CON46

Wow... my table really got jumbled above. Guess I can't post that.

mm6ch , Please forgive the length of this post: The CO lost the battle against the use of this contract type on this requirement and we have been informed in very certain terms that under no circumstances will T&M be approved. The reason for making the scope unattainable is that under CPFF Term, if the contractor satisfies the LOE then the contractor can end performance (unless I believe their is a bilaterial modification). This would mean that if we estimated the LOE to be too small then another contract would have to be put in place fairly quickly. To answer your question about my CLINs. CLIN 0001 FFP - Program Support (Routiene Maintenance, bonded storage, etc) CLIN 0002 CPFF Term - Product & Technical Support (Emergency Repairs) CLIN 0003 CR - Materials CLIN 0004 CR - Packaging/Handleing CLIN 0005 CR - Travel Originally I planned on taking a tiered approach to the CPFF type. (Note: this was before the AF published a guide indicating that the Fee’s are based on the actual hours expended. Prior to this AF guide, I was under the impression that the Fee was fixed and that the contractor received the fee if their performance was considered satisfactory). I developed fee brackets/tiers and calculated an estimated cost for each bracket based on the maximum hours worked in that bracket. The fee would have been calculated as a percentage of that maximum cost. By the end of the period, if the contractor worked lets say 3250 hours, based on the chart below, then they would be entitled to the fee associated with that bracket which in this case would equal 9.5% * the max estimated cost of that bracket (i.e. 3600 * weighted average hourly rate). Of course this approach requires that the Fee % for each bracket be negotiated up front and the actual fee be identifed in terms of $$$ during the negotiation as well. Hours Worked Weighted Avg Hourly Rate Max Est Cost Fee % Fee $$$ 1 to 1200 XXX 1200 * XXX 10% 10% * Max Est Cost 1201 to 2400 XXX 2400 * XXX 9.75% 9.75% * Max Est Cost 2401 to 3600 XXX 3600 * XXX 9.50% 9.5% * Max Est Cost 3601 to 4800 XXX 4800 * XXX 9.25% 9.25% * Max Est Cost 4801 to 6000 XXX 6000 * XXX 9.00% 9% * Max Est Cost 6001 to 7200 XXX 7200 * XXX 8.75% 8.75% * Max Est Cost 7201 to 8400 XXX 8400 * XXX 8.50% 8.5% * Max Est Cost 8401 to 10000 XXX 10000 * XXX 8.00% 8% * Max Est Cost Not sure if this method would fly or not but it was the best I could come up with. However since the AF guide was published I am now back to square one and looking for possible solutions. I will have to look at your optional LOE suggestion further to see if that would work.

In my case the desired result (completion of all emergency repairs in a 12 month period), can be achieved without reaching the LOE. I charted the emergency repairs services that I mentioned in my previous post over the last 6 years and found demand to be considerably lumpy. Additionally, when demand is compared to the estimated demand, each period's estimate is so far off that the demand could easily be deemed unpredictable. To put some numbers to this analysis, the emergency repairs fluctuated from under 100 hours in one 12 month period to about 4000 hours in the next 12 month period. So since I cannot identify a realistic LOE my only choice, as I see it given the direction to utilize this contract type, would be to ensure that the contractor could never reach the LOE and force a fee adjustment, based on the guide, at the end of each period of performance. Since the guide seems to imply that the desired result or completion cannot be achieved without reaching the identified LOE, I am not sure what other option I have but to make the LOE unattainable. Can you think of any issue with setting the LOE so high that it most likely could never be attained?

The AF recently published a new guide that I am having trouble understanding. https://cs.eis.af.mil/airforcecontracting/knowledge_center/Documents/Other_Pubs/Other_Guides/cpff_loe_guide.pdf#zoom=100% It seems that the guide is in direct conflict with the FAR 16.306(a) which states that the fee is "fixed at the inception of the contract" however page 5 paragraph (h) of the guide states that the fee can be reduced if the contractor works less hours than the stated LOE. (To be clear, this is not an adjustment based on change in the work to be performed, but an adjustment based on the number of hours actually worked to achieve the LOE). According to the guide, the fee is tied directly to the actual hours incurred and gets proportionally adjusted when the contractor expenses hours which is less than the identified LOE. Additionally, the guide specifies that the Fee is paid based upon hours expended. So my question for the WIFCON community is: If the guide were utilized, how exactly would the fee be considered fixed? ------------------------------------------------------------------------ Note: I have been directed to utilize this contract type for emergency repair services as opposed to T&M. In my situation the LOE is unknown, definite goals as well as how long it will take components to be repaired are unknown, and the end products are also unknown as I cannot predict what component or product will need to be repaired. I had some creative solutions but after reading the guide, I am lost as to how a fixed fee is able to fluctuate. If the guide is accurate, my revised solution would be to set the LOE so high that it would be improbable that the contractor could ever attain it then simply be adjust the fee each period relative to actual hours expensed.

Side topic, just out of curiosity: What do you call the notice/synopsis if you have an acquisition that is anticipated to be a sole source award? One school of thought is that since you are not looking for other sources your synopsis should be called a Presolicitation Notice and the comapny whom you intend to award to should not be listed. Another opinion is that you should call the notice a Sources Sought Synopsis that states your intent to make a sole source award to a particular company. (The purpose of naming the company is so that small businesses can contact the company to express their interest). Of course IAW 5.207 a statement that all responsible sources may submit a capability statement, proposal, or quotation, which shall be considered by the agency, would also be included.

Vern, thank you for the clarification. Our office procedures have been to do a Sources Sought notice to gather interested sources for market research then after the acquisition plan is approved, post a presolicitation notice. Although I see nothing wrong with this approach, it adds time to our acquisition milestones which in turn may be detrimental to staying on schedule. However, since there seems to be no written internal policies that say otherwise, incorporating the Sources Sought notice into the Presolicitation notice may be of significant benefit where acquisitions may be behind. Thanks again.

Our office has a difference of opinion regarding the Sources Sought Notice/Synopsis that I am hoping this board can resolve. We understand that a Sources Sought notice also known as a Sources Sought Synopsis is used to gather information on potential offerors when a government intends to issue an award. The purpose of the Sources Sought notice is to increase competition and small business participation. The advanced notice, when posted on the GPE of a pending contract action, qualifies as a synopsis. Having said that, I have seen multiple FBO posting that call out a "Sources Sought / Presolicitation Notice" or "Combined Sources Sought / Solicitation Notice". I have also seen the Sources Sought referred to merely as a market research tool. As such, is a Sources Sought Notice/Synopsis also considered a Presolicitation Notice which would satisfy the posting requirements under FAR 5.204?

Fizzy, In this case the Manufacturer restricts the sale to a reseller who is also the mandatory distributer. To answer your questions... Could you issue the RFQ to all of the providers on the Schedule: An RFQ was posted and seperately emailed to about 20 licensed resellers. However this did no good what-so-ever becasue XYZ supplied much higher prices to all the other resellers. Remember, the manufaturer is limiting competition by making all the other resellers obtain pricing from XYZ... then XYZ submits their lowered bid. Does the award have to go to the lowest-price quote? Yes, why wouldn't it. You cannot award on a small-business set aside becasue the manufaturer is actually performing the work and a SB cannot do 51%. Treat it like a product and you have the same situation. Set-asides are not allowed inthis situation. To make matters worse XYZ knows that they are working in a loop-hole here and has increased their pricing 9% year after year while the product coming from ABC has stayed the same (without increase). Do licensed dealers who obtain their product upgrades from XYZ offer any other advantages to the government that could justify a higher priced award? No it is absolutely the same product. If you award to company EFG they have to buy from XYZ who purchases from manufacturer ABC. ABC performs the service or supplies the product directly to the DOD bypassing interaction with both EFG and XYZ (technically this should be a product but creative CO's could argue as a service). Neither EFG or XYZ contribute to the effort at all and are accepting a payment for not doing nothing. XYZ pays ABC for exclusive rights to supply all Federal Agencies who use their product/service. However since the payment is going from the prime (since we have to contract with XYZ) to the sub (ABC) it is legal.

UPDATE: So the Antitrust issue was escalated up to the Air Force Legal Operations Agency (AFLOA). Turns out this business practice is acceptable and there is not an issue as we seem to be boxed in by our own rules. Company ABC can restrict competition so that company XYZ is the sole provider for the entire Federal Government. This seems wrong to me as XYZ can mark up the products without reason, currently what is happening, however their is no alternative and no way to stop it. (Both ABC and XYZ are very very large businesses so i assume that their attorney's have earned their keep). As for the IG, they never returned my emails or any emails from my legal office. Legal's take was that since they were being ignored there must not be an issue.

Thanks Don, I already had the Integrated Life Cycle Chart but I figured that was more for the Program Mgt side. I also got ahold of a SPAWAR Contracting Process chart (google it). If I can make some free time available I can build a spreadsheet whereas if you click specific check boxes relating to the contract (cost, type, method, vechicle, etc) it will populate a process chart including review thresholds and approving authorities. Built something similar at the defense contractor I worked for to plan my projects. It was great for training purposes as well. I also had one (that I did not design) that built contracts including standard clauses but that was a very complex spreadsheet that generated a very large word doc. Simple check box style with about 100 boxes to check. After generation users had to scan and fill in specific verbage (total contract construction took about 2 days w/ about 1 week of reviews).

Vern, thank you for your assistance. Following FAR 3.303 I will draft a memo, run it by my legal office for clearity and send it to the Attorney General and the agency office responsible for contractor debarment and suspension under Subpart 9.4.

Then again, this was my first contract that I worked on so it is possible that I just did not recognize an anti-trust issue when I saw one. Legal believed ABC granted XYZ a monopply on gov business.

My logic was that an actual organizational conflict of interest is created when all licensed ABC software resellers obtain their quotes from company XYZ and XYZ then turns around and bids. It creates an unfair competitive advantage. It may be an acceptable commercial practice but when dealing with the gov we have our own rules. I had doubts about 3.303 anti-trust beacuse this practice is inline with the natural (commercial) operation of market forces.

Yes XYZ always submits better pricing. This issue went the IG at GSA for collusion and a pricing issue but I beleive that was a mistake as the GSA IG has seemingly not done anything yet. (Like I said in my original post it has been a while). Alternate issues here: ***Company XYZ pays company ABC for being the sole provider of guranteed federal business (this is actually printed in ABC company literature) ***Market prices are about 4% or 5% of the prices listed on GSA. For this award in particular GSA prices had the total at around $64 million whereas market pricing is well below $1 million. I understand GSA's MOT 500K but the unit prices are absurdly inflated. The GSA CO seemed very disinterested in correcting the pricing situation so our office had to escalate it to the CO's director. Only then did it go to the GSA IG. The GSA's prices are still grossly out of sync with market to this day. I have completely lost faith in the FED Gov's ability to police anything to ensure enthical practices are followed. Both GSA and IG seem to be complete failures.

dcarver -- Where is the contracting process chart located? No one from my office has ever heard or seen of one. I would love to take a look and possibly modify it to fit my units function (DOD USAF).

Understandably acquisition rules change... however the FAR and other agency guides are a tad bit over bearing. Streamlined policies would go far in leaning out the acquisition length and rules. I come from the strategy and acquisition side of a major defense contractor i was also a Lean Assessor at this contractor, only have a year in acquisition with the gov but I was just shocked at how much waste is built into gov processes. Make the process more efficient, (for gods sakes, at least develop a process chart), reduce procedures, reduce duplicate work, and training will naturally fall in line behind these actions. Maybe then we could use strategic sourcing efficiently to leverage the acquisition power of the gov to yield greater savings and results.

This was ran by my legal dept. (last year) and 3 issues were recognized, (all 3 required legal investigation)... An IG investigation was launched but IG will not provide status or even status on which issues they are looking into. It is now a year later and IG has given no instruction (pretty much does not respond to emails until I escalate) and due to criticality of the software we must move forward with a new acquisition/award. I am conducting a DOD acquisition which is Brand Name only and award will be made using other than full and open competition procedures to licensed product resellers of company ABC. Only licensed ABC software resellers can fulfill the requirements of the acquisition. However, based on ABC’s licensing agreement with those resellers, all resellers who supply the Federal Government must purchase their products and upgrade services from company XYZ, who in turn subcontracts with company ABC. All licensed ABC software resellers in affect obtain their quotes from company XYZ. Since company XYZ also submits their own quote, the nature of this relationship between company ABC and XYZ allows company XYZ a competitive advantage. (Also of note, the products being delivered are upgrades for current software, as such, 100% of deliverables come from company ABC. Company XYZ only adds on a pass through charge and provides no additional support or service. The same goes for every licensed reseller of ABC's products. (Resellers are both Large and Small buinesses). So XYZ essentially sets the resellers prices with exception to the resellers own pass through charge. I have received written confirmation from company ABC that it will not compete against company XYZ or provide support sole source). At this point, given an ongoing IG investigation, should I address the situation as a DFARS 209.571-3 Organizational Conflict of Interest issue? This means contacing with company ABC or XYZ or both to resolve the situation. IG has not instructed me as to what I can say or reveal so can I tell the contractor that IG is reviewing the current situation in order to facilitate change and promote competition?