chrisp

I found the following template calculation guide online. I think it was on the national guard's website. I think this may be only for 8(a) jobs though. I think I saw a different calculation for non-small biz jobs which may not have included the line to take out materials, but I am having a hard time re-finding it. Actually, I just relocated it and it is below the 8(a) calculation. A. Clearly describe the work to be self-performed: _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ B. Show Calculation of Self-Performed Work: B.1 Total Proposed Price: $_______________ B.2 Subtract all G&A, home office overhead, prime ($______________) contractor's markups for profit, bond, state use tax, etc. on self- performed and subcontracted work B.3 Subtract identifiable cost of materials to be incorporated ($______________) into the work B.4 Remainder is "Total Cost of the Contract" = $______________ B.5 "Work to be self-performed": = $______________ (only cost for mobilization and utilization of owned or rented plant and equipment to be operated by the contractor's own employees, labor for equipment operated by contractor's own employees; contractor's own labor to fabricate or to install materials into the finished construction; (NON Design/Build Only: performance by the contractor's own employees of design work, land surveys and other engineering or technical specialist services required by the contract); supplies to directly support the aforementioned work to be accomplished by the contractor's own employees; and the contractor's own job overhead costs. NO MATERIALS! B.6 % Self-performed Work = Line B.5/ Line B.4 X 100% = _____________ I found this second calculation template which lends credibility to the idea that materials may be included in the "cost of the contract" for non-8(a) jobs. Notice, it doesn't have line B.3 as the other does. On page 31 of 516 of the word doc found at the link below (hopefully it works), it gives some good information on this point. The document is from 2000, but I still believe it may be helpful. http://www.google.com/url?sa=t&source=...PTg&cad=rja Use a format similar to the following to identify and calculate cost of the work to be self-performed. Refer to the definitions pertaining to "Self-performance of work", "On the site" and "Total amount of work to be performed under the contract". Include this information in the envelope for Volume II (Pro Forma Requirements), if undetermined until the specified deadline for proposal submission. Otherwise include it in Volume I (Performance Capability) in TAB A: A. Clearly describe the work to be self-performed: _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ B. Show Calculation of Self-Performed Work: B.1 Total Bid Price: $__________________ B.2 Subtract Design Cost: ($ ) B.3 Subtract G&A, home office overhead, prime contractor's markups for profit, bond, state use tax, etc. ($ ) B.4 Remainder is "Total amount of work to be performed under the Contract" = $________________ B.5 "Work to be self-performed": = $________________ (Includes mobilization and utilization of owned or rented plant and equipment to be operated by the prime contractor's own employees; only those materials, which will be both purchased and installed by the prime's own forces; labor associated with those aforementioned materials or equipment; only those supplies to directly support work performed by the contractor's own employees; and the contractor's own job overhead costs.) B.6 % Self-performed Work = Line B.5/ Line B.4 X 100% = % ________________________________________________________________________________ __ B.4 Remainder is "Total Cost of the Contract" = $______________ B.5 "Work to be self-performed": = $______________ (only cost for mobilization and utilization of owned or rented plant and equipment to be operated by the contractor's own employees, labor for equipment operated by contractor's own employees; contractor's own labor to fabricate or to install materials into the finished construction; (NON Design/Build Only: performance by the contractor's own employees of design work, land surveys and other engineering or technical specialist services required by the contract); supplies to directly support the aforementioned work to be accomplished by the contractor's own employees; and the contractor's own job overhead costs. NO MATERIALS! B.6 % Self-performed Work = Line B.5/ Line B.4 X 100% = _____________

We now are facing this issue with a non-8(a) or set aside contract. Are the rules different for large business jobs? I know all the meat of the regulations are in FAR 125.6, but those rules seem to apply just to small business contracts. Here, it would be really helpful if materials didn't count in the cost of the contract. I think these are the applicable FARs for non-small biz jobs: FAR clause 52.236-1 & 36.501 as joel referenced earlier. Can you help? Are materials still excluded from the cost of the contract on large business jobs?

This information is somewhat helpful on the CCR/CAGE code process, but not enough for me to understand it completely http://guidebook.dcma.mil/40/index.cfm See DFARS 204.7204, Maintenance of the CAGE File and DFARS 204.7205, Novation Agreements, Mergers and Sales of Assets. 4.3.4. NOTE: when a contactor changes its name, address, business affiliation, financial institution, financial account number or mailbox in the Central Contractor Registration (CCR), CAGE information in the MOCAS database is automatically updated through DLIS. Consequently, even though the CCR system warns the contactor that making such changes without a contract modification may result in payment delays, contractor changes in CCR information may result in contracts being transferred from one cognizant CMO and/or Defense Finance and Accounting Service payment division to another in MOCAS. Therefore, in those cases where a contractual modification is required (e.g., Novation and Change of Name Agreements or change in address/CMO) it is important that ACOs advise contractors to wait until such modifications are actually processed in MOCAS before making changes to CCR information. However, since timing is crucial in the MOCAS system, the ACO shall advise the contractor to update CCR within 48 hours after the signing of the modification. LATEST CHANGE The ACO shall follow-up with the contractor or check the CCR to confirm that the change to CCR has been made.

Hi Carl. Thanks. I know that PPIRS is where the past performance information ends up. The folks at CCR have said a CAGE code swap would accomplish this. I think that because CCR is the central system for gov contractors and all info for other sites is pulled from there, that that is how this is accomplished. However, one must be trusting in this situation as there is very little info regarding this level of detail in the process.

Right. The issue was more so how to link past performance/make sure that when the Government looked up the new DUNs and CAGE code and didn't see any past performance they didn't freak out and not award the contract. I think the consensus is that a narrative will accomplish the goals, but the idea was floating around at one point that the CCR accounts could be "linked" for past performance purposes. I am told that can happen, but not until the novation goes through. When the novation is complete, the old CCR will be shut down and a CAGE code swap will take place so that the past performance of the old company is linked to the new company's CCR. The issue is the interim period until that occurs. I suppose under this strategy, you just have to trust that the proposal reviewers will look up the past performance for both companies. More comments are welcome. Thanks to everyone who has responded thus far.

It's an asset sale, so most everything was sold to the new company including goodwill. All the management, employees, operations staff are the same. Also, novation can only be approved after the transaction takes place by definition. Yes, in general that is a risk because it is discretionary for the Government to approve, but I am told it is actually usually a straightforward process especially if like in this situation nearly all the assets went to the new company.

In this hypo, the asset sale has already gone through and we are talking about the period after the deal has closed but before the novations have been approved. Thus, all the people, assets, etc . . . are with the new company. Also, we are talking about a period before any CAGE code swap has taken place. That is why the new company's name is being used. The company wouldn't want to continue to propose in the old company's name because an endless loop of novation requests might occur.

Thanks for the response. I tend to agree that this is a good approach. However, you could see how there would be some worry involved that those reviewing the proposals would miss this and then not properly evaluate a proposal.

I am curious about the following hypothetical situation. A contractor has engaged in an asset sale. It plans to begin the novation process as soon as it is able and submit the required forms to the appropriate ACO or CO as applicable. However, it also needs to continue bidding jobs and it must do so in the name of the new company. This isn't a huge issue except for that fact that it wants to make sure that the past performance from the old company shows up when the government evaluates its proposals. It is told that it should leave the old company's CCR existing and unchanged until the novation goes through (for payment and other reasons). However, it needs to set up a new CCR to bid new jobs. Should it just write a narrative in its proposals stating that there has been a change, and listing the CAGE and DUNS numbers for the old company as well as for the new company? Advisors of the company have been told that once the novation goes through, CCR will do a CAGE Code swap to get the past performance information over to the new company. The old CCR registration will then be shut down. However, in the meantime before the swap takes place and during the potentially lengthy novation process they are worried about their proposals. Will those evaluating them know to look up the old company's information? How has the Government handled this in the past? What would it recommend? The FARs and DFARs don't seem to have anything exactly on point. Have any of you had experience with this? How have you handled it? What have you recommended or would you recommend? Applicable regs are: DFARS 204.7205 Novation agreements, mergers and sales of assets. DFARS 204.7206 Using CAGE codes to identify agents and brokers. FAR 42.1204 There are others as well.

Because it is an important issue that warrants continued evaluation . . . ? I was doing research on that point yesterday, and so it came up for me again.

What about the ostensible subcontractor argument? I have read this provision a number of times with this concept in mind. However, usually, I have been dissuaded by the language in 121.103(h)(4) which seems to limit the rule to the relationship between a subcontractor and a prime contractor. However, if there ever was a basis for the Government to go after contractors engaged in this arrangement, I think this would be it. This would especially be true if they just took out all reference to prime in that provision. The end result is that the two companies would be deemed in a JV and thus affiliated for that job causing the small business to likely lose its small business status. "(h)(4) A contractor and its ostensible subcontractor are treated as joint venturers, and therefore affiliates, for size determination purposes. An ostensible subcontractor is a subcontractor that performs primary and vital requirements of a contract, or of an order under a multiple award schedule contract, or a subcontractor upon which the prime contractor is unusually reliant. All aspects of the relationship between the prime and subcontractor are considered, including, but not limited to, the terms of the proposal (such as contract management, technical responsibilities, and the percentage of subcontracted work), agreements between the prime and subcontractor (such as bonding assistance or the teaming agreement), and whether the subcontractor is the incumbent contractor and is ineligible to submit a proposal because it exceeds the applicable size standard for that solicitation."

Hi Guys, We are doing some research into whether it would be a good idea to move toward an integrated project delivery approach for construction contracts. We plan to comb through the FARs to find constraints and/or conflicts with that approach. However, I thought I'd start by asking this group its thoughts. Some initial issues that came up were how to deal with Miller Act issues, small business subcontracting issues, and such. Please impart your wealth of knowledge on me. We are still evaluating which form of IPD would work best under a government contracting regime as well. Thanks, chrisp

Right. I have reviewed that. I just mean that the supplies section says specifically that it applies to small business set asides, but there is not a similar provision in the construction materials section. That lends credibility to your idea that the BAA may or may not apply to small business when they are buying construction materials. We did a little more research. When it says that small businesses, war materials, etc . . . are an exception to the TAA in 25.401, does that in small business set asides the businesses can buy from any country? Does it mean they aren't given the benefits of the TAA, such that they can't purchase foreign materials from designated countries, or does it mean that they aren't subject to TAA requirements? Are they exempt such that they can buy from anywhere?

The BAA clearly applies to small business set asides for supplies, correct? 25.101(. We are just not sure if it applies to construction materials?

Hi, My understanding is that the Buy American Act allows construction contractors and their subcontractors to purchase materials from designated foreign countries (listed in FAR 25.003) so long as the total value of the acquisition meet the applicable threshold, 25.202?; 25.001(; 25.402(a)(1), which for WTO countries is $7.4 Million However, the trade agreements exception does not apply to small business set aside contracts, correct? 25.401(a)(1). Additionally, we also know that there are differences for DOD contracts. DFARS 225.401-70 list the end products subject to trade agreements. One question here, does this only apply to DOD procurements of supplies or is it a general statement? We see that section 56 lists construction and building materials. Any general knowledge filling in the gaps in our understandings would be greatly appreciated as well.

Thanks guys. Your insight was helpful. We had questions about whether materials covered the sub's materials. I have a feeling I may have to review things a couple more times before I get it all straight, but I appreciate the input.

A few of us have been researching the performance of work requirements for a construction contract which was awarded to an 8(a) mentor-protege JV. We know that 15% of the cost of the contract must be performed by the JV, 13 CFR 125.6(a)(3) & (i), 124.510. We also know that the 8(a) partners to the JV must perform a "significant portion" of the work the JV performs, 13 CFR 124.513(d). We also know that the SBA's proposed rules aim to define significant portion as 40% of what the JV performs. What we do not know is what exactly cost of the contract means. We have read the definitions in 13 CFR 125.6(e), but have trouble practically understanding how they apply to a construction contract. Also, we know that the performance of work requirements go toward responsibility and compliance is determined at bid time (though the proposed rules impose add'l reporting requirements.) Further, most if not all of our jobs are firm fixed price contracts. As such, we do not deal much with the concepts of direct and indirect costs. We know that the cost of the contract does not include profit, fees, materials, and equipment. However, when you take these things out, what is left? Also, it is difficult to discern what materials means. The definition in e(4) is not very illuminating. Does this include materials used by the subs too? Also, we believe there are misconceptions that the 8(a) partner must perform 15% of the labor. When you read the regulation, that is not what it requires of the 8(a) partner on a construction contract. For example, how would you calculate out how much the 8(a) partner must complete on a $10 million job? Fill in whatever numbers you'd like for subcontracted $$, materials, equipment, profit, fees, etc . . . Any practical experience or insight here would be greatly appreciated.

Then, I think the same thing would apply to small business subcontracting plans according to the language of 121.410. I think that might solve my problem entirely and give me the solution I needed.

Hi Guys, I appreciate all your help and know how much insight and practical knowledge you have to offer. I think I might just be over thinking things. I understand that the revenue/employees of all of the affiliates must go toward the applicable limit. The question is what is the applicable limit? It is the NAICS code, but based on what industry? Does it depend on the procurement? I think so for set-asides and sole source contracts. Does it depend on what type of small business assistance you are requesting? Financial assistance or otherwise? I believe it does. My real question goes toward subcontracting goals as I mentioned before. Is a potential subcontractor small for small business subcontracting goals purposes if he is small as to the primary industry he performs (even when combined with affiliates) but not as to the primary industry of himself and all his affiliates? I think 121.410 might answer my question as to small business subcontracting goals. If he is small as to the service the prime contractor is requesting (when including the measure of employees or revenue of his affiliates), he will be small for small business subcontracting purposes. I just get lost in the web that is these rules. Any more thoughts, ideas, or insight would be appreciated. If you think I am dead wrong, feel free to tell me.

13 C.F.R. ? 121.410. Could that statute be it? However, still does not say whether the primary industry is based on the company alone or company with affiliates . . .

Right, my questions is where is the exact authority stating a firm's primary industry must be determined based on the primary industry of it including its affiliates is for a regular small business not one that is in the 8(a) program or otherwise. If you can point me to that statute, you will solve my whole issue/confusion.

Ok. I appreciate hearing your thoughts. Thanks. The only real size appeal I could find on point, SBA No. SIZ-4441, considered whether you must determine an 8(a) SDB's primary industry by including its affiliates. The SBA office of appeals concluded it was correct to make the determination of primary industry by looking at the firm and its affiliates because of the legislative history of 13 C.F.R. ? 121.601 which used to explicitly say so. That is why I was wondering what the "primary industry" rule for a regular small businesses said. I have had trouble locating a similar rule. However, I have a recollection that older appeals which were more difficult to locate said that the determination of a primary industry must always include affiliates. They were based on statutes that used different wording, but perhaps the statute has changed to attempt to eliminate the difficulty some people, such as myself, were having.

The OR in that sentence doesn't leave some ambiguity for you? Also, 121.103 has a two part test using both the primary industry of the concern and the primary industry of the concern plus affiliates. The "Which way you count is determined by the rule that you are applying" didn't show up above. Any thoughts on how the rule is applied for just a normal small business (not 8(a) SDB or otherwise)?

We are concerned with whether a concern is small for small business subcontracting plan goals. I understand that a contractor can usually rely in good faith on a small business concern's representations with some exceptions (HubZone). However, this is worth investigating for us. Thanks, I will take a look at those provisions.

I am trying to analyze whether a company that is clearly part of an affiliated group would have its own primary industry/NAICS or if it must rely on the primary industry of the affiliated group. I have read 13 CFR 121.107 and some of the size appeal cases that discuss this section, but for our purposes it would help if a manufacturing standard applied to the manufacturing company. Taken as a whole, the primary industry of the group would likely be construction. However, because there are less than 500 employees in the entire group, the manufacturing company could still be small if manufacturing was deemed its primary industry. I think I may be reaching here, however, given the fact that 121.103 has a two part test for determining when a small business concern can receive financial assistance (based on whether the concern by itself is small given its primary industry and is small according to its group's primary industry), I thought their might be other circumstances where a concern's primary industry is based on its business activities alone. Also, 121.107 says when determining a concern's primary industry "or a concern combined with its affiliates" look at the following factors. I was hoping that wording was not a mandate that the primary industry of a concern always must be determined based on the group. Thanks!