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Everything posted by ji20874

  1. apsofacto, Vern did not suggest a T4C -- he suggested a no-cost T4C -- that's different. See FAR 49.402-4(c).
  2. When a source selection takes longer than World War II

    The no fee on the cost portion made sense to me. To agree on a fee, the parties have to agree on an estimated cost -- but here, the parties cannot agree on an estimated cost, so they cannot agree on a fee. The fixed price portion can include whatever fee the hand of competition will allow.
  3. A contractor may be in default based on anticipatory repudiation. If a contractor has declared its intent not to comply with the contract terms, a termination for default at that time may be appropriate -- it is not necessary to wait for the actual failure to occur. From the 2014 Contract Attorneys Deskbook (chapter 25, Contract Terminations for Default): "Each party to a contract has the common-law right to terminate a contract upon actual or anticipatory repudiation of the contract by the other party." https://www.loc.gov/rr/frd/Military_Law/pdf/CAD_2014_Ch25.pdf
  4. Termination for the Government's convenience? This sounds like a termination for the contractor's convenience. However, I understand that a no-cost T4C might be an action in lieu of default. But I want the original poster to get off his or her "plainly or palpably illegal award" horse -- there is no illegal award, based on what has been written here -- the contractor made promises that it now chooses not to keep -- I want the original poster (assuming he or she is a contracting officer) to get on the horse of doing his or her job of protecting the Government's interest in the awarded contract and respecting correct principles. If he or she considers T4D and then decides on no-cost T4C, I'm okay with that. If he or she seeks a no-cost T4C to excuse the contractor from its obligations or to avoid hurting the contractor's feelings, the outcome will appear the same but will based on a poor premise. In either case, a failing CPARS record should be made -- but wait, that might hurt the contractor's feelings. H2H, a T4D would allow for immediate award to the next in line offeror.
  5. I agree that no one can prescribe a definitive solution based on the very short initial posting. But based on what I read, I would encourage consideration of a T4D. I don't like it when contracting officers award contracts and then let contractors off the hook for performance solely because they (the contracting officers) want to be nice. Here, the contractor seems to be failing to honor its promises. The contractor could honor its promises by dropping its other clients?
  6. A termination for default (or cause) sounds like the right step. The contract is valid. The contractor is unwilling to honor its obligations.
  7. Acquisition Reform ― It’s Soylent Green!

    Here's a great idea (since only great ideas are invited) -- I made the submission on the 809 Panel webpage a few minutes ago... Detailed Description of the Challenge How many GS-1102s does it take to make a contracting decision? If a contracting officer's decision or recommendation has to be approved by a higher-level official, such as the HCA, there may be six, eight, ten, or fifteen or more GS-1102 (or military equivalent) persons in between the contracting officer and the HCA. And we're not even talking about lawyers. We need to streamline the decision-making process. Proposed Solution or Recommendation Maybe in DFARS Part 201: When acquisition regulations require approval of a contracting officer decision or determination at some level above the contracting officer, the following instructions shall apply: When the action requires (a) approval within the local contracting office or center, or (b) review by the chief of the contracting office before submission to the head of the contracting activity, there shall be no intermediate GS-1102 (or military equivalent) persons as reviewers within the local contracting office or center. The contracting officer may submit the action directly to the approving official or chief of the contracting office for consideration. However, if the approving official's or chief of the contracting office's position is graded for a member of the Senior Executive Service (or comparable or higher position, including a general or flag officer in the armed forces), the approving official or chief of the contracting office may appoint one GS-1102 (or military equivalent) person to perform a staff review as part of his or her consideration of the action. When the action requires (a) approval by the head of the contracting activity (HCA), or (b) review by the HCA before submission to the agency head, the HCA may require an intermediate review by the chief of the contracting office (see the paragraph above). In addition, the HCA may appoint one GS-1102 (or military equivalent) person on his or her staff to perform a staff review as part of his or her consideration of the action. If the approving official, chief of the contracting office, or head of the contracting activity desires the formal input of other GS-1102 (or military equivalent) persons before making a decision on the action, he or she may convene an in-person or virtual meeting for that purpose. The contracting officer should be invited to participate in the meeting whenever practicable. The names of all attendees shall be recorded for the record in the contract file. The above paragraphs only limit GS-1102 (or military equivalent) reviewers for actions requiring approval above the contracting officer level and up to the head of the contracting activity. Reviews by attorneys or other specialists or advisors are not limited by these paragraphs.
  8. I'm with Todd -- it seems strange to have already decided on the solution without knowing that it will meet the need. Regarding the 52.217-x clauses, no, you don't need any of them. You also don't need any of the determinations required by FAR Subpart 17.2. Your authority is the 52.207-5 clause. You're doing an option to purchase a leased or rented item, not an option to buy additional quantities. Your attorneys or procurement analysts might tell you differently, of course.
  9. Unreasonable Price

    I don't see any benefit in asserting that a price reasonableness decision must be objective. As I see it, a price reasonableness decision includes both factual observations (objective?) and value judgments (subjective?). Some price reasonableness decisions will have more of an objective flavor; some will have more of a subjective flavor. In torts, they say an action based on a reasonable person standard is objective and an action based on a person's feelings is subjective. But surely the method of divining or discerning a reasonable person standard (what a reasonable person would do) is very much subjective. So in a tort case, the lawyers argue and the judge uses a subjective method to come up with a reasonable person standard, and then retroactively imposes that standard on the defendant in the case. Objective? Really? I am fine with price reasonableness determinations that are influenced by a contracting officer's value judgments; providing, the contracting officer is faithfully doing his or her job.
  10. Supply vs Service

    105 CONS, What difference does it make? A card holder made a decision, and supports the position. Do you want the information so that you can punish the card holder, revoke the purchase, and require a ratification? Or do you want the information to use it for training or professional discussion in the future? I tend to treat contracts for commercial product warranties, software and hardware maintenance plans, insurance policies, and so forth as supply contracts -- not because there is any tangible item of supply ever delivered, but because I am forced to categorize them as either supply or service, and I cannot abide calling them service. For example, a health insurance contract DOES NOT purchase the services of a nurse or medical technician. For these types of contracts, a contractor delivers a warranty paper or maintenance plan or an insurance policy, and we pay in full immediately after delivery even though the period of coverage may reach into the future. I insert a delivery date into my automated system and FPDS-NG of when the warranty, plan, or policy is due -- not a period of performance date equal to the coverage period. Then, after payment, the contractor honors the promises it made in the warranty, plan, or policy. I encourage you to have a professional discussion with your staff on supply versus service. Everyone will agree on some examples, but on other examples there might be some differences of opinion.
  11. H - clause vs FAR/DFAR

    Does the contract include the clause at FAR 52.215-8, Order of Precedence-Uniform Contract Format? If YES, that clause suggests that a Sec. H special contract requirement will take precedence over a Sec. I contract clause.
  12. Generally speaking, for your ACCOUNTS RECEIVABLE, if you propose the terms to those to whom you sell, changing from Net 30 to Net 60 will be detrimental to you, if your payers actually wait the full 60 days. Generally speaking, for your ACCOUNTS PAYABLE, if you impose the terms to those who sell to you, changing from Net 30 to Net 60 will be beneficial to you, if you actually wait the full 60 days and if your suppliers don't raise their prices because of the payment terms. For Government prime contracts, Net 30 days is seen as the default. A contractor may offer discount terms, such as 1%-10, meaning that if the Government makes payment within ten days, it may take a 1% discount. I have never seen Net 60.
  13. Sap114, What are you changing from?
  14. FAR 16.505(b), no debriefing

    No, you're wrong. FAR Subpart 15.5 doesn't reach to fair opportunity considerations under 16.505(b) -- see 15.502. For a fair opportunity consideration, FAR 16.505(b)(6) establishes the requirement -- for those circumstances where a debriefing is required, it sends the contracting officer back to 15.506 for convenience instead of repeating the procedural steps again.
  15. In your market sector, is tear-down-and-quote free? Or is it customary for a repair shop to charge for it? If the latter, you could do a few BPAs that include fixed prices for different tear-down-and-quote possibilities, fixed prices for certain types of common repairs, and labor rates or shop rates for uncommon repairs. When a repair need arises, pick one based on the tear-down-and-quote price and your own prior price and quality experience with the vendors -- when you get the quote, if you like the quote, authorize the work to occur since the price is reasonable and that is the only source reasonably available (time constraints and so forth) -- if you don't like the quote, have the first vendor box up the item and you take it to another vendor for tear-down-and-quote and repeat the process. I assuming that your purchases (calls) will be under the threshold for synopsis.
  16. Unreasonable Price

    Is $10.00 an unreasonable price for a bottle of water? In a grocery store in the U.S., where all the competitors are selling their bottles for around $1.00, it might seem that the $10.00 bottle is unreasonably priced. Someone might buy it if it has a prestige label, I suppose -- if the glitterati are willing to pay that price for the prestige label, maybe $10.00 is unreasonable after all. In the desert, if your bus breaks down and a cart comes along seven hours later with bottles of water, and the vendor offers to sell a bottle to each passenger at $10.00 per bottle, well, that might be a reasonable price -- after all, he and his donkey walked seven hours to get the water to your bus -- you might buy two for yourself and one for your cash-strapped neighbor. A price that might be unreasonable to one person might be reasonable to someone else. A price that is unreasonable to a contracting officer, after "the contracting officer has taken all the authorized actions . . . without success," might be reasonable to someone at a level above the contracting officer.
  17. FAR 16.505(b), no debriefing

    Note: I'm not opposed to a contracting officer voluntarily providing a debriefing under $5.5 Million for a fair opportunity consideration in some cases -- but it is not mandatory and cannot be demanded.
  18. FAR 16.505(b), no debriefing

    16.505(b)(6). A multiple-award contract holder is entitled to a debriefing only for order awards exceeding $5.5 Million. So you have no right to a debriefing, and the contracting officer does not have to have "grounds" for denying a debriefing. You can ask nicely, and the contracting officer might be willing to give a debriefing on a discretionary basis, but there is no right to demand and there is no basis for talking about "grounds". It is possible that the contracting officer's decision is entirely prudent. With regard to debriefings, an acquisition under $5.5 Million is supposed to be a little simpler and easier for the contracting officer. Demanding a debriefing denies the simpler and easier aspect, and treats every acquisition as if it were of the highest dollar value. Suppose the contracting officer received 75 offers for a $200K task or delivery order (yes, it happens!) -- I wouldn't do debriefings, either -- I have other acquisitions to work on. Perhaps instead of asking for a complete FAR 15.506 debriefing, you might instead say that you aren't asking for a debriefing but you have one particular question, and then pose that one question. Maybe you'll get a response?
  19. Increasing Rights in Software--> In-scope Change?

    Beauty is in the eye of the beholder. Same for scope, right? The way you tell the story, I can agree that acquiring unlimited rights can be a reasonable step as part of a shutdown effort. I don't know what "Smart Shutdown" is, but if that authority allows you to restructure the contract to allow for orderly shutdown, then maybe that is also your authority for buying the unlimited rights. I would try to avoid presenting it as a scope question -- a scope question tends to invoke the Changes clause, and I don't think you need to go there. I think you could buy the rights as part of a termination for convenience settlement, for example.
  20. This is an important topic -- too many contracting personnel believe the contractor is ineligible for further task (or delivery) order awards after re-representation.
  21. A re-representation as NOT SMALL has no effect on the awarded contract. The contractor is still eligible to participate in the fair opportunity consideration process and receive task order awards for the life of the contract, both for offers submitted before the re-representation and offers submitted after the re-representation. Here are the only two differences when a formerly small business multiple-award contract holder re-represents as a large business: (1) If the task order contracting officer decides, at his or her own discretion, to set aside a task order for a small business category, then the contractor will not be considered for that task order. (2) Orders issued after re-representation do not count towards the agency's small business goal achievements. The order may be issued to the formerly-small-now-large-business, no problem, even if the parent IDIQ contract was awarded as a small business set-aside, except in the case of (1) above -- but the order doesn't count towards the agency's goal achievement. At least, this is how I understand it.
  22. When the Government and contractors all know that the contract performance will occur in a conflict zone, they should be able to negotiate "appropriate contractual coverage" (FAR 31.205-7). If they don't, then I have little sympathy. A contractor should not accept a fixed-price contract unless it is certain it can perform for that fixed price. Choosing not to recognize realities, and not to take prudent steps, but instead pretending like there are no contingencies just to get the contract and then crying about the realities to get the price increased seems unprofessional to me. Absent a DPAS situation, a contractor is not forced to accept a contract not to its liking. A contractor can insist on the flexibilities allowed by the cost principles, or the contractor can walk away from an unreasonable situation. Before contract award (perhaps as part of its offer), the contractor might ask for inclusion of a home-made re-opener clause-- RE-OPENER FOR HOST COUNTRY PAYROLL TAXES The agreement of the parties in forming this contract is based on an assumption that host country payroll taxes levied on contractor employees will not increase or decrease more than 20% during the period of the contract. If at any time during the period of this contract, the host nation changes the payroll taxes levied on contractor employees to a level more than 20% higher or lower than the rate effective on the date of contract award, the Contractor shall provide a prompt written notice to the contracting officer. The parties agree to adjust the contract price accordingly; however, the contract price shall not be increased unless the Contractor demonstrates that the host country payroll taxes levied on contractor employees significantly impairs its ability to retain employees in the conflict area. Failure to agree to an adjustment shall be a dispute under the Disputes clause. However, nothing in this clause shall excuse the Contractor from its performance obligations under the contract. Of course, I suppose a contractor also has common law recourse under an impossibility theory. (Wikipedia: In contract law, impossibility is an excuse for the nonperformance of duties under a contract, based on a change in circumstances (or the discovery of preexisting circumstances), the nonoccurrence of which was an underlying assumption of the contract, that makes performance of the contract literally impossible.) But the original poster generally wants performance, not excuses for non-performance.
  23. Boof, Our contract is with the contractor, not with the contractor's workers. If the contractor's workers have to pay taxes on their income, that is between them and the taxing governments -- the tax is paid by the workers, not by the contractor. We only reimburse contractor costs (allowable, allocable, reasonable), not individual worker costs. Fixed-price contract: if the contractor's costs go up (for example, if it has to pay its employees 15% more than it anticipated, such as for a reason as you described), the contract price is unchanged. Cost-reimbursement contract: if contractor costs go up (for example, if it has to pay its employees 15% more than it anticipated, such as for a reason as you described), the increased cost might be reimbursable if it is otherwise allowable, allocable, and reasonable. Your contractors should be able to take care of themselves -- they shouldn't be cry-babies. If the place of performance for a contract is in a conflict zone, they should know that and they should negotiate the contract accordingly. You also know it when you do your acquisition planning. Shortest answer: An increase in worker payroll taxes has zero effect on the contractor's costs.
  24. joel, Should the parties read their contract as it should have been written, or as it actually is written? You seem to be suggesting the former -- I tend to prefer the latter. That's why I think the contractor (assuming the original poster is a prime contractor) should simply get the Government to agree to delete the clause by contract modification (or at least an agreement that the clause is not effective).
  25. Send a note to the contracting officer requesting a contract modification to delete the clause. Make your case with facts and FAR citations, not like you did here. Make it clear if you are a prime contractor, or a first- or lower-tier subcontractor. Be prepared to answer a question about why you didn't object to the clause during the solicitation phase.