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joel hoffman

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Everything posted by joel hoffman

  1. The contracting officer makes the determination or relies upon a previous determination. Without researching case law, it would seem logical that, If the contracting officer cannot determine that a product is a commercial item, and if the contractor wants to maintain that it is a commercial item, then the contractor needs to substantiate why it is a commercial item Without a government determination, I believe it’s not a commercial item for purposes of that acquisition. There are likely are appeal rights and procedures. That should also partly answer your earlier “what then” question. I don’t know if the KO ultimately agreed with TransDigm but assume not because the IG Audit Report didn’t elaborate after noting the governments position. I remember Aircraft manufacturers trying to assert that the C-17 and (I think) C-130 were commercial items to no avail.
  2. I believe that the IG is saying that the FAR limits the KO’s ability to go beyond limited price analysis for sole sourced parts to determine fair and reasonable prices. [Edit: Even when relying on price analysis, one should consider the context of similarities and differences between the earlier and current purchases]. I asked constricting officer what the “best information available” is for small quantity sole source items to be manufactured…
  3. Good question. The IG report didn’t elaborate on whether TransDigm substantiated that they were commercial items. TransDigm only provided data other than cost or pricing data on 2 items. The KO apparently relied on historical prices (limited price analysis). The IG obtained access to the data and likely assumes that they aren’t commercial items. From the data, the IG concluded that TransDigm earned substantial excess profits over what might have been paid had the government used cost analysis, rather than having to rely upon historical prices. ”U) By using the uncertified cost data, which is one of the most reliable sources of information to perform cost analysis, we found that TransDigm earned excess profit of at least $20.8 million on 105 spare parts on 150 contracts. The DoD will continue to pay higher prices if the DoD is not enabled to use cost analysis to determine price reasonableness for sole-source spare parts procured using market-based pricing.”
  4. I believe that this discussion is about trying to find the best information available and whether or not a sole source supplier should make it available. For sole source, small quantity or one-off purchases of an item or items required to be manufactured, what is the “best information available”? I’m assuming that the purchases here are for items not otherwise available on the open market and most are not “commercial items” with catalog prices or other sales price history available. If they are commercial items, then the supplier should provide that info to justify commercial item pricing - and should be able to justify adjustments/differences for individual or small quantity pricing, as described in the cited critiques . Did anyone ask? Did TransDigm explain? There is some valid criticism about DoD buying sole source. However, some of the complaints about TransDigm are that it appears to seek out other possible sources and then acquire them to reduce or eliminate competition. If DoD would foster competition, then one firm buys out the competition, it negates those efforts, doesn’t it? I don’t know how many parts are involved. However, if 16.1 million dollars of “excess profits” were claimed (and it seems that Transdigm voluntarily refunded that amount), there must be a whole lot of one of a kind or small quantity purchases.
  5. I thought that part of the originally stated problem was that Transdigm would allegedly acquire competing manufacturers or sellers of the type of parts that the government buys, thus reducing or eliminating alternate sources. Was this correct? Could that be indicative of *restraint of trade activities? Also, I read that very few of the parts are commercial items. Thus the cost or pricing data exemption for commercial items was not applicable for non-commercial item buys. I believe that another stated problem was that Transdigm would refuse to provide cost or pricing data or other than cost or pricing data when requested. I do understand that small buys and individual, one-off buys can involve a lot of costs, vs. mass-produced commercial items. And a company can charge whatever supply and demand allow for profit margins. But I learned about the practices of eliminating competition to create monopolies over 55 years ago in American History classes. *Edit: replaced the word “anti-trust” with “restraint of trade”.
  6. Thanks, Bob. I can understand the Boeing predicament associated with the economics of the Seattle based union manufacturing workforce. I’m sure that their quality was unbeatable but must be very expensive.
  7. The MCAS software was apparently used earlier on an (unidentified) military tanker -possibly the KC-10 USAF tanker or the KC-135.
  8. Methinks you must be kidding!!! Boeings engineers altered the application of MCAS to include lower speeds e.g. takeoffs. Forkner wasn’t even initially aware of that and he was the lead technical pilot!!! It was because the first flights of the new MAX showed rough handling characteristics at low altitudes and speeds. The MCAS relied upon a single angle of attack sensor, which the Boeing engineers had previously expressed concern about as they were known to fail. If they did, the MCAS could aggressively and repeatedly force the nose down (into a dive)…!!! https://www.pbs.org/wgbh/frontline/film/boeings-fatal-flaw/transcript/
  9. If you read the indictment it sure looks like “yes”. The MCAS program software could engage at slow speeds - which it did in the simulation and actually did in both crashes. if a pilot wasn’t trained for that possibility and how to disengage the MCAS program or recover, there was probably a high probability of an incident. It is a different animal than a 737- NG. According to the indictment, it appears that there was NO training for the MCAS. I don’t know when the cause of the first crash was known and who knew though… I admit I haven’t watched the documentary…
  10. I am disappointed and embarrassed to say that Mark Forkner is a USAF Academy graduate. However, I am not surprised as there are a whole lot of Academy Graduates working in the Aviation and Space industry after retirement or service commitments. What is particularly upsetting to me is that Honor (Honesty), Integrity, Ethics, Leadership and Character Development are Hallmark values of USAFA.
  11. This link in the cited article discusses the deception by Boeing and some of its employees (“scapegoats” ?) of the FAA Aircraft Evaluation Group FAA-AEG during the certification process and foot dragging during the investigations subsequent to the grounding of the MAX fleet. https://www.justice.gov/opa/pr/boeing-charged-737-max-fraud-conspiracy-and-agrees-pay-over-25-billion It would be incredulous to believe that two Boeing technical pilots* independently schemed to deceive the FAA and Boeing’s customers about the differences between the 737 MAX and the 737-NG planes. Of course, public reports and documents are not going to go into depth or detail about the extent or depth of the deception and problem, in deference to the long term business health of the company. The extent of remedial actions as part of the deferred prosecution agreement, including reorganizing Boeing’s engineering function to have all Boeing engineers, as well as Boeing’s Flight Technical Team, report through Boeing’s chief engineer rather than to the business units, is telling… Yes- I know there is much more complexity to the story, the Aviation and Airline competitive pressures and business climates, etc. *Former lead technical pilot Mark A. Forkner was indicted last fall. The other pilot has apparently not been indicted, leading some to speculate that he cooperated in the investigation…
  12. I bought the book for my pilot son-in-law (including 737 MAX-9) and ex-USAF pilot daughter (C-130). I do intend to read it as soon as I can visit them. I read the preview and outline so far. As for the PP evaluations, there are so many ex-military employees embedded at the Company and so much political support that I have little confidence in the probability of negative recent, relevant past performance evaluations.
  13. Agreed. The article also mentions the FAA, though not in much depth.
  14. Thanks , Bob. Very intriguing article along with additional links to related stories. Article discusses avoiding loss of market share, profit over safety concerns by engineers, airline resistance $$$ and seller penalties for cross-training, additional simulator time, etc. and apparently some shame on SWA, too.
  15. I read in my latest issue of ENR (formerly “Engineering News Record”) that Biden’s order is supposed to apply to all construction projects of $35 million or more. That is probably the great majority of federal construction for transportation, aviation, building and other infrastructure projects. As of January 22, 2021, organized labor’s share of the construction labor force is 12.7%.
  16. Since one won’t subcontract the home office and likely not other support functions and the actual work is performed outside of the US and it’s outlying areas, what would be subcontracted anyway…
  17. As for your services assistance to the Greek government example, the Greeks might not care how you contract for the assistance. However, if it were for construction, I’ll bet they would care.
  18. I would think US Agencies providing military OR non-military services to foreign countries would have some type of country to country or program agreements. If not or if the recipient country doesn’t care who you contract with, then your question is still open. Edit- add: But if they do care, the Part 19 programs are restricted to or favor US Small Businesses, correct? I’m sure that would go over like a lead balloon…
  19. Tzarina, you mentioned the Foreign Assistance Act earlier. Are you specifically asking about non-military agency programs (e.g., USAID, Dept of Commerce, etc.)? I don’t know what country to country agreements apply to such foreign programs. Are you aware of any that would be applicable to your contracts (e.g., USAID)? I’d think that there would be… Thanks!
  20. It was meant to be a tongue in cheek comment. “Let’s report on what we did to improve competition, reduce award times, save money, achieve mission requirements… or…if that didn’t work…what the heck …what we did to achieve the small business goals.”
  21. SEC. 4. PROCUREMENT INNOVATION LAB REPORT. (a) REPORT.—The Under Secretary shall publish an annual report on a website of the Department on Procurement Innovation Lab projects that have used innovative techniques within the Department to accomplish— (1) improving or encouraging better competition; (2) reducing time to award; (3) cost savings; (4) better mission outcomes; or (5) meeting the goals for contracts awarded to small business concerns under section 15(g) of the Small Business Act (15 U.S.C. 644(g)).” Is it [(1)-(4)] or (5)? (1)-(3) and [(4) or (5)]?
  22. This, from the article that Vern provide the link to, is an immediate “Bingo!” For me. “…V. AN EXPANSION OF SMALL BUSINESS SET- ASIDE REQUIREMENTS TO EXTRATERRITORIAL PROCUREMENTS NOT ONLY CONFLICTS WITH THE FAR, BUT ALSO WITH OTHER U.S. STATUTES AND INTERNATIONAL AGREEMENTS ..................................................... 179 A. U.S. Statutes and Treaties Should Control Over the Regulatory Interpretation of the Small Business Act ........................................... 179 B. A Worldwide Application of Small Business Set-Asides Will Conflict with Statutes and Agreements Governing the Presence of U.S. Armed Forces in Other Countries ......................................... 180 C. Applying Small Business Set-Asides to Overseas Procurements Will Also Conflict with the Letter and Spirit of Valid, Enforceable International Executive Agreements................... 184 1. The FAR Exempts From Certain U.S. Laws and Policies [of] Countries with which the United States Has Entered into Executive Agreements ................... 185” EDIT: For example, the 1965 USACE “Engineer Assistance Agreement” (EAA) and subsequent Memoranda Of Agreement (MOA’s) with the Kingdom of Saudi Arabia, various Status of Forces Agreements (SOFAs) and Various Foreign Military Sales (FMS) Agreements and other agreements that covered work in Central Latin America and South America come to mind.
  23. If the information I mentioned is already part of the proposal, then I don’t see a need to ask for anything else after submission of proposals. https://www.acquisition.gov/far/52.222-46
  24. I’m assuming that indirect costs and support are performed by in-house company personnel who support multiple contracts (hence “indirect”) and who are not contractors. Is that correct? Are the personnel accepting, packing and shipping materials directly charged to the contract?
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