Federal Acquisition Regulation. 

    FAR 16.405-1 -- Cost-Plus-Incentive-Fee [CPIF] Contracts
     (b) Application
       (1) A cost-plus-incentive-fee contract is appropriate for development and test programs when -- (i) A cost-reimbursement contract is necessary; and (ii) A target cost and a fee adjustment formula can be negotiated that are likely to motivate the contractor to manage effectively.
       (2) The contract may include technical performance incentives when it is highly probable that the required development of a major system is feasible and the Government has established its performance objectives, at least in general terms. This approach also may apply to other acquisitions, if the use of both cost and technical performance incentives is desirable and administratively practical.

    FAR Subpart 16.5 -- Indefinite-Delivery Contracts
    FAR 16.505 -- Ordering

    (c)  Limitation on ordering period for task-order contracts for advisory and assistance services.
       (1) Except as provided for in paragraphs (c)(2) and (c)(3), the ordering period of a task-order contract for advisory and assistance services, including all options or modifications, normally may not exceed 5 years.
       (2) The 5-year limitation does not apply when--  (i) A longer ordering period is specifically authorized by a statute; or (ii) The contract is for an acquisition of supplies or services that includes the acquisition of advisory and assistance services and the Contracting Officer, or other official designated by the head of the agency, determines that the advisory and assistance services are incidental and not a significant component of the contract.

    FAR Subpart 17.1 -- Multi-Year Contracting
    FAR 17.104(a) – Multi-year contracting is a special contracting method to acquire known requirements in quantities and total cost not over planned requirements for up to 5 years unless otherwise authorized by statute.

    FAR 17.106-3 -- Special Procedures Applicable to DoD, NASA, and the Coast Guard
    (d) Contracts awarded under the multi-year procedure shall be firm-fixed-price, fixed-price with economic price adjustment, or fixed-price incentive.

    FAR Subpart 22.10 -- Service Contract Act of 1965, as Amended
    FAR 22.1002-1 -- General.  Under 41 U.S.C. 353(d), service contracts may not exceed 5 years.

    DFARS Subpart 217.2--Options
    DFARS 217.204 -- Contracts

    (e)(i) Notwithstanding FAR 17.204(e), the ordering period of a task order or delivery order contract (including a contract for information technology) awarded by DoD pursuant to 10 U.S.C. 2304a— (C) Shall not exceed 10 years unless the head of the agency determines in writing that exceptional circumstances require a longer ordering period.

    DFARS 207.103 Agency-head responsibilities
    (d)(i) Prepare written acquisition plans for— (A) Acquisitions for development, as defined in FAR 35.001, when the total cost of all contracts for the acquisition program is estimated at $10 million or more

    2. In response to the first part of this inquiry, we can find no express limitation in the FY10 DoD UARC Management Plan (hereinafter, “the Plan”) that restricts contracts with UARCs let by Contracting Activities to the contract type let by the sponsoring agency. In fact, DoD policy as stated in paragraph D.4 of the Plan states that UARCs are not restricted to providing support only for 6.1 basic and 6.2 applied research programs, which are usually awarded on a CPFF basis, but that UARC core competencies may also be used to support advanced technical development and advanced component development and prototype engineering programs (6.3 and 6.4). Typically, it is possible to devise predetermined objective incentive targets applicable to cost and technical performance for 6.3 and 6.4 type programs, which would lead to the use of CPIF type contracts as prescribed in FAR 16.405-1(b). Therefore, quite to the contrary, we believe that DoD Policy and Procedures as expressed in paragraphs D.4 and F.1, respectively, of the Plan would permit the use of different contract types with a given UARC depending upon the nature of the development work being that is being acquired by the Contracting Activity from that UARC.

    3. The second part of this inquiry is concerned with a possible “5-year” limitation on the UARC contract period of performance.  In response, the statement in paragraph B.2 that: “The term average is defined as over the length of their contract(s), but not more than 5 years,” must be read in context with the rest of this paragraph, with paragraph B.3, and with the definition of a UARC in Section C.1 as described above. When read in context, this statement does not mean that the UARC Management Plan mandates a maximum 5-year performance period for any UARC contract.  Rather, it refers to the annual average amount of sole source funding under the authority of 10 U.S.C. 2304(c)(3)(B) that a research organization within a university or college must receive to establish or maintain an essential engineering, research, or development capability in order to be considered a UARC.  As specified in paragraph B.3.a of the Plan, college or university laboratories that receive on average less than $6 million annually under the authority of 10 U.S.C. 2304(c)(3)(B) are not considered to be UARCs.  Therefore, the term “average” means the time period over which the UARC must receive such annual sole source funding of at least $6 million, which time period may vary from the length of the UARC contract to “no more than 5 years”, in order to maintain its status as a UARC.

    4. With regard to time limits on the length of DoD contracts in general, our review of the FAR and DFARS as described above indicates that contract performance period limitations are only applicable to the following categories of contracts. Each of these contract categories either have specified approval requirements, or would require a FAR deviation, to exceed these limitations.
    • Task-order contracts for advisory and assistance services (5 years)
    • Multi-year contracts (for DoD, restricted to fixed-price type contracts) (5 years)
    • Service contracts (5 years)
    • Task order or delivery order contracts with options (10 years)
    Therefore, if the contract being awarded to the UARC does not fall within any of the contract categories listed above, then there is no limitation specified in the FAR governing the length of the contract performance period.

    5. However, if the UARC acquisition is for a 6.3 or 6.4 development effort, then the probable dollar value of the acquisition would require the development and approval of a written Acquisition Plan that would state the proposed contract type and contract performance period.  Based on the responsibilities of Contracting Activities and Tasking Activities as set forth in the Plan as described above, this Acquisition Plan would require the approval of the DoD Primary Sponsor for the UARC so that the sponsoring agency can fulfill its obligations under the Plan to review UARC contractual relationships for consistency with provisions of the Plan and to collaborate with Tasking Activities and UARCs to define and prioritize UARC work in a manner that is responsive to overall DoD priorities. As stated in paragraph E.2.h of the Plan, a Primary Sponsor shall not reject work going to the UARC from other DoD organizations without sufficient cause.



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