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Neil Roberts

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About Neil Roberts

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  1. Cost Monitoring Plans

    Is FAR 52.248-1 ALT I Value Engineering relevant to this discussion?
  2. Unless someone can identify a mandatory regulatory requirement or law that the prime must provide pbp, they may agree to do so when and if they want under whatever terms they wish. In my experience, prime contractors do not make interim payments without adequate safeguards. It is bad business to do so and requires costly financial oversight. What those safeguards are, can vary and may be negotiable. My comments are based on my experience and expertise and are just offered as business guidance for whatever it is worth to anyone, since the majority view seems to be there are no regulatory requirements, the prime's business judgement is all that remains. I think I have now moved on and I thank all those involved for these discussions.
  3. Retread, we seem to have different views about FAR. To me, It has a huge impact on the relationship between a prime and its subs. Many FAR clauses, because they are obligations the prime owes to the Government, wind up being business flowdowns in the subcontract in order for the prime to comply with its obligations and/or are adopted as the model for subcontract language even when it is not required to comply with a prime contract obligation to the Government. It is understandable that a company under a firm fixed price contract does not want to disclose actuals. However, the prime is still responsible for ensuring itself that the subcontractor is financially sound before making an interim payment not supported by what it contracted for, a deliverable product. Many commercial financial institutions take liens and so forth on inventory/accounts receivable to protect its loan. Perhaps financial stability assurances could be provided by a financial statement signed off by a 3rd party accounting firm. What I don't hear from siwilliams' company are any counteroffers. Also disappointing, is the apparent lack of reasonable explanation by the prime contractor, other than "it's required," as to why it needs to have actuals. Perhaps the prime needs to select a different supplier and/or the supplier needs a diffferent prime.
  4. The DFARS clause above requires that the prime submit total costs incurred to date. It would be nice if some of the finance types here weigh in on this. it seems to me that if payment to your company was based only on deliverable items, and there was no performance based payment, the prime financial records would reflect that payment for a deliverable item as its cost. However, since payment to your company is not based on that, perhaps the thinking is that the mere negotiated value of the performance payment is not sufficient for the prime to meet its obligation to the Government to disclose total costs incurred to date, and that the subcontractors costs are to be included, because interim negotiated performance payment is not a cost. If such disclosure is your only objection, I suggest you get finance types together to understand the rationale for the prime's request and whether the prime rationale is reasonable and necessary. Failing that, as I previously indicated, your company may need to give up the performance payments and resubmit a proposal with higher fee to reflect added risk.
  5. In my prime contract experience, 52.232-32, suitably modified, is a mandatory prime contract business flow to subcontractors. If not that clause, something so substantially similar, that it would be best to just flow the clause in order to administer the bases for payment. If siwilliams' company has a different proposed term and conditions for performance based payments, it should offer them to the prime. Arguing about whether it is mandatory in its language or "mandatory" from the point of view of the prime, is not fruitful to me. Ditto for DFARS 252.232-7012.
  6. EEO-1

    If FAR 52.222-22 was included in your prime, per(c) you should have obtained a certification before awarding the subcontract.
  7. A few thoughts...not sure you are a subcontractor in the normal sense of the word that I am accustomed to. Your principal might want to issue a different type contract to you, other than a traditional subcontract, one that perhaps focuses on ensuring you abide by all ethics and work rules required of employees and the prime. If the principal insists on issuing a standard type subcontract to you with flowdowns from the prime contract, you may be able to accept many of them because they would be inoperative/inapplicable to the work you are to perform (and you are not providing any goods). I can not envision what "selling the prime's product and services to the customer" means. Usually, the sale is memorialized in a prime contract. There isn't anything more to sell after that. .
  8. Price Analysis - Modifications

    Shot in the dark. Perhaps the concept you are searching for was derived from FAR 2.101 which states as follows: “Micro-purchase” means an acquisition of supplies or services using simplified acquisition procedures, the aggregate amount of which does not exceed the micro-purchase threshold (emphasis added). “Micro-purchase threshold” means $3,500..." I do not read the above as requiring a price analysis for a $4,000 purchase when you already did one for a $3,000 purchase and there is only a $1,000 change notice value. I only point this definition out because it includes the $3500 threshold you were taught and "aggregate amount" may be where your taught "cumulative value" came from. In my mind, the above definition only serves to state that in your example you may have had a micro-purchase, and now you don't.
  9. Appendix 19 of the DCMA CPSR Guidebook dated May 9, 2017, does not appear to clearly instruct the DCMA review team whether or not flowdowns the team is evaluating for inclusion in subcontracts are limited by whether or not the subcontract is for a commercial item. The Appendix is a "job aid." Appendix 19 Practice section, for example, reads as follows: "The CPSR analyst is required to utilize the Contract Flow Down tab of the DATA workbook for reference while reviewing each file. Compare the mandatory flow downs for the prime contract the procurement is being purchased for to the actual file being reviewed. Record the results of the file being reviewed in the DATA workbook for the mandatory FAR and DFARS flow downs and whether or not they were adequately flowed down to the subcontractor." The above may be the source of the DCMA position initiated in this thread.
  10. The following just posted LinkedIn CPSR Forum group. I do not know if this is coming from a different firm than ThomCons posted here on this thread: DCMA's Latest Changes to Commercial Item Flow Down Clauses Just want to give everyone a heads up in preparations for your next CPSR. We went through an audit in Dec 2016, and were cited a finding for not flowing down all required clauses for commercial items. Apparently, DCMA has taken the position that if your prime contract is issued under FAR Part 15, not only is 52.244-6 required to be flowed down for commercial items, but also all other mandatory flow downs from the prime contract. We are in disagreement with this, but are proceeding accordingly. It is causing great difficulty getting our commercial vendors to accept all the additional terms and conditions. Please let me know if others are having the same findings and issues.
  11. So, bottom line for this thread, I wonder if ThomCons, who started this thread, got what he needed out of it. If you are still with us Thom, what can you tell everyone?
  12. Good comments by contributors above which can serve you well in your defense. It is all about risk to me. I would rather reduce or eliminate: (a) customer allegations that a prime contract clause requirement was breached and harmed the customer (is anyone aware of any federal case, statute or FAR regulation holding a prime contractor insulated from all prime contract liability caused by furnishing the customer with a commercial item which was not compliant with a prime contract clause?) (b) risk to an approved procurement system due to DCMA allegations of flowdown deficiency or (c) receiving mid-course allegations by a customer that the subcontractor goods or services are not commercial. My experience is that when the customer perceives that a prime contractor caused a serious or possibly embarrassing problem, people just run to the contract and look at the plain words in the four corners of the document. During negotiations with a commercial item subcontractor, it's objection to clauses can be examined by the prime contractor for risk and deleted if the prime contract risk is acceptable. Also, the subcontractor can view many flowed clauses as little risk due to it being inapplicable. They should have no objection to its inclusion.All clauses that help satisfy the prime contractor's contractual obligation to the customer should be flowed.
  13. Retreadfed, I respect your reading of 252.244-7000(a), but I think the clause is ambiguous and I feel it to be too risky to adopt your view at this time. My reading is that the Contractor is not required "to flow...unless so specified." My reading of "so specified" is that any mandatory flowdown is required to be flowed because it is specified. It doesn't have to specify that it be flowed in commercial items. Would be receptive to your reading if there was some definitive guidance other than our opinions. I have not had time to research this further. In my experience, those that I would flow can be challenged by the subcontractor and deleted during negotiations if warranted as inoperative/inapplicable.
  14. The contracting officer does not know whether or if a prime will be procuring commercial items. The prime contract in my experience, necessarily includes the clauses needed or required per the prescription for each clause corresponding to the contract work, contract type, etc. Those clauses in the prime are not necessarily limited to only the clauses in FAR 52.244-6. Including those clauses is not a deviation from FAR 44.402(b). Some of those required clauses may include mandatory flowdowns.
  15. Don, This language is not included in the contract. Also, how do you see the flowdown situation when DFARS 252.244-7000 is also included in the prime?