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Vern Edwards

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Everything posted by Vern Edwards

  1. No, if by "award" you mean issuing a task or delivery order.
  2. @Tzarina of Compliance In your opening post you asked: I don't know of anyone in the Federal government who has done a PFS contract under the FAR or an other transaction, and no one has stepped up here to date to say that they have. The responses that you have received thus far, including mine, have not been helpful. As I said, I don't think FAR provides for PFS contracting, wherein a private financier pays a service provider and the government pays the financier if the service provider is successful. It's a strange kind of subcontracting arrangement conjured up by bureaucrats short of taxpayer money. Now you ask: I don't want to sound harsh. I don't mean to be. But it strikes me that you have heard about something that seems promising, but you haven't done enough research and don't understand PFS contracting or the FAR well enough to figure out how it would work, so you have come here. I for one don't want to write a thousand words or more in this awkward back-and-forth and forever-branching-out forum to sort things out for you. Consider this from the Delaware State Code that I cited earlier: https://delcode.delaware.gov/title29/c069/sc07/index.html As I tried to explain in my earlier post, PFS contracting is largely a financing arrangement. The FAR makes no mention of and prescribes no rules or guidance for such privately financed contracts. You could call Delaware officials to learn more about what they are doing, but they probably know next to nothing about the FAR and what it permits federal agencies to do. In short, if you want to know more about the possibility of PFS contracting under the FAR, either wait for someone to post here who has done one under the FAR or start a research file and go to the library and make some phone calls. Best of luck to you.
  3. FAR 1.108 says: Emphasis added. That rule explains how to interpret dollar thresholds in the FAR. It does not explain how to interpret limitations on certificates of appointment. The general rule when I was a contracting officer was that the dollar limitation on a warrant referred to the maximum obligation that a contracting officer could make. But that was before the widespread use of IDIQs that we see today. When the exercise of an option does nothing more than give the government a right, without entailing a new obligation, I don't see how the dollar amount on a warrant has any applicability. The maximum on an IDIQ contract is a limitation on a right, not an obligation. Moreover, I'm not sure that COs modify IDIQ contract maximums when exercising options. In any case, obligations other than a minimum are made on task and delivery orders, not on the option exercise document. Maybe the amount on a warrant means different things in different agencies. Maybe the OP should address their question to the authority that signed the certificate of appointment.
  4. That must be a local policy. There is nothing in statute or governmentwide regulation that requires the issuance of a delivery order within 24 hours after contract award.
  5. Carl has, I think, made the point that if the option has its own maximum, then that's the level of authority that the CO must have. Good catch, Carl. But I'm not sure that applies to warrant authority, since the maximum is not an obligation, and dollar limits on certificates of appointment are usually obligational limits.
  6. If: the contract is IDIQ, and all the option will do is extend the contract ordering and performance periods as set forth in FAR 52.216-18 and 52.216-22, and there is no minimum guarantee for the option period, then exercising the option would not create an obligation. And if the $250K warrant states a limit only on obligational authority, then any CO should be able to exercise it.
  7. Pay for success contracting is really a funding scheme. The idea has been around for about ten years. It's being done by some states, Delaware is one that I know of. See Delaware Code, Title 29, Part VI, Ch. 69, Subchapter VII, which defines "pay for success contract" as follows at § 6990: See also Burand, "Contracting (Incompletely) for Success: Designing Pay for Success Contracts for Social Impact Bonds (SIBS)," Cornell Journal of Law and Public Policy (Fall, 2019). It cannot be done under FAR. It's not really about procurement contracts. There would have to be authorizing legislation and new regulations, which would take years for Congress and the FAR councils to produce. Congress has mentioned pay for success contracts about four times, mostly in hearings in connection with war on poverty and welfare programs.
  8. For those of you who don't know, Major Matthew Fleharty is a U.S. Air Force officer, a graduate of the U.S. Air Force Academy, where he earned a Bachelor's degree in economics. He is now serving as a Program Element Monitor in the Pentagon after spending a year studying at Harvard, where he earned a Masters degree in public administration. He also earned an MBA at the Naval Postgraduate School. Before going to Harvard, Matthew served as the chief of an Air Force contracting office. Before that he was the executive officer for the Deputy Assistant Secretary of the Air Force for Acquisition (Major General Holt), and before that he served as a contracting officer with an unlimited warrant in the Global Positioning System Directorate at the Air Force Space and Missile Systems Center. Matthew is the outstanding example of everything that an acquisition professional should be, as demonstrated by his last post.
  9. I used the guidance available at the time, which was not much. The Weighted Guidelines do not require the use of formal risk assessment techniques. Look at the guidance in DFARS 215.404-71-2 and -3. Also see this: https://www.dau.edu/tools/Lists/DAUTools/Attachments/122/WGL Extraction.pdf The WG are just analytical tools. The results you get are just aids to analysis and argument. I used to do three or four of them for a negotiation, plugging in different numbers just to see what results I'd get and how convincing I could make them seem, not only to the contractor, but also to the people who would review my file. It's a game, Dude! PLAY it!
  10. I think open discussion of risk is an important topic in price negotiation. I wouldn't hesitate to share my risk assessment.
  11. I have worked with the DOD weighted guidelines since 1975 and have shared my computations with contractors in several negotiations with some positive results and a few laughs. If a CO understands the weighted guidelines method and knows how to use it, he or she need not worry about being shot down. The negotiator for the other side can disagree, and undoubtedly will, but opinions are just opinions.
  12. I gave you my best answer. I hope it was clear. Negotiating is fun. Enjoy.
  13. Keep in mind that an increase in the estimated cost of a cost-reimbursement contract need not be based on a contract change in order for the government to increase the estimated cost. If, in accordance with FAR 52.232-20(b) the contractor notifies the CO that "The total cost for the performance of this contract, exclusive of any fee, will be... greater... than had been previously estimated," then the CO must decide whether to (1) fund the overrun and increase the estimated cost, (2) modify the contract to reduce the estimated cost, (3) terminate the contract, or (4) let the contractor work until the funds run out. It doesn't matter why the contractor is going to overrun, the choices are still the same. An increase in the estimated cost is an increase in the government's obligation and must be funded. This is cost-reimbursement contracting 101.
  14. If you are negotiating an equitable adjustment, I don't think you should begin by discussing profit. If the EA is based on the changes clause, I think you should begin the negotiation with a discussion of the change and the consequent change in cost. Only after you have settled the issue of cost should you go into the issue of profit. When the time comes to discuss profit, I generally do not like to negotiate profit on the basis of percentage. That's because profit should reflect risk—the higher the risk the higher the profit. Thus, if the estimate of the effect of the change on cost ranges from, say, $1,000,000 to $1,250,000, then I would plot a profit that decreases in amount as the cost settlement amount approaches $1,250,000. The rate of decrease could be linear or nonlinear. I would not utter or acknowledge the word "percentage." On the other hand, taking what might be an easier path, if the changed work were similar in nature to the work originally specified, I might agree to apply the contract profit percentage to the increase. If the changed work were more challenging, I might agree to a higher percentage. If the changed work were less challenging I would propose a lower percentage.
  15. I'm not sure I understand that question. Please clarify. Are you asking whether to begin the negotiation with a discussion of profit percentage or whether to begin the negotiation of profit with a discussion of profit percentage?
  16. @Don MansfieldDid you see footnote 6? And do you think DODM 4120.24 is covered by 5 USC 553(a)(2).?
  17. @NASA COFirst, let's use proper terminology. In professional discussion there is no such thing as a "cost-plus" contract. There are cost-reimbursement contracts: cost (no fee), cost-sharing, CPFF, CPIF, and CPAF contracts. Cost-reimbursement contracts have an "estimated cost" or "target cost," not a "contract value." If the current estimate to complete a cost-reimbursement contract exceeds the current contract estimated cost, then the government has a choice. It can (a) increase the estimated cost to cover all or part of the projected overrun, (b) terminate the contract, or (c) let the contractor stop working when the funds run out. Since an increase in the estimated cost of a cost-reimbursement contract would be an increase in the government's obligation (see FAR 52.232-20 or -22), the government must have appropriated funds to cover the amount of the increase. Increasing the estimated cost without enough appropriated funds to cover the amount of the increase would violate the Anti-deficiency Act (ADA), for which there are criminal penalties. So, NASA CO, are there funds to cover an increase in the estimated cost from $385M to $1B? If not, then the mod that the PM wants would be illegal. (The ADA provides for criminal penalties.) You cannot increase the estimated cost just to save the PM from having to deal with settling overruns. You do it to increase the obligation of both the government and the contractor. If the PM does not understand all that, then he or she is professionally ignorant. (Maybe confused by people who talk about "contract value.") The CO should understand all that and explain it to the PM with appropriate references—FAR clauses and the GAO Red Book.
  18. Then the second-year warranty is a bona fide need of this fiscal year. Buy it if you think it's worth it.
  19. @Don Mansfield$4,200 for a Dell laptop. A Dell?! Heck, man, I can buy a top-of-the-line, fully-loaded, 16" MacBook Pro for almost $2,000 less than that! I'd have enough left to buy an Apple watch! One of the good ones! A strongly-worded letter demanding compensation in a sum certain RIGHT BLEEPING NOW addressed to someone high up in the company should do the trick. That, plus a CPARS threat. And by the way, I'd tell them I was going to notify the FBI, the OSI, the CID, and the NCI. THE 82ND AIRBORNE! THE 75TH RANGERS! THE GREEN BERETS! THE SEALS! DELTA FORCE! The heck with the local fuzz. What I wouldn't do is ask for the company's property management policies and procedures. I don't want to be insulting, but that just sounds dumb. You know, our government is just plain incompetent. It's become a threat to life, liberty, and the pursuit of happiness! When I think of all the stuff we need—fire-fighters and equipment in my part of the USA—the idea of paying taxes for somebody to read a company's property management policies and procedures because they lost one of our laptops makes me want to... Well, I better not say.
  20. What's the expected service life of the equipment? How long does the user plan to use it?
  21. When does an agency regulation have the "force and effect of law"? See LAX ELECTRONICS, INC. d/b/a AUTOMATIC CONNECTOR v. United States, Court of Federal Claims No. 19-1668C, June 10, 2021, in which the Court cites the Federal Circuit. https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2019cv1668-36-0 The discussion is on pages 5 - 8.
  22. What kind of gold-plated laptop was this? Make and model?
  23. You must understand that the definition of subcontractor is caught up in socio-economic acquisition policy and is thus partly political. The FAR definitions of subcontractor are dubious from an industrial point of view, in which it would seem to be better to distinguish between subcontractors and suppliers (or vendors), etc. The definition in FAR is overly broad, in part because it eliminates arguments about distinctions and in part because the socio-economic/political goal is to distribute as much business as possible to a particular economic sector. That goal is based in part on the myth of small business job creation. See Atkinson and Lind, Big Is Beautiful: Debunking the Myth of Small Business (MIT, 2018), pp. 81 - 93. It also reflects a general dislike and distrust of "big business." Ibid., pp. 221-239.
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