Retreadfed

I recall a case before the Federal Circuit in the 1990's where the Court held that the proper time to assess risk is when a change is made to contract work, not when the amount of the adjustment is negotiated. With my limited research capabilities, I have not been able to find that case, but I believe it involved Texas Instruments.

Delayn, what is the rationale for this process? From a contractor's perspective, this seems like a poor business practice. What information is provided to offerors in regard to funding when a solicitation is issued? If I were a contractor who submitted a proposal then had the procurement canceled because the government did not have funding available for the contract I would be ticked off. If this was a recurrent theme with the agency, I would be tempted to stop dong business with that agency. Also, it seems like a waste of government resources to go through the procurement process then find out that there is insufficient funding for the procurement.

In regard to Carl's post, note that the DFARS structured approach is used to establish the government's negotiation position. The results of application of the weighted guidelines are not binding on contractors. Further, DFARS 215.404-4 is not a contract clause.

CR, I don't know what your last paragraph means, but in the situations you describe, the actions of the contractors is not only wrong, i.e., not in accordance with regulations and contract terms, but also illegal, i.e., subject to criminal sanctions.

CR, I really have to wonder about the type of ethics programs these contractors have. There should be no question concerning whether this practice is proper. Look at FAR 52.203-13. If you have not been trained in what is correct and what is not, there is a real problem.

Also, look at FAR 52.215-10(d)(2). In the situation you describe, if it was a sole source procurement where certified cost or pricing data was required, somebody would need to get fitted for an orange jumpsuit. As for the customer not asking for certified cost or pricing data when it would otherwise be required, the statute places the onus on the contracting officer to require the submission of certified cost or pricing data. This is usually done through the use of the solicitation provision FAR 52.215-20 which would be inserted in Section L of the RFP (although many contracting officers erroneously put it in Section I). If that provision is in the RFP, certified cost or pricing data would be required unless the contractor asked for and received an exemption. If it is not in the RFP, the contractor has no obligation to submit certified cost or pricing data. If it is not required, the contractor cannot be held liable for defective cost or pricing data. Joel, I think CR was talking about regional salary surveys that would be used to justify labor rates proposed in a proposal.

Also, look at the discussion of bona fide needs.

CR, I don't know about today's government "customers," but I spent 24 years in DoD procurement and mischarging to FFP contracts was a significant issue if it could be detected. Detection was a problem because the government does not have the general authority to audit costs incurred on an FFP contract. Shifting costs from cost reimbursement or T&M contracts to an FFP contract, while not usual in my experience, gives a distorted picture of the contractor's ability to control costs and its internal controls. A lack of cost control would be reflected in the contractor's CPARS. A distorted CPARS showing that the contractor is a better performer than it truly is is potentially harmful to the government's interest. Further, if we are talking about CPIF or CPAF contracts, shifting potential overrun costs to an FFP contract can entitle the contractor to receive more fee than they otherwise would. Finally, if there is a follow-on to the FFP contract, the false recording of costs on the predecessor contract can be a justification for a higher price on the follow-on. In short, mischarging to an FFP contract is not a "victimless crime."

As you describe it, it is an illegal act. Intentionally allocating a cost to a cost reimbursement contract to which the cost is not allocable and then submitting a claim for that cost to the government violates the False Claims Act, 31 U.S.C. 3729. It also violates several criminal statutes such as 18 U.S.C. 287, 18 U.S.C. 1001, 18 U.S.C. 1343. The same would apply to a T&M contract if the contractor intentionally claims an hour of labor that was properly allocable to an indirect cost pool as a direct hour of labor. The criminal statutes cited above, all require intent. However, no intent is required to be in violation of the FCA.

I agree generally with Neil. However, I am a little fuzzy on why you are asking for additional funding for a CLIN. If the contract is not funded at the CLIN level, why would you need additional funding for a single CLIN if there is adequate funding for the contract as a whole?

We have seen examples of where certain functions of government are moved from Washington to other areas of the country. For example, the Social Security Administration is located in Baltimore. DoD's DFAS was centralized in Columbus, OH, elements of the FBI were moved to West Virginia. Perhaps moving entire agencies out of Washington may not be a good idea in some circumstances, but why it could not be done with others, such as the regulatory agencies such as FCC or FTC, is an open question in my mind. With modern communications capabilities, travel is much less a requirement than it was a few years ago.

Just to clarify, were the SCA clauses in the contract at time of award or were they added with the WD?

Are you with the government or contractor? If the former, one thing you have to keep in mind is whatever position the government takes has an impact on the contractor. In this regard, the answer both COs give might be different from the contractor's interpretation of the contract and none of the interpretations may be correct.

What, if anything, does your contract say about compliance with the SCA and adjustments because of changes in the WD?

The FAR does not mention a socio-economic plan. My cynical side thinks this is a way for a contracting officer not to do business with a small business since small business subcontracting plans are not required from small business concerns. Further, with the limitation on subcontracting imposed on small business concerns, they may be constrained on the subcontracting opportunities that exist under a particular contract.