Over the past several months, this blog has analyzed several key provisions of the Fiscal Year 2019 National Defense Authorization Act (NDAA) that impact government contractors. This post briefly summarizes a variety of other government contracts-related provisions of the FY 2019 NDAA that we have not yet discussed, including several that reflect a congressional intent to enhance the use of multiple-award, indefinite-delivery/indefinite-quantity (IDIQ) contracts and encourage commercial item contracting, several that concern subcontracting and supply-chain considerations, and assorted other issues.
Awarding IDIQ Contracts Without Considering Price to Increase Order-Level Competition.
Section 876 provides a limited exception to the general requirement in 41 U.S.C. § 3306 that agencies must include cost or price to the government as an evaluation factor in evaluating proposals. The exception applies to task-order contracts (i.e., IDIQ contracts) for services that are priced on the basis of hourly rates. Specifically, agencies need not consider price as an evaluation factor for such contracts if:
- the agency will award a base contract to every “qualifying offeror”—meaning a responsible source whose proposal conforms to solicitation requirements, meets all technical requirements, and is otherwise eligible for award; and
- the agency will consider cost or price to the government in competitions for individual task orders.
This provision applies to non-defense agencies. Defense agencies had previously been granted a similar exception in the FY 2017 NDAA. See 10 U.S.C. § 2305(a)(3)(C).
Congress’s goal, as evidenced by the title to section 876, is “Increasing Competition at the Task Order Level.” By awarding base IDIQ contracts to all compliant proposals, without discriminating between them based on price, agencies are likely to have more contract-holders available to compete for specific work at the task-order level. Use of this mechanism should reduce an important barrier to entry to many potential competitors—not holding the necessary IDIQ contract to compete for work solicited under task order solicitations—and, by increasing competition, could result in lower pricing and better technical offerings at the task order level.
Keep reading article at: http://www.mondaq.com/article.asp?articleid=810088
On November 8, 2017, the U.S. Senate and House Armed Services Committees announced that they had reached agreement to reconcile the different versions of the National Defense and Authorization Act (NDAA) for Fiscal Year 2018 passed by the Senate and House earlier in the year.
The Senate version of the NDAA authorizes defense spending at close to $700 billion for Fiscal Year 2018, which begins on October 1. The Senate NDAA’s $700 billion total is more than President Donald Trump requested, and also exceeds the caps set by the Budget Control Act of 2011. In order to provide the authorized $700 billion level through appropriation bills, Congress will need to address the limits of the Budget Control Act and eliminate the threat of sequestration.
As one offeror recently discovered in 
In a recent decision, the answer of the Armed Services Board of Contract Appeals was: not nearly as much as DCAA claimed.
After auditing three LMIS contracts, DCAA questioned $103 million in subcontract costs. DCAA claimed that, for the costs to be allowable, LMIS had to provide documents showing it had: (1) reviewed subcontractor resumes to confirm personnel qualifications; (2) reviewed subcontractor timesheets to confirm the accuracy of invoiced hours; and (3) tried to obtain incurred cost submissions from its subcontractors, contacting “the Government” for “assistance” if the subcontractors refused. DCAA claimed it could find no subcontract costs allowable “[w]ithout an incurred cost submission from the subcontractor,” which was the prime contractor’s responsibility to obtain.
