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Matthew Fleharty

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Everything posted by Matthew Fleharty

  1. Vern, From what I read in the GAO's decision, they did not rely on the statute as the basis to justify their action against Latvian (http://www.gao.gov/products/D14354#mt=e-report):
  2. Vern's absolutely right - consider an analogous situation many people face when constructing a new home. A person can estimate a budget based on "objectives" (# of bedrooms, square footage, etc.) without the "specifications" that will then be created after sitting down with a professional architect. Moreover, the manner in which those "objectives" are met can even be constrained by the original estimate to prevent to work's cost from spiraling out of control.
  3. SubK, From what I've read, this issue has already been adequately addressed/answered in the other forum. Furthermore, you fail to present a key piece of information in regards to whether or not FAR 52.222-43 is in the solicitation. Finally, read the FAR language. It states: If the -8 option is priced in the contract, ask yourself: wouldn't the exercise of that option be "within the limits and at the rates specified in the contract?" Then as far as the rate adjustment is concerned, that depends on the FAR 52.222-43 clause as to what level of escalation should or should not be included in the option pricing; however, as Vern said in the previous thread, speak to the Contracting Officer regarding this solicitation...that is, after you fully understand the solicitation and compose a clear question (I'd advise against just dumping information and assertions from your colleagues as you did here). In the future, I'd recommend you keep posts regarding the same topic consolidated so that individuals can know what has been already asked and answered.
  4. Matthew Fleharty

    Reading Recommendations for Contracting Professionals

    Or by practicing and receiving constructive feedback. I wish the Government's required "in residence" acquisition training focused more on developing/honing skills like that rather than instructors parroting the FAR with the help of Powerpoint...but I digress. Maybe when I can find some spare time I'll sit down and lay out my thoughts so I can have a constructive conversation with Don (and any others interested in the subject).
  5. Matthew Fleharty

    Reading Recommendations for Contracting Professionals

    Joel, I'm curious what recommendations you have on the topic of negotiations. Some notable ones that I've read are Getting to Yes and Getting Past No by William Ury as well as The Art of Negotiation by Gordon Wade Rule (which can be found electronically here http://www.wifcon.com/pubs/artofnegotiation.htm though I'd love to find a hard copy...) and Don's recommended Crucial Conversations. Any others would be quite welcome! Also thanks to everyone who has contributed thus far! I've already ordered most of the recommended books if they weren't part of my library already, though some of those texts Vern just referenced are pricey
  6. Matthew Fleharty

    Definition of SUBCONTRACTOR

    I'd love to see/hear the rationale behind DCAA's allegation, if that's something you could share.
  7. Matthew Fleharty

    Definition of SUBCONTRACTOR

    The full definition of "subcontractor" at FAR 44.101 reads: Consulting could meet that definition - "a...firm that furnishes...services to...a prime contractor" - the services in this case being consulting. "Furnish" has a few definitions, American heritage dictionary defines it as "to provide" (https://ahdictionary.com/word/search.html?q=furnish) - based on that definition, "to provide"/"furnish" services would not necessarily require the production of a tangible item or deliverable. What argument do you want to make and what can you use to support it?
  8. Matthew Fleharty

    FAR 13 fair and reasonable

    Fair enough, but one day I'd like to have an in depth conversation regarding when definitions/standards should be required and when they shouldn't. As someone who has been through and watched this career field and the regulations governing it evolve, I think I could learn a lot if you could spare the time for discussion. I think my final point is that when we're assessing whether competition was had or not, that reasoning seems to draw on similar criteria as contained in the definition of "adequate price competition." Don't worry any further - I promise I won't point any buyers using simplified acquisition procedures to the "adequate price competition" standard, but many (if not all) of those components will come up while using business judgment to reason through the issue of whether competition could have resulted in a fair and reasonable price - I'll just find some business text instead.
  9. Matthew Fleharty

    FAR 13 fair and reasonable

    Vern, I'm definitely not a FAR Part 15 person - I cringe every time I see a commercial acquisition that meets the requirements of FAR 13.5 go the FAR Part 15 Source Selection route... What I am is someone that likes to have a standard or definition to base a position on - I've agreed with you that the applicability is inappropriate as currently written; however, given what those standards state, I think they could potentially have use outside of the a prohibition on obtaining certified cost or pricing data.
  10. Matthew Fleharty

    FAR 13 fair and reasonable

    That sounds a lot like FAR 15.403-1(c)(1)(ii)...
  11. Matthew Fleharty

    FAR 13 fair and reasonable

    Completely understand that analysis is what drives the determination of fair and reasonable prices (refer to my first post in this thread) - I'm discussing the (or a potential) basis/standard for that determination.
  12. Matthew Fleharty

    FAR 13 fair and reasonable

    Forum discussions are about whatever is being discussed by the members at the time - I don't think my posts or questions have taken the original question and discussion to a point that is completely unrelated. Is FAR 13.106-3(a) all you need for FAR Part 13 acquisitions? "Whenever possible, base price reasonableness on competitive quotations or offers." What are competitive quotations or offers? Can you point me to a definition? For example, if a requirement is solicited and only one quote is received, is that a competitive quotation that could serve as the basis for price reasonableness? Why or why not? On the other hand, the standard for "adequate price competition" (referenced in FAR 15.404-1(b)(2) price analysis techniques to determine a fair and reasonable price which are remarkably similar to your FAR 13.106-3(a) reference) actually sets standards that make sense (already explained in my previous post). I've already conceded to Vern's point that because it states "offers" it should not be applied to simplified acquisitions when quotes are received...my point/question is shouldn't there be such a standard for "competition" that is consistent regardless of whether quotes or offers are solicited and why couldn't it be the one for "adequate price competition?"
  13. Matthew Fleharty

    FAR 13 fair and reasonable

    Vern, Since "adequate price competition" as a term is included under FAR 15.404-1(b)(2)(i), I'd argue that it is relevant even on FAR Part 15 acquisitions below $750,000 when performing price analysis and comparing proposed prices received in response to the solicitation. If you don't meet the standards of adequate price competition, the use of that technique to determine price reasonableness would be improper. Outside of the FAR Part 15 specific language of "offers" and "source selection" (bolded and underlined above) the rest of the words/information contained in the standard for "adequate price competition" is quite useful in answering the question "When might the Government have a fair and reasonable price resulting from competition?" Here's a partial breakdown as I see them: Two or more offerors that are: (a) Responsible (b) Competing independently (c) Satisfying the Government's expressed requirement Price is a substantial factor No finding that the price of the otherwise successful offeror is unreasonable. Those are sound standards that could easily be applied to simplified acquisitions, but apparently should not (at least not by reliance on the FAR) due to the use of the word "offers," which you correctly pointed out, and the distinction between "offers" and "quotes" in FAR 13.004. Now, as someone who stresses the importance of definitions, since "competition," "adequate price competition" or a similar term is not defined in FAR Part 13 or FAR 2.101, where should contracting professionals go when basing price reasonableness for simplified acquisitions off of competition to answer the question "when might the Government have a fair and reasonable price resulting from competition?" Surely they can answer the question through reason, business judgment, and sound logic (and, in doing so, will likely make many of those same points bulleted above), but I think if a similar definition or standard existed that included quotes (or just didn't exclude them) that would be beneficial. Hope you enjoyed the fair and, as always, thanks for an engaging and educational discussion.
  14. Matthew Fleharty

    FAR 13 fair and reasonable

    Fair point Vern, I withdraw my disagreement regarding the application of the standard for "adequate price competition" to simplified acquisitions; however, in that case, should there be a definition in FAR 2.101 for "adequate price competition" that captures both quotes and offers? I hope if you were my boss you wouldn't assign me to working contract closeouts...
  15. Matthew Fleharty

    FAR 13 fair and reasonable

    Vern, I somewhat disagree. The statement I quoted, FAR 15.404-1(b)(2)(i) uses the term "adequate price competition" in the context of price analysis (and then references you back to the definition of "adequate price competition" which is, admittedly, under the FAR section for Prohibition on Obtaining Certified Cost or Pricing Data). Still, it's association with price analysis, the consistency between the price analysis techniques/standards at FAR 13.106-3(a) and FAR 15.404-1(a), and the statement in FAR Part 13 at FAR 13.003(g) which authorizes "any appropriate combination of procedures in Parts 13, 14, 15, 35, or 36..." leads me to conclude that if I'm trying to determine a fair and reasonable price based on competition IAW FAR 13.106-3(a), since FAR Part 13 does not provide an explicit standard for what meets that standard, it is appropriate to use the standard for "adequate price competition" from FAR Part 15.
  16. Matthew Fleharty

    FAR 13 fair and reasonable

    The lack "full and open competition" does not mean that you cannot determine a fair and reasonable price based on "competition."
  17. Matthew Fleharty

    The Great Debate: Agency Perspectives on Procurement

    I agree with the general sentiment that liberal arts majors should be more welcome in this career field. As much as I love my Economics degree, the time I spent in high school and college competing in speech and debate has served me infinitely better as a contracting professional than any statistics, business, or economics class has. I could crunch numbers, build models, and understand ratios all day long, but if I can't convincingly reason, debate, and critically think when I'm sitting across the table from a contractor (or a clearance official), what good are those perfect numbers and what odds do I have in successfully negotiating that position?
  18. Matthew Fleharty

    FAR 13 fair and reasonable

    I disagree - if a contracting officer made an unreasonable determination, or no determination at all, that matters.
  19. Matthew Fleharty

    FAR 13 fair and reasonable

    Maybe...FAR 15.404-1(b)(2)(i) states "Normally, adequate price competition establishes a fair and reasonable price" (emphasis added...you can reference the definition for adequate price competition at FAR 15.403-1( c )(1)). I add the emphasis because there are situations where adequate price competition would not result in a fair and reasonable price - for example, let's imagine a requirement for widgets that has a Government estimate, based on market research, of $50k. The requirement is solicited via a RFQ for 3 days and results in 2 offers for $100k and $150k (let's assume we meet the definition of adequate price competition mentioned previously). Now ask yourself, is $100k a fair and reasonable price? Maybe, maybe not. Any good contracting officer/professional would need to consider the totality of the circumstances and then do some thinking to make the proper determination. Consider the following: The prices quoted are inconsistent with the Government estimate...why is that? The prices quote by the offerors are 40% different...why is that? Why did the Government receive only two quotes? Did market research indicate a large number of potential suppliers for the requirement or a few? Or, did the short solicitation response time limit other offerors' abilities to participate? Was the requirement clearly explained in the solicitation and adequate understood by the offerors? I could go on and on. Point being, Vern is absolutely right when he states "it depends." Final point - you stated you're doing reviews. It sounds like this may be a case of a poorly documented contract file. I'd stress the importance of making sure that individuals document their business judgment (even if it seems apparent) for this very reason - a decision needs to be able to be readily understood and needs to be reasonable...even for SAP purchases.
  20. Matthew Fleharty

    Guaranteed Minimum fully funded in FY?

    Yes, we're on the same page. Thanks! As for DTMD's question, I think a scenario would help explain the funding requirements as I see them: If the minimum order specified in the contract is $120,000 and the plan is to place an order for $120,000 and incrementally fund $10,000 per month, that would not meet the requirements previously posted; however, if the plan is place a minimum order for $240,000 and incrementally fund by at least funding $120,000 when the order is placed, then incremental funding may be permissible (I say may because I don't know your agency's procedures, the type of contract, or funds at hand).
  21. Matthew Fleharty

    Guaranteed Minimum fully funded in FY?

    Does that mean my characterization of the issue at hand is incorrect? I've just looked at obligations and funding as two separate issues and, to your point, see FAR 52.232-22(f) as conditioning the extent of each parties' obligation, but I understand how functionally it creates incremental options as you discuss.
  22. Matthew Fleharty

    Guaranteed Minimum fully funded in FY?

    Sure you can, you're just conflating two concepts. The issue of "obligation" is separate from "funding" (full funding versus incrementally funding). Obligating the Government is to bind the Government to that contract action (i.e. executing an order for the minimum purchase amount) - see definition of "obligate" (https://ahdictionary.com/word/search.html?q=obligate) When/how the Government obligates itself is when the issue of funding comes into play - you have two situations that may arise per FAR 32.703-1: full funding or incremental funding (I say may, because as Vern pointed out, some contracts cannot be incrementally funded). As long as you meet your agency's requirement(s) for incremental funding you may do so. The two are often conflated/married together because the Anti-Deficiency Act (http://www.gao.gov/legal/anti-deficiency-act/about) prohibits: "making or authorizing an expenditure from, or creating or authorizing an obligation under, any appropriation or fund in excess of the amount available in the appropriation or fund unless authorized by law. 31 U.S.C. § 1341(a)(1)(A). involving the government in any obligation to pay money before funds have been appropriated for that purpose, unless otherwise allowed by law. 31 U.S.C. § 1341(a)(1)(B). accepting voluntary services for the United States, or employing personal services not authorized by law, except in cases of emergency involving the safety of human life or the protection of property. 31 U.S.C. § 1342. making obligations or expenditures in excess of an apportionment or reapportionment, or in excess of the amount permitted by agency regulations. 31 U.S.C. § 1517(a)." See how the terms "obligation" and "funds" come up together consistently, yet also notice how they are separate (this is, in fact, how violations of the ADA occur...obligations without funds, for example). Now reread that excerpt you provided - it says nothing about a requirement for full funding. Maybe some other regulation applicable to your agency does, but the one you quoted, in my opinion, does not prohibit incremental funding of task orders for the minimum order under an IDIQ as long as you cover the minimum.
  23. Jamaal, I wish there was a FAR definition for "fair opportunity to be considered for..." but there isn't. Under the common definition though (https://ahdictionary.com/word/search.html?q=consider&submit.x=46&submit.y=26), I think a contracting officer would be unable to "consider" a contractor for an order if the contractor has reached the ceiling of their contract. Joel, the ordering procedures might provide more specifics, but I don't know that they would/could change the nature of the situation because any ordering procedures for a multiple award contract must comply with FAR 16.505(b). From what I've read, I don't believe and cannot find anything stating that a multiple award contract can become a single award IDIQ when only one contractor has ceiling remaining.
  24. For multiple award contracts, FAR 16.505(b)(1)(i) requires that contracting officers to provide each awardee fair opportunity to be considered for each order exceeding $3,500 (unless exempted by FAR 16.505(b) - to which you point out is not applicable) and FAR 16.505(b)(1)(iii) requires orders in excess of the SAT be placed on a competitive basis. I'd argue that the fact that a contractor has reached their ceiling does not relieve the contracting officer of the requirements of FAR 16.505(b)(1)(i) & FAR 16.505(b)(1)(iii), it just makes the requirements impossible to fulfill (because a contractor that has reached their ceiling cannot be fairly considered for the award of any more orders). If the preceding analysis is correct, it would be improper to just use Vendor B's contract and treat it as a single award ID/IQ. Does anyone else have any thoughts on this issue?
  25. Matthew Fleharty

    The Great Debate: Agency Perspectives on Procurement

    I did not state that I thought Vern was wrong or that the data would disprove his point, quite the opposite in fact. I was making the point you referred to in order to crowd source research ideas to further explore the issue because, while I'm not "in a command where have people act[ing] on [my] behalf," I do have contacts and former professors back at the Naval Postgraduate School that get new students every 1.5 years that are looking for research/thesis topics - this would be something that those individuals have the time, energy, and resources to research and write on. So thanks for commenting on the merits of what further research might or might not be beneficial on this issue and not assuming I'm already some lazy, dejected contracting professional that just wants to complain...
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