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joel hoffman

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  1. Even if you don’t read the book, I highly recommend that you at least read the overview and preview of the book. It outlines and explains the author’s view of how the BUSINESS decisions and “win at all costs” management policies of Company leadership and “hordes of cutthroat managers” (brought in after the MD merger in 1997) often overrode the engineering and production side of the business. “Brilliant”? That is debatable.
  2. There is apparently no open action for the current ID/IQ or delivery order involving the parts in question. Yes, as Vern said, the data needs to be accurate, complete and current as of the time of agreement with the government for any future proposal for the parts. The old subcontract proposal isn’t tied to any current action or prime contractor proposal. Any future action on this or for another contract would require then certified CURRENT, complete and accurate data. Old C and P data that predate a proposal for a new action by several years aren’t “current”.
  3. H2H, You might change your mind after reading only the expanded overview and first 37 pages of the book that I referenced above. I can’t quote from the book but it won’t take a tremendous amount of time to get a glimpse of some of the problems - many stemming from the late 1990’s merger with McDonnell Douglas.
  4. I ordered the book: Flying Blind The 737 MAX Tragedy and the Fall of Boeing by Peter Robison · 2021 for my son-in-law. There is an excellent overview of Boeing and a 37 page preview of the contents of the book at: https://books.google.com/books/about/Flying_Blind.html?id=T88LEAAAQBAJ&printsec=frontcover&newbks=1&newbks_redir=0&source=gb_mobile_entity The book also discusses the History of Boeing and some of its competitors, including McDonnell Douglas. I recommend at least reading both the (expanded) overview and the preview of the book. (I will read the book when I visit them ASAP. He is a retired Air Force McDonnell Douglas (now Boeing) C-17 pilot and current United Airlines B-737 and B-737 Max 9 pilot before the grounding and now again. I haven’t had an opportunity to discuss his current views of the Max 9 with him. He thought it was simply a pilot error problem back at the time it happened.)
  5. You don’t necessarily have to pay the minimum guarantee. See, for instance: https://www.linkedin.com/pulse/minimum-order-under-idiq-you-entitled-amount-olga-wall
  6. Thanks, TNT. How does that relate to the price of the prime contract for those units? Was the price included in your contract back then?
  7. I think it also depends upon what is the most important consideration. Is it specific personnel or the caliber of provided personnel? I’ve seen where the A Team was proposed to help win the job and then quickly substituted by employees of much lesser qualifications and experience. It is what we call the bait and switch to the B Team. Even the Bechtel’s, Fluor’s, and Keiwit’s of the engineering and construction world have A and B teams, which can correlate with the degree of successful performance on a project. I was less concerned with retaining specific personnel than with having no input over who replaces them. We had no desire to stifle career moves and promotions - only to avoid lesser qualifications of replacements, especially if there was a cost cutting motive involved.
  8. Ok, I’ll bite here… TNT, please clarify what you meant. What is the IDIQ for and between which parties? You and a supplier? You and the government? Are you saying you never issued (“placed”) an IDIQ subcontract? Or never issued (placed) an order against an IDIQ subcontract? Who never “placed the IDIQ”- the government or you, as the prime to a sub? What do you you mean by “we pick the IDIQ back up”? Are the prices you negotiated two years ago already reflected in your prime contract price? Is your prime contract fixed price? Sorry, I don’t understand the context of your question.
  9. The re-competition after the Boeing protest resulted in the DoD switching from BV Tradeoff to essentially LPTA, which was a setup for Boeing, with its smaller plane. The DoD/USAF announced to the media and general public that the re-competition would be a “fixed price” contract. The TV media apparently didn’t either know or understand that it was actually a “fixed price incentive” award for the first part of the program. Not publicized was that the government’s cost share between the target price and ceiling price ended up being 60% of the overrun - over $500 million dollars. Edit: Apparently, the cost growth is more than 100% of the original 2011 award… ”Boeing on Jan. 27 [2021] reported another $275 million charge to its KC-46 program, pushing the total cost overruns it is responsible for to more than $5 billion in the past six years—more than the initial contract award for the tanker.” Source: https://www.airforcemag.com/boeings-kc-46-cost-overruns-surpass-5-billion/
  10. We developed a clause for key trade subcontractors that were specifically proposed and for specific key personnel who were proposed, recognizing that some key personnel might not be available if award is delayed or for an entire contract period. If an offeror proposes the “A Team”, we expect the A Team, not the “B team” or B substitutes. It essentially says that the contractor shall use those proposed key subcontractors, if any and proposed key personnel. The solicitation specifies which key trade subs and which personnel positions are “key” . For subcontractors we look at recent relevant experience and past performance. If a person is no longer available, the contractor must propose a suitable substitute to the KO. The minimum standard for qualification will be based upon those of the originally proposed and evaluated person and consistent with the original evaluation criteria. I don’t have the clause handy right now. We would really frown upon substituting key subs. Strong indicator of bid shopping after award. Plus, the strengths of the proposed key subs usually influence the prime contractor selection, since they often perform the major portion of the work . That’s not Germaine to this thread. But both key subs and key personnel are covered by the clause.
  11. Address it in negotiations for the contract and include it in the contract award document and documentation.
  12. See also : https://www.gao.gov/products/gao-22-104530 GAO-22-104530 Published: Jan 27, 2022. Publicly Released: Jan 27, 2022.“KC-46 Tanker:Air Force Needs to Mature Critical Technologies in New Aerial Refueling System Design”
  13. For comparison, see: https://en.m.wikipedia.org/wiki/Airbus_A330_MRTT
  14. Patrick3, these are questions you should ask of your agency legal, higher contracting and finance authorities, with all pertinent, situational facts- not here and not in a piecemeal fashion. If there is no contract instrument (task order for the work) to pay the invoice against, they will have to be involved anyway.
  15. Nothing surprises me any more about this continuing debacle. Thanks for the update, H2H.
  16. Thanks for this info, FAR-flung. We had three very unpleasant experiences with household move damages plus storage stolen/damaged items during 6 1/2 years of overseas assignments. I was able to out-lawyer the Army lawyer’s twice by thoroughly reading the regulations. They tried to depreciate goods lost or damaged during storage but the regs forbade that. But the first limited household shipment from Mississippi to Saudi was a disaster. They failed to crate the overseas shipment as required, instead shipped in on a pallet in cardboard boxes. Broke all our chiina and flattened the wife’s sewing machine, then depreciated all the broken items to almost nothing. When we returned from overseas, most furniture and stored clothing had molded or rotted due to lack of moisture control. Again, we had to call their hand on depreciation during 6 1/2 years storage but had to bear significant share of replacement costs.
  17. I would like to clarify one aspect of cost based pricing. Modifications of existing contracts pursuant to a clause that provides for a price adjustment based upon cost impacts/increase/decrease in contractor’s cost would generally be cost based, not value or market based. Of course, equitable adjustments include consideration of profit in the cost or credit.
  18. It is also interesting that employees of companies with less than 100 employees don’t pose a “grave danger” to their fellow employees or to the general public. From Newsweek magazine: “According to data from the U.S. Census Bureau, a total of 98.1 percent of companies in the U.S. employ fewer than 100 people, with companies with less than than 10 employees accounting for 78.4 percent.” Reported “BY EWAN PALMER ON 9/10/21 AT 9:06 AM EDT” There is a ton of general interaction with the general public by employees of small firms or self employed persons. So why should only certain company employees face mandatory vaccination or be subject to testing or termination??
  19. I’ve read summaries and reader reviews. Looks fascinating and reminds me of one of my favorite recent movies, “Ford vs. Ferrari”.
  20. Yes competitive. I was editing my post to add that while you posted.🤠
  21. I honestly don’t know how much manufacturers normally mark up their products. I do know that a friend of mine is related to a family who still owns one of the original Ford dealers in Montana or Idaho. FMC would sell the dealer one vehicle per year at a deeply discounted price. The family let my friend buy a new 1997 Ford F-150 under that program. The dealer sticker price was about $23,000. He paid $13,000 for it including shipping from the factory. Of course that doesn’t necessarily represent the FMC cost. But the dealer cost at the time would have been much closer to $19,000- $20,000. I can’t speak for the present but in the late 60’s to early 70’s, the Air Force Academy Cadet Store sold everything to Cadets at cost with no markup. The store sold a wide variety of goods like a smaller Base Exchange Store. Most everything cost about 50% of suggested or pre-tagged retail prices. It seemed to me at the time, comparing prices between other stores and the Cadet Store, that retail store prices ran about 100% of a store’s cost from a manufacturer or wholesale supply. Of course that also included all of a retail store’s costs plus profit margins. So, yes - I can see that normal retail markups on supplier prices for their internal costs plus profit can be substantial and I don’t have a clue what normal manufacturer markups in a competitive market are. I say competitive because the FAR cites a competitive market in the description of “fair and reasonable price”.
  22. That’s great. Now, please show how a part that allegedly cost $128 to produce and sold for over $7000 is a fair and reasonable price buying it from the manufacturer, not a dealer. I’m assuming that the KO or CS justified the priced based upon historical prices for that item. Perhaps I am assuming too much.
  23. There is another possible view. If a contractor can get away with outrageous prices on sole source acquisitions, KO’s who take the easy route to justify what they are paying and poor negotiators or worse, those that don’t negotiate, why wouldn’t they keep doing it? Nothing compels a firm to sell to the government but I’ll bet that a firm would rather sell products at lower than outrageous prices than sell little or nothing.
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