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Vern Edwards

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Everything posted by Vern Edwards

  1. 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.
  2. 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.
  3. 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.
  4. 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?
  5. Some of you will remember the thread in which our resident agent provocateur, Pepe the Frog, posted many controversial comments about negotiation ethics and tactics. (Said with affection, Pepe.) Well, I was wandering about in a bookstore yesterday (a Barnes and Noble in southern California) when my eyes fell on the following title: Kissinger the Negotiator: Lessons from Dealmaking at the Highest Level, by Sevenius, Burns, and Mnookin (Harper 2018). Dust jacket blurb: "In this groundbreaking, definitive guide to the art of negotiation, three Harvard professors---all experienced negotiators---offer a comprehensive examination of one of the most successful dealmakers of all time." I bought it, of course. While the book is about diplomatic negotiations, at least some of its points and tactics ought to be applicable or adaptable to contract negotiations. In any case, it appears that it will be a fascinating read. You might want to take a browse in a bookstore near you.
  6. 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?
  7. 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.
  8. Vern Edwards

    SCA

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

    Negotiation Skills and Tactics

    There it is.
  10. Vern Edwards

    Negotiation Skills and Tactics

    Thanks, MV2009. That's all I wanted to know. You all enjoy your discussion.
  11. 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.
  12. In an article in the June 11, 2018 issue of National Review, "Upside of The Upsized," Ike Bannon reviews a book entitled, Big Is Beautiful: Debunking the Myth of Small Business, by Robert D. Atkinson and Michael Lind, published in March by MIT Press. According to Bannon: I love it, because, speaking as the owner of a small business, I'm sick of FAR Part 19 and everything associated with it. According to the description of the book at Amazon.com: I'm going to buy it, even though I understand that the members of Congress will pay no attention to it.
  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. https://www.nytimes.com/2018/06/14/opinion/sunday/meditation-productivity-work-mindfulness.html?action=click&module=MoreInSection&pgtype=Article&region=Footer&contentCollection=Sunday Review
  16. @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.
  17. I do not understand that argument. Does anyone?
  18. I don't think any of Pepe's last post was funny, and I'm not talking about what he said about me. He cannot prove his assertions. Everything is innuendo. They are expressions of feelings that don't belong in this forum.
  19. Gee, I guess DOD is going to have to revise its Contract Pricing Reference Guides, Volume 4, Chapter 5: I wonder on what basis they shortened the time to five business days. I wonder if business days means government business days or industry business days. I wonder if the memo should have been published in the Federal Register. See 41 USC 1707:
  20. Retread: No correlation intended or that I'm aware of.
  21. IT management and project management systems have reduced lag time for firms that have them. It has not eliminated it. But do you think that all DOD contractors that must submit cost or pricing data have such systems? Do you think that all subcontractors that must submit cost or pricing data to the prime have such systems? What percentage of them do? Boeing and Lockheed and such are not the only contractors who are affected by DOD's new policy. I'm not worried about them, because they'll tell DOD to stuff it. Anyway, the author of the Defective Pricing Handbook, 2017 - 2018 ed. thinks there is still lag time, especially with respect to subcontractors, and he cites American Bosch as an illustration. Pardon me for taking his word for it. I don't know about competitive advantage. If there is competition, then there is no requirement for cost or pricing data. Cost or pricing data is required when there is no competition. Much of DOD's problem with sweeps is in connection with definitization of mods. In any case, I called around this morning to ask some people about their thinking about post-agreement sweeps. The people I spoke with considered them essential, because many subcontractors are not sophisticated or diligent about updating their cost or pricing data while the prime is negotiating. They are especially concerned about being charged with false claims. I have always maintained that the motto of the Department of Justice is that they don't have to win the case in order to punish the contractor. They can just litigate them to death. They seem to have a bottomless budget with which to do so. Anyway, I'm not going to waste time with Joel anymore, because he's a government retiree.
  22. The relevance of the quote from American Bosch is illustrative. The quote sheds light on the concept of lag time. I would have thought you could see the relevance of that illustration, but apparently not. I think the point you tried to make is that modern IT systems can reduce lag time. I agree.
  23. I don't know how you reached your conclusion, that the 8(a) Program is "explicitly" based on race. In order to be eligible for 8(a) status a firm must be a small disadvantaged business (SDB). The eligibility rules are in 13 CFR 124. In order to an SDB a small firm must be at least 51 percent unconditionally owned by a socially and economically disadvantaged person. According to the rules, a socially disadvantaged person is: Race is only one source of social disadvantage. Other sources are ethnic identity and culture. The census bureau considers race and ethnicity to be "two separate and distinct concepts." According to the American Heritage Dictionary, ethnic means: According to SBA regulations: Note that groups like Asian Pacific Amercans are not racially defined. They are "persons with origins" in places like Vietnam and Nepal are not racial in nature. The regulation then goes on to say: An economically disadvantaged person is: Anyone interested in this topic should read 13 CFR 124 in its entirety. In short, Pepe and FrankJon, you guys aren't reading the rules very carefully, if at all. 8(a) Program eligibility is not "based on" race. 8(a) eligibility can be established on any of a number of bases, not just race. I don't mind discussing things like this, but if we are going to discuss it let's do it like pros, not like amateurs.
  24. @Tony Bones Tony, going over my long response to you, it seems to me that I did not answer your question: "Why does [a cut-off date] make sense?" So, as punishment for your more snarkey remarks, I'm going to explain some more. The best way to understand the argument for cut-off dates is to read Defective Pricing Handbook by David Bodenheimer. I'm looking at the 2012-2013 edition, Chapter 5, "Reasonable Availability of Cost or Pricing Data." There is a newer, 2017-2018 edition. Here is as simple and short an explanation as I can write: Contractor's must disclose cost or pricing data that are reasonably available to it for disclosure. You have to connect availability and disclosure. Data may exist within a company, but it takes time to identify and process it for disclosure. The process of going from identification to disclosure is not instantaneous. Bodenheimer refers to this time as "lag time." Here is an illustration and explanation from a famous 1967 defective pricing case: American Bosch Arma Corp., ASBCA 10305, 65-2 BCA ¶ 5280. Of course, today's computer systems reduce the time lag. Bodenheimer identifies two kinds of lag time, "availability lag time," which it the time required to compile and disclose data, and "organizational lag time," which is the time required to locate, identify, and process data existing in other parts of a large corporation. Cut-off or closing dates are supposed to take such lag times into account. How long a lag time should be allowed? That is a matter for negotiation. Keep in mind that the definition of cost or pricing data is very broad. It includes more than accounting data: Emphasis added. Not all of those data are going to be readily identifiable as cost or pricing data and processable as such through accounting IT systems. Look particularly at items (3), (4), (7), and (8). So cut-off and closing dates are an accommodation. You can agree to a reasonable cut-off or closing date in recognition of a reasonable lag time or you can wait for the results of a sweep. It's up to you. Choose. The government has no authority, legal or moral, to force a contractor to sign a certificate before it feels reasonably certain that it will be telling the truth. It's not a matter of giving up the government's "right" to data and getting something in return. For the government it is a matter of deciding how much uncertainty to accept when negotiating a price. For the contractor it is a matter of how much risk to take of defective pricing litigation and even fraud prosecution.
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