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Vern Edwards

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  1. @KatzMEven if there were lawyers here who were willing to answer such a question, they could not answer it without a lot more information. Getting an answer to such a question would require a dialogue between questioner and answerer.
  2. @styreneI have written two articles about the -8 option pricing controversy, but they are available only to Westlaw subscribers. Contact me via the Wifcon Forum email, and I will send them to you. But to be brief, I think that the best course of action would be to establish a contract line item. Whether strictly necessary or not, it would avoid confusion and controversy.
  3. To add to what Retreadfed said, fixed fee is not stated as a rate and, ideally, should not be thought of in terms of a rate. It is a fixed dollar amount that is paid to the contractor for undertaking the contract. The amount should reflect the degree of effort and uncertainty associated with performance, within statutory limits. The parties presumably enter into the contract knowing that the actual cost is very likely to be greater than the estimated cost. Thus, if the contractor thinks of fee as a percentage of the estimated cost (almost everybody does at one time or another), then they should know that there is always a significant risk that the realized percentage will end up being less than the negotiated percentage.
  4. Wnen determining an offeror's responsibility, you do so with respect to the present time. The issue is whether they presently meet the standards in FAR 9.104. You can consider information about past performance, but only if it is pertinent to the present time. The fact that they have not performed well in the past may not be enough to support a determination of nonresponsibility.. I cannot give you any advice about whether your office's experiences with the offeror would be enough to support a determination of nonresponsibility. If you are not sure, then you should consult with someone who knows what specific facts you have and can advise you as to whether those facts would be pertinent and sufficient. Responsibility is a big and sometimes complicated matter.
  5. By "that information," do you mean:
  6. I presume you mean: Use some information to make a determination of nonresponsibility. A key question: Is the vendor a small business? If so, a determination of nonresponsibility would have to be referred to the SBA. So you should ask yourself whether they would agree with your determination. I would expect them to be more objective than your office.
  7. Emphasis added. Okay. Here's what you "actually" wrote, in context: Emphasis added. Here's what I wrote in reaction: Cost-reimbursement contracts are not "zero cost risk," because if the contractor overruns, and the government funds the overrun and requires the contractor to continue performing, then the contractor will likely incur additional, legitimate, yet unallowable business costs, but it will not receive additional fee. That's a risk which, if realized, would "eat into" the contractor's fixed fee. Now, as for expectations—I expect knowledgeable, experienced people responding to inquiries to respond with more than half-baked, toss-off, remarks such as yours to the OP in this thread. I don't know why you bother posting your standard, hasty, one or two-sentence, insubstantial, unsupported flimsies. Given your knowledge and experience, I expect more, and so should everyone else. And every time you post one of those things, I am going to show you the kind of thing you should have posted. Every single time. That's something you can expect. You can count on it. P.S. "Unfair" is whining.
  8. That's a common myth about cost-reimbursement contracts. The fact is that many legitimate business costs are unallowable under such contracts.
  9. @styreneAre you just asking if a line item is necessary, or are you asking more than that?
  10. @OuterSpace See FAR 16.306, Cost-plus-fixed-fee contracts: See, also, the contract clause at FAR 52.216-8, Fixed Fee: However, if the government changes the contract pursuant to the Changes clause, FAR 52.243-2, Changes—Cost-Reimbursement, and if the change increases the cost of performance, then your company would be entitled to an equitable adjustment in the fee: Emphasis added.
  11. @joel hoffmanI think your first post scared him off. 😁
  12. I disagree. A CO cannot declare a prospectively successful offeror to be nonresponsible solely because he or she thinks the offeror's price is "too low." A company might have any number of legitimate reasons for taking the contract at a price below its cost, and price realism is not among the responsibility standards in FAR 9.104. Assuming that price realism is not an evaluation factor, a CO who wants to reject an offer because he or she thinks the price is "too low," i.e., less than the cost of performance, must first determine that the prospectively successful offeror would be unable to perform at that price because it lacks sufficient cash or credit to perform at a loss. Thus, it is financially nonresponsible. See FAR 9.104-1(a). Also: STG LLC-Reconsideration, B-418490.3, Dec. 8, 2021. The GAO has said that 78 times since 1970. If there is nothing inherently improper in proposing a below-cost price, then a CO cannot declare an offeror to be nonresponsible solely because the offeror proposed such a price. There has to be more to it than that, such as the inability to perform at a loss due to lack of cash or credit. The CO must determine that the offeror is nonresponsible because (1) its price is below cost ("too low") and (2) it lacks the financial wherewithal to perform at the projected loss. What you appear to have proposed𑁋determining an offeror to be nonresponsible solely because its price is "too low"𑁋is not consistent with the definition of "responsible prospective contractor," FAR 9.104, and bid protest case law. Maybe that's not what you mean.
  13. I don't care about the OP or his/her circumstances. I wrote in response to your comment: I say that if the CO determines that the offeror's price is "too low," in the sense of "not enough to cover the cost of performance," the CO can then inquire as to whether the offeror has the financial resources necessary to perform. If the CO determines that it does not, then the CO may determine the offeror to be nonresponsible. But if the offeror can perform at a loss, then the CO may not determine it to be nonresponsible on the basis of the low price alone. My point is that proposing a price that is "too low," i.e., not enough to cover the cost, is not, in and of itself, disqualifying. A company may have sound business reasons to perform a contract at a loss. I believe that the cases I cited show that the GAO believes that the only way to reject an offeror proposing a price that is "too low" is to find it nonresponsible on some basis, one basis being financial incapacity. Do you disagree?
  14. I do not believe that a CO may find an offeror to be nonresponsible merely because its price is "ridiculously low." However, if an offeror's price is very low, the CO may investigate the offeror's ability to perform in the face of a prospective loss, and might find the offeror to be financially nonresponsible. An excessively low price, in and of itself, is not grounds for a determination of nonresponsibility. See FAR 9.104-1(a): And see PAE Government Services, Inc., B-407818, March 5, 2012: See also J.A. Farrington Janitorial Services, B-206875, October 18, 2005:
  15. Questions: 1. Is this acquisition being conducted pursuant to FAR Subpart 15.3, Source Selection? 2. Have you determined that the proposal is technically acceptable?
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