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Matthew Fleharty

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Posts posted by Matthew Fleharty


  1. 1 hour ago, brent said:

    Awarding a competitive task order.  RFP stated that TO would go to LPTA and that only the lowest priced offer would be evaluated for TA (continuing until there is a TA offer, then stop).

    Can the lowest price be considered fair and reasonable when you do not know if the other offers are technically acceptable?

    Brent,

    Let's think this through for a moment - imagine all your circumstances were identical except you only received on offer in response to you RFP...what would you do in that situation?  Would it be possible for you to determine whether or not that single offer has a fair and reasonable price? 

    Bob - this question should go in the Beginners Forum. 


  2. Vern,

    I think dak9204 is referring to FAR 12.301(d)(3) which reads:

    Quote

    Insert the clause at 52.204-21, Basic Safeguarding of Covered Contractor Information Systems, in solicitations and contracts (except for acquisition of COTS items), as prescribed in 4.1903.

    dak9204 should have provided that reference when he/she made the statement.


  3. Maybe you should ask that agency why they use that business practice.  Anything anyone tells you here is nothing more than a guess (unless someone from that office decides to respond here on WIFCON).

    1 hour ago, Hilarity_Follows said:

    Fee should be a completely independent point of negotiation - right

    No, not at all.  See FAR 16.103 for starters:

    Quote

    (a) Selecting the contract type is generally a matter for negotiation and requires the exercise of sound judgment. Negotiating the contract type and negotiating prices are closely related and should be considered together. The objective is to negotiate a contract type and price (or estimated cost and fee) that will result in reasonable contractor risk and provide the contractor with the greatest incentive for efficient and economical performance.

    Also see FAR 15.405:

    Quote

    (b) The contracting officer’s primary concern is the overall price the Government will actually pay. The contracting officer’s objective is to negotiate a contract of a type and with a price providing the contractor the greatest incentive for efficient and economical performance. The negotiation of a contract type and a price are related and should be considered together with the issues of risk and uncertainty to the contractor and the Government. Therefore, the contracting officer should not become preoccupied with any single element and should balance the contract type, cost, and profit or fee negotiated to achieve a total result -- a price that is fair and reasonable to both the Government and the contractor.

    (c) The Government’s cost objective and proposed pricing arrangement directly affect the profit or fee objective. Because profit or fee is only one of several interrelated variables, the contracting officer shall not agree on profit or fee without concurrent agreement on cost and type of contract.

     


  4. 24 minutes ago, Hilarity_Follows said:

    Hello, 

    Can someone direct me to the FAR provision that spells out the requirement for Contractors to provide consideration to the Govt. in exchange for granting  no cost extension requests? (Specifically, the requests I am primarily involved in are NOT due to any Govt. cause) 

    Since this is the beginner's forum I just wanted to point out how frequently the above highlighted text is misused (whether it is in this case or not, I cannot say for certain because I do not have enough facts about the situation, but based on my experiences I'd bet it is wrong).  I'm sure the phrase is used either to make extensions more palatable or out of a lack of understanding, but it's incorrect nevertheless.  Unless the contractor is no longer charging costs to the contract during the extension period, it is not a "no cost extension."  Absent some additional term, that extended work period will still cost the Government money.


  5. I agree with everything you just said Vern, that's why I used the words "which, I agree, is still movement in the right direction"  in my previous response.

    However, there seems to be another issue here with that no one has talked about.  Presumably, the Government does not want to exercise an option for production of whatever this is until they get the first article and test results (that makes sense) - but we all know delays happen.  So why not specify a period post-completion of Phase I (with better grammar than the 52.217-7 language) rather than hoping everything goes according to plan from the outset when establishing the option?  Or would you rather include a specific date and modify the contract's option if/when a delay occurs?


  6. 20 hours ago, Vern Edwards said:

    If I were the CO I would change the option exercise deadline from a number of months to a specific date.

    Aside from changing the grammar of the 52.217-7 clause (which, I agree, is still movement in the right direction), I don't see how that solution is any different from a risk of delays perspective.  It merely eliminates the need for someone to do math or call the grammar police to determine what the date is for the option deadline.

    Is there any issue you're aware of with my previously proposed solution to use an option exercise deadline of X days/months after Phase I completion (or some other milestone)?


  7. 10 hours ago, Contractor123 said:

    If the option is dead...

    If? 😑

    What’s the basic rule governing how an option must be exercised?

    What are the rules governing changes to a contract when it comes to the Competition in Contracting Act (CICA)?

    I’m sure if you thought about those two questions in light of all the situational facts you have available that we don’t/won’t, you’d know what you could and couldn’t do and how to do it.

    You didn’t post this in the beginner’s section so you should have some foundational knowledge about contracting (and options) - try thinking about it from that vantage point.


  8. 25 minutes ago, jayandstacey said:

    I think we are assuming that these are %s that the CO has independently calculated.  To me, it points to the idea that more offeror info/discussions/research should be conducted to break the tie and determine the most likely cost.  

    I could be wrong about this, but I feel like these are simple %s applied to complex scenarios.  To look to the future and say “there is exactly a 50/50 chance” between two outcomes in such a scenario seems either virtually impossible OR an admission that very little is known about the scenario.  

    Are there real world contracting scenarios where a proposed cost may be A or B, and the chance of A or B is known to be an even 50%?  I sense the writers of the FAR clause didn’t think such things existed. 

    (Edit- using my own drawbridge example from above, then let’s assume a third offeror “Smith” has a drawbridge that’s open 50% of the time, thus creating the scenario you ask about here...in that case, if I’m the CO, I think I realize that the FAR doesn’t cover everything, it can’t.  And I think I make the call that says “the tie goes to the runner” and I allow the Smith offer to be evaluated at the lower cost (with a higher ‘ding’ in the risk evaluation).  I document the file as such, and if any other offeror also has a true 50/50 cost, I treat them the same.  Having said that; I’d at least try to see if in fact the drawbridge is open EXACTLY 50% of the time, given the aging infrastructure and all that...)

    (a little more editing:  I believe one of basic tenants of the FAR is that the Government is choosing.  Choosing awardees, requirements, evaluation factors, etc.  It is the job of the CO to choose in many situations.   Often there just isn’t room for a “tie”; the Government can’t buy the same tank from two different companies.  It has to choose one.  I believe this clause is an instance of that, suggesting that the CO reasonably determine the most likely cost and use that as the basis for evaluation.  It doesn’t leave room for a 50/50 because...it’s in the business of choosing.  It instructs the CO to find the most likely cost; 50/50 is not following the instruction.

    Have I gone off the rails?  It’s late.)

    Don’t fight the hypo - if based on extensive analysis a CO thinks two outcomes are equally likely, what then?


  9. 3 hours ago, Don Mansfield said:

    Assume the method was reasonable. 

    Well the I think that answers it then - I didn’t have resources handy to look up the reference, but Vern provides the reasonable standard used by the GAO to evaluate cost realism methodologies.  So the question is whether a method is unreasonable given what the solicitation states - in this case, I don’t think the expected cost estimate methodology I provided in my first post is unreasonable.

    Are there any other methods you or others would use to estimate the probable cost in the given hypothetical?


  10. I may be wrong, but I don’t think FAR 15.404-1(d) is so clear that the cost with the highest probability is necessarily the probable cost.  @jayandstacey honed in on the words most likely, which is an argument in favor of that point; however, that argument ignores the words best estimate.  An estimate that outright ignores, a 20%, 40%, etc. of cases is, arguably, an incomplete estimate regardless of how much probability the one most likely event captures.

    Let’s imagine we had a third contractor, we’ll call him Bob.  The probability of Bob’s cost being $100M is 51%.  There’s a 49% chance that the cost will be $200M.

    While $100M is technically more likely than $200M, does $100M represent the best estimate of the potential cost of a contract with Bob?

    I’m traveling so I’m without my usual resources - if someone could point to particular case law I’d be curious to know how this matter has been adjudicated.


  11. This is basically the BAA approach, but for "innovative commercial items, technologies, or services."  If you read FAR 35.016 you'll notice a lot of the language in the Class Deviation is lifted word for word from there.  Since proposals are not necessarily evaluated against each other, there are concerns of affordability (i.e. a proposal can be technically sound with a fair and reasonable price yet not affordable).

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