Comment on FR Doc # E9-10351

Mr. Al Matera Director, Office of Acquisition Policy General Services Administration FAR Secretariat Washington, DC 20405 Re: FAR Case 2008-015 – Retainage on A/E Services Contracts Dear Mr. Matera: The Management Association for Private Photogrammetric Surveyors (MAPPS) is the only national association exclusively comprised of private surveying and mapping (now commonly known as “geospatial”) firms in the United States. Our more than 170 member firms include the overwhelming majority of geospatial contractors and subcontractors to the Federal government. MAPPS strongly supports a revision to the standard clause in FAR 52.232-10. We commend the FAR Council for initiating this proposed rule. We support the proposed rule. Making retainage a discretionary, rather than mandatory, feature of a Federal A/E contract is a step in the right direction. We have heard from numerous member firms who have had very unfortunate experiences with Federal agencies. These firms have found that agencies regularly withhold 10 percent retainage for months, even years. This has involved tens of thousands, even millions of dollars in fees. This causes an undue financial burden on our members, particularly small business. It affects firm cash flow and profitability. It is our experience that the retainage is most frequently a result of no fault of the firm. Rather, surveying and mapping firms provide deliverables to Federal agencies in a timely manner, in full accordance with contract terms, conditions and schedules. However, there is a lag time between “delivery” by the contractor and “acceptance” by the agency. During this lag time (again often months and sometimes years), 10 percent of the fee due to the firm was retained by the agency. This places the private firm (often a small business) in the position of providing an interest-free loan to the government. This is a costly and unfair practice. It is not common for the agency to ultimately fully accept the firm’s work. Despite exemplary performance by the firm, it is penalized by an arbitrary and capricious retainage. There is also often a lag time between ‘final acceptance’ and processing of the ‘release of claims’ and payment of the retainage. Coordination between this rule and the Prompt Pay act, in order to assure fair and timely payment of contractors, should be implemented. As a result, we believe policies and procedures must be implemented to assure prompt and timely review and acceptance of deliverables by surveying, mapping and geospatial services firms. Many surveying, mapping and geospatial services fall under the “Brooks Act” (40 USC 1101 et. seq.), which provides for selection of contractors on the basis of demonstrated competence and qualifications. Making retainage discretionary, rather than mandatory, is consistent with the spirit and intent of the Brooks Act. Retainage is not necessary on such contracts, given that firm’s past performance is such an integral part of Federal A/E selection. If a firm has a record of failing to meet delivery schedules, or requiring substantial and frequent revisions of their work, such a firm should not be deemed the most qualified in a qualifications based selection (QBS) process. Thus, if a firm has an excellent past performance record, including its compliance with accuracy requirements and schedules, retainage is not necessary. MAPPS offers the following comments specific to FAR Case 2008-015 published in the Federal Register notice of May 5, COFPAES: • There is often confusion as to the application of the Brooks Act (40 USC 1101 and FAR part 36.6) to a wide range of surveying, mapping and geospatial contracts. We urge the FAR council to clarify that retainage is now discretionary, not mandatory, on such contracts, and that the term “surveying, mapping and geospatial” be specifically included in the rule and in 52.232-10. • ID/IQ (or MATOC and SATOC) contracts should be treated differently than firm fixed price/lump sum contracts by invoicing on acceptance of the deliverable under ID/IQ and on milestones in a Firm Fixed Price contract. Milestone payments should apply to ID/IQ task orders, as they do today. Retainage for individual task orders under an ID/IQ contract is, at times, currently held until the entire ID/IQ contract is complete. (ID/IQ contracts typically have multiple task orders or projects that are performed). Retainage should be released upon completion of each individual task order under an ID/IQ contract and not held from task order to task order until the completion of the entire ID/IQ contract. • As mentioned above, a standard (either time or performance, or a combination thereof) should be for the contracting officer’s technical representative’s (COTR) acceptance of a deliverable. An open-ended, indefinite period is grossly unfair to the agency regarding use of the A/E’s deliverable, and to the firm that is effectively extending credit to the government without interest. Alternately, interest should be paid to the firm from the date of submission of the deliverable. If the COTR cannot provide acceptance of a deliverable within a reasonable time period or in accordance with the standard, retainage should be immediately released and paid to the contractor. • The retainage should be negotiated on each contract; in an ID/IQ on each task order, just as profit is negotiated (See FAR 15.404-4). • Past performance on previous contracts shall be taken into consideration when negotiating whether retainage will be applied to a contract. A firm with an excellent record should not be penalized with a retainage clause. • The FAR should clearly distinguish A/E contracts from construction contracts. A/E services are NOT construction services. • The proposed rule loosely and inappropriately uses the term “design work”. The revision and the rule should apply to all types of A/E contracts, not just those for design. Today, the retainage requirement in FAR 52.232-10 is applied to all types of A/E contracts, not just those for design services. Thus, the relief from this proposed rule should similarly apply to all types of A/E services. As outlined in the Brooks Act and the FAR, A/E services are defined not just as design services, but A/E services (including surveying and mapping) “associated with research, planning, development, design, construction, alteration, or repair of real property.” There are numerous services the A/E community provides to the Federal government that are not solely design and are often independent of design. This includes surveying, mapping and geospatial services. • The rule should require the contracting officer to release any excess retainage once the work is substantially complete. Currently, contracting officers "may" do so, but are not required. The rule should be changed from "may" to "shall" in this regard. MAPPS once again commends the FAR Council and the SBA Office of Advocacy for its efforts on this important revision. We would be pleased to meet to answer any questions or provide any assistance with this rule revision. Please direct any questions to Mr. John Byrd, MAPPS Government Affairs Manager, at the contact information below. Respectfully, Jeff Lovin, CP, President MAPPS 1856 Old Reston Avenue Suite 205 Reston, VA 20190 (703) 787-6996 www.mapps.org