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Which Clauses in the Basic Schedules Contract flow down to Task Orders Issued Against Those Contracts?

Submitted by Brad Powers on Friday, November 30, 2012 - 7:18 PM

 

This is a frequently asked question we cover to some extent in our standard Using GSA Schedules for Professional Services seminar but our friends at the Department of Interior recently pointed out during one of our seminar sessions that there exists no discussion on this topic online (or at least nothing they could find).  Well, I can’t find it either!

In fact, the only mention of this I am aware of on any GSA site is on Section 3, Page 9 of the MAS Desk reference (Online here) where we state that clause 52.217-9 needs to be included in any RFQ when an agency wants to use options on their task orders.  If anyone reading this knows of another location on the GSA portal page (meaning within the gsa.gov domain) where this topic is discussed, please let me know.  I should note that this is not about the flow down of specific clauses from prime contractors to subcontractors.  That is a completely separate topic which is discussed in Clause 52.212-5 in the basic contract.

So assuming there’s not some magical place out there, I am going to take a stab at putting out some general thoughts on both what I believe flows down and what I believe an ordering officer will need to add to their RFQ.  Philosophically, I think it would be hard to argue that a clause required by statute or regulation doesn’t flow down to a task order.  For example, Clause 52.222-26 EQUAL OPPORTUNITY (MAR 2007) should most definitely flow down.  I mean, seriously, why would something explicitly required by the Code of Federal Regulations (41 CFR 60) suddenly not apply?  You would have the Christian Doctrine at play, anyway.  Other examples are the clauses for the Service Contract Act and small business set asides. 

The particular question DOI asked me is a bit hazier.  What about the standard Part 12 Clauses (52.212-1,-3, -4 and -5)?  I would say they definitely flow down.  Not only are many of the components of these “megaclauses” statutory or regulatory in nature but I would argue they are core terms and conditions of the basic contract that must apply to any task orders placed against that contract.  If you awarded a stand-alone Part 12/15 hybrid IDIQ contract, would you not enforce those standard clauses on your task orders?  I would!  For anything else, I would say evaluate in on a case by case basis and consult with legal counsel if there’s a question.  If you want a definitive answer on a specific clause, let us know and we’ll get our policy team engaged to help you.

So that’s what I think flows down.  So what does not flow down?  That list is a lot shorter and I believe it is really about those clauses which directly affect the management of the basic contract.  The most common example is the previously mentioned options clause (52.217-9).  The clause in the basic Schedule contract is about the options only for that contract.  If you need options clauses on your task order, you need to add that to your RFQ.  Another specific example is 52.217-8 OPTION TO EXTEND SERVICES (NOV 1990) or what I like to call the “six-month optional contract extension that saves me from a panic attack when someone drops the ball on a task order renewal” clause.  Do you want that in your task order?  Great!  Just remember to add it to your RFQ. 

But wait, you say.  If I start adding clauses to a task order, don’t I risk conflicting with the terms and conditions of the basic contract?  Why yes, you do.  In general, you are usually fine if you are adding other than Part 15 clauses, any clauses required by your agency supplement (e.g. the DFARS) or any local clauses/provisions necessary to make the task order function properly (security requirements, facility access procedures, government property issues, etc).  For more than you ever wanted to know about the topic of adding non-conflicting clauses, you can read our blog post on that topic here.

Anyone out there have an alternate opinion?  Let’s hear it!

Tags: 
Ordering
Task Order
Federal Supply Schedules
clauses
flow down
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Professional Services Category
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Comments

sidabey
<p>Consistent with the goal of offering a contractor&#39;s most favored customer pricing, can an individual Task Order issued against a GSA Schedule deviate from the Master Schedule with regard invoice prompt payment terms ?&nbsp; Specifically, the Contractor proposed invoice prompt payment terms of a 1% discount for invoices paid within 15 Days on the Master Schedule but did not offer any prompt payment discount on the Individual Task Order.&nbsp; Th Contractor&#39;s rational for not offering Invoice prompt payment terms on the Task Order was based on the rational that the overall Task Order catalog discounts already reflected their most favored customer pricing and that additional prompt payment discounting was not necessary.&nbsp; Does the prompt payment terms reflected in the Contracto&#39;s Master Schedule take precedence in this instance ?&nbsp; Any advice regarding this matter is greatly appreciated.&nbsp;</p><p>&nbsp;</p><p>&nbsp;</p>
Posted 07/16/2013 11:45 PM
Brad deMers
<p>sidabey,</p><p>A Prompt Payment Discount shown in the GSA FSS Contract ALWAYS apply to the TO, otherwise it has no meaning. &nbsp;The Prompt Payment Discount is in addition to and completely separate from any other discount offered at the TO level. &nbsp;In other words, it is mutually exclusive and applies. &nbsp;In fact, it is the duty of the Task Order CO under FSS orders to ensure they convey such prompt payment disount to financing when approving invoices so that the government gets the benefit of the discount if payment is made in accordance with the terms of the Prompt Payment Discount. &nbsp;The contractor need not &quot;offer&quot; that discount as it is a term and condition of the FSS Contract. &nbsp;Due to the fact that it is a term and condition of the FSS contract, they must comply if payment is made on time. &nbsp; It is automatic. &nbsp; In your case, finance folk would pay the approved invoice amount less 1% if they made payment within 15 days.&nbsp;</p>
Posted 07/17/2013 7:13 PM
Steve Sizemore
<p>Just a bit more information on Dan&#39;s response to alldal above. &nbsp;52.237-3 is incorporated by reference into the Schedules and would automatically flow down to the order if needed. &nbsp;I do agree that it would have no effect at the contract level since nothing is being bought there, but would be in force at the order level as needed by the ordering activity. &nbsp;</p><p>Additionally, in adding to this discussion in general, Schedule contracts contain 52.216-18, ORDERING (OCT 1995) (DEVIATION II -- FEB 2007), which states in para b that: &nbsp;</p><div>&quot;All delivery orders or task orders are subject to the terms and conditions of this contract. In the event of conflict between a delivery order or task order and this contract, the contract shall control.&quot;</div><div>&nbsp;</div><div>So we clearly see that the terms and conditions flow down to the order level, however it does take some discernment to distinguish between contract managment clauses that GSA would use and those that the ordering activity would have available for their use.</div>
Posted 06/27/2013 5:50 PM
Laura4p0
<div class="gmail_default" style="font-family: arial, sans-serif; font-size: 13px;"><font size="4">There is a pretty good discussion of the flow down of clauses and provision from the MAS schedule to the task order here on GSA interact:</font></div><div class="gmail_default" style="font-family: arial, sans-serif; font-size: 13px;">&nbsp;</div><div class="gmail_default" style="font-family: arial, sans-serif; font-size: 13px;"><a href="https://interact.gsa.gov/wiki/adding-provisionsclauses-rfqs" style="color: rgb(17, 85, 204);" target="_blank"><font size="4">https://interact.gsa.gov/wiki/<wbr>adding-provisionsclauses-rfqs</wbr></font></a></div><p><wbr><div class="gmail_default" style="font-family: arial, sans-serif; font-size: small;">&nbsp;</div><div class="gmail_default" style="font-family: arial, sans-serif; font-size: small;">Basically,&nbsp;<span style="color: rgb(76, 76, 76); font-family: Arial, 'Arial Unicode MS', Helvetica, sans-serif; font-size: 14px; line-height: 21px;">the&nbsp;offeror/quoter has agreed to all of the&nbsp;clauses that are in the schedule contract, and therefore must comply with those terms and conditions in performance of any order awarded under their schedule contract..&nbsp;</span></div><div class="gmail_default" style="font-family: arial, sans-serif; font-size: small;">&nbsp;</div><div class="gmail_default" style="font-family: arial, sans-serif; font-size: small;">[excerpt below taken from the link above]</div><div class="gmail_default" style="font-family: arial, sans-serif; font-size: small;">&nbsp;</div><div class="gmail_default" style="font-family: arial, sans-serif; font-size: small;"><span style="color: rgb(76, 76, 76); font-family: Arial, 'Arial Unicode MS', Helvetica, sans-serif; font-size: 14px; line-height: 21px;">As you read the Schedule contract clauses, you will notice that the Schedule contracts contain the typical required FAR Part 12 clauses used for larger commercial contracts, including some clauses for IDIQ contracts. &nbsp;The contracts also contain GSA and FAS clauses, mostly dealing with the administration of the Schedule contract and generally having very little impact on ordering.) The Schedule contracts are written for use by all Federal agencies and contain no clauses from any agency&#39;s FAR Supplement. &nbsp;</span></div><div class="gmail_default" style="font-family: arial, sans-serif; font-size: small;"><p style="margin: 12px 0px; padding: 0px; color: rgb(76, 76, 76); font-family: Arial, 'Arial Unicode MS', Helvetica, sans-serif; font-size: 14px; line-height: 21px;">Nothing in the FAR or in the Schedule contract prohibits ordering agencies from adding non-conflicting clauses from the FAR or from their agency FAR Supplements. &nbsp;In fact, the&nbsp;<a href="http://interact.gsa.gov/sites/default/files/mas_desk_reference_-_2010.pdf" style="color: rgb(3, 147, 201); margin: 0px; padding: 0px; text-decoration: none;" target="_blank">2010&nbsp;<em>MAS Desk Reference</em>&nbsp;</a>states:</p><p style="margin: 12px 0px; padding: 0px; color: rgb(76, 76, 76); font-family: Arial, 'Arial Unicode MS', Helvetica, sans-serif; font-size: 14px; line-height: 21px;">- [page 31, top] &quot;While GSA will not alter the terms and conditions of a Schedule contract in violation of CICA, nor alter the scope of a contract to meet an individual ordering activity&#39;s unique needs, an ordering activity may add terms to an order that do not conflict with the Schedule contract terms and conditions.&quot;<br />- [page 42, middle], ensure the following information is included in the order&#39;s RFQ] &quot;Other pertinent information - such as agency-specific provisions and clauses that do not conflict with the Schedule contract clauses.&quot;<br />- [page 44, top] &quot;Any additional requirements included in a Schedule order must not conflict with the scope of the Schedule contract. &nbsp;Remember, orders must be for commercial items or services with the purview of Part 12, not just within the scope of a particular Schedule contract, to remain within scope.&quot;</p><p style="margin: 12px 0px; padding: 0px; color: rgb(76, 76, 76); font-family: Arial, 'Arial Unicode MS', Helvetica, sans-serif; font-size: 14px; line-height: 21px;">The GSA Schedule Contracting Officer has adopted a minimalist philosophy when it comes to adding FAR or GSA clauses where the inclusion of the clause is &quot;as required&quot; for a particular procurement situation. &nbsp;The GSA CO (who has no knowledge of the particular requirements in an ordering agency&#39;s PWS) simply doesn&#39;t know if an ordering agency will need a particular situational clause. &nbsp;The Schedule contract cannot and does not include clauses necessary for every possible agency requirement. &nbsp;For example, maybe an ordering agency will be providing government-furnished property, material, or information to a Schedule contractor on a particular task order. &nbsp;But the standardized Schedule contracts don&#39;t include FAR 52.245-1 &quot;Government Property&quot; or another property clause required for that possible situation. The Ordering Officer is responsible for protecting the Government&#39;s interests and for complying with all agency regulations. &nbsp;There are many situations where that responsibility cannot be met without including a situational &quot;as required&quot; FAR or agency clause - - a clause for which the GSA Schedule contract CO cannot have reasonably foreseen the need. For example, options are permitted on task orders. &nbsp;But how could an ordering agency exercise that authority without an options clause in the order (something like FAR 52.217-8 &quot;Option to Extend Services&quot;)? &nbsp;The options clause in the Schedule contract (providing for a base period of five years and up to three option period of five years each) is not useful for task orders and by its own terms applies only to the Schedule contract and not to any orders. Similarly, FAR and agency supplement clauses related to task order funding don&#39;t appear in the Schedule contracts. &nbsp;(Why would they?) If an ordering activity needs a clause like FAR 52.232-18 &quot;Availability of Funds,&quot; it&#39;s not going to get there unless the ordering activity includes it in the task order RFQ.</p><p style="margin: 12px 0px; padding: 0px; color: rgb(76, 76, 76); font-family: Arial, 'Arial Unicode MS', Helvetica, sans-serif; font-size: 14px; line-height: 21px;">In accordance with FAR 1.102(d) ordering activities may assume that since the practice of adding non-conflicting clauses to Schedule orders is not addressed in the FAR, nor prohibited by law, Executive orders, or regulation, that the practice is a permissible exercise of authority if in the best interest of the government.</p></div><p><wbr></wbr></p><wbr><div class="gmail_default" style="font-family: arial, sans-serif; font-size: small;"><span style="color: rgb(76, 76, 76); font-family: Arial, 'Arial Unicode MS', Helvetica, sans-serif; font-size: 14px; line-height: 21px;">For example, If they are using&nbsp;Service&nbsp;Contract Act (SCA) labor categories&nbsp;in&nbsp;any given task order (TO), then they have agreed to the terms and conditions (Ts&amp;Cs) including&nbsp;52.222-41, -42, and -43. The SCA labor categories and the non-SCA labor categories have already been determined at the schedule contract level. There shouldn&#39;t be any new labor categories at the task order level. If there are labor categories on the quote that do not exist on the schedule contract authorized price list, those new labor categories&nbsp;become open market items. Then and only then would you need to reapply clauses at the TO level, as the clauses at the schedule contract level DO NOT flow down to the open market items. Otherwise, there is no need to repeat the clauses at the task order level.&nbsp;It is up to the offeror/quoter&nbsp;to&nbsp;follow the clauses they agreed to on their schedule contract. &nbsp;</span></div></wbr></wbr></p>
Posted 06/27/2013 3:34 PM
alldal
Can you comment specifically on FAR Clause 52.237-3, Continuity of Service. Is this talking about the GSA Schedule Contract or is it meant to be applicable to the Task Order. I'm thinking it's highly unlikely to have any services being provided under the GSA Schedule and it has to be meant for the TO.
Posted 06/26/2013 7:45 AM
Dan Briest
<p>alldal,</p><p>In my opinion, you are absolutely correct! GSA prepares the schedule contract with minimal clauses so that an agency has the ability to&nbsp;tailor task orders to their specific needs.&nbsp;All service contracts do not require FAR Clause 52.237-3.&nbsp;When a GSA schedule contract is awarded,&nbsp;no services of any kind have been ordered yet.&nbsp;FAR&nbsp;Clause 52.237-3 would be considered a&nbsp;non-conflicting clause&nbsp;that can be added by the Contracting Officer at the task order level. For more information on adding clauses at the task order level: <a href="http://interact.gsa.gov/wiki/adding-provisionsclauses-rfqs">Click here.</a></p><p>Keep in mind that when&nbsp;an agency&nbsp;adds FAR Clause 52.237-3 to the task order, it is because the services are (per the FAR) vital to the Government.&nbsp;One of the first contracts I ever worked on was for food attendant services on a military base.&nbsp;Can the services stop just&nbsp;because the incumbent did not win the contract on the recompete? No. This was a clause that we definetly&nbsp;used.&nbsp;It ensured that the incumbent assisted the new service provider in proper phase-in training and to make the transition as smooth as possible. This clause does come with a price, so use it wisely and when needed!</p><p>Great question!</p><p>Dan</p>
Posted 06/27/2013 8:25 AM
shauneelu66
<p>A friend of mine is&nbsp;a retired Contracting Officer&nbsp;who consults writing subcontract agreements&nbsp;used by the primes to&nbsp;flow down clauses from the basic contract to their subs, I can tell you there is no &quot;one size fits all&quot; answer to this.&nbsp;&nbsp;You have to read the basic contract, then read each clause (yes, all those clauses listed in the 52.212-XX clauses) and then between the clause itself and the prescriptions for it&#39;s use in the FAR&nbsp;Parts / Subparts, you can tell&nbsp;if they flow to a sub.&nbsp; Many of the prescriptions back in the FAR Parts / Subparts state that the clause it applies to the prime and all subs, or subcontracts over X amount, or that it isn&#39;t required but may be used...&nbsp; See where I&#39;m going with this...you have to read.&nbsp; You have to research.&nbsp; You have to be a student of the FAR and understand what each clause means and the situation it which it is being used --&nbsp;then&nbsp;flow the&nbsp;clauses that FAR says MUST flow&nbsp;down.&nbsp;&nbsp; You have to read! :)</p>
Posted 12/07/2012 8:48 AM
Brad Powers
<p>I completely agree. &nbsp;That was one of the reasons I specifically excluded prime-to-sub flowdown from this posting. &nbsp;You really do need to research each clause and provision no matter how painful that might be. &nbsp;That&#39;s why you&#39;ll see many large companies have &quot;subcontract managers&quot; who speciailize in this area. &nbsp;I expect your friend keeps very busy working with those folks!</p><p>While the master contract to task order flowdown is not as complicated in most instances, that doesn&#39;t mean reading and research are not equally important. &nbsp;I remember when I was an intern one of our senior contract administrators told me there were only three rules you needed to remember to administer a contract and I think they also apply to this issue: &nbsp;(1) &nbsp;Read the contract &nbsp;(2) &nbsp;Read the contract (3) Read the [expletive] contract! &nbsp;In this case, just substitute clause for contract.</p>
Posted 12/07/2012 9:56 AM
Brad deMers
<p>While one could argue that <a href="http://sws.gsa.gov/sws-search/generateClauseBodyPdf.do?method=generateClauseBody&amp;solNo=VEZUUC1NQy0wMDA4NzQtQg==&amp;refreshNo=17&amp;clauseNo=52.217-8&amp;clauseType=O&amp;sequenceNo=0">52.217-8</a> IS included in the Task Order by a broad interpretation of <a href="http://sws.gsa.gov/sws-search/generateClauseBodyPdf.do?method=generateClauseBody&amp;solNo=VEZUUC1NQy0wMDA4NzQtQg==&amp;refreshNo=17&amp;clauseNo=52.216-18&amp;clauseType=D&amp;sequenceNo=2">52.216-18</a>&nbsp;(ref para b <em>&quot;All delivery orders or task orders are subject to the terms and conditions of this contract&quot;...)</em>, it would be prudent, as Mr. Powers advises, &nbsp;to include this one in the task order as one could argue the 52.217-8 in the FSS Contract applies to the <em>FSS</em> <em>Contract </em>and <u><strong>not </strong></u>the Task Order. &nbsp;</p><p>I would further argue that in light of &nbsp;<a href="http://www.gao.gov/decisions/bidpro/401472.htm">http://www.gao.gov/decisions/bidpro/401472.htm</a>&nbsp;one must also include the 6 month value of said option in the total Task Order price evaluation. &nbsp;While including that 6 month value may seem overkill (as pricing usually remains unchanged for that up to six month period) , GAO does not think so as quoted in the case <em>&quot;<span style="font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 12px; line-height: 15.588889122009277px;">The option to extend the contract here under FAR clause 52.217-8 was not evaluated as part of the initial competition, so that the exercise of this option amounts to a contract extension beyond the scope of the contract, and therefore effectively constitutes a new procurement.&quot;</span></em></p><p>&nbsp;</p>
Posted 11/30/2012 10:49 PM
Yoda
<p>The authoritative Vern Edwards tackles a part of this topic as it relates to 52.217-8...http://www.wifcon.com/discussion/index.php?/topic/911-policy-interpretation/ and&nbsp;http://www.wifcon.com/discussion/index.php?/topic/1571-52217-8-and-expiring-task-order/</p>
Posted 12/11/2012 8:08 AM
Brad Powers
<p>I the second cited WIFCON link, Vern says this:</p><p><span style="color: rgb(40, 40, 40); font-family: helvetica, arial, sans-serif; font-size: 14px; line-height: 22px;">&quot;I do not assume that 52.217-8 applies individually to task orders. I don&#39;t know whether it does or not. I do think it applies if invoked in a solicitation for an order. However, invoking it is not enough. You must price the option and consider the option price during evaluation.&quot;</span></p><p>While I stick by my interpretation that this clause does not automatically flow down, even if it does my advice would be similar to Vern&#39;s in that you should cite the clause in your task order RFQ AND make sure you have considered the option during your task order&nbsp;pricing&nbsp;evaluation . &nbsp;In that way, I believe you&#39;ll eliminate potential ambiguities while being compliant with recent GAO and COFC decisions regarding how options should be priced, evaluated and exercised.</p>
Posted 12/11/2012 10:51 AM

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