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joel hoffman

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Everything posted by joel hoffman

  1. joel hoffman

    Barring Subcontractor

    Ji, subcontractors aren’t normally rated separately in CPARS are they? As far as I know, the performance rating is for the prime. I believe that the government is limited to including a narrative about the sub’s performance. In the prime’s evaluation. [Edit: I seriously doubt that a narrative covering the subcontractor’s performance within the prime’s rating evaluation would justify disbarment or survive a dispute, unless perhaps the sub’s performance was so poor as to cause the prime’s overall performance to be unsatisfactory. As I stated before, the prime is ultimately responsible to the government for the performance of its subs. On top of that, the government’s design is defective, which could be claimed as a contributing factor. ] The clause at 52.209-6 is only effective if the subcontractor is a firm that has been officially debarred.
  2. joel hoffman

    Barring Subcontractor

    It may well be that any money that the architect of the capitol saves in not been subject to the federal acquisition regulations could be spent on purchasing new chiller Just joking. However, it would be nice to know upfront that we are dealing with another animal. 🤭
  3. joel hoffman

    Barring Subcontractor

    Never mind, Torey. You did not ask about advice concerning post acceptance problems.
  4. joel hoffman

    Barring Subcontractor

    Torrey, does anyone in your organization have any experience with architect-engineer liability or with the legal implications or defenses to the Spearin Doctrine?
  5. joel hoffman

    Cost Allowability

    ok, thanks, Corduroy.
  6. joel hoffman

    Cost Allowability

    ok, thanks for the clarification. But if it concerned the recent thread, I admit that I also flubbed, as stated above.
  7. joel hoffman

    Barring Subcontractor

    Regarding the immediate problem: If a contractor, through its subcontractor, knowingly connected a chiller in a manner that it knew was improper and that would lead to failure, it might be possible to establish some responsibility - you need some legal advice. Since it has been discovered during the warranty period it might not matter whether the ultimate defective installation is a latent defect, known but not disclosed by the contractor or its sub. All that and the possibility of A/E liability will require some investigation by competent personnel. Of course, if this is a design-build contract, then it should be a slam dunk - the design-builder is most likely responsible for fixing the design and replacing the chiller, in this case under the Warranty of Construction clause and under any other similar contract requirement.
  8. joel hoffman

    Barring Subcontractor

    I will be out for the rest of the day, so might not see other posts here until later.
  9. joel hoffman

    Barring Subcontractor

    Thanks for the clarification. The work is complete. Your original question then concerns avoiding participation by this subcontractor on future contracts. I'm sorry. My above posts assumed that the work is on-going. If the government is using best value acquisition methods, I would include an evaluation factor or subfactor to evaluate the experience and past performance of key subcontractors, especially mechanical subcontractors. I would definitely document the performance of the prime (during the work) and its sub. If the performance evaluation is not final, I would document it there - of course, the prime may not agree. How all that is done is beyond the scope of my answer here. As for the current problem, I don't know whether a prime contractor can be held liable under the warranty clause for a patent defect in the design that the contractor's sub should have brought to the prime's attention and the prime should have brought to the government's attention. It requires some legal investigation and determination. At least the problem has been identified during the warranty period. On the other hand, there may be A/E liability for the design error, which caused the failure of the chiller unit. Was there an A/E contract for the design? The A/E contract clause 52.236-23, Responsibility of the Architect-Engineer Contractor, establishes the standard of care for the /E design. It may be possible to establish a case of A/E liability under this clause, but there are some rigorous efforts and standards involved in making the determination and successfully establishing A/E liability. I don't know what your role or expertise is, what organization you work for. Nor do I know what degree of expertise is available in your organization and/or any other organization that provided the design and construction contract to accomplish the above investigations and actions concerning recovery of costs to replace the chiller and replumb the connections. As a minimum, an A/E is required to provide any necessary redesign due to a design error under the above clause.
  10. joel hoffman

    Barring Subcontractor

    There are numerous possible oversight and QA actions available. I might advise telling the prime, as part of its supervision and inspection roles to look for root causes of the defective work of its subcontractor and to propose a corrective action plan. You can also document and put the contractor on notice of its performance problems , including interim performance evaluation … There are procedures that would have to be followed. As for ji's suggestions, remember that there are procedures that must be followed to be able to implement and defend the government's course of action. I am assuming that the contract in question is on-going. Is it completed? If so, then other government actions and possibilities exist to avoid using this subcontractor in the future which require separate discussion.
  11. joel hoffman

    Barring Subcontractor

    If this is a federal construction contract, generally speaking, directly banning a subcontractor from the job site would be interfering with the prime-sub contractual relationship and would usurp the contractor’s role, responsibilities and control of the work. Federal construction contracts make the contractor responsible for material and workmanship (see, for instance clause 52.236-5, Material and Workmanship), for direct supervision of the work (see, for instance clause 52.236-6, Superintendence by the Contractor), and for quality control and inspection of the work to ensure that it meets the contract requirements (see for instance clause 52.246-12, Inspection of construction and any other more specific contract quality control requirements ). The government must require and importantly - allow the prime contractor to perform its responsible roles for the quality and safety of the work. If the contractor isn’t doing that, the government should be notifying the contractor of failures or deficiencies in its superintendentence, inspection and quality control system. Pursuant to the Permits and Responsibilities clause, the Contracting Officer may require, in writing, that the Contractor remove from the work any employee the Contracting Officer deems incompetent, careless, or otherwise objectionable. But that does not extend to directly barring a sub from the campus. One of our area engineers (an ACO) once directed the contractor to fire a subcontractor. The government ended up being responsible for the cost and time impacts as a constructive change. If the problems or poor workmanship or supervision can be attributed to specific personnel, the KO may be able to direct their removal and replacement or at least some corrective action to improve their performance, at the risk of removal. As for the drawing error, if it is the government’s design, the government is responsible for the defective design error. However, if the defect is patent or obvious to those who know that it is wrong, then the contractor or it’s sub should normally promptly notify the KO and ask for direction, to minimize impacts to the job. But a change order would be required to correct the error. Had the sub or contractor notified the government of the error, it might have been little or no cost to correct it. Impact costs or delays caused by a failure to notify the government of a patent defect, might not be considered “reasonable costs” or reasonable delays. Depends upon the circumstances. The contractor and government both have some good faith responsibilities. The above is “the short answer”. There are entire courses on contractor quality control and government quality assurance management systems and procedures. Not enough context here to fully describe other possible actions available to the government in the event of failures in the QC and supervision of the work. If it is seriously deficient to the point where it endangers property or personnel, or will seriously affect the rest of the work, the KO might be able direct that the contractor stop all directly affected work until the contractor fixes its QC and supervisory processes. It should not be directed as a “Suspension of Work” but as a failure to comply with the contract requirements for performance of the work in a skillful manner and to supervise and inspect the work. Avoid any language that would refer to “suspending the work” or to a “suspension of work”. The “Suspension of Work” clause is written for suspending the work for the convenience of the government, not for enforcement of contract requirements.
  12. joel hoffman

    Barring Subcontractor

    Please clarify if this is a federal government construction contract. You referred to the “campus”.
  13. joel hoffman

    Cost Allowability

    H2H, I didn’t find that quoted statement in a recently closed thread. Are you referring to something that I said ? I didn’t say that. I did see in one of my posts in that thread where I incorrectly referred to “G&A base”, which is the denominator. I should have used “indirect G&A pool”, which is the numerator, for calculating G&A to charges to the government. Quote: “I would “derive an answer from above” , (thanks H2H) that Business Development costs should be allocated to the benefiting cost objectives. G&A costs are those costs which benefit the business as a whole. This may apparently be be done by adjusting the G&A base [I should have said: indirect G&A cost pool] for those non-general business costs and include them in overhead for the benefitting cost objectives rather than in G&A.“
  14. joel hoffman

    Business Development

    Sorry, I was referring to the apparent reason for the question, which was described as the OP’s involvement in a “feud” between two parties. I incorrectly used the term “debate”. Corduroy said: “Maybe the problem is me, in assuming that there would be a widely-held view that prefers one over the other. I am currently involved in a feud between a party who believes this stuff should be G&A, and another who believes this should be Overhead.“.
  15. joel hoffman

    Business Development

    Yep, but he/she doesn’t seem to want that answer. Appears to want a simple one size fits all answer, independent of context/circumstances - for a debate** yet! Clarified: ** involvement in a feud between two parties at opposite viewpoints. One says” business development is G&A” and the other says it is “overhead”.the OP wants to if there is a widely held viewpoint favoring one or the other position.
  16. joel hoffman

    Business Development

    Ok, thanks for your original point above, prior to edits. At any rate, I believe that’s why the answers to the questions should indicate that it depends upon the circumstances.
  17. joel hoffman

    Business Development

    I agree that specifics are necessary. What does the term “general descriptions” mean? After all, Corduroy said in the initial post: “This is a general question with general answers expected.” Simple answers to general questions lacking specifics can be dangerous and misleading, when there is little or no context. Especially for “beginners”, who need to understand more than a high altitude, carpet bomb, one size fits all answer. Executive level people like simple answers. I don’t think that “Beginners” in federal acquisition/contracting benefit much from simple, non-contextual answers. I don’t think that one can effectively participate in a debate based upon a simple answer without understanding the context. “They don’t know what they don’t know.” Just my opinion. I guess that I should review the Forum guidelines for responding under the “beginners” category. EDIT: Vern edited the above quoted post to add a reference to “selling costs” . Yes, I also mentioned that in an eArlier post. But - as to where these various costs belong - in general and administrative or some type of lower level or specific overhead, “it depends” on the circumstances.
  18. joel hoffman

    Business Development

    When I was employed as a civil engineer designer and project engineer in a consulting firm almost forty years ago, I had to charge my daily time in fifteen minute increments to specific customer projects/jobs or to other activities. The non-project cateories included such activities as training, personal time, “business development”, etc. As I recall, I charged general client relations such as face to face visiting and phone discussions, marketing time with existing clients and some public non-project presentations during business hours to business development. I wasn’t willing to charge my clients directly for those hours. i assume that my boss, the company principle, accounted for business development as overhead in establishing hourly rates for our professional services. We did not perform any wrk for the federal government. Our clients were generally private individuals, developers, municipal public works departments, public and private utilities, etc. I don’t know what type or amount of non-billable hours were written off or included in the overhead cost pool.
  19. joel hoffman

    Business Development

    In the way that you broadly described “business development costs”, my answer to your question “Is there no definitive answer to the above? ” would be “No, it depends upon the nature of the specific costs under “Business Development”. as Vern stated, there is no FAR definition of Business Development Costs.” You generally mentioned some types of activities. They are covered under various cost principles.
  20. joel hoffman

    Business Development

    H2H indicated that they weren’t. Why not ask him? In reading: 31.205-1 “Public relations and advertising costs”, much of what you described appear to be unallowable self promoting marketing type costs. They don’t appear to benefit performance of the required contract scope. I’m not sure what “schmoozing the customer” means. Some of the activities that you described may be allowable type costs under 31.205-38 as “Selling costs”. EDIT: Add I think that one might have to examine the allocabity of such costs. (31.201-4 Determining allocability). However, they might not all be G&A costs, as H2H and I previously explained. In attempting respond to your question about deriving an answer to [your initial question and H2H’s initial response], I said: “I would “derive an answer from above” , (thanks H2H) that Business Development costs should be allocated to the benefiting cost objectives. G&A costs are those costs which benefit the business as a whole. This may apparently be be done by adjusting the G&A base for those non-general business costs and include them in overhead for the benefitting cost objectives rather than in G&A.” That’s why I believe that the one word answer “G&A” isn’t necessarily appropriate, especially in response under a “Beginners Only” category. Perhaps a better one word response is “Depends”, although you didn’t ask for a one word answer. Finally, even though a cost is legitimate and all companies engage in it, it might not be allowable as a reimbursable cost under a federal government contract, when subject to the FAR 31 cost principles. I think that your last post agrees with that point.
  21. joel hoffman

    Critical Thinking

    My wife is a teacher. She designed and taught a semester length (18 weeks) class on critical analytic thinking skills, as defined in the Mitre Study, to all the ninth grade class at UMS-Wright Prepatory School in Mobile,AL. She taught three classes of students per day each semester. Although designated as a mandatory class, the students generally liked the class in their student evaluations and felt that they learned how to improve therir thinking skills. She also asked the ninth grade teachers if they noticed a difference in student’s thinking in their subject areas during and after completing the course. Every ninth grade teacher provided positive feedback.
  22. joel hoffman

    Business Development

    Corduroy, since you are a “beginner”, you may not have noticed that unallowable costs are not normally to be “charged” to a federal contract as overhead, G&A or direct costs, when costs are being identified claimed and/or negotiated. When the cost principles are applicable to a pricing action. You can account for them as costs to the company but cannot properly charge them to the government. And H2H’s answer is correct concerning how to account for allowable business development or other costs. See, for instance, FAR 31.201 and subparagraphs.
  23. joel hoffman

    Business Development

    “The question, if not otherwise clearly stated, is "which pool are business development costs normally charged to - G&A or Overhead?" NEITHER. Hows that for a one word answer?
  24. Then one can’t logically expect the same person to be available during every available business hour during a calendar year.
  25. joel hoffman

    Business Development

    I would “derive an answer from above” , (thanks H2H) that Business Development costs should be allocated to the benefiting cost objectives. G&A costs are those costs which benefit the business as a whole. This may apparently be be done by adjusting the G&A base for those non-general business costs and include them in overhead for the benefitting cost objectives rather than in G&A.* There may be other necessary adjustments beyond elements of business development cost, too for government contracts.* I didn’t assume that a proposed G&A rate was necessarily “correct”. I seldom assumed that a DCAA audit rate was correct, either. DCAA auditors often weren’t familiar with special aspects of treatment of costs under FAR for construction contracts. Plus their techniques for sampling costs were at too high a level for me. *I don’t doubt that our treatment of certain costs caused those construction contractors some complications in cost accounting consistency. The company would, in essence, have one G&A rate for our work and another for other work. I think that Biggies who do business with the government generally seemed to establish their accounting practices consistent with the FAR 31 principles and CAS rules. However, we would sometimes detect inconsistent treatment of their costs and bring those up, too. It was more prevalent where companies have FFP and Cost Reimbursement or Fixed price incentive contracts with the government.
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