Vern Edwards

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About Vern Edwards

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  1. FAR 37.204 applies only to the use of contractor personnel to analyze or evaluate proposals. See FAR 15.305(c).
  2. Matthew: Some history. In 2004 DPAP sought public comments about performance based payments. See 69 FR 54651, September 9, 2004. In 2005 it published its responses. 70 FR 32306, June 2, 2005. One comment complained about the use of an incurred cost ceiling by some offices. Here is DPAP's response: So in 2005, DPAP appears to have been opposed to an incurred cost ceiling. Then, in 2013, the DOD IG published a 51 page report entitled, Award and Administration of Performance Based Payments in DOD Contracts, Report No. DODIG-2013-063, April 8, 2013. The report was very critical of DOD administration of PBP and said that DOD was being unnecessarily generous by providing more "financing" than contractors needed in light of their incurred costs. See the report, pages 26 - 28. The following comment appeared on page 11: In 2014, DOD instituted the incurred cost ceiling, as I described in an earlier post, quoting the agency's explanations. In it's 2005 response to public comments, DOD had said: But in its 2014 rule, DOD reported these comments and responses: The rule amended DFARS 232.1003-70 to add the following: As for the addition of 10 U.S.C. 2307(b)(2), the following appears on page 214 of the Senate Armed Services Committee report accompanying P.L. 114-328: Ultimately, Section 831 of P.L. 114-328, which was inserted in the legislation as proposed by the Senate, amended 10 U.S.C. § 2307 as follows: In conclusion, based on the foregoing, I think that it is reasonable to conclude that it was the intent of Congress to eliminate or at least modify DOD's incurred cost ceiling policy. DPAP has opened DFARS Case 2017-D019, "Performance-Based Payments." A report is due on May 17. I don't know what they intend to do. I have spent all the time on this that I am going to spend. In any case, it appears that ShawnT has left the building.
  3. Emphasis added. krusem: See FAR 2.101: The service you want to buy is the very essence of advisory and assistance services, subdivision (1). Read FAR Subpart 37.2 and comply as appropriate. It's not a big deal.
  4. This is the Beginners Only category, and that might be mislead some beginners. The government always takes transportation costs into account in some manner. In f.o.b. destination acquisitions, transportation cost is typically included in evaluated prices. In f.o.b. origin acquisitions it's often a "price-related" or "cost to the Government" factor that can be considered even though it's not part of the bid or proposal price. See FAR 14.201-8 ("price-related factors") for sealed bidding and 15.304(c)(1) ("cost to the Government") for competitive negotiation. The concept of "price-related factors" and "cost to the Government" and the rules about their consideration are discussed in Formation of Government Contracts, 4th ed. For sealed bidding, "price-related factors" are discussed in pp. 591-597. See pp. 593-595 for specific discussion of transportation costs. For competitive negotiation, "cost to the Government" are discussed in pp. 692-695 under the heading "Other Costs to the Government." I disagree that consideration of transportation cost is "simple." Sometimes it is, but even a casual review of GAO protest decisions about evaluation of transportation cost will show that it can be very complicated.
  5. Well, Shawn, I'm glad that you made your last post. My first response to you was based on the final rule in the Federal Register of March 31, 2014, 79 FR 17931, which is when DOD added the incurred cost ceiling in DFARS 252.232-7012. Here, in part, are DOD's responses to comments about the rule: Here is another: And another: So what about 10 U.S.C. § 2307(b)(2), which states: It turns out that the above sentence was added to 10 USC 2307 by the National Defense Authorization Act of 2017, P.L. 114-328, December 23, 2016, about four months ago and more than two years after DOD promulgated the incurred cost limitation in March 2014. So is there a conflict between the DFARS and the statute? Yes. You were right about that, and I was wrong. I assumed that the sentence was in the statute when DOD promulgated the incurred cost rule and that the rule reflected DOD's interpretation of the statute. That was not the case. Stupid of me. I know better. Thank you for insisting. As you can see from the comments in the Federal Register, my explanation for DOD's rationale was correct--the idea behind the incurred cost limitation was to prevent performance-based payments from becoming advance payments, and DOD did not violate any statute when it imposed the rule. But my assumption about DOD's interpretation of the statute was unfounded. There was no apparent conflict in the statute for them to interpret when they issued the incurred cist rule. It appears that industry complained about the rule to Congress and Senator McCain (or someone else) agreed with them and added the sentence to the statute, ostensibly to override DOD's incurred cost limitation. I'm still researching the legislative history in an effort to understand what prompted the change and its specific intent. I have checked, and DOD has not issue a proposed rule to change the DFARS. We'll have to wait to see what they're going to do. It's going to take them a while to work through all the new rules required by P.L. 114-328. BTW, if any reader is a Westlaw user, Westlaw's text for 10 USCA 2307(b)(2) is incorrect. It says: "Preference for performance-based payments shall not be conditioned upon costs incurred in contract performance but on the achievement of performance outcomes listed in paragraph (1)." The phrase "Preference for" is not in the actual statute. I verified this through comparisons with the public law and other sources for the code, including the U.S. House of Representatives site. Thanks, Shawn, for pursuing the issue. It prompted me to do some interesting research. For what it's worth, I think DOD's policy is sound and consistent with the original intent behind PBP, but the law is the law. I think DOD can insist on compliance with the current clause if it's already in a contract, but I do not think that DOD can do so under contracts solicited and awarded after the effective date of the statute.
  6. here_2_help may be correct that DOD is ignoring the FAR, the statute, and Congress, but that is not why DFARS 252.232-7012 asks for total costs incurred to date. The clause prescribes a procedure for calculating a performance-based payment as follows, starting with this: Emphasis added. The clause then prescribes a calculation: 1a. State the negotiated value of all previously completed performance-based payment(s) event(s); 1b. State the negotiated value of the current performance-based payment(s) event(s); 1c. State the cumulative negotiated value of performance-based payment(s) events completed to date (1a) + (1b); 2. State the total costs incurred to date; 3. State the amount from (1c) or (2), whichever is less; 4. State the cumulative amount of payments previously requested; and 5. Determine the payment amount requested for the current performance-based payment(s) event(s) (3) - (4)d In other words, the performance-based payment is to be: a. the difference between the negotiated value of the performance based payment events completed to date and the amounts previously requested or b. the difference between the total costs incurred to date and the amounts previously requested, whichever is less. Why whichever is less? See DFARS 232.1001: Emphasis added. Thus, as quoted above, the clause says: "At no time shall cumulative performance-based payments exceed cumulative contract cost incurred under this contract." That limitation does not violate the statute or FAR. Performance based payments are contract financing, but are not advance payments, which are given before performance. That's why the statute does not allow the determination of a performance based payment based on incurred cost, because incurred cost is not necessarily commensurate with performance. If the contractor is overrunning, a performance based payment calculated on the basis of incurred cost might not, in fact, reflect performance. It would be in advance of performance. However, the statute does not say that you cannot limit a performance based payment to incurred cost when the contractor is underruning. Such a limitation is consistent with the concept of payment based on performance. That is why DFARS asks for incurred costs.
  7. You'll get arguments from some people about award terms and options. The issue is whether an award term should be something to which the contractor becomes entitled on the basis of the performance evaluation or whether it should be just the addition of another government extension option. There are reasonable arguments on both sides. If you look around you'll find examples of clauses for both approaches.
  8. Does your GS-1102 (or GS-1101) job challenge you intellectually? By intellectual challenge, I mean the need to think critically and creatively by framing issues, raising questions, researching and gathering facts separating pertinent facts from irrelevant facts, reasoning deductively from premises to conclusions, presenting arguments and persuading others, and speaking and writing clearly. How challenging is your work as a GS-1102?
  9. Thoughts? You haven't provided nearly enough information to prompt useful thoughts. However... A lot of people have thought and written about award term. See, for example: Award Term Contracting: A New Approach for Incentivizing Performance (NCMA 2001). "Award Term: The Newest Incentive," Contract Management (February 2001) "The Award Term Incentive—What It Is And How It Works," http://www.wifcon.com/anal/analaterm.htm "The Award Term Incentive--A Status Report," http://www.wifcon.com/anal/analaterm2.htm "Award Term Contracting: A New Idea," The Nash & Cibinic Report (August 1999) "Award Term Contract Extensions: New Procurements?" The Nash & Cibinic Report (September 2016) "Can Contractors Dispute Award-Fee and Award-Term Decisions: Who Ever Heard of Burnside-Ott," The Nash & Cibinic Report (March 2006) "NASA Launches Idea To Award High-Performing Contractors," https://www.law360.com/articles/870535/nasa-launches-idea-to-award-high-performing-contractors "Award Term Contracts: Good for Business?" Contract Management (September 2005) Air Force Guide: Award Term Incentive Options (January 2003) CI2 , Inc., ASBCA 56257, 11-2 BCA ¶ 34823 Coast Professional, Inc. et al. v. United States, 120 Fed. Cl. 727 (April 22, 2015) Coast Professional, Inc. et al. v. United States, 828 F.3d 1349 (Fed.Cir.July 2016) There are about 35 GAO decisions that briefly describe various award term incentive arrangements. That list scratches the surface. There is no general agreement on how best to set up an award term incentive, and I am not aware of any reliable evidence that they "work." Do some research. Google "award term incentive" and "award term contract." Look at agency FAR supplements. Some of them have (or did have) coverage. See a proposed NASA regulation on award term at 81 Fed. Reg. 89038 (December 9, 2016) It's not an incentive that should be used by the clueless.
  10. help: There are five or six definitions of subcontract and subcontractor in FAR and they do not all agree. Here are the ones from 52.203-13: As you can see, they're similar to the ones in FAR 44.101. I think the trend is to make all new definitions of subcontract and subcontractor the same as the ones in 44.101. Still, my point was not that this or that purchase would be a subcontract, but that the government generally does not make a distinction between vendors and "true" subcontractors, a point that is confirmed by the definitions in FAR 44.101 and 52.203-13. I'm not surprised that DCAA has not checked for compliance with EEO clauses. They barely have time to do anything. However, it would be wise for F&L to understand that if the EEO clause (or another clause) should have flowed down to a subcontractor (vendor, supplier), but was not, the cost of payments to that sub would be unallowable pursuant to FAR 31.201-2(a)(4). It is even possible that a request for reimbursement for such a payment could be a false claim. Thus, a contractor would be wise to document compliance, even if it did not expect DCAA to check on a routine basis. See DCAAM 6-310.3 d. "Negotiation. The auditor should... (4) ascertain if the type of subcontract issued meets the requirements of FAR Part 16 and includes all clauses required by the prime contract...." Emphasis added. You were out here and didn't call???!!! Well, I'm glad you saw Mt. Hood. We are finally seeing it on occasion from Portland now that spring has arrived. My wife and I are moving from L.O. to the mountainside across from Hood River, Oregon, and have a full view of Mt. Hood up close from our new living room window. (If it blows, we're done for.) The weather is drier east of the Cascade summits, and we'll see it a lot more often. Next time you're going to be here, call a few days in advance. I'll be about a 90 minute drive from the city. Vern
  11. help: As I think you well know, I understand the issues concerning the definitions of subcontract and subcontractor, and I didn't say that the definitions in FAR Part 44 apply to DCAA audits. I said: I stand by that. Can you show that the FAR distinguishes between vendors and "true" subcontractors. Does the EEO clause, for instance, make such a distinction? Can you show that DCAA generally recogniozes a difference between vendors and "true" subcontractors? I think that DCAA expects to see some contractual documentation of all but very minor purchases that will be charged directly to contracts. Am I wrong about that? You didn't respond to Michael 11's question. He didn't ask about documentation establishing or justifying price reasonableness. Would you care to respond now?
  12. Retread: Actually, the plaintiffs sued based on both common law tort claims under the Federal Tort Claims Act, 28 USC 1346, which is a suit against the U.S., and on constitutional tort claims (the "Bivens" claim), which is a suit against an individual. The plaintiffs sued both the U.S. and six NASA employees. The following is from the plaintiffs' brief: I presume that the reason they filed both is because the government has a bigger bank account than the individuals. As for constitutional torts--actions against individuals--see http://biotech.law.lsu.edu/map/ConstitutionalTorts-BivensActions.html: "Qualified immunity" is the "limited" immunity mentioned in the appellate decision. By the way, a jury trial in a Bivens action would be a killer: six big men against one 4' 11" 74 year old widow. Oh, boy. they might as well sell their houses and all their other stuff and pay up. What a bunch of dopes.
  13. Don: Just to confirm: I assume you mean that F&L could eliminate that firm after evaluating its offer and determining that it's not among the most highly rated. Am I correct? You do not mean that he could eliminate the firm simply because it was not invited to submit an offer. Right?