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Everything posted by Locke

  1. I believe that the short answer to your question is no. Are you considering subcontracting cost and subcontractor quote to be the same? I do not believe so. My understanding is that the subcontracting cost will include the prime's profit; whereas, the subcontractor quote is just that. Depending on the terms of the contract, FAR Part 15.404-3 might apply. If so, then the contracting officer is responsible for the determination of a fair and reasonable price for the prime contract, including subcontracting costs (15.404-3(a)). Even when 15.404-3 does not apply, the CO might be trying to use data other than certified cost or pricing data provided by the offeror (prime) as the means to determine price fair and reasonableness. See 15.404-1(b)(2)(vii). There is nothing that prevents the CO from removing "certified" from the instructions and utilizing FAR Table 15-2. Excerpt from Table 15-2- II. -- Cost Elements A. Materials and services. Provide a consolidated priced summary of individual material quantities included in the various tasks, orders, or contract line items being proposed and the basis for pricing (vendor quotes, invoice prices, etc.). Include raw materials, parts, components, assemblies, and services to be produced or performed by others. For all items proposed, identify the item and show the source, quantity, and price. Conduct price analyses of all subcontractor proposals. Conduct cost analyses for all subcontracts when certified cost or pricing data are submitted by the subcontractor. Include these analyses as part of your own certified cost or pricing data submissions for subcontracts expected to exceed the appropriate threshold in FAR 15.403-4. Submit the subcontractor certified cost or pricing data and data other than certified cost or pricing data as part of your own certified cost or pricing data as required in paragraph IIA(2) of this table. These requirements also apply to all subcontractors if required to submit certified cost or pricing data. (1) Adequate Price Competition. Provide data showing the degree of competition and the basis for establishing the source and reasonableness of price for those acquisitions (such as subcontracts, purchase orders, material order, etc.) exceeding, or expected to exceed, the appropriate threshold set forth at FAR 15.403-4 priced on the basis of adequate price competition. For interorganizational transfers priced at other than the cost of comparable competitive commercial work of the division, subsidiary, or affiliate of the contractor, explain the pricing method (see FAR 31.205-26(e)). (2) All Other. Obtain certified cost or pricing data from prospective sources for those acquisitions (such as subcontracts, purchase orders, material order, etc.) exceeding the threshold set forth in FAR 15.403-4 and not otherwise exempt, in accordance with FAR 15.403-1(b) (i.e., adequate price competition, commercial items, prices set by law or regulation or waiver). Also provide data showing the basis for establishing source and reasonableness of price. In addition, provide a summary of your cost analysis and a copy of certified cost or pricing data submitted by the prospective source in support of each subcontract, or purchase order that is the lower of either $13.5 million or more, or both more than the pertinent cost or pricing data threshold and more than 10 percent of the prime contractor’s proposed price. Also submit any information reasonably required to explain your estimating process (including the judgmental factors applied and the mathematical or other methods used in the estimate, including those used in projecting from known data, and the nature and amount of any contingencies included in the price). The Contracting Officer may require you to submit cost or pricing data in support of proposals in lower amounts. Subcontractor certified cost or pricing data must be accurate, complete and current as of the date of final price agreement, or an earlier date agreed upon by the parties, given on the prime contractor’s Certificate of Current Cost or Pricing Data. The prime contractor is responsible for updating a prospective subcontractor’s data. For standard commercial items fabricated by the offeror that are generally stocked in inventory, provide a separate cost breakdown, if priced based on cost. For interorganizational transfers priced at cost, provide a separate breakdown of cost elements. Analyze the certified cost or pricing data and submit the results of your analysis of the prospective source’s proposal. When submission of a prospective source’s certified cost or pricing data is required as described in this paragraph, it must be included as part of your own cost or pricing data. You must also submit any data other than certified cost or pricing data obtained from a subcontractor, either actually or by specific identification, along with the results of any analysis performed on that data. Essentially, I believe that there are times when the prime is responsible for providing their subcontracting cost. For all other times, it might be in the primes best interest to provide their subcontractor's quote. Especially if the outcome of the modification, assuming this is post award, will increase the cost of the contract. If so, the burden is on the prime to demonstrate that their price is fair and reasonable. Otherwise, the CO might not have enough information to determine that the price is fair and reasonable. Hope this helps.
  2. Vern, It appears that the CRS Report for Congress would disagree with your statement “Not so. The legal standards for responsibility are directly linked to an offeror’s bid or proposal. See FAR 9.104-1.” Seeing in their January 4, 2013 report they state, “Responsibility determinations are sometimes confused with responsiveness determinations; evaluation of past performance in negotiated procurements; and qualification requirements. However, all these focus upon contractor’s bids, not the contractors themselves.” Furthermore, the report goes on to say “While responsibility is determined when the contract is awarded, responsiveness is determined when the bid is opened.” Per FAR Part 9.105-2(a)(2), If the contracting officer determines that a responsive small business lacks certain elements of responsibility, the contracting officer shall comply with the procedures in Subpart 19.6. When a Certificate of Competency is issued for a small business concern (see Subpart 19.6), the contracting officer shall accept the Small Business Administration’s decision to issue a Certificate of Competency and award the contract to the concern. Based on the responses from this post, if the CO determines the contractor to be non-responsible because their proposed price was either too high (price analysis) or too low (cost realism), the CO would stop the evaluation process and contact the Small Business Administration (SBA)? Under a competitive firm-fixed price contract, if the government is concerned that the proposed price is too low (based on the IGE), so what. First, price analysis is used to determine if the price is too high, not to low. Second, there is nothing illegal about a contractor willing to complete the project at a cost the government believes is too low. Under 9.104-1, before award, the CO must determine that the prospective contractor meets the conditions (a) – (g). (a) Have adequate financial resources to perform the contract, or the ability to obtain them. This asks if the contractor has the financial means to complete the project even if it results in a loss to the contractor. Not is their proposal responsible.
  3. The keys words are " ability to execute" and " comply with laws and regulations." Neither of these have to do with if the proposed price is too high or low. Under a firm-fixed priced contract, if a contractor proposes to complete the project for a price the government believes is too low, so what. As long as the contractor has the financial means to complete the project even if it results in a loss. While "buying in" is always a concern, if the contract specifications are clear and precise it's not an issue. https://www.fas.org/sgp/crs/misc/R40633.pdf
  4. All, Please correct me if I'm wrong, but contractor responsibility determination is not concerned with the contractors bid/proposal. Instead, the focus is on if the contractor meets certain legal standards. I believe this post is referring to the reasonableness of the offered price. One is concerned with the company itself (business standards, ethics, financial capability, etc..) and one is used to determine if the contractor's proposal is fair and reasonable. Two different "things."
  5. CSalt, So what is the effect of letting the POP expire on a contract when there is no excusable delay? More work for the government is my answer. Unfortunately, I believe there are a lot of individuals that share similar views with your office. In particular, statements such as “we can’t let the POP expire” and “it effectively waives all of [the governments] rights in the contract” seem to be the most common arguments for why we can’t allow the POP to “expire.” The first point of contention is understanding that contracts do not expire. I know your question refers to the POP expiring, and not the contract. However, if the POP expired, it would follow that the contract would expire. As previously posted by Mr. Vern Edwards on 6 November 2012, Contracts don't have expiration dates. Contracts have (1) a delivery date, (2) a completion date, or (3) a period of performance. (In addition, an IDIQ contract has an ordering period.) Contracts do not "expire" until all obligations of both parties have been fulfilled. If the contractor is not able to perform within the time specified in the contract, the contractor would be in default. Assuming of course that the delays were not excusable. Most, if not all, contracts will contain some form of a Default clause. For example, for supply and service contracts, FAR 52.249-8 & FAR 52.249-10 for construction contracts. If the POP “expires,” then the government has the right to terminate the contract. In such cases, the contractor will be liable to the government for any excess cost for those services being terminated. Or, IAW FAR 49.402-4, the CO can permit the contractor to continue performance under a revised delivery schedule. If this route is taken, the government must receive consideration for the extension. In both cases the POP has “expired” and the government has not lost its contractual rights. There is more involved than the few items I mentioned above. Steps must be taken before the government can terminate for default, not taking action once the POP has passed changes a few things, strict compliance may be a factor, substantially completed is a factor when considering LDs, etc….
  6. Depends on the agency. If you worked for Health and Human Services, then IAW HHSAR 301.603-1(d) The dollar amount of an individual transaction determines whether a Contracting Officer has the authority to sign it in accordance with the delegated authority specified on the SF 1402. For new or follow-on awards, the dollar amount of an individual transaction is the amount obligated at the time of contract or order award plus any potential option amounts or future funding amounts established by the transaction. However, under an existing contract or order, when an option is subsequently exercised or a contact or order is otherwise modified to add funding, the dollar amount of the modification (individual transaction) determines whether a Contracting Officer has the necessary delegated authority to sign it.
  7. Joel, Out-of-scope modification: A contract is awarded for the production of 10 widgets. After award, the CO changes the number of widgets from 10 to 100. This would be out of scope. In-scope: A contract to install a fence is awarded. The contract specifies that the post are to be buried 4 feet below the ground. During the installation phase, the contractor discovers sprinkler lines two feet below the ground where one of post needs to go. For whatever reason, neither the government or the contractor had reason to know that sprinkler lines were buried in the location of the fence project. The determination is made to reroute a portion of the sprinkler line to make way for the post. The cost is negotiated and a modification to include the new work to the fence project is issued. Because the reroute work does not change the "intent" (not sure if intent is the best word) of the original contract, it would not be considered out-of-scope. If the line did not interfere with the fence project and it was added because the user had extra money to spend, then it would be out-of-scope.
  8. Vern, Would the Statement of Work be considered a specification? We include it in Section C - Descriptions and Specifications in our contracts. In Melrose Waterproofing, CO., ASBCA 9058, 1964 BCA 4119, the board held that the government could change the special conditions of the contract under the Changes clause becasue such provisions were listed as part of the contract specifications......It therefore appears that the government may be able to greatly broaden the coverage of the Changes clause by arbitrarily calling all contract documents "specifications." (taken from page 391 of Adminstration of Government Contracts. If the SOW cleary states that the period of performance is X amount of days, can the CO then change the PoP by revising the SOW under the Changes clause?
  9. Retreadfed, Yes. Unfortuately, I believe that their reasoning is based on a flawed foundation. For example, once I received my warrant there was talk on the limit of my warrant. Is it the total amount of the contract or the action taken? It seems clear as day to me that my limit is based on the action and not the total contract amount. If I've been given a mod to issue and the action is lower than my warrant but the contract is above it seems obvious that a previous CO has already committed the government and my action is a separate binding agreement. Depending on which person I ask, I'll get a different answer. There reasoning is based on stuff like the word "authority" on the SF 30. They equate authority as being something a clause and only a clause gives us. I was told that a Release of Claims is the same as the Contractor's Statement of Release. Is it? My understanding is one is required before final payment and the other is associated with equitable adjustments. Why do we issue an NTP? Response is to ensure that the contractor has submitted all the material submittals in the design phase before commencing. OK, that's what we use the NTP for but why is there a need for an NTP? My understanding of the the NTP letter is to ensure that the government is protected (bonds) before the contractor begins work. Their reasoning is that's how they were taught (told) to do it. They never took the time to understand the why of it. I know it sounds crazy but we deal with MACC contracts and task orders. You know what that means, they cannot protest. Which means that horrible procedures thrive because there isn't a "check and balance" like in other places. It's easy to think that the current system is correct when there hasn't been any issue that would prove otherwise. I am frustrated. But it's beacuse their reasoning has more holes than swiss cheese. Last thing. I disagree with Vern on one thing: But don't try to talk them out of one stupid thing by suggesting an alternative stupid thing. Why? If all my options are stupid, should you not try to find the least stupidest one of them? It's logic and reasoning like this that I truly don't understand.
  10. If you have a multi-year contract for three years for the initial performance and include two option years to round out the 5 year PoP, does the cancellation fee only apply for the program years 2 and 3? FAR Clause 52.217-2(d)states: (1) Cost-- (i) Incurred by the Contractor and/or subcontractor; (ii) Reasonably necessary for performance of the contract; and (iii) That would have been equitably amortized over the entire multi-year contract period but, because of the cancellation, are not so amortized; and (2) A reasonable profit or fee on the costs. * Does over the entire multi-year contract period include any options or just the program years?
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