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robert_antonio

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  1. Shortly after we celebrate our country's independence on July 4, 2013, Wifcon.com will end its 15th year on the internet. With much help from the Wifcon.com community, I've raised a growing teenager. When I started, I was 49 and my hair was so thick that I often shouted ouch or some obscenity when I combed it. Wifcon.com has existed in 3 decades and parts of 2 centuries. During that period, I've updated this site for every work day--except for the week or so when I called it quits. I remember the feeling of relief. I thought it was over. However, many of you convinced me to bring it back. Yes, just when I thought I was out, many of you pulled me back in. As I mentioned in an earlier post, someone once told me that Wifcon.com was my legacy. I once had great hopes for a legacy. Perhaps, a great saxophone player belting out a solo in front of thousands of fans and seeing them enjoying themselves. Instead, here I sit in my solitude looking for news, decisions, etc., to post to the home page. For many years, my dog Ambrose kept me company. Now, my dogs Blue Jay and Lily stare at me and look for attention. With my sights now set realistically, I accept that Wifcon.com is my legacy. It's the best I could do. Every now and then, I receive an e-mail from someone thanking me for Wifcon.com. They tell me how it helped their careers. These e-mails keep me and Wifcon.com going. The thoughts in these e-mails won't let me quit. I still search each night for something to add to the site in hopes that it will increase your knowledge. If I find something new, I still get excited. Often, it feels like a self-imposed weight around my neck. What started as a release for my imagination has evolved into a continuing and daily addition to the contracting community. In the evenings, it is as if I'm Maillardet's automaton. I head over to my office, sit before the computer, and update. Then I send the updated pages to Virginia where it is accessed from around the world. Maybe I'm addicted to Wifcon.com; maybe I was born with the Wifcon.com gene. If you haven't added the numbers, I'm 64 now. Wifcon.com and I are showing our age. I can comb the top of my head with my fingers. The ouches and other obscenities caused by my once thick hair are gone. A recent upgrade to the discussion forum requires that I turn the "compatibility mode" off on my browser. In that mode, I realized that Wifcon.com is ugly. I have current software for the needed future redo of this site. I am Wifcon.com; Wifcon.com is me. It is my legacy and my albatross. As always, thank you for your support.
  2. As we all know, federal agency budgets are being cut. Those cuts will work their way into contracting programs. Of course, that made me think about the abuse of the fixed-price incentive firm target (FPIF) contract. Almost a decade ago, I posted an article I titled The Fixed-Price Incentive Firm Target Contract: Not As Firm As the Name Suggests. The abuse I mention there requires a special skill and an understanding of what can be done with the FPIF. These skills were at their peak in the 1970s. I've always wondered if the skills would be repeated under similar circumstances. Recently, I was introduced to a contract type that was claimed to be an FPIF. The particulars of this contract type are laid out in the first post on FPIF Math on the discussion forum. I think Joel Hoffman came closest to my view of the contract type when he called the it a fixed price, non-incentive, firm-target with a fictional cost ceiling (post #69). I recommend reading the entire thread because it includes a discussion of contract clauses, formulas, and legal issues. I'll exclude all three and only look at part of the pricing structure below the target cost. The FPIF Math thread does a good job of looking at it above the target cost. In this contract, target cost is $60 million and the share ratio is 100/0 (government share/contractor share). That means that the government gets any savings the contractor might achieve below $60 million. In effect, there is no incentive to lower costs. The lack of any incentive to reduce costs was explained as "Rather than an incentive, the arrangement was structured to remove the contractor's incentive to limit expenses in order to pocket additional profit which was a concern at the time when the RFP was issued (post #55)." Let's think about that for a moment. The government didn't use a firm fixed-price contract, in which a contractor has an incentive to lower its costs to increase its profit. Instead, the government used an incentive contract and inserted a non-sharing ratio into the formula to dissuade the contractor from saving money below the target cost and pocketing those savings for itself. I cannot pull any hair out of the top of my head since I don't have enough up there now. What bothers me is that I understand why they did it. In a perverse way, it seems to do what was wanted. Pardon me while I take my high blood pressure pills. Someone mentioned that below the target price it was a cost plus fixed fee contract (CPFF). Is there any incentive to control costs in a CPFF contract? Depending on the contractor, there are! Years ago, I was sitting in a class with government and industry contracting types. The government-types were criticizing extensions used to spend the money left in the government's account for the contract work. I was on the side of the government-types. All of a sudden, some frustrated industry-types complained that they did not like these extensions either. As costs but no fee were added to their CPFF contracts, the fee, or profit rate decreased. These industry-types were being rated by their company on profit rates and as funds were added to the contract, they saw their ratings decrease. If they could lower the costs on the CPFF, their profit rate went up and their ratings would be higher. Getting back to the FPIF contract. In the thread, FPIF Math, the initial poster--later in the thread--explained that a graphing tool was used but it didn't work as expected (post 55). Well, I can see using a graphing tool as an assistant. However, an FPIF is a living contract type that will live until the contract is closed out. If you don't feel that way, don't use it! If you don't know what is in the proposed contract price, don't use it! If you don't know the company within an industry or the industry itself, don't use it! I can think of more don'ts than I can think of dos. Finally, if you are going to use an FPIF to eliminate a contractor's incentive to cut costs, don't do it! Use something else!
  3. It was the Fall of 1978 and I was walking down the steps from the contracting office at Rock Island Arsenal. At this point in my contracting journey around the country, I was told that P. L. 95-507 had been signed into law. I was reviewing contracts awarded under the Mandatory Small Business Subcontracting Test which was authorized by the Office of Federal Procurement Policy (OFPP). OFPP conducted the test in response to Recommendation A-48 of the Commission on Government Procurement, which by the way, recommended the creation of an Office of Federal Procurement Policy. So much for history. I had been answering questions for congressional committees as I travelled from one contracting office to the next. However, now P. L. 95-507 was law and I hadn't started writing the GAO report about the OFPP test. What to do? Issue the report anyway and explain that GAO was offering something to consider for P. L. 95-507's new subcontracting program. In the 1979 GAO report, it was noted that P. L. 95-507 did not define subcontracting and that during the OFPP test agencies used various definitions including: "subcontract" includes all construction, modifications, materials, supplies, and service work contracted for by the prime contractor and "subcontracts and purchases" as used herein means procurement by the contractor of any article, material, or service required for performance of this contract, including where reasonably allocable to this contract, an appropriate portion of stock inventory, purchases of plant maintenance, repair, operation, and capital equipment. Another agency explained that the term "subcontracts" was to "include vendors." The definition above for "subcontracts and purchases" was derived from the 1978 forms that were used by contractors to report subcontract totals to the federal government. The GAO report noted that the forms' definition may have included everything possible. However, some consideration should be given to an agency's ability to determine compliance with a subcontracting plan. For example, during the OFPP test, contractors were including items charged to their overhead accounts as subcontracts. Because of P. L. 95-507's lack of a definition for subcontracting, GAO recommended that OFPP define the term subcontract for use in P. L. 95-507. Additionally, GAO explained that such a definition should consider the requirements of the various kinds of contracts and an agency's ability to determine compliance with subcontracting plans. So why do I mention a 34 year-old law and a 33 year-old GAO report? Well on the Wifcon Forum, there is a topic called: When is a subcontractor a subcontractor? As you read the questions and answers, you'll understand. By the way, the GAO report is entitled--The Mandatory Small Business Subcontracting Test: Considerations For Public Law 95-507's New Subcontracting Program.
  4. Over on the Wifcon Forum, a member started a topic called How to find the best places to work. It made me remember how I became involved in contracting as an auditor for the Government Accountability Office (GAO). I've laughed about it many times over the years. When I was hired, GAO had a rotation policy for its new employees (trainees). There were 3 trainee assignments: one for 2-months and two for 3-months within the various GAO divisions and offices. After the trainee assignments, the trainee faced a 1-year assignment. The 1-year assignment was preceded by a meeting in which the trainee was given a choice from a list of divisions and offices that had openings. If the trainee rotated at the beginning of the month, there were openings in each of the divisions and offices. If the trainee rotated at the end of the month, there were only the leftovers. Before we get to my 1-year rotation, let me briefly explain GAO's pre-1970 organization. Prior to my being hired, GAO underwent a reorganization. Before the reorganization, there was a Civil and a Defense division. After the reorganization, the Civil division was broken into several divisions covering the programs of the civilian agencies. The former Defense division was broken into functional divisions. For example, there was the Procurement and Systems Acquisition Division (PSAD) and a Logistics and Communications Division (LOGCOM). Theoretically, these functional divisions could perform audits in both defense and civilian agencies. However, for the most part, PSAD and LOGCOM remained the old Defense division because its management and employees were set in their ways. On the other hand, the new civilian divisions were filled with GAO's up-and-comers. The civilian divisions were the divisions where everyone wanted to work. There were no up-and-comers in PSAD or LOGCOM--just plenty of geeks. PSAD and LOGCOM were the divisions to avoid. Now it was time for my 1-year rotation meeting and it came at the end of the month. My choices were PSAD or LOGCOM and I had 30 minutes to choose. PSAD was pronounced as the letter "P" followed by SAD. P-SAD. How would you like to hear that as a 22-year old? LOGCOM was pronounced just as it looks and the scuttlebutt was that LOGCOM was worse than PSAD, if that was possible. For 20 minutes, I thought about the end of my career and then I was told that GAO didn't have to give me a choice. "Pick one," I was told. I "chose" PSAD and walked down the hall on my career "death march." Whenever I told someone I was going to PSAD, they laughed at me. That wasn't the end of the laughter. It came when I entered PSAD. PSAD was broken down into three groups: General Procurement (GP), Science and Technology (S&T), and Major Acquisitions (MA). Three of us rotated into PSAD on the same day and we met in the Office of the Director for assignment into one of the groups. Our host started with MA and described the travel and the work on major systems. It sounded great! Then he described the work of S&T--it wasn't bad either. Now, it was my turn. He looked at me, explained I was going to GP, and just laughed. That was it. He just laughed. Here I was in the land of the geeks and one of the geeks just laughed because I was going to a sub-group of the geeks. My first work in GP dealt with Defense Contract Administration Service (DCAS) and Defense Contract Audit Agency (DCAA) reports and contracting officers' price negotiation memoranda. I was doing the preliminary work for GAO's defective pricing reviews. Back then, GAO did about 25 pricing reviews each year. Of those 25 audits, maybe a handful led to defective pricing. They led indirectly to cost recovery and we were always looking for that. I never imagined that for the next 40 years of my life I would be involved with federal contracting. Federal contracting is business and that is why I like it. We have contracting laws, contracting regulations, administrative and legal decisions, etc. There is always something to learn in this constantly changing process and always something to improve--including ourselves. When I fell into a career rut, I sought self-improvement. In the 1980s, I earned an M. S. in Procurement Management on my own time. GAO never fully appreciated it but I did. When I was bored at work, I went in a slightly different direction. I wrote GAO's only procurement course for its auditors. When I wanted to be part of the internet, I created and managed Wifcon.com in the 1990s--on my own time. Federal contracting--our club--has fulfilled all my career needs. Now, I can laugh about being 22 and entering the land of the geeks--PSAD/GP. I'm just so happy I never had the opportunity of choosing to work in one of those boring GAO civilian divisions. Besides, I found that I fit in well with the other geeks.
  5. Years ago, I had three stories from my life posted on Wifcon.com and they picked up a small following on the internet. Since I usually add something from my life around Christmas to Wifcon.com, I thought I would add one of those three stories. So here is, as it happened: Just Call Me Johnson! In the 1970s, when I first moved to the Washington D. C. area, I lived in Greenbelt, Maryland. Although Greenbelt is actually a small town, it is also one of those "areas" located around Washington that is a larger postal area. Even now, I live in one of those postal areas in Pennsylvania. The Greenbelt area surrounds the major intersection of Kenilworth Avenue and Greenbelt Road. Looking north, if you imagine this intersection as creating four geographic areas, the small town of Greenbelt would be located in the upper right hand area. Within the town was a small shopping center called Greenbelt Plaza. In the upper left area of the intersection, a larger shopping center called Beltway Plaza was located. Our story begins at Beltway Plaza. One day, I took my car to a garage to have some repairs done. In the afternoon, I realized that I needed to cash a check to pay for the work. From past experience with the car shop, I knew that the shop did not take the American Express card. So I walked from my apartment to Beltway Plaza where my bank was located. I arrived at the bank shortly after 2 PM. The lobby service had closed at 2 PM so I stood in line behind a car waiting to cash a check. When my turn came, the teller told me that I could not cash my check at her window because I was a pedestrian. I needed a car or some other vehicle. Knowing I needed a car or some other vehicle, I walked over to a phone booth in Beltway Plaza and called a cab. I reached the cab company and ordered a cab for Antonio at Greenbelt Plaza. After waiting for about 10 minutes, I realized that I had ordered the cab for the wrong shopping center. So I called the same cab company and ordered a cab for Johnson at Beltway Plaza. That was simple enough. Give them a different name and no one would ever know the mistake that I had made. I was in no mood to admit my mistake. Well, my cab arrived fairly quickly. That was too good to be true. I flagged the cab down. "Are you Antonio?" the driver asked. "No, I am Johnson." I told him. Immediately, he began questioning me about my name. "Are you sure you are not Antonio?" He again asked. "No, I am Johnson." I told him again. "Well, I am here for Johnson too." The cabbie said. "Did you receive a call from Antonio to meet you at Beltway Plaza?" I asked. "Yeah." The cabbie said. All I could think of was this cabbie made the same mistake that I did. I ordered a cab for Antonio at Greenbelt Plaza and this guy shows up looking for me at Beltway Plaza. Well, he was here and I was not going to admit that I was Antonio. "Where to?" He said. "Over to that bank." I pointed. "Why do you need a cab to go to the bank?" He asked. So now I had to tell this guy the other part of my experience in the Beltway Plaza parking lot. After I explained that I could not cash a check because I was a pedestrian and I needed a car, he seemed to understood my plight. As we were sitting waiting for the line to move, the driver turned around to me and asked again "Are you Antonio?" "No, I'm not Antonio." I shouted. "I am Johnson." I told him. So we waited in line for my turn at the teller window. It was my turn in line and I looked at the teller with satisfaction and said "I've got a car now. Here is my check." Then I tried to remember if bank tellers say thank you after they cash a check. Well they do. At least this one did. "Thank you, Mr. Antonio." She said. The cabbie immediately looked around at me and said "There, I told you that you were Antonio." "No, she said Johnson." I yelled. "I'm Johnson, not Antonio." I added to make my point. We finally pulled out of that parking lot and stopped at a red light on Greenbelt Road. The cabbie again turned around. This time he said "you sure do look like Antonio." "How do you know what I look like?" I answered. For the next 15 minutes of the cab ride we had these continuing spats about whether I was Antonio or Johnson. Finally, we reached the car dealership. I paid the cabbie and as he drove away he shouted "Antonio." I shouted back. "Johnson." I walked in the car shop and told them I was Johnson. "Nothing here for Johnson." She said. "Could you check for Antonio?" I asked, now wondering if they would give me my car. As they were preparing the bill, I noticed that there was an American Express emblem on the garage window. "Do you take American Express?" I asked. "Yes, we just started taking it last month." She said. My entire day passed before my eyes when she said that. "How would you like to pay for this?" She asked. "American Express." I responded. After I signed my name she said, "thank you Mr. Antonio." At least the cabbie was not there to hear it.
  6. Not long ago, a discussion board user posted a note about a theoretical government negotiator misrepresenting the truth during contract negotiations. The responses were on target. Vern Edwards was succinct and said: "Don't tell a lie!" Napolik said: "I would be . . . concerned with losing my credibility in the contractor's eyes." Now, its time for a story from over 40 years ago. It was my sophomore year in college and it was the night before the final exam in second year Spanish. I didn't learn very much Spanish during that semester. Anyway, our class's resident thief picked a lock, stole the final Spanish exam and answers, and brought them back to the dormitory that night. Almost everyone had copies of the test--except for two of us. A friend and I decided to be honest. The next day, during the exam, our professor carefully placed screws on students' desks to let them know he knew about the cheating and the cheaters were screwed. After the final, my friend asked me: "How'd you do?" I told him: "I didn't know anything." He responded: "Neither did I." We consoled each other by imagining that we would get an "A" for being honest while the cheaters would get an "F" for cheating. Then we went home for the Summer. Our grades came a few weeks later and I got a 71 in Spanish--passing was 70. My friend got a 78--apparently, he learned a bit more than me. So much for our "A" for being honest. When we returned to college that Fall, we found out that the cheaters got an "A." One cannot expect an immediate reward for being honest. Its something you work on every day. Being honest is part of what builds and defines our character. In the end, the character we build during a lifetime is all we have. This, of course, leads me to a scene from the movie Saving Private Ryan. The scene is in the American Cemetery at Normandy, France. The aged Private Ryan visits the grave of his Captain who in his last breath told him to "Earn this. Earn it." The Private Ryan character kneels beside the grave and speaks to his Captain. Then he gets up and asks his wife for confirmation of his life by saying: " ." Its a good scene to reflect upon on one of our Nation's holidays.
  7. Some time ago, I received an e-mail from a Wifcon.com user. The user said that Wifcon.com was my legacy to the contracting field. I never intended for Wifcon.com to be my legacy to anything. In July 1998, I wanted to be part of the internet and the first thing that came to mind was "federal contracting." So, I started with daily contracting news and soon began building a portal for federal contracting information. My goal was to build something that people would use, and as I built the site, more and more people used it. Hey, I did it! Today, Wifcon.com is still growing in usage?slowly, of course. There have been ups and downs over the years. The ups included beating larger web sites to the punch with information, at times. Once in a while, a user will send an e-mail, thank me, and say something nice about the site. Those are blessings and much appreciated. The downside was all the time I spent to keep Wifcon.com alive and growing. I was in my late 40s when I started; now I am in my early 60s. Sometime over the past Winter, I had a small stroke. You may have noticed some mistakes on the web site. Let's face it! I'm slowing down. I have high blood pressure now, prescription drugs, an aspirin regimen, a doctor, and a neurologist. Didn't have any of that in my 40s or 50s. I've tried to make Wifcon.com unique and these three things do. First, the Textbook On A Page. That's the bid protest section. I've taken key excerpts from decisions, added a link to the full .pdf file, and sorted the decisions according to the FAR. If you select a FAR section, paragraph, etc. and read it, you can get a nice little education about that area from the Comptroller General, the Court of Federal Claims, and the Court of Appeals for the Federal Circuit. Just think of all that information on one page! It makes my toes quiver. Second, the National Defense Authorization Bills or our annual contracting legislation. My idea was to give you an explanation of why Congress passed the various sections of the bills. On one side you have the legislation and on the other side you have an explanation. Why wait for someone to tell you why; now you can find it yourself. Finally, the FAR Research section. You have FAR cases, Federal Acquisition Circulars, and their regulatory history. All in one place! Those three unique features give you an idea of what Wifcon.com is. Its about hard work for both of us. I build it and you use it. It is my version of a learning center. Who's out there? I get basic information from my commercial web host about the domains (.mil, .gov, .us, .com) that visit Wifcon.com. They include civilian and defense agencies, state and local governments, major contractors, small businesses, law firms, non-profits, educational institutions, etc. Just about what you would expect. Some of you have been with me since the beginning. I remember you. Some of you use the site as your home page. I remember you too. Its all good. Who's in here? Me, just me. Additionally, I have had some wonderful people contributing articles, discussion posts, and blog posts too. What started out as my effort to be part of the internet, became an extension of my mind, and is now a habit. At times, it brings me peace. Over the past year, I was introduced to my mortality. Anything so closely tied to a mortal must end with that mortal. When that will be, I don't know. I guess we will quietly fade away, an old webmaster and his web site. Bob Antonio July 6, 2011
  8. As many of you know, I was an auditor for the Government Accountability Office (GAO) for over 33 years. About 32 years of that was spent reviewing the contracting practices of federal agencies. To enhance my ability to review federal agency contracting practices, I picked up an M. S. in Procurement Management in the 1980s. I wasn't your typical auditor. I had an extensive knowledge base in my field of work―federal contracting―and much of my time was spent with my face in agencies' contract files. How many contact files? In the thousands. How many contracting offices of federal departments and agencies? Many! They were located somewhere between Seattle, San Diego, Atlanta, and Long Island, New York. Speaking of island, yes Rock Island too. Can't seem to remember anything in Florida though. Maybe I forgot. When I reviewed contract files, I tried to understand the person who put them together, who wrote the documents, who filled out the forms. Was the person conscientious? Was the person thorough? I did that with the contract files at each agency contracting office I visited. Most times, I was reviewing a stack of contract files from more than one contracting officer. From the quality of the contract files compiled by different contracting officers, I began to get a feel for the contracting activity and its leadership. Now, let me tell a little story about contract files and the people that complete them. I may have told this one before since I like it a lot. Many years ago, I was reviewing contract files at the headquarters contracting office of the Department of Housing and Urban Development (HUD). I had been there more than once over the years. While I was reviewing the files at HUD, one contracting officer stood out. His files were pristine, well documented, beautifully written. As I read the files, I learned that the contracting officer was an attorney and a Certified Public Accountant. The files were so well done that I never had a question to ask the contracting officer. What was there to ask? It was all in the contract files. So, I never met him. Years later, I moved into a new home in a new development in the Washington, D. C. area. One day, a new neighbor was walking up the street with his wife and they stopped to introduce themselves. He explained that he had been a contracting officer at HUD. I don't remember what he said but I recognized the fellow. Since I never met him at HUD, it wasn't by his appearance. He was the fellow that compiled the pristine contract files that I had reviewed years earlier. As he talked, I thought to myself: "This guy is going to be a great neighbor." And he was. Here's the point. Your contract files, whether they are paper or electronic, tell people who you are. Is your justification and approval a "cut and paste" job or is it clearly written for a specific procurement? Does your negotiation memorandum explain the history of the procurement up to the time of the contract action? Are your contract modifications documented and explained? Do they track to the original contract? Can your written documents be traced to an audit, a technical evaluation, a contractor proposal, a contract? These aren't just forms and documents required by law or regulation. They reflect You and Your work. They are You. At least, that is how I always used them. One more thing. Do you enjoy your work? Even if you don't, does it interest you? Let me tell a little story again. Over the years, I met some of the same contracting officers more than once at different stages of their careers. Sometimes, they were at the same agency. Sometimes, they had moved to a different agency. I wondered how their careers progressed. We're they burned out? Anyway, I reviewed this fellow's contract files years earlier and I was about to do it again. I sat down to chat. The fellow had been promoted to a branch chief. Initially, the fellow appeared to be worn down by the years of contracting work. Then I stepped out of ignorant auditor mode and began to speak his language―contracting. He was like a young contract specialist again. Through the years, he maintained his enjoyment for his work. Oh, you say you are a Head of a Contracting Office and no longer compile contract files. Wrong! The quality of those contract files reflect on you too. If a trend of ugly contract files reared their heads, I began to question the leadership. Same thing for the contracting officers' attitudes. Are your contracting officers burned out and lifeless? If so, that reflects on you. In the end, your contracting activity's contract files and contracting officers' attitudes reflect on you and your leadership qualities. You would be surprised what contract files say about you. One last story. Back in the early seventies, the word "Watergate" was a highly charged word. Watergate, led to the resignation of a sitting U. S. President and was one of the lowest points in our Nation's history. While that was going on, I was participating in a review of a major source selection and was reviewing source selection files. All of a sudden, I found a page that contained the phrase "[Program name] Watergate." (I've deleted the program name intentionally). Of course, I spent a good deal of time on that file until I was satisfied the page was a joke and had been mistakenly included in the file. I put my thumb in the file to remember where the page was. Then I went to the office where the technical evaluator sat. I opened the file to the page I mentioned, placed the file on the evaluator's desk in front of him, and told the evaluator that I would be back in a few minutes. On my return, the file no longer contained the page. Some things do not belong in contract files.
  9. This morning, I was searching for bid protest decisions from the Court of Appeals for the Federal Circuit (CAFC) and the Court of Federal Claims (COFC) and stumbled across two interesting decisions on indirect research and development (IR&D). I remember listening to debates about IR&D in the bowels of the then General Accounting Office (GAO), now the Government Accountability Office. I was a pup back then in the early 1970s. I'm a pup no longer. The decisions involve the phrase--required in the performance of a contract. Apparently, the issue has been controversial for years. On page 5 of the CAFC decision on ATK Thiokol, Inc. v. U. S., the Court states The dispute over that issue focuses principally on the meaning of the phrase "required in the performance of a contract" in the definition of IR&D. The scope of that phrase has been a subject of controversy in the government contracts community since 1971, when it first appeared as part of the definition of IR&D in the Armed Services Procurement Regulation ("ASPR"), a predecessor to the FAR. The COFC decision is at ATK Thiokol, Inc., v. U. S. See p. 33 for "The 'Debate' Concerning 'Required in The Performance Of A Contract' Language In CAS 420." On p. 24 of the COFC decision, we are given a brief lecture on the Federal Acquisition Regulation (FAR) and the Cost Accounting Standards (CAS) issues of allowability and allocability and the precedence of the FAR or CAS when there is "any conflict . . . as to an issue of allocability." (p. 26 of the COFC decision.) In addition, there is a decent history of the Cost Accounting Standards Board that we don't often see. This case in an important case because, as the COFC stated: Arguably, the "debate" is exacerbated by the fact that no decision of the United States Court of Appeals for the Federal Circuit, the United States Court of Federal Claims, nor Board of Contract Appeals has interpreted in the abstract the meaning of "required in the performance of a contract," as used in FAR 31.205-18 and CAS 420. The Cross-Motions for Summary Judgment on Count I invite the court to resolve this long standing "debate." In the end, the COFC ruled that the contractor properly allocated its independent research and development costs. The CAFC affirmed that ruling. The two decisions comprise 61 pages. This page count can be reduced by skipping some procedural pages. However, there is a wealth of information here. In addition, you will be reading a first opinion on the subject. Start with the COFC decision which includes the research and read the CAFC to top it off. Somewhere in the two decisions, you will reach a point and say to yourself: "huh, I never knew that."
  10. In 1992, I moved into a new house in the Maryland suburbs of Washington, D. C. When the 6-month check-up came to fix any settling issues with the house, a tough-looking guy came to do the work. I told him about my plans to buy a dog the next year. He looked down and said, "I'll never get another dog." He then tearfully told me about the recent death and life of his dog. There he was. This big bruiser with tears running down his cheeks. Now I know what he meant. I'll never get another dog. Ambrose, Wifcon.com's Chief Advisor, died on Thursday morning, February 18, 2010. He was 5 weeks short of being 17 years old. Why should Ambrose be mentioned here? If you are one of the original users of Wifcon.com, you will recognize the original, but now defunct, domain http://www.radix.net/~ambrose/ It wasn't until a few years later that wifcon.com bought its own domain. Ambrose's photo was posted on Wifcon.com once or twice for a Christmas greeting. Additionally, Ambrose was at my side--until now--for every key click over the nearly 12 years of Wifcon.com. When we were in the Washington area, we would get up at 4:35 AM each morning. We would get ready and then play "ball and bear." That was throwing a soft stuffed bear and a stuffed ball down the hall 100 times. Then we would go into my office and upload the changes made to Wifcon.com. In the evenings, it was much the same. The vet told me that Ambrose was near death 14 months ago. Ambrose didn't believe her and continued on. Last month, the vet came to euthanize Ambrose. He made a miraculous recovery and the vet left shaking her head about Ambrose, the miracle dog. This past weekend, Ambrose decided to stop eating and drinking water. I knew what he decided to do and called the vet. Ambrose died peacefully with his head in my hand. He was a miniature poodle.
  11. From time to time, I am asked what the AIMH DSJ means on the About Page and Home Page of Wifcon.com. I've never told anyone. Her name was Deborah and we worked together in the late 1980s. In bureaucratese, I was her direct supervisor. Deborah was "larger than life." She was about 5' 11" tall and she always wore high heels. You could hear her voice and laugh from a great distance. She loved her job, she loved her daughter, and she loved her family. Unfortunately, Deborah was given a less than healthy body. Often she was riddled with pain. On her worst days, she had to stay home. On other days, she would come to work and take "pain breaks." When she took a "pain break" she lowered her head on her desk and cried. She would remain in that position until she could control the pain. On her good days, she wanted to do everything well. One day, January 28, 1986, we drove to Fort George G. Meade in Maryland. One of our goals was to visit the Fort's supply store and identify any defective goods that were supplied by the General Services Administration. If we did, we then checked the date of delivery to the Fort, whether the warranty expired, and whether the Fort reported the defective product. While at the Fort, we hit pay dirt. Deborah was ecstatic. We took an image of the product and the image appears on page 16 of our report (pdf, 3.8MB). Not long after our little trip to Maryland, I caught some sort of flu and was out of work for 2 days. At that time, I lived in Crystal City, Virginia, and our "work space" was at the General Services Administration in Crystal City. I was a short underground walk from our work space. While I was out, Deborah collapsed at work and was taken, by ambulance, to a hospital. I didn't know about it until I arrived at work a day later. Some months after Deborah collapsed at work, she died. For some time, I blamed myself for not being at work to save her when she collapsed. But that wore off as I grew older. Over the years, if someone asked me about Deborah, I would just sit there silently and go to a different place in my mind. This was personal and it was between Deborah and I. I wasn't going to share it with anyone. However, today I will. Deborah died in 1987. Wifcon.com was born in 1998. For years, I had planned to write a book about an aspect of the U. S. Civil War, or if you prefer, The War Between The States. Of course, the book would have been dedicated to Deborah. I never wrote the book. Instead, I built Wifcon.com. Since its birth in 1998, Wifcon.com has been quietly dedicated to Deborah with the simple notation "AIMH DSJ." "Always in My Heart ― Deborah S. James" Merry Christmas Deborah. Merry Christmas to all of you. Bob Antonio, December 25, 2009
  12. Sometime in your career, you will be faced with a decision that will affect the way you perceive yourself. It may be an immediate career changer or it may be one of those little decisions that help to define your career. You will know it when you encounter it and you will think about it before you take action at least the first time. There will be rules designed to lead you in your decision, but in the end, it will be your decision. Your choice may be as easy as right or wrong or it may be in various shades of gray. The choice may be complex where there are competing interests and each one sounds persuasive. You may face pressure to reach a decision that others want you to reach. However, in the end, it is your decision, you will make it alone, and you will live with it. People Over Process Recently, as I analyzed The Weapon Systems Acquisition Reform Act of 2009, I thought to myself: "more hoops to jump through." It has some nice ideas about process but it just adds more process to an already overburdened process. It does have a provision for an award for good performance. Whoopee! However, what it fails to do is focus on the most important aspect of the process――the people working within the process. The Contracting Course In 1987, I wrote an introductory training course on contracting for the Government Accountability Office's (GAO) analysts. Unlike contracting courses for those who do contracting, this one was designed to do three things: 1) give analysts an idea of how contracting was supposed to be done, 2) show analysts ways the contracting process could be abused, and 3) get analysts interested in doing contracting reviews. The course was designed for 3 days and covered 1) the process, organizations, and people; 2) competition; 3) requirements; 4) methods of contracting; 5) contract types; 6) pricing; 7) major systems acquisition; and 8) contract administration. As you can imagine, the course skimmed the surface of this process. At the beginning of each course, I always told the analysts that we would be discussing a complicated process. However, consistent with my views, I stressed that the people within the process were most important. I told the analysts to ask themselves: What would you do if you were doing the contracting? Why did the contracting people do what they did? After giving the course for 10 years, I decided to call it quits in the late 1990s. For the final course, I tried something different. I added a special 1-page document for an exercise within the systems acquisition part of the course. The focus was a hypothetical major system that was unworkable. No matter what was done to it, it wouldn't work. Class members would be split into two groups. Program office members would be the proponents of the system. Operational, test, and evaluation office (OT&E) members would decide whether the system was ready for production and fielding. The class included 6 tables. Three members of each table would be program office members and 3 would be OT&E members. Oh, and me? I was to be General Bullmoose?a character that belonged in the movie "Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb." Think . The General, of course, was the program's main supporter. He was willing to lean on people or organizations to get what he wanted done. At the end of the exercise, each table would report on what it decided to do with the system. Could Good People Be Persuaded To Do Wrong? The goal of this exercise was to persuade the class members to make the wrong decision about our theoretical system. It wasn't going to be easy. First, I would explain the process and how it was designed to avoid failure. Second, I would give examples of what people, within the process, did that resulted in systems that failed. Third, after telling the class members, both orally and in writing, that our theoretical system would not work, I was going to try to persuade them into making the wrong decision and approve it for production and deployment. As always, I went through the basics of the process using a chart from an old Office of Federal Procurement Policy pamphlet. Some of you may remember it. It has decision points listed at the top and the basic steps of a process within the chart: identification of mission need; conceptual design, concept demonstration; prototype demonstration, operational test and evaluation, initial production, production. Yes, its basic. There's probably thousands of pages of instruction on this process in the federal government and every time GAO or an inspector general issues a report on a system, the process gets 10 pages longer. We worked our way through the process while I used the chart as an overhead. I explained the chart and gave examples of problems with systems. Along our way, I stressed the role of the people within the process--including the roles of the program office and the OT&E. Towards the end of the presentation, I walked up to the overhead projector and squeezed the OFPP document so that the only thing that could be seen on the wall was "analysis of mission" and "production." The other steps in the process were scrunched together. With that, I would explain that they were seeing "concurrency" where steps are run simultaneously to "shorten" the acquisition process. After the presentation, it was time for the exercise and time for the class to meet General Bullmoose. I called to an imaginary person outside the door to come in. I left the room and General Bullmoose entered. When the General entered the room, the only thing he could talk about was the need to get the system into the field. Then he went into his initial speech about God, America, and the system. He appointed an assistant and told the assistant that the room was filled with a bunch of weaklings who needed direction and a "push" through their decision-making. The assistant was to be inside the room listening for non-believers. The General would persuade the non-believers with their own personal face-to-face account of God, America, and the system. After his initial barrage, the General walked out of the room and left the class to proceed with their discussions about the system. After a bit, the General returned. He explained to the class that he had just left a meeting with the Secretary of Defense and the President. They both wanted to see the system in the field as quickly as possible. After that, he roamed the room praising the system. The General again left the room so the class could further discuss the system. After about 15 minutes, it was time for the General to seal the deal. When he returned to the room, he pleaded for the members of the program office and OT&E to get this system to the field for the "boys and girls" who needed it. As he bounced about the room--and off the walls--the class members could see his eyes watering and a tear or two rolling down his cheek. Yes, the General was trying hard. The General moved to the front of the room, gave his final "encouragement," and left the room for good. Once I was outside the room, I needed to walk the halls of the GAO building to rid myself of the General. It wasn't easy. However, after pacing the ugly dullness of the GAO building, I slowly became myself again. After about 15 minutes, I walked into the room. The class had about 45 minutes to discuss the system and reach their decision and it was time to see what each table did with the system. The first table, concluding that the flaws in the system were minor, approved the unworkable system for production and deployment to the field. The second table approved the system too. The third table approved it and planned to "retrofit" it in the field. I liked that one. And so it went, one table after the other approved a system that they knew would not work. There was some minority sentiment too from program office and OT&E members, especially at the sixth and last table. Two members at that table explained this "system won't work." And they were quite upset that the majority at their table approved the system. They issued a "strong dissent." Think about this for a moment. After discussing the process, after explaining the human causes of systems that failed, after telling the class that our theoretical system would not work, all six tables in the class approved the system for production and deployment to the field. The only thing between the right decision and the wrong decision in this exercise was persuasion. Now, you will never meet General Bullmoose since I retired him. However, you will encounter some form of persuasion that wants to affect one of your decisions. What will you do? Remember, the decision is yours and you will have to live with it.
  13. "We're going to develop a trained, professional workforce." A professional workforce has been a goal of decades worth of commissions, panels, etc. For example, last week before the Senate Committee on Armed Services, Secretary of Defense Gates said: "Since the end of World War II, there have been nearly 130 studies on these problems." Secretary Gates went a bit further and noted a list of systemic problems that went beyond the contracting workforce such as: Entrenched attitudes throughout the government are particularly pronounced in the area of acquisition: a risk-averse culture, a litigious process, parochial interests, excessive and changing requirements, budget churn and instability, and sometimes adversarial relationships within the Department of Defense and between DoD and other parts of the government. At the same time, acquisition priorities have changed from defense secretary to defense secretary, administration to administration, and congress to congress ? making any sort of long-term procurement strategy on which we can accurately base costs next to impossible. Add to all of this the difficulty in bringing in qualified senior acquisition officials. Over the past eight years, for example, the Department of Defense has operated with an average percentage of vacancies in the key acquisition positions ranging from 13 percent in the Army to 43 percent in the Air Force. I think Secretary Gates defined a number of our problems fairly well. In my view, the problems include the Senate, House of Representatives, congressional staff, Executive Office of the President, GAO and Inspector General analysts and attorneys, agency leadership, program offices, and finally the agency contracting offices. The efforts of these organizations have resulted in a process that often fails. These organizations and people need to know what they are doing before they do it. In short, I believe they all need specific training that matches their organization's duties. I have a lot of bones to pick with all of these organizations and I plan to do it--eventually. However, it is too much to cover in one blog entry. Instead, I'll focus on the importance of training--not any training. I'm talking about the type of training that instills needed knowledge so that people can do their jobs successfully. The government always seems to react to disasters instead of preparing for them. We never seem to have an adequately trained contracting staff to deal with events that should have been foreseen. For example, Katrina, Iraq redevelopment, etc. Well, here is a personal story that involves the effects of a lack of training. Its not a contracting story but contracting training, or the lack of it, can affect lives too. In 1981, I was working as an investigator for the U. S. House Committee on Appropriations. That Summer, a senior staff member--I'll call him "Sarge"--sat at my desk to discuss our next assignment. We were going to investigate the deaths of 2 Fish and Wildlife Service (FWS) employees who had died fighting a wildfire at Merritt Island National Wildlife Refuge near Cape Canaveral. Sarge and I traveled to the Refuge and talked with the employees who fought the fires. As we talked, their pain was etched on their faces and in the sounds of their voices. They just had lost 2 co-workers. One of the employees guided us as we walked the path the 2 men had taken to build a firebreak with a small bulldozer. After that, we left Merritt Island and headed for the FWS regional headquarters in Atlanta. For whatever reason, the individual we spoke with there brought out the men's partially melted helmets. Perhaps, he was trying to make a point to staff of an Appropriations Committee. If so, he did with me. Sarge did the talking and I stared at the helmets. Back in Washington, Sarge met with FWS headquarters personnel and I analyzed the wind speed and wind direction from the weather stations at Merritt Island for June 8, 1981. We knew the approximate time the 2 men entered the brush on the bulldozer and now we knew the timing and the effect of the thunderstorm as the 2 men moved into and through the brush. Here is what happened. Lightning struck the Refuge on June 7, 1981, and at least 2 fires started the next day. On the morning of June 8, 1981, the wind was blowing from the southeast due to a weather disturbance on the Atlantic Ocean. As the disturbance moved off shortly before noon, the wind shifted and was coming from the south. At about that time, the two men entered the brush east of the fire. It was as if a door opened for a brief moment to invite the men to enter. Even at that moment, a thunderstorm was in the general area and it was heading in their direction. In a few minutes the wind again shifted--this time it came from the southwest. Now, a door seemed to close behind the 2 men sealing their fate. Shortly after the men entered the brush, the staff at a fire to the west reported the thunderstorm and that its rain was knocking down their fire. By now, the 2 men probably made a right turn towards the west preparing to surround the fire with their firebreak. As they did, the thunderstorm approached them with increasing winds from the west, now heading directly at them. They turned the bulldozer to the east hoping to cut their way through the brush to safety. However, the bulldozer became stumped and they jumped off and ran for their lives. Not far from there, they stopped in a clearing and set up a fire tent. By now, the thunderstorm was upon them. The wind from the thunderstorm, with gusts in excess of 52 mph, had shifted violently from the west. It turned the fire into an inferno that overtook the men and fatally burned them in their tent. Immediately after the men were fatally burned, the rain knocked down the fire. I gave Sarge a copy of my maps with the wind analysis to read. As I explained, his eyes filled with tears. We completed our analysis, sent our report to the Committee, and the Committee included it in the Committee print. Our conclusions were clear--funds for firefighting training were not getting to the staff at Merritt Island Wildlife Refuge. It didn't take long for The House Committee on Appropriations and the rest of Congress to do something. After the tragedy, firefighting training funds found their way through the system. For the 2 men, it was too late. Instead of lives, they now have monuments and at least one building with their names on it. Two lives were lost due to a lack of training. Its worse when you read a brief biography of the 2 men. Meet Scott Maness and Beau Sauselein. Who would they have become? Who did we lose? Nearly 28 years have passed since I walked the path of that bulldozer and stared at those helmets. I still think about the two men, I still see those melted helmets, and I still see my weather maps. I've asked many people the following question since 1981. What is the first thing you think of when a thunderstorm approaches? Nearly all of them say rain. After they say rain, I give them my stock answer. First the wind . . . . First the wind, then the rain. First the wind, then the rain!
  14. Back in the 1970s and early 1980s, GAO referred to the Multiple Award Schedules (MAS) as noncompetitive. GAO also claimed that there was little or no price competition for commercial products under MAS. Over and over again, GAO claimed that MAS prices were lousy. Reports stating so were issued to the House Committee on Government Operations (now the Committee on Oversight and Government Reform) whose Chairman was Jack Brooks. In 1984, under the Competition in Contracting Act, Jack Brooks declared MAS contracts as "competitive procedures" and inserted a provision into CICA, which is now at 41 USC 259( b )(3) The original language, as I remember it, required both GSA and the using agency to participate in determining whether an MAS order was a "competitive procedure." Currently, the "B" part of the provision is different than the original legislation. Apparently, it has been changed over the last 25 years. Does "B" require the determination of a "fair and reasonable" price? If so, who does it--GSA or user agency? If you know that, I think you will have your answer.
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