Hilarity_Follows

The items would be a direct cost to the contract. If an indirect company expense, I wouldn't be concerned too much about it.

Hi, I'm with a small business firm. First, we register annually with the JCP. This is typically the first step required to gain access to Govt. export controlled data. As far as actually manufacturing items and complying with any applicable EAR/ITAR regulations that apply to the items - we make sure all our drawings are marked with the appropriate export warnings. We counsel our fabrication vendors on export law, which requires that they may not provide the drawing or allow the part to be made/accessed by any foreign nationals. The electronic copies of the drawings in their system must also not be accessible to foreign nationals. It is on our drawings and export restrictions are notated on any fabrication POs we send to vendors when it is applicable. We also talk to them and make them certify with signature that they understand and will abide by the restrictions which includes not allowing access of the information to any foreign nationals. For extra good measure, our non-disclosure agreements that include export control compliance provisions. Was the drawing you received of the part from the Govt. marked as an export controlled item? Sometimes larger assemblies are export controlled as a whole, but the smaller components individually are not - like the fasteners, individual fabricated sheet metal pieces like brackets etc. are not on their own export controlled. So, by segregating the larger assembly drawings showing the whole widget and how it goes all together, we can avoid some export restrictions just by sharing very limited part information and using a number of vendors. We also go out of our way to find/use vendors who can outwardly certify that they are ITAR compliant. This is just an example of how we address compliance, by not knowing about your part or your selected vendor, or your contract requirements regarding data handling, the above may not apply to your situation at all. The DDTC is another good resource to give you clarification on your specific situation/item. https://www.pmddtc.state.gov/?id=ddtc_public_portal_contact_us

This question is regarding an R&D CPFF type contract with DoD, (this is not a contract to deliver any specific supplies or materials.) As part of the effort, the firm is creating a prototype for testing. The science team at the firm wants to buy some used components on ebay to save money instead of buying the components new from the actual manufacturer. The prototype that would be made from these components could be consumed in testing, it is unclear at this point, or it could have to be delivered to the agency as residual materials. It is not specifically a deliverable in the contract, it's research so there are no specs tied around this prototype either. The contract has FAR 52.245-1. The only clause I can think of requiring a firm to use only new or vendor re-manufactured items in performance/ delivery is FAR 52.211-5 Material Requirements. This clause is NOT included in this contract. Is there another contract clause or requirement to look for I am not thinking of that would prevent this type of purchase?

The budget line for fee in the proposal says " Fee (RATE X%)......... $$$$$" It was shown as a whole dollar amount but described in the line as a percentage. I'm asking what the best approach would be to use with a contracting office who just says "We just don't do that anymore on CPFF Contracts." They aren't discounting my proposed fee using any cost analysis methodology described in the FAR like... using the DOD weighted guidelines (this is a DOD contract)... Just stating they won't accept fee as requested because of a newly enacted business decision... UNLESS I agree to a FFP award then they have no issue accepting the entire fee as it was proposed.

In the process of negotiating a contract for complex Research and Development exceeding $750K with a performance over 24 months with an Agency my firm very often receive awards from. Submitted a technical and cost proposal, showing fee applied as a percentage of total budgeted cost. The Agency has just implemented a new but unwritten policy/business practice only allowing the proposed fee percentage to be applied to labor and overhead costs if the firm wants to pursue a CPFF cost type award - so, no fee can be applied to materials, equipment, travel, subcontractor, ODCs, etc.. However, if the firm chooses a FFP cost type instead, fee is allowed to be applied as a percentage of all budgeted costs and does not require any reduction or alteration. Altering fee application in the manner which I've described can cut the fee to half of what was initially requested because our budgets typically have a variety of different types of costs: research partners, materials and supplies, equipment, travel etc. In Federal complex R&D, CPFF is necessary because the technical proposal and research work is purely theoretical. It might work - or something could go differently than we theorized - there are a lot of known unknowns. Estimating all costs accurately on day 1 is an impossibility. If the work was proven, it wouldn't be R&D. FFP is unduly risky for research type work. We have an approved accounting system, so there is no reason the firm can't perform on or accept a cost type award. We have given up fee on some types of costs with other agencies, however the application of fee not being allowed on travel or equipment or some other single cost element was always clearly spelled out in the solicitation. The firm has no black marks on past performance. I'm at a loss how to negotiate a CPFF award with this Agency and still preserve proposed fee. This new unwritten policy seems almost predatory forcing the firm to accept all cost risk under FFP. The FAR is pretty clear that CPFF is an appropriate cost type for complex R&D, though they aren't technically denying that we can have that cost type award - just as long as we forgo nearly all of the fee. I am only getting this type of negotiation feedback from a single agency, but unfortunately we do a lot of work with them. So, this new policy aims to also affect future awards. There is no mention of this in the solicitation under which the awards are being made. The agency says they have no control over what is in the overall solicitation. Would it be beneficial to alter budgets going forward to show fee only as a total fixed dollar amount and try negotiate as a whole dollar figure instead of a percentage of cost? I could then state the firm no longer wants X percentage of cost - they want $YY,YYY dollars for fee... which was deemed an acceptable amount of fixed fee on previously awarded contracts from the same agency for similar work and total contract value on contract no. A, B, C, D, E, etc. dated W, X, Y, Z. However, I have a feeling this likely won't be successful because it is entirely obvious what contract type the Agency is motivating the firm to accept. Have you heard of this fee application approach in negotiations to essentially require contractors to accept one contract cost type over another or else significant fee reduction? What strikes me is that the FAR dictates what cost type contract is appropriate for certain types of federal requirements. Fee should be a completely independent point of negotiation - right? Is there something I'm not thinking of in this scenario that I should be asking/asserting? Thanks for your input.

Yes! Thank you for pointing that out. That is true, we just call them NCEs internally and it is a misnomer. If they were truly at no cost I would not have a consideration issue. As often as I need to request them, if they were at no cost to the contract it is also likely my employer would go out of business so I wouldn't have a job either haha. When I formally request extensions, I state that the current funds remaining on the contract will support the requested revision to the period of performance and no additional funds are being requested .. not that it is actually "at no cost".

Thank you! I administer federal awards and have been pushing our PM Director to provide consideration with each extension request I facilitate with the Government. He's been refusing to give it to me up front and wants to wait to address it until the Govt. asks for it.... just in case they don't notice or ask. I feel it is (in its very best light) bad form on my part and ultimately delays the extension and makes my job harder when the KO notices that we are not offering consideration in the formal request for extension. Then I have to go back and get it from the team, redo the request.... To prevent this practice going forward, I am working on writing a formal policy and process governing extension requests for the organization and wanted to reference the consideration requirement, in whatever text it comes from, to further solidify the requirements I am including in the policy. Thanks again.

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)