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Vern Edwards

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Everything posted by Vern Edwards

  1. Default Clause to extend Period of Performance

    @Construction CO: I recommend against researching and reading cases. Look, the plain language of the clauses supports your position about time extensions under the Default clause. You don't need any $&*# cases. Tell those people that if they can't understand the simple English of the clauses to read a book on the subject, like Cibinic, Nash and Nagle or Nash and Feldman. Keep in mind, however, that you may not correctly understand the point that they are trying to make. So make sure that you do before you tell them to get lost.
  2. Default Clause to extend Period of Performance

    The following is from FAR 52.243-4(d): We're talking Contracting 101---a matter of plain English. There are professional books that discuss this matter. See e.g., Administration of Government Contracts 4th. If your IG and DBO (whatever that is) told you that the Changes clause does not authorize a time extension under any circumstances, they are simply not qualified for their jobs. I still don't see what there is to discuss, other than the professional ignorance of some of your organization's staff. Of course, there is always that chance that you have misrepresented or incompletely reported their views. We're hearing only your side, and as you've already acknowledged, you previously failed to relate all of the pertinent facts.
  3. Default Clause to extend Period of Performance

    The Default clause, FAR 52.249-10, mandates time extensions in recognition of excusable delays, such as those listed in paragraph (b). The Default clause does not mandate or authorize time extensions for other reasons. That should be apparent from the plain text of the clause. I'm not sure what there is to discuss. Generally, a CO would not need a JA (i.e., J&A) or express authority merely to extend the time for completion of a completion-type contract at the contractor's request, since merely extending the completion date would not constitute a new procurement. What the CO would need is consideration for granting such an extension.
  4. Tracking LOE in FFP subcontracts

    Suppose you have a CPFF LOE Term contract with a 6,000 hour LOE, a $10,000,000 estimated cost, and a $600,000 fixed-fee. You are obligated to deliver the LOE in order to get the $600,000. You are not obligated to work beyond the LOE. You expect to have to burn the 6,000 hours with your own employees. You hire an FFP consulting sub to advise you, but you still expect to have to use your own people to deliver the 6,000 hours. Along comes the COR and tells you, to your surprise, that you must count the sub's hours against your LOE obligation. You realize that if you do that you can get to the 6,000 hours and collect your $600,000 with fewer hours from your own people. Why would that be a bad thing for you?
  5. See Darst, Sales Commissions & Contingent Fees In Government Contracts, 05-10 Briefing Papers 1 (September 2005). The author provides a complete history and legal analysis of the covenant against contingent fees. You can read the rest yourself.
  6. On-Site Contractor Supervision

    Almost every janitorial contractor works after hours without government supervision. Security contractors work after hours without government supervision. I know of no governmentwide regulations about this.
  7. FFP Contract Maximum Increase?

    It seems often to be the case that agencies create unorthodox arrangements in order to meet various needs. In my experience, such arrangements are contrived because the people involved simply did not know how to do what they wanted to do through orthodox arrangements. Then, when problems arise under the unorthodox arrangements, people have questions which others simply do not understand or to which they have no answer. How the heck does that work? What the heck did you do? The answer is along the lines of Well, you had to be there. Of course, pros want to ask: Was Contractor2 a party to the contract? A third party beneficiary? Did the CO delegate authority to place orders to Contractor2? In writing? Is Contractor2 a COR? What about FAR 1.602-2(c)(1)? What if Contractor1 breaches an order from Contractor2? Can Contractor2 sue for breach? Whom would it sue? What if Contractor2 breaches, does the Disputes clause apply? Does Contractor1 file its claim with the government or Contractor2? What about the Anti-deficiency Act? Et cetera. The people who put the deal together rarely have good answers, because they didn't know enough to consider such possibilities when they put the deal together. It's no way to run a contracting activity. It's the kind of thing that brings us new laws and regulations.
  8. Including an ODC CLIN

    You're not being unreasonable. What you describe could happen if the CO does not do his or her job. The CO should ensure that the materials purchased were required for the work being done. The CO should not allow the contractor to act as a purchasing agenct and circumvent acquisition laws and regulations under the guise of buying materials for use under a T&M contract. The CO should require the contractor to show why the materials were required and how they were used for or incorporated into the work. All kinds of schemes are probably being carried out under T&M contracts, some of which are little more than money laundering. All in the name of "innovation".
  9. FFP Contract Maximum Increase?

    If Contract1 is a government-awarded contract, and if the Contract2 contractor is placing orders against it, and if the orders placed by the Contract2 contractor have reached the maximum quantity (value), then the maximum has been reached. Period. It does not make sense for you to say "all Contract1 transactions are commercial to commercial transactions[.]" They are not "commercial", i.e., private sector, transactions, if they are carried out under a government contract. It does not matter that the government itself placed no orders against the contract. It does not matter that the contractor is using what you call "commercial money." The government has awarded a contract to a contractor to sell stuff under the terms of a government contract. What a tangled web you people have woven! What are you up to---awarding a contract, then placing no orders but allowing another government contractor to use the government's contract to buy stuff, then buying that stuff from the second government contractor? What the heck?! Was the government hired to be the Contract2 contractor's contracting agent? Is the second contractor paying the government a fee for services? It sounds like you guys are running some kind of money laundering scheme. I sure as heck hope that the government is not paying the Contract2 contractor's indirect costs and profit on top of the price it paid for the stuff it bought under Contract1. That's a hoot. A government contract says that some transactions under it are private sector transactions. Do all of the government contract clauses apply to those transactions? Surely you realize how strange this must sound to others.
  10. FFP Contract Maximum Increase?

    @D3ad3y3 If I understand the problem correctly, and I'm not sure that I do, then the problem is not whether "to secure additional money." The problem is whether you can increase the maximum quantity (value) of Contract1 without getting full and open competition or preparing a CICA J&A. The maximum quantity (value) of an IDIQ contract limits how much the Government can buy under the contract. Any contract modification to increase the maximum quantity would be an out-of-scope change. See FAR 16.505(a)(2). See also Feldman, The Government Contracts Guidebook § 4:30 (4th ed.): (The language used in the statutes and FAR is confusing. Maximum quantity (value) is one of the terms that delineates scope.) If the maximum quantity of Contract1 has been ordered by (a) the government, (b) a contractor ordering against the contract as expressly authorized by the government, or (c) a combination of the two, then a modification to increase the maximum quantity would be an out-of-scope change and the agency would have to seek full and open competition or prepare a CICA J&A for sole source contracting. Increasing the maximum quantity (value) would not increase the Government's obligation and would not require more funds. Does that answer your question?
  11. A signal feature of source selection under FAR Part 15 as conducted today is solicitation and evaluation of “technical” (and/or “management”) proposals. Although FAR 2.101 conflates proposals with offers,[1] that attributes more dignity to “technical” proposals than they deserve. Under FAR Part 15, contracts are formed through offer and acceptance. Offers are promises—prospectively binding commitments to act or refrain from acting in a specified way.[2] “Technical” proposals are packages of information, the specific content of which depends on the instructions in RFPs. “Technical” proposals may contain promises, to be sure, but if they do they also contain illusory promises and nonpromissory statements: assertions of fact, descriptions, estimates, statements of expectation and contingent intention, sales pitches, and so forth. In most cases the various kinds of statements in proposals are so intermingled and worded as to make it hard to distinguish between what is being promised and what it not. As explained by one commentator: See also the Restatement (Contracts) Second § (2)(1): And § 2, Comment e: So when an agency awards a contract to an offeror, it will not be contractually entitled to everything that is in the winner’s “technical” proposal. It will be entitled only to that offeror’s performance as its contractor and to what that offeror promised to do or deliver. Unfortunately, what is so often found in “technical” proposals is the product of what is little more than an essay-writing contest. That is because essays are what agencies instruct offerors to submit. Consider the following proposal preparation instruction in an RFP for sign language interpreter services: Those instructions do not call for promises. They call for “demonstrations”, i.e, persuasive descriptions of various things, i.e., a sales pitch.[4] Even if incorporated into a contract, they will not bind the contractor if not written as promises. The “technical” proposal approach to source selection, in which offerors describe (but do not necessarily promise) how they intend to do this or that during contract performance and submit various plans for facets of performance—such as systems engineering, safety management, staffing, use of agile software development techniques, task order management, cost control, schedule control, risk management, and quality assurance—is in widespread use in source selection. Such content usually is not subjected to a thorough legal analysis. Instead, “technical” evaluators with no legal training read offerors’ submissions and judge them largely on subjective bases. The evaluators react to what they read by tagging certain statements in proposals as “strengths,” “weaknesses,” or “deficiencies” and assigning what they consider to be an appropriate adjectival rating—outstanding, good, acceptable, marginal, unacceptable, and the like—much like a professor grading a college test essay. The result of this method of source selection is decisions that are based on what is essentially advertising copy. Such proposals may not have high predictive value, and such practices do not ensure that the Government will be entitled to, or will receive, “best value.” The value to which the Government will be entitled will be obtained, if at all, from the things that the agency will be entitled to receive under contract. What it will be entitled to receive is (a) fulfillment of the promises the winning offeror made and (b) competent performance by that offeror. Thus, the proper things to evaluate are not essays in “technical” proposals, but offerors and their offers (promises). The offerors and their offers are the proper objects of evaluation. Evaluation of offers determines the value that each offeror promises. Evaluation of offerors determines the likelihood that each offeror will deliver on its promises. Source selection planners must ensure that evaluations are based on the attributes of offerors and their offers and not merely on creative writing. When offers include descriptions of the products to be delivered or the services to be performed, they must be the objects of “technical” evaluation, but they should also be the objects of a legal analysis to determine whether the statements in them constitute promises and to detect vagueness, ambiguity, and loopholes, intentional or otherwise. When planning a source selection the first thing an agency must decide is what to evaluate, i.e., what are to be the objects of its evaluation. In common parlance and according to the FAR, agencies evaluate proposals. But such parlance is based on a misconception. Proposals are not the things to be evaluated. They are merely packages of information. The things to be evaluated are offerors and their offers. Unfortunately, rather than thinking matters through on the basis of clear concepts and sound principles, many agencies take a cut-and-paste approach to source selection, uncritically borrowing schemes used in past acquisitions and cutting and pasting text from past RFPs. The result is that many half-baked ideas and poor practices are deeply embedded in acquisition culture and are passed on to future generations of acquisition personnel through on-the-job training. Regrettably, acquisition culture and the bid protest system are very forgiving, despite catastrophes.[5] No one knows how such practices have affected the value actually received from contract outcomes. The solution to these problems begins with better understanding and thinking, better source selection planning, and better choices of evaluation factors for award. [1] See FAR 2.101 definition of “offer”: Offer’ means a response to a solicitation that, if accepted, would bind the offeror to perform the resultant contract. Responses to invitations for bids (sealed bidding) are offers called ‘bids’ or ‘sealed bids’; responses to requests for proposals (negotiation) are offers called ‘proposals’; however, responses to requests for quotations (simplified acquisition) are ‘quotations,’ not offers.” [2] Restatement ( Second) of Contracts § 2(1) and § 24, Comment a. [3] Shearer, “How Could It Hurt To Ask? The Ability To Clarify Cost/Price Proposals Without Engaging in Discussions,” 39 Pub. Cont. L.J. 583, 596–97 (Spring 2010) (footnotes omitted). [4] See Edwards, “Streamlining Source Selection by Improving the Quality of Evaluation Factors,” 8 N&CR ¶ 56; and Edwards, “Still Waiting for a Reformed and Streamlined Acquisition Process: Another Essay-Writing Contest,” 22 N&CR ¶ 47, asserting that source selection too often is based on essay-writing contests. [5] See Jacobs Tech., Inc., v, United States, 131 Fed. Cl. 430 (2017); EDC Consulting, LLC, Comp. Gen. Dec. B-414175.10, 2017 CPD ¶ 185.
  12. Including an ODC CLIN

    Anonymouse: In a "true" T&M contract for commercial items, using the clause at FAR 52.212-4, Alt. I, you would have one contract line item. The unit of delivery would be "Job" (JO), and the line item would include a ceiling price. Prime and subcontractor labor rates could be stipulated in informational subline items or elsewhere in the contract. Materials are not always specified or separately identified. They are TBD, meaning that the contractor will determine, buy or draw from inventory, and use whatever is required as the work progresses. The contractor will invoice to the one CLIN. But, if you want, you could have one or more informational subline items specifying and capping the cost of materials within the ceiling price. You could also write contract terms that let the CO or the COR specify, approve or disapprove, or otherwise control what the contractor uses, buys, and spends. The are no regulatorily specified limits on the ratio of labor to material costs, but I think the normal expectation is that labor costs will exceed materials costs. Having said all that, many T&M contracts today are more complex than what I call "true" T&M and have complicated funding schemes. Agencies have developed different kinds of CLIN structuring and work procedures to cope. In short, you can do pretty much what you want within the limits set forth in FAR, your agency supplement, local policy and procedures, and with any mechanical limits imposed by any "automated" contract writing system.
  13. Just think of all that trash. Whatever happened to "mess kits"?
  14. Including an ODC CLIN

    First, if you're going to use a T&M contract, why do you need a separate line item for what are essentially materials? I'll let that lie, however, and make this point: see FAR Subpart 4.10, "Uniform Use of Line Items", quoted in part below. Note the emphases: See FAR 4.1005-2 for exceptions. See also the definition of line item in FAR 2.101. See also, for example, the instructions in FAR 15.204-2(b). Bottom line--Line items describe DELIVERABLES. "Other direct costs" are not deliverables. They are costs incurred in order to buy something that, presumably, will be delivered to the government in one form or another, through use or consumption in performance or simply through pass-through purchase and delivery. Since costs are not deliverables, and thus cannot be a basis for establishing line items, you cannot properly establish a line item for "other direct costs." I know people do it, but they're being dumb when they do. It's poor professional practice. Establish a line item for"additional IT products (TBD)", materials, or data, etc., if you like, and price the line item in accordance with your needs. Use subline items if necessary to distinguish among miscellaneous deliverables. Nothing wrong with that. We were doing that 40 years ago. But don't establish a line item for "other direct costs." Costs are not deliverables. If you are with DOD, then the rules for establishing line items already apply through the DFARS. If you are with another agency, you have until October 2019 to comply, but to establish a line item for "other direct costs" would be poor professional practice, rules or no rules. No. Of course not. What does dollar amount have to do with it?
  15. Then like much "tribal knowledge", it is not necessarily true. An approved purchasing system is not required to qualify for responding to large Government contract solicitations unless an agency decides to make it so through its specification of evaluation factors for award. In the GAO decision you cited NASA did not make it a requirement that an offeror have such a purchasing system in order to quality for award, but that an offeror must be able to convince NASA that it would able to pass a NASA-conducted (not DCMA) review within 90 days after award: That would not be hard to do, especially with the help of a consulting firm. In any case, my inquiry doesn't have anything to do with source selection factors. My question at the outset was: " I don't see where FAR 52.244-2 requires that a company pass a CPSR or have an approved system, unless I missed it, and imposes no sanctions for failing to quality for, have, or maintain one. Did I miss it? I already discussed more demanding notification and approval requirements for certain subcontracts and what I thought about them. Here_2_Help showed us a DFARS clause. There may be other agency-specific clauses. But what about a FAR clause? What I'm trying to do here is provoke some discussion of the matter as considered from a strictly contractual point of view. Clearly, for a big company with a lot of government contracts for which subcontracting of the kinds that require approval will be necessary, an approved purchasing system is a necessary evil. Also, failing a CPSR could potentially have responsibility (FAR Subpart 9.1) implications with respect to new procurements. But is it breach of contract? Is it grounds for T for D? I'm asking. I haven't taken a position.
  16. True. But I didn't see where it says that the contractor is obligated to pass or that there will be consequences for failing. Did I miss it?
  17. "Combat zone" probably doesn't mean what you might think it means. There are plenty of Camp Cupcakes in combat zones. Here is the official DOD definition: Here is the official definition of rear area: Here is combat area: Go figure. According to E.O. 13239, Dec. 12, 2001, which as far as I know is still in effect, all of Afghanistan and the airspace above it is officially a combat zone. On the other hand, as far as I can tell, Niger, where four members of the U.S. Special Forces were recently killed in an ambush, is not.
  18. Thanks! I notice that the DFARS clause does not mention a CPSR specifically. Neither does DFARS 252.244-7001. Did I miss it? They refer to "acceptable" systems, but not "approved" systems. Are they the same?
  19. That's all a crock. We don't disagree regarding the importance of employee morale. What we disagree about is what should affect it. You don't know whether we disagree about DOD suffering from a loss of cutting edge technology, because I never said anything about that. I also never said where I stood on the GAO decision, so you don't know that we disagree about that, either. I can see that the GAO decision has upset you. Well, I think that grownups with jobs they like don't take a morale nose dive because their employer won't give them free paper plates and plastic forks. Sure, there are a lot of silly government rules. But a lot of brilliant people work for the government under those rules and don't think anything about them unless they keep them from doing their jobs. Paper plates and plastic spoons? Bah! The bright boys and girls in Silicon Valley who don't want to work for DOD feel that way because they don't want to work in what they think would be a nimrod military bureaucracy. They don't want to work with people they think will be bozos. They don't want to have to submit reams of paper when they want to try something and then have to wait weeks or months for a decision. They don't want their work hung up by absurd procedures and government shutdowns. They don't want to be told, over and over, what they can't do. Some of them just don't like the military and don't want to work on developing tools for killing people. Some of them just don't trust government. You make a complicated problem seem to arise from petty matters. Bob was being provocative when he posted the GAO decision.
  20. Maybe. And the answer? I don't know of any clause that requires an approved purchasing system or that requires a contractor to submit to a review of its purchasing system. The only contractual consequence that I know of due to lack of an approved system is that the contractor will have to notify the CO of, and seek approval of, certain prospective subcontracts. If so, that's more work for the government as much as for the contractor, since the government will have to perform diligently in reviewing and approving or rejecting prospective contractors and in justifying its decisions in that regard or face claims for delay and costs due to failure to cooperation and, possibly, bad faith. I suppose it could lead to cost allowability challenges, but not in and of itself. What if an ACO wants to schedule a CPSR and the contractor says, "Thanks, but no"? Failure to get an approval of a purchasing system does not necessarily indicate that a contractor cannot keep its promises. It may indicate nothing more than that some bureaucrat is unhappy with its purchasing processes or policies. Don't get me wrong. Failure to get approval would be a nuisance. Maybe. Am I wrong about any of this?
  21. Disagree about what? That I'd think you were silly? That the best and the brightest are working in Silicon Valley because they like the work and are paid really well? That they're paid enough to buy a house in San Francisco? What David Halberstam meant by "the best and the brightest"? I've got sources for my assertion about Halberstam.
  22. Question: What if any standard FAR clause requires a contractor to pass a CPSR and to have an approved purchasing system?
  23. Well, I would think you were pretty silly if your morale were seriously hurt because your employer wouldn't buy you paper plates and plastic utensils. To the extent that the people working in Silicon Valley are the best and the brightest, they're there because (1) they like the work and (2) they can afford to buy a house in San Francisco. BTW, David Halberstam meant "the best and the brightest" to be ironic.
  24. Sealed bid- Late Price Modification

    @VETCON You're right. Here's the problem. Late bid cases can be tricky. In a case like yours, the outcome might turn on some fact that seems unimportant to you or on some aspect of the situation that you do not know about. As the GAO has said: Emphasis added. This kind of forum is not well suited to interrogation in pursuit of more information from a poster, especially from one who is not deeply familiar with the rules. Such a poster might unintentionally omit something, unintentionally mischaracterize something, or give an ambiguous description of something. For instance, in response to REA's question, "Were both bids low," you wrote, "Both bids were low." What does that mean: that they were identical (equal low bids) or that they were both lower than all other bids, but one was lower than the other? In any case, I don't see how that would be relevant to the resolution of your issue. It may be that in your case it is clear to the government, based on an examination of the other guy's bid documents or based on other information, that his bid was lower than yours both as originally submitted (then withdrawn) and as modified (then resubmitted). If so, the agency may have based their corrective action on FAR 52.214-7(b)(2): Consider, for instance, the GAO's decision in the matter of B.L.I. Construction Co., Inc., B-239246, 90-2 CPD ¶ 85, July 30, 1990, which involved events similar to yours. I will quote it at length: Emphasis added. That sounds kind of like your story, but it is different in important details. FAR 52.214-7 has been revised since 1990, and the pertinent rules may have been different then. Maybe the fact that the bid was modified in the contracting officer's presence was key. Based on your account of what happened in your case, I think the outcome in your case should be different, but I haven't heard both sides of the story. I only know what you told us. I don't think you are lying, but I've been around long enough to know that sometimes an account is incomplete, or not entirely accurate, or not in accord with how other people saw things. Another problem is that you did not say whether the agency gave you an oral or written explanation of its corrective action. If they did, their explanation would be helpful, but you did not relate it. Based on what you have told us, I think everyone who has responded to date thinks that the resubmitted bid was late and should not have been considered. I don't know what more any of us can say. It sounds like you have protested the agency's corrective action. If so, then you will learn the outcome soon. I'm sorry that I was impatient with you.
  25. Who is "we"? Are you the CO? A COR?
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