airborne373

I try to avoid past performance evaluations because my agency makes it too hard -- so many reviewers, some of whom don't understand the purpose of a past performance evaluation, and so many people afraid to make a hard decision, and so many people afraid of a protest, and so many people so very cautious, and so many people who care much more about the process and the file documentation than they about results or performance of the awarded contract, so much second-guessing -- all of this combines to make it too troublesome. If they understood your comment and actually cared about the results we deliver to users and line managers acting on behalf of the American taxpayer, well, then I would be more eager about past performance evaluations. I'm dealing with too many other fires and I don't have time to re-educate the entire agency contracting workforce -- but I wish DAU and FAI and so forth would do much better teaching on the correct principles of past performance evaluations.

True statement, Too many see the role of evaluating PP as going through the motions. sometimes i fear that it is not just PP evaluations that people dont understand the purpose of what they are doing.

One more question for thought. Imagine a contractor performed poorly (almost disastrously) on a recent and very relevant (very similar in all respects) contract, and the poor performance is reflected in CPARS/PPIRS. Can the past performance evaluation for a source selection have knowledge of this information and still assign that contractor a low risk (or high confidence) rating for past performance?

Yes, while it may increase the risk of a protest, but if the evaluators documents their rationale as to why the performance does not impact the overall risk, then yes they can. It is not just a simple yes or no, the evaluator needs to look at the facts and the information and provide a rationale for their judgement as to how that performance will impact the risk in their opnion.

Factors are in descending order of importance, and the non-price factors when combined are significantly more important than price. The reasons for the Excellent ratings in Factor 1 are essentially the same, so Factor 1 is not a discriminator in the selection. Which offer provides the best value?

. Offer A Offer B

Factor 1 Technical Excellent Excellent

Factor 2 Past Performance Low Risk Some Risk

Factor 3 Price $100 $95

One more question for thought. Imagine a contractor performed poorly (almost disastrously) on a recent and very relevant (very similar in all respects) contract, and the poor performance is reflected in CPARS/PPIRS. Can the past performance evaluation for a source selection have knowledge of this information and still assign that contractor a low risk (or high confidence) rating for past performance?

Since it appears that you are doing a trade off, there is not enough information available here to make a judgement. What is the make up of the factors that rate them as excellent in technical. what are the factors that make up the ratings in past performance. If offeror B is offering something that A is not, and the Government determines that proposal is the best value, then why can' t they award to B.

Thanks, while it would be nice to get these in our contracting shop, i dont see that happening anytime soon. but good to know of other sources out there and i will check with our attorneys to see what they have.

Briefing Papers? is that a subscription site like the public law journal ?

Let's just say sometimes lesson you learn that stick with you are the ones that ....

LPTA is a method. Sometimes the right one sometimes not.

Experience is a great teacher.

Would I do it today. No

Thanks all,

And yes I have been called an idiot and an ass but never a threat to national security. ( maybe it was becauses exes were calling me that )

sorry about resurrecting an old discussion, but this has some good points and would like to pose this question.

We are currently in the process of looking at the potential pros and cons for utilizing this method. ( I am providing background and advise to the KO, not the KO nor in their chain)

We are considering utilizng an LPTA for a requirement ( Support services) and the contract type will be CPFF. ( to use LPTA for LOE services is another discussion, thanks)

In our discussions with Legal, it has been identified that IAW FAR 15.404-1(d)(2) Cost realism analyses shall be performed on cost-reimbursement contracts to determine the probable cost of performance for each offeror.

The KO stance is that we don't have to evaluate each offeror and we can award to the the lowest priced offeror if they are technically acceptable.

The Attorneys stance is that in a cost environment, you have to evaluate all offerors for technical acceptability and then do cost realism based upon the above citation for each offeror based upon the above cite.

( Legal has no issue in a FP environment with this methodology)

I am tending to agree with the attorney, however want to make sure I am not missing anything. ( Caveat - I have utilized this methodologyseveral times without much success (FFP), the lowest offeror(s) were never technically acceptable, so ended up evaluating them all, so my support of this method is limited, good in theory, so so in practice)

What are y'alls thoughts on doing economical LPTA on a cost contract in light of FAR 15.404-1(d)(2)

Thanks appreciate any and all comments

If the OP was an observation post, I would be calling for fire for effect. LOL (OP original poster)

While i enjoy bickering to bicker, i will reply with a situation where i think it is appropriate. so dont think i am avoiding it.

unfortunately, I have to go off to a a meeting to have discussions as to why there are cost overruns.

and before you get the opportunity to state it, i did have a few landings where my cranial housing group became a point of contact.

airborne373:

The LPTA appendix speaks for itself. The other statements are general and I'm not sure why you refer to them. In any case, I just pointed out the policy. Have you spoken with anyone at DPAP about using LPTA for CR acquisitions?

I'm sticking with my blanket statement, and unless you have better data than you have presented, you have said nothing that changes my mind.

However, I would be interested in your view of what the "right situation" would be in which to award a CR contract via LPTA, assuming that the use of CR is appropriate pursuant to FAR 16.301-2. How would you argue for that in front of a skeptical source selection authority? That would be your best chance to change my mind.

Vern,

yes the appendix speaks for itself, and you have to read it in total and not cherry pick what you want to read. You chose one section related to price. If you re-read section A.1 of the guide its states "often for acquisitions of commercial or non-complex services or supplies which are clearly defined and expected to be low risk."

As to CR and LPTA, my actions that have been done are in excess of $100M and I have determined that the provisions at 16.301-2 (a) are applicable.

but then again, I am in the TO arena, so I fall under 16.505 not 15.3. ( and I never stated that I did stand alone)

and FWIW, the OP is more than likely under a TO rather than a stand alone contract.

I will also add that I searched the GAO database and found only one reference to LPTA being used in connection with CPFF, and that was the protest cited by Steward, which was for award of a CPFF task order by the Department of the Army. See CACI Technologies, Inc., GAO Dec. B-409147, 2014 CPD ¶ 44. Task order selections are not governed by the FAR source selection rules. The Court of Federal Claims database included no instance of an acquisition in which a CR contract was to be awarded by LPTA.

I now know of one case of an RFP being issued to award a CFPP contract by LPTA, by the Air Force in 2011. I called the contracting office and they were not aware of it. It was below the dollar value that required review by the chief of the contracting office. They did not know off hand whether the contract was actually awarded pursuant to LPTA, and were shocked to learn that their office had issued such an RFP, because that would have been "stupid".

Those were protests. That alone does not mean that there were no awards of contracts done by LPTA for a CR action. I fail to see the purpose of that note.

as to the AF, you have provided anecdotal information. and they don't even know the status of it, so again I fail to see the purpose.

I have conceded that we will agree to disagree, as I am sure that in hindsight, I will do many things that are considered foolish and or stupid by others, just am I am sure that you have done the same.

interesting the selection you quoted from was from A5 which is price.

however there are other sections that discuss LPTA in the guide.

1.2 Lowest Price Technically Acceptable (LPTA) Source Selection Process (see FAR
15.101-2). The LPTA process is appropriate when best value is expected to result from
selection of a technically acceptable proposal with the lowest evaluated price.

and

A. 1 The LPTA process is appropriate when best value is expected to result from selection of the
technically acceptable proposal with the lowest evaluated price. LPTAs may be used in
situations where the Government would not realize any value from a proposal exceeding the
Government’s minimum technical or performance requirements, often for acquisitions of
commercial or non-complex services or supplies which are clearly defined and expected to be
low risk. The LPTA process does not permit tradeoffs between price and non- price factors.

and from A. 5

the PCO may conduct a cost analysis to support the determination of
whether the proposed price is fair and reasonable.

in regards to analysis over time, yes it was done over time. re-compete of a previous action, while not done with final audited costs, the analysis was done with invoiced amounts.

I guess we will agree to disagree on your blanket statement.

I have read your articles over the past 5 years, and into several of your archives, and for the most part I agree with you.

But i do take exception to your "blanket statement". In some situations yes, and in the right situation it is the correct and best choice.

CPFF term contracts/actions awarded on a trade off can be just as foolish and stupid in my opinion. (in the right situation)

I assume the RFP is rather brief? In a sole source you don't generally have evaluation criteria. What type of information are you asking for?

My argument that to award a CR contract by LPTA is foolish is based entirely on doctrine, logic, theory, and judgement.

I don't mind debating about this with you based on doctrine, logic, theory, or judgement, which is all I've got, but if you're going to assert actual experience and facts, then you'll have to show them to me. If you can't, or won't, do that, then I'll have to assume that what you said about facts and extensive experience is just b.s. and that continued discussion with you is a waste of my time. Fair enough? I won't debate the law with you, because I don't think law is an issue. I've been very clear about that.

By the way, the protest decision to which you provided a link in Post # 23 concerned a task order competition. Task order competitions are not subject to the source selection rules in FAR Part 15 and are not relevant to this discussion. Please be more careful in the future before asking me to read something. And no more cases, please.

Vern,

here are some facts based upon my experience with CR actions and some comparisons to actions being awarded as a trade off, or utilizing T&M/LH/FFP actions.

1. Comparison between previously competed actions one T&M, recompeted as a CPFF/LPTA netted in a savings to the Gov't of approximately 18%.

2. Competition for an CR action awarded trade off, resulted in a 26% premium being paid.

Both of these actions were for support, or " butts in seats" . Nothing special, just provide personnel to support OCO actions in areas of operations.

In the first case the COR had good oversight as to what was happening and monitoring what they were doing. The other case, well, lets just say the incumbent won.

So to make a blanket statement that it is foolish to award a CR action on LPTA is questionable. Without all of the facts and rationale why something is done, it appears that you are saying don't do it as we have not done it that way in the past. If that is what you are saying, then we are doing nothing but contracting by checking the box. I believe that there are some KO's that will make decisions based upon the situations and infomration available rather than by "that is the way we always do it"

There are reasons that actions are done that way and they can be successful if the KO and the COR are involved. If they sit back and ignore, yes you can have cost overruns quite easily.

As to the original post, it was never really explained why there were cost overruns.

Did the Government underestimate the effort?

Did the contractor decide to pay higher rates than what was proposed? ( this happens quite a bit, and if the COR/KO are not monitoring spend reports, then this will happen)

Did the contrator pay signing bonuses that were not part of their proposal?

From what it appears the contractor was given potentially a pws, with historical labor hours and categories to bid to, and they bid to those. so not really sure why they are in an overrun status. Not enough information given.

you state that the labor categories were not incorporated into the contract, What is the level of effort that they are holding you to? How was the level of effort determined at the onset?

If not advisory and assistance, what kind of services are they? What does your market research show? Why is an IDIQ contract appropriate? (or why does the customer want an IDIQ contract?

unfortunately he can't.

The COR will probably not get into the "weeds", or as you asked "Is he sitting side-by-side with every worker verifying that each of them is working on what they're supposed to be working on?" but will be looking bigger picture. Is the task getting done if is services to meet the required timeline.

The management reports, metrics and various other propaganda that the contractor provides will be what the COR utilizes in addition to the QASP.

excerpt from the DOD COR handbook reference invoice and payment date 22 March 2012.

CORs can approve invoices on fixed-price contracts. However, for cost-reimbursement,

time and-materials, and labor-hour contracts, CORs can review — but not approve —

invoices. For other than fixed-price contracts, DCAA has the sole authority for verifying

claimed costs and approving interim payment requests. Only the Contracting Officer can

approve final payment requests.

Basically the COR has to monitor the contractors performance, track the monthly reports, and surveillance reviews. As far as costs go, the COR will probably be looking at on service contracts the hours worked vs the hours billed and labor category as compared to the monthly reports the contractor submits and information gather from the COR's technical monitors, (if he has any) (if he even does that quite honestly)

If he sees an issue he is to contact the ACO and DCAA and get the issue rectified

right now disagreeing with the coffee maker,

my thoughts are with this share ratio, the contractor is on the hook for everything over 67M. that is why i dont think we will make the ceiling price.

I disagree, the preceding sentence is discussing the application of the formula, if you read both sentences in context it discusses the application of the formula, and in this instance the formula would lead to a net loss prior prior to reaching the ceiling.

"When the contractor completes performance, the parties negotiate the final cost, and the final price is established by applying the formula. When the final cost is less than the target cost, application of the formula results in a final profit greater than the target profit; conversely, when final cost is more than target cost, application of the formula results in a final profit less than the target profit, or even a net loss.

the next step is to determine if the final cost is greater than the ceiling price then the contractor absorbs the difference as a loss.

in this situation, with the contractor absorbing 100% of the overrun over $60M, then the likelihood of reaching the ceiling is extremely unlikely.

seems clear to me.

(will this make it page 4?)

I think that the FAR does allow for a profit of less than zero.

if you read 16.403-1 it discusses the application of the formula and states " or even a net loss" when using the formula to determine profit when final cost is more than target cost.

unless there is an exception

43.105 (a) (2) Contain a limitation of cost or funds clause (see 32.704).

32.704 (b ) Under a cost-reimbursement contract, the contracting officer may issue a change order, a direction to replace or repair defective items or work, or a termination notice without immediately increasing the funds available. Since a contractor is not obligated to incur costs in excess of the estimated cost in the contract, the contracting officer shall ensure availability of funds for directed actions. The contracting officer may direct that any increase in the estimated cost or amount allotted to a contract be used for the sole purpose of funding termination or other specified expenses.

it appears that the procedure that Ji is recommending may be feasible.

If the requirements of 43.105, 37.204 and 52.232-20/22 is included, then the guidance at GAO B-300480 and page 7-9 of the Principles of Fed approp, vol II ch7 will need to be adhered to. "As more precise data on the liability becomes available, the obligation must be periodically adjusted, that is, the agency must deobligate funds or increase the obligational level as the case may be. "

Section B.1. f of the PoFA, page 7-23 also states that "However, for many types of obligations, the precise amount of the government’s liability cannot be known at the time the liability is incurred. As summarized in our preliminary discussion of 31 U.S.C. § 1501(a), some initial amount must still be recorded."

for the purpose of this, I argue that an intial amount was recorded and that they have met the intent, and as more specific information is available (perJi discussion) the obligation will be adjusted up or down.

edited to try and remove smiley face

.

FWIW, my vote (absent my "judicial" assessment below) is $68 because (1) incentive contracts do not permit adjusting profit to less than zero, and (2) the permitting the profit adjustment to be less than zero renders the price ceiling meaningless, and we are required to interpret a clause in a way that gives meaning to all its terms.

how do you reconcile your statement with FAR 16.403-1(a) which states ...."When the final cost is less than the target cost, application of the formula results in a final profit greater than the target profit; conversely, when final cost is more than target cost, application of the formula results in a final profit less than the target profit, or even a net loss."

Tried the first link to the report, said file not found

this might work

http://afgeunionblog.files.wordpress.com/2013/02/sequestration_4-pager_single_feb6-2.pdf

my original statement

In this case since it is a 0/100 share on the over, the ceiling does not matter as the contractor assumes responsibility for for all costs over the the target cost. ( if there were a different ratio, then I could see where the ceiling would come into play

so yes in this case .