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joel hoffman

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Everything posted by joel hoffman

  1. So you are finally alluding to the actual question that I asked three days ago. Thanks for your opinion.
  2. Bob, I think you deleted one of those duplicate posts of mine while I was composing my post as an edit to the one that said "duplicate". When I hit "save", the post had already been deleted. Not your fault. Someone called me on my cell phone while I was walking my dog and I apparently push the wrong button twice, thus a duplicate and triplicate.
  3. Already been done with design-build. Pentagon Renovation after 9/11/2001. Although CM@risk, rather than D-B, GSA is doing it, in accordance with the PBS policy that I referred to earlier today. Joel: That link does not work. This edit is a reminder to me to tell you that.
  4. DOE has an abysmal track record on their recent cost type construction and remediation contracts - However, that doesn't matter. DoD cant use them. My last full time assignment was on the DoD Chemical Demilitarization Program on two CPFF Systems contracts that are STILL not finished and the cost has doubled or tripled over the original estimates - all for various reasons.. I left that program over ten years ago. I did come up with a name for it: It's "Fixed Price Incentive with GMP". The contract explains that it is an FPIF where the target and ceiling are one and the same.
  5. Vern, If you took as much time to read it as to count the words, you would have known what I was asking and you would have known that DoD can't use cost plus contracts for construction or design-build without approval by the Sec Defense or designee, except for environmental - which require Sec of Mil. Dept. approval . That leaves - - - - Fixed price. At any rate - three lines into the long post: I can understand if you forgot what I was asking after my excruciatingly long post.
  6. Vern, No - but thanks. CPFF is generally prohibited by law for Military construction and the cost reimbursement contract type only requires that the contractor make a best effort to complete the project within the contract cost. Adding a little incentive doesn't fix that. In addition I don't see that "managing" a cost reimbursement contract is any easier than an FPI - I'm talking about true management, not just passively administering it and paying the bills. In addition to management of design and construction, a robust project controls (cost, schedule and production) team is necessary. True earned value management skills - not reading EVMS report deliverables that reflect past events - is necessary. That's what they teach in Construction Management college curricula. That's what contractors do and that's what government project management and contract administration teams must be able to do. FPI has been successfully used for D-B in the Pentagon Renovation after 9/11/2001 and is being used by GSA for its version of CM @ risk. The D-B industry highly praised the PENREN program. P.S., they had true program and project management.
  7. ,My "next post" was somehow deleted . I described the GSA's "Construction Manager as Constructor (CMc) Project Delivery Method", which is GSA's version of Construction Manager@Risk. where: "The PBS Offices of Design and Construction and Acquisition Management are issuing the attached Policies and Procedure for using the CMc delivery method. The policy prescribes the steps for successfully completing a project under this delivery method. The policy is posted on the PBS Acquisition website at http://insite.pbs.gsa.gov/pbsacqpolicy". That method uses a form of the FPIS contract type with a "GMP" rather than the separate "target" and "Ceiling". I described the Pentagon Renovation Office's successful use of D-B, using an FPI contract format to rebuild the just completed first of four phased "pies" in the Pentagon after the Terrorists hit it on 9/11/2001. It was also successfully used to complete the remaining phases of the PENREN. It was highly acclaimed by the Design-Build industry. The Government's Program Manager, Lee Ivey later became the President and CEO of the DBIA. I explained how CM@risk fits between D-B-B and D-B in the spectrum of design and construction delivery systems. I explained how there are few government agencies that are sophisticated enough to successfully use the more complex delivery systems, anyway. Thanks, Bob... Joel: I am adding this edit because your link does not work. It may be to an internal page. I wanted to remind myself to tell you.
  8. Vern, THis guidance is intended to be for broad application across federal government. You should be able to understand the challenge of trying to convince lawyers and contracting officers in many agencies to do anything outside of the ordinary, let alone devise a new type of contracting outside of the boundaries of FAR Part 16. Beyond that, I am unable to determine what contract type you are talking about using. It would have to be some type of incentive contract that is either fixed price or cost reimbursement. Cost reimbursement type of contract is inappropriate for design build because the contractor would only have to make the best effort to complete the project within the so-called guaranteed maximum price. I could not find where a different type of fixed price cost incentive contract is allowable under the wording in the FAR. I have asked you several times what type of contract format you are going to use and how you are going to define costs and cost reimbursement for actual costs expended. I would appreciate it if you could please specifically tell me how it can be done under the current FAR, so that the contracting officers and their lawyers will agree that it is FAR compliant. Also, how would you provide for reimbursement and determination of allowable costs under your ?? type contract. This is not a one time experiment. This guidance would have to be "within the FAR box" for the generally timid and risk adverse gov't legal and contracting community to use it. A GMP design-build contract would likely only be used by the more sophisticated construction contracting agencies for complex projects where it is too early in the acquisition cycle to be able to establish a reasonable FFP amount. In fact, there are only a couple of USACE Districts that I feel might be presently qualified to try it either. The Pentagon Renovation Office used something similar after 9-11-2001 to rebuild Phase 1 of PENREN, after it was destroyed by the Terrorists and was used to design and construct the other 3 phases, thereafter. The FPI clause isn't THAT complicated if the final price adjustment is only subject to one adjustment scenario . The rest of the clause primarily explains how allowable costs are determined , and how the billing process and some facets of earned value project management are necessary, which design-builders and most construction contractors do any way. You still haven't told us anything about your contracting process other than a one sentence explanation of how to pay the cost incentive. You often chide others here for not providing references or sources for their positions. I sent the draft guidance document to Don. If you would like, Don can share it with you. I think that it very closely resembles the industry version of cost – plus/GMP design – build, which is explained in the Design Build Institute of America's Manual of Practice. The major differences are in semantics. What the industry refers to as cost – plus is not the same as what a government cost – plus contract type is. In addition, the industry can use (QBS) qualifications based selection of the design–build contractor, in any point of the acquisition cycle, then use the same design- build team from project conception through completion. They call it "Progressive Design – Build". The federal government must use some type of best value determination to select the contractor, which would consider price. In addition, the federal government is subject to the Brooks Act and other restrictions (e.g., FAR 36.209) which prohibit the government from selecting an A – E contractor, construction contractor or design-build contractor to develop "the program", and/or to develop the design criteria, and then design and construct the project, with construction as an option at some later point. P.S., The GSA is already using a similar type of a fixed price incentive contract with GMP for their version of "construction management at risk." See next post.
  9. Vern, that appears to be a type of cost incentive contract. Name or not, it has to be SOME contract type and has to be described in the solicitation: "16.105 Solicitation provision. The contracting officer shall complete and insert the provision at 52.216-1, Type of Contract, in a solicitation unless it is for— (a) A fixed-price acquisition made under simplified acquisition procedures; or (b) Information or planning purposes." Is it a cost incentive contract type described somewhere in subpart 16.4 - Incentive Contracts? If not, that is the problem: How do you define "cost" in a "GMP with Cost Incentive, GMP-CI", which doesn't seem to be a contract type described in Part 16? How do you determine the "actual cost" in a "GMP with Cost Incentive, GMP-CI"? In order to do that, the contractor and government would have to have a contractual mechanism for determining and agreeing upon "every dollar it underruns". This implies that there has to be a method to determine and agree on what actual costs we are measuring. How is a "GMP with Cost Incentive, GMP-CI" simpler, in actual practice than the FPIF with GMP? Bingo! See the highlighted FPIF applicable "cost incentive" paragraph (d)(2)(iii). I doubt that paragraph (d)(2)(i) is achievable, within $1 . Paragraph (d)(2)(ii) is not applicable. because the target cost plus target fee = GMP = ceiling price. The final negotiated cost cannot exceed the target cost and the final price cannot exceed the ceiling price (GMP). There is no profit adjustment if "actual cost" exceeds the target cost. So the only applicable "incentive clause" language is : I think that the result is the same as in the "GMP with Cost Incentive, GMP-CI. "The contractor shall share in the savings at the rate of $.25 of every dollar saved, calculated as follows" (The contract states that the target cost plus target profit = GMP) => Target cost = ( GMP - target profit) [(GMP - target profit) - (actual cost)] x .25 or: (target cost - actual cost) x .25
  10. "The contract will provide for shared savings on the project if the actual costs are less than the ceiling price/GMP, through contract provisions for sharing of savings." The parties agree on a cost savings share ratio.
  11. Vern, As I explained above, a "Cost-Plus GMP" is a standard industry type of design-build contract that is widely used. Apparently, industry doesn't think that it is ridiculous. I wasn't the one who proposed that we need to find a way to implement the GMP method for federal design-build and to provide guidance for federal government design-build usage. That was a group of industry and federal design-build practitioners. I was asked to find a way to use it, to see what laws and/or FAR coverage would have to be revised and to develop guidance for Federal Agencies to use it. I am proposing that the FAR allows that type of pricing method without the need to seek FAR revisions. The industry term "Cost-Plus" doesn't equate to the FAR "Cost-Plus" / "Cost Reimbursement" contract types. It most closely resembles the industry Cost-Plus/GMP approach, as long as the target and ceiling are the same. What is the contract type that "the simple clause" applies to? It isn't a FFP if actual cost of performance must be considered or used to determine or adjust the contract price . I looked for something other than a fixed Price Incentive to use with cost incentives but didn't find language that would seem to allow it. As I initially said - (other than FFP) type of contract is used when the it is too early in the project's design development "to be able to establish a firm fixed-price (FFP) without having to include considerable contingencies or risk in the FFP". In your simple clause, what is the contractor underrunning from? What is that amount, contractually? A target cost? An estimated cost? A Fixed cost Incentive? In order to do that, the contractor and government would have to have a contractual mechanism for determining and agreeing upon "every dollar it underruns". This implies that there has to be a method to determine and agree on what actual costs we are measuring. There will have to be a way to determine and make progress payments to the contractor during design and construction. The parties could work to definitize the contract price from a (??) to a FFP at any point, but that also brings in FAR Subpart 15.4 and Part 31 rules and requirements. The FPI pricing method can also allow for definition of parts or all of the price to FFP.
  12. Vern, are you saying, in effect, that the FPIF format doesn't allow the target to equal the ceiling and therefore, we have to "just craft" a custom cost incentive contract type, called a "CIC"? Would this need to be adopted in FAR? If not, would any agency or office that intends to use the federal design-build with GMP method have to justify using the custom cost incentive contract type and use the custom, non-standard contract clause? Would your answer be any different if this design-build with GMP guidance is planned to be published (not by me) for government-wide use for those agencies subject to FAR? Of course, 'Guidance' is simply that - guidance. There should not be a need to "just' craft a new type of cost incentive contract for federal agencies, if the GMP with target = ceiling is allowable under the FPIF contract type, with proper justification, . The DFARS, for example establishes the ceiling at 120% and 50/50 share ratio as "the point of departure " for establishing an FPIF incentive arrangement. However, that isn't mandatory. I did not see any special approval authority there or in the PGI, other than the official who has to approve the acquisition plan. Of course, other agency policy requirements might apply. Here is an excerpt from the PGI coverage: Following the (proposed - to be published) Guidance for Federal Agency Use of Design-Build with Guaranteed Maximum Price , DoD solicitations using the GMP methodology could "depart from the 120% "point of departure" and establish 100% of target as the ceiling/GMP, with appropriate justification and approval. Here is the standard FPIF clause language with applicable fill-ins: *The solicitation will state that the target and ceiling are one and the same. Paragraph (d) (2) (ii) in the clause 52.216-16 provides for a "fill in", which would simply be filled in as "0%" with the clarification language substantially as shown above. ** I presume that (subject to any agency policy) the cost savings share ratio in (d) (2) (iii) may be established through competitive negotiations (accepted final proposed share ratio) or the government may specify it in the solicitation. If established through the source selection process, the clause will be filled in at award to reflect the accepted final proposal. For DoD, the government could establish "50/50" in the solicitation, could "depart" and establish a different ratio in the solicitation or could allow the proposers to propose and justify a different ratio
  13. Is my question too difficult or did I provide too much explanation? The question is simply, as the title of the Thread says: "Must a Fixed Price Incentive Contract include Separate Target and Ceiling (Prices)?" - - not whether or not using FPI is allowed for design-build under the right circumstances. That would closely resemble the design-build industry's "Cost-Plus with GMP" pricing method I provided the background because many of us complain about the "Original Poster" not enough development of the circumstances , which OFTEN leads to people speculating and following rabbit trails. Thanks.
  14. Project Manager - Count as Labor / Personnel?

    Is the project manager effort charged as a direct cost to the contract and not included in your overhead or G&A pool(s)? Please clarify what you mean by this question? Are you referring to your project manager for subs? Where is the PM located? If you are referring to determining subcontractor labor, SBA used to say that - if the subcontractor's proposal doesn't break out labor or construction materials, then consider the entire subcontract as subcontracted labor. Now that primes can count similarly situated subs for purposes of meeting the self performance requirement, I doubt if that is SBA's current position. But I'm not going to research the SBA's CFR's, because I'm not clearly understanding your question.
  15. going once... going twice... Boom - three times.
  16. Nena, why not ask GSA? The contract is with them.
  17. AHA! - ok, understood and thanks, Retread. Well, the Contracting Officer should provide direction for the question to insure or self-insure, I would think. Signed: Sincerely, "Bald Tire".
  18. As for taking title, the government normally takes title of the property during contract performance and the contractor has possession of and accountability for it under the terms of the cost reimbursement contract. . I don't think that he government can take title to something that you have disposed of . See 45.101 Definitions and also 52.245-1 Government Property. (a) Definitions:
  19. It shouldn't make any difference. What does the contract require for insurance and what is the KO saying or requiring? I'm wondering why you are asking for specific answers here rather than asking the contracting agency... I do recommend contracting the KO,. who (especially on a cost reimbursement contract) should be providing direction concerning the requirements for automobile insurance to protect the government's and your interests..
  20. U. S. Civil War Discussion Forum

    Do those already registered in the WIFCON Forum have to separately register at the Civil War Site? When I attempted to register the other day, the software stated that there was already a user with my name...
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