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Matthew Fleharty

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Everything posted by Matthew Fleharty

  1. I recommend starting any negotiations with an exploration of expectations and responsibilities. From an expectations standpoint, I would describe what the other party can expect from me and what I expect from the other party. Those expectations are largely reciprocal - if an expectation isn't reciprocal, stop to think about why and whether or not it is fair to make that an expectation. Come to an agreement on those expectations first with an understanding between both parties that we're all fallible so when those expectations are broken it's in the collective interest to identify that and correct it immediately. Sounds like you're on the Government side - I would add that I often see an asymmetry of information/transparency for negotiations over the CCoPD threshold. The Government requires contractors to prepare extensive estimates and provide current, accurate, and complete data in extensive/elaborate proposals, yet I see some Government negotiators reluctant to provide the details behind the Government's estimates to contractors. That baffles me and I think it violates the norm of reciprocity and, consequently, trust during negotiations. One thing I did during every major negotiation was to provide the same information/estimate for every Basis of Estimate (BoE) and put it side-by-side with the contractor's estimate so that we could compare the methodologies, assumptions, and data to talk about which ones held more merit than the others. That's the other key point in my opinion - focus less on the total/results and more on what the right methodologies, assumptions, and data to use are and let the numbers come out however they come out. I was in a negotiation where we did this and both parties treated the negotiation as a problem solving exercise, not a battle of wills. At one point we came across a BoE where the Government thought a different methodology was more appropriate - after listening to our explanation the contractor agreed. That methodology happened to calculate that the labor effort was significantly lower than the contractor proposed which would result in considerable savings for the Government; however, a day later, the negotiation team realized we used the wrong number in our computations and that the methodology we agreed on now estimated that the effort would take significantly more labor than both the Government's and the contractor's original estimates. I checked the revised math and it was now correct so I accepted the results, much to everyone's dismay - including my own...the delta was not only surprising but significant so a natural inclination could have been to fight it. But I am glad that I didn't because following that single decision, our negotiations proceeded remarkably well - the contractor understood that I meant what I said about my expectations and my responsibility to negotiate a fair and reasonable price (not the lowest price possible). If you find a way to establish trust and teamwork in your negotiations, when you discuss the topic of profit percentage won't matter.
  2. Let's note that "PoP" is regularly misused in place of more proper terms such as "delivery date" or "completion date" (your original post was not specific as to if this was a supply, service, or project) - I have seen many a contracting practitioner worry or fall prey to a contractor's claim that they could not continue to work beyond the contract's "PoP" and, in some cases, improperly extend the "PoP" without any consideration. The reality is that the contractor could continue to work and that their delivery or completion would just be considered late (based on the "PoP" dates established by the two parties in the contract). An expiration of a "PoP" is not a license to stop fulfilling one's contractual commitments - just consider how a contractor might feel if the government chose to stop paying invoices once a "PoP" ends because it allegedly signals contract completion to the parties...
  3. @formerfed Talk about the pot calling the kettle black...This forum is supposed to be for the exchange of ideas and effective exchange of ideas in many cases requires us to challenge the ideas others present. If that makes you feel lectured to the point that you just say “I’m done” that’s unfortunate. This is an appeal to an authority which is a logical fallacy - there are plenty of DoD acquisitions that had scrutiny and approval at very high levels that were not sound and did not achieve the desired objectives...
  4. Exactly - that’s a major problem with the way acquisition professionals conduct competitions - instead of focusing evaluation factors on promises and an offeror’s capabilities that are more likely to predict their performance, we instead ask for fluffy narratives called “technical approaches” or “key personnel plans” or “employee management/retention plans” - none of which provide any value other than making the source selection team feel good about their decision because they liked what they read from the offeror. Recommend you read Vern Edwards’ exceptional article “A Primer on Source Selection Planning: Evaluation Factors and Rating Methods” in Briefing Papers issue 17-8 - I think it is required reading for all acquisition professionals, especially those involved in conducting competitive acquisitions. I re-read the Army’s competition - it didn’t pay a penny for development...it Instead paid up to $5K for an idea presented on paper and up to $100K for an idea presented as a pitch, neither of which required the presenter to do any development (at least based on the stated evaluation method on their website). The recipients of that prize could choose to spend it on developing a ventilator based on the idea they presented...or they could choose to do literally anything else with it because I saw nothing requiring recipients to spend the prize money on ventilator development (unless I missed it). Assuming I didn’t miss that fine print, what makes that an effective approach to encourage small businesses and educational institutes to develop ventilators? I would think a more effective prize competition would be something like this: we’ll pay $250K to the first 4 small businesses or educational institutes who show up with a functioning ventilator prototype that meets these standards...
  5. (Emphasis added above) - you say “different objectives”...why? To me the objective for both “ventilator challenges” is to get to more ventilators fastest to address the potential shortfall...did I miss something? Everything you detail about “promoting new technologies” vs. “taking pieces of existing, commercial items” are not objectives...those are means to an end (and if the means became the objective during a pandemic then that, to me, is the definition of taking one’s eye off the ball). Anyone have any idea how the Army’s essay writing and public speaking contest turned out?
  6. Different team, different competition with a different rule set - looks like the one you posted @bob7947 focused more on getting prototypes than paper...a lesson for the Army, @formerfed, and @joel hoffman : all “innovative” acquisition strategies/procedures are not equal
  7. My apologies that you felt insulted by my remarks, that was not my intention. I suppose we’re not going to reach a common understanding on this issue - I think the notion of “sparking thinking” is better done by asking for actual results/prototypes rather than ideas in the form of quad charts and pitches. Some doctor was able to do just that with parts from a hardware store ( https://www.usatoday.com/story/news/health/2020/04/07/coronavirus-ventilators-mississippi-medical-center-charles-robertson/2966719001/ ) probably for less that $105K too...
  8. @formerfedDo we want ideas in a time like this or actual solutions? The article’s situation and where the Army could end up aren’t too different if you think critically about it - both selection mechanisms were based on proposals/sales pitches and no credibility related to previous experience or demonstration of an actual product. I suppose others share the inability to see the similarity between the two which is way the prize was structured the way it was to ask for quad charts (for $5K) and pitches (for $100K) rather than actual products. Recommend you check out the book “How to Make a Spaceship” which discusses the XPrize and a drastically different way for using prizes to actually deliver tangible innovations rather than just “very quick ideas.” If you enjoy history, consider looking into the Orteig Prize which Charles Lindbergh won not by talking about how he would fly across the ocean, but actually doing it.
  9. Just thought I’d share an example of my concern with focusing on paper/pitches of possibilities in times like these: https://www.nytimes.com/2020/05/08/nyregion/ventilators-fema-coronavirus-cuomo.html
  10. It’s not the amount of money, it’s what companies are getting money for - companies can earn $105K without turning a single wrench or delivering a single piece of product...as John Doerr says “ideas are easy. Execution is everything.”
  11. Did you gentlemen even read the website?: https://www.challenge.gov/challenge/xTech-COVID-19-ventilator-challenge/ Prizes will be offered under 10 USC §2374a (Prize competitions). The total prize pool is $1,000,000.00. Application Part 1: White Paper - $5,000 Application Part 2: Technology Pitches - $100,000 Number of winners is to-be determined, with total prizes not to exceed $1,000,000.00. ----------------- Part 1: Concept Submission Quad Chart and Video All eligible entities shall submit a concept quad chart and accompanying video up to 3 minutes in length outlining their technology, the technical viability of their approach, human and clinical risk, and speed to production. Please adhere to the following requirements: All concept quad charts must be submitted using the template found on the registration page, “xTechCOVID19_QuadChart_Template.ppt”. Any proposals submitted in a format other than that provided by the template will not be reviewed. Please include on your quad chart your company name, proposal title, and company logo EXACTLY how you would like them to appear on any contest marketing materials. Provide an optional URL on the contest registration page to a video supporting your application. Production value does not matter at all, and the can be used to explain the concept, brief the quad chart, or to otherwise demonstrate the technology concept proposed. MAXIMUM of 3-minutes for the video’s length. Part 2: Technology Pitches Selected participants will conduct a virtual pitch to the Ventilator Challenge panel of Army, medical, and manufacturing experts. Detailed pitch instructions and evaluation criteria will be provided to selected applicants. Technology pitches selected to meet the requirements of this posted solicitation will receive a prize of $100,000 and will be invited to develop and demonstrate a concept prototype to potentially receive follow on contracts for additional production and deployment.
  12. Based on my reading of the contest, all the Army is paying for is paper, not product...I think that’s the wrong focus in times like these. Moreover, the selection criteria are suspect IMO - there is nothing that captures a company’s past performance or entrepreneurial experience (which I think is crucial for determining if an entity has any clue for how to turn a concept into a capability). Basically, whoever wows the judges with their pitch gets $105K just to deliver papers and presentations. Using prize competitions could be a step in the right direction, but I think they’re competing the wrong things.
  13. Even if they do what you want, none of that information is a binding promise so it basically amounts to a sales pitch. I don’t think either of us is going to convince the other of our respective positions - basically, you just want the contractor to tell you things that will make you feel good about your decision which I think is distinctly different than getting information that will help you make a better decision.
  14. Why even evaluate approach as a separate factor when you can get the same information more accurately through a past performance and experience evaluation?
  15. I’m with Don on this one - evaluating an approach or plan (particularly since most of them are not promises) is not only wasted time and effort, it actually introduces noise to the decision making process.
  16. What is the source for your definition of "stand-alone contract"?
  17. A former member of this forum was kind enough to give me some sage advice once: when the answer isn’t clear cut, interpret the regulation in a manner that gives you the most latitude/power.
  18. Have you considered that the word "or" is disjunctive so that the "through another government agency" qualifier does not apply to the "from a specific source" language?
  19. FAR 5.202(a)(4) reads "from a specific source" which means it only applies to sole source actions, not competitive ones - they don't have to follow the same rules/procedures. I agree w/ Confused1102 and Don and have nothing new to add to either of their explanations.
  20. @Retreadfed Your posts are confusing this issue - I think you're either missing or ignoring the information provided by the OP and the piecemeal posting plus the pseudo hypothetical debate you're having with joel is not providing coherent information or advice for the OP. Emphasis added above - how did you arrive at this conclusion? The contractor listed the incorrect bond percentage of 4%...why are you considering that "accurate" cost or pricing data? I think you need to reread the OP's clarifying post:
  21. Well no wonder everyone is talking past one another on this thread...
  22. What are you trying to say here? Clearly the contractor's cost or pricing data was not accurate as they erroneously used 4% instead of 0.4% for the bond percentage.
  23. Why do you find (1) and (2) questionable? If I understand the scenario: On (1), the bond percentage did impact the proposed/negotiated price so it is cost or pricing data...aka a fact that one would reasonably expect to affect price negotiations significantly (the bond percentage is factual and verifiable which is how the contractor discovered it as a mistake). The OP stated that the contractor provided a certificate of current cost or pricing data. On (2) the correct bond percentage was available to the contractor before the agreement on price (they used 4% instead of 0.4% because of a typo). Did I miss something? Read 15.502 "Applicability" - while the subpart technically applies to competitive proposals it goes on to read "the procedures in...15.508...with reasonable modification, should be followed for sole source acquisitions..." (Note: this is a crucial habit to learn - ALWAYS read the Scope, Applicability and Definitions [SAD] of any FAR Part/Subpart first). I think the question at hand is, what do you think the right way to approach this situation is? If the contractor was forthcoming with identifying the mistake and earnestly wants to rectify it, I don't know of a rule or regulation that prohibits you from doing so; however, if the contractor identified is not cooperating, I think you could make an argument for defective pricing to either encourage them to cooperate or else... I would opt for the former vs either of the latter...a defective pricing battle is no way to start a contractual relationship (but if it is necessary, the Contracting Officer has an obligation to recoup the excess amount).
  24. Odds are @NenaLenz is (or advises/represents) the supplier of the prosthetic that physician put on the prescription, but didn't receive the purchase order.
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