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joel hoffman

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About joel hoffman

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

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  1. DCAA memo concerning contracting officer documentation of inadequate contractor proposals.
  2. Based upon previous experience and the limited data in the proposal, the OP said that he doesn’t have enough information to “believe it is fair and reasonable”. Is this an opinion or a question? Either way it doesn’t make any sense to me. What are you trying to say? Are you asking whether the OP can “just trust” the prime based upon the information provided in the proposal? Would you simply trust the proposer if it won’t even tell you who any of the firms are that quoted or who it selected? Especially if you recently bought the same item at a much lower price? Is it the same supplier? The OP doesn’t know if it is the same supplier or if the same supplier is one of the lower priced quotes. Are you referring to the prime contract action? We don’t know if it is a new contract or a modification to an existing contract. The OP only said it is a sole source action. The present contract action has nothing to do with best value at the prime level. The prime says that it selected the (unknown subcontractor) based upon some type of best value competition between prospective subs. It selected the highest priced sub quote.
  3. A vendor accepting payment by Government purchase card) is charged a fee by the card company. I don’t know how much It typically costs per transaction these days . it was substantial amount eleven years ago as a one person consultant small business. A unilateral change order will probably not be free. It’s not an administrative modification. its probably not a big deal to a Vendor for a small amount, assuming that they accept charge cards..
  4. Ok. And in addition, where the Offeror is justifying an exception to the requirement for a proposed sub to provide cost or pricing data, based upon adequate competition and it selected the highest price offer as the “best value”, let me see all the quotes...
  5. joel hoffman

    Negotiation Skills and Tactics

    “Never say Never” is sometimes good advice Gee, splitting the difference often works for the “American Pickers”. ‘‘Tis the season to be jolly.” 😁
  6. The point is that the prime has to provide the vendor quotes with identification of who the firms are for each so that Sunstrider can evaluate the cost or pricing data and develop his/her prenegotiation objectives with “factual cost or pricing data”, not have to speculate or guess who has proposed what in order to develop a PNO or have to discover after award via post audit. The liklihood of getting DCAA to perform a post audit on a smaller action are slim, based on my experience, unless they have on-site or otherwise assigned plant auditors. The proposal is deficient.
  7. To clarify - I will venture an opinion, based upon the limited information available herein, that the subcontractors would qualify for an exception to providing “cost or pricing data” breakdowns to support their prices (15.404-1 (b). They allegedly submitted quotes or proposals in a competitive environment. But that doesn’t automatically make the prices of one or any of the quotes “fair and reasonable” (not directed at Sunrider) It aggavates me when government personnel (not directed at Sunrider) fall back on one sentence in 15.404-1 to assume that prices received through competition automatically define those prices as “fair and reasonable” - especially when comparison with prior pricing shows significant differences (as Sunrider can attest to here) - especially if the government evaluator doesn’t have a clue what the items should or could cost and makes little or no effort to independently research the matter - especially if the prime contractor/Offeror is proposing under sole source circumstances (as I described hereinafter) with little or no incentive to examine or bargain for good market pricing - using the excuse that there was competition. The higher the proposed direct costs are, the higher the fee or profit allowance - especially if the prime will bid shop after award and/or pressure the sub to lower its price after prime contract award. — The vendor quotes themselves ARE cost or pricing data in the prime contractor’s proposal. They are used to develop and support the price proposed by the contractor, which exceeds the cost or pricing threshold. I hope that readers understand that important distinction. However, that doesn’t preclude the government from requesting that the prime contractor obtain and provide “data other than cost or pricing data” from a sub(s), if necessary to evaluate the price reasonableness of a sub (subs’) quote(s). I don’t know what information might be necessary here. Just making the point that an exception to “(certified) cost or pricing data” doesn’t mean that no “data other than cost or pricing” can be required to support a subcontract price. And one can negotiate proposed subcontract pricing obtained through “competition”. The above is not meant as any criticism here of Sunrider. It’s a general observation, not directed at any specific poster.
  8. Thanks, Sunstrider. You are definitely NOT a Moron! I think that you have enough ammunition to demand that the contractor or perspective contractor pony up the necessary information for you to analyze the proposal. Good luck.
  9. Vendor quotations are not anonymous. The vendors produce and provide the quotations. I’ve never seen an anonymous vendor quotation provided to a contractor. Vendor quotations are examples of cost or pricing data. I cant believe that I am wasting my time justifying why a prime would be required to identify who the selected sub is or who the other firms were that the prime is using to substantiate that there was adequate competition. This sub, it’s price, it’s products and how the sub was selected comprise the bulk of the scope and cost of the contract action. They are factual data “that prudent buyers and sellers would reasonably expect to affect price negotiations significantly”, unless the buyer is a moron.
  10. “Vendor quotations”, which is considered cost or pricing data per H2H’s quoted reference, would identify the vendor. Get real here fellows! This is unbelievable You would apparently advocate the buyer not having the right to know who will produce or provide the product or who the competitors were and their prices and other criteria that was considered in the selection. This was a “best value” selection by the prime, involving quality of the product or supplier in addition to price. And the government couldn’t determine whether the sub is suspended or debarred before award. The idea of a prime proposing and justifying secret subcontracting is one of the more ridiculous arguments I’ve ever heard of. I’d expect to see the vendor quotations.
  11. EDITED: Is the identity of the selected subcontractor cost or pricing data for the prime? I think so. That should be evident. Some firm has proposed a price, which has been allegedly used as a basis for the overall proposed price. Who the firm is and its price would be factual rather than judgemental data. The other proposers’ (the “competitors”) identities and prices are also factual data which are part of the proposal.
  12. Oh yes, I see. So part of your question would relate to whether the contractor provided adequate subcontractor information for the contracting officer to analyze the subcontractor information provided by the contractor (per 15.404-3). Makes sense. Regarding other aspects of 15.404-3, I think that Sunstrider already indicated what he/she thought about the adequacy of the prime contractor review and cursory price analysis. If it had been adequate, Why do you think Sunstrider initiated this thread? The sole source contractor has little incentive to do more than the bare minimum concerning pricing a subcontract. Which makes it all the more necessary for the KO to analyze the subcontractor data. What data is there to analyze? Also, we don’t even know any of the firms’ names. But that’s only my opinion.
  13. Did you mean 15.403-5 and 15.408?
  14. Sunstrider, my question to you is this. Do you have enough information to either 1) agree that the proposed price and subcontract amount are “fair and reasonable” for preparation for negotiations and for negotiation purposes or 2) if not certain that they are, do you have enough information to conduct an intelligent proposal analysis, prepare a pre-negotiation objective, and negotiate with the contractor?
  15. H2H, I would need to know who the sub is before I would agree to the price for award. There may be a reason to object to the sub. I would need to verify what the actual quotes were. If I had separate price information, for example, knowledge of a lower priced source or that one of the sources in the competition would, could or has offered a lower price or recently sold the same items for lower price(s), then I would want to be in a position to bargain for better prices. There are many scenarios possible. Therefore, NO. I don’t automatically take it for granted that the proposed Subcontractor’s price is fair and reasonable, especially if I can’t verify that the actual quote is what is being offered or who is offering it, what the other prices are and who offered them. For that matter, they could all be high for some reasons, such as misunderstanding the requirement, a contingency or other cause for unusually high or low pricing. I’ve experienced instances where , upon investigation, all competing prospective subcontract suppliers had included significant contingencies, which we were able to mitigate, resulting in vastly reduced prices (over $2 million in one instance). We have discovered ambiguous, faulty or unnecessary aspects in our specs or statement of work that caused high pricing for all competitors, whether primes and/or subs. We’ve found alternate sources which, were significantly lower in price for major items ($3 million in one case). We saved the three million plus the difference in markup. We had to know who the firms were getting pricing from and how much the quotes were for. We’ve occasionally experienced instances where the prime was less than truthful about the amount of the actual subcontract proposal. Honestly, I am not intending to brag here. My purpose is to emphasize why it is important to be thorough. I am attempting to share some reasons, learned through experience, why government negotiators and KO’s should use sound business judgement. Don’t take it for granted that merely having competition, by definition, will assure that prices are fair and reasonable. Think about this. What motivation does a sole source, FFP prime contractor have to save the government money by proposing lower prices? Why would it perform more than a cursory mandatory price analysis of subcontractor quotes? Why would it dig into subs’ prices? Why should it bargain with proposed subs (before the award of the prime contract action)? Why would it want to provide the government with more than a bare minimum amount proposal detail, etc.? Does the FAR mention that reality in its default assumption that “adequate” competition at some level will assure fair and reasonable pricing? What is “adequate” competition anyway? The reality is that there is one heck of a lot of difference between the effort a sole source prime contractor will devote to pricing it’s subcontracts before and after awarded the contract action. I’m not going to ask and don’t need to know why but suspect that there are some pretty good reasons why Sunstrider asked the questions here...
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