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Vern Edwards

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Everything posted by Vern Edwards

  1. Does that mean you are unable to determine how it works or unable to determine what to call it? And Joel, how about short and to-the-point posts. That one from an hour ago was 659 words. Your first one was 2,556. It's too much!
  2. Whatever, Joel. I have been in contracting a long time and this is the kind of thing I would do with a very short homemade contract incentive clause and without the least trouble. I think the FAR is blurring your vision. The incentive price revision clause is very long and very complicated and is not necessary for what you want to do, but if you want to use it, then use it. I wouldn't, but that's me. I tend to look for simple ways to do things. You tell people to use an FPI with a target price and ceiling price that are the same and you're going to get more questions than you're going to want to answer. But be my guest. I don't have a stake in your project.
  3. If the final contract price is less than the GMP, then the contractor shall share in the savings at the rate of $.25 of every dollar saved, calculated as follows: [(GMP - Contractor's Fee) - Actual Cost] x .25 Is that what you have in mind? If so, then that's the only incentive clause you need.
  4. If you have to give it a name, which you don't, call it GMP with Cost Incentive, GMP-CI. The contractor shares in the savings. That's the idea, right? From the GMP. The lower the final price from the GMP, the higher the contractor's fee (profit).
  5. CPFF LOE Calculations

    Clarification: By yes, I meant that if the contract is annually funded the calculation must be done at the end of each contract year.
  6. I didn't say you have to do anything, and I didn't say you couldn't have a combined target/ceiling price (although I think it's ridiculous). My thought is simply that the FPI contract is the most complicated in use today. If all you want to do is reward the contractor for coming in below some maximum price, why not just write a simple clause that gives it so many cents for every dollar it underruns. Why mess around confusing everybody with that ridiculous FPI contract. (Have you read the incentive price revision clause?) You can use any contract type or combination that is not prohibited, and FAR does not limit you to the FPI cost incentive. KISS is the essence of brilliance. Joel, you're talking a design-build construction contract, not a contract to develop or produce a new spacecraft, aircraft, or warship. Keep it simple.
  7. CPFF LOE Calculations

    Is the contract annually funded? If so, then the answer is yes, based on the bona fide needs rule.
  8. Why call it an FPI contract? Why not just craft a custom incentive. Call it just a cost incentive contract (CIC). Write a clause that describes how it works. That would free you from the terms of the incentive price revision clause.
  9. Not true. An "inter-company work order" must include any flowdown in which the applicable definition of subcontract applies.
  10. Not true. With respect to small business subcontracting goals and plans see FAR 19.701, which I cited and quoted above. An inter-company work order is a subcontract for purposes of the small business subcontracting program if it fits that definition.
  11. You said you have searched regulations and guidance. Which ones? See the Small Business Administration regulations, 13 CFR 125.1: See 13 CFR 125.3: See also FAR 19.701: Emphasis added. Now, you said your affiliate is a "sister company," i.e. a separate firm with the same parent. The relationship between the firms is not employer-employee. Based on the above definitions, if you give your sister firm an intercompany ("inter" means between separate companies) work authorization ("delegation," as you now call it) you are making them, a third party, a subcontractor. So my answer to your question is no. Is your sister firm a small business?
  12. help: Calm yourself. FAR 15.407-2 applies only when a contractor is required to have a make or buy program. The OP was asking about a GSA schedule contract. To the best of my knowledge, there is no requirement for a make or buy programs under any GSA FSS contract or any contract for commercial items. So I don't know why you brought up 15.407-2. Moreover, even if a firm is required to submit a make or buy plan, an affiliate can still be a subcontractor for some other contractual purpose. As for the definitions of subcontract in FAR, there is no definition in FAR 2.101. Thus, there is no definition of subcontract that applies throughout the FAR. There are about seven definitions of subcontract, which appear in various places in FAR, and each is applicable only in the part, subpart, or section in which it appears. Otherwise, the term is defined in accordance with FAR 1.108(a). Most common dictionary definitions would include affiliates. The OP should be aware that under some of the FAR definitions, the government might assert that an affiliate is a subcontractor. Here is the OP's question. The correct answer is: It depends on what you mean by "proper." If "proper" means as required by the FAR, then I do not know of any requirement in that regard. Delegate the work however you like. If "proper" means as required by contract, then none of us can answer. Read your contract. I think I said that in my first response. I only mentioned the subcontract definitions because the OP seemed to think that there is an essential distinction between an "inter-company work order" and a subcontract. That might not be the case. So I don't know why you're jacked up.
  13. Nena: I am not aware of any government acquisition regulation that requires a company to use any particular procedure or legal instrument to buy something from an affiliated company. However, there may be something in your GSA contract. Do not assume that the government considers inter-company work authorizations and subcontracts to be different instruments. I think that in most cases the government will consider an inter-company work authorization or inter-organizational transfer to be a subcontract for the purposes of regulation and contract interpretation. See e.g., the definition of subcontract in FAR 12.001: See also FAR 15.401: See FAR 22.801: See, too, FAR 44.101:
  14. Types of orders

    See footnote 3.
  15. From DMV.org, http://www.dmv.org/insurance/bodily-injury-and-property-damage-liability-coverage.php Liability insurance protects the insured from liability.
  16. Types of orders

    Call is an old term. You used to find many references to "calls or orders" in the pre-FAR procurement regulations. As best I can determine the word call was not officially defined. In my experience it was used in connection with Blanket Purchase Agreements. Agencies would place a call against a BPA. The term originally may have literally referred to a telephone call, which was how most BPA calls were made. It may be that calls were placed against agreements, like BOAs and BPAs, and orders were placed against contracts. You placed a call when the contractor was not contractually bound to perform and an order when it was. But that's speculation. The term call appears in only four places in FAR today, all in FAR Part 4, and all in similar expressions. See for instance FAR 4.606(a)(1)(iii): "All calls and orders awarded under the indefinite delivery vehicles identified in paragraph (a)(1)(ii) of this section." The term call appears in six places in the DFARS and in one or two places in a few other agency supplements. None shed any light on the proper use of the term, if there is one. I think that use of the term call is just a holdover from the old days. The term most commonly used today is "order."
  17. U. S. Civil War Discussion Forum

    See also Shotgun's Home of the American Civil War for links to the official records of several battles. http://www.civilwarhome.com/records.html
  18. U. S. Civil War Discussion Forum

    Official reports of Battle of Shiloh (Pittsburg Landing), 6-7 April 1862 by Halleck, Grant, Buell, Sherman, Beauregard, and Bragg http://www.aotc.net/shiloh-rep.htm
  19. The following is from a Bureau of National Affairs (BNA) email update dated today: Our biggest practitioner challenge is the acquisition of services, not systems. We know what we ought to be doing when we buy systems (F-35, USS Ford, various IT systems), we just can't make ourselves do it. But we don't know much about services requirements analysis, specification, cost estimation, and quality assurance. Who knows what we really wanted, and what we've really gotten, from support services contracts? Buying major systems can be fun, but there's little new under the sun besides the systems themselves. If you're looking for a challenge, start thinking about how we buy, and how we ought to buy, support services.
  20. UCA - Required Contract Clauses

    What kind of undefinitized contractual agreement? An unpriced purchase order? Something else?
  21. Cost Monitoring Plans

    Help: I'm not trying to be difficult; I'm just responding to your assertions. As for the latest assertion, it seems to me that if a company has decided to cut costs, then it is likely that it has told somebody to keep an eye on costs and report what they find out to somebody else in the company. If DCMA shows up and wants to know what it's doing about controlling and cutting costs, it has information that it could share if so inclined. I don't doubt for one minute that companies like Apple and Google wouldn't be particularly eager to spend a lot of time with DCMA bureaucrats explaining and justifying what they're doing (or not doing). Maybe that's the point that you are trying to make.
  22. Cost Monitoring Plans

    Apple is not focused on cost reduction? See these: "Apple Cost Reduction Strategy -- Analysis" https://www.linkedin.com/pulse/apple-cost-reduction-strategy-analysis-roberto-lecky "Apple’s cost-cutting strategy draws ire of Chinese supply chain" https://www.cultofmac.com/442885/apple-receives-pushback-from-suppliers-over-cost-cutting/ "How Apple cuts costs in building its gadgets" http://www.cnn.com/2012/02/06/tech/gaming-gadgets/apple-supply-chain/index.html "ISuccess: How Manufacturing Cost Reductions And Strategic Sourcing Help Apple Become The World's Most Valuable Company" http://www.strategicsourceror.com/2011/10/isuccess-how-manufacturing-cost.html Google? "Google Takes Stricter Approach to Costs" https://www.wsj.com/articles/google-takes-stricter-approach-to-costs-1436827885 "Google looks to cost-cutting, mobile and YouTube for the future" https://www.cnet.com/news/google-earnings-q2-2015/ "Google’s Cost Cutting Pays off with Rise in Profits" https://www.fastcompany.com/1270917/googles-cost-cutting-pays-rise-profits "Google Inc Adopts Cost-Cutting To Fight Rising Expenses" Google cost cutting There is no such thing as a company that doesn't focus on cost reduction. The ones that don't don't last.
  23. Cost Monitoring Plans

    If you are looking for an explicit contractual requirement, then I can't recall any. However, I think the idea that a contractor should have at least a notional plan/program to monitor and reduce costs is implicit in FAR 52.216-7(a)(1)'s reference to the rules for allowability in FAR Subpart 31.2. See FAR 31.201-3, Determining Reasonableness, and its references to "prudent person in the conduct of a competitive business" and "Generally accepted sound business practices...." I think that the lack of at least a notional plan/program or the refusal to describe it would affect my thinking about the reasonableness of the company's direct and indirect costs. I would not buy an assertion that cost monitoring/reduction planning was "not applicable" to a company with a government cost-reimbursement contract, and I would have a very negative reaction to a company that took the position that they don't have to discuss the matter with the government's representative and produce some facts.
  24. 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.