joel hoffman

VEQ clause? Where did that come from? How does that apply to the situation as we know it from schickson's posts?

QUOTE (schickson @ Oct 29 2010, 12:05 PM) *

'You're right, this really isn't that big of a deal--I was hoping for a quick sanity check on my approach in contract formation. The original question really had little if anything to do with competition, but more with suggestions on how to set up the contract for the easiest administration over the life of the contract. It is A/E and I will be negotiating with only one contractor (hopefully).

My customer has since confirmed that the extra hours needed from time to time are in fact not "overtime" hours, but rather additional labor for unexpected situations. Unfortunately, these unexpected situations range significantly year-to-year, so I'm leaning away from having the contractor propose on an estimated amount of extra labor hours plus/minus a certain percent (with variation in quantity provisions) and leaning toward the separate L/H CLIN as originally proposed."

My suggestion is to find out how they would price "after hours" time for inspectors in a fact finding seesion with the most qualified firm. They might only pay overtime after 8 hours per day, depending upon what type of employee you are needing. Discuss the situation then set up the CLIN's to price.

Forgot to mention this, yesterday in responding to your post #27. You don't necessarily have to deal with the VEQ clause. If both parties agree during negotiations that there wont be any variation in the unit cost for an as needed OT CLIN, just state that the overtime CLIN's aren't subject to the VEQ clause. The personnel still fill out time cards and the payroll program calculates the pay and pays them for time worked. I don't see any special admin costs associated with keeping track of OT for engineers or inspectors. It was no big deal in the company I worked for.

You're right, this really isn't that big of a deal--I was hoping for a quick sanity check on my approach in contract formation. The original question really had little if anything to do with competition, but more with suggestions on how to set up the contract for the easiest administration over the life of the contract. It is A/E and I will be negotiating with only one contractor (hopefully).

My customer has since confirmed that the extra hours needed from time to time are in fact not "overtime" hours, but rather additional labor for unexpected situations. Unfortunately, these unexpected situations range significantly year-to-year, so I'm leaning away from having the contractor propose on an estimated amount of extra labor hours plus/minus a certain percent (with variation in quantity provisions) and leaning toward the separate L/H CLIN as originally proposed.

Thanks again to all.

My suggestion is to find out how they would price "after hours" time for inspectors in a fact finding seesion with the most qualified firm. They might only pay overtime after 8 hours per day, depending upon what type of employee you are needing. Discuss the situation then set up the CLIN's to price.

Let me turn this around, and pose the hypothetical situation where it is a contractor employee who is being harassed at the contractor's site by a government employee such as an inspector or auditor. What authority would the contractor have to ban the government employee from the premises to protect the contractor employee?

How about the EEO clause? It prohibits the contractor from discriminating on the basis of sex in matters of employment. The courts have carved out allowing sexual harassment by outside employees (in that case by a government official) that could create a hostile workplace for the contractor's employees as a form of sex discrimination.

The EEO provisions of the Civil Right Act also apply to a contractor. Regardless of the contract clause, an employer of more than 15 employees must take steps to stop such activity or risk being sued for allowing a hostile workplace to exist.

The contractor has every right to demand that the person stop such activity and/ or demand of the government that it replace the inspector. The government has a fundamental responsibility to not interfere with the contractor's business or contract performance and to act in good faith.

This is not an official legal opinion, only my own opinion.

Not missing anything. I'm trying to determine the best, least administrative way to handle the extra, "outside" hours (see my previous post for more detail). For the "unit-priced line items" for extra hours, I'm considering:

CLIN 006; As-Needed Labor Hours As Directed by The CO (Other Than Included in CLINS 001-005) CEILING: $20,000/YR

In accordance with contract clause xxxx.

Clause: Something to the affect that the Gov may direct work outside the normal duty hours and payment will be made at the wrap rates included in the contract for the specific labor type and quantity directed. The ceiling price would be addressed, with a provision that it would be changed from ceiling to actual at the end of the period, etc.

Ok. but this could be refined during the actual negotiations, if necessary to simplify the administration of it, correct?

By "wrap rate", what do you mean? I think of a wrap rate as a price to cover different situations. And you said earlier today in a reply to Vern Edwards that adding a provision for overtime later "would be subject to CICA". What do you mean ? You aren't supposed to be competing A-E services using price as a factor.

I honestly don't see this as a big deal if you are negotiating the price after selection of the firm. You said I wasn't missing anything, so I assume that this is a contract for A-E services, including inspection during construction. My gut feel from this whole thread is that you are trying to price the contract in a competition, rather than mutually price it as required by law for A-E services.

We're forming a new FP Engineering Services contract with a base and 4, 1-yr options--the contract is more for inspection services. Customer/management do not want an IDIQ contract (a FP contract with option years has "worked well" for years).

Situation: Occasionally, the customer needs the contractor to work overtime providing inspection, etc.,. I'm looking for a way to write the new contract which will allow both routine monthly services plus an avenue to authorize and pay for overtime without negotiating a modification on this FP contract. I'm thinking a L/H CLIN funded specifically for OT, with labor wrap rates in the contract used to pay against. The customer would request the OT and the CO would direct the contractor to perform against the LH CLIN a certain amount of hours within the pool of funds on the contract for this purpose.

Any better ideas or thoughts for further consideration?

H2H

I agree that contractors bid FP on risky things all the time but the risk is typically on the Contractor's ability to perform, not that the Gov will "require OT at an unspecified amount". Even with a sample of past OT use in the RFP, it doesn't help if there are no parameters on the OT (e.g. only on Holidays).

Example: If Contractor A builds in a reasonable amount of OT Cost in a all-inclusive (planned time and potential OT) proposal and Contractor B decides to go much lower and only focus on bidding the planned time and decides to take a "risk" that there will be little or no overtime.

Let's say Contractor B wins - Would you have no problem during performance requiring overtime even though you awarded the contractor that showed little to no OT costs in their bid? Is it, "Shame on the Contractor for bidding so low?"

I know it's hypothetical on top of hypothetical but my point is why wouldn't you want to clearly separate the known from the unknown requirement? When I see RFPs that can't spell out the unknown from the known, I no-bid them and let someone else provide potential pro-bono work.

If this contract is for engineering services with respect to real property, then it should be procured under the Brooks Act procedures. This means that you select the firm based upon qualifications, then negotiate prices. If so, I don't understand why you cant simply negotiate prices for inspection services during normal hours and include unit priced line item(s) for overtime (after 8 hours or whatever???). You should be able to jointly develop the CLIN and the pricing for it. What am I missing here?

How did we go from: Can the government terminate a contract for default based on sexual harassment of a government employee by a contractor employee to joint employment? Are we on another topic now?

Some people are speculating whether the contractor has violated the EEO clause, thus cause for default termination, I think.

Regardless of all that, inappropriate behavior to those that work with you must not be tolerated, so seek advice from the experts, promptly investigate and stop the behavior. It might or might not require further action beyond that. But don't dillydally and don't bury your head in the sand. If the situation gets to the point of creation of a "hostile workplace", its not a good scenario for the affected employees or the organization.

I don't see where requiring the contractor to include a contingency for something (OT) in its standard rate,s which might or might not be necessary, would be better than simply defining what is considered to be overtime and including a unit-priced estimated quantity that would only be used as necessary.

I would add that it is unwise to add unnecessary risk that can be fairly easily managed by pre-defining and pre-pricing overtime in a unit-priced CLIN that is only used as needed. Then, if you need more hours, you can add them at the pre-agreed rate. Be sure to say that, too in the contract.

We're forming a new FP Engineering Services contract with a base and 4, 1-yr options--the contract is more for inspection services. Customer/management do not want an IDIQ contract (a FP contract with option years has "worked well" for years).

Situation: Occasionally, the customer needs the contractor to work overtime providing inspection, etc.,. I'm looking for a way to write the new contract which will allow both routine monthly services plus an avenue to authorize and pay for overtime without negotiating a modification on this FP contract. I'm thinking a L/H CLIN funded specifically for OT, with labor wrap rates in the contract used to pay against. The customer would request the OT and the CO would direct the contractor to perform against the LH CLIN a certain amount of hours within the pool of funds on the contract for this purpose.

Any better ideas or thoughts for further consideration?

I don't see where requiring the contractor to include a contingency for something (OT) in its standard rate,s which might or might not be necessary, would be better than simply defining what is considered to be overtime and including a unit-priced estimated quantity that would only be used as necessary.

Carl - sorry, the second paragraph in particular of my post was not very clear. The thread was discussing a vendor proposing less than the wage determination amount (not necessarily paying less). It was in that context that I wondered what to do if a Contractor submitted an adjustment (as a result of an updated wage determination) that increased the below determination wages originally "proposed" up to a new minimum established in an updated determination.

GNS, I assume that you are saying that the contract price doesn't reflect the higher wage being paid. Then a new wage decision requires a higher rate. You are wondering if the contractor is entitled to the difference between the under cost contract price and the new requirement? So a contractor that buys-in can be made whole? How would that occur?

A timely and somewaht related Washington Post article:

http://www.washingtonpost.com/wp-dyn/conte...0102403060.html

The article discusses discrimination and harassment from the perspective of the victim being a contractor employee who could be effectively considered a government employee, working under the government's supervision.

It doesn't specifically discuss the situation where the contractor is considered the perpetrator of improper behavior toward "coworkers", but I suppose that it could be stretched to cover that scenario. All the more reason for the Government's "officials" to quickly contact their EEO office and then put a stop to the behavior. If the victims (plural, per the original post) cannot abide having any further contact with the person, then he or she will have to go in order not to foster or foment the creation of a hostile work environment, for which the pertinent government agency could be held responsible.

A timely and somewaht related Washington Post article:

http://www.washingtonpost.com/wp-dyn/conte...0102403060.html

QUOTE

"The issue is becoming increasingly important as to whether a federal agency or a contractor is responsible when disputes emerge over pay, workers compensation, harassment complaints, discrimination claims and other workplace issues. Contractors aren't entitled to the same grievance processes as federal employees and typically have to go through outside agencies such as the U.S. Equal Employment Opportunity Commission or get private lawyers and file lawsuits, whereas federal employees have a range of mediation services and appeals available to them.

In the last decade, the EEOC has ruled in 90 cases that a federal agency and a private contractor are "joint employers" of a person, meaning their case has to be processed as if they were a civil servant."

And:

QUOTE:

"One case that involves the EEOC's ruling of a "joint employer" goes beyond the typical office cubicle in Washington's suburbs. It involves a 35-year-old Northern Virginia man who worked as an intelligence analyst for CACI International of Arlington under a contract it had with the Central Intelligence Agency to do work in Afghanistan.

When contacted, the man, who was given an alias of Nicolas R. Brewster by the CIA, didn't comment, citing an agreement he signed with the government. The CIA also wouldn't comment on his case, saying it "doesn't as a rule comment on personnel matters." CACI did not respond to requests for comment. The following account is based on documents and filings with the CIA and the EEOC.

Brewster alleges that while in Afghanistan in the fall of 2009 he was sexually harassed by a female CIA supervisor. After he filed a complaint with the agency, it dismissed his complaint on the grounds that he was not a CIA employee but a contractor. That meant he didn't come under the same complaint process as an employee of the agency.

Brewster took his case to the EEOC, arguing that while he may technically have been a contractor on paper, he was, for all intents and purposes, working not only for CACI but also for the CIA. Before he went to Afghanistan, the CIA trained Brewster on how to survive in a battle zone and how to use its classified databases.

"Because the CIA controlled the manner and means of [brewster's] employment, the CIA must be deemed [as his] joint employer," according to Brewster's filing to the EEOC.

The EEOC agreed and ruled recently in his favor, reversing the CIA's decision."

Interesting, thanks, formerfed.

Carl, I'm curious how you concluded that inappropriate behavior by an outside entity, in this case, a contractor, violates the EEO clause in the contract.

The EEOC response to your question referred to employment discrimination by an employer.

Thanks, Joel. I've assumed throughout that the question was, "If the 'inappropriate actions' met some applicable threshold (e.g., created a hostile work environment), what, if any recourse does the Contracting Officer have against the contractor under the contract?" "Inappropriate action" just seems to wishy-washy to me, so I used "unwanted sexual advances" as an example for severe enough "inappropriate action" to warrant action, if the government employee was in the class of folks protected by the EEO clause. I think I've been fairly consistent throughout this thread to suggest that the EEO clause does not provide grounds for adverse action under the contract for "inappropriate actions" (regardless of severity) toward a government employee. Carl at one point disagreed, and (while this may be an unrealistic hope or irrelevant concern) I'm trying to close the loop in case someone comes back to this thread later.

I'm somewhat curious as to what response, if any, the EEOC will offer Carl, if he more directly crafts his question. I do have some doubt that they will directly address it in an e-mail.

Carl,

Sounds like OFCCP & EEOC ignored your question. Have you come to any conclusions as to whether unwanted sexual advances by a contractor to the government employee violates the EEO clause?

Jacques, we don't know if there were any" unwanted unwanted sexual advances by a contractor to the government employee". The allegations involve inappropriate actions towards government employees working at the same site as the Federal contractor.

This could refer to offensive jokes, offensive language or gestures, whistling, posting pictures in a cubical, who knows? It doesn't necessarily involve unwanted sexual advances.

H2H - As usual no need to echo Vern as he has provide ample support but here is a EEOC reference for you as well.

http://www.eeoc.gov/eeoc/publications/fs-sex.cfm

Carl, did you happen to notice that the EEOC did NOT directly answer your question, as it relates to the referenced situation? It may have something to do with the way you phrased it.

I suggest rephrasing your question and asking them again:

Suggested New Question to OFCCP -

If a Federal contractor who performs services in a government facility has acted inappropriately towards government employees working at the same site as the Federal contractor, who should the Federal Contracting Officer refer the matter to?

I believe that KMY was responding to a remark that I made. I don't think he/she was proposing a different scenario.

Ok, I was responding to KMY's scenario, not to DBH. Didn't mean any disrespect to either but KMY's scenario indicated personnel cost overruns on a recurring basis, so it looked like they need to exercise some better surveillance, aggressively challenge what appear to be excessive salaries when they significantly exceed proposed or negotiated rates and need to write in some protections from free spending.

If a contractor's goal is to obtain the maximum amount of fee, then under a CPFF Term Form contract can't the contractor can best achieve that by incurring the maximum amount of costs allowed under the contract? There's no incentive for the contractor to find efficiencies or find other ways to reduce costs. Cost control on these contracts relies almost solely on Government surveillance, which would seem to make it the most difficult to control. In DBH's case where the contract also allows for the flexibility of government personnel to direct contractor performance, that technical direction may alter the technical approach and/or labor mix used by the contractor from what they had originally proposed. I agree the contractor is bound to the LOE and labor rates stated in the contract, but without an incentive to reach the contract's objective or a final end product for the Government to accept, the burden is on the Government to surveil the contract to ensure costs are being incurred wisely.

Perhaps its better to say that the worst contract for controlling cost overruns is the contract that does not include the proper controls and incentives for monitoring costs, and is administered by personnel who don't understand how or care about controlling contract costs.

I apologize, since I am confused about the scenario(s) presented in this thread. We apparently have two different posters with two separate problems.

In one case, "DBH" said yesterday at 11:29 AM that "[t]he prime contractor takes the position that the “cost growth” was a result of the Government, after contract award, directing the prime contractor to allocate more LOE to more expensive subcontractors on their team than the LOE the prime contractor originally allocated in their cost proposal during negotiations."

"KMY" appears to be another person with a separate problem (Yesterday, 04:47 PM) : "Why does it matter if the contractor staffs the contract with personnel who far exceed the average rates used to win the contract. Well. if we contracted for a LOE of 1000 hours under a cost type contract and the contractor staffed the contract with individuals at rates twice as high as the proposed rates, we would only get 1/2 the level of effort we contracted for and use up all our funding. Sure, we could adjust the fee down, but what about the mission that is not being met. We have plenty of instances of contractors buying in with low rates and executing at much higher rates."

I was responding to "KMY". Then "DBH" replied to me. Are you the same person or two individuals with separate scenarios?

Another one is the requirement to use Earned Value Management (EVM). I know it's used well to manage many major system type buys. But it's also used whenever certain dollar thresholds are exceeded and this often varies by agency ($10 million, $20 million, $50 million, etc.). First of all, the more or less mandatory use creates a huge administration burden on contractors and this gets passed on to the government in the form of higher costs. Second, in many cases the only thing that happens is the contractor submits reports that no one looks at. Third, the Government spends a lot of time and money training people to understand EVM but that training never gets used. Lastly, I haven't seen or heard anyone saying projects now are producing better performance, more are delivered on time, and fewer without cost overuns now since they have EVM.

I agree concerning the very formal EVMS programs, as we specify, including a very expensive "IBR" process, which can cost into the hundreds of thousands of dollars or more on larger contracts.

The actual concept of earned value management systems is generally necessary for many cost type contracts in order to be able to measure cost and schedule performance. For construction contracts, it is part of good contractors' inherent business practices. They use these type of cost and schedule controls internally on fixed price as well as cost contracts.

But, unless government surveillance includes the ability to see and analyze real-time data and to be able determine trends as they are occurring, the summary level reports that we see are old history (up to 60 days or more old) and worthless for day to day oversight and management of cost contracts.

If I wanted to do more than WATCH the contract and wanted to manage the damned store, which was the question of this post, what would you suggest? Labor rate ceilings have been suggested; however, how would you implement this, invoicing of a cost type contract is not at a loaded rate at the labor category level?

How do you manage the store on a cost type contract?

Vern – thanks for correcting my misuse of cost growth.

"Why does it matter if the contractor staffs the contract with personnel who far exceed the average rates used to win the contract. Well. if we contracted for a LOE of 1000 hours under a cost type contract and the contractor staffed the contract with individuals at rates twice as high as the proposed rates, we would only get 1/2 the level of effort we contracted for and use up all our funding. Sure, we could adjust the fee down, but what about the mission that is not being met. We have plenty of instances of contractors buying in with low rates and executing at much higher rates."

Cost contracts for LOE should have some controls included and there should be some oversight capability within your QA or management organization. Do you have any government surveillance provisions in the contract and/or in your organization to provide any kind of assurance that the contractor is being efficient and that effective cost control measures are in place (FAR 16.301-3 (2))? Even though the contract may not include more formal cost controls, there are ways to determine how closely costs track against the proposed rates.

All payment invoices must identify the reimbursable costs, correct? You said that the invoices don't allow you to determine the individual salaries? Why can't you require enough detail to determine how well they track against the negotiated or proposed rates/salaries? You have the right to require a reasonable level of detail. Whoever is managing the contract should be able to tell very early on whether the actual costs are tracking against the proposed labor mix and rates. There shouldn't be big surprises down the road.

If the contractor proposed - especially if it proposed and the parties negotiated - the applicable labor mix and salaries, then significantly overruns those rates, you'd certainly want the contractor to justify its cost. Per FAR 31.201-2 and -3, there is no presumption of reasonableness are attached to the incurrence of costs by a contractor. The burden of proof is upon the contractor to establish that such costs, when they are way out of line with those negotiated or proposed, are reasonable and allowable. That would seem to be the least one could do.

I agree that labor rate ceilings or other forms of advance agreements are good ideas, especially if this is a recurring problem for your organization.

Just saw Vern's response above and agree that cost control provisions can and should be written into the contract. This situation appeared to be, from the initial post: 1) recurring 2) discovered well into contract performance and 3) you know what the cause of the cost overruns are and have been.

So, next time, you can add some specific language. But you still have the power to challenge - and you must do this as early as possible - the reasonableness of labor rates or salaries, especially if they were specifically identified in the proposal and even more importantly if they were negotiated.

Why does it matter if the contractor staffs the contract with personnel who far exceed the average rates used to win the contract. Well. if we contracted for a LOE of 1000 hours under a cost type contract and the contractor staffed the contract with individuals at rates twice as high as the proposed rates, we would only get 1/2 the level of effort we contracted for and use up all our funding. Sure, we could adjust the fee down, but what about the mission that is not being met. We have plenty of instances of contractors buying in with low rates and executing at much higher rates.

Who's minding the store there,'anyway? Are you managing the contract or WATCHING it?

I've always thought all the government's focus on labor provisions, especially the Service Contract Act and Davis Bacon, makes little sense and poses a huge administrative burden on both industry and the government. The reasons for passing these laws decades ago no longer are valid. Now the government has a huge bureaucracy to manage the programs and industry undergoes a big endeavor in complying.

People say the government needs to follow more commercial practices - how about adopting commercial practices in contracting for services?

Not counting the Pentagon, the DOL seems to have the biggest office building in DC, next to the Dept. of Agriculture, which I doubt is full of Ag Dept employees anymore. I suspect that somebody seems to be interested in looking out for the working class, thank God.

As for the SCA, service contract administrators seem to do little if any enforcement or administration of those provisions, anyway. That is primarily left to DOL to worry about.

As for DBA, I'd agree that the applicable threshold is way outdated. I don't agree that the provisions don't serve any useful purpose, though.

This was your question:

There is no standard language for a firm-fixed-price contract that will protect the Government from paying a contractor more than it pays to its employees. If all you want to do is reimburse the contractor for its actual, allowable labor costs, then you have to negotiate a cost-reimbursement contract.

While there is no standard language to assure that the contractor pays the wage rates that the parties negotiated, you could write into the agreement (contract) something to the effect that "[t]he Contractor shall pay its labor $ x.xx /hr for carpet installation." Of course, that would introduce a new problem if the contractor has to pay more than this to get the job done. Who is then responsible if he can't enough labor at that rate to fulfill the contract requirements. You could try saying "[t]he Contractor shall pay its labor at least $ x.xx /hr for carpet installation." However, you are then requiring the contractor to assume all risk in case it can't get carpet laid for that labor rate. Unless the contractor is well assured that the negotiated rate is plenty adequate, it probably won't accept that risk.

But if the contractor is willing to accept the risk that the negotiated rate is adequate, it might well agree to the first statement.

Joel - Do you recall this thread?

http://www.wifcon.com/discussion/index.php...entry5656

Thanks, Carl. I wondered how I missed this thread. Baireli must have posted the question in duplicate threads. Gosh time flies. I thought that happened this past spring, not last year!

I would like to get some guidance or advice on what is common practice when working construction contracting:

Is the notice to proceed issued after all submittals have been submitted/approved? My position is to issue NTP after bonding and insurance have been verified, and the submittal process is part of the entire performance period up to competion and including final cleanup.

I have someone challenging me on this position and I have remained firm, so far. I told them they have 90 days from NTP to final completion and submittal process is part of that time. If the submittal process was arduous and lengthy, they could request with supporting documents/proof of such delay impacting their work schedule and we may consider an extension.

Is this a typical position or do my colleagues practice differently? Is there written guidance on this matter anywhere?

Looking forward to hearing back from you acquisition professionals!!

eb

Sorry that I missed this original post.

The Corps of Engineers ACO offices generally issue the NTP during the post award conference or just before or after that meeting (also commonly referred to as the "pre-con". This meeting is set up as soon as possible after receipt of required bonds and insurance, similar to baierle's scenario.

The DOD and NASA maintain Unified Facility Guide Specifications (UFGS) found at the Whole Building Design Guide website. I work for HQUSACE. Last spring, one of our Districts discovered that the Guide Spec for Progress Schedules had been changed to state that NTP issuance would be after all submittals, schedules and other pre-construction requirements were complete. Upon investigation, I discovered that NASA is the current proponent for updates and that they had made this drastic change to the UFGS. Apparently NASA issues the NTP as described in the original post. Well, obviously, this can add a significant amount of undeterminable time to the overall construction schedule, especially where one or both parties aren't diligent in their duties in handling such submittals.

We directed the UFGS committee to delete this wording for Army projects in the UFGS.