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joel hoffman

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  1. Per the Payments for Fixed Price Construction clause at 52.232-5, the prime must certify that it won’t retain funds from the progress payments due subs for performance, that it has paid the subs from previous progress payments and that it will timely pay the subs (within seven days after receipt) among other requirements It must identify in the progress payment invoice, among other things, “i) An itemization of the amounts requested, related to the various elements of work required by the contract covered by the payment requested. (ii) A listing of the amount included for work performed by each subcontractor under the contract. (iii) A listing of the total amount of each subcontract under the contract. (iv) A listing of the amounts previously paid to each such subcontractor under the contract. (v) Additional supporting data in a form and detail required by the Contracting Officer.” And as previously stated, the prime must pay its subs within seven days of receipt of payment by the government. i don’t know whether government employees understand all the ramifications and requirements. I suspect not. I don’t think that the author of the article at the website that Neil referenced earlier does, either. The contractor can withhold payment from a sub’s progress if consistent with the subcontract terms but it can’t ask for payment of or retain such withholding from progress payments. The government must not pay the contractor for withheld subcontractor earnings. This was a huge change resulting from the Prompt Payment Act (PPA) Amendments of 1988, implemented through an OMB Circular, effective in April of 1989. I was responsible for providing the policy and guidance to all of my District’s ACO offices back then. I developed and included forms for contractors to include in their progress payment requests. I still have my PPA file folder, which is several inches thick,
  2. The referenced article isn’t completely accurate concerning progress payments for construction contracts. In accordance with the Prompt Payment for Construction Contracts clause at Federal Acquisition Regulation 52.232-27, the prime contractor isn’t allowed to be paid retainage from subcontractor progress payments. The contractor must inform the government of any retainage withheld from subcontractor progress invoices. The government is then supposed to subtract such retainage from progress payments and hold them until the prime releases the retainage. That was implemented in the Prompt Payment Act Amendments of 1988, in response to subcontractor complaints to Congress of prime contractors traditionally withholding retainage from government prime contractor progress payments for subcontractor earnings to reduce the primes’ contract financing costs. The government is now supposed to hold such retainage- not the prime. This was done to disincentivize widespread prime contractor practices of using retainage from government progress payments for the purpose of financing prime contractors’ contract costs at the expense of their subcontractors.
  3. A contractor doesn’t have to absorb all of its G&A overhead costs. For instance, there is an indirect cost pool (numerator) and a cost of sales pool (denominator) when G&A uses cost of sales for the determination basis. in that case, I don’t see the government subsidizing the contractor’s commercial work. Regardless of what the contractor is charging other contracts for G&A, the government shouldn’t be paying any more than what the supported G&A rate would be. Am I wrong? Edit: Many construction contractors include various construction equipment costs, such as amortization of capital equipment, shops, mechanics, etc. in their G&A pools. But FAR 31.105 I’m in a requires a contractor to remove such costs from indirect cost pools and treat them as direct costs when a rate schedule is required/used for owned construction equipment. Thus, the effective G&A rate should be different (lower) than the company’s normal” rates that may be used on commercial, non-government work.
  4. If you are referring to “if time permits the solicitation, submission and evaluation of sealed bids” language, I believe that the time primarily referred to the time for publicizing the action, preparation and submission of sealed bids. A minimum of 30 days allowance for preparation and submission of bids (especially for construction contracts) was generally prescribed: “14.202-1 Bidding time. (a) Policy…A bidding time (i.e., the time between issuance of the solicitation and opening of bids) of at least 30 calendar days shall be provided when synopsis is required by subpart 5.2.” Bob is correct that it was a cut and paste job from the predecessors to FAR. Back in 1983-1984 time frame, Competitive bidding with public bid openings for most domestic construction and many other types of acquisitions was the normal or predominant method used in Federal (and also in State and local) government purchasing. The bid evaluation time wasn’t normally a long process…unless bids greatly exceeded the government estimate and/or available funding to the extent that they prevented award. Bidders would/will sometimes challenge the accuracy of the government estimate, which then invokes processes to review, justify or change the estimate. If the government agreed, then it might find the additional funds and/or justification to make an award. If it didn’t agree, then it may have resulted in a bid cancellation and/or bid protest and the government would have to justify its estimate. It might have required revising the design or requirements of the solicitation, then resoliciting. I was tasked several times to convert construction IFBs with busted bids to competitive RFPs to allow discussions/negotiaton techniques. That, of course, brought its own complications and frustrated the bidders - especially the lowest bidders, since the original bids had been publicly opened and shared…
  5. Here is a link to a Naval Postgraduate School presentation concerning “Price Analysis on Commercial Item Purchases Within the Department of Defense” It also specifically mentions the generality within FAR 13.1. https://www.dair.nps.edu/bitstream/123456789/1180/1/SYM-AM-14-122.pdf
  6. Price construction projects at the task order level and include the first task in the competition for base award. There is too much price/cost variation and market volatility to pre-price a variety of and/or multiple construction task orders for the same design. I think that it is equally applicable to both single award and multiple award Indefinite Delivery/Indefinite Quantity, task order contracts. Effective competition has been shown to produce reasonable pricing for construction task orders. The Army Corps of Engineers extensively used multiple award ID/IQ construction and design-build contracts, especially during the 50+ Billion dollar Army MILCON Transformation and Base Realignment and Closure Programs from around 2007-2016 era.
  7. If one is buying something for themself, they would normally do at least some “simple” form of “price analysis” to determine that the price is affordable and reasonable. If one is a government professional buyer, it would seem obvious to me that they have a responsibility to their employer as well as them self and other taxpayers to perform at least some “simple” form of price analysis for purchases using simplified acquisition procedures. One shouldn’t have to dig through the regulations to determine if they have such a responsibility. Even some form of cost analysis as “simple” as dividing the offered or quoted cost by an estimated number of hours to perform a service, then estimating the makeup of the price isn’t that hard to do. If a buyer can’t do any of those “simple” procedures, then they are in the wrong occupation as far as I’m concerned. It reminds me of a very recent thread in the Forum that addresses the order of acquisition procedures in the FAR, e.g., general requirements before specific requirements. Read the beginning of Nash and Cibinic books or the FAR for example. What are the basic responsibilities of government acquisition officials in the course of meeting the mission? During my career and lifetime, I’ve read books on successfully negotiating, which included the ideas that almost anything is negotiable. In one of my night school business law courses, I was taught that most listed prices are not set in stone and may well be negotiable if you bother to find someone in the company to negotiate with. in many cultures, bargaining is the custom. One co-worker in my office in Saudi Arabia, who was Korean, once told me that Americans are too gullible and don’t bother negotiating, when almost any price is negotiable. For crying out loud, how hard is it to search for sample pricing on the Internet… seems “simple” enough to me.
  8. That works. I don’t know if it is necessary to use ID/IQ with orders for unit priced services or which is less complicated but ID/IQ wil work. Don’t know how this work is ordered or otherwise individually authorized under the scenario described. At any rate, unit-priced line items for specific services are a form of fixed-price contractiing.
  9. As long as the unit prices are fixed with estimated quantities and you only pay for actual quantities provided, it can still be a FFP contract under Part 16. I’d separately describe in the specs that the quantities are only estimates, that additional line item quantities mght be required (and contractually added/adjusted as necessary) , that there could be underruns of line item quantities, that payment will be made for actual quantities provided during the contract period and specify the billing periods (e.g., monthly, bi-weekly, weekly, etc.) for progress payments.. When closing out the contract, your contracting system might require you to reconcile final quantities, administratively adjust the final line item quantities and finalize the total contract cost.
  10. You can use a FFP contract with fixed unit prices for line items with estimated quantities that can vary depending upon usage. more details available if you understand the basic concept. See for instance FAR 36.207. You might have to include language regarding a range of quantities. The quantities can be increased by mods if necessary. But this type pricing is still considered a FFP contract type.
  11. I think so, concerning the execution of an acquisition. One may well select a specific, special category of contracting up front to execute but many of the GCR would likely apply to the execution processes. It’s not so much of a question of “Chronological Order” as general and/or overarching principles and procedures often preceding separate, specialized topics and procedures.
  12. Inasmuch as this is part of an awarded vessel refit contract, I suspect that there might be already a warranty of systems clause in the contract. Otherwise, why is Guest asking questions about “systems”? It should be obvious that a warranty only applies to the work performed. Unless the contract identifies what “systems” are within the contract scope and excluded bottom paint as a system, I consider the bottom paint protective coating system to be a system. A protective coating system starts with surface prep and includes primer application, any further surface prep and one or more applications of bottom paint. If the contract requires an inspection, marking and repair of the bottom paint system and the contractor misses some areas that a reasonable govt inspection failed to note at the time of identification and making the repairs, then the contractor “might” be responsible for additional repairs - within the warranty period if any. EDIT :You normally cannot make a contractor responsible for additional work areas under warranty that couldn’t be determined during the contract performance or that failed after the original contract oerformance. It depends upon the contract requirements when read as a whole.
  13. Are you the technical rep or contracting? Is this spot painting a steel hull I.e., sanding and prepping and repainting and (if in salt water) applying bottom paint? Those are typical repairs for steel hulled boat paint. From a contracting aspect, this is normal maintenance and repair (rust removal and patching the protective coating and bottom paint, if any). The contractor would only be warranting the extent of its work. From the technical perspective, check with the Navy or Coast guard to see how they do it and what type of warranty they get. Lastly, from the info you shared, it would be foolhardy not to set it up so that the government can inspect each phase as performed, e.g., after all grinding, sanding or sandblasting; after priming; after each coat of paint; after each coat of bottom paint, etc. You could call this a “system” or not. Protective coating paint system, bottom paint system, whatever. But it is simply a repair to any such system. As ji said, some market research is necessary.
  14. Edit: just realized that FAR 52.246-4 is Inspection of Services clause, not a warranty clause. ———————————————— Well the warranty of Services clause is fairly limp and is mainly intended to make sure the services were performed, which you ought to be able to tell simply by iinspecting each step of all repairs before the next step, e.g. sanding, grinding or sandblasting all marked locations (whichever is applicable), priming all surfaces, painting all surfaces. Arrange for inspections by phase/step of the repairs. The warranty clause that I referenced is applicable to service contracts but had a little more meat. You would define what the system is in the specs. I don’t understand what the purpose or usefulness is of a 60 day warranty if the boat won’t come out of the water for one or two years. Why can’t you ask for a longer warranty if you want it to last for 2-2.5 years? Perform market research on what is available… Better yet, ask the Navy. They should routinely be contracting for repairs, probably including hull painting.
  15. No, I don’t. You are going to bilaterally agree on the contract requirements including the terms or the warranty. 60 days is a pretty simple warranty to meet. Does the boat come out of the water regularly within that time frame? My Catalina 36 sailboat bottom jobs or spot repairs are warranted longer than that . I only pull the boat at most once per year to check the bottom. Edit: my fiberglass sailboat boat bottom paint is good for 2-3 years in Gulf Coast salt water with an annual haul out and power wash. I may have to make some small paint touch up paint repairs.
  16. I am assuming that the areas to be painted will be distinguishable from the unpainted surfaces and/or one can take pictures and measurements before and after the repairs/painting to document and locate the repairs. Is that correct? i am assuming that this is a service contract. Is that correct? You can define what the warranty will specifically cover very easily in the specifications. See FAR 36.7 (particularly 46.706).. Question: Do you want a warranty that the repairs will last for some specific period (e.g. one year?) or just that the repairs were performed in accordance with the specifications? I’m guessing that you want a warranty of repairs for some reasonable period of time. If so, you can use clause 52.246-19, “Warranty of Systems and Equipment under Performance Specifications or Design Criteria” as prescribed under 46.710 (c).with fill-ins as appropriate. If this will be a construction contract, 46.710 (e)(1) allows the use of the “Warranty of Construction” clause at 52.2416-21, again with fill-in edits, as appropriate. Any Agency supplements or procedures would also apply… I would thank that you’re not re-inventing the wheel here and that these type of paint repairs have been done before… You should be able to devise the specs for the repairs and determine what you want warranted and for how long… The “system” to be contracted for and warranted should be defined as the protective coating repairs and painting that are to be performed.
  17. Bob, should this thread be under another topic area (e.g., Contract Award Process or Schedules, GWACS, MACs, ID/IQs)? It doesn’t concern Contracting Workforce personnel questions.
  18. Yes, I agree. Plus, one can purchase batteries for handheld radios “everywhere”, cheaply. This is probably not a good “let’s say” example of a quandary.
  19. The last time @old51C signed in to visit was when they posted the question. So, how many radios are we talking about 1 or ?? Radios? Upon Checking on the Internet for prices of handheld radios batteries, they aren’t very expensive. Say $23-$43, for example… Prices on GSA advantage are also relatively reasonable.
  20. An SF44 was the only mechanism available back in the early 1980’s then for small, local purchases by field offices. The lab needed the markers that day in order to identify fresh concrete cylinders for later testing . The KO’s at the District Office didn’t know what Marie required of the lab boys that day. The field office in Mississippi was about 280 miles from the Mobile, AL District Office. Needless to say, the KO’s had more important duties… I was never required to get three quotes for small supplies or materials from local lumber yards for small projects in my other offices.
  21. Gosh, how hard can it be to buy extra batteries for specific brand of handheld radio(s) off the GSA schedule even if you have to initiate another purchase? Reminds me of the time that my Corps of Engineers remote Resident Office secretary (Marie) required our concrete testing lab boys to drive to the local town in a government pickup truck (we were located outside a small city in Mississippi) and get three quotes for three magic markers to mark concrete test cylinders. They drove back to our office with three quotes and reported that the lowest price was $.59 each at the local Walmart. Marie called Walmart and got a nickel each, discount. Then, she sent the guys back to Walmart with a Standard Form SF44 to purchase them. The average internal cost of each SF 44 transaction to the government was something like $30-$70 in labor costs at the time (1983). That was in addition to the time and cost of the two trips to town and back and postage. We had to overnight mail the paperwork to our District office for processing.and payment. The District Office mailed a check to Walmart for payment… I still remember how ridiculous that was. There are more Marie purchasing stories… 🙃
  22. I only mentioned cost analysts with respect to estimating indirect rates. If the action will be cost reimbursement and the proposed indirect rates aren’t binding, their office may be interested in estimating an expected realistic rate. If the rates are binding FFP, their office can use price analysis, comparing rates among the competitors.
  23. If this is a competitive action and you have indirect rates to compare, then you may be able to determine if the proposed rate is reasonable. But is this rate binding after award? I don’t know what type of pricing is involved.
  24. Fishpaw, just curious- do you have any cost analysts who are familiar with Part 31 cost principles, that could perform a desk review of the basis for the proposed, “estimated” indirect cost rate(s)? It really doesn’t take that long to do such a review, if you ask the proposer for the necessary information to perform the review.
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