general_correspondence

I wouldn't be relying on FPDS but your concerns have to be clarified with some documentation. If you have the subcontract agreement in your hands from the prime with a period of performance that extends beyond public recorded date by the USG, get something from your direct customer that clarifies this.

The prime simply needs to flow down their tax exemption certificate for the subcontractors use. 

no definition to that word other than it is defined as:  "Change Order",  'Amendment", "Modification". a formal written order describing the changes to be made, issued and signed by the prime

Do you have reference for the US Appeals court decisions ?

I meant FTE, full time equivalent 

Joel asked the most obvious question thus far, "where is the changes"

I should have the same enthusiasm as Here 2 Help to discover what carrying costs means, but I am leaning on the Redtread comment and Joels latest comment.  The subcontract clause in the contract is titled: "Contract Direction/Changes" the full language the subcontractor is using to stake this claim from their agreement is as follows: 

"The contractor shall submit any "proposal" for adjustment under this clause within 7 days from date  of the written order. However if the primes subcontract manager decides the facts justify it, the subcontract manager may act before final payment of the contract.  If any changes causes an increase or decrease in the time required for performance of this contract, an equitable adjustment shall be made in the contract price, the delivery schedule, or both, and the contract shall be modified accordingly"  

2 key points to that language are I never provided a change or written directive to prompt a proposal, and 2, the contract is a long way away from the final payment of the contract.

we the prime never received a suspension notice from the USG, we have been working on non permit related activities.

The permit is the responsibility of the USG, 

In addition to the FAR clauses in the subcontract, there is a "changes" clause that says: If any changes causes an increase or decrease in the time required for performance of this contract, an equitable adjustment shall be made in the contract price, the delivery schedule, or both, and the contract shall be modified accordingly"  

This is why I wanted to know what is the rule of thumb or FAR accounting principle anyone knows that can be used to baseline this negotiation? 

We are the prime contractor on a CPFF with our DoD customer.  We have a FFP subcontract for construction work. Permit delays, neither party liable for damages, considered an excusable delay.  The subcontractor gave us Notice of these delay impacts when required and in conformance of the contract.  However the most recent Notice is a claim for carrying costs.  Is there a rule of thumb, or an accounting standard that the prime should use to negotiate the costs being claimed by the subcontractor?

The delay has been well beyond 6 months, The subcontractor has told me they have "diverted" most of the field labor during this delay so the costs are FE, likely OH and G&A type mostly, including Fee.  (Fee may be prohibited?) Is there a process to use to baseline negotiations,  

in order of precedence the contract has:

FAR 52.242-17

FAR 52.249-14

Joel

In one of your posts you said

On 10/29/2022 at 8:23 PM, joel hoffman said:

For construction contracts, on-site project supervision and management salaried labor costs  are referred to as “field overhead” or “general conditions”, although it is a actually a direct cost to the contract in the contractor’s accounting system, rather than indirectly charged to a contract.

Such costs are often, in practice, spread over all activities for unit pricing or lump sum pricing of individual activities. Yet, they are direct costs to the contract.

Joel, I don't know what "spread over all activities" are you saying this field person was not proposed or currently being billed as a FE?  If I was the owner I wouldn't want a field supervisor PE on my project? splitting his hours and attention to any project other than mine? So the accounting system, in practice, is allocating costs spread out over several project sites but the person is at one specific construction site? 

I am a subcontract manager for a prime contractor.

Yes, the prime contractor is responsible for documenting the NAICS after developing the SOW they contemplate issuing in a RFP to potential subcontractors. Yes, many program managers as well as subcontract managers working for prime contractors want to prequalify and create a Bidders list compatible to the SOW.   In doing so, the pool of potential subcontractors may contain Firms not represented to the RFP NAICS,

if after reviewing previous orders to the Firms we want to include in our bidder's list, we discover the reps & certs they have on file with the prime, do not contain a NAICS aligned to this current SOW, do we have a responsibility to not solicit these Firms?  Is it a requirement for the USG contracting officer to solicit Firms represented only in the NAICS of the government's RFP?( If so, what is the Reg?)  Because these Firms (subcontractors) can be in SAMS as many often are, would the NAICS need to be, or should be, represented in at least SAMS, or the annual certs we (the prime) may have on file, before we send a RFP to them?

The Bidder's list contained Firms that we (the prime) knew, have not been represented to NAICS on the current reps & certs we have on file for them, however the RFP cautions that any potential award would require the awardee to represent themselves to the NAICS in the RFP, and that can only be accomplished by sending in updated reps & certs with their proposal.

In order to get the award, a Firm may represent themselves to a NAICS that was not otherwise represented to the prime on other previous subcontracts we awarded to them. 

Is their a perceived ethical issue with suppliers turning on a dime and adding NAICS to offers in order to receive awards, or do these Firms have to involve the SBA and inform or document to the SBA they are adding NAICS codes to their offers for prime contracts?  Or is it the prime contractor responsibility for these responsibility matters?

Prime contractors have the responsibility to ensure not to, or document debarred and excluded subcontractors. The central contractor registry, ORCA, EPLS, etc...are defunct or consolidated down into SAM.gov.  Subcontractors are not required to register in SAMS.  I believe all this to be fact.

Does this mean the Prime is relying on self certification from the subcontractor on debarment ?

you didn't think 1.9T was actually going to fix your pot holes and bridges did you? The money is staffing diversity officers, HR compliance auditors, federal over reach on States, federal overreach on federal contractors, IRS agents. woke up.

There is a difference between a subsidiary and a wholly owned subsidiary.  What is the status of company A after the purchase?  If they are a wholly owned subsidiary of Company B they may be able to remain the ELB.  

Neil

I think you're right.  That is a sound approach, I have seen it done before too.

thank you

I seem to remember if a Prime contractor uses (issues a purchase order) to a government facility to perform some qualification testing for example, that procurement is considered a competitive procurement.  Is this true ?  If so, where is reference for this for a file write up? The Prime has a CPFF contract and FAR 52.244-5 is included in Primes' contract.

I thought as much, we do have to include option pricing but I agree option pricing should not go towards the small biz goals

We are the prime, and the government RFP requires the planned percentage of total proposed contract value awarded 28% to small business.

Is contract value the proposed cost?

or is contract value the proposed price?

The analyst words should be assertive regardless if the analyst organization has final word on the subject.  It should always say....and therefore the price has been determined to be fair and reasonable.

The contracting officers in this branch of the Air Force we get our RFP from, state unequivocally that the subcontracts price/cost reasonableness responsibility is on the Prime.  In other words, just as someone else already said, the government is using the prime (who may eventually win the award)  to do the analysis. They want to see a write up that leads them to same conclusion so not much questioning or investigating is needed.  All the large Primes outsource ~40% in subcontracts/procurement every year, just to clarify I know this thread is not about subcontracts, nonetheless subcontracts can be a significant amount of the Primed Bid. 

Should contractors include a price/cost proposal for this portion of a government RFP with their initial proposal response?

Neil said: I do not agree. Per FAR 15.406-2, the Certificate is required from a subcontractor as close as practicable to the date when your company reached price agreement with the subcontractor,

I don't disagree with this either.

We haven't reached an agreement on price until the assist audit is completed, in which case if not completed by time of award if we should be that fortunate - a reopener clause has already been communicated to the subcontractor.

Neil and All

thanks for your comments, very helpful.  I think Neil nailed in the last post, "or is required to be certified"  per the Definition. 

My subcontractors, nor we as the prime, are signing a cert and sending it in with our proposal. Albeit required, the government's request is when the prime signs a cert.  That is when our subcontractors will send the prime a signed cert, before we the prime sign our cert.  if omission, errors, or changes have occurred since the initial proposal was submitted, it's resolved before we send our signed cert in.  That seems to make sense  Agree?

We are a prime contractor pursuing a government RFP and our subcontractor has proprietary information they will not allow or provide us to see - and the subject line scenario happens frequently.  Do the subcontractors certify, and sign certificates of current cost and pricing data with the Prime contractor, or do the subs certify their cost directly with government customer?

H2H had sound advice.

How should we interpret " I have formed my subcontracting team"?  Does this mean you have other companies poised, for something you all have agreed is in your wheelhouse,?  Or does the "your team" consist of a smaller scale of consultants or internal personnel?  I assume you are a small business yourself?  Either way there are 2 things you must do:  a) Subscribe to a M&A, competitor intelligence, customer intelligence, and opportunity intelligence that will steer you into target rich environments for what you do  b) search out the B&D and procurement and subcontract manager points of contacts at the large primes.  The how about getting started sounds like a cold call, so if it is a cold call, you need the stars aligned, timing, well crafted communication, and  impressive expertise.  

ji

Ramesses was a Pharaoh - and Ramesses said it.  💰👑🗡️

I agree Joel.  The Sub had the option fee at X%, when they were required to submit option pricing a year ago. But then we had "ideas" that would upgrade their 'system" and the customer likes our idea.

Due to our suggestions that the customer accepted and agreed to fund, the Sub is asking for 35% more Fee than they originally proposed.  I like what Neil was writing about, Neil mentioned it a couple times, "there is not government order" that really kicks this action into gear.  From the government perspective and what the historical record will show is that the government increased funding on the contract, with no RFP, ECP, or change in SOW. When the Option is exercised here in a couple weeks, the government will simply increase the funding from what was originally proposed.  But to answer your questions:

1. sub now wants a higher % fee for ALL of its work or just the additional and any revised duties?  Answer: Our suggested changes in the upcoming Option period is the original work, but the work now consists of new software, tools, systems, than originally asked for.  it can be argued the complexity has increased as a result. 

2. Please clarify WHAT Is 35% higher: Answer:  overall, they simply want 35% more in the option period  from what they originally proposed. You interject a good argument we wouldn't increase fee for work originally required, I will have to look at that.   the Sub will be asked, and they will need to go point by point justifying the risk and complexity factors to merit the requested fee.  

Sorry, one and the same, it increased by 35%, not quite doubled