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Vern Edwards

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About Vern Edwards

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  1. Vern Edwards

    SCA

    It has everything to do with it in the scenarios that lotus gave us. You have described a different set of facts than lotus described. In both of lotus's scenarios there is no discussion/negotiation of conformance classifications before contract award. Conformance and referral to DoL begins after contract award and is thus governed by the clause. Those were the scenarios on which I based my analysis. It seems to me that those scenarios are the bases on which we should discuss this, but you have chosen a different course. The wording you used to describe what you would do confuses me a little, but I think I get the general idea. You appear to have described a sole source acquisition. The parties would negotiate an agreement about price adjustment prior to contract award and an agreement on price adjustment terms pertaining to the outcome of the conformance process. I presume that the parties would negotiate a special clause to implement their agreement. That might work, it's just not what lotus presented us with. If I were a reviewer I'd ask why you want to agree to such an adjustment when FAR and 52.222-41 do not provide for it. I suppose you'd say something about "fairness." If the acquisition were competitive, then what you propose might work if you described your procedure in the solicitation and did the same with all offerors in the competitive range. I'm sure that the offerors would welcome it. The risk is that you might get an outside-the-scope-of-the competition protest when you modified the winner's contract to adjust the price if the adjustment changed the winner's price standing and raised an issue about the technical/price tradeoff on which the decision were based.
  2. Vern Edwards

    SCA

    So you have a time-and-materials service contract with a number of service employees who must be paid at least the wage specified in a wage determination. Suppose that the contractor decides to conform certain of those employees to the classification "General Clerk 1." The wage rate/hourly rate for that classification is $16 per hour. The CO agrees to that classification and forwards SF 1444, Request for Authorization of Additional Classification and Rate, to Department of Labor (DOL) for review. DOL rejects the conformance and determines that a classification with a wage rate of $20 is applicable. The question is whether the contractor can get an upward adjustment of its hourly rates. FAR 52.222-41 specifies the conformance procedure. The CO's agreement to a conformance, as indicated by signature on SF 1444, is not a contract price agreement. It is just an classification agreement between the parties that is subject to DOL approval. The parties hope, but do not know, that DOL will approve. The Service Contract Act clauses, FAR 52.222-41 and, as mentioned by bremen, FAR 52.222-43, prescribe the conformance procedure and make no provision for a contract price adjustment in the event DOL rejects a conformance agreement and imposes a different classification with a higher wage rate. In the case of the scenario described in my first paragraph, suppose that the contractor asks for a price adjustment. Can the CO agree, as proposed by Carl: Presuming that the contractor read the contract, it knows what the conformance procedure is to be and that there is no provision for an adjustment in the clause that prescribes the procedure. A wage determination does not specify the contract price for an employee's work. No standard contract clause conditions the contract price upon DOL approval of the proposed conformance. The CO's signature on SF 1444 does not indicate that the contract price is conditioned upon DOL approval. Thus, contractually, the government is not obligated to agree to an adjustment. So, even assuming that the CO has authority to agree to such an adjustment, the CO would have to get consideration from the contractor in return. The CO couldn't just agree to an adjustment out of the goodness of his or her heart. He or she would have to get something in exchange. But I question the CO's authority to agree to such an adjustment. The CO would, in effect, be making policy, and I think it would be a FAR deviation, because FAR addresses conformance and makes no provision for an adjustment in the event of DOL disapproval. If I were a reviewer or an approving official, I would reject any agreement to an adjustment. I have not consulted the Service Contract Act literature or case law, and I don't know that I'm right on the basis of rules or past decisions. I'm just thinking out loud, so to speak.
  3. Vern Edwards

    SCA

    Here's lotus's 1st scenario: Note: 1. "No requests for SCA wage conformance are made." 2. "Questions about the proper wage arise. Eventually the decision is made by DoL and hence the contracting officer that $20.00 per hour is appropriate." I don't understand 2. It does not appear that the WD was wrong. It appears that the contractor's link between its workers and the appropriate wage rate was wrong. If that's true, then the contractor is "hosed." lotus's second scenario, seems to be what Carl was addressing. There is a wage conformance, but DOL disagrees with it. I still think the contractor is "hosed," even if the CO agreed with the contractor's conformance.
  4. Vern Edwards

    SCA

    I don't know. I don't necessarily think it would be a deviation. I'm just trying to consider every possible angle and anticipate any possible objection by staff upon review. FAR 52.222-41(c), Compensation, subparagraph (2) discusses the conformance procedure and makes no mention of an adjustment to the contract price if DOL rejects the conformance and requires a higher rate of pay. The only mention of price adjustment in the clause is in paragraph (c)(3), which says nothing about a price adjustment in such a case. FAR 1.102 does not say you can do anything as long as it's not prohibited. FAR 1.102(d) says: FAR 1.102-4(e) says: Well, FAR 52.222-41 does specifically address conformance, compensation, and price adjustment, provides for a price adjustment in a specific instance, which does not include cases such as the one presented by lotus. So how would you explain and justify such an adjustment if someone argued that it would deviate from the clause? I think a CO would want to be prepared to show that agreeing to such an adjustment was in the government's best interest. What would the CO cite as authority on the SF30 under which the adjustment is made. She couldn't cite FAR 52.222-41. It she wrote "mutual agreement," what would she cite for authority to make such an agreement. I'm not objecting to your idea. I'm just trying to think it through. You have to anticipate objections.
  5. The prime contract clause doesn't answer your question, does it? That clause says "similar," not identical. So what makes sense? It seems to me that it makes sense to require the sub to retain records until three years after final payment on the subcontract. If you can't buy that, then ask the DOE contracting officer.
  6. Vern Edwards

    Negotiation Skills and Tactics

    From Kissinger the Negotiator, under the heading Genuine Empathy or Duplicity, pp. 219-222: But how should that inform us about negotiating government contracts?
  7. Vern Edwards

    SCA

    Suppose you do that and lotus's scenario comes about. Would the record of negotiations enable the contractor to get a price adjustment? On the basis of what contract clause or legal doctrine could the contractor lay claim to a price adjustment?
  8. Vern Edwards

    Negotiation Skills and Tactics

    I think some people are making a distinction between what is often true and what should be true, and I don't consider that to be a sign of naiveté. It's one thing to say that people do engage in deception. It is another thing entirely to say that they should. It seems to me that the question at this point ought not to be what people do, but what they should do in government contract negotiations. Does anyone think that people should engage in deception in government contract negotiations? Should contractors try to deceive contracting officers in pursuit of a favorable deal? Should contracting officers try to deceive contractors? If so, please explain what you mean by deception and what limits, if any, ought to apply. If you don't do this, the silly, pointless back and forth that you're having will continue ad nauseam. It's pretty much at that point now.
  9. Vern Edwards

    SCA

    In writing? Have you ever seen that done? Would that be a FAR deviation? I'm not challenging, just asking.
  10. Vern Edwards

    Negotiation Skills and Tactics

    There it is.
  11. Vern Edwards

    Negotiation Skills and Tactics

    Thanks, MV2009. That's all I wanted to know. You all enjoy your discussion.
  12. Vern Edwards

    Negotiation Skills and Tactics

    DECEPTION, Black's Law Dictionary (10th ed. 2014) MV2009's statement is highly problematic in light of the legal definition. I his or her statement to indicate (1) that negotiators routinely engage in deception during sole source negotiations and (2) that deception is necessary in order to make a good deal when contracting on a sole source basis. The first may be a statement of fact, although the use of "routinely" may be an exaggeration. The second is statement of opinion and is problematic in that deception may entail a criminal act, a civil false claim, or defective pricing. In U.S. v. Singer, 889 F.2d 1327 (1989), the Fourth Circuit held that failure during sole source negotiations to disclose the padding of cost estimates to cover contingencies gave rise to false claim liability: So I suggest that MV2009 either confirm my reading or reject it. If MV2009 literally means that deception is an essential part of dealmaking in government contracting, perhaps he or she would like to explain whether deception includes lying and, if not, what it does include.
  13. @here_2_help I didn't speculate. I asserted. I think a speculation would have begun with something like, I wonder if... (Can you personally attack an anonymous person?) I asserted that you thought it was beneath you to argue or that you felt you didn't have a good argument. Those were reasonable assertions and should not be insulting. In any case, you're right. I did not mean to affront you. Just goad you. It didn't work, I see.
  14. Competitive advantage arises from certain qualities among companies that contend with one another for business. A particular quality is a competitive advantage for a company if it is a quality that will prompt customers to prefer it or its products to others. Cost or pricing data must be submitted in non-commercial acquisitions when there will not be adequate price competition, prices set by law or regulation, or a waiver. It is in such acquisitions that timely sweeps might become a matter of concern. But such acquisitions usually occur when the customer is seeking a particular technical quality that outweighs all other prospective sources of competitive advantage. See e.g. FAR 6.302-1(a)(2)(i): a unique or innovative concept, a unique capability, a concept or services not otherwise available; or follow-on positioning. In such cases the technical quality/source of advantage trumps all others. Thus, in those cases in which cost or pricing data must be submitted and sweep delays might be an issue, the quality of being able to complete sweeps in a timely manner is outweighed by technical qualities and will not be a source of competitive advantage, at least not in the short term. Whether in the long term the customer would seek other sources in order to get faster sweeps is a matter of conjecture, but seems unlikely if the technical quality continues to be the only or principal source of competitive advantage. If two or more companies could compete on the basis of their technical qualities, then the ability to complete sweeps in a timely manner would be irrelevant, because there would be adequate price competition, which would eliminate the need for cost or pricing data. Companies that deal in the government market tend to know the sources of competitive advantage, and I doubt that DOD would have had to issue its memo if timely completion of sweeps were such a source. I would be open to consideration of H2H's assertion about competitive advantage if he would make a persuasive argument, but he considers that to be beneath him or beyond his abilities. Based on what I am able to work out in my limited way, not only is it not "apparent" that the ability to complete sweeps in a timely manner is a competitive advantage, I cannot see how it would be so.
  15. @here_2_help Non sequitur? What does not follow from what? My statement that if there is no competition there is no requirement for cost or pricing data was not supposed to follow from your statement about competitive advantage, like a conclusion follows from premises. It was a statement in response to something that at least two of us found to be obscure. How can there be a competitive advantage if there is no competition? Why is it too hard for you to explain? When Retread asked for an explanation, you said you don't have to explain. Well, if that's your attitude, why participate in a discussion forum? I don't get that. Defective pricing risk does not end on the date of price agreement. What ends on the date of price agreement is the obligation to submit available cost or pricing data. Risk remains until the contractor verifies that all cost or pricing data that were available before price agreement were, in fact, submitted, assuming that verification is possible. A post agreement sweep is done in order to try to find any cost or pricing data that were available before price agreement, and that should have been submitted, but that inadvertently were not. It is due diligence before signing a certificate and a contract, and as such it reduces (mitigates) the risk of defective pricing. Corporate executives owe it to their stockholders to protect their companies from defective pricing and possible false claims litigation and penalties. Would it be better to have found the data and submitted them before price agreement? Yes, but organizations, people, and processes are not perfect. Every executive must decide whether the sweep process is worthwhile in light of the risk. If I have misunderstood you, you could straighten me out with an explanation. But your attitude seems to be that you'll say what you want and explanations be damned. Well, so be it. As for Joel's club, he must mean the Club of Irrelevant Recollection and Chatter.
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