Jump to content

BradB

Members
  • Posts

    4
  • Joined

  • Last visited

Everything posted by BradB

  1. @joel hoffman Thanks for the clarification.
  2. Many thanks for the all the fantastic advice! I appreciate you all sharing your thoughts. To paraphrase what I've learned so far: 1. Get rate escalation clauses into the IDIQ so it's upfront. 2. Barring that, negotiate rate escalation at the TO level, if there is a bilateral mod at some point. Corollary: a POP extensions seems a good time to make the case that the delay is increasing costs. 3. "Don't be a doormat" 4. I'm still unclear on potential C&P ramifications. Do you think there is any qualitative difference in the chances of success or equities involved in negotiating rate changes at the IDIQ v. TO level? To me it seems that if we don't have escalation baked into the original IDIQ, there is little chance of changing that even if there's a later mod. In this case, I suppose the best time to have done this at the IDIQ level would have been when they extended the ordering period back in 2016. Now that the ordering period is passed, it seems like trying to negotiate a rate change for a lingering TO wouldn't make sense. And it also seems like it wouldn't make much sense (for the government) to agree to new IDIQ labor rates if there were many active TOs--assuming there was some need for a bilateral mod to the IDIQ. As for a mod at the TO level, it probably would have been good to do this when we agreed to the most recent TO POP extension. Yes, I agree with this. As stated above, we haven't historically pushed back in instances like these (again, client care/cultural focus, and perhaps capacity strategy). It seems like we should take a closer look at this to make sure we aren't shooting ourselves in the foot longer term. I'm not sure I understand--how can we factor in escalation if the government doesn't want to agree? Are you making a distinction between negotiating new labor rates altogether and proposing something else (e.g., escalate all LCats by 3%)? Is there another way to factor in escalation (e.g., hours?). As far as judgmental data goes, what exactly are you saying is judgmental and not C&P data? Concur. This isn't what is happening. These rates (and LCats) are 10 years old now. If the folks working on the project meet quals for the higher LCats, this isn't a problem is it? Mainly business reasons and perhaps some internal negotiating processes we need to improve. But I appreciate all the advice (and experience) because it helps me calibrate expectations going forward. Interesting question. Client care is a cultural imperative that goes all the way up the chain. I don't feel frozen out of the process, so I think there are things we can do to improve and create win-win situations.
  3. Yes--I think this is where we are headed. The way our business is structured, our senior PMs all have pretty strong personal relationships with the Govt PMs, so it definitely can be a challenge to insert myself. Unfortunately, there is just no history of the company renegotiating rates. Part of my question gets at how often/realistic it is to expect to successfully re-negotiate labor rates on an IDIQ (or even a TO under the IDIQ). I assume by this that you are thinking there are no such mysterious fiscal law complications that would make it impossible/inadvisable to adjust the labor rates at this point? The ceiling I am referring to is the IDIQ ceiling. We had so many TOs under the IDIQ that we ran out of capacity. So the client added more capacity to the IDIQ. As far as being "stuck," I mean that we agreed in the original IDIQ to labor rates for each labor category for the IDIQ. The IDIQ included automatic escalation to those rates for each of the option years, but provided for no escalation of rates on long-running (or any) TOs.
  4. We have an A/E services IDIQ with the DoD that we initially entered in 2011 with a base year and four option years. Each of the option years included rate escalation. The IDIQ was fairly active and the ceiling was raised a couple of times. In 2016 (the last year of the IDIQ) we were awarded a major FFP TO order that is the subject of this question. Performance of this TO has been subject to delay after delay (changed client plans, re-scoping, etc). Unfortunately, throughout all these delays we've been stuck with rates from 2016 that have not escalated. We are now on Mod 14. With each delay, the 2016 rates become increasingly problematic. The TO was finally slated to be complete this summer, but then COVID hit and the necessary travel to perform the services couldn't happen. There was talk that the entire TO would move to a new IDIQ with fresh rates and much more ceiling. However, we just learned this month that the DoD was going to raise the ceiling on the old IDIQ and also extend the TO POP to 2025. Our company has historically just determined to take extensions like these as "mixed blessings" in the name of client care, and try save money on execution. It looks like that's going to be the same approach to this one...but I have questions: 1. This TO: With each of these 14 mods, we've worked and re-worked the hours to fit the new scope. We are at the point where our actual rates are so different than the contract rates that using our current profit projection tools, it's almost impossible for us to know if we'll make a profit. So the pressure is to either: a) Use our current rates x hours to figure out what we need to make a reasonable profit, and then reverse engineer the hours with the old rates to figure out what we need to submit for back up and negotiations. The client actually suggested we do this, but wouldn't this raise an issue with certified cost and pricing data if we are just pushing up the hours to make sure we don't go in the hole? b) Add in lots of contingency, on the basis that we have a performance risk based on low rates. Maybe this is the way to go? Not sure how that would go over with the client) c) Push much more senior positions onto the job (The client seems receptive to this, but I'm not sure if it's right. How can you argue that a senior engineer is required for literally every task?), d) Push up profit. Correct me if I'm wrong, but I think the max is 12% under the Structured Approach. Is there a way to go higher?, OR e) Mod the rates to bring them in line with current. I'm getting mixed signals from our PgM that the client won't to do this for some fiscal law reason. I'm not sure what that would be and I'm not sure he really understands either. He might just be reluctant to engage the client. Any recommendations on what might be done with this current ancient TO. I've looked in the forums and haven't seen anything directly on point, so I'm probably missing something obvious. 2. Future TOs on new/other IDIQs: Any thoughts on negotiating escalation on multiple year TOs into the IDIQ? In the past, we've apparently tried to argue that we should be able to use the current option year rates as a TO lingers on. We've been told 1) that the new option year rates can't be used until the option is exercised, and 2) even if the option is exercised, the rates in effect at the award of the TO govern. I agree with both of those statements. But, our inability to figure out TO escalation seems to encourage a bit of strategy that seems unfair--e.g., in one instance, we had a client who literally awarded a TO in the last week of the option year just to slide under the old rates. Then, the very next week they awarded the exercised the option. I understand why the govt would do that. Certainly makes a contractor want to figure out a way to address that behavior--because now we are performing the entire TO on old rates and there is nothing we can do about it. Any thoughts or examples of how such a clause might look?
×
×
  • Create New...