Question

If your agency decides to limit competition for the BSVD contract, which FAR Subpart 6.3 exception is best justified in relation to the facts presented? Provide rationale for your response to include addressing any unique requirements contained in the FAR Subpart 6.3 exceptions. (2 points)
Undefinitized Contract Actions (UCAs) – 4 points total

DFARS Subpart 217.74

In analyzing your alternatives to get this requirement on contract rapidly and responsibly, you are now considering using a letter contract - a type of undefinitized contract action (UCA). Under a UCA, the contractor starts work before all contract terms, specifications, or prices are agreed upon.
Identify and explain four risks that are introduced into a program by use of a UCA. For each identified risk, what limitation in DFARS 217.7404 could be used to mitigate that risk? Explain. (1/2 point for each identified risk with supporting rationale and ½ point each for identifying and explaining how the applicable DFARS 217.7404 limitation mitigates that risk – total of 4 points)

Answer 1

Answer:

6.302-1-  

Only one responsible source and no other supplies or services will satisfy agency requirements. This authority shall be used, if appropriate, in preference to the authority in 6.302-7; it shall not be used when any of the other circumstances is applicable. Use of this authority may be appropriate in situations when there is a reasonable basis to conclude that the agency’s minimum needs can only be satisfied by unique supplies or services available from only one source or only one supplier with unique capabilities; or for DoD, NASA, and the Coast Guard, unique supplies or services available from only one or a limited number of sources or from only one or a limited number of suppliers with unique capabilities.  

It appears that Nanotech is the only commercial entity with technology that is mature enough to potentially meet the stringent 90 day criteria for delivery of working prototypes

Undefinitized Contract Actions (UCAs)

Risk:  Improper justification of the issuance of a UCA, or undefined UCA approval delegations  

Mitigation: DFARS 217.7404-1  - The contracting officer shall obtain approval from the head of the contracting activity before entering into a UCA.  The request for approval must fully explain the need to begin performance before definitization, including the adverse impact on agency requirements resulting from delays in beginning performance.

Risk:  The contractor has little incentive to control costs during the undefinitized period, creating a potential for wasted taxpayer dollars.  

Mitigation:  This is mitigated by DFARS 217.7404-2 which requires UCAs to include a not-to-exceed price.  DFARS 217.7404-4 provides that the Government shall not obligate more than 50 percent of the not-to-exceed price before definitization.

Risk:  Definitation dates may not be met.  

Mitigation:  This is mitigated by DFARS 217.7404-3 - In order to meet the definitization dates, the contracting officer shall closely coordinate and monitor each UCA. Contracting officers should frequently communicate with the program office and requiring officials as appropriate to actively manage the definitization of UCAs. The contracting officer should alert the approval authority if, for any reason, the definitization schedule appears to be in jeopardy.

Risk:  Failure to obligate funds within allowable limits for UCA

Mitigation:  This is mitigated by DFARS 217.7404-4.  Where the Government shall not obligate more than 50 percent of the not-to-exceed price before definitization.  However, if a contractor submits a qualifying proposal before 50 percent of the not-to-exceed price has been obligated by the Government, then the limitation on obligations before definitization may be increased to no more than 75 percent (see 232.102-70 for coverage on provisional delivery payments).   In determining the appropriate amount to obligate, the contracting officer shall assess the contractor’s proposal for the undefinitized period and shall obligate funds only in an amount consistent with the contractor’s requirements for the undefinitized period.