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Neil Roberts

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  1. Could you clarify the chain of potential subcontract levels (who is buying from whom in your hypothetical), and/or explain what you are thinking about the relationship between -7007 and -7008? Perhaps I do not understand the post. In my mind, a prime contractor should be flowing both clauses to its supplier and in so doing, change the parties in the last paragraph such that each supplier would be required to flow it to the next level supplier. If -7007 is included in a prime contract, a prime Contractor subject to Cost Accounting Standards and any of the lower level suppliers in the chain would be in violation of a contract if it does business with an OEM that does not agree to accept -7007. What am I missing?
  2. well, there are Bid & Proposal Cost and there are Cost Accounting Disclosure Statements applicable to many contractors and subcontractors. An answer should be found somewhere in there. Whoever is proposing these costs should be requested to justify them as allowable, allocable and reasonable with references provided to each of the above if they are applicable to the contractor or subcontractor business.
  3. Using GSA in price analyses

    The May 2017 Handbook Appendix 11section reads as follows below ( I am not aware of a more recent version. Does the bold sentence below answer your question? It appears to me that the answer to your question is "no." II. Practice The CPSR Analyst needs to first determine whether an award was competed or based on sole source. If an award was not competed, the analyst must review and analyze the price analysis that was utilized to determine if the price was fair and reasonable. As required in the contractor’s policy, each of those applicable files must document the rationale used for making the pricing decision and include the source and type of data used to support the determination. The complexity and circumstances of each acquisition should determine the level of detail of the analysis required. FAR 15.404-1(b)(2) describes examples of price analysis techniques to establish price reasonableness:  Comparison of proposed prices received in response to the solicitation. Normally, adequate price competition establishes a fair and reasonable price.  Comparison of proposed prices to historical prices paid for same or similar items. This method may be used for commercial items including those “of a type” or requiring minor modifications. o The prior price must be a valid basis for comparison. If there has been a significant time lapse between the last acquisition and the present one, if the terms and conditions of the acquisition are significantly different, or if the reasonableness of the prior price is uncertain, then the prior price may not be a valid basis for comparison. o The prior price must be adjusted to account for materially differing terms and conditions, quantities, and market economic factors. o Expert technical advice should be obtained when analyzing similar items or commercial items that are “of a type” or requiring minor modifications, to ascertain the magnitude of changes required and to assist in pricing the required changes.  Use of parametric estimating methods/application of rough yardsticks.  Comparison with competitive published price lists, published market prices of commodities, similar indexes, and discount or rebate arrangements.  Comparison of proposed prices with independent cost estimates.  Comparison of proposed prices obtained through market research for same or similar items.  Analysis of data other than certified cost or pricing data provided by the offeror. In accordance with DARS class deviation memo 2014-O0011, if a contractor is authorized to use GSA schedules, then a price reasonableness determination should be made using the analysis techniques at FAR 15.404-1. GSA schedules are not be used as a basis for comparison when conducting market research.
  4. Trade Agreements (TAA)

    Are you questioning whether 52.225-5 is applicable to the task order you received because the task order is not for the acquisition of supplies or the acquisition of services involving the furnishing of supplies? If so, I think you have a good argument that even though the clause is included in the terms of the task order, it is inapplicable. The government may have included this clause on the outside chance that some task order may involve the acquisition of supplies or the acquisition of services involving the furnishing of supplies. As ji20874 indicated above, to be applicable, the services and/or supplies are those deliverable to the government. The task order appears to be your schedule in this case. If ODC items are required to be furnished/delivered to the government per your task order requirements, my opinion is they need to be compliant with 52.225-5. To me, the key is not what your internal accounting system calls the purchase. Instead, the key is whether the task order requires an ODC, Tool or Material item be delivered to the government. Your company's requisitioning and accounting system in my mind should indicate that the such a supply item is "charged" to the task order government contract and must meet the terms and conditions of the such contract.
  5. Trade Agreements (TAA)

    If you are a contractor, Love, I commend you for reading the contract to solve your question. "What's in your contract" is a common refrain. I am not sure why you mention FAR Part 25 in connection with your contract. Generally speaking, Part 25 guides Contracting Officers and are not contract clauses or provisions like Part 52. Did you have some experience or belief that they were incorporated into government contracts or that some Part 25 language is made expressly applicable to contractors even if not in the contract?
  6. Trade Agreements (TAA)

    It was not clear to me whether you are a Contracting Officer that already issued a contract and are attempting to understand what contract obligations to expect performance from the contractor, or you are the contractor. Can you please clarify?
  7. Basic Question

    From a contractor view, could you please clarify what you are trying to do? Are you asking whether FAR 51.1 may authorize the sale of vehicles to contractors (and if so, not sure what supply source sells such vehicles), or use of such vehicles by contractors? Perhaps others in this forum would benefit and be able to better respond. What led up to your focus on FAR 51.1? Was FAR 51.2 inapplicable?
  8. DPAS

    Seems to me that the sub may choose to stop delivering and the prime may choose to stop paying if they each have that right under the contract between them. To me, in so far as DPAS is concerned, if the prime is reasonably in jeopardy of or has actually failed to deliver or perform per the prime contract, the Government may exercise its right against the prime. The Government may step in with the sub if requested by the prime. For all anybody knows, the sub delivered items are not acceptable from a quality or other standpoint, and the prime is seeking another source or in the process of terminating the subcontract to protect the prime schedule.
  9. What is a GACO?

    There is a Government Agency Coordination Office (GACO) that sponsors a series of FAR seminars.
  10. Where/ How to start learning?

    Aside from flowing down the right requirements on the subcontractor side of the business, if you are also the company's negotiator with customers on the contracts side of the business, you need to be aware that there are terms and conditions (FAR/DFARS/Uniform Commercial Code, etc.) that your company should think about negotiating for inclusion into the customer contract, which are not being proposed by your customer. These are not as obvious as the process for handling the subcontractor side of the business. Perhaps others in this forum could recommend learning tools for you. Examples include data rights and liability.
  11. Where/ How to start learning?

    StePa, Suggest you obtain a free email subscription to the Federal Register to keep abreast of new contract clauses and provisions. Check daily under Department of Defense and GSA (GSA handles FAR) for final final FAR/DFARS regulations. If you want to be a real student, read all the proposed ones as well and get involved with commenting on them. Happy adventure!
  12. Where/ How to start learning?

    Not sure whether your assignment is as a contracts person trying to determine how to review and negotiate terms and conditions of your company's contracts with a prime contractor or whether your assignment is with respect to flowdowns to subcontractors derived from your company's prime contract terms and conditions. Or, is your assignment with respect to both the above? Makes a difference as to learning focus. You may already be aware that FAR/DFARS terms and conditions generally guide Government and do not obligate contractors or subcontractors except where specifically mentioned and incorporated in the contract between the Government and the contractor And, when so incorporated, some such terms and conditions are expressed as mandatory flowdowns to subcontractors, which may require that the 1st level subcontractor flow it to its subcontractors. Other terms flowed to subcontractors by contractors may be business flowdowns which may or may not need to be further flowed by the 1st level subcontractor. Sufficiently confused? Very normal, and you may find different positions regarding a term and condition taken by people which may or may not be in line with your most knowledgeable current position. Try to learn the bases for their position and make up your own mind.
  13. Hi, Vern. I only chimed in with a post because it seemed that some of the other posts may have been leaning in the direction that all contractors are at all times members of the Acquisition Team due to FAR 1.102 (c) , and that therefore everything in FAR is binding on them as a result. Surprisingly, I have met many contractor supplier management employees and managers that actually believe every FAR regulation is applicable to Contractors. They had "good intentions" and beliefs that if FAR guides Agencies and Contracting Officers, Contractors are to be guided by the same. Thanks for your clarification.
  14. FAR 1.102(c) does state that contractors are members of the Acquisition Team. I am not sure how or when that occurs in general. However, the law department for many Contractors, in my experience, would not agree that Contractors are obligated by any FAR regulation that specifies requirements solely for Agencies or Contracting Officers.
  15. Commercial Subcontract

    You should be able to Google standard contracts for the sale/purchase of international goods and download them free and/or buy them. However, you may wish to consult your company's attorney with respect to what I said above, decisions to make regarding application (or opting out) of the 1980 UN Convention on Contracts for the International Sale of Goods, application of the Uniform Commercial Code, and application of the standard terms of purchase currently in use by your company. Bottom line, just blindly adopting some existing form would probably turn out to be the right thing to do for your company only by accident. I have known such accidents to happen when neither party reads the contract, both parties comply with laws such as export and import as a matter of practice, and both parties expectations are met regardless of what the contract says.
  16. Commercial Subcontract

    A subcontract may vary depending on the country where subcontract work is performed, the country where the subcontractor "resides," the country where your company resides and the relationship between the Dubai office and your company. Is the Dubai office considered to be a company under Dubai law or recognized under Dubai law as a company under the laws where your company resides.
  17. tguns: Assuming it is a CAS covered contract with a commercial organization, does FAR 31.205--21 Labor Relations Costs, help you?
  18. In my experience, it would be best practice to flow the clause, indicating that it is included in your prime and applies to the extent applicable.
  19. I may not correctly understand your post. Generally, an affiliate in the business world is a company that is less than 50% owned by another company. In your post, you seem to indicate that you are referring to companies that are wholly owned by another company. If it is an affiliate, the other company should be dealing with it at arms length via a subcontract.
  20. Cost Monitoring Plans

    Is FAR 52.248-1 ALT I Value Engineering relevant to this discussion?
  21. 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.
  22. 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.
  23. 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.
  24. 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.
  25. EEO-1

    If FAR 52.222-22 was included in your prime, per(c) you should have obtained a certification before awarding the subcontract.