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joel hoffman
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Posts posted by joel hoffman
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How is the price for an IT support task determined/established?
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Yes. By Statute, the “head of an agency shall require offerors, contractors,and subcontractors to make cost or pricing data available”, as described in the Statute, where applicable.
Yes, the provision and applicable clauses are required in negotiated acquisitions by the Code of Federal Regulations
However, the Christian Doctrine has been applied to the Truth in Negotiations Act., when the government omitted mandatory TINA clauses that were applicable to the type of acquisition to implement this deeply ingrained procurement policy. Thus, the implementing clauses were read into the contracts.
Reference, for instance: https://www.weitzmorgan.com/2017/06/16/christian-doctrine/
At this point, I’m not sure which scenario or what requirement is under debate in this thread. A CPFF prime received one subcontractor CPFF proposal and one question seemed to be whether or not there was “adequate price competition” to assume that the price is fair and reasonable.
DoD policy is that the scenario doesn’t automatically constitute adequate price competition to establish a presumption of “fair and reasonable pricing”.
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For DoD:
“215.371-3 Fair and reasonable price.
(a) If there was “reasonable expectation… that …two or more offerors, competing independently, would submit priced offers” but only one offer is received, this circumstance does not constitute adequate price competition unless an official at a level above the contracting officer approves the determination that the price is reasonable (see FAR 15.403-1(c)(1)(ii)).”
The above reflects DoD policy not to assume that adequate competition exists where multiple firms were solicited but only one responded or where multiple firms expressed an interest but only one responded.
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14 hours ago, Retreadfed said:
Neil, the reason I asked my earlier question was your reference to business practices. In regard to complying with the US Code, the relevant statutes (10 U.S.C. 2306a for DoD), do not impose any requirements on contractors or subcontractors. They only impose requirements on the government.
You might want to review the 10 USC 2306(a) again. The statute states that the Contracting Officer shall require that the contractor or Offeror to submit cost or pricing data and for subs to submit C&P data as applicable.
It also requires that the contractor submit it and to obtain C&P from subs or prospective subs as applicable.
It requires a sub or prospective sub to submit it, where applicable.
I reread my old Briefing papers on TINA and they clearly state that the prospective contractor or contracting shall submit..., shall review..., etc.
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I think that this thread concerns an internal debate over hypothetical scenarios, not an actual A/E task order.
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30 minutes ago, Don Mansfield said:
Why not issue a task order for what you can price at the outset, then subsequent task orders for other work when you price the other work?
Yes, that is one of my suggestions, with the proviso that it or they will be follow on task orders, exempt from fair opportunity (based upon the description provided). If so, then state that intent in the initial task order.
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You can only price what you can definitize.
What do they say about my suggestions, both of which would be consistent with 16.5?
Your organization would have to be totally ignorant about architect -engineer design processes, design development, design integrity if they won’t let you use the same architects and engineers of record for follow on design work that would be essentially non-severable or based off of the initial design effort.
The other A-E pool members should understand that if you let everyone know that during the initial task order selection process.
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Ok, so just issue the follow up task orders to the same A-E firm as an exception to fair opportunity. Mutually determine and define the scope then negotiate the design fee.
If the follow on design work is within the overall scope of the instant task order, you can add the work as in-scope changes. Mutually define the additional design work and negotiate the price.
if You are in the initial task order solicitation process , include your intended course of action for the phases in the task order statement of work.
Edit: you probably ought to state that it is the government’s intent to... but the government reserves the right to separately contract for such design work, if it is determined to be in the best interest of the government to do so. Not being familiar with the nature of the follow on limits my recommendation somewhat.
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“Some “ in Desperado’s organization appear to be hanging their hats on 17.2 and perhaps 17.207, which aren’t applicable to A-E contracts.
A-E contracts use a specifically directed QBS process to select the most qualified.firm, then the parties negotiate fair and reasonable pricing to accomplish the A-E services task.
I hope that my understanding is correct that that they cant definitize a price for later phases of the contract that will depend upon the initial design.
If so, how would the organization contract for A-E services to design the project if there were no ID/IQ ?
Also, please note 36.101(b):
“(b) When a requirement in this part is inconsistent with a requirement in another part of this regulation, this part 36 shall take precedence if the acquisition of construction or architect-engineer services is involved.”
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Continuing a closed thread from 2918, see where the GAO concluded that HUD had violated the Anti Deficiency Act for purchase of office furniture, furnishings and fixtures for the office of the HUD Secretary wifthout advance notification to Congress.
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8 minutes ago, Desparado said:
That was one suggestion as well. But, like you, I find that clunky and unnecessary. Sadly, my lack of A&E knowledge puts me at a disadvantage in these discussions with the HQ peeps.
If this is USACE, I’d be glad to discuss offline with you.
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8 minutes ago, Desparado said:
They don't argue that there can be options... but insist they much be priced.
They are really just going with the basic concept that any award has to have a negotiated cost/price (even if a ceiling) to be legal and binding.
That basic concept is flawed where QBS is the basis of award and where 17.2 is not really applicable and the government could logically not be required to use fair opportunity for the follow on phases.
“Some” apparently don’t understand the complexities of A-E contracting for complex projects or programs and are trying to force fit requirements for best value contracting to QBS.
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Also consider this. If the A-E firm is logically and practically the only choice for the follow on design phases*, you could issue separate follow on task orders using an exception to the fair opportunity requirements in 16.505.
But that would be a clunky way to accomplish the same purpose and wouldn’t produce any different result or method of pricing the follow on A-E work.
*it should be obvious, for continuity in accountability and responsibility for design, warranty of design, familiarity with the basis of design and the initial developed design, not to mention the cost and time involved to substitute another firm .Follow on phases would likely depend on the initial design. If they don’t and if the integrated program schedule permits, then you could consider separate task order using fair opportunity. I’m guessing not though, here.
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22 hours ago, Desparado said:
Oh believe me, I have... They are sticking to the article in the original post that these equate to unpriced options and are therefore illegal.
We are making selection based solely on technical, then reaching agreement on a fair and reasonable price for the first phase of work (there are several phases but the latter phases are undefinable at a level low enough to facilitate getting a cost proposal), but their contention is that we still have to get a full cost proposal for all phases upfront.
So, they are basing their reasoning on a 1986 GAO report that discusses options on service contracts that were competed with price as a factor and that would now be subject to 17.207 (not applicable to A-E contracting).
How is that applicable to an AE contract,? And here, the follow on phases can’t be definitized up front. There are some controls on the cost of A-E design services , most notably the 6% statutory limits, plus negotiating a fair and reasonable price for any follow on work.
If the firm won’t reasonably negotiate follow on prices, technically, you could replace them. I never heard of our organization being held hostage by an incumbent A-E firm. By and large A-E firms want to maintain good designer-owner professional relationships. Relationships are critical when future work is based upon QBS and client satisfaction, which is expressed in past performance, as well as personal experience of those often on the A-E selection boards.
“17.200 Scope of subpart.
This subpart prescribes policies and procedures for the use of option solicitation provisions and contract clauses. Except as provided in agency regulations, this subpart does not apply to contracts for
(a) Services involving the construction, alteration, or repair (including dredging, excavating, and painting) of buildings, bridges, roads, or other kinds of real property;
(b) Architect-engineer services; and
(c) Research and development services.
However, it does not preclude the use of options in those contracts.
[61 FR 41469, Aug. 8, 1996]”
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The price should be of no concern to other A-E firms. None of the firms will prepare price proposals at the time of response to the task order request. The concern would be whether or not the work is within the scope of the task order competition.
I don’t think that the base ID/IQ contract has to specifically address the possibility of options for follow on phases of a task order project, as long as the project to be designed is within the scope of the multiple ID/IQ base (“parent”) contract.
The fact is that the situation here apparently precludes being able to definitize pricing or the specific design parameters of follow on design phases at the outset.
Ive seen an A-E umbrella single award ID/IQ contract, which included follow on designs to be based upon a pilot plant , site adapted and updated to include lessons learned and engineering change proposals, etc. as the pilot plant design matured and construction, systemization, pilot testing and operations progressed for that first plant.
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Based upon what?You’re going to have to make them justify their position.
In order to price and option one must know what the scope of work for the option will be. Same with all phases
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Of course, “some” know that 17.207 isn’t applicable here, correct?
Edit: The scope of services for any options would have to be within the scope of the original A-E or task order A-E competition.
But the fact remains that this is a qualifications based selection (QBS) not a priced based or Best Value based selection.
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Based upon what source for the requirement? FAR 17.2?
As for timing, are “some” saying that this is supposed to be priced during the negotiations for the task order price?
There are no prices at the MAC -pool level.
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16.505
(d) The statutory multiple award preference implemented by this subpart does not apply to architect-engineer contracts subject to the procedures in subpart 36.6. However, agencies are not precluded from making multiple awards for architect-engineer services using the procedures in this subpart, provided the selection of contractors and placement of orders are consistent with subpart 36.6.
Ask the “some” in your agency that justify their position that you must price A-E task order proposals or price base award A-E contracts. Price is not a factor in the task order selection, unless you are unable to reach agreement on a fair and reasonable price with the most highly rated firm.
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Task orders for A-E services on multiple award A-E contracts are not competed on the basis of price.
You use the QBS procedures to select a firm, then negotiate the price to perform the task.
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Yes, I agree that JTR per diem rate limits themselves don’t directly apply to contractors.
Having said that, I’ve found that, when I travelled along with contractors, some companies had better hotel rates than the government rates.
And, depending upon the timing and circumstances, contractors sometimes paid less airfare than the government’s all-season, fully refundable rates, when they used non-refundable fares.
I chose the wrong term in the phrase “firm’s travel costs fairly well conform to the JTR limits”. I meant “compare reasonably well in comparison with the JTR limits.
And yes, one could use the criteria in 31.205-46, Travel Costs as a guideline for an estimate of reasonableness in the evaluation criteria. But keep in mind that, for an FFP competitive proposal, “allowable cost” limitations aren’t directly applicable. It’s more a yardstick for evaluation purposes, subject to application of judgement.
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https://oversight.house.gov/legislation/hearings/government-shutdowns-contract-killers
Hearing by House Committee on Oversite and Reform was held on May 6,2019.
QuoteBACKGROUND
The longest shutdown in the federal government’s history ran 35 days, from midnight on December 22nd through January 25th. The shutdown was the 3rd federal government funding gap of the Trump Administration.
In addition to the 400,000 federal employees affected by the shutdown, approximately 800,000 contractors from 10,000 companies that support and enhance the government directly felt its negative effects.
Federal employees rightly received back pay for the days they were furloughed, but many contractors – who support, supply, or sit directly next to these federal employees – received no similar recompense.
These contractors live and work in every state in the nation, including:
NASA contracts worth $7.9 million per week in Huntsville, Alabama and Cape Canaveral, Florida.
Virginia’s 11th Congressional district includes an estimate of at least 70,000 contractors, representing over 16% of the employed workforce.
In the National Capital Region, federal contracts pump $66 million into the local economy every week.
The U.S. Chamber of Commerce estimated that the shutdown had an adverse effect on at least 41,000 small businesses across all 50 states, costing them more than $2.3 billion in lost revenue.
Many affected contractors were low-wage employees, including security guards, janitors, and other service workers.
See Contracting News, posted 8 May 2019 on the WIFCON Homepage.
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On 4/26/2019 at 1:17 PM, Anonymous2019 said:
Working in a CPFF environment where we have a PWS that is sometimes a little broad.
If there is additional work that is requested, not originally planned, but determined to be "in scope," I'm looking for some basis to determine if the additional work should/could be Fee bearing?
...Other party believes the opposite that just because it's in scope, does not automatically preclude the additional costs from being subject to additional fee. Thoughts? Thanks!
Sorry but your question is VERY broad and not well defined or described.
You said "there is additional work that is requested" What do you mean by "additional work"? How is it "additional" - additional to what? And how is it "requested"?
How is the work "not planned"? Or to put it another way - How is the work "planned"? Not "planned" by whom? By the contract? By you?
What specifically do you mean when you said "[the work] is determined to be in scope". For instance, is the type of work to be performed the same type of work described and required to be performed?
17 hours ago, Anonymous2019 said:For instance if we have 2 people working on an effort and the customer has more work that originally anticipated and now we need 2 additional staff to support the work this doubles our original anticipated cost, but the scope remains unchanged.
We don't know what you mean by "the customer has more work [than] originally anticipated". What do you mean by "more work" and "originally anticipated" Is the work in addition to work that was described in the performance work statement or other contract requirement? Who or what originally anticipated the quantity of work?
How is the amount of work to be performed identified or to be identified by the contract requirements?
All of those points matter as to whether or not additional fee is warranted on a CPFF environment.
Generally speaking, the fee is fixed, unless there is a change to the actual contract requirement. What the actual contract requirement is, of course, sometimes subject to the rules of contract interpretation.
That is why we are seeking clarification of your scenario.
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4 hours ago, ji20874 said:
Joel,
If the locations are known, and the number of nights is known, and the number of meals is known, then FFP is the best approach, hands down. Compliance with the JTR is wholly irrelevant. Competition with FFP is the best approach for the original poster. No travel CLIN — just bury travel as part of the work CLIN. The faraway crybaby offeror will need to sharpen its pencil — if it can’t win on price, it will have to win on technical merit.
I don’t disagree that FFP is likely a good way to go when the scope and costs are reasonably determinant .
But if they include an FFP travel CLIN, which might be useful for contract admin purposes, they could evaluate the reasonableness. That seems to be a concern of the customer and was the essence of the original question.
As for a price advantage due to location, it wouldn’t matter whether travel is paid for as FFP or cost reimbursement.
Subcontract cost/price analysis as part of CO consent decision?
in Contract Pricing Including CAS & Allowable Costs
Posted
“Adequate competition” is more indicative of price reasonableness than cost realism in the case of a cost reimbursable competition. Cost realism analysis may be necessary due to pressure or tendency to understate costs in a competitive CP environment.
A cost realism analysis is discussed under 15.404-1 (c) as one form of COST analysis.