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Everything posted by Jimmie

  1. I am not sure what you mean about the poison pill questions but thanks for your response. The way you reframed the possible solution makes sense: "re-negotiate the estimated cost (to raise it) and the fixed fee (to lower it)"
  2. Many of you are asking yourselves why a company would do such a thing. I admit that it does sound very crazy and I think a contractor can go too far to please the Government customer. I would like to know whether a contractor is allowed to use their fee from their CPFF completion contract to pay for an overrun on the contract. My gut tells me that this is not allowable because the contractor would be giving free services to the Government and think this can be linked to 52.203-3 Gratuities however the "free" services (services at no charge to the Gov't) would not be given to an individual (they would benefit the whole agency). To say it a different way, the contractor wants to forego invoicing the government for a few months of services on a CPFF contract to alleviate an overrun at their own expense. The contractor would also be satisfied and would agree to having the CO move the amount on the fee CLIN to the labor CLIN. Additional information about the overrun: The overrun is primarily caused by the Government adding NEW scope to the contract. I know that the Government is obligated to pay for the additional scope costs with fee. Maybe I am thinking down the wrong path and there is a much simpler answer out there. I have done google/wifcon searches but have not seen anything out there on this specific topic. As usual, your help is very much appreciated. 52.203-3 Gratuities. As prescribed in 3.202, insert the following clause: Gratuities (Apr 1984) (a) The right of the Contractor to proceed may be terminated by written notice if, after notice and hearing, the agency head or a designee determines that the Contractor, its agent, or another representative— (1) Offered or gave a gratuity (e.g., an entertainment or gift) to an officer, official, or employee of the Government; and (2) Intended, by the gratuity, to obtain a contract or favorable treatment under a contract. ( The facts supporting this determination may be reviewed by any court having lawful jurisdiction. © If this contract is terminated under paragraph (a) of this clause, the Government is entitled— (1) To pursue the same remedies as in a breach of the contract; and (2) In addition to any other damages provided by law, to exemplary damages of not less than 3 nor more than 10 times the cost incurred by the Contractor in giving gratuities to the person concerned, as determined by the agency head or a designee. (This paragraph ©(2) is applicable only if this contract uses money appropriated to the Department of Defense.) (d) The rights and remedies of the Government provided in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law or under this contract. (End of clause)
  3. Hello Retreadfed, While researching this topic I stumbled across this article: https://dap.dau.mil/aap/pages/qdetails.aspx?cgiSubjectAreaID=3&cgiQuestionID=116493 which states that prior consent is required for 2nd tier subs per the definition of subcontracts within FAR Part 44: FAR Part 44 – Subcontracting Policies and Procedures FAR 44.101 – Definitions As used in this part— “Subcontract” means any contract as defined in Subpart 2.1 entered into by a subcontractor to furnish supplies or services for performance of a prime contract or a subcontract. It includes but is not limited to purchase orders, and changes and modifications to purchase orders. “Subcontractor” means any supplier, distributor, vendor, or firm that furnishes supplies or services to or for a prime contractor or another subcontractor. 3. As set forth under FAR 44.101, the definition of “subcontract” also means any contract entered into by a subcontractor to furnish supplies or services for performance of a prime contract or a subcontract. The definition of “subcontractor” also means any firm that furnishes supplies or services to or for a prime contractor or another subcontractor. Taken together, we believe that these definitions would certainly include Tier II suppliers performing under a Government prime contract.
  4. Ok, I think I see what you all are getting at. The reason I originally thought there had to be a minimum is that the Government is normally required to include a minimum. I understand that my company is not the Government and therefore I would not necessarily need to list a minimum. With this same concept in mind, I guess that I would not need to include pricing as part of the IDIQ master subcontract either. My main concern stems from the pricing piece and not the minimum. My end goal is to negotiate the terms and conditions now and then have the flexibility to price each task order without being locked into any particular labor rates for the specified labor categories.
  5. Vern, I guess we would not need to promise a minimum and can simply label the minimum as "the amount of the initial task order award." I have it stuck in my mind that a BOA would be the best solution because the pricing of each task order (especially labor rates) could change based on the price to win. If I could set up an IDIQ without establishing any kind of specific pricing (only negotiate terms and conditions) then that would be best but I think that is pretty much the description of a BOA. I would love to be wrong in this case and go with an IDIQ sans pricing because I am more familiar with setting up an IDIQ (I have never actually set up or administered a BOA). Thanks for the help!
  6. My company was awarded an IDIQ from the Gov't as part of a multiple prime IDIQ vehicle. We are currently weighing whether to issue our subcontractors a BOA or an IDIQ. Since each task order at the prime level (there are multiple primes) will be competed and our team will need to stay very flexible in order to win, I believe that a BOA would probably be more appropriate than an IDIQ Subcontract. We envision that labor rates within the established labor categories for each task order will need to be different depending on the SOW and the price to win. If we used an IDIQ in lieu of a BOA then any pricing that we established (labor rates) would most likely need to be discounted once the task orders are released/competed (so I don't think an IDIQ would be as appropriate). Another reason I don't believe the IDIQ would be appropriate is that my company would not be able to promise a minimum and would not do a very good job in estimating a maximum subcontract value. In order to stay as flexible as possible, I believe a BOA would be the right choice for my company to issue to subcontractors but I am seeking your help in determining possible pitfalls associated with BOAs (vs using an IDIQ subcontract). I understand that a BOA is not a contract and the subcontractor is under no legal obligation to accept a task order (or purchase order if that the preferred terminology when speaking about a BOA). But once my company issues a TO and the subcontractor accepts (either formally in writing or by commencing work), then they do have an obligation to complete that work in accordance with the terms and conditions of the BOA, incorporated docs and any instructions included in the TO. Both vehicles are used to streamline orders however I believe there is much more in setting up an IDIQ than a BOA because the IDIQ would contain pricing to be evaluated and a ceiling value which would set off many threshold related administrative work (FFATA cert, EEO, CAS, etc.). I realize that with a BOA, the administrative part would need to be completed with each TO award depending on the value of each award however I think this is a risk worth taking since we can't really predict how many task orders we will actually win or the values. I know that the values can be as low as 100k and as much as hundreds of millions. Does anyone have any experiences to share with respect to services based BOAs in lieu of IDIQs? Any concerns one might have with putting a BOA in place with their subs in this scenario? Oh yeah, workshare to the subs is not an issue in our situation as my company did not make any promises to any of the subs. From DAU website (https://dap.dau.mil/aap/pages/qdetails.aspx?cgiSubjectAreaID=22&cgiQuestionID=18517): The key distinction in their application is that Government is in a position where it can commit itself to a minimum quantity when awarding an IDIQ contract, whereas the Government may not be able to commit to a minimum quantity when setting up a BOA. Further, BOAs are commonly used to streamline ordering when using simplified acquisition procedures. IDIQ contracts are commonly used to expedite the ordering process for requirements of any dollar value. The ceiling for some IDIQ contracts is in the billions, with individual orders under those contracts in the hundreds of millions. Just curious - Why are BOAs commonly used when using simplified acquisition procedures as stated above...why would there be a limit on the dollar value of a BOA?
  7. All, Thanks for your helpful comments! I learned that there are actually 24 process areas and 58 policy/procedure areas that DCMA will expect to see while reviewing our company. The 24 processes come from DFARS 252.244-7001(a) and the 58 policy/procedure areas come from the Guidebook Appendix B (which I still haven't been able to access for some odd reason). I received the list of 58 indirectly from DCMA (one of the enclosures they include in their pre-CPSR package). I am quickly becoming fully immersed in the world of CPSRs thanks to the help of online forums and internet resources like this one! Happy Holidays Jimmie
  8. Hello, It appears that DCMA has taken down the link which leads to the DCMA guidebook on Contractor Purchasing System Reviews (CPSR). http://guidebook.dcma.mil/26/guidebook_process.htm Does anyone have a soft copy that they can send me or know of a different location to download the guidebook? I am helping my company prepare for an upcoming CPSR and believe that this guidbook would be tremendously useful. I have seen a number of CPSR briefings which claim that Appendix B of the guidebook has 55 key topic areas which DCMA auditors expect to be covered as part of a contractor's policies and procedures. It is my understanding that DCMA auditors will review a contractor's policies and procedures to gauge whether the 55 areas have been adequately covered. If anyone has taken any classes related to CPSR preparation and has recommendations, I would certainly be interested in hearing your story. Thanks in advance for your time! Jimmie
  9. Here_2_Help, Thank you, I appreciate the feedback and insight. It doesn't surprise me that they are essentially looking at whatever they want. Hopefully we will have enough heads up on which files they are selecting so that we can ensure all flies are compliant and as perfect as we can make them. Obviously we try hard everyday to make all files perfect but in a large company this just isn't possible/realistic. Any other comments about recent CPSRs are certainly welcome!
  10. Hello, With respect to a CPSR, I have always been under the impression that the Government typically audits files which are not older than 12 months. I researched but didn't find any conclusive evidence of this statement. Does anyone have the reference? I understand there are some special circumstances where they would go back further than 12 months, for example if a 3 month old task order was issued under a 4 year old IDIQ. Any others? Thanks in advance for your time!
  11. Hi, The contract type is CPAF, originally awarded as one year + four option years. When the contract was coming to an end, the Government decided to extend the contract by another year due to the mission criticality and lack of planning for the follow-on. This situation happened twice (where the contract was about to end and then the Gov't decided to extend by another 12 months). Right now we are in year 6.5 of a 5 year (planned) contract. Thanks for your help! Jimmie PS - A friend of mine did some heavy digging and found a similar question posed and answered by Vern Edwards (revised below): ======================= Responsibility is a contract formation term that refers to the ability of a prospective contractor to perform the contract for which it has submitted an offer; by law, a contracting officer must determine that an offeror is responsible before awarding it a contract. The concept of responsibility expressly applies to “prospective contractors”-not “current” or “existing” contractors-a limitation that is repeated throughout the applicable statutes and regulations, and that indicates that the requirement for a responsibility determination applies before award of a contract. Consistent with this statutory and regulatory framework, once an offeror is determined to be responsible and is awarded a contract, there is no requirement that an agency make additional responsibility determinations during contract performance. E. Huttenbauer & Son, Inc., B-258018.3, Mar. 20, 1995, 95-1 CPD para. 148 at 2 (holding that a contracting officer was not required to make a new responsibility determination before deciding whether to exercise an option because the concept of responsibility has no applicability with respect to a contract once that contract has been awarded). ======================= I would apply the logic of the GAO decision to EEO clearances, as well. From http://www.wifcon.com/discus/messages/8522/9575.html =======================
  12. Hello, I was wondering if anyone knew whether a EEO Pre-award clearance is required after award of the contract. I am in a situation where my contract has been extended unexpectedly by two years. When the NTE contract values were originally established for my subs, we did not expect them to exceed $10M however due to the extensions, many subs have crossed the $10M threshold. This fact has been pointed out in a recent internal audit and the recommended solution is to send a request to the OFCCP for approval (6.5 years after the subcontracts were awarded). Has anyone else ever been in this situation? Thanks for your time!
  13. I think you are on the right track. Prior to contract award the government requested and received cost information and used this information to perform their cost/price analysis. Their analysis resulted in decrements to the proposed subcontractor labor rates. These decremented fixed labor rates were negotiatied into the subcontract agreements due to the government's findings. So each fiscal year had fixed labor rates negotiated and accepted. Now I believe that the government wants to ignore the fixed labor rates negotiatied with the subcontractors and re-evaluate the subcontractor labor rate build up as if the subs were proposing another set of rates today. I don't think the government will reimburse us for costs already incurred but I believe they are trying to evaluate now as an opportunity to change fixed/contract rates in the future. I believe this is their desired course of action because I have seen them do it on other programs at my company. They will state something like "going forward, the government will only pay $100.00/hr for Sr. Technician at subcontractor A." even though the contract rate is $115.00/hr.
  14. Hi Vern, Thanks for weighing in! To clarify, at my company we define "sealed packages / unsanitized proposals" to describe another company's labor rate build up which includes proprietary information to that company. For instance, this build up would disclose G&A, Fringe, Indirect labor rates, Overhead and any other adders a company might use to build the labor rate. This information is normally sent to us in a "sealed package" which reads "for the Government's eyes only" because of the proprietary information included. We would then deliver to the Government along with the prime proposal. Sometimes the subcontractor/other company will simply email this spreadsheet (labor rate build up) directly to the Government and we don't have to deal with it. So essentially this unsanitized proposal (labor rate build up) contains a lot of cost or pricing data. I guess the core of my issue surrounds whether the Government can use today's subcontractor cost or pricing data to decrement the subcontractor's labor rates months after negotiations have already concluded. Today's labor rate build up can be much different than their build up from 6 months ago. This is because a company's overhead may have gone up/down or their indirect labor rates may have changed, or G&A, etc. So a company's rate could have gone up or down and I don't agree with the government using this current information to analyze whether a sub's contract rates are fair and reasonable. I hope this clears up the issue but I'm getting the picture that we all use slightly different terminology. Thanks again for following this story and helping me. This situation comes up often and it is great to get an outside perspective.
  15. Hello Helper, Your comments allow me to see things from a different point of view and I definitely appreciate that. It is my understanding that the Govt cost or pricing office will use these unsanitized labor rate build ups to perform an analysis and then decrement the contract labor rates (if they discover any "findings"). These labor rates were put on contract months ago and the Govt has been paying these contract rates since then. I can't think of a reason why they would want us to disclose updated information which doesn't pertain to the contract rates under the fixed price type subcontracts. Update: We sent the Govt the sealed packages for the new subcontractors and sent them a certification of cost or pricing (which was signed just prior to signing subcontracts many months ago) for the old subcontractors (old subs had already submitted their unsealed package and accepted decrements).
  16. So now I have two subs who refuse to complete another sealed package despite the Gov't request. I'm not sure how this will play out but I have heard that the Gov't may hold up our funding/any further contracting activities until they receive the last two unsanitized proposals (labor rate build up). I plan to ask the two companies to send me an official letter stating their denial and reasoning so that I can forward to the Gov't CO. Has anyone else been in this situation?
  17. It was explained to me that the CO had already discussed the issue with the Gov't Cost and Pricing group. My company argued that this process would increase costs and the Gov't replied that they are aware of the potential pitfalls which include re-opening negotiations of the labor rates. Bottom line is that the Gov't is not going to budge on this issue. To me this seems excessive and wasteful. Any thoughts?
  18. I requested that a note be sent to the CO and will report back. The Gov't Cost and Pricing Group maintains that the new sealed packages are required even though they already negotiatied with my subs directly to decrement all of the labor rates (based on the first sealed packages sent to them). Those rates are still on contract (fixed labor rates as part of their four year FFP LOE subcontract agreement). Thanks to all for reading this string and I look forward to reading anyone's opinion/comments.
  19. Hello, Question: Are there situations when the Government shouldn't be requesting sealed/unsanitized packages? Situation: -Cost or Pricing Data is required -Four year CPFF / FFP LOE prime contract (depending on the delivery order) -Four subcontractors included in the original sole source award and three added after award (total of 7). Despite what the FAR says, all 7 subs were put on FFP / LOE subcontracts with all of the contract values over $100K (actually over $650K). All subs have four years of fixed labor rates on contract and all subcontracts include a "downward adjustment" or re-opener clause due to the excessive request for sealed packages. -The Four subs included during the original prime contract award included a sealed package (unsanitized labor rate build up) for Gov't eyes only and the Gov't performed a cost and price analysis against these four sealed packages. The Gov't decremented the subs' labor rates and accepted their rates based on the results of the findings and the subcontractors accepting the Gov't decrements. -Months after the original prime contract award, an Engineering Change Proposal (ECP) was issued and three more subs were added (total of 7). This time sealed packages were not requested with the ECP. -Months after the ECP was submitted and accepted, the Gov't has requested sealed packages for all seven subs. Problem: I have a problem with the Gov't requesting sealed packages from the original four subcontractors because they did not change their labor rates for the ECP. The Gov't has already seen their labor rate build up, performed a cost and price analysis, decremented their labor rates and actually called/negotiated with the subcontractors directly in some cases to make sure the subs accept the decrement. Now I fear that the subs will not be able to certify to their original fixed labor rates because it has been eight months since the original sealed package submission and I assume that factors such as G&A, indirect rates, fringe, etc. have changed. I'm desperately looking for a good explanation of this process. Question: Are there situations when the Government shouldn't be requesting sealed/unsanitized packages?
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