DoD Exploring Unpriced Schedule Options

Posted Oct 31, 2018 by
John C.

Several years ago, the General Services Administration (GSA) raised the idea of having an “unpriced” contract schedule. The motivation was to evaluate contractors on their capabilities, past performance, and overall skillsets, and not focus on price as a primary factor in early stages. The price competition would then happen at the task order level.

The idea of an unpriced schedule would constitute a seismic shift in the Federal market where price has always been a considerable factor in the evaluations of bids. GSA’s success with the One Acquisition Solution for Integrated Services (OASIS) professional services contract vehicles, and the Human Capital and Training Solutions (HCaTS) procurement is one reason to believe this shift could be successful and beneficial for government and contractors.

To pursue this course of action, the Defense Department submitted a legislative proposal to Capitol Hill to remove price as an evaluation factor, and there was language supporting this concept in the 2017 Defense Authorization bill, according to Alan Chvotkin, senior vice president and general counsel at the Professional Services Council.

More recently, pursuant to Section 876 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 which amends 41 U.S.C. 3306(c), Federal agency heads now have the discretionary authority to not include price or cost as an evaluation criterion when awarding services contracts containing hourly rates. This legislation effectively establishes an unpriced schedules contract that will significantly alter the existing pricing strategy, drive competition by providing increased flexibility, reduce costly and burdensome oversight mechanisms, and reduce barriers to entry into the marketplace.

The Federal Acquisition Regulatory (FAR) Council is currently drafting a proposed rule that would allow DoD, the Coast Guard, and the National Aeronautics and Space Administration (NASA) to award multiple-award task order contracts for services without considering price or cost as an evaluation factor. Under the proposed rule, however, the government would still be required to consider price or cost when awarding task orders on a contract. A report on the proposed rule from the FAR Council’s Acquisition Strategy Team is currently scheduled to be complete on 14-NOV-18.

There is a renewed focus on evolving changes to government agencies’ culture, challenges and goals in dealing with contractual, financial and audit efforts. St. Michael’s brings successful contract management administrative experience to our clients by leveraging over 11 years of relationship management experience between our firm, clients, customers, teaming partners business associates, and approving government agencies.

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