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Fara Fasat

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  1. Actually there is a contract type in the FAR that is close to what you are asking, although not exactly the same. It is an Energy-Savings Performance Contract, or ESPC. It has its own statutory authority (42 USC 8287), and is implemented at FAR 23.205, although 23.205 simply sends you to the DoE ESPP regs, which are extensive. It has the features you mentioned -- performance is financed by an outside financier, and payment is based on achieving the savings guaranteed in the contract. It's not the general PFS authority you are looking for, since it is limited to energy saving projects by its special statutory authority, but if you are looking for ideas and experiences, the DoE web site has lots of reference material. Now, can you apply its concepts using an OT as the contract vehicle -- who knows?
  2. It's a step in the right direction, but the definition would only apply to Part 19 and probably only Subpart 19.7. It would not apply to flowdown in general, where it would be much more useful.
  3. Oh we have and we do. Posting here was just a check to make sure I'm not missing anything. By the way, when checking Neil's reference to the SBA regs, I saw something interesting - the SBA's definition of a subcontract at 134 CFR 125.3. It has two things that are lacking in the FAR's various definitions - a time element and what I will call a "carve-out." It's only a subcontract if the awarding party is already under contract with its customer (the time element), and the subcontract is for a part of the work that the awarding party has undertaken with its customer (the carve-out). In my opinion, that's a big improvement over the FAR's "supplies and/or services required for performance of the contract," which has led some CO's to call utility contracts 'subcontracts' because utilities are required to run the factory that performs the contract. Here's where it makes a difference: factories usually order materials, parts and components on a forecast, and make their products as the customer orders come in. Under the FAR definition the orders for materials, parts and components would be subcontracts; under the SBA definition they would not.
  4. Yes, but in that same reg it states (at 13 CFR 125.(c)(1)(x)): "Except when subcontracting for commercial items, the prime contractor must require all subcontractors ... to adopt a subcontracting plan of their own...." A prime can only take credit for awards by lower-tier subcontractors with individual subcontracting plans, and a CI subcontractor isn't required to have a plan. Besides, as I said above, I've never had a prime use that as their reason. They always said a plan was required simply because the subcontract exceeded $750k.
  5. Good to know the experts think the answer is no. Too bad some of our largest and (allegedly) most experienced aerospace and defense contractors think the answer is yes. Joel - I don't think it matters whether the prime is a FP or CR contract. The issue is simply whether the prime must require its CI subcontractor to have a plan. I see nothing in the text of the clause that breaks it down by type of contract (FP or CR). Neil - interesting point, but I didn't think primes could take credit for subcontractors awarded by their subcontractors. Even if they can, can't the prime accomplish that by simply having the sub report its small business awards rather than by flowing down the requirement to have a plan, with all the administrative burdens and risks that go with it? Besides, the primes I have seen aren't doing it for the credit. They just think they are required to flow down the clause. They never even see see the report, so they don't know the value of any SB subcontracts awarded.
  6. Someone asked a similar a similar question a few years ago, and it got one somewhat cautious response. I'd like to ask it again more directly and see what anyone thinks. Over the years, I have seen numerous prime contractors' standard subcontract terms for commercial items, and many of them include 52.219-9, the requirement to have a small business subcontracting plan. I believe that a subcontracting plan is not required at all in subcontracts for commercial items. My opinion is based on the language in 52.219-9(j), which states: "Subcontracting plans are not required from subcontractors when the prime contract contains the clause at 52.212-5, Contract Terms and Conditions Required to Implement Statutes or Executive Orders-Commercial Items, or when the subcontractor provides a commercial item subject to the clause at 52.244-6, Subcontracts for Commercial Items, under a prime contract." Since all contracts should have one or the other of those clauses, a subcontractor providing a commercial item is not required to have a plan. Looking at it another way, the only subcontract required to have plan is under a non-commercial prime (which includes 52.244-6) and the subcontract is for non-commercial items. There are obviously a lot of people who think differently, because several large primes (who shall remain nameless) include 52.219-9 in their commercial item subcontract terms. Their reason is that FAR 19-704(a)(9) states that a subcontract plan shall include "... assurances that the offeror ... will require all subcontractors (except small business concerns) that receive subcontracts in excess of $750,000 ... to adopt a plan that complies with the requirements of the clause at 52.219-9, Small Business Subcontracting Plan." Also 52.219-9(d)(9), which states that an offeror's plan will include "Assurances that the Offeror ... will require all subcontractors (except small business concerns) that receive subcontracts in excess of the applicable threshold specified in FAR 19.702(a) on the date of subcontract award, with further subcontracting possibilities to adopt a subcontracting plan that complies with the requirements of this clause." Sure looks like conflicting instructions, but here are my thoughts: first, ignore the FAR text at 19-704. It doesn't go in a prime contract; only 52.219-9 does. Next, read 52.219-9(d)(9) and (j) together: (d)(9) says to require a plan of all subcontractors, but (j) narrows it by saying 'but not from subcontracts for commercial items.' So - is a subcontracting plan required from a commercial item subcontractor?
  7. Thanks. By the way, in anticipation of the inevitable "have you read ...", I did review the DoD Government Charge Card Guidebook, and other materials at https://www.acq.osd.mil/dpap/pdi/pc/index.html . Nothing seemed to answer this question, although if someone can point to any relevant information I would be glad to review it.
  8. The Government Commercial Purchase Card (P-card) can be used to make micro-purchases (see FAR 13.201 and 13.301). Presumably this means that a government P-card holder can make purchases from a seller online site or portal, as long as the purchase is authorized . Some of these sites require a user to set up an account before making a purchase. Question: can a government buyer set up an account in order to make a purchase from a seller site?
  9. In 2003, OMB issued a memo regarding the use of Part 12 or Part 36 for construction. I'm paraphrasing, but it basically says that even though construction is commercial, Part 12 is inappropriate for construction and Part 36 should be used in most cases. It noted that Part 36 was already consistent with "customary commercial practices in the construction industry."
  10. Thanks Vern. A fresh perspective always helps. I see the expansion in how it lists services in one line (A), and then services covered by the SCA on another (B), but I could be reading too much into it.
  11. Thanks Vern. What you said is very true, although I hadn't focused on those issues. I was more concerned with what seemed to be an expansion of the coverage. Whereas the current coverage is specifically limited to SCA- and DBA-covered services, the new EO applies to all services. While there is no definition of "service" in Part 2, Part 37 covers service contracting, and basically a service contract is for the performance of a task rather than the delivery of supplies. It then lists numerous examples, but it seems to cover just about anything that is not for the delivery of supplies. For the purpose of my question, 37.107 then says the SCA will not apply to all service contracts. So, in addition to the other problems you pointed out, my question is whether the new EO is an expansion on the current minimum wage coverage. I think it is, but it didn't seem to draw much attention. For example, a contract for audit services, advisory and assistance, R&D, architect-engineer, etc would be covered, and every worker on those contracts, including employees working "in connection with" (another undefined term) the contract, would be covered. Same for all other services that are not covered by the SCA. Seems to me a big expansion that has slipped in unnoticed. That's why I'm wondering what others think.
  12. I want to run this by the forum to get a check on my reading of the new Executive Order issued on April 27, requiring federal contractors and subcontractors to pay a minimum wage of $15 per hour to workers on a range of covered contracts for procuring services and construction. It supersedes the 2014 Obama EO that is implemented at FAR Subpart 22.19. That rule only applies to contracts covered by the Service Contract Act (for services) and the Davis Bacon Act (for construction)(see 22.903, "Applicability"). I read the new EO as applying to all contracts for services, including SCA and DBA-covered contracts. This would be an expansion to the current coverage. I base this on section 8 which defines covered contracts as (A) contracts for services or construction, or (B) contracts for services covered by the SCA, or others at (C) and (D). The only other requirement is that it applies to contacts covered by the FLSA, which frankly applies to almost everything. Here's my problem: several law firms have sent out alerts on the new EO, but none of them have noted the expansion that I am reading in it. Since SCA-covered services are a subset of all possible contracts for services, it would seem this is worth a comment. How does anyone here read the coverage of the new EO? Executive Order on Increasing the Minimum Wage for Federal Contractors _ The White House.pdf
  13. Interesting. They got rid of it 25 years ago, and yet it resurfaces only in commercial item contracts.
  14. Glad it helped, although these discussions do often go off on tangents. 🤷‍♂️ I'm still genuinely interested in what a contractor is supposed to comply with in 18 USC 431. Anyone know?
  15. Thanks Vern and Don. Regarding the BAA and TAA certs - I overlooked 52.212-3. I actually keep a separate document with those in it but didn't go back and check it. There are so many bread crumbs to follow when dealing with the FAR that it's easy to forget some, and I did. Here's another thing about 212-3 that's a pain, but what can you do -- the reps and certs in it do not have clause numbers, just the name and text. I added the clause numbers to my reference document to help keep track of what and where. And 212-4(r) - what a mess. Besides the contradictions I pointed out above, there's this: one of the laws listed is 18 U.S.C. 431 relating to officials not to benefit. Basically it says that contracts may not be awarded to members of Congress. I can find no associated clause, or even a section of the FAR that addresses it. And I'm not sure there's anything for a contractor to comply with. It looks like the only people affected are the awarding officer and the member of Congress. So why is it even in 212-4(r)?
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