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joel hoffman

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    Following God, Family, Sailing, Motorcycling, Hunting, Volleyball; Acquisition, Negotiating, Source Selections, Contract Administration, Construction, Design-Build Construction, mods, claims, TFD, TFC, project controls,

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  1. We were ignorant of the distinction between a “matter of responsibility” and a “matter of responsiveness” to the contract requirements”. What we did know was that there were frequent examples of primes who were fronts for subs, primes who took advantage of their small or small/disadvantaged business status, contractors who couldn’t obtain award of prime contracts for various reasons or because it was reserved for small or small disadvantaged business, etc. One form was for unrestricted solicitations (52.236-1 Performance of Work by the Contractor) and the other was for sole source or set-asides for small business, 8(a), etc.(52.219-14 Limitations on Subcontracting). In working with SBA Regional Office in Atlanta, we defined what was self-performed work for purposes of the -14 clause and included that in the form. We included the various lines for the contractor to fill in to determine intended compliance. After all, the clause clearly says “(e) Limitations on subcontracting. By submission of an offer and execution of a contract, the Contractor agrees that in performance of a contract…” Since they were “agreeing” or would have to “agree”, what did they have to complain about? They should know at the time of proposal submission how they intended to meet the self-performance requirements. Since we provided pretty straightforward explanation and description, there wasn’t much room for doubt or ambiguity to argue about later. And we required the prime to provide direct management and supervision of the job (consistent with the SBA regulations and requirements). For source selections, it was a go/no-go factor. For sole source, it was simply a requirement to include in their proposal. We never got any complaints. Those competing for set-aside construction contracts or selected for sole source construction were in a privileged class for those competitions. Congress decided that those having the opportunity to participate in a restricted competition or sole source environment must self-perform at least a certain portion of the contract work. And Congress specifically agreed that simply buying the materials for someone else to install/perform the work won’t be allowed to count as self-performed work. Similarly, for unrestricted source selection competitions, we defined what was and examples of what wasn’t self-performed work, “on-site”, with its own organization ” and provided the lines to fill in. Again, buying materials for subs to install/perform work wasn’t self-performed work. It was also a go/no-go factor. Essentially, this clause was designed to prevent a contractor from obtaining and performing a contract in name only, without providing any added value (e.g., brokering or acting as a front for other firms). It precludes a contractor from reaping the profits and credit for the work when in actuality the subcontractors perform the entire job.* FAR 36.501(a) states, in part, “To assure adequate interest in and supervision of all work involved in larger projects, the contractor shall be required to perform a significant part of the contract work with its own forces.” *See:https://publiccontractinginstitute.com/far-52-236-1-performance-of-work-by-the-contractor-a-hard-clause-for-oconus-construction-contractors/ In the 90 or so source selections and 60 or so sole source negotiated contracts while I was with the Mobile District USACE, we never had a problem, complaint or a protest from a proposer- even when we occasionally eliminated one or more proposers that didn’t or couldn’t meet the stated requirements. If I was still in the source selection business, I’d figure out a way to get or consider the information at the responsibility determination stage of the acquisition. But that would be a much more inefficient way to try to meet the intent of the clauses. You go through the SS only to find that the apparently successful offeror doesn’t intend to or can’t meet the requirement. Stupid, in my ignorant opinion. There shouldn’t be any legal problem with sole source negotiated acquisitions in requiring the proposer to show how they intend to meet the -14 limitation. Go for it!
  2. Ok, we understood you the first times, govtacct02. 🤪. The OP was referring to the prime’s markup on a sub’ prices.
  3. I don’t think that will be allowed but you can read up on that here: https://casetext.com/statute/united-states-code/title-41-public-contracts/subtitle-ii-other-advertising-and-contract-provisions/chapter-63-general-contract-provisions/section-6305-prohibition-on-transfer-of-contract-and-certain-allowable-assignments/analysis?citingPage=1&sort=relevance
  4. Since NewbieFed is a government employee, he or she should have access to their agency counsel for answers to the questions herein.
  5. Please remember that I said what you are proposing goes beyond what the industry calls GMP and what the couple of government agencies using a similar form of GMP are doing. In both cases, the owner or government make regular interim payments during performance and they incentivize cost savings by sharing cost savings within a defined band.
  6. You could ask NAVFAC or the GSA folks for their policy guidance and descriptions of their methods. I saw them a few years ago but no longer have that info. The Design-Build Institute of America(DBIA) hired me to develop a GMP model for Federal Contracting that would be compliant with the FAR. I provided it to them and they own the rights to it. It was very similar to what the GSA has developed. It is basically a much simplified FPI type contract. However, it would only be used for very complex design-build projects that aren’t suitable for FFP.
  7. Please note that both the Navy and GSA are using forms of FPIF and FPIS for design-build construction to get as close to the industry model of GMP as possible. But, of course- progress type payments are included in their methodology. That and zero contractor share of cost underruns would be the major difference here.
  8. Correct, under the scenario that I described. Its a variation of both a fixed price incentive with fixed target (FPIF), where the target equals the maximum price and what industry refers to as a Guaranteed Maximum Price (GMP). No payment unless and until the object/requirement is successful. (Edit: Profit or fee also payable but only upon success).
  9. So, it appears to me that what Tzarina might be proposing would look somewhat similar to an industry “guaranteed maximum price” (GMP) contract (but with the differences described below) to successfully perform a requirement The GMP would provide for 100% government share of any cost underrun and 100% contractor share of any cost overrun. And there would be no payment prior to successful completion of the requirement. The contractor would bear the cost of financing the performance as an investment, in return for some future benefits to the contractor.
  10. Vern, yes. I focused on your Bold type wording in your earlier post quoting paragraph (d) of 52.212-4: “The Contractor shall proceed diligently with performance of this contract, pending final resolution of any dispute arising under the contract.” I failed to notice the word “arising under or related to” in the wording of (d) above the bolded quote: Note that it doesn’t specifically refer to alternate 1 of the FAR 52.233-1. Clause. Just the clause is incorporated by reference. However, the 52.212-4 clause at (d) specifically requires diligent performance pending resolution of any dispute “arising under the contract.” So, does that mean that, in a commercial contract, the contractor doesn’t have to continue performance under any dispute “relating to” the contract?
  11. Agreed, I was simply responding to the several posts, which implied that alternate 1 to 52.233-1 is necessary for non-commercial contracts. However, if it is a commercial contract, 52.212-4(d) doesn’t refer to actions relating to the contract. and… So, if 52.212-4(d) is adequate for commercial contracts, then so is 52.233-1 for non-commercial contracts, without alternate 1. Thats all I meant. I said this morning: “For the purposes of this scenario, there is no need to use alternate 1 to 52.233-1. Paragraph i of the basic clause would cover a dispute arising under a non-commercial contract.” Sheesh.
  12. In this case, the funding would be available at the outset. “Allotment” of funds”? I believe that Incremental funding for this would have to be otherwise authorized. However, it would appear that the funds are obligated , not obtained during or after the fact for payment for performance. I’m not sure whether the second question above refers to this type of action or a conventional contract type: “Also, if an agency issues a Fixed Unit Price Contract for services and incrementally obligates and only pays for outcomes or not at all, would it not be possible?” So the scheme described in the initial post wouldn’t be appropriate, if it is designed for use when funding isn’t initially available.
  13. Here, NewbieFed didn’t describe the circumstances of the alleged breach of contract. So, I suppose that we can’t determine whether the alleged government breach is an action under or relating to the contract.
  14. I think that the subject example in the thread is primarily an attempt to circumvent the FAR pricing and other government contracting requirements. The government and contractor agree on some amount, be it fixed or a rough order of magnitude or a not to exceed, and then government obligates the funds in order not to violate the Anti-Deficiency Act. The government only agrees to pay for successful performance and delivery. Can’t that be done under a conventional contract? Various forms of performance based contracting have been done before (I think).
  15. I can envision a scenario for a claimable government action “relating to the contract. The government awards another contract relatively soon after the instant contract, with higher wage rates or otherwise was more attractive for labor or professional employees. The contractor claims that it severely affected its cost of labor or ability to attract and retain personnel. Only the government knew or could have known about the second contract. There are examples like that cited in Nash and Cibinic’s Administration of Government Contracts (my latest is the Fourth edition). For the purposes of this discussion thread, a material government breach of contract would be an action “under” but not otherwise “relating to” the contract.
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