Increasing Federal Contract Competition Through “Unpriced” Contracts

The world of federal acquisitions is known for its complexity and burdensome rules around contract competitions. The federal acquisition environment is also known for the slow rate at which procurement rules change to adapt to current needs and how rare it is for major changes to come down the pike. But some of that appears ready to change.

In our recent report Federal Acquisition Landscape, 2021 we examine the trends, policies and legislation shaping the procurement of goods and services by U.S. government agencies. Throughout our analysis we outline the developments in agency acquisition processes and methodologies that impact federal contractors’ business development strategies. We also provide near-term and long-term recommendations for contractors navigating this market.

One aspect of the federal acquisition landscape that appears poised for a significant sea change is that of how government-wide acquisition vehicles – and specifically multiple-award Indefinite Delivery/Indefinite Quantity (IDIQ) contracts – are structured and evaluated for price competitiveness. The government is shifting price concerns off the initial awards of IDIQs and onto the individual task orders that follow.

Increasing Competition Through “Unpriced” Contracts

Two similar Federal Acquisition Regulation (FAR) rules, driven by provisions in the FY 2017 and FY 2019 National Defense Authorization Acts (NDAA), aim to increase competition at the task order level by allowing for what are essentially unpriced contracts and schedules.

Both provisions allow contracting offices to award multiple award task order contracts for services without considering price or cost as an evaluation factor for the base award. Further, both provisions apply in instances where the government intends to make a contract award to all qualifying offerors for the same or similar services, which is a key aspect to note as things move forward.

The FY 2017 NDAA included the provision that applies to the evaluation of multiple-award Indefinite Delivery/Indefinite Quantity (IDIQ) contracts at the Department of Defense (DOD), the National Aeronautics and Space Administration (NASA) and the U.S. Coast Guard. That final FAR rule became effective near the beginning of August 2020.

Section 876 of the FY 2019 NDAA expanded upon the scope of the earlier provision to make this applicable to all civilian agencies for IDIQ contracts and Federal Supply Schedule (FSS) contracts for services that are priced at an hourly rate. The resulting FAR rule is pending review and report by the FAR Acquisition Environmental and Contract Management team and the pending rule will be open for comment for several weeks, so the final rule is still very pending.

Implications

The impacts of these provisions promises to be one of the most significant adjustments to IDIQs in years, and we are about to see just how true this is. Recently, the General Services Administration (GSA) released the solicitation for its new 10-year ASTRO IDIQ contract vehicle to acquire manned, unmanned, and optionally manned platforms and robotics, along with related services. GSA has made the decision to include the Section 876 authorities as a key feature of this new solicitation. (You may get all of the details and track ASTRO’s progress on GovWin here.)

GSA hopes that the end result will be fewer protests of the main contract awards and overall better pricing on the task orders that follow. Hopefully, that is indeed the case. Further, let’s hope that this approach broadens the pool of awardees as well as speeds the up-take utilization of the new IDIQ.

Still, all this may that may depend on how those future task orders are structured and evaluated. As other NDAA provisions have grown up that allow protests of certain task orders, it is unclear whether the Section 876 provision will simply shift protests farther downstream to the individual task orders that follow. I would imagine that contractors winning a spot on ASTRO and other contract vehicles that employ the Section 876 provisions won’t be reassigning their contract attorneys too quickly.

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Want to know more about the major trends in federal acquisitions affecting the contracting community? Check out the full report: Deltek’s Federal Acquisition Landscape, 2021.