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Jacques

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Everything posted by Jacques

  1. The point of my post wasn't to force an unwilling ratifying official to look elsewhere for help. If the ratifying official wants to deny ratification, that decision isn't really subject to review. For some folks, the fact it isn't subject to review is proof enough that the decision is entrusted to the discretion of the decision maker. Others might want to dig a little deeper.
  2. Sorry. When I say, "benefit of the bargain," I mean the price agreed to between the vendor and the individual lacking authority who attempted to enter into the contract. That number isn't always the same as "as much as he deserves" or "as much as they were worth." I'm really super curious about the significance of your discussion of deviations. Please help me connect the dots as to why it is relevant to this discussion. If the ratifying official and the vendor cannot reform the agreement to make it legal, then you would never get to whether or not a deviation is possible. (By the way, not to complicate matters, but I think a deviation from including the clause at FAR 252.222-7006 is "precluded by law," to quote FAR 1.402.)
  3. Assume for sake of argument the disagreement in this thread is one where reasonable minds differ, and that I'm not just being a mule. Assume a ratifying official thinks I might be right but isn't convinced. (It's my hypothetical, it doesn't have to be realistic.) How would a ratifying official go about coming to an authoritative resolution? I personally don't think it is within the contracting chain. As a practical matter, I think if the ratifying official decided to ratify based on my interpretation, that decision is not really reviewable within the contracting chain. (Assume some competitor of the vendor learned of the Government post-hoc rationalization for the sole source award and protested to the GAO. My reading of the decisions related to protests of sole source awards is that the GAO would consider the post-hoc justification, so the GAO likely wouldn't render some authoritative interpretation of FAR 6.302-3(c)(3) in the decision denying the protest (assuming the justification withstood scrutiny).) I think the better way to get a direct answer to the issue would involving getting a financial manager (FM) to push back on implementing the ratification, perhaps at the encouragement of the ratifying official. I think the FM could request an advance decision on whether the obligation of funds in connection with the ratification was proper. (I point this out not in invite "lawlessness" on the part of ratifying officials.)
  4. By "it," I assume you mean not being liberal in ratifying unauthorized commitments. I'm curious, @Jamaal Valentine, why you think, in the face of a valid post-hoc rationalization for a sole source award, the contractor should NOT receive the benefit of the bargain (assuming the only thing preventing the ratification is (presumably Vern's interpretation of) FAR 1.602-3(b)(3))? I know most of this conversation has focused on competition requirements, but what if the illegality at the time of the unauthorized commitment was, for a DoD contract, failing to include the "Restrictions on the Use of Mandatory Arbitration Agreements" clause at DFARS 252.222-7006 in the agreement between the contractor and the person without authority to bind the Government? I hope we can all agree that the ratifying official doesn't have authority to award the resulting contract without that clause (in the case of a DoD contracting activity). Should the contractor not get the benefit of his bargain, even if the contractor was continuously in compliance with the clause between the unauthorized commitment and the potential ratification, and the other requirements for a ratification were present, like a fair and reasonable price (FAR 1.602-3(c)(4))? I don't see how the interpretation of "proper" for which I've been advocating is unfair to the Government. I certainly can see the potential for a strict interpretation to be unfair to vendors. In my experience, the vendors that perform in the absence of a valid contract are not sophisticated. If they don't know enough to avoid working under an unauthorized commitment, are they going to educate themselves to know about FAR Subpart 50.1? Is the Government working these ratification packages quickly enough to not prejudice the contractor's potential remedies under FAR Subpart 50.1? See, e.g., the 6 month limit at FAR 50.102-3(d)(1). EDIT: I don't normally engage in policy discussions. The reasons I interpret FAR 1.602-3(c)(3) the way I do is because of the various decisions, memoranda, and commentary I've read, not for the policy reasons discussed in this post. I think the heart of @Jamaal Valentine's post is a policy argument, so I (perhaps foolishly) responded.
  5. McGraw-Hill Info. Sys. Co, B-210808, May 24, 1984, dealt with a ratification issue under the Federal Procurement Regulation, 41 CFR 1-1.405. That regulation contains the same "otherwise proper" language contained in the current FAR. The decision includes the following: The test is not whether the contract WAS properly made at the time of the unauthorized commitment, the question is whether it could have been properly made had proper procedures been followed.
  6. I appreciate that the conditional nature of the language at FAR 1.602-3(c)(3)--"would otherwise have been proper"--could lead to that interpretation, but I don't think it is the right one. Again, the FAR reads, "The authority in paragraph (b)(2) of this subsection [which is the authority of the head of the contracting activity (as delegated under (b)(3)) to ratify an unauthorized commitment] may be exercised only when...[t]he resulting contract would otherwise have been proper if made by an appropriate contracting officer." The unauthorized commitment is not a contract. I think the "resulting contract" is the one awarded in conjunction with the ratification. Nash & Cibinic, Formation of Government Contracts (4th Ed. 2011), at 102 notes, "They [courts and boards] have recommended, however, that ratification authority be liberally exercised in cases where an injustice would result if the government did not become bound. See Globe Indem. Co. v. United States, 102 Ct. Cl. 21 (1944), cert. denied, 324 U.S. 825 (1945)..."
  7. I guess I need to better understand what folks think the phrase "resulting contract" means under your second interpretation.
  8. I think you need to focus on the authority of the ratifying official, rather than on the unauthorized commitment. By way of example, make a change to the facts in In Sec'y of War, A-66806, Jan. 16, 1936, 15 Comp. Gen. 618. Instead of the agency claim the spark plugs were for "experimental purposes," assume the agency COULD come up with a valid post-hoc rationalization for the sole source award. Would the contract then have been illegal? It seems to me the answer would be the resulting contract was legal. In other words, if the Army could have come up with a valid after-the-fact explanation for the sole source award, the GAO would have accepted it and permitted the ratification. It seems to me if the Government can reform (what would have been) an illegal contract to make it legal, that contract may be ratified. Perhaps another example: Say the only illegality in an unauthorized commitment was that it omitted the "Restrictions on the Use of Mandatory Arbitration Agreements" clause at DFARS 252.222-7006 even though the clause was prescribed. It seems to me the parties can "reform" the unauthorized commitment in the process of awarding a proper contract ratifying the unauthorized commitment to include the mandatory clause, and that would be within the authority of the ratification approval authority. This is true despite the fact that, in the absence of the clause, one might reasonably describe the resulting contract as illegal.
  9. Vern, I suspect what the drafters of the Department of Energy language had in mind was that purely procedural requirements did not necessarily have to be followed at the time of the unauthorized commitment. Not that the 1936 decision is all that important to the discussion, but I attach it here since it is hard to find. Comptroller Gen. McCarl to the Sec'y of War , 1936 U.S. Comp. Gen. LEXIS 20.pdf EDIT: At the time of the memorandum in The Department of Energy’s Ratification of Informal Commitments and Use of Precontract Cost Authorizations, B-197057 O.M., Aug. 22, 1980, the Federal Procurement Regulation, 41 CFR 1-1.405 provided: (emphasis added). (This is the civilian agency predecessor to what we're discussing.) The Comptroller General noted in the memorandum, “Under the terms of the quoted regulation, an informal commitment may be ratified only if the commitment could have been properly made by the contracting officer in the first place. In other words, a contracting officer cannot ratify an agreement which does not include the clauses and conditions required by law or regulations, which would violate any substantive legal requirement, or which would be in excess of the contracting officer's authority. For example, a contracting officer may not ratify a sole-source commitment of a program official if a sole-source procurement would not have been proper in the first instance or would not be proper at the time of the ratification.” (emphasis added).
  10. I would think the first place to look when an unauthorized commitment can't be ratified would be FAR Part 50, but I don't have any personal experience with that. EDIT: I see FAR 1.602-3(d) now, but see National Parks Serv. Contract--Payments to Subcontractors, B-303906, Dec. 7, 2004.
  11. That Comptroller General decision from 1936 continues to be cited in McBride & Touhey, 1 Government Contracts: Law, Administration & Procedures § 4.60[4][b]. I think the idea is, if the substantive law can be complied with prior to ratification, then it is within the ratifying official's authority to ratify.
  12. For another competition-related (though obviously pre-CICA) example, Nash & Cibinic, Federal Procurement Law (1977), at 71 states, "Where a contracting agency purchased spark plugs on a sole source basis in violation of statutes requiring formal advertising, the agency could not subsequently legitimize the transaction by classifying spark plugs as an experimental item subject to negotiated procurement." 15 Comp. Gen. 618 (1936). Sorry that my earlier post is wrong.
  13. If you are a contracting officer for a prime, and your subcontractor wants to omit a clause from the subcontract because it believes what it is selling to you is a COTS item, but all the subcontractor has to support its conclusion that the item is in fact a COTS item is sales to state or local governments, and you're worried I may be right (and, God forbid, Vern Edwards may be wrong), recall that under the Disputes clause, you can always ask the Government contracting officer for an "interpretation of contract terms."
  14. It seems the Department of Energy did not share my view that "otherwise proper" was solely about the substance of the agreement itself. See 48 Fed. Reg. 43772 (Sept. 26, 1983) (proposed 48 CFR 901.603-71(b)) and 49 Fed. Reg. 11922 (Mar. 28, 1984) (final 48 CFR 901.603-71(b) provides in part, “As used herein, the phrase ‘otherwise proper’ means that a ratification of an unauthorized commitment can be made only if there occurred no violation of any substantive legal requirement; (e.g., there can be no ratification unless a sole source can be justified; a determination made that the contractor is not debarred or otherwise ineligible for award; the organizational conflicts of interests reviews and determinations, if required, are completed; and where all other substantive legal requirements have been met.”). However, even under this interpretation, the agency can, after an unauthorized commitment, take steps that would make an otherwise improper contract proper.
  15. So, FAR 1.602-3(c)(3) says, "The authority in paragraph (b)(2) of this subsection may be exercised only when...[t]he resulting contract would otherwise have been proper if made by an appropriate contracting officer." I think the use of the word, "resulting" here is meaningful. To me, the focus of what (c)(3) is asking ratifying officials to consider is NOT whether FAR procedures preceding the unauthorized commitment were followed, but whether the actual content of the agreement is proper. For what it's worth, the Army's 4th Operational Contracting Course Deskbook (at 2-21) identifies an improper contract as one involving an improper contract type or a contract prohibited by law.
  16. I didn't interpret you question as telling the OP anything. Your question is the right one. My post is merely that there may be an answer as to why it matters. I hope the OP gives us the context for his question. You write, "It seems you are telling the OP...to not consider the widget a commercial product?" I hope no one interprets my posts that way. Given the wide variety of circumstances under which something can be a "commercial product," and given the OP's conclusion earlier in the thread that it was a commercial product, I have no reason not to believe the OP. My point is narrow: If one is relying on the sales to state or local governments to qualify as sales in a "commercial marketplace" for purposes of the definition of a COTS item, I personally think that is misplaced. While I want to say that follows from the plain meaning of the expression, "commercial marketplace," I realize that may not be very satisfying reasoning to some. That's the reason I referenced the legislative history. I get that I may not be convincing very many folks here, and I'm not sure I would ever be able to do so. It's my opinion, but it is an opinion that makes sense to me in the various contexts (see the bulleted list in my earlier post). For instance, for the last bullet above, does the interpretation that sales to state and local governments qualify as being in the "commercial marketplace" make sense if it results in a Government PCO not being able to ask for other than certified cost or pricing data when the only sales have been to state or local governments? It might to some, but it doesn't to me.
  17. While a very good question, your's is not a rhetorical one. · FAR Subpart 4.19 does not apply to acquisitions solely for COTS items. FAR 4.1902. The “Basic Safeguarding of Covered Contractor Information Systems” clause at FAR 52.204-21 is not prescribed in contracts exclusively for COTS items. FAR 12.301(d)(5).Accord, paragraph (c) of the “Basic Safeguarding of Covered Contractor Information Systems” clause at FAR 52.204-21. Likewise, per paragraph (c)(1)(iv) of the “Subcontracts for Commercial Products and Commercial Services” clause at FAR 52.244-6, contractors are not required to flow down the clause if the subcontract is exclusively for COTS items. · The “Compliance with Safeguarding Covered Defense Information Controls” provision at DFARS 252.204-7008 is not prescribed for acquisitions consisting solely of COTS items. DFARS 204.7304(a). · The “Notice of NIST SP 800-171 DoD Assessment Requirements” provision at DFARS 252.204-7019 is not prescribed for acquisitions consisting solely of COTS items. DFARS 204.7304(d). Likewise, contractors are not required to flow down the “NIST SP 800-171 DoD Assessment Requirements” clause at DFARS 252.204-7020 on subcontracts exclusively for COTS items. See paragraph (g)(1) of the clause. · The “Contractor Compliance with the Cybersecurity Maturity Model Certification Level Requirement” clause at DFARS 252.204-7021 is not prescribed for acquisitions consisting solely of COTS items. DFARS 204.7503. Likewise, contractors are not required to flow down the “Cybersecurity Maturity Model Certification Requirements” clause at DFARS 252.204-7021 on subcontracts exclusively for COTS items. See paragraph (c)(1) of the clause. · The restriction on subcontracting with a debarred or suspended vendor does not apply with the subcontract is solely for COTS items. FAR 9.405-2(b). Accord, paragraphs (b)-(e) of the “Protecting the Government’s Interest When Subcontracting with Contractors Debarred, Suspended, or Proposed for Debarment” clause at FAR 52.209-6. · Consistent with Executive Order 13637, Strengthening Protections Against Trafficking in Persons in Federal Contracts (Sept. 25, 2012, 77 Fed. Reg. 60029), sec. 2(a)(3), the requirement at FAR 22.1703(c) for a certification and compliance plan does not apply for contracts solely for COTS items. FAR 22.1701(b)(1). Thus, the “Certification Regarding Trafficking in Persons Compliance Plan” provision at FAR 52.222-56 is not prescribed for acquisitions entirely for COTS items. FAR 22.1703(c); 22.1705(b)(2). Additionally, paragraph (b)(1) of the “Certification Regarding Trafficking in Persons Compliance Plan” provision at FAR 52.222-56 makes it clear the certification is not required if the acquisition is exclusively for COTS items. Likewise, the discussion of the compliance plan in paragraph (h) of the “Combating Trafficking in Persons” clause at FAR 52.222-50 does not apply to any portion of the contract that is for COTS items. · The “Employment Eligibility Verification” clause at FAR 52.222-54 is not prescribed if the acquisition is entirely for COTS items. FAR 22.1803(c)(1). The clause does not flow down to services in support of the purchase of a COTS item. See paragraph (e)(1)(i). Accord, FAR 22.1802(b)(4)(i). (“Interestingly,” it does not appear that Executive Order 13465, the impetus behind FAR Case 2007-013 (FAC 2005-29, 73 Fed. Reg. 67651 (Nov. 14, 2008)), required this exception.) · As one would expect from FAR 12.505, the “Recovered Material Certification” provision at FAR 52.223-4 and the “Estimate of Percentage of Recovered Material Content for EPA-designated Items” clause at FAR 52.223-9 are not prescribed. FAR 23.406(c) & (d). · As one would expect from FAR 12.505, the domestic content test has generally been waived for acquisition of COTS items. FAR 25.001(c)(1); 25.101(a)(2); 25.201(b)(2)(i). In other words, COTS construction material (not predominantly of iron or steel) manufactured in the United States automatically qualifies as “domestic construction material,” regardless of from where the components of the end item came. See definition of “domestic construction material in” FAR 25.003 at (1)(i)(B)(2). · See also the definition of “domestic end product” at DFARS 225.003 and the definition of “automotive item” at DFARS 225.7003-1. · Broadly speaking, the restrictions on the acquisition of specialty metals do not apply to COTS items, but there are exceptions. DFARS 225.7003-3(b)(2)(i). See also paragraph (c)(2)(i) of the “Restriction on Acquisition of Certain Articles Containing Specialty Metals” clause at DFARS 252.225-7009. · Broadly speaking, the restrictions on the acquisition of certain magnets, tantalum, and tungsten do not apply to COTS items, but there are exceptions. DFARS 225.7018-3(c)(1). See also paragraph (c)(1)(i) of the “Restriction on the Acquisition of Certain Magnets, Tantalum, and Tungsten” clause at DFARS 252.225-7052. · In determining price reasonableness when acquiring a major weapon system as a commercial product, when “prices paid for the same or similar commercial products under comparable terms and conditions by both Government and commercial customers” is not sufficient to determine reasonableness, DFARS 234.7002(d)(3) calls on the PCO to request from the contractor uncertified cost or pricing data. However, a contractor shall not be required to submit uncertified cost or pricing data with regard to COTS items. DFARS 234.7002(d)(4).
  18. Vern, I'm not self-aware enough to make the distinction you ask. The legislative history suggests as much to me. Other folks can do their own research to decide for themselves. I base my conclusion on the discussion of the legislative history in Federal Publication's Course Manual on The Federal Acquisition Streamlining Act, at IV-35ff. It references the Conference Report at 228 (HR Conf Rep 103-712), which in turn states: It seems to me, if sales to non-Federal governmental entities (state and local governments) were to be treated as part of the commercial marketplace, then there would be no need for this distinction. Had the Senate receded, then the "commercial marketplace" could conceivably include every "marketplace" except one in which the Federal Government is a buyer. Maybe I'm making a leap.
  19. A couple of the prerequisites for an item to qualify as a COTS item is that the item is a commercial product AND "sold in substantial quantities in the commercial marketplace." While 41 USC 104 comes out of FARA (Pub. L. 104-106, § 4203) rather than FASA, the legislative history for FASA (passed close in time to FARA) suggests that sales to state and local governments would NOT count as sales "in the commercial marketplace."
  20. By way of a research aid, consider the following: The test program for certain commercial items was originally implemented by FAC 90-45, Item VII (FAR Case 96-307), whose final rule appears at 62 Fed. Reg. 262 (Jan. 2, 1997). While the test program coverage originally appeared in FAR Subpart 13.6, it was later moved to Subpart 13.5. In its original form, FAR 13.602(a) provided in part, "[C]ontracting officers shall not conduct sole source acquisitions...unless the need to do so is justified...and approved at the levels specified in paragraphs (a)(1) and (a)(2) of this section." FAR 13.602(a)(2) stated, "For a proposed contract exceeding $500,000, the approval shall be by the competition advocate for the procuring activity, designated pursuant to 6.501; or an official described in 6.304(a)(3) or (a)(4). This authority is not delegable." Under FAR 6.304(a)(2)-(4) at the time, the competition advocate could approve actions between $500K and $10M; a designee could approve actions between $10M and $50M; and the senior procurement executive (without power of delegation) could approve actions over $50M. While I concede the above summary does not show that I'm right, I continue to believe the fact that a justification could have a value over the ceiling for an individual action under the (then) test program was to accommodate class justifications.
  21. While I haven't researched it, maybe for a class justification?
  22. I didn’t have much luck in my search. A recent version of the SASS template appears in a Robins user guide accessible at https://www.robins.af.mil/Portals/59/documents/ent_acq_branch/AFD-130222-120.pdf?ver=2016-07-12-100630-883
  23. Forgive me if I'm missing it, but I don't see a reference to a clause in your original post. (I see the disjunctive "or cause to be submitted" and "or cause submission of" language in FAR 15.404-3(c)(1) and (c)(2) respectively, but I couldn't find that language in a provision or clause.) Some additional factual context would be helpful as well, especially the applicability of TINA to your anticipated subcontract, and the procuring agency. For instance, for the DoD contracts, DFARS PGI 215.404-3(a) is relevant to your issue.
  24. You have a particular solicitation in mind. Is it set aside for small businesses under a NAICS code whose size standard you don't qualify as small? If so, don't submit a proposal. If the solicitation isn't set aside (or you qualify as small under the NAICS code listed in the solicitation), I don't understand why you can't rely on your annual reps & certs. I believe ANNUAL representations and certifications came about after the provision on small business certification, which is probably why paragraph (c)(1) reads in the binary, "on-off" way that it does. (When the provision was originally drafted, the provision only applied to a single solicitation.) The fact that (c)(1) doesn't really account for annual reps doesn't change the fact that the list of NAICS codes and the vendor's representation of size status relative to those NAICS codes is listed right there in the completed provision. The provision, when read as a whole, does not amount to a representation that the vendor universally qualifies as small. In other words, I think you CAN rely on the annual representations rather than filling out on a solicitation-by-solicitation basis. If I were you, I still would not submit bids, proposals or quotations for contracts that have been set aside for small business if you don't qualify as small under the NAICS code listed in the solicitation. (If you do, protest the set aside prior to deadline for receipt of proposals.)
  25. The topic of the thread states, "no longer a small business," but then the body of your post indicates for at least one of the NAICS listed in your submission, you are. The completed provision in your annual reps & certs at FAR 52.212-3, immediately before (c)(1) lists out all the NAICS codes you've included and whether you qualify as a small business under a given NAICS code's size standard. No one is going to be misled. As a mechanical matter, I encourage you to take a look at the "Entity Registration Checklist" linked at the following FSD.gov Q&A. Page 11 of the checklist notes:
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