A December 2008 research study was conducted to determine variations and common characteristics among 24 active multiple-award contracts across the federal government, specifically focusing on military use within the realm of construction. The study employed a rigorous content analysis methodology. The research utilized a cross-section of current contracts from the U.S. Coast Guard, Navy, Air Force and U.S. Army Corps of Engineers in an effort to determine the similarities and differences among the contracts from agency to agency as well as between offices or regions within a single agency. The resultant findings categorize key characteristics within each of the contracts to determine where they are in line with and where they diverge from one another.
These characteristics include price, length of contract, option years, number of awardees, parent contract award criteria, task order award criteria, bid requirement on each task order, non-bid termination, incentives/liquidated damages, non-completion liability, contractor award during design, subcontracting, warranty length and type, design-build capability, sustainable design capability, maintenance capability and value engineering. The research consequently establishes a characteristic base and makes apparent the differences and similarities in use and content within public-sector multiple-award contracts. The findings of this research offer insight into the current state of practice for MACCs. This article touches on a few of the highlights from this research.
Of the 24 contracts analyzed, different federal agency contracts used several different criteria to select contractors for award of a parent contract. All but one contract studied used “best value” in their selection process, but many agencies had different methods of determining best value. Some contracts established an evaluation of qualifications alone to select contract awardees, while other contracts based selection on evaluation of a seed or sample project. Finally, several contracts laid out a two-phase selection process that helped the evaluation team narrow its pool of prospective contractors using a two-tier approach.
One can see areas where a government contracting office might make changes to its contracting methods after reviewing these research results. For instance, when using a seed project to evaluate prospective contractors, it may be more cost effective to use a seed project that will be constructed rather than using a sample project where the results are only used to evaluate the prospective contractors. The use of the seed project gives the contracting office a head start in getting its first project task order under the multiple-award contract underway, while to some extent, the sample project only exercises the contractor in preparing a project proposal that will never come to fruition.
Individual task order award factors used best value as well as “low bid” to determine their preferred contractor per task order. The exception used an innovative rotational basis for award that appeared to give the government an advantage in reducing lead time. The contract accomplished this by eliminating the need to bid individual task orders. Of those contracts that used best value or low bid, the ones that allowed the use of either method per task order appeared to offer the most appropriate award criteria. In this case, users were not limited to low bid where the nature of the project required particular qualifications, and conversely not required to execute a full technical evaluation team review of evaluation criteria when the project warranted a lowest-price-technically-acceptable award.
In terms of individual task orders, a small number of contracts included the option to pay each contractor submitting a project proposal a stipend realizing that the effort to prepare a preliminary design for a design-build offer can often be significant, especially on larger projects or those of a specialized nature. This language was included in the contract to specifically read “At the contracting officer’s discretion” to prevent abuse or excessive compensation. When offered, the stipends were neither promised, guaranteed, nor intended to provide total reimbursement for proposal preparation fees. Offering proposal compensation is a potential approach to incentivizing the meaningful development of project proposals and ultimately maximizing the effort and innovation given to each.
Task order bid requirements produced a wide array of results in that some parent contracts contained requirements while other contracts omitted them entirely. Contracts researched most commonly required contractors in a parent contract (where there are a limited number of bidders) to bid on most, if not all, task orders issued under the contract. Most contracts enforced this bid requirement with the option to release the non-responsive contractor at the renewal year. Others went further to include the option to disallow the contractor’s minimum award guarantee should the contractor fail to meet its good-faith bid obligation. Overall, omitting a bid requirement could potentially leave the government contracting office without response on its task orders, in the end leaving them with a less effective contracting vehicle.
Two of the contracts studied reserved the right to issue additional solicitations and award additional contracts within the region covered by the multiple-award contract. This allows the contracting office the ability to supplement their pool of contractors should any be released after the base or option years of the parent contract. Rather than reestablishing an entirely new multiple-award contract, this option may revive an otherwise failing contracting tool.
The study conducted is strictly a cross-section comparison of military application multiple-award contracts. The characteristics found are not intended to be a best practices guide to the development of this type of contract. A best practices guide for this method of contracting has been published by the Government Office of Management and Budget for public-sector offices shifting to a first-time use of multiple-award indefinite delivery-indefinite quantity contracting. This research offer insights into the current state of practice and characteristics being used across the branches of military to construct contracts using the MACC delivery method. It is a look at how the federal government is presently developing and using this contract delivery method. Some characteristics were strongly established within the framework, such as bid requirements and the incorporation of design-build capabilities, while other factors were more scarcely found in their implementation.
In this research, the finding or omission of a contract characteristic from one contract to the next was readily apparent as preference in some instances. In other instances, the contract would clearly benefit from the inclusion of the common characteristics found in the other contracts researched. One could presume that many of the contracts reviewed were the local result of several iterations and lessons learned. This present study took the iterative process a step further to include a compiled list of contract characteristics gathered from several offices and agencies in hopes of greater gains in terms of establishing the most effective contracting vehicle of this type.
To improve effectiveness, it is imperative that federal agencies and their underlying units and offices continually share and solicit information with each other to gain new ideas, find best practices and offer new ways of doing business. Otherwise, each agency has the potential to work within a stovepipe, resulting in each reinventing the wheel on many levels. As shown by this study, working openly across agency lines has vast potential in terms of knowledge sharing and information gain.
*This article is a synopsis of Lt. Wimmer’s larger master’s report that was the culmination of his postgraduate work to earn his Master of Science in Civil Engineering at the University of Colorado, Boulder.