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MICHIGANKO

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Everything posted by MICHIGANKO

  1. Vern - Criticism appreciated as always. One of the rights of passage of wifcon is the inevitable question of one's intelligence/competence/professionalism from yourself, so I appreciate the opportunity to post this thread to the office bulletin board, and allow everyone a chuckle, at my expense. Your comments are continuously entertaining to myself and my colleagues, so thank you for that. I've read the Edwards / Nash article you linked prior, and now again. I appreciate the argument, however, has this approach been adopted/executed, or is it merely academic? -MICHIGANKO
  2. While I agree that the application of PBSA to A&AS procurement is extremely complex (and rare), I do not necessarily agree that PBSA and A&AS are antithetical. https://www.linkedin.com/pulse/getting-your-two-cents-worth-strategies-maximizing-mcmartin-esq-?trk=prof-post
  3. DOECPA - So you have a Labor Hour requirement, and a proposed FFP-LOE contracting approach. Just a guess, but I will bet a significant sum that you are working for an agency where LH/T&M is never an option even when it is the correct contract type for the requirement (DOD perhaps?). Being commercial, Cost types are off the table, and you have no completion scope, so straight FFP isn't an option. If the above is correct, then you are probably going down the only path possible. So you have 1 seat for an SME for a year to provide support services (limited by space or funding), and now the question is if you lock them in to provide an LOE on a fixed price basis, how to define the LOE, and how to deal with the practical considerations of the single FTE requirement over a 12-month POP. I agree with going with 1,920 on an annual basis as your LOE. If the SME is working on a Government Site, you are compensating or 80 Federal Holiday hours plus 80 hours of vacation. Really, in setting up your LOE, you are simply defining that your requirement is for 1,920 hours to be performed within 12 months by a single contractor employee (with the single FTE driving the definition). It shouldn't be that way, but if cost-type and LH are off the table, then it is an unfortunate fix. As to the billing question, with FFP-LOE I would set up monthly LOE's so that you would have full performance of the monthly LOE to trigger the payment each month. I understand that practically speaking with 1 FTE that is difficult, but I have used language (as suggested by others above) which allows a KTR to reduce the total LOE by up to 80 hours in a given period to cover vacation (if you choose this route, first put the LOE back up to 2,000 Hours). Payment in an FFP-LOE is triggered by delivery of the whole LOE. If you are paying along the way then you are involved in some form of financing arrangement. If you structure your LOE in monthly blocks then the KTR can satisfy the monthly LOE and trigger the monthly payment. Of course, the trick with one FTE is if they get sick on the final day of the period, coming up 8 hours short with no time in the period to make it up, how do you choose to enforce the terms. The KTR is in default. If you simply prorate out the 8 hours and accept delivery, then you really have a LH contract. At a minimum, I would ask for performance of the 8 hours in the next period and seek consideration for late delivery, once completed. I have recently seen an "FFP-LOE" OSD contract in which the LOE included 5,000 hours to be performed within one-year, with a payment instruction for the KTR to bill monthly on a labor hour basis. This certainly isn't FFP-LOE and I can't wait to see how OSD settles up at end in the event that the KTR only delivers 4,999 hours. Hard to deny payment for default when you've paid almost the entire amount and treated the entire effort as a LH contract. On the flip side, if OSD is willing to prorate the 1 unperformed hour out of the effort, then it was truly a LH contract the whole time. Good luck on your procurement!
  4. My initial response is that under a Firm-Fixed-Price effort, the prime may increase or decrease its labor force as necessary to successfully perform the effort. The fixed price is based upon successful completion of the effort, not the hours expended. As such, the Government has no duty to provide an adjustment in the event that the Contractor incurs additional costs in performance. Further, the Government has no duty to inform the prime that its Sub has increased total personnel to meet the requirements of the effort. It is the Prime's responsibility to manage its Subs. I'm calling this my initial response, as I'm sure some contract specific facts will be revealed next which may alter the above.
  5. If I am understanding you correctly, your subcontractor added personnel, increasing its total labor billing to you by 50%, and you were unaware of this change for over 4 months? Is your contract with the Government FFP?
  6. OK I'll bite. Before I even address your bridge question, can you actually support a J&A? If so, under which exception? How quickly can you have a signed J&A in place?
  7. Recently amended Army Regulation 5-14, Management of Contracted Advisory and Assistance Services, 13 March 2014, contains the following statement: 4-5. Development of performance work statements "a. Performance Standards and/or metrics reflect level of service required by the Government to meet performance objectives.........Standards may be objective (for example, response time) or subjective (for example, customer satisfaction)........" I was surprised to see the inclusion of subjective standards within the regulation, however I do not dispute the need for such flexibility. I was immediately reminded of a passage from an article on the subject of PBSA (Edwards and Nash, A Proposal for a New Approach to Performance-Based Services Acquisition, Defense Acquisition Review Journal, p.352-367). Specifically, the paragraph stating: "Relationships are crucial, and it is well established in service marketing literature that subjective customer satisfaction is as important, and sometimes more important, than technical success. The importance of subjective factors in government service contracting is confirmed by the fact that subjective incentives - award fee and award term - are the most popular of all incentives used in performance-based contracts." Id. at 356. I have not researched the revision history of AR 5-14 (although I will begin that now) to determine when the "subjective" language was added. Regardless, dealing with the requirement for PBSA in the procurement of A&AS is a daily challenge for the activity I represent. I am always looking for better solutions. If the Army is going to allow customer satisfaction to qualify as a "measurable standard" then I have one more approach at my disposal. I am curious whether such subjective performance standards are actually being applied in Army Performance Work Statements, or in any Performance Work Statements for that matter.
  8. Gentlemen - Thank you for the feedback. This has been most helpful. In addition to the suggestions above, the payment clause includes the following: (5) Vouchers may be submitted once each month (or at more frequent intervals, if approved by the Contracting Officer), to the Contracting Officer or authorized representative. The Contractor shall substantiate vouchers (including any subcontractor hours reimbursed at the hourly rate in the schedule) by evidence of actual payment and by (i) Individual daily job timekeeping records; (ii) Records that verify the employees meet the qualifications for the labor categories specified in the contract; or (iii) Other substantiation approved by the Contracting Officer. (6) Promptly after receipt of each substantiated voucher, the Government shall, except as otherwise provided in this contract, and subject to the terms of paragraph (e) of this clause, pay the voucher as approved by the Contracting Officer or authorized representative. It appears from the billing, that the Prime was submitting time sheets from the Sub directly to the COR along with its billing. There is no documentation from the prime demonstrating that it actually paid the Sub.
  9. The Contract Type is T&M. Payment Clause 52.232-7 - Payments under Time-and-materials and labor-hour contracts FEB/2007 is included. Prime is a SB, as is its subcontractor.
  10. I recently inherited administration of a contract in which the prior KO suspended payment to the prime after learning that the prime had been receiving disbursements, but not paying their subcontractor. The subcontractor performs a large percentage of the actual services. As I begin my research, I thought I would reach out to this community. What (if any) authority exists for such an action?
  11. Nap - In reviewing the subject deviation, my interpretation is that DPAP is adding a requirement that the KO review the schedule rates proposed against each effort, de novo, to determine the rates to be fair and reasonable, applying the techniques at FAR 15.404-1. FAR 8.404(d), prior to this deviation, allowed ordering activities to rely on the schedule rates as fair and reasonable, subject to the review in 8.405-2(d) (when requiring a statement of work). FAR 8.405-2(d) requires the ordering activity to consider the labor mix and level of effort, and determine the total price to be reasonable. 8.405-2(d) does not require the KO to revisit the reasonableness of the rates (beyond determining that the proposed rates are at or below the contractor's schedule rates); only that he/she determine that the proposed categories (labor mix) and hours (LOE) are reasonable in relation to the SOW, and therefore when multiplied against the schedule rates (already determined fair and reasonable), that the total price of the effort is reasonable. The effect of this deviation should be a required analysis of the proposed rates, to determine them fair and reasonable without reference to their inclusion in the Federal Supply Schedule. I'm not sure how large of an impact this deviation will have, unless there are activities that rely on GSA's reasonableness determination to support their awards. My experience is that most activities have been performing price analysis of FSS rates based upon historical prices from similar competitive actions, or seeking other than certified cost or pricing data.
  12. KA - As Mr. Edwards stated above, this is a matter of BPA/Order interpretation. I will add however, that absent any language regarding ordering procedures / prices, I would have to side with your customer. Your current pricing schedule, as you've described it, includes FFP's for "Claims" split into annual periods. If those prices were subject to adjustment dependent on Period of actual Performance (crossing periods), then the resulting order would not be a straight FFP. Such an adjustment scheme would need to be called out in the BPA/Order, and would most likely have been identified/requested/demanded in the Contractor's original proposed pricing schedule for establishment of the BPA. Interpreting the proper price to be based on % of work performed x performance period rate, as you are proffering, incentivizes the Contractor to push the majority of the work into the back half of the period of performance, which puts your customer in a bad spot. Look at it from your customer's point of view. They have programmed dollars based upon your pricing schedule, which purports to offer FFP "Claims" by ordering period. They have most likely briefed several groups in their office in order to have dollars committed for this FFP effort. Now you are telling them that they may need more money, but you can't tell them how much until you determine how much of the effort was performed in the first period and the subsequent period. Of course they are upset! They briefed their management that they were ordering a FFP completion effort, and now they have to explain that they need more funds. Their management is asking them why they need more funding for an effort that was FFP, and asking them why they didn't foresee this issue. While I often have the urge to fire off a scathing E-mail to put a PM in their place, I usually find, as I believe you will here, that ultimately our interests are aligned. Both you and your customer are interested in a clear pricing scheme, in which all parties agree upon a FFP for an identified outcome. Contracting is interested in having set price schedules to issue orders, rather than negotiate each effort, and is also interested in avoiding the administrative burden of price adjustment modifications. The customer is interested in set pricing schedules to plan their program and brief up their chain. Your interests are aligned! Rather than fire off that E-mail, I would recommend that you go see that customer and explore your common ground. Your current instrument is not meeting either of your needs. Re-negotiate it.
  13. KA - In issuing a FFP Order for a non-severable service, I would not adjust the FFP later due to an increase in cost. If this is truly FFP, then you should be locking in the total price of the service outcome at time of award of the call order. The Contractor should have already factored their impending rate change into their original proposal against your call order. If this is not the situation, or if you have additional facts, please post them.
  14. KA - First, what contract type is your order? Second, What are the ordering terms under your BPA?
  15. Anonco - Call center and mail processing services are readily available in the commercial market. As a current KO who works almost exclusively in services contracting, I can tell you that your situation is all too familiar. Take a step back and look at your requirement. I would suggest performing market research of commercially available mail service and call centers. How do they advertise their services? By volume? By response time? By available personnel? By the hour? You stated that you can quantify the average call rate and mail volume. I assume from your $8M / 5 Year statement, that you have an IGCE based on some historical manpower formula. With that much information to start, I agree with the other respondents that some form of LPTA is most appropriate. If an Offeror has a good track record of providing similar services, and proposes an approach which will reasonably meet your minimum technical requirements (e.g. All mail distributed within X hours of receipt; or contractor responsible for processing 98% of outgoing / incoming mail [measured daily, weekly, monthly]; or contractor required to processes a min. of 50 pieces of correspondence per hour for all regular work hours; or All calls answered and forwarded within 2 minutes of receipt; or no more than 2 calls unanswered per hour; or 98% of calls received during regular hours (7AM - 5PM) answered, forwarded, and logged [measured daily, weekly, monthly]), then I would recommend that you leave it up to industry to propose whatever manning strategy they create to meet your need. Looking at key personnel for this type of effort is out of line with the subject matter. A private company procuring call center services certainly would not ask for the resumes of the people answering the phones. Reading between the lines, when the COR wants to look at the qualifications of the key personnel, what I perceive this to mean is that you are looking at whether the proposed new people will measure up to Mary, who has answered the phones for the past 3 years, or Bob and his nephew Billy, who are quick to get your FedEx packages out when you're in a rush, or Russ, who has successfully managed the Program, and always has a good story to tell when he drops in. Don't get suckered into looking at key personnel, or performing a best value trade-off for clerical services. Of course there is at least one fatal flaw in my line of reasoning. That being where the requiring office is interested in "BITS" (Butts In The Seats), as opposed to volume of mail delivered, or calls received and logged, or call issues resolved, etc... If you are in a BITS situation, you can still successfully employ an LPTA approach. As suggested above, give the Offerors the Labor mix, work schedule, etc.... This is an inefficient way to contract, raises personal services issues, and gives industry no incentive to be creative in designing an approach to meet your requirement, however, it can be done by simply evaluating corporate experience, or qualifications of key personnel (or both) against Government designated minimum qualifications. In services contracting, you will always be afforded another opportunity to deal with a difficult requirement, whether it be based upon a poorly defined scope, lack of identifiable performance metrics, or based upon the customer's desire to shape the procurement to the contractor they are comfortable with. When you get a requirement for services readily available in the commercial market, with identifiable performance standards, measurable data on the required output, and which lends itself to Firm-Fixed-Pricing, you owe it to the taxpayer to produce a high quality result. Don't perform a trade-off because the handbook states so; don't evaluate key personnel because the COR wants to; don't just put butts in the seats because it takes less work then drafting quality performance metrics. Right now there is a contractor out there that can handle all your calls and mail with less people than you are estimating, and for less money than you have budgeted. How are you going to find them, and how is your procurement going to offer them the opportunity to propose their approach?
  16. Kostdiek - There are a number of facts missing from your query which could impact the answer you may receive for this post. What is the prime contract type? What do you mean by "our performer has recently been required to travel locally between a few different Government buildings to do his job"? Was this not required before? Was there a modification to the terms of the contract? It's hard to tell if the travel you are providing is truly "free" without knowing the type and terms of the contract beyond the CLIN structure. Further, what is the contract structure between you and the prime? Absent some more facts, it would be difficult to point you in the right direction.
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