Jump to content

amthomf

Members
  • Posts

    60
  • Joined

  • Last visited

Posts posted by amthomf

  1. The following excerpt from the FMR supports the position that one could not award an FY 14 requirement in FY 13 when using two year money.

    DoD Financial Management Regulation 7000.14-R (FMR),

    Volume 3: Budget Execution – Availability and Use of Budgetary Resources

    Chapter 8 – Standards for Recording and Reviewing Commitments and Obligations (Sep 2009)

    0803 Obligations

    080303. When recording obligations under this section, utilize the principles specified below:

    B. Performance Under Contracts or Orders. Contracts entered into or orders placed for goods, supplies, or services shall be executed only with bona fide intent that the contractor (or other performing activity) shall commence work and perform the contract without unnecessary delay.

  2. Moreover, as was pointed out by someone else, above, under a set-aside you must ignore the proposal submitted by the large bidder

    I am confused by the above statement since the referenced decision also stated the following:

    In making a determination of price reasonableness in this context, the contracting officer may, among other things, perform a comparison of proposed prices received in response to the solicitation, including prices submitted by an otherwise ineligible large business.

    I would think instead of "must" ignore it would be "can" ignore but perhaps I'm missing something.

  3. A little off topic but I think the concept is related. The following is from a GAO report on serverable services, B-317636, dated April 21, 2009.

    Severable services are considered a bona fide need of the appropriation current at the time rendered. Consequently, an agency using a multiple year appropriation would not violate the bona fide needs rule if it enters into a severable services contract for more than 1 year as long as the period of contract performance does not exceed the period of availability of the multiple year appropriation.

  4. Since this topic has been open for several days I thought I would chime in to reinvigorate the discussion.

    GAO-04-261SP Appropriations Law—Vol. I Page 5-11 states, "The bona fide needs rule is one of the fundamental principles of appropriations law: A fiscal year appropriation may be obligated only to meet a legitimate, or bona fide, need arising in, or in some cases arising prior to but continuing to exist in, the fiscal year for which the appropriation was made."

    This definition (to me) implies that one cannot obligate funds to fulfill an FY14 requirement because the need is not arising in or prior to the fiscal year for which the appropriation was made.

    However, GAO-04-261SP Appropriations Law—Vol. I Page 5-14 states, “The bona fide needs rule applies to multiple year as well as fiscal year appropriations. In other words, an agency may use a multiple year appropriation for needs arising at any time during the period of availability.”

    This statement (to me) implies that one could obligate funds to fulfill an FY14 requirement at anytime during the appropriations availability. Hence one can buy a second year requirement in its first year of availability and not violate the bona fide needs rule.

    Please help shed some light on this topic.

  5. Good morning,

    I am doing a research project on 52.232-20, Limitation of Cost, 52.232-22, Limitation of Funds and 252.232-7007, Limitation of Government’s Obligation. I am trying to generate a good overarching definition explaining the purpose of these clauses. Not how to apply them, that is clear when reading the regulations, but why they were created in the first place. I am thinking more in line with the “Purpose” portion of the regulations in the FAR and its supplements.

    Possible a definition to answer the following.

    Buyer: Why were the LOC, LOF, and LOGO clauses created?

    Example answer: To provide the Government the flexibility to provide only those funds required for work in a given fiscal year while ensuring the Government’s legal liability to meet its contractual funding obligations aligns with Congressional Appropriations, statues and regulations (I’m thinking ADA) by ensuring funding limitations are clearly defined and enforceable through the inclusion of clauses in the contract.

    My example answer may demonstrate my ignorance of the purpose of the clauses but I think it clarifies the intent of the definition I seek to generate. I may be trying to fit the purpose of these clauses into a neat definition which may not be practical.

    Thank you in advance for your thoughts and efforts.

  6. My information source is a NASA EVMs guidebook. Here_2_help, point taken, if the IOT is based on price then the generic and incomplete definition I provided would not apply. I should not have been so quick to provide a generic definition.

    So now I have a question – How does the following excerpt from a DCAA Memorandum, dated 2 Mar 2010, affect the treatment of G&A and fee/profit for IOTs?

    Table 15-2 at FAR 15.408 provides instructions for submitting cost/price proposals when cost or pricing data are required. Section II, Paragraph A, Materials and services, of Table 15-2 requires all work performed by the prime contractor, including any inter-organizational work, be included in the prime contractor’s own cost or pricing data and submitted to the Government. As a result, the support for inter-organizational transfers should be considered the same as the prime contractor’s own cost or pricing data.

  7. Inter Divisional Work Authorization (IDWA). The document or procedure for “subcontracting” work between divisions of a company. Cost for authorized work by the performing division is transferred to the prime contracting division without G&A overhead and fee to preclude double charging on the prime contract. It is sometimes referred to as an Inter Group Work Authorization (IGWA) or as Inter Organizational Transfer (IOT) and, apparently, it can also be referred to as an IWO.

  8. Thanks, Cajuncharlie -- my answer focused on "the contractor can exceed the ceiling at their own risk" but you more correctly focused on "My customer is requesting an increase of ceiling of work".

    From a previous post of Mr. Edwards. Just so individuals aren't mislead when they read, "the contractor can exceed the ceiling at their own risk".

    Mr. Edwards states:

    You cannot say that the Government has no liability to pay just because the contract contains a limitation of cost or funds clause, since some boards of contract appeals and the Court of Federal Claims have found that the issuance of a change order might constitute a waiver of the limitation of cost or limitation of funds clauses, depending on the facts. See Nash and Feldman, Government Contract Changes 3d ? 8.14 (2011). Your "no liability to pay" statement goes too far. While the LOC and LOF clauses usually protect the government, they do not always protect the government.

  9. In my organization we use the following definitions to describe the different fund cycles:

    Active: Available for obligation and to expend those obligations

    Expired: Available to expend and adjust obligations already incurred

    Canceled: Accounts canceled. Obligations or adjustments that would otherwise be chargeable to these years must be charged to active funds

    Well based on the original post I believe this individual would be trying to fund and overrun by deobligating/obligating from one CLIN to another. So I guess the question is - does the funding of an overrun constitute a new obligation?

  10. XYZ program with an approved Sole Source J&A creates an option CLIN with a set price (cost + fee). Funds are then committed up to that amount.

    Based on historical data XYZ program has an idea of what type of effort will be performed under the option (general scope) but does not know any specifics (Ex. Modify a landing gear for a new environment not yet identified). Once the URGENT requirement (the environment the landing gear will need to perform in is established) is identified the organization receives a SOW, BOEs and supporting cost data from the contractor. The parties then expeditiously negotiate the cost of the effort and apply the pre-established fee percentage (detailed in the original option CLIN) to the negotiated cost.

    The negotiated price (cost + fee) is less than the original option price and the need to field the urgent requirement is met. Is this a successful solution to meet an urgent need or has XYZ program bent the rules too FAR (pun intended)?

    Other concerns:

    As detailed in FAR 17.202(B)(2), would an indefinite quantity or requirements contract be more appropriate?

    As required by FAR 17.207©(4), can the option be properly synopsized since the scope of the work is only vaguely defined?

    Hopefully I will not have to come back and add a ton of additional information b/c I know Vern hates that. My goal is to generate a good discussion and not necessarily answer the question directly.

    Thanks in advance.

  11. In order to keep, what I believe to be an interesting topic going, I have provided further information.

    Background: A cart was shipped with inspection, acceptance and FOB all at source, while being shipped it is discovered the stress from the fasteners being ratchet down has caused the tires to bend and even break off. The shipping company was a commercial/standard trucking company and no special shipping requirements or instructions were provided. The item is a modified Commercially available Off-The-Shelf (COTS), but shipped differently in the commercial market place. The item is also advertized by the contractor as being extremely durable and the SOW states that all necessary materials, containers, transportation, and personnel shall be provided by the contractor when shipping. This is a Firm-Fixed-Price contract and no shipping, certificate of conformance, or any other clauses related to shipping or handling are on the contract. Currently we are denying all DD250 request.

    Based on the above information I am trying to figure out what questions I should ask in order to understand who should pay for the fix. Once I have the full story I plan to get legal involved, but for now I am just trying to gather as much information as possible. Here are a few questions I generated to start the conversation. Please feel free to add to the list and/or provide advice.

    Questions

    1. Why aren?t we shipping the item in the same manner as in the commercial market place?

    2. Is the method we use to ship the item reasonable?

    3. Since the SOW states that the contract must provide all materials necessary to ship the item, is this considered improper packaging when shipping (assumption = packaging differently would prevent this issue)?

  12. Is anyone familiar with the following case and know where I can access it? The contract I am working on may have a potential latent defect and I am trying to do some initial research before getting legal involved. I have found several other cases but this one (as described on DAU?s ask a professor) seems to be the most similar to my situation. Any other information concerning latent defects is also appreciated.

    General Electric Co., IBCA 442-6-64, 65-2 BCA p 4974 (1965) where a metal fatigue failure was held to be a latent defect.

  13. I assume that one of the Limitation of Cost clauses (52.232-20 or 52.232-22) is in the CPFF contract, which require the contractor to provide advance notice of an expected "overrun".

    So, the Government has no liability to pay and the Contractor isn't entitled to any payment for an overrun of the cost limitation, right? Then there would no basis for a "claim" for payment due. Thus, this is merely a "request" for the Government to consider adding funding and allowing payment, correct? Are you asking if there is some regulatory or statutory limit on when it may request to be reimbursed for something that occurred years ago? Or stated another way, is there a time limitation on when the government may entertain a request for payment on something that occurred years ago?

    Yes the Limitation of Cost clause 52.232-20 is in the contract. However, for the entire effort (all agreed upon cost including options, changes/mods, etc.) the Contractor is below the agreed/negotiated cost (?under running?), but for certain individual CLINs they are ?overrunning?. Therefore, I am unsure if this clause applies since the ?overruns? are on individual CLINs and not on the overall effort.

    Until I have a clear understanding if the Limitation of Cost clause (52.232-20) applies to individual CLINs, my question concerning if there is a time limitation on when the government may entertain a request for payment on something that occurred years ago, may be inconsequential.

  14. I don't understand any of that. Moreover, it is not clear what you mean by "overrun."

    I assume that the contractor performed and got paid and is now asking for more money. If so, then I can think of two possibilities. If the request is for additional compensation based on the changes you mentioned, then under existing statute (the Contract Disputes Act of 1978) the contractor has six years from the date that the basis for any claim "accrued." See FAR Subpart 33.2. Otherwise, if there is any limitation on the "timeframe" it might be in your agency regulations.

    Some other posters here are going to point out that you did not state the contract type. They'd be right to ask. However, I'm not sure that it makes a difference.

    I'll try this again and see if I can be a little clearer. This effort began in 2005, it is still ongoing. It has been modified 10 times since its inception under the authority of Far 52.243-2. The effort has been funded with 3010 and 3600 money (i.e. some CLINs funded with 3010 & some with 3600). Several of the CLINs on this effort delivered (DD 250?d) in 2007 and now the Contractor is requesting to be reimbursed on the portion of the effort they ?overran? on. As stated in the first sentence of my original post, the contract type is Cost-Plus-Fixed-Fee (CPFF).

    For the sake of this post, overrun is the difference between the latest revised (agreed upon) baseline cost estimate (original estimate if no revisions have been applied) for the work to be accomplished and the actual cost of the completed work.

    Thank you for your patience Vern.

  15. Background Information:

    This sole source CPFF effort was originally placed on contract in 2005 and was funded with FY05 3010 BP10 and 3600. The Contractor delivered the items on the CLINs funded with FY05 3010 BP10 in 2007. During this 6 year time span since the award of this effort the contract has been modified several times and the overall effort is schedule to complete in 2012.

    Recently I received an overrun funding request for this effort from the Contractor. Within this overrun request the Contractor group several of the CLINs on contract together (3010 and 3600) making the amount of additional funding needed indistinguishable between CLINs (the contractor will have to revise this). The overrun funding request includes several 3010 funded CLINs that delivered in 2007.

    Question:

    Are there any regulations that discuss the timeframe the Contractor is allowed between delivery on a CLIN/effort and an overrun request for that effort?

    I believe my first step is to require the Contractor to better define/breakout their overrun request by CLIN, not groups of CLINs. Once I have this information I can begin to determine whether the costs are allowable, allocable, and reasonable. Any insight is much appreciated.

  16. FAR 52.215-22, in my opinion, should apply to this effort; however, given the sole source relationship we have with the contractor this below SAT effort won?t make it on the list of priorities concerning contractor and program issues. And perhaps rightfully so, since one could make a reasonable argument that the prime contractor is adding value (the speed by which the effort is administered vs if the Government were to go directly to the subcontractor (yes this point can be argued) and the knowledgeable oversight the prime will provide). Furthermore, the cost benefit analysis on this CPFF effort would more than likely show that it is more costly to the Government to challenge the prime and delay the overall objective(1) than to just agree to pay profit on this minor effort. The one aspect I can control is the weighted guidelines developed for this effort.

    1. Overall ?theoretical? objective ? create a solution to global warming before it gets uncontrolable.

  17. In response, "portion" is referring to the subcontractor's portion of the overall effort, which in this case is approximately 85%. This effort is below the SAT, so based on FAR 15.408(n)(ii) it is at the CO's discretion to include the Limitation on Pass-Through Charges?Identification of Subcontract Effort clause 52.215-22. The contract type is CPFF and the risk to the prime is minimal. Thank you for your responses and I apologize for the vague original post. It was posted in haste and I will make sure I refrain from doing that again.

×
×
  • Create New...