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joel hoffman

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Everything posted by joel hoffman

  1. Gen. Robin Olds was our Commandant of Cadets at USAFA for the first three (1967-1970) of my four years there. He was tough as nails but was a great leader. https://en.m.wikipedia.org/wiki/Robin_Olds
  2. Ok, pricing information, consistent with current DAR and DFARS emphasis - which is what the DoD-IG is complaining about.
  3. Ok , the report said that the KO’s used price analysis for most of the parts buys and the “DLA Contracting officers requested uncertified cost data for 26 of the 107 spare parts on 27 of the 153 contracts in the audit.” “However, TransDigm operating unit officials provided the requested uncertified cost data for only 2 spare parts on 2 contracts and did not provide uncertified cost data for the remaining 24 parts on 25 contracts.” “Therefore contracting officers were unable to use cost analysis to determine fair and reasonable prices for sole-source spare parts that were bought in small quantities at low dollar values and instead used other price analysis methods required by the FAR and DFARS, including historical price comparisons. In addition, 10 U.S.C. § 2306a, Federal, and DoD policies do not require contracting officers to use cost analysis when the DoD is making fair and reasonable price determinations for sole-source spare part contracts below the TINA threshold. However, we were able to obtain uncertified cost data from TransDigm for 152 out of the 153 contracts in our sample.” Maybe DLA needs to call in the DoD-IG for assistance in obtaining information on a routine basis. The IG was more successful in their pricing efforts (just kidding here 🤠).
  4. Don, did I miss where the DoD-IG mentioned that TransDigm provided information other than cost or pricing in response to requests? Shoot, maybe the KO’s didn’t routinely ask for information?
  5. “H2H”, I don’t necessarily disagree with you. As for the situation here, I’m mainly trying to mention what the DoD-IG raised in their report and apparently after auditing certain contract acquisitions.
  6. I agree about the apparent general incompetence here. I also wonder why the government waited until after the third year to de-obligate the remaining balances of the task order line item funding for the first two years? And why didnt the contractor invoice for or demand the balances on the two earlier years if they believed that those lot prices were for what it was due until after the government de-obligated all three year excess funding?
  7. Not sure what you mean. “Within context” here, the sole source contractor only furnished data in response to government requests in 2 instances. One can’t “work through anything together” (negotiate or ask questions) with a contractor if it won’t provide any information. That’s one of the points of the IG report or IG audits of the transactions. And as I mentioned earlier, “Even when relying on price analysis, one should consider the context of similarities and differences between the earlier and current purchases”, which often benefits from communications between a buyer and seller. The seller can discuss all the points raised in this thread and in the critiques about why a part is expensive. .
  8. It was definitely a screwed up contract. The services intended and provided don’t meet the current FAR Part 2 definition of “commercial services”. The government didn’t contest that. The cases mention that the government’s intent was to contract with a firm to provide “up to 14 classes per year” and the vehicle was an indefinite delivery/indefinite quantity (ID/IQ) contract with task orders (DFARs clause). Maybe someone here knows whether or not the intended purpose was stated in either the base contract or in the task orders. The COFC case that I could access referred to an earlier COFC ruling which discussed the details of the contract and task order. But the COFC and the Appeals Circuit Cases didn’t discuss why the task orders or task order language are ambiguous. I’m obviously behind the times. The unit of measure here for the yearly task order was “lot”. I generally know what “lot” refers to in supplies. It refers to the amount supplies in a shipment or acceptance. I know that “lump sum” (LS) units of measure were used to price undivided items, in contrast to unit priced units of measure, e.g., “each” (ea.). So, has “lot” replaced “lump sum” now for services? I think that the contract or task order stated that individual classes would be “ordered”. I don’t know if those were subsequent actions under the “task order”.
  9. WifWaf, your approach involves obtaining information from the contractor/proposer and working through it together. Transdigm only provided data other than certified cost or pricing data for 2 parts on 2 contracts included in the DoD-IG audit. Most requests were apparently refused. *Edit-add: [Thus, one of the points raised by the DoD-IG, ‘Should a proposer be required to comply with a KO request for info other than certified cost or pricing data?’ ] Signing off for now. I’ve got other things to do today, 🤠
  10. 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.
  11. 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…
  12. 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.”
  13. 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.
  14. 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”.
  15. 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.
  16. The MCAS software was apparently used earlier on an (unidentified) military tanker -possibly the KC-10 USAF tanker or the KC-135.
  17. 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/
  18. 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…
  19. 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.
  20. 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…
  21. 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.
  22. Agreed. The article also mentions the FAA, though not in much depth.
  23. 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.
  24. 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%.
  25. 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…
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