DingoesAteMyBaby

Great question, complicated answer. Okay, so there are two distinctly seperate modifications occurring. The first is let's say modification A00003 completed by Contracting Officer "B" which served to incorporate a contract change and adjusted the target cost. This is the modification that Contracting Officer "A" is not in agreement with; however, Contracting Officer "A" must now do a CIF modification (A00007) where cost incentive fee is determined once the job that was captured in A00003 and other various modificaitons has completed; and lets say the contract hit the target cost. Contracting Officer "A" doesn't agree with the negotiation behind modification A00003 so refuses to complete modification A00007 on the basis that he / she wouldn't have reached the same conclusion and therefore doesn't feel comfortable signing modification A00007 using the target cost from A00003 as a part of the contractually prescribed calculation. The question is, is this within the discretion of Contracting Officer "A" in executing his/her warranted Contracting Officer duties to complete modification A0007.

So I am bringing a scenario forward to the WIFCON community for discussion and comment. As with any academic scenario there is always a question of 'who writes these things and what real-world event caused this?'. Sometimes truth is stranger than fiction. In this case I am running into difficulty describing to a Contracting Officer what I have always accepted as a basic concept. I have searched but have not been able to locate DAU training or a more expansive analysis which reflects the most basic concept of what I can only equate to "Finality" as discussed in Administration of Government Contracts (4ed, page 60**). The 'finality' I am seeking in this case is that once a contract modification is completed between the parties, that's it. Not 'finality' as it relates to a dispute or a COFD. Both parties move forward and administer downstream accordingly. Without further adieu... Scenario: Contracting Officer "A" is administering a CPIF contract. Contracting Officer "B" is assigned by management as an alternate to administer this CPIF contract in the event that Contracting Officer "A" is unavailable. Contracting Officer "A" was recently unavailable to conduct negotiations for a contract change on the CPIF contract, so Contracting Officer "B" conducted the negotiations and reached a negotiated change to the target cost with the Contractor; this negotiated target cost was incorporated into the contract via bilateral modification between the parties and the modification and all supporting documents were signed by Contracting Officer "B". Contracting Officer "B" followed all required processes and procedures to complete the contract modification and the modification was otherwise entirely valid and binding. Upon Contracting Officer "A"'s return he/she reviews the Post-Negotiation Business Clearance Memorandum which describes the negotiations and describes how Contracting Officer "B" used sound business judgement to reach the negotiated target cost. Contracting Officer "A"' fundamentally disagrees with the rationale used by Contracting Officer "B" to reach the negotiated target cost. As a result, Contracting Officer "B" refuses to use the target cost to calculate the Contractor's Cost Incentive Fee (CIF) using the CIF formula prescribed within the contract, and additionally refuses to complete the entire CIF modification and passes the modification to management for adjudication. Analysis: Contracting Officer "B", following all applicable required regulations, supplements, policies, and procedures completed a legally binding bilateral contract modification on behalf of the United States of America under his/her authority as described at FAR 1.602-1. Contracting Officer "A", is tasked with using a CIF calculation which does not allow for discretion by the Contracting Officer beyond merely completing the calculation based upon target costs and overruns / underruns for various completed projects. Question: Given the task assigned to Contracting Officer "A", what are his/her options in completing the CIF modification if he/she does not agree with the basis for negotiated target costs that were completed by other Contracting Officers? **For reference: "Since the government can act only through its agents and employees, it is clear that it will be bound when authorized agents carry out their duties properly. However, government personnel cannot be expected to act only in ways favorable to the United States. Whether resulting from mistakes, negligence, or poor judgment, their statements, acts, or omissions are sometimes contrary to the government's best interests. This may become evident from later reflection or subsequent events, or it may be determined by the agents' advisors, superiors, or successors. In such cases, attempts may be made to avoid the consequences by repudiating or countermanding the agents' acts. Two major concepts are invoked to prevent the government from disowning authorized agents' acts or agreements - thereby making them binding on the government. The first concept is finality; the second is estoppel. "Finality - The actions of a government employee acting within the scope of his or her employment are the actions of the government itself, and, as with any contracting party, once the government has taken the final step toward committing a contractual act, it is bound by it. Thus, the focus of analysis in this area is on the action of the government employee that contains the elements of finality in the contracting process."

Sure, except the clauses at DFARS 217.7104 don't actually appear in ship repair contracts because they are only prescribed for use in a Master Agreement under that section of the DFARS. That's not to say that they are not useful clauses, because they are. Frankly, I'm a little surpised that they are not in the contracts. In any event, this only actually furthers my point that ship repair is a unique niched contracting realm that's made to artificially fit into one type of contract or another when that is not really how it should be. And really, at its most basic level, the question that any of us should ask ourselves is "what is the nature of the work being done, and what labor category on either SCA or DBA is the most appropriate fit". That is what should decide the labor law that should be applied. And for most depot level or intermediate level work that the ship's force cannot accomplish on its own, Davis Bacon wage categories are likely the best fit. That being said, I will reiterate this again: 1) Why go to the unnecesary expense and administrative burden to go that route if it is not legaly required? and 2) Why allow a wage determination to drive the entire structure of the contract clauses as was so very clearly and specifically asserted by GAO in B-234196?

So doesn't it seem a bit flippant for the DoL to just simply state that if the civilian agency knows where the repair location will be it should use D-B, but if they don't know, then just use SCA. Especially when you have the GAO saying that any such contract should be solictied "as a service contract with the clauses and certifications appropriate to a service contract". That's a profound distinction. Because you could certainly infer from this statement that the wage determination should be allowed to decide the contract's other terms and conditions; this is well beyond the scope of what a wage determination should do. This is a slippery slope Don, and I've resisted being drawn down it by people that should know better on numerous occaisions. So if the solicitation and resulting contract use D-B then what, use FAR Part 36 and the clauses associated with construction? It just doesn't fit into a clean way for the civilian agency to perform the acquisition management function. The flippancy introduces risks to the Government either way; FAR Part 36 clauses are probably the better fit, but could be a little much and certainly D-B wages will sweep funds from the already austere coffers, while FAR Part 37 clauses combined with 52.246-x, Inspection of Services, provides no real protection for the Government when considering the type of work being done. And here's where the slope gets away from an acquisition manager who just treats acquisition planning like a flowchart exercise: 'We can just do ship repair as a commercial service. We will include 52.212-4 and that pretty well covers things'. It is at that point that anyone with any sort scruples blows a gasket; whereas I have learned to proceed with great caution at the very mention of the question as to 'why is ship repair a supply?'

Don, Fair enough, all good points on the years long discussion on this subject. That still leaves DoD ships to be treated as supply contracts due to the inclusion of the legislatively required Walsh-Healey. I don't necessarily believe that a wage determination should drive the entire body of the contract, although I have seen time and again that it does drive CLIN structuring and clause inclusion, which in turn drives the Government's method for administering the contract as well as the administration of the contract. One instance that made no sense to me, for illustrative purposes, was a demolition contract which forced the use of PBSA due to the SCA being applicable when the contract should have very well been a FAR Part 36 contract with SCA in lieu of Davis-Bacon. The acquisition strategy and ultimate contract was nothing short of an abomination. In the ship repair world, at least treating the body of work as a supply allows for a congruent and enforceable contract. In terms of non-DoD ships, recall the previous conversation regarding Davis Bacon; in summary, how can Davis Bacon be invoked where the repair location is unknown and how can a wage determination be selected for inclusion in the RFP. And recall what the DoL manual said about those cases. So where does that leave non-DoD agencies in terms of which type of labor law to enter into the contract? Recall though, to support the notion of ship repair as services, is GAO Decision B-234196 http://www.gao.gov/products/420843#mt=e-report, which says a lot on this subject then states as its conclusion: "Since the Coast Guard considered the contract here to be one for supplies, the solicitation included clauses and certifications appropriate to a supply contract rather than those for a service-type contract. recommend that the contract awarded to Stevens be terminated for the convenience of the government and the requirement resolicited as a service contract with the clauses and certifications appropriate to a service contract. In addition, we find G. Marine entitled to recover the reasonable costs of preparing and submitting its bid and the costs of filing and pursuing the protest, including attorneys' fees. Bid Protest Regulations, 4 C.F.R. Sec. 21.6(d) (1988). G. Marine should submit its claim for such costs directly to the Coast Guard." Regarding efforts that the National Oceanic and Atmospheric Administration had made to be subject to the same legislative authority that the Navy has to use PCA for ship repair; the voluminous records that I have show that a vigorous effort was made leading up to a point in 1989 where the following legislation was introduced, but died in committee: http://thomas.loc.gov/cgi-bin/query/z?c101:H.R.896.IH: HR 896 IH 101st CONGRESS 1st Session H. R. 896To provide that contracts for the construction or repair of vessels of the National Oceanic and Atmospheric Administration are subject to the provisions of the Walsh-Healey Act. IN THE HOUSE OF REPRESENTATIVES February 7, 1989Mr. JONES of North Carolina introduced the following bill; which was referred to the Committee on Merchant Marine and Fisheries A BILLTo provide that contracts for the construction or repair of vessels of the National Oceanic and Atmospheric Administration are subject to the provisions of the Walsh-Healey Act. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Act of August 6, 1947 (33 U.S.C. 883a-i), is amended-- (1) by redesignating sections 9 and 10 as sections 10 and 11, respectively; and (2) by inserting after section 8 the following: `SEC. 9. Each contract for the construction, alteration, furnishing, or equipping of a vessel owned or operated by the National Oceanic and Atmospheric Administration is subject to the Act entitled `An Act to provide conditions for the purchase of supplies and the making of contracts by the United States, and for other purposes', approved June 30, 1936 (commonly referred to as the `Walsh-Healey Act'), unless the President determines that this requirement is not in the interest of national defense.'. END The agency has proceeded with ship repair contracts using PCA as if this had passed ever since.

Don, I'm so glad that you have asked. I point primarily toward the use of the Walsh-Healey Public Contracts Act, which is prescribed for use on non-commercial supplies. The NAVSEA FSC Dictionary (Chg 1) issued out on 1/24/2007 states the use of J999, Maintenance Repair & Overhaul/Non-nuclear Ship Repair (West Coast), is required. However, the comments also states: "Use for all contracted services for maintenance, repair & overhaul (MRO) on all non-nuclear ship repair on the West Coast. Individual equipment MRO will be reported under J020. Although ship MRO is coded with a "services" FSC, it is not subject to the Service Contract Act. Per 10 U.S.C. 7299, ship repair/overhaul is subject to the Walsh Healy Act (41 U.S.C. 35 et seq) which applies to contracts for supplies and equipment. Contracts subject to the Walsh Healy Act are not subject to the Service Contract Act (41 U.S.C. 356(2): FAR 22.1003-3(). The use of OCC 257 is also consistent since OCC 257 is for operation, maintenance, repair and storage of equipment." That's my warmup, but I'm trying to gauge just what type of ambush I am walking into.

Precedent exists for the use of "Foreseeable Costs" which has been published in the Federal Register by the U.S. Department of Commerce for ship repair contracts, which are considered a non-commercial supply. This mechanism has been criticized, but I have personally used the mechanism successfully a number of times. Other methods like a "local area set-aside" are only available in extraordinary situations or by the publishing of a J&A to limit competition. The latter is a viable approach, but likely could be unapealing to the higher level at which the J&A would likely need to be approved. Here is an example of a similar J&A used by the Navy: https://www.fbo.gov/?s=opportunity&mode=form&id=f952b8da17e88f2af9e7e0a894de6839&tab=core&_cview=0 Two components necessary for the use of Foreseeable Costs: Consider using this provision in Section K: K.4 52.215-6 – PLACE OF PERFORMANCE (OCT 1997) (a) The offeror or respondent, in the performance of any contract resulting from this solicitation, [_] intends, [_] does not intend [check applicable box] to use one or more plants or facilities located at a different address from the address of the offeror or respondent as indicated in this proposal or response to request for information. ( b ) If the offeror or respondent checks “intends” in paragraph (a) of this provision, it shall insert in the following spaces the required information: Place of Performance(Street Address, City, State, County, Zip Code) Name and Address of Owner and Operator of the Plant or Facility if Other Than Offeror or Respondent (End of Provision) And using provisions similar to these in Section M: M.3 1352.271-74 FORESEEABLE COST FACTORS PERTAINING TO DIFFERENT SHIPYARD LOCATIONS (APR 2010) (a) The Contracting Officer will evaluate certain foreseeable costs that will vary with the location of the commercial shipyard to be used by bidders/offerors under this solicitation. Costs will be calculated based on the bidder's/offeror's shipyard location and these costs will be added, for the purposes of evaluation only, to the bidder's/offeror's overall price. ( b ) These elements of foreseeable costs consist of the following: (1) Vessel Transit: (i) Vessel delivery costs will be based on one round trip from the vessel's homeport of Norfolk, VA to the contractor's facility at a cruising speed of ten (10) knots. Distances will be based on the NOAA publication, Distance Between U.S. Ports, Attachment J.2-6. (ii) Daily vessel operational cost to navigate the vessel between its homeport and the contractor's offered place of performance is $9,800 per day. The number of days to transit to the contractor's offered place of performance from the vessel's homeport will be multiplied by the per-day operational cost. (iii) No operational costs will be applied if the ship can be delivered to the contractor's facility from its homeport within eight (8) hours port-to-port. If the delivery time exceeds eight (8) hours, but is less than 24 hours, it will be considered one full day. Any fraction of subsequent day(s) will be considered as a full day. (2) Shore Leave Costs: If the contractor's facility is outside of a 50-mile radius of the vessel's homeport— (i) An assessment of $1,387.40 for each 15-day period or portion thereof, beginning with the vessel's departure from the homeport and concluding with the vessel's return to homeport. (ii) There will be an additional transportation cost for 14 vessel crew members for one (1) round trip(s) between the contractor's offered place of performance and the vessel's homeport at the cost of coach-type airfare. (3) Travel and Per Diem Costs: If the contractor's facility is outside of a 50-mile radius of the vessel's homeport— (i) There will be a transportation cost for one (1) Contracting Officer's Representative (COR) for Eight (8) round trip(s) between the contractor's offered place of performance and the COR's official duty station at the cost of coach-type airfare. (ii) There will be a per diem expense for Forty (40) calendar days to support one (1) COR while in the city of the place of contract performance, to be determined in accordance with the Joint Federal Travel Regulations (JFTR). The cost of car rental for the estimated performance period will also be included. (End of clause) M.4 AWARD BASIS A) The contract resulting from this solicitation will be awarded to that responsible offeror whose proposal, conforming to the solicitation instructions, represents the "best value" to the Government. "Best value" represents that proposal which is most advantageous to the Government, cost or price and other factors considered. Evaluation of the proposals is based on an integrated assessment of technical (non-price) factors and price. B ) The technical evaluation factors, when taken as a whole, are considered to be less important than price in the evaluation. The degree of importance of the technical evaluation will increase with the degree of equality of the price proposals. C) The Government reserves the right to make an award to other than the low priced offer or to the offeror with the highest technical rating if the source selection official determines that to do so would result in the best value to the Government. D) A detailed review of each offeror's pricing proposal may be made to assess the reasonableness of the offeror's proposed prices. In order to determine whether a price proposal is reasonable, the government may perform a review and analysis of the pricing information submitted by each offeror, including information provided by the offeror in its proposal explaining the basis for the proposed cost and justifying the price proposal. E) The price that will be considered for the purpose of determining the best value to the Government will be calculated by determining the cumulative sum price for all CLINs appearing on the pricing schedule and adding Foreseeable Costs evaluated in accordance with M.3. (End of Provision) I hope this helps!

Okay, well, we all have those days. Today my answer is sure, I would do it over again. But with the current state of the Government and no end in sight, I think it would be best to decide to leave federal service unfortunately earlier than the retirement age of 57 and open a micro brewery / micro distillery.

I am having some trouble fully envisioning your situation, but I think it sounds like you may have a question about antecedent liability. Try reading this and see if it helps: http://www.wifcon.com/discussion/index.php?/topic/600-fiscal-law-antecedent-liability/

Have you considered whether there is appreciable difference between using a Part 14 Sealed Bid solicitation versus a Part 15 LPTA for obtaining your needed contract? Trying to pull off an end-of-year miracle?

Thank you Joel. I went back and re-read FAR 36.606, A-E Contracts Negotiations, and some of the emphasis that I seemed to remember on price was not really there, and more an emphasis on negotiations per Part 15. I will have to reflect on that.

So when I am thinking in an obtuse manner I generally know that I am, but not necessarily why. So can you elaborate on why this is unwise. Especially given that at the time of the negotiation I was being faced with the possibility of having to live with 5% escalation which was completely unsupported by historical data or the outlook of the economy. To me, at worst, the index was capped at 7%; so even if the PPI exploded it would be contained, and the net increase over the course of the option periods would never rise to more than the market price for such services. I'm not being a wise guy here, I really need to know why it's unwise so that I can learn from this and I have the utmost of respect for your opinions.

Vern, The contract was certainly a Labor Hours contract with fixed labor rates. Task orders were issued against the contract as a labor hours contract type using the fixed rates in the contract as the basis for the price to the Government for the Contractor to meet the requirements of the statement of work. I cannot tell what your opinion is of the clause's technique for adjusting the labor rates according to the BLS' PPI. This technique does ignore the costs as the basis for the labor rate and focuses instead on the price in the realm of the PPI. Is that a good method for measuring price fair and reasonableness? To me it should be, regardless of changes to the costs. If the the market for that particular NAICS is consuming the service at a higher price then that is an important metric to consider when making a determination of price fair and reasonableness (see FAR 15.404-1( b )(2)(iv) where comparison with published market price indices is inferred). Which was one of the fundamental goals of the clause. Maybe it was too ambitious or simplistic. It should have been officially approved by the agency. Bottom line, is this a viable clause? It sounds like with some adjustment it could be, but then I'm not sure that it would have the desired effect of tying the fixed rate to the price of the service as it is consumed in the market. Maybe this is just interesting reading, but BLS' guidance at http://www.bls.gov/ppi/ppiescalation.htm was the basis for 'how to' for the formation of the clause.

The only FAR reference that I am aware of is specific to the 8(a) Program at 19.203( c ) where the SBA had previously accepted a requirement into the program and it must remain in the 8(a) program until released. I have relied on this in the past for service contracts with 8(a) firms which were recompeted after the base plus four option periods completed, etc. 19.203 -- Relationship Among Small Business Programs. ( a ) There is no order of precedence among the 8(a) Program (subpart 19.8), HUBZone Program (subpart 19.13), Service-Disabled Veteran-Owned Small Business (SDVOSB) Procurement Program (subpart 19.14), or the Women-Owned Small Business (WOSB) Program (subpart 19.15). ( b ) At or below the simplified acquisition threshold. For acquisitions of supplies or services that have an anticipated dollar value exceeding $3,000 ($15,000 for acquisitions as described in 13.201(g)(1)), but not exceeding $150,000 ($300,000 for acquisitions described in paragraph (1) of the simplified acquisition threshold definition at 2.101), the requirement at 19.502-2(a) to exclusively reserve acquisitions for small business concerns does not preclude the contracting officer from awarding a contract to a small business under the 8(a) Program, HUBZone Program, SDVOSB Program, or WOSB Program. ( c ) Above the simplified acquisition threshold. For acquisitions of supplies or services that have an anticipated dollar value exceeding the simplified acquisition threshold definition at 2.101, the contracting officer shall first consider an acquisition for the small business socioeconomic contracting programs (i.e., 8(a), HUBZone, SDVOSB, or WOSB programs) before considering a small business set-aside (see 19.502-2( b ). However, if a requirement has been accepted by the SBA under the 8(a) Program, it must remain in the 8(a) Program unless SBA agrees to its release in accordance with 13 CFR parts 124, 125 and 126. ( d ) In determining which socioeconomic program to use for an acquisition, the contracting officer should consider, at a minimum— (1) Results of market research that was done to determine if there are socioeconomic firms capable of satisfying the agency’s requirement; and (2) Agency progress in fulfilling its small business goals. ( e ) Small business set-asides have priority over acquisitions using full and open competition. See requirements for establishing a small business set-aside at subpart 19.5.

metteec, When you say "fixed price with economic price adjustment" I understand I think your reasoning; however, your focus is on the costs of the various components building the fixed labor rate; whereas my methodology (which I now know should be a formula) ignores the costs going into the rate and focuses on the price change over the past year. I believe that this is a better way to measure the value of the labor hour from a price analysis perspective. The 7 percent cap may be arbitrary, but if it is term and condition that the Contractor agrees to, then they have made a business judgement. Business judgements are inherently risky.

Vern, The contract is an A-E contract.

Vern, Yes, truly the CCO and HCA have to use their judgement to balance the agency's mission against the funds that may or may not be available. For some agencies this is a black and white issue, for others it is not. But in any event, as long as it is clear to all involved the status of the funds, then at least the Government is operating in good faith.

Don, yes, you know exactly which customer we are talking about here. And commitment certainly is a relative term, which is certainly a new concept to me.

Question: At what point in the acquisition process does the Government need to have committed funds or the process is on hold? Situation: The Government has a hybrid CPIF/CPAF contract with a Contractor for what is most correctly classified as a series of complex non-commercial supplies which will be accomlished according to specifications. This contract is not an IDIQ, rather the ordering of work is done by modifying the contract to add the work according to option CLINs much like the issuance of a delivery order. The Government agency is a little short on money, needs to have some work done within the current fiscal year, but will not commit funds for the work just yet. The magnitude of the work is roughly $6M. The agency sends an unfunded purchase request to the contracting office for action stating that 'we would like to fund this'. The contract contains no clause which would restrict the Government from moving forward with a request for contract modification to add the work which would be considered within scope despite having no committed funding at the level of the Government estimate. The Contracting Officer has observed the agency behave in this manner previously; specifically two instances where the agency was not able to fund a major portion of the requirement for work similar in magnitude to the instant body of work but has gone through the process of requesting a change proposal and even negotiating and arriving at a negotiated target cost for the work, only to have the work scope significantly reduced to fit the actual amount of funding available. The result previously has been that the Government in the course of descoping work had to cut 1/2 of the work package to accomodate the deficit of 1/3 of the necessary funding for the entire work package. The Contracting Officer considers the following realistic potential Courses of Action (COAs): Course of Action 1: The Contracting Officer halts the process stating that funds must be committed at the level of the Government's estimate for the work in order to request a change proposal. The Contracting Officer conducts an exhaustive search for his / her authority to enforce such a standard, but is unable to find one. This exhaustive search includes the contract, agency internal controls and policies, FAR, agency FAR supplement(s), case law, Administration of Government Contracts, Formation of Government Contracts, wifcon archives, etc. The agency becomes displeased with the contracting office, does not commit funds, and communicates at the executive and senior executive level to force the request for change proposal to be issued by the contracting office. Course of Action 2: The Contracing Officer proceeds with the request for change proposal with no assurance that funds are available or budgeted to fund the requirement. History repeats itself. Discussion: I've got to say it seems like COA 1 is a losing battle. There's nothing explicit that I have been able to find aside from the Army FAR Supplement at 5101.602-2 that gives Contracting Officers the responsiblility and authority to force the agency to have funding in-hand or budgeted and that only seems to apply when forming a new contract. The Air Force in the past has used Special Advance Authority to identify within soliciations that fudning is not available and would assign a degree of probability that the requirement would become funded. But again, that was specific to forming a new contract. It just seems to me that an agency can't say with a straight face that it is proceeding in good faith with the Contractor to go through a 4 month change proposal process (which is paid for through costs on the contract) without (1) having funds committed in its accounting system, (2) having funds budgeted, or (3) at a minimum formally notifying the Contractor that funds are not currently available and may or may not become available. Any thoughts on this topic would be greatly appreciated.

Maybe this will help, it's a NAVSEA clause used to cap indirect rates for ship repair contracts... LIMITATIONS ON INDIRECT COST RATES (NAVSEA) (OCT 1990) (a) Pursuant to FAR 42.707, an indirect cost rate ceiling is incorporated into the contract. "Indirect cost" is defined as set forth at FAR 31.001 and 31.203. "Indirect cost rate" is defined as set forth at FAR 42.701. ( b ) Notwithstanding the clause of this contract entitled "ALLOWABLE COST AND PAYMENT" (FAR 52.216-7), the allowable indirect cost under this contract shall be obtained by applying limitations on indirect cost rates to bases agreed upon by the parties, as specified below. ( c ) Allowability of costs and acceptability of cost allocation methods shall be determined in accordance with FAR Subpart 31.2 in effect on the date of this contract, as limited by the indirect cost rates established by this requirement. (d) For the first three Contractor fiscal years, the indirect cost rates contained in the Contractor's accepted contract proposal shall be incorporated into the contract schedule as limitations on indirect cost rates for each Contractor fiscal year of contract performance. The bases to which the indirect cost rates apply shall be those contained in the Contractor's accepted contract proposal and hereby, incorporated into the contract schedule, in accordance with the Contractor's accounting system upon which its proposal was based. (e) After the first three Contractor fiscal years, the Contracting Officer and Contractor shall negotiate the limitations on indirect cost rates for subsequent Contractor fiscal years (unless the parties agree to a different period) and execute a written indirect cost rate limitation agreement setting forth the results. The agreement shall specify (1) the agreed-upon indirect cost rates, (2) the bases to which the rates apply, (3) the fiscal year (unless the parties agree to a different period) for which the rate applies, and (4) the specific items treated as direct costs or any change in the items previously agreed to be direct costs. The agreement is incorporated into this contract upon execution. (f) Pending establishment of indirect cost rates for any subsequent Contractor fiscal year (or other period agreed to by the parties), the Contractor shall be reimbursed either at the rates fixed for the previous fiscal year or at billing rates acceptable to the Contracting Officer, subject to appropriate adjustment when the final indirect cost rates for that period are established. (g) The Government will not be obligated to pay any additional amount should any final indirect cost rates for any Contractor fiscal year (or for any different period agreed to by the parties) after the first three fiscal years) of contract performance exceed the indirect rates incorporated into the contract schedule. In the event any of the Contractor's final indirect cost rates are less than the indirect cost rates incorporated into the contract schedule, the incorporated rates shall be reduced to conform with the lower rates. (h) The limitations on indirect cost rate shall not change any monetary ceiling, contract obligation, or specific cost allowance or disallowance provided for in this contract. If facilities capital cost of money is proposed as an allowable cost, the rates proposed shall be subject to the limitations imposed by this requirement. (i) The limitations on the indirect cost rate shall apply to all work performed under the contract, and to all change orders and supplemental agreements, including changes due to growth, supplemental, emergent and new work. (j) Notwithstanding any of the terms of this requirement, should the Contractor initiate a change to its accounting systems which would alter the composition of any overhead base or pool effected by this requirement, the Contracting Officer and Contractor shall negotiate to determine the rate ceilings to be applied to the new overhead pools, provided that no agreement shall be made which would increase the costs paid by the United States under this contract. (k) The limitation on indirect cost rates specified in the Contractor's cost proposal shall be the rates used to compute the costs in the Contractor's cost proposal upon which the award is based. (End of Clause)

So, maybe this is just a silly question, but why not just let the delivery order / task order competition take care of the proposed price for the end product; why create a fixed price for raw materials?

I know the Air Force used Education Within Industry (EWI) for company grade officers who at least appear interested in making a career of the Air Force. From what I understand you gain a service commitment of 2-3 years, and the goal is to provide a different perspective and to do some career broadening. I believe that there was a restriction that the company could not hire you, beyond the obvious ethics restrictions. It seems like the company gets the benefit of having a well-trained motivated resource to give some project responsibilities to, and the Air Force really just loses a body for that span of time. To me, if you were a Contracting Officer in a dedicated field, let’s say construction, IT, ship repair / construction, etc. it could be beneficial to see how the other side operates and maybe get some experience with the management gimmick of the day (e.g. LEAN, TQM). But it seems like a solution without a well-defined problem. A symptom resulting from participation in such a program could easily be that the KO becomes less effective and frustrated when he/she comes back to the Government because you have to come back into the bureaucratic fold after being out in the wild. To me it just kind of seems silly, beyond circuitous, and a boondoggle; I don’t see how it is a good use of resources to support what the Government should be doing. It would be better to be an active participant in a number of professional organizations.

From what I have observed over the past few years a lot of the more talented contracting officers that I have worked with have looked toward program management as a better use of their many and varied skills. I my self have applied for some program management positions without success. I would say that in order to be the program manager you would really need to follow the track of first being a project manager and live in the trenches for a couple of years. There are niches of great places to work throughout the Government as a contract specialist though, and I have been very fortunate to find these positions about 50% of the time. I'm a rather basic guy, but to me it comes down to being able to do meaningful work that ties directly to what the Government should be doing according to the preamble U.S. Constitution: "establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare". To me, in my career of public service, if I am doing something profound that points directly to one of these four ideas, then I am doing meaningful work. After that, if in doing your work you can say that both you have done what you can to provide others with the tools that they need to do their job, and if you are being provided the tools and resources that you need to do your job, then you're already better off than half of your conterparts at other agencies. At that point, do your best to be an expert at the basics, find a way to be a leader of the Acquisition Team - either formally or informally, then the rest will take care of itself. If you're good at what you're doing you'll be rewarded wtih advancement, if not, then you're a good American contributing to society. So yeah, I'd do it all again, and I'd shape the minds of others to make their work place a better place as I can and would expect others to do the same.

So if the purpose for providing a minimum guarantee is to make the IDIQ contract binding, what is the purpose of establishing a minimum guarantee for option periods? I have never heard a satisfactory answer to this... it seems like it just makes management of the contract more difficult for the program office.

In fairness, I did not state until later that the contract was an A-E contract. I actually thought about the question more in terms of how you can make the determination at FAR 17.207(f) with for any IDIQ, notwithstanding the clause that I have put forward. I guess my question is this: With an IDIQ where the scope is typically defined in terms of the Statement of Work, period of performance (base period plus any option periods), minimum guaranteed ordering amount, and maximum ordering amount, and ordering units with fixed rates, how do any of the listed items which are provided as exempli gratia apply to the exercise of an option period under an IDIQ? In any case, you are exercising the option period according to the terms and conditions of the contract and nothing about the action is undefinitized - the rates are determined using the clause language. Is the clause made better by prescribing an exact formula to be followed?