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  2. Ultimately, it is your firm's business decision that should prevail. There are contractors that will accept cost type contracts with a low fee amount in order to help out a customer if it looks like there are future business opportunities that may be more in line with the firm's contract business model. Is the Agency or your firm willing to explore a cost plus incentive fee contract where it could be shown that the potential Agency dollarized share of savings might exceed their unwritten policy expectation? Other aspects to consider are whether this is a competitive situation.
  3. Today
  4. A couple of things that we know: (1) for R&D work, fixed fee is capped at 15% of total costs (FAR 15.404-4(c)(4)(i)(A)); and (2) when cost analysis is performed a structured analysis approach must be used to develop negotiation objectives. In my mind the best way to approach the negotiation is to use the structured approach (e.g., weighted guidelines or similar) to determine the fee you believe you are entitled to receive, then negotiate that dollar value, not the percentage. Avoid discussing the fee as a percentage of certain cost elements; attempt to discuss the fee as a dollar value--but use the results of the structured approach to support your position. All I've got. Hope this helps.
  5. Neil Roberts

    Solicitation questions and answers

    I am not sure if my position is inconsistent with all the others. If the solicitation was brand name or equal, I would not tell any bidder whether their pre-bid selection of a particular "equal" brand name was acceptable or not. I believe that is a matter for evaluation of the bids.
  6. Can you propose a FFP level-of-effort?
  7. Don Mansfield

    Solicitation questions and answers

    I don't think that you would be required to disclose your answer to other quoters. I've never thought of the problem of technical transfusion (i.e., revealing one offeror's technical solution to another offeror) in regards to answering questions about the solicitation, but I see that it could potentially happen.
  8. As we await the NDAA for 2019, DoD focuses on 2017 mandates aiming to ease requirements for commercial item companies. Despite Congress’ 1994 acquisition streamlining bill, the administrative burden for Defense contractors supplying commercial items to the Federal Government has grown quite cumbersome. Here is an update on DoD’s progress, and how the proposed changes may affect some Defense contractors. Read the full article here.
  9. MAJFJPKO

    Solicitation questions and answers

    Gentlemen, The solicitation was written as "Brand name or equal" and all bidders were on equal footing. I was just a little "conflicted" as I believe in making all clarifications available to all, but I also believe in the right to a certain "competitive advantage" in that realm. I greatly appreciate your input!
  10. Maybe you should ask that agency why they use that business practice. Anything anyone tells you here is nothing more than a guess (unless someone from that office decides to respond here on WIFCON). No, not at all. See FAR 16.103 for starters: Also see FAR 15.405:
  11. So how about this thought from a little different angle to support your belief. Do you know of any contractual authority, other than what others might want to make up, to exceed the maximum (scope of contract) of an IDIQ contract? Concluding that 52.217-8 does allow such a increase in scope since it became a stated contract clause of the FAR is a slippery slope that could very well lead to the risk of a protest on the basis of scope, period, or maximum value of the contract.
  12. In the process of negotiating a contract for complex Research and Development exceeding $750K with a performance over 24 months with an Agency my firm very often receive awards from. Submitted a technical and cost proposal, showing fee applied as a percentage of total budgeted cost. The Agency has just implemented a new but unwritten policy/business practice only allowing the proposed fee percentage to be applied to labor and overhead costs if the firm wants to pursue a CPFF cost type award - so, no fee can be applied to materials, equipment, travel, subcontractor, ODCs, etc.. However, if the firm chooses a FFP cost type instead, fee is allowed to be applied as a percentage of all budgeted costs and does not require any reduction or alteration. Altering fee application in the manner which I've described can cut the fee to half of what was initially requested because our budgets typically have a variety of different types of costs: research partners, materials and supplies, equipment, travel etc. In Federal complex R&D, CPFF is necessary because the technical proposal and research work is purely theoretical. It might work - or something could go differently than we theorized - there are a lot of known unknowns. Estimating all costs accurately on day 1 is an impossibility. If the work was proven, it wouldn't be R&D. FFP is unduly risky for research type work. We have an approved accounting system, so there is no reason the firm can't perform on or accept a cost type award. We have given up fee on some types of costs with other agencies, however the application of fee not being allowed on travel or equipment or some other single cost element was always clearly spelled out in the solicitation. The firm has no black marks on past performance. I'm at a loss how to negotiate a CPFF award with this Agency and still preserve proposed fee. This new unwritten policy seems almost predatory forcing the firm to accept all cost risk under FFP. The FAR is pretty clear that CPFF is an appropriate cost type for complex R&D, though they aren't technically denying that we can have that cost type award - just as long as we forgo nearly all of the fee. I am only getting this type of negotiation feedback from a single agency, but unfortunately we do a lot of work with them. So, this new policy aims to also affect future awards. There is no mention of this in the solicitation under which the awards are being made. The agency says they have no control over what is in the overall solicitation. Would it be beneficial to alter budgets going forward to show fee only as a total fixed dollar amount and try negotiate as a whole dollar figure instead of a percentage of cost? I could then state the firm no longer wants X percentage of cost - they want $YY,YYY dollars for fee... which was deemed an acceptable amount of fixed fee on previously awarded contracts from the same agency for similar work and total contract value on contract no. A, B, C, D, E, etc. dated W, X, Y, Z. However, I have a feeling this likely won't be successful because it is entirely obvious what contract type the Agency is motivating the firm to accept. Have you heard of this fee application approach in negotiations to essentially require contractors to accept one contract cost type over another or else significant fee reduction? What strikes me is that the FAR dictates what cost type contract is appropriate for certain types of federal requirements. Fee should be a completely independent point of negotiation - right? Is there something I'm not thinking of in this scenario that I should be asking/asserting? Thanks for your input.
  13. joel hoffman

    Solicitation questions and answers

    If the solicitation does permit the use of alternative materials, I would say that it would be appropriate to respond directly to the individual quoter, depending upon the actual solicitation language.
  14. joel hoffman

    Solicitation questions and answers

    If the solicitation doesn’t permit alternate materials, approving such would be a deviation from and a change to the solicitation requirements. In that case, you would have to amend the solicitation to allow all “bidders” or “quoters” to compete on an equal basis. It is a fundamental principle in competitively negotiated federal acquisition that a proposal that fails to conform to a material solicitation requirement is technically unacceptable and cannot form the basis for award. See discussion, for example, at: http://www.wifcon.com/pd15_305.htm
  15. CS, the only limit that I see in your example is the $10 maximum. The $2/year is only an estimate isn’t it?
  16. CS, how does including language that says the "estimated" amount to be ordered each year cause any confusion? The "limit" in the contract is $10. Thus, if you exercise the -8 option, the option only permits you to place orders within the $10 limit. The $2 "estimate" as you describe it is not a "limit".
  17. Don Mansfield

    Solicitation questions and answers

    Does the solicitation permit the use of an alternative material?
  18. MAJFJPKO

    Solicitation questions and answers

    I agree that the Q&A's should be made available to all bidders to a solicitation. My question pertains to a construction solicitation. One of the prospective quoters asked me to approve of an alternative material for the project. The material was acceptable to the project engineer. I hesitate to answer the question to all prospective quoters because the awareness of the alternative material (although commercially available), would possibly destroy the competitiveness of the quote if others are not aware of that alternative material. Would you agree? Is it appropriate to answer directly to the quoter in this case?
  19. Vern, in researching this issue on wifcon, I saw several of your responses regarding other IDIQ and -8 questions (in particular, if the -8 incorporated at the multi-award IDIQ-level flows down to task orders). You indicated that you thought the -8 was not appropriate for IDIQs, but also that the -8 could be tailored. I've never seen a tailored -8...do you have any examples? Also, do you think it would be acceptable to tailor the -8 to make it clear that if utilized, the increase in ordering period (NTE 6 months) would trigger a proportional increase in the contract maximum? It would seem to me that more clear language such as this (on a future IDIQ) would alleviate the confusion now faced on this $10 IDIQ.
  20. I agree. However, the "within the limits" language is exactly what is being pointed to as support for the $1 increase. The suggestion is the current limit ($10 max) and annual estimated amounts ($2) are BOTH shown in the contract. Therefore using the same estimation, a 6-month extension adds $1 to the max. It seems to me it's an end-run around a max increase.
  21. The clause says nothing about increasing the maximum quantity. In fact, the clause expressly states that exercise of the option extends the contract "within the limits... specified in the contract." Ask those who claim that the clause increases the maximum to show you the words that do so. It would be different if the contract stated the maximum as a rate, say, a max of $10/month. But I've never seen that.
  22. My apologies if this has been asked before, but I can not find the topic here on wifcon. Consider a single-award IDIQ structured as a base + 4 OY (one-year ordering periods). What impact, if any, does the 6-month extension clause (FAR 52.217-8) have on the contract max quantity? I believe the -8 simply extends the pricing of the given ordering period for a NTE total of 6 months, and has no impact on max/ceiling. However, there is some debate internally about whether or not the -8 also increases the max quantity by the same relative percentage. Example: If a max quantity over five years was stated as $10, and the estimated quantity per year was $2, then utilizing the -8 for a full 6-months would increase the max quantity by $1 (half of the one-year estimate) for a new max of $11. Thoughts?
  23. Yesterday
  24. Inquiring, take a look at the solicitation provision found at FAR 52.230-1, particularly Roman numeral II. I think that will provide you with an answer.
  25. That violates the canon of regulatory interpretation that says you must interpret a regulation as a whole. See Lengerich v. Dept. of Interior, 454 F.3d 1367 (Fed. Cir. 2006): If the regulation applied full coverage only to the current accounting period, would it say so? That doesn't make sense to me. Take a look at the DCAA flow chart and note that it includes language that is not in the regulation. It's not a regulation. It's for DCAA internal use. Having said that, if it works in your best interest, use it.
  26. h2h: Thanks for the input and advice. The reason I am doing a critical analysis is to certify our business unit as a Non-traditional DOD Contractor (definition shown below). If in the next twelve months, we can determine any DOD contracts awarded as modified coverage, we can then certify as Non-traditional. The contract that is full coverage that will be on going is under a non-DOD agency.
  27. Last week
  28. Vern: I appreciate the thoughts and I believe this is probably the thought process of the consultant. My only debate with this thought process is your statement: I don't see "if the business unit were not already subject to full coverage" in the regulation in (b)(1), so my interpretation is that you can read sections (a) and (b) independently. If you meet a criteria in (b) for modified, then the contract can be determined as subject to modified CAS, although the business unit will still be subject to Full CAS as long as there is one contract that was determined as Full CAS still active. Why would it state in (b)(2): if the full determination continued beyond the "same cost accounting period"? Wouldn't it state "Thereafter, any covered contract awarded during the trigger contract's performance must also be subject to full CAS coverage? The CAS regulation starts with: My interpretation of this is that each contract should be determined either full or modified. The business unit will be subject to full CAS during the performance of a contract that was determined to be full CAS (the $50 million triggers), but each contract independently should be determined as full or modified and if it meets the requirements in 9903.201-2(b)(1) and (2), it can be determined modified. Although, I dislike (with a passion) the use of the DCAA Manual and I will admit that relying on the logic of the flowchart in the DCAA Manual is very hypocritical for me, it does make the regulation ambiguity more clear and shows that section 9903.201-2(a) doesn't block the ability to determine a contract to be subject to modified CAS even if the business unit may still be subject to full CAS for other contracts. I think we can all agree that the regulation is not as clear as it could be. I appreciate the input.
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