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This blog is managed by Bob Antonio, the Owner of Wifcon.com. It includes link to news items on contracting and the blogger's comments

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bob7947

For those of you who are not familiar with the auditing world, GAGAS is the acronym for Generally Accepted Government Auditing Standards and it is written and maintained by the Government Accountability Office (GAO). Compliance with GAGAS is mandatory for an auditor during the conduct of an audit and a memo noting compliance with GAGAS should be in the auditor's assignment folder for each audit.

Although I was a member of the auditing community during my career with the GAO, I also viewed myself as a member of the contracting community, As an auditor, I too was bound by GAGAS and I satisfied all of the training necessary to be a professional auditor. As a member of the contracting community, I reviewed thousands of contract files at contracting offices throughout the United States. In addition, I gained an MS in Procurement Management and I wrote GAO's contracting course which I specifically designed for auditors.

Before you think I'm a braggart of some sort, let me explain that I never awarded a federal contract, never wrote a justification and approval, never wrote a determination and findings, never wrote a negotiator's memorandum, etc. I never was a contract specialist and I don't think any auditor should have been one. My interest as an auditor was in how contracting should be done; not how it was being done. There could be a big difference between the two. But enough of this. Why am I writing this entry?

GAGAS CAN BE A SHAM

Recently, I read one of the worst pieces of garbage issued by an auditing activity in my lifetime. It was so pathetically awful that I couldn't read the report. It was page after page of unintelligible gibberish. That brought me back to a longstanding problem I have with GAGAS. It is why GAGAS should make you gag. GAGAS includes things that an auditor should possess for an audit. Below, is an excerpt from GAGAS on an auditor's Competence at section 3.69. I bolded and italicized the word collectively.

The staff assigned to perform the audit must collectively possess adequate professional competence needed to address the audit objectives and perform the work in accordance with GAGAS.

If an auditor does an audit on contracting, must the individual auditor know something about contracting? Simple answer. No! Let's dive a little deeper into the area covering an auditor's Technical Knowledge at section 3.72.

The staff assigned to conduct an audit in accordance with GAGAS should collectively possess the technical knowledge, skills, and experience necessary to be competent for the type of work being performed before beginning work on that audit. The staff assigned to a GAGAS audit should collectively possess . . .

c. skills to communicate clearly and effectively, both orally and in writing; and . . . .

Let's ask another question. If an auditor does an audit on contracting, must the individual auditor know what the auditor is talking about? Simple answer. No!

Go back and look at the two quotes. Notice how I highlighted the word "collectively." Collectively is an agency's way out. The staff assigned to an audit might include an attorney assigned to review the draft audit report once the audit is finished. Maybe, the attorney has some familiarity with contracting but the attorney will not be involved in doing the work. Perhaps, the staff assigned to an audit has an advisor who is knowledgeable but that advisor has no real authority over the conduct of the audit. I served as such an advisor. So much for "collectively possess." GAGAS can be a sham.

Over the years, I listened to agency officials' stories about ignorant auditors who would review their contracts. One of my favorites was the auditor who asked the contracting officer to point out the solicitation for him in the contract file. I wonder what the auditor was going to do with it when he was shown which document it was. You may have had your own unfortunate experiences.

During one of the final audits that I performed, I had contract files stacked in an agency conference room. From time to time, contract specialists would stop in the conference room and talk to me and we would discuss contracting issues. Towards the end of my stay in that conference room, an experienced contracting officer stopped in to see the anomaly--an auditor who could talk intelligently about contracting. I was proud of that. It let that contracting officer and other contract specialists know that I, as a reviewer of their work, took the time in my life to become familiar with the subject matter of their careers.

If the current version of GAGAS ensures an auditor's technical competence, why are there so many horror stories about auditors contracting ignorance? Why was I viewed as the anomaly during my entire career? The honest answer is that GAGAS, as it is currently written, does not ensure an auditor's technical competence in the field of contracting. That's it!

GAGAS CAN BE REVISED EASILY

Now for my suggestion. GAO should rewrite GAGAS's section 3.69 on Competence as I describe below.

The auditor-in-charge of the audit must possess adequate professional competence needed to address the audit objectives and perform the work in accordance with GAGAS.

GAO should rewrite GAGAS section 3.72 on Technical Knowledge as I describe below.

The auditor-in-charge of conducting the audit in accordance with GAGAS should possess the technical knowledge, skills, and experience necessary to be competent for the type of work being performed before beginning work on that audit. The auditor in charge of a GAGAS audit should possess . . .

c. skills to communicate clearly and effectively, both orally and in writing; and . . . .

My suggestion places responsibility for Competence and Technical Knowledge in one individual--the person who directs the audit. Normally, that person is called an auditor-in-charge or something similar. This can easily be done for contracting audits. For example, I was responsible for the conduct of an audit that included 17 subordinate auditors who had no experience with contracts. The work was done at several agencies and several sites around the country. To do the audit, I brought all members of the team to Washington, D. C. and trained them specifically for the work to be done. By the time we were done with the training, my staff knew what to look for and what the documents would look like. They had no trouble identifying problems and documents. As my staff performed their work, I visited with each of them, reviewed their workpapers, and reviewed the contract files, if it was necessary. Throughout the audit, I was available to assist and answer contracting questions. The audit was successful and it had an effect on the way you do contracting.

More and more, an ignorant Congress depends on what auditors report as contracting findings and recommendations. As a result, the work of ignorant auditors can affect contracting careers and contracting laws. Additionally, when an agency sends an ignorant auditor out to identify contracting problems the ignorant auditor doesn't know what to look for and couldn't identify the problem if it him him/her.

MORE SUGGESTIONS

In addition to GAO making the changes I noted to GAGAS, I suggest that agencies that conduct audits

identify auditors who have an interest in contracting and provide the technical training and knowledge they will need as they become auditors-in-charge on contracting audits.

require officials signing an audit to identify the auditor-in-charge on the signature page and certify that the auditor complies with the revised version of GAGAS's Competence and Technical Competence standards.

Further, I suggest that contracting agencies who are the subject of an audit require

their procurement executive or designee to request proof of auditor compliance with GAGAS sections 3.69 and 3.72.

officials that comment on the draft audit report to note any auditor non-compliance with GAGAS sections 3.69 and 3.72 in their comment letter.

bob7947

You're travelling on your own for the government and you found a way to save money but you're subject to the Joint Travel Regulations as well as the Federal Travel Regulation. What do you do?

You went ahead and saved the government money and were proud of yourself. Unfortunately, your finance office stiffed you when it came time for payment. Its time to learn about rules that are mandatory.

See the case at cbca.gsa.gov. (it is only 2 pages.)

bob7947

We've all seen this before. The government and contractor sign a contract with a base period and several 1-year options. Sometimes, the 1-year option periods even mirror the government's fiscal year. A nice little puppy. Then, the harsh realities of government take over and our little puppy grows into an unwieldy mongrel. Such is life in federal contracting and here is a story about one such dog.

On February 27, 2009, the Army National Guard and Glasgow Investigative Solutions, Inc. (GIS) signed a contract for armed security guard services at the National Guard Armory, Washington, DC. The contract included a 3-month base period from March 1, 2009 to May 31, 2009 (CLIN 0001) and 4 option years (CLINs 2 through 5) beginning October 1, and ending September 30 of 2010, 2011, 2012, and 2013. There is another option to extend the base period for 4 months from June 1, 2009 to September 30, 2009 (CLIN 0006). Of course, the contract included the clause at FAR 52.232-18, Availability of Funds (Apr 1984).

Mod 1, a bilateral agreement, exercised the option in CLIN 0006 for the 4 months to the base period from June 1, 2009 to September 30, 2009 and added the clauses in FAR 52.217-6 Option for Increased Quantity and 52.217-8 Option to Extend Services.

Mod 2, a bilateral agreement, fully funded the contract through September 30, 2009.

Mod 3, a bilateral agreement, modified the contract by extending CLIN 0006 from October 1, 2009 through January 31, 2010 and fully funded this 4-month extension. The 4, 1-year option periods in CLINs 0002, 0003, 0004, and 0005 were reset to begin February 1 and end January 31 of the following years.

Mod 4, a bilateral agreement, exercised the first 1-year option period in CLIN 0002 from February 1, 2010 through January 31, 2011.

Mod 7, a bilateral agreement, extended the first option period in CLIN 0002 for 2 months, from February 1, 2011 through March 31, 2011.

Mod 8, a unilateral agreement, and Mods 9 and 10, bilateral agreements, extended the first option period in CLIN 0002 from April 1, 2011 through June 30, 2011.

By now, the contractor was irritated with the extensions to the first option period. After all, the parties signed an original contract that contained 1-year options--not 1- or 2-month extensions to the first option period. The contractor notified the contracting officer about its concerns. On June 28, 2011, the contracting officer noted the contractor's concerns but explained that "due to limited funding, the government is unable to exercise a one (1) year option to the contract at this time." Instead, the contracting officer said she was prepared to extend the contract for an additional 30 days through July 31, 2011. The contractor agreed to the 30-day extension but maintained its position that the modification is contrary to the original contract.

On November, 17, 2011, the contractor filed a claim due to fundamental changes in the original option periods. The contractor had signed up for 1-year options not 1- or 2-month extensions. The contractor filed a notice of appeal to the Armed Services Board of Contract Appeals on April 27, 2012 and about 1 year later the Board rendered its decision.

So what did the Board say? Find out on the bottom of page nine at Glasgow Investigative Solutions, Inc.

bob7947

The government has plenty of rules involving time. In certain circumstances, an offeror has 10 days to submit a protest. On the other end of the process, contractors have so much time to submit a claim or to respond to a contracting officer's final decision. Here is one case involving time limits:

On April 26, 2012, EPSI submitted a certified claim to the SBA contracting officer seeking $135,013.27 from the SBA for increases in the minimum wages during EPSI's period of performance from October 1, 2007, through April 19, 2009. The contracting officer issued a final decision denying the claim on July 5, 2012. There is no dispute in the record that EPSI received the final decision on July 5, 2012. EPSI filed its notice of appeal by fax with the Board on October 5, 2012 (a Friday), which is ninety-two days after receipt of the final decision. On October 19, 2012, the respondent filed a motion to dismiss, arguing the notice of appeal was untimely. In response to a show cause order, EPSI responded to the motion, arguing that the notice of appeal should be considered timely in light of the extent of the activity and delays by SBA for three (3) years after performance of the contract and the existence of reasonable excuses for the one (1) day delay.

See what the Civilian Board of Contract Appeals had to say about this.

bob7947

In Estes Express Lines, Inc. v. U. S., No. 11-597C, January 15, 2013, the Court of Federal Claims said:

"For the government to be sued on a contract pursuant to the Tucker Act, there must be privity of contract between the plaintiff and the United States." "This is so because the doctrine of sovereign immunity precludes a suit against the United States without its consent and because, under the Tucker Act, the United States has 'consent[ed] to be sued only by those with whom it has privity of contract."' Accordingly, "[t]he effect of finding privity of contract between a party and the United States is to find a waiver of sovereign immunity."

Conversely, a finding of lack of privity deprives this court of jurisdiction.

See the opinion here.

bob7947

I had planned to write a detailed article about my plan for the above committees. However, I'm never going to get to it. So, I'm going to try a series of quick posts to get my thoughts published. Don't tell me that these committees will never be formed. I know they won't. Committees and subcommittees are entities run by politicians for politicians. However, I can dream.

You can see from the titles of my proposed committees that they would deal with federal contracting and federal assistance. For now, this blog entry will deal with federal contracting only. In fact, this blog entry will deal only with the structure of the committees. Both the House and Senate committees will have the same jurisdiction and subcommittees. Here we go!

Committee on Contracting and Assistance: Complete jurisdiction over federal contracting. No other committee or subcommittee may propose contracting legislation.

  • Subcommittee on Defense Contracting: All defense contracting issues.
  • Subcommittee on Civilian Agency and Congressional Agency Contracting: All civilian and congressional agency contracting issues.
  • Subcommittee on Small Business Contracting: All small business and socioeconomic issues.
  • Subcommittee on the Contracting Workforce: All issues dealing with the contracting workforce.
  • Subcommittee on Streamlining: Identifying (1) current public laws governing federal contracting with the goal of eliminating unnecessary and conflicting legislation and (2) any needed public laws.
  • Subcommittee on Congressional Contracting Goals: For any needed public laws, this subcommittee will convert specific legislative language into congressional goals that identify the outcomes Congress seeks to achieve.

I view the first 4 subcommittees as oversight committees that would work with the last 2 subcommittees. However, I see much work for the final 2 subcommittees beginning with Day 1.

More later.

bob7947

One of our colleagues sent this to me and I am posting it for you. Even Bilbo Baggins has a contract attorney to watch over him.

"I, the undersigned, [referred to hereinafter as Burglar,] agree to travel to the Lonely Mountain, path to be determined by Thorin Oakenshield, who has a right to alter the course of the journey at his so choosing, without prior notification and/or liability for accident or injury incurred."

"The aforementioned journey and subsequent extraction from the Lonely Mountain of any and all goods, valuables and chattels [which activities are described collectively herein as the Adventure] shall proceed in a timely manner and with all due care and consideration as seen fit by said Thorin Oakenshield and companions, numbering thirteen more or less, to wit, the Company."

See the article at wired.com.

bob7947

No, they are not candy; no they are not turtles. However, they did have an iron shell. Pook Turtles were designed by Samuel M. Pook and were the "City Class" of armored gunboats that sailed the Mississippi and its tributaries beginning in early 1862. They were called Pook Turtles because people thought they looked like turtles. The seven ships were the USS Cairo, Carondelet, Cincinnati, Louisville, Mound City, Pittsburg, and St. Louis. The recovered remnants of the USS Cairo now rest at the National Military Park in Vicksburg, Mississippi.

The contract is between James B. Eads, the ships' builder, and Montgomery C. Meigs. Among other accomplishments, Meigs was the architect and engineer of the Pension Building, now the National Building Museum, across G street from the GAO Building. In the contract, Eads is referred to as the "first part" and Meigs is referred to as the "second part." You will see reference to an 1808 act in the contract. That was a law passed to prevent members of Congress from benefiting from government contracts.

I found this 1861 contract while I was doing research for a future article. As you read it, you will notice some concepts that are in current government contracts. In fact, as you read the Wifcon Forum, you will note that its members ask questions about some of the same concepts that are in the following contract

Oh! About the price and delivery date--the price more than doubled and the delivery slipped by several months due to design changes. Some things never change!

Agreement between James B. Eads, of the city of Saint Louis, State of Missouri, of the first part, and Brig. Gen. M. C. Meigs, Quartermaster-General, acting for the United States, of the second part, witnesseth:

That the party of the first part, for and in consideration of the matter hereinafter referred to and set out, covenants and agrees with the party of the second part to build, on the Mississippi River, and deliver to the party of the second part at the wharf in the city of Cairo, State of Illinois, seven gun-boats, as described and referred to in the printed specification, a copy of which is annexed to, and is to be deemed and taken as part of, this contract, and do the same in conformity to said specifications and to the directions he may from time to time receive from the superintendents in charge.

Said gunboats are to be completed and finished, according to the specifications, on or before the 10th day of October next; and the said party of the first part agrees to forfeit to the United States the sum of $250 per day for each and every boat that is delayed beyond that time, i. e., the 10th day of October next.

The party of the first part further binds himself, with four sureties of $30,000 each, that he will faithfully perform his part of the contract, said sureties to be approved by the Secretary of War.

And the party of the second part, for and in consideration of the premises, covenants and agrees to pay to the party of the first part, for each and every boat so built, the sum of $89,600, as follows: The work to be estimated every twenty days, and 75 percent of said estimate to be paid by the party of the second part to the party of the first part.

Provided, nevertheless, That in case the party of the second part shall at any time be of the opinion that this contract is not duly complied with by the party of the first part is irregular or negligent, in such case he shall be authorized to declare this contract forfeited, and thereupon the same shall become null and void. And the United States shall thereupon be exonerated from every obligation thence arising and the reserved percentage on the contract price, as well as all the material furnished, upon which no estimate or payment may have been made, shall be forfeited to and become the right and property of the United States; and the party of the second part may thereafter agree with any other person for the execution of the remainder of the work, and the party of the first part shall have no appeal from the opinion and the decision aforesaid, and he hereby releases all right to except to or question the same in any place or under and circumstances whatever; but the party of the first part shall still remain liable to the party of the second part for the damages occasioned to him by said failure or refusal.

And it is further agreed between the parties that, in order to secure the punctual performance of the covenants above made by the party of the first part, and to indemnify and protect the party of the second part from loss in case of default and forfeiture of this contract, the said party of the second part shall be authorized to retain in his hands, until the completion of the contract, 25 per cent on the amount of moneys at any time due to said party of the first part.

The United States reserves the right to suspend the work under this contract at any time, and when the work has been faithfully performed by the contractor he will be paid in full for all work done up to the time of such suspension.

And it is further stipulated and agreed that no member of Congress shall be admitted to any share or part in this contract or agreement, or to any benefits to arise therefrom. And this contract shall be in all its parts subject to the terms and conditions of an act of Congress passed on the 21st day of April, 1808, entitled an act relating to public contracts.

Provided, Nothing herein contained shall be so construed as to authorize any officer of the United States to bind the United States by contract beyond the amount appropriated by Congress, or to sanction any such contract heretofore made:

Provided, also, That it is expressly understood and agreed that this contract, nor any part thereof, shall not be sublet nor assigned, but that it shall be well and truly carried out and fulfilled in good faith by the above-recited party of the first part, and that all payments on account thereof shall be made to the aforesaid party of the first part, his heirs, executors, or administrators.

It is further agreed that the party of the second part shall immediately appoint a superintendent, whose duty shall be to inspect the material used in constructing said boats as the work progresses, and to reject all that he may deem defective. If all of said boats are not built in one yard, then an assistant superintendent shall be appointed for each additional yard where the said boats may be in course of construction, provided there shall not be more than one superintendent to two boats. All extra work shall be estimated and paid for accordingly.

And for the true and faithful performance of all and singular the covenants, articles, and agreements hereinbefore particularly set forth, the subscribers hereunto bind themselves, jointly and severally, their and each of their successors, heirs, executors, ad administrators.

Thus covenanted and agreed by the said parties this 7th day of August, in the year of our Lord 1861, as witness their hands and seals.

James B. Eads,

M. C. Meigs,

Quartermaster-General

Witness: William A. Gordon

bob7947

The Army plans to develop and procure a new Ground Combat Vehicle (GCV) that will do two things: 1) operate as a combat vehicle and 2) transport soldiers onto the battlefield. The GCV would replace the current Bradley Infantry Fighting Vehicles. The Congressional Budget Office (CBO) believes that implementing the GCV program would cost $29 billion–in 2013 dollars–between 2014 to 2030.

The CBO did a report that compares the Army’s plan for the GCV with four other alternatives. Although none of those alternatives would meet all of the Army’s goals for the GCV program, the CBO claims that all are likely to be less costly and less risky than the Army’s plan. Two of the alternatives would involve procuring the vehicles from other countries.

See it at cbo.gov.

bob7947

In the U. S. District Court for the District of Columbia, a recent opinion was issued in which 3 hospitals wanted to avoid being labled as government subcontractors to avoid the Department of Labor's rules covering subcontractors.

The hospitals had contracts with UPMC Health Plan to provide medical services and supplies to individuals enrolled in its program. UPMC contracted with the U. S. Office of Personnel Management (OPM) to provide coverage for federal employees in the Federal Employees Health Benefits Program. Since the hospitals provided medical services to federal employees pursuant to their agreements with UPMC, the Department of Labor concluded that the hospitals qualified as subcontractors and were subject to certain statutory and regulatory requirements imposed on subcontractors.

Part of the judge's opinion stated that the "Provision of medical services and supplies was a critical component of the UPMC's contract. The contract depended on medical providers like the [hospitals] to offer medical services and supplies necessary for UPMC to meet its obligations under its contract with OPM." "Therefore, they qualify as subcontractors under the Secretary's regulations."

You can see the full opinion here.

bob7947

In 2010, the U.S. Central Command's Task Force for Business and Stability Operations, had a requirement for security services to facilitate investment and commerce in Iraq. This blog entry deals with the 2 competitive solicitations and contracts that led to a case before the Court of Federal Claims (COFC).

Unfortunately for Tigerswan, the awardee of the 2 contracts under the solicitations, the contracts weren't rewarding--at least for the contracted items. (TigerSwan did claim damages of $56,246.24 on the first contract which DoD paid.)

The first contract was terminated for convenience in a litle over a month. The second contract received a stop work order within days due to a bid protest. It too received a termination for convenience a little more than 3 months after contract award. Meanwhile, the incumbent contractor received sole-source work at the same time. What to do?

Tigerswan filed a breach of contract claim to the COFC "arising from the termination for convenience of the last contract [solicitation W91GDW-10-C-6005] awarded to TigerSwan. For its breach of contract claim, [it] seeks $238,352.72 for lost anticipatory profits and $35,539.06 for line of credit interest."

So what did the COFC say? Here is a short excerpt: "TigerSwan has alleged sufficient facts to demonstrate a potential breach of contract for improper termination for convenience based on the government's alleged 'abuse of discretion' and failure to honor its contract with TigerSwan."

There is more to it than that. If you are interested in the whole case, you can read it at TigerSwan, Inc. v. U. S., No. 12-62C, April 2, 2013.

bob7947

"The Subcommittee’s investigation of food service contracts has revealed systemic deficiencies in the transparency and oversight of contractors’ rebate and discount policies. Chairman McCaskill asked Office of Management and Budget Director Zients to review the Subcommittee’s findings and issue guidance to federal agencies to address these deficiencies. She also requested that OMB consider how the federal government can better leverage its buying power through the strategic sourcing of food service."

See it at hsgac.senate.gov. (The letter is on the upper left of the linked page in a pdf document.)

bob7947

In Lockheed Propulsion Company; Thiokol Corporation, B-173677, June 24, 1974, GAO issued its bid protest decision on the Solid Rocket Motor (SRM) Project for the Space Shuttle Program. This decision was issued before the National Aeronautics and Space Administration (NASA) had its first SRM and before it had its first Space Shuttle.

One part of the Lockheed protest dealt with the proposed costs for ammonium perchlorate (AP), a major part of the propellant in the SRM. Two offerors, Lockheed and Thiokol, had proposed different costs for the AP even though they would be getting the AP from the same suppliers. GAO concluded that the offerors' evaluated costs should be the same for the AP because of this. As a result, GAO proposed a $68 million dollar adjustment to the evaluated costs of Lockheed and Thiokol. Since NASA had concluded that Lockheed and Thiokol were technically equal and that their evaluated costs were both in the $800 million range, a proposed adjustment of this size could affect the outcome of the selection.

GAO recommended that

In view of our findings in the ammonium perchlorate area, we believe that [NASA] should determine whether the validity of [its] selection is materially affected by the substantial reduction in the cost difference.

NASA promptly considered GAO's recommendation and continued with its original selection of Thiokol for the SRM award.

Nearly 39 years later, I was reminded of this decision by GAO's decision in BC Peabody Construction Services, Inc., B-408023, May 10, 2013. In this procurement, the Corps of Engineers rated the same subcontractor as acceptable for Edens Construction Company but unacceptable for BC Peabody Construction Services.

GAO explained

Where multiple proposals propose the same subcontractor, once the agency becomes aware of that subcontractor's experience, including from another firm's proposal, it cannot reasonably assign one proposal a higher score than another based on that experience.

Although GAO concluded that the two offerors had been treated unequally by the Corps, GAO further explained that it

will not sustain a protest unless the protester demonstrates a reasonable possibility that it was prejudiced by the agency's actions; that is, unless the protester demonstrates that, but for the agency's actions, it would have had a substantial chance of receiving the award.

Unlike in the Lockheed decision, GAO decided that BC Peabody did not have a chance to win because it still would have received a "deficiency" for not having a letter of commitment from a subcontractor.

The moral of this story is that even after proving that a mistake was made, if the protester cannot win anyway, it still loses.

bob7947

In my last post on the Wifcon Blog, I proposed a House and Senate Committee on Contracting and Assistance. Why, you might ask? Remember the Clinger-Cohen Act? It was part of the National Defense Authorization Act for Fiscal Year 1996, P. L 104-106. What about the SBIR/STTR Reauthorization Act of 2011? It was part of the National Defense Authorization Act for Fiscal Year 2012, P. L. 112-81. What about the new Limitations on Subcontracting provision that was mentioned on the Wifcon Forum? You may have guessed: The National Defense Authorization Act for Fiscal Year 2013, P. L. 112-239, Section 1651.

So how does government-wide contracting legislation end up in the annual National Defense Authorization Acts? Think "sticky bill!" To be more exact, and maybe more accurate as it affects contracting, remember the scene in Saving Private Ryan where Tom Hanks' character explains how the remnants of his unit will deal with tanks--"

." As the annual National Defense Authorization Act makes its way through the corridors of Congress, you throw your sticky bill at it and hope it sticks.

It doesn't begin nor end there. Remember our old friend the Federal Acquisition Streamlining Act of 1994? It was originally introduced in the old Senate Committee on Government Affairs, now the Senate Committee on Homeland Security and Governmental Affairs. This Senate Committee has a counterpart in the House of Representatives--the House Committee on Oversight and Government Reform, formerly the old Committee on Government Operations. If Congress cannot keep the names of its committees simple, how can it keep contracting legislation streamlined? I'll answer that--it cannot. Getting back to the House Committee on Oversight and Government Reform, this year its chairman introduced H. R. 1232, the Federal Information Technology Acquisition Reform Act. Currently, H. R. 1232 is wallowing in the full House of Representatives. It may eventually stick to something and get passed. Pray it doesn't.

Finally, there are agencies totally overseen by a single committee in the House and Senate. These committees treat their agencies as their own turf, and of course, write agency-specific contracting laws. I remember sitting with some bright, young, eager, staff members of one such committee. They were writing a piece of legislation that would affect an agency's contracting law. As I read the bill, all I could think of was--at least they heard of the Competition-in-Contracting Act. Eventually, the bill was passed without question and became another piece of garbage legislation affecting one agency's contracting. If you are working in one of these agencies' contracting offices, woe are you.

I only will briefly mention that the House and Senate Small Business Committees can initiate their own legislation and eventually pass it too.

In our wonderful game of baseball, one pitcher stands on a hill and throws the ball towards the batter to start the action. If Congress wrote the rules for baseball, all 8 players facing the batter would throw balls toward the batter and the catcher squatting behind the batter would take some cheap shots at the batter. If you work in a contracting office or if you are a contractor, you are the batter in Congress's version of baseball.

bob7947

On April 26, 2007, the Army awarded an indefinite delivery, indefinite quantity, fixed price, job-order contract to Lakeshore Engineering Services, Inc., for repair, maintenance, and construction services at Fort Rucker, Alabama. Lakeshore performed 79 construction delivery orders in the base year and 74 construction delivery orders in the first option year.

On March 10, 2009, Lakeshore filed a claim with the contracting officer seeking $1,996,152.40 for losses it incurred while performing during the base and first option year. Lakeshore claimed that it had lost money as a result of the Army's pricing scheme. The contracting officer issued a final decision denying the claim and Lakeshore took the matter to the Court of Federal Claims.

The pricing scheme was a bit complex. Offerors were told that offers were to be priced using three coefficients – one for work (1) during normal hours on pre-priced items, (2) during overtime work on pre-priced items, and (3) on non-pre-priced items. For the pre-priced items, the coefficient was to be "multiplied by the unit prices listed in a Universal Unit Price Book (UUPB) to price a job or project on individual job orders. According to the Solicitation, the coefficient was "a numerical factor that represents costs (generally indirect costs) not considered to be included in the [uUPB] prices, e.g., general and administrative and other overhead costs, insurance costs, bonding and alternative payment protection costs, protective clothing, equipment rental, and contractor’s profit." The Solicitation said the coefficient should account for a wide variety of risks of doing business, adding at a later point, the coefficient "shall contain all allowable contractor costs, including contingencies and profit." It further stated that the "offeror’s coefficient shall contain all costs other than the pre-priced unit prices, as no allowance will be made after award." The Solicitation, however, allowed for adjustments in the coefficient for the option years, to be based on the Engineering News Record building Cost Index (BCI), in accordance with the Economic Price Adjustment Clause, Army Federal Acquisition Regulation Supplement 5152.237-9000.

The Solicitation designated the Gordian Group Construction Task Catalog (the Gordian Catalog) and PROGEN Online as the UUPB and accompanying software, respectively, to be "used by the contractor in development of price proposals for individual Task Orders." According to the Solicitation’s technical specification, "[t]he UUPB, modified for Fort Rucker, contains pricing information (i.e., Government Estimate) for the description of work to be accomplished and for the units of measure specified." This segment further indicated that the "UUPB consists of Divisions 1 through 16 that are applicable to Divisions 1 through 16 of the Job Order Contract Technical Specifications." It additionally specified that the "UUPB modified for Fort Rucker contains unit pricing data to be used by the Contractor in development of price proposals for each work order," adding that "[t]he pricing data is presented as basic items and as price adjustment modifiers to the basic item."

The pricing information available to offerors also included the caveat that: "[w]hile diligent effort is made to provide accurate and reliable up-to-date pricing, it is the responsibility of the Contractor to verify the unit prices and to modify their Adjustment Factors accordingly."

What happened at the Court of Federal Claims? See Lakeshore Engineering Services, Inc. v. U. S., No. 09-865C, April 3, 2013.

bob7947

In Thomas F. Neenan, as Trustee of the Thomas F. Neenan, Sr., Revocable Trust, v. U. S., No. 11-733C, August 22, 2013, you are taken through some of the basics of federal contracting. How many basic points can you identify in this 10-page opinion? I've listed those that I identified below:

1. Offer and acceptance, unconditional offer, preliminary negotiations.

2. Change in ownership, death of party, trust agreement.

3. Pattern or practice.

4. Contract specialist's authority, integral part of the duties assigned.

5. Express authority, implied authority, actual authority, apparent authority.

bob7947

The General Services Administration (GSA) has about 19,000 Multiple Award Schedule (MAS) contracts. About 80 percent are contracts with small businesses. Last year, GSA proposed terminating thousands of small business contracts for not meeting the $25,000 annual sales threshold. Apparently, GSA forgot to pay the contractors something--$2,500.

The House Committee on Small Business did some checking--more likely someone told them--and found that GSA owed some money. Here is the story.

Between Fiscal Year 2008 and Fiscal Year 2012, there were 3,300 of these canceled federal contracts. Of these, 1,334 were eligible for a minimum guaranteed payment from GSA; 1,281 of the eligible firms were small businesses. Because of this error, GSA will pay $3,108,888 owed to these companies. The remaining firms had not filed the necessary forms, so it is unclear if GSA would have owed them the $2,500 payment.

You can read all about it at the Small Business Committee site.

bob7947

" . . . was on the take. At the New Mexico Department of Corrections she was responsible for selecting the best contractors to perform maintenance work for the State. Instead and bypassing any public bidding process, she awarded about $4 million in contracts to . . . over the course of three years -- receiving about $237,000 in return from . . . , [the contractor's] owner."

See the judgment at ca10.uscourts.gov (pdf).

bob7947

"What you’re looking at is a cell in the midst of dividing into two identical copies—a process called mitosis. Here, the chromosomes (in blue) are aligned at the cell’s equator. Microtubules (red) from opposite poles of the cell attach to the chromosomes using the kinetochores (green) and pull them to opposite ends of the cell, which then splits in half. But sometimes cells do not divide properly—a common problem in cancer. Understanding the mechanics of cell division could help us correct this process when it goes wrong."

See it at directorsblog.nih.gov.

bob7947

I was reading a decision of the Armed Services Board of Contract Appeals (ASBCA) about a week ago and I found the following.

Sharp Electronics Corp. v. McHugh, 707 F.3d 1367 (Fed. Cir. 2013) is the first Federal Circuit interpretation of FAR 8.406-6 regarding the respective authorities of GSA schedule COs and ordering agency COs.

Why read the ASBCA decision when I could go straight to the horse's mouth! So I searched the Court of Appeals for the Federal Circuit (CAFC) web site and I found the Sharp decision--and it was recent. Here is a brief description of the issue in the Sharp case.

On September 18, 2001, the General Services Administration (GSA) awarded a multiple award schedule (MAS) contract to Sharp Electronics Corporation for office equipment. On December 1, 2005, the Army issued a delivery order "in accordance with and subject to terms and conditions" of Sharp's MAS contract. The order provided for a four-year lease of copier equipment, including one base year and three option years, with the last option year ending on December 1, 2009. Option years one and two were exercised in full. The Army partially exercised option year three for six months and subsequently extended the lease for three more months. The lease finally ended on August 31, 2009.

Sharp filed a claim with the Army contracting officer (CO) citing the termination fee provisions of its schedule contract. The Army CO did not respond and did not refer Sharp's claim to GSA's CO who was responsible for Sharp's MAS contract. After 60 days, Sharp appealed to the ASBCA which determined that it did not have jurisdiction and dismissed the case. Sharp then filed an appeal with the CAFC.

What should an agency CO do with a dispute on an order? What should an agency CO do if there is a question of contract interpretation with the MAS contract and that interpretation affects the interpretation of the agency order? Well, in a majority decision, the CAFC tells us this.

We hold that FAR 8.406-6 does not authorize an ordering CO to decide a dispute requiring interpretation of schedule contract provisions, in whole or in part, regardless of whether the parties frame the dispute as pertaining to performance. However, the ordering CO is certainly authorized to construe the language of the order (or its modifications). Because an order's details--not merely price, quantity, and specifications, but also permissible variation in quality or quantity, hours and location of delivery, discounts from schedule pricing, etc.--are arranged between the schedule contractor and the ordering CO, the ordering CO is able to construe these commonly disputed terms as long as the dispute does not involve interpretation of the schedule contract. We also see no reason why an ordering CO resolving a dispute cannot apply the relevant provisions of the schedule contract, as long as their meaning is undisputed. For example, an ordering CO who resolves a dispute over whether goods are conforming may apply schedule contract provisions governing replacement of nonconforming goods. See FAR 8.406-3(a) (2012) ("If a [schedule] contractor delivers a supply or service, but it does not conform to the order requirements, the ordering [CO] shall take appropriate action in accordance with the inspection and acceptance clause of the contract, as supplemented by the order."). The dispute only need go to the GSA CO if it requires interpretation of the schedule contract's terms and provisions.

It is easy for the CAFC but is it that easy for you? There was a minority opinion in this CAFC case too which looked at it differently.

Anyway, the CAFC case is Sharp Electronics Corporation v. John McHugh, Secretary of the Army, No. 2012-1299, February 22, 2013. The ASBCA decision is Impact Associates Inc.

bob7947

"Under a Contractor Team Arrangement (CTA), two or more GSA Schedule contractors work together to meet ordering activity needs. By complementing each other's capabilities, the team offers a total solution to the ordering activity's requirement, providing a "win-win" situation for all parties."

But what is a Prime/Subcontractor relationship and what is the difference from a CTA? Let GSA explain.

See the information at gsa.gov.

bob7947

At this time of year, newly introduced legislation often is introduced and then quickly enters oblivion. I checked this Senator's committee and subcommitee assignments and did not find any direct link to federal contracting. Maybe that explains it.

"Sen. Toomey's bill would require the GAO to include the most common reasons bid protests are sustained. This additional information could help federal agencies identify needed improvements in the contracting process, reduce the number of protests overall and provide Congress with much-needed information about possible weaknesses in the federal contracting process to facilitate potential legislation."

See it at toomey.senate.gov.

bob7947

The Competition in Contracting Act of 1984 requires the Government Accountability Office (GA0) to report to the U. S. Congress annually when government agencies fail to fully implement its bid protest recommendations. GAO has posted these reports on its website since fiscal year (FY) 1995. Initially, these reports provided little information but by FY 2004, GAO published its "Bid Protest Statistics" covering FY 2004 through 2001. I have added every one of these reports to the fiscal year numbers at the top of the bid protest statistics.

Beginning in its report for FY 2013, GAO began listing its "most prevalent reasons for sustaining protests" during the FY. This has continued for FY 2014, FY 2015, and FY 2016. Although the information provided does not include cases where an agency took corrective action before a formal sustained decision was reached, it does provided information on 366 sustained decisions. In that sense, it may provide some help whether you are trying to prevent a protest or whether you may protest a procurement.

For FY 2016, there were 139 sustained protests compared to the 227 protests for the previous 3 Fiscal Years. Since GAO does not provide the number of sustained protests by most prevalent causes, I have ranked the most prevalent causes considering the number of sustained protests during a year.  For example, I divided the number of protests in each of FY 2016, 2015, 2014, and 2013 by 1.  That resulted in the following factors:

  • FY 2016 (139/100=1.39)
  • FY 2015 (68/100=.68)
  • FY 2014 (72/100=.72)
  • FY 2013 (82/100=.82)

I then multiplied each factor by each most prevalent reason in each Fiscal Year using GAO's ranking.  Then I added my raw rankings of individual reasons for each Fiscal Year to come up with my final numerical ranking.  Yes, it's somewhat crude but all that GAO provides is general information.  

Below is my ranking of the most prevalent reasons for sustained protests listed by GAO for FY 2016 through FY 2013 with my numerical ranking:

  1. failure to follow the evaluation criteria (Numerical Ranking of 8.4 and it was listed 3rd in FY 2015 and 1st in FYs 2014 and 2013)
  2. unreasonable technical evaluation (Numerical Ranking of 8.28 and it was listed 5th in FY 2015, 3rd in FY 2014, and 1st in FY 2016)
  3. unreasonable cost or price evaluation (Numerical Ranking of 7.05 and it was listed 1st in FY 2015, 4th in FY 2013, and 3rd in FY 2016) and
  4. unreasonable past performance evaluation (Numerical Ranking of 6.89 and it was listed 2nd in FY 2015 and FY 2016)
  5. inadequate documentation of the record (Numerical Ranking of 3.97 and it was listed 4th in FY 2015 and 2nd in FY 2013)

Anyway, that is my way of trying to quantify the reasons.  

Other reasons for sustained protests GAO listed include

  • flawed selection decision (Numerical Ranking of 2.75 and it was listed 2nd in FY 2014)
  • unequal treatment of offerors (Numerical Ranking of 2.42 and it was listed 4th in FY 2014 and 3rd in FY 2013)

In addition to listing the most prevalent reasons, GAO also gives 1 example decision for each of the most prevalent reasons it lists in a FY.  For example, under unreasonable technical evaluation which GAO placed first in FY 2015, GAO lists Deloitte Consulting, LLP, B-412125.2, B-412125.3, Apr. 7, 2016, 2016 CPD ¶ 119.

To me, the most striking reason for GAO sustaining a protest is inadequate documentation. That can be prevented by a thorough review of what documents are provided in the evaluation and selection decision. If there is something missing, identify it and correct it. You can get more information on the documentation issue by looking at the Wifcon.com protest page FAR 15.305 (a)(3): Technical Evaluation - Documentation.

Another striking reason for sustained protests is the first that I list--failure to follow the evaluation criteria. One time a friend of mine was sitting on an evaluation panel for a GAO procurement that I had no involvement in at all. He had something extra he wanted to include in his evaluation of proposals and he asked me about it. Although I was stunned at the question, I simply told him that he must follow the evaluation criteria in the solicitation and if he had any questions he should ask the contracting officer--not me.

Before ending this entry, I will once again remind you that the information provided by GAO only includes sustained protests. These are decisions in which the agency digs in its heels and fights the protest to a final decision. As GAO explains, "agencies need not, and do not, report any of the myriad reasons they decide to take voluntary corrective action." What you see here may be the tip of the iceberg.

bob7947

You are a program officer with big "wants" but with little federal money. Your contracting officer is not familiar with hiding overruns in an FPI(F) contract--yet. Besides, you have never heard of it--yet. What to do? Well, this politician knows best. With a little luck and plenty of ignorance, you may see the "fixed price technical competition, under which all offerors compete solely on nonprice factors and the fixed award price is pre-announced in the solicitation."

Let's think about this. Fixed price, fixed award price, the same thing. Nobody is saying anything against the FPI(F). So, get ready, low ball your fixed-price and let the offerors compete for it. If they want the business, they can promise you anything. What else can they do? In a few years, just before things fall apart, find another job.

By the way, if you want to read about it start at the bottom of the "Discussion draft" to the right of the article. It is in Title V "Other Reforms." They should have called it "Afterthoughts."

See it at fcw.com

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