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  2. We were ignorant of the distinction between a “matter of responsibility” and a “matter of responsiveness” to the contract requirements”. What we did know was that there were frequent examples of primes who were fronts for subs, primes who took advantage of their small or small/disadvantaged business status, contractors who couldn’t obtain award of prime contracts for various reasons or because it was reserved for small or small disadvantaged business, etc. One form was for unrestricted solicitations (52.236-1 Performance of Work by the Contractor) and the other was for sole source or set-asides for small business, 8(a), etc.(52.219-14 Limitations on Subcontracting). In working with SBA Regional Office in Atlanta, we defined what was self-performed work for purposes of the -14 clause and included that in the form. We included the various lines for the contractor to fill in to determine intended compliance. After all, the clause clearly says “(e) Limitations on subcontracting. By submission of an offer and execution of a contract, the Contractor agrees that in performance of a contract…” Since they were “agreeing” or would have to “agree”, what did they have to complain about? They should know at the time of proposal submission how they intended to meet the self-performance requirements. Since we provided pretty straightforward explanation and description, there wasn’t much room for doubt or ambiguity to argue about later. And we required the prime to provide direct management and supervision of the job (consistent with the SBA regulations and requirements). For source selections, it was a go/no-go factor. For sole source, it was simply a requirement to include in their proposal. We never got any complaints. Those competing for set-aside construction contracts or selected for sole source construction were in a privileged class for those competitions. Congress decided that those having the opportunity to participate in a restricted competition or sole source environment must self-perform at least a certain portion of the contract work. And Congress specifically agreed that simply buying the materials for someone else to install/perform the work won’t be allowed to count as self-performed work. Similarly, for unrestricted source selection competitions, we defined what was and examples of what wasn’t self-performed work, “on-site”, with its own organization ” and provided the lines to fill in. Again, buying materials for subs to install/perform work wasn’t self-performed work. It was also a go/no-go factor. Essentially, this clause was designed to prevent a contractor from obtaining and performing a contract in name only, without providing any added value (e.g., brokering or acting as a front for other firms). It precludes a contractor from reaping the profits and credit for the work when in actuality the subcontractors perform the entire job.* FAR 36.501(a) states, in part, “To assure adequate interest in and supervision of all work involved in larger projects, the contractor shall be required to perform a significant part of the contract work with its own forces.” *See:https://publiccontractinginstitute.com/far-52-236-1-performance-of-work-by-the-contractor-a-hard-clause-for-oconus-construction-contractors/ In the 90 or so source selections and 60 or so sole source negotiated contracts while I was with the Mobile District USACE, we never had a problem, complaint or a protest from a proposer- even when we occasionally eliminated one or more proposers that didn’t or couldn’t meet the stated requirements. If I was still in the source selection business, I’d figure out a way to get or consider the information at the responsibility determination stage of the acquisition. But that would be a much more inefficient way to try to meet the intent of the clauses. You go through the SS only to find that the apparently successful offeror doesn’t intend to or can’t meet the requirement. Stupid, in my ignorant opinion. There shouldn’t be any legal problem with sole source negotiated acquisitions in requiring the proposer to show how they intend to meet the -14 limitation. Go for it!
  3. Today
  4. @WifWafBrace yourself. You may soon be hearing from Carl Culham about your duty to proactively enforce the clause. As for me, I wouldn't spend even one minute enforcing the clause unless compelled to do so by some higher power. 🙄
  5. @C CulhamThat's more refined that you know. I think you're right, the USG doesn't solicit the actual calculation, because it is a certification to be examined during responsibility determination, not something for proposal evaluation. After all: Emphasis added. In that case, the applied calculation must not be solicited. Oops - 13 CFR 125.6(d)(2) even explicitly calls it an, "[E]lement of responsibility." Furthermore, why am I even attempting to enforce this compliance during performance? I just read 13 CFR 125.6 and FAR Subpart 19.5, and I drilled down through the Service-Branch regs, all without finding a single imperative CO Responsibility to determine LOS compliance. All I found is "Contracting officers may, at their discretion, require the contractor to demonstrate its compliance with the limitations on subcontracting at any time during performance and upon completion of a contract" (13 CFR 125.6(e)(4)). If that is the case, I suppose the weeds of this calculation are best left to post-award orientation conference banter, if they even come up at all between CO and and awardee. Fine by me - I don't need more work to do. Someone tell DPAP and the CAAC if they need COs to do anything here, they have another class deviation to write. Criminy, @Vern Edwards, the time we've wasted on this! 😂 There are 154 "Contracting Officer shall" statements in FAR Part 19, but none apply here. I'm frustrated, but not surprised. If anyone so chooses to take up the SBA on that "CO may" duty, try using the above calculation, and let us know how it goes.
  6. Happy Friday, Readers. It’s sad that summer is coming to an end but the good news is that fall is upon us which means it is time for cool weather, falling leaves, and football! It seems everyone is filled with optimism at the start of the season. Here’s hoping your favorite team is victorious and in between games here’s a few interesting articles on what’s going on in federal government contracting this week. Have a great weekend! Go Team! Class Deviation—Limitations on Subcontracting for Small Business [DoD]2021 Growth Accelerator Fund Competition and SBIR Catalyst Competition Result [SBIR]Defense Wants to Know More About Potential Barriers for Small Businesses Contracting [NextGov]Where does waste, fraud and abuse in the military stand after Afghanistan? [FedNewsNet]Minimum Wage for Federal Contracts Covered by Executive Order 13658, Notice of Rate Change in Effect as of January 1, 2022 [FedReg]Five Ways 9/11 Changed the Defense Industry [GovExec]Questions Linger on Vaccine Mandate for Federal Contractors [GovExec]Pentagon official says CMMC changes will be finalized ‘very soon’ [FedNewsNet]Industry’s patience wearing thin with DoD’s CMMC, GSA’s follow-on to OASIS [FedNewsNet]Air Force software platform expansion stalled by cybersecurity concerns [FedScoop]Parkville Man Pleads Guilty to $335 Million Fraud, $615,000 Tax Violations [DoJ]One contractor learned that it’s a bad idea to bribe federal officials [FedNewsNet]Former Walter Reed department head pleads guilty to federal charge [FedNewsNet]SBA Announces Entrepreneur, Investor, and Award-winning Entertainer Jennifer Lopez to Headline National Small Business Week Virtual Summit 2021[SBA] The post SmallGovCon Week in Review: September 13-17, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  7. Fascinating discussion (to me) because I'm always interested in whether or not a contractor can escape liability under the False Claims Act by claiming it was making a reasonable interpretation of an ambiguous regulation or other requirement when it prepared and submitted its invoices. This discussion seems to support the notion that the rule is, if not patently ambiguous, at least so dense as to require an expert (probably a top-notch government contracts attorney) to help the contractor chart a compliant course.
  8. With the above clarification I really do wonder about giving this instruction/advice/calculation format in the RFP. The subcontracting limitation clause, in my words, is a representation made by the contractor they will meet the performance standard on limitation at proposal submission and execution of contract. In making such a representation the contractor should be left to their own devices, pursuant to the clause, as to how they made their determination of compliance. If the government tells them how to they are taking on a responsibility in my view that is not appropriate. The tentacles of application of the limitation clause reach far and wide. Agencies themselves questioning a firms size based on the limitation clause, other firms also questioning, GAO protests, SBA OHA appeals and even DOJ False Claims Act cases ( https://gtpac.org/2019/08/29/doj-cracks-down-on-set-aside-contracting-fraud/) How often, how many, I really do not know. In the end no matter who questions the limitation matter the one that does question will be compelled to prove their position with a preponderance of evidence. In doing so the specific facts of the contract, how it is priced and how such pricing assists in evaluating the limitation matter will play a big role along with what the contractor is actually doing. And then there is 13 CFR 125.6 that carries with it its own examples of calculation. I know my thoughts are not refined for this post but quickly stated they all lead me to think that in the scheme of things putting a calculation method as created by the agency and placing it in the RFP does not make sense to me.
  9. Presumably, Congress and executive branch policymakers and planners. It is management information about what the government buys. See, for example, the following from a 2008 report by the Congressional Budget Office, "Contractors' Support of U.S. Operations in Iraq (August 2008)": Emphasis added. When you buy half-a-trillion dollars a year worth of stuff, planners and budget makers like to know what it is—for example, what your military needs and buys when it goes to war. For other mentions of use of the PSCs, see Congressional Research Service, Defense Acquisitions: How and Where DOD Spends Its Contracting Dollars. https://www.everycrsreport.com/files/20180702_R44010_3dbc3cecbdbf9321a06cd672ead10348033320c8.pdf
  10. Yesterday
  11. Correct, thank you for explaining Joel. @govtacct02 I edited the OP to specify negotiation of a noncommercial item. It can be comprised of some commercial item supplies, though.
  12. You're right to question that. From the Final Rule: I think we leave the calculation above as-is for use in the RFP. But I think the invoice instructions would have to go into those weeds, and elicit what happened after the the Contractor proposed to pay so-and-so SB. Let's try this calculation again, adjusted for Section G. You would need to specifically require this in the final invoice of the Base and each Option period (if enforcing at the TO level), or at the end of each ordering period (if enforcing at the Indefinite Delivery vehicle level). (Note you have the option to choose which way you want to enforce compliance where the clause is prescribed in FAR 19.507(e)(1). You fill in one of the two methods in the clause itself.) a) Enter amount that was paid by the Government here: $_____________ b) Subtract from line a the amount paid by the Contractor to subcontractors. Do not subtract the amount paid to subcontractors in order to meet PWS requirement C.xxx [CO to fill-in known PWS section requiring service where it is both not the principal purpose of the acquisition and small business concerns do not provide the service]. Do not subtract the amount paid by the Contractor to a "similarly situated entity", as defined in clause FAR 52.219-14 of this contract, UNLESS the similarly situated entity further subcontracted to an entity that does not meet this contract definition. Enter the resulting difference here: $_____________ c) Contractor’s estimated percentage of self-performed work (b/a X 100 = c%) ________% Trying not to overcomplicate (again). I think it's still practicable.
  13. Newbie, I am trying to remember whether the PSC makes any difference or has any importance. It might be a rhetorical question. The NAICS code might matter because that sets the small business size limitation, and for 8(a) contracts might limit the field to certain players, but does the PSC make any difference to anyone? Who cares about the PSC?
  14. It's a different transaction but involves something that is somewhat similar. That other post is "resolved" because I went with the PSC that Program and past Programs/past contracts used, so it remains more of a theoretical question of what falls under services vs supplies in general and in the context of PSC.
  15. Thanks. I ended up going with the service codes since that is what previous contracts/other programs used too. So this is now more of a theoretical quesiton of what falls under supplies vs services.
  16. We are buying a 1 year license to the 'knowledge, know-how, and rights' to produce certain biological components (adjuvants) that was patented by this company.
  17. My small business was awarded a Phase II STTR contract, which was issued on an SF 1449 for commercial items. We are delivering reports under the contract analyzing our research and development. The services do not meet the commercial item definition. It seems an SF 1449 is the wrong contracting vehicle. Am I right? And if so, what is the proper standard form for a Phase II STTR contract?
  18. Another fact: Searching the Federal Register, I found 144 entries published between 1983 and today that involved rules about limitations on small business subcontracting. Think of the time and effort that went into preparing, staffing, and coordinating 144 Fed Reg entries. Think of all the time spent quibbling about wording, interpretation, and application. Ponder how many breaches of 52.219-14, intentional and unintentional, have gone undetected. Think how much time and effort would have to be spent to prevent, detect, and remedy such breaches. In the movies, communist bureaucrats are often portrayed as tedious apparatchiks. (See, "Ninotchka.") But when it comes to being apparatchiks, no one tops us.
  19. I have nothing to contribute to the substance of this thread, but I do have some facts that might interest you all. In the 1984 Code of Federal Regulations, in the paperback edition published by the Government Printing Office, Title 48, the FAR, Part 19, occupied pages 253 - 283. In the 2020 Code of Federal Regulations, in the paperback edition, same format as in 1984, Title 48, Part 19, occupied pages 428 - 501. Count the pages. Calculate the average growth per year. This happened during the terms of both Democrat and Republican presidents and Congresses. We work in a utopia of rules. I find this very discouraging.
  20. I have read and re-read your example and I wonder if it addresses this portion of the clause (deviation) with regard to services -"Any work that a similarly situated entity further subcontracts will count towards the prime contractor’s 50 percent subcontract amount that cannot be exceeded." My simple calculation to illustrate my wonderment. In this example all dollars relate to principle purpose.- Contract award is for $1,000 to the SB (Prime) Prime subs $500 to LB (not similarly situated) and subs $250 to similarly situated entity. All good at this point. The similarly situated sub then subs $200 to a LB (not similarly situated). Not good now as the subcontracted amount to not similarly situated entities is $700.
  21. Ok, we understood you the first times, govtacct02. 🤪. The OP was referring to the prime’s markup on a sub’ prices.
  22. I do not understand how decrementing profit on a commercial item would be appropriate if the determination of price reasonableness was truly based on a market price. It seems to me that the buyer is conducting a cost analysis and hoping to arrive at a cost-based price for a commercial item. Please clarify!!
  23. I do not understand how decrementing profit on a commercial item would be appropriate if the determination of price reasonableness was truly based on a market price. It seems to me that the buyer is conducting a cost analysis and hoping to arrive at a cost-based price for a commercial item. Please clarify!!
  24. I do not understand how decrementing profit on a commercial item would be appropriate if the determination of price reasonableness was truly based on a market price. It seems to me that the buyer is conducting a cost analysis and hoping to arrive at a cost-based price. Please clarify!!
  25. Last week
  26. I have worked in several agencies, and they all handle it differently. I am okay with that diversity. Whether or not a contracting officer in Agency X can sign a particular modification (or other action) can only be answered within Agency X.
  27. This thread includes many great solutions to a problem complying with FAR 52.219-14, including the use of regulatory history @Retreadfed, use of the available 13 CFR 125.6 (b) "Mixed contracts" regulatory examples @C Culham, use of a special clause/deviation @Don Mansfieldand @joel hoffman, use of partial set-asides @Constricting Officer, and use of separate line items' applicabilities @Vern Edwards. There are so, so many interpretations and loopholes to be found in Limitation on Subcontracting clause's implementation, that I was surprised in my research this year to not find one contract that set it straight within its four corners! Now that FAR Case No 2016-011 went to Final Rule and was added to the FAR via Federal Acquisition Circular 2021-07, and both DPAP and the CAAC have issued a Class Deviation to correct it (see Final Rule comments 12A thru 12D), the calculation is simplified, less intrusive on a SB, and, in a word, practicable (everyone's favorite word). So, since it's no longer an impossible task, I propose COs award contracts and orders that straighten out the remaining rough edges and set forth both 1. The way to calculate compliance under the contract, and 2. The way the CO will measure compliance during performance of the contract. I work primarily with services, so I will address them only here (supply and construction will differ at b) below). 1. I propose COs require calculation of the awardee's self-performed work as follows: a) Enter amount to be paid by the Government here: $_____________ b) Subtract from line a the amount to be paid by the Contractor to subcontractors. Do not subtract the amount proposed to be paid to subcontractors in order to meet PWS requirement C.xxx [CO to fill-in known PWS section requiring service where it is both not the principal purpose of the acquisition and small business concerns do not provide the service]. Do not subtract the amount proposed to be paid by the Contractor to a "similarly situated entity", as defined in clause FAR 52.219-14 of this contract. Enter the resulting difference here: $_____________ c) Contractor’s estimated percentage of self-performed work (b/a X 100 = c%) ________% 2. I propose simple review of invoices (thank you Final Rule!) to measure compliance, but COs need to tailor their Section G invoice instruction clauses to enable this review at the end of the POP. Maybe in your RFP you also solicit how much dollars they plan to put in each of 1.a and 1.b above, so you're not setting them up for failure at the outset, and so there's a meeting of the minds on this new rule's implementation. Don't just rely on course of performance interpretations with a new rule. Does anyone have a better way of writing the calculation I did at 1., or perhaps a different understanding of the calculation? If your NAICS is 562910 or you are awarding for work OCONUS, you can just name that work by using the Class Deviation clause language. If your PWS is not set up to allow 1.b) fill-in then you can cite the service itself I guess. Just don't leave room for interpretation - it's your contract after all.
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