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Patrick Mathern

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Posts posted by Patrick Mathern

  1. In general terms, what does having a "directed source" do for a Prime with a certified procurement system other than relieve them of justifying the decision not to compete?

    I have a case where the Prime is considering using "directed source" as rationale for saying that a review of price reasonableness is not required (cost or price analysis). The logic here is that since the CO directed the source, the Prime has no option and therefore has to purchase at the offeror's price.

    I wholeheartedly disagree with this - source direction has nothing to do with price reasonableness. Has anybody experienced a case where source direction was successfully linked to price reasonableness?

  2. Though Vern is probably right from a by-the-book perspective, I would proceed in alignment with Here_2_Help's advice. If LCAT rates are agreed-to and on contract, those rates are considered fair and reasonable only within the scenario that supports them. If it can be shown that the lower rate is for the same caliber of labor and that there will be no additional hours required due to the lower-cost employee, then I'd say there's a to be made for stating the lower rate as "fair and reasonable." Realize, however, if you can lay that story out, then you've actually conducted a price analysis and this whole conversation goes away.

    With regard to an approved purchasing system, Here_2_Help again makes a good point. Even if you're negotiated at the Prime, if you have an approved system, you have to make a determination of fair and reasonable. Doesn't have to align with TINA at that point, but the work has to be done.

  3. They're always going to request data in their format. However, if there's nothing in your contract that states this as a requirement, you should be fine in your own format. Do your best to provide the data elements that they've requested. I would recommend that you submit it in a format that can be modified and worked with (xls rather than pdf if that makes sense for you). Frustrating an auditor doesn't typically work out in the end for contractors.

    Best of luck!

  4. Here's the scenario:

    A large business submits a contract-specific small business plan with their proposal. Prior to negotiations, two of its key small businesses become large businesses (one is purchased by large business and the other grows beyond the size requirements). The impact is sizable and there will be no chance for the subject large business to meet their goals originally stated in the proposal:

    Question: Is it customary to submit a modified contract-specific small business plan for the contract when this occurs since negotiations have not been completed?

    Thanks!

  5. I'm working through a Prime proposal >TINA in response to a non-competitive FPIF RFP with progress payments. I have limited experience with FPIF, so I need some education.

    My question is regarding liquidation and profit:

    Assuming a 20% liquidation rate (80% progress payment) how and when does the contractor invoice profit/fee? Is it invoiced with customary progress payments and if so, what % is applied? The target fee % agreed to in negotiations? How/when is that then adjusted to reflect the outcome of the agreed to share ratios related to the FPIF?

    Thank you,

    Patrick

  6. Unless your contract has a provision in it that requires you to disclose or share savings, your rate is firm and shouldn't be re-opened. As long as you acted in accordance with TINA (if this is in fact a TINA procurement) and did not hold back information when agreeing to the rates, you should be ok in my opinion.

    Would love to hear from others on this.

    Patrick

  7. I think your question has been answered but wanted to give you a piece of advice on how you respond since you mentioned "Learning Curve" in your original post. If you did not use a learning curve but it is something the DCMA requested, make sure that you respond with a case that implicitly refutes (no need to spell it out) the applicability of a learning curve, especially if the number of units being purchased now is >=10% of the total units produced to date (rough rule of thumb I use).

    Good luck!

    Patrick

  8. Like some of the other respondents, this is a little confusing to me. Could you clarify this: Are incurred costs being requested in order to determine what you're due as a result of the termination? Or are the incurred costs being requested in support of Table 15-2, which is used in proposals?

    I'm going to go out on a limb and guess that it's the latter. Since your customer has a fixed bucket of dollars, they're going to be required to substantiate that the value of the work incurred plus the value of the new work is truly worth what you're charging.

    If that's the case, you're in the driver's seat on this one. Speaking as simply as possible: Provide actual hours and actual material dollars. They can burden all of that using the bid rates that you provided previously.

  9. I'd like to re-open this conversation under a slightly different light. Is there anyone out there in private industry that uses or has seen a contract administration system that allows for effective organization and management of prime contracts? I have clients that use a mix of Windows File Manager, Sharepoint, and one that says they use GovWin for this purpose (though I haven't seen this myself). Anybody have experience with other systems that they can share?

    Thanks in advance!

  10. We conduct cost/price analysis on behalf of federal primes and subs and have never flinched in using prior price history as a basis for price analysis (assuming, of course, that the historical price can be substantiated as fair and reasonable as well as a suitable basis in and of itself, a whole other topic of conversation...)

    Recently, we took a closer look at FAR 15.404-1( B)(2), which reads as follows:

    The Government may use various price analysis techniques and procedures to ensure a fair and reasonable price. Examples of such techniques include, but are not limited to, the following:

    (ii) Comparison of the proposed prices to historical prices paid, whether by the Government or other than the Government, for the same or similar items. This method may be used for commercial items including those “of a type” or requiring minor modifications.

    Am I reading this wrong or does this say analysis based on historical pricing is only valid for commercial items? Let's say the contractor purchases items which required cost analysis (subject to TINA). Three months later, a new requirement pops up (under TINA threshold but over simplified acquisition). Since these are not commercial items, would this prior procurement and cost analysis not be a suitable basis for determining price reasonableness (of course after adjusting for quantity and passage of time)?

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