Recovery Q & A

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Recovery Q & A

Below are Q&As which specifically address topics related to The American Recovery and Reinvestment Act of 2009. These questions were submitted by subscribers to our Virtual Acquisition Office subscription service. For each question up to a four-hour-level-of-effort response is provided.

Given that one project labor agreement (PLA) may be different from another in terms of the issues each addresses, what criteria should the agency consider to determine if a specific PLA is in the best interest of the government for a specific construction project?

A service organization is working on stimulus guidance and trying to develop some standard contract terms and conditions for national use. The service organization is looking at how much insurance should be required on our jobs based on the size of the project. In Federal Acquisition Regulation (FAR) 28.307-2, the minimums listed have not changed or been adjusted for inflation since before 1995. Is there is any additional guidance available about insurance that could be explored?

In light of the Recovery Act, we expect there will be much greater focus on contract documentation and review and we are looking to develop a contract review checklist that could be used to ensure that all Departmental contracts are adequately documented and properly reviewed. Please research what other agencies are using for checklists/review documents.

Do you have any sample evaluation plans for a competition task order process under a multiple award indefinite-delivery, indefinite-quantity (IDIQ) for construction? We seem to be treating construction task order evaluations as source selection procurements.

It has long been debated whether "construction" could be deemed a "commercial item." Rather than discuss the definition, I am interested in pros and cons of using FAR part 12 when buying true-blue construction services (e.g., building a five-story structure).

Do you have any information on incentives for construction contracting? We are looking for agency guidance, solicitation/bids to review, articles, etc.

Question:
Given that one project labor agreement (PLA) may be different from another in terms of the issues each addresses, what criteria should the agency consider to determine if a specific PLA is in the best interest of the government for a specific construction project?

Your question is both perceptive and timely. Given President Obama's February publication of E.O. 13502 reinstating permission to use project labor agreements (PLAs) for U.S. government funded construction contracts, coupled with the release of economic stimulus funding, savvy acquisition managers will quickly want to become knowledgeable regarding PLAs.
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Question:
A service organization is working on stimulus guidance and trying to develop some standard contract terms and conditions for national use. The service organization is looking at how much insurance should be required on our jobs based on the size of the project. In Federal Acquisition Regulation (FAR) 28.307-2, the minimums listed have not changed or been adjusted for inflation since before 1995. Is there is any additional guidance available about insurance that could be explored?

Background:
Federal Acquisition Regulation (FAR) 28.307-2 outlines minimum insurance requirements for cost-reimbursement contracts and for fixed-price contracts exceeding the simplified acquisition threshold that require work on a government installation. Currently, FAR 28.307-2 requires the following insurance:

Workers' compensation and employer's liability - Contractors must comply with applicable federal and state workers' compensation and occupational disease statutes. A minimum employer's liability coverage of $100,000 is required.
General liability - $500,000 per occurrence for bodily injury. Property damage liability insurance is required only in special circumstances as determined by the agency.
Automobile liability - Policy must provide for bodily injury ($200,000 per person and $500,000 per occurrence) and property damage ($20,000 per occurrence).
Aircraft public and passenger liability - $200,000 per person (multiplied by the number of passengers or seats, whichever is greater) and $500,000 per occurrence for bodily injury; $200,000 per occurrence for property damage.
Vessel liability - Amount for vessel collision liability and protection and indemnity liability to be determined by the agency.

The FAR allows these minimums to be reduced when a contract is to be performed outside the United States and its outlying areas.
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Question:
In light of the Recovery Act, we expect there will be much greater focus on contract documentation and review and we are looking to develop a contract review checklist that could be used to ensure that all Departmental contracts are adequately documented and properly reviewed. Please research what other agencies are using for checklists/review documents.

Your research produced only one agency that has posted contract file compliance checklists to use when performing reviews of contract files.
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Question:
Do you have any sample evaluation plans for a competition task order process under a multiple award indefinite-delivery, indefinite-quantity (IDIQ) for construction? We seem to be treating construction task order evaluations as source selection procurements.

Background:
The intent of setting up IDIQ contracts is indeed to simplify the awarding of individual orders, saving time at the point of need. The basic regulatory requirements (for fair opportunity competitions in general, not just construction) include:

Federal Acquisition Regulation (FAR) 16.505(b)(1)(ii), which specifies that submission requirements should be kept to a minimum. Price must be one of the factors considered, and past performance under previous task orders for the contract should be considered. (This makes it imperative that the contractors' performance should be regularly evaluated during the entire contract period, as past performance and price are the only essential evaluation factors in these cases.)

FAR 16.505(b)(1)(iv)(B), which states, "Formal evaluation plans or scoring of quotes or offers are not required."
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Question:
It has long been debated whether "construction" could be deemed a "commercial item." Rather than discuss the definition, I am interested in pros and cons of using FAR part 12 when buying true-blue construction services (e.g., building a five-story structure). I can easily think of benefits, mostly expediency. Can you provide reasons why FAR part 12 should NOT be used for such construction contracts? For example, necessary FAR-clause-based-protection, labor law compliance, price, etc.
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Question:
Do you have any information on incentives for construction contracting? We are looking for agency guidance, solicitation/bids to review, articles, etc.

Background:
Federal Acquisition Regulation (FAR) 36.207(a) states the default policy that "generally, firm-fixed-price contracts shall be used to acquire construction." It goes on to express the preference for lump sum, as opposed to unit pricing, except where the magnitude of the effort cannot be estimated with precision. When an incentive construction contract is used, it is not to be performed at the same site as a fixed-price contract without approval by the head of the contracting activity.

FAR 16.403 describes methods of accomplishing fixed-price incentive contracts, which while not commonly used, are not prohibited for construction. Acquisition Solutions' Response:
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