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  2. May I recommend that you make an argument, one way or the other, and then ask others to share insights on your arguments? I think you need to separately address the incentive for an employee obtaining a vaccine and the incentive for an employee seeking an exemption from the contractor. And consider whether you are talking about an already-awarded contract versus negotiating a new contract.
  3. Yes competitive. I was editing my post to add that while you posted.🤠
  4. Is the product sold in a competitive market? If so, maybe there are two questions: Not how much they can mark it up, but (1) how much can they sell it for and (2) how little can they make it for. See Car: A Drama of the American Workplace (1999), by Mary Walton. One of the best business books I've ever read. In fact, THE best.
  5. I honestly don’t know how much manufacturers normally mark up their products. I do know that a friend of mine is related to a family who still owns one of the original Ford dealers in Montana. FMC would sell the dealer one vehicle per year at a deeply discounted price. The family let my friend buy a new 1997 Ford F-150. The dealer sticker price was about $23,000. He paid $13,000 for it including shipping from the factory. Of course that doesn’t necessarily represent the FMC cost. But the dealer cost at the time would have been much closer to $19,000- $20,000. I can’t speak for the present but in the late 60’s to early 70’s, the Air Force Academy Cadet Store sold everything to Cadets at cost with no markup. The store sold a wide variety of goods like a smaller Base Exchange Store. Most everything cost about 50% of suggested or pre-tagged retail prices. It seemed to me at the time that retail store prices ran about 100% of a store’s cost from a manufacturer or wholesale supply. Of course that also included all of a retail store’s costs plus profit margins. So, yes - I can see that normal retail markups on supplier prices for their internal costs plus profit can be substantial and I don’t have a clue what normal manufacturer markups in a competitive market are. I say competitive because the FAR cites a competitive market in the description of “fair and reasonable price”.
  6. Yesterday
  7. And who knows? That contract with Transdigm might have delivered the part that kept an airplane flying. It might be that under the circumstances, the best possible contract price was negotiated.
  8. Or look at buying a new vehicle today, especially those in demand. A $50,000 MSRP Ford Bronco is selling some places at $30,000 over sticker. Wonder what cost or pricing data from Ford shows as the cost? Just like lots of contracting areas, we don’t need more policy, procedures, regulations or laws. We need better and trained people who are held accountable for results and rewarded accordingly for good performance.
  9. $128 : $7000 = $0.128 : $7.00 I can easily see $7.00 as a reasonable price for something that costs 12 or 13 cents to produce. Think of a specialty bottle of water.
  10. I looked through the IG report. Maybe this recommendation has the most merit to me If an agency is buying something needed, they ought to have knowledgable functional experts that at least can say what’s a reasonable price/cost. COs can leverage that expertise for negotiating. The way most COs are trained combined with limited experience, they can’t really benefit from cost or pricing data or other price/cost information. Sure auditors are available but the process of using them is cumbersome and time consuming. When a CO finally gets the audit findings, contractors can bring up lots of new information during negotiations. Then often the CO is lost for lack of understanding and assistance. It’s either wing it or go back again to the auditor. Here’s a question - how many government negotiators understand accounting and specifically cost accounting?
  11. I'm not following your point about manufacturer vs. a dealer. If you see a pair of these vacuum tubes that cost less than $128 to produce selling for $7000, buy them quick because you can flip them and make some serious bucks. Or would that be corrupt? NOS Western Electric 300B, Black Plate, 1964 & 1966, Matched Pair | TubeDepot.com
  12. That’s great. Now, please show how a part that allegedly cost $128 to produce and sold for over $7000 is a fair and reasonable price buying it from the manufacturer, not a dealer. I’m assuming that the KO or CS justified the priced based upon historical prices for that item. Perhaps I am assuming too much.
  13. I apologize if this has already been asked. I tried searching the forum but could not locate this topic. I would like to solicit opinions on the allowability, allocability, and reasonableness of costs (either as direct or indirect) associated with a Federal contractor paying its employees' incentives (i.e., $100-$500) to receive the COVID-19 vaccine or secure an approved medical or religious exemption from receiving the vaccine. Federal contractor asserts the incentive costs are necessary/allowable to comply with the recent Executive Order mandating compliance for all Federal Contractors to be 100% vaccinated. Thanks in advance.
  14. Hello, Readers. We’re feeling the effects of the cold snap here in Lawrence, KS. If you are, too, we hope you’re keeping warm. There’s nothing like a mug of hot chocolate, a soft blanket, indoor heating, and (of course) a roundup of the week’s federal contracting news to fight the chill. As usual, we’ve got the highlights for you covering what happened this past week in federal government contracting news. Hot topics include: updates on vaccine mandates and pandemic response initiatives, cyber security, and several government fraud, bribe, and theft schemes being brought to light. Read more below and don’t forget to check out our blog for even more federal government contracting news. Former acting DHS IG pleads guilty to charges on stealing federal software, databases [FedNewsNet]Punishments, and first religious exemptions, for military vaccine refusers [FedNewsNet]With an increase in federal payouts comes an increase in improper payments [FedNewsNet]GSA Unveils Updated Vendor Support Center [GovConWire]Four Sentenced for Bribery and Scheme to Defraud VA and SBA [DOJ]Omicron Variant Prompts Federal Government to Accelerate Pandemic Response Initiatives [GovConWire]Cloned Dept. of Labor Site Hawks Fake Government Contracts [Threatpost]DOD Hopes for Legislative Action on Product, Services Pricing Policy [DOD]FY 2021 Procurement Management Review “Year in Review” Newsletter [DOD]Former DoD OIG Official Sentenced for Accepting Bribes and Defrauding the United States [DOJ]Audit of the Department of Defense Foreign Military Sales Acquisition Process [DODIG]NAVSUP Fleet Logistics Center Norfolk Awards Unique Mentor Protégé Program Agreement [Navy]Agencies need to work smarter, not harder to close cyber vulnerabilities [FedNewsNet]HHS says it’s ready to take over Operation Warp Speed, but GAO is not so sure [FedNewsNet] The post SmallGovCon Week in Review: January 17-21, 2022 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  15. I forget where I first found this, but here is a quote by Henry Ford on prices/costs that I often share when I hear/see similar debates as this one:
  16. I do not know why but your post brought this to mind "Victory Vertical".
  17. I am seeking information on what other organizations do regarding insurance on private personal property. The Department of State’s 14 FAM 641 Policy on Private Insurance by Employees, encourages employees to carry their own private insurance to offset damages or losses not covered by the agency which only covers the depreciable costs of items damaged during a move. Additionally, the Military Personnel and Civilian Employees’ Claims Act of 1964 will significantly depreciate the value of most effects and reimburse no more than $40,000, unless it was an emergency evacuation or extraordinary circumstance (of which reimbursement may increase up to $100,000).
  18. Outrage is fashionable Congress, and elsewhere. Maybe, instead of focusing on the contracting process, Congress should ask why the government buys and uses things that will need hard-to-get and pricey spare parts in a few years. How much longer are we going to need manned "fighter" aircraft and strategic bombers? ("Dogfight" means firing a missile at a plane that's still over the horizon.) How long will aircraft carriers last in a war with a major nation armed with hypersonic missiles? (Like China.) Do we still need airborne infantry divisions? (To make mass drops behind enemy lines? Really? Like Market-Garden in WWII, that great success?) How many of our "needs" are driven by necessity and how many by a desire for cultural preservation? Nostalgia?
  19. Nor does a clumsy attempt at calculating cost & profit necessarily produce a fair and reasonable price. COs and CSs are not auditors. I negotiated a 'reverse' deal whereby the Navy was selling GFM/GFP from the losing contractor to Hughes after a down-select. Hughes' offer was based on their total costs to buy and rehab the GFM/GFP, not the price the Navy paid when they bought the GFM/GFP. Hughes was willing to walk away at the cost for them to buy new material. The biggest hurdle I faced was getting my leadership to understand that C&P data was irrelevant and market conditions were the primary driver of the negotiated price.
  20. From the Transdigm response: When you see a report with "findings" that look more like statistical outliers you have to question the entire methodology - and this report was used as the basis for proposed legislation. Gosh; it's almost as if the people we sent to Washington will use anything to justify using the power of government to punish their enemies and gain the support of the most fanatical and febrile zealots among us.
  21. Contracting offices have been procuring housing/lodging services for military and civilian personnel for as long as I have been around, and I have been around for almost 50 years. Such acquisitions are not at all uncommon. Maybe it's time to put your personal experience as a "personnelist" behind you. Contracting contracts for whatever is needed.
  22. In some situations, it may make sense for an organization to contract for housing and provide it to personnel, rather than making those persons find their own accommodations with their housing allowances. If your organization is contracting for housing, I am sure the proper authorities have decided it is appropriate to do so.
  23. There is another possible view. If a contractor can get away with outrageous prices on sole source acquisitions, KO’s who take the easy route to justify what they are paying and poor negotiators or worse, those that don’t negotiate, why wouldn’t they keep doing it? Nothing compels a firm to sell to the government but I’ll bet that a firm would rather sell products at lower than outrageous prices than sell little or nothing.
  24. Am interested in other acquisition professionals opinions on the notion of Contracting being responsible for securing housing of military personnel. My understanding is, it pertains to active duty and reserve personnel, there are provisions already in place for securing lodging. I'm formerly personnel, to include when I initially retired before coming on board in Contracting. For my entire career and to my knowledge, up until entering the Contracting workforce, lodging/travel for military/civilians was a function of personnel. Since starting at my present location I've issued orders for expert witnesses; reserve personnel; and military families. Am I alone in this sentiment or are there others who feel Contracting is being pulled in to do someone else's jobs? As a personnelist at units I issued orders for AD personnel to travel; secured lodging for court-martial witnesses (working in conjunction w/ Legal). At no point did I ever contact Contracting to complete personnel functions.
  25. I thought it has been explained in the audit report and in at least two examples that relying only on previous sales pricing doesn’t necessarily produce a fair and reasonable price. It covers the KO’s ass to justify why they paid a proposed price.
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