Vern Edwards

11 minutes ago, REA'n Maker said:

anyone who can fog a mirror is apparently qualified to be a COR.

🤣

Me wrong?! God will not permit it! (But someone else might. 😈)

A good source of information about ratification is the Army Contract Attorneys Deskbook.

https://tjaglcs.army.mil/documents/35956/56922/2022+Contract+Attorney+Deskbook.pdf/9a2d2125-61b4-7dbe-8e1c-5ccf1339d9dd?t=1657901660444

The topic is discussed in several places, but see page 3-12 under the heading Unauthorized Commitments.

For an interesting GAO decision, see Maintenance Service & Sales Corporation, 70 Comp. Gen. 664 (Comp.Gen.), B- 242019 (1991). The agency refused to ratify because the unauthorized commitment did not comply with the Competition in Contracting Act. The company then applied to GAO for compensation on a quantum meruit basis, under which the standard is less strict than FAR.

Well, if the contract sets no price for quantities from 1 to 29, then I don't think you got competition for such quantities, and your agency and the contractor might not be contractually bound with respect to such quantities. If so,  then you may need a J&A depending on the price proposed for the quantity you want to buy.

This will boil down to how your agency wants to interpret law, regulation, and the contract.

@Sam101

In re your comments on SF 30:

20 hours ago, Sam101 said:

I suspect that Item 13 says "CONTRACT/ORDER" because in FAR part 2 Contract means, in part:

Quote

orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance;

The slash between CONTRACT and ORDER in Item 10A stands for "or." Look it up. See Webster's New World Punctuation (2006) or The Best Punctuation Book, period, by Casagrande (2014) and see paragraph (e) of the instructions on the back of the form.

Thus, in Item 10A, read CONTRACT/ORDER as CONTRACT or ORDER. That being the case, your "rant" in that regard is silly. While orders are contracts according the definition of contract in FAR 2.101, many persons in our business do not understand that, and saying CONTRACT/ORDER on the form is designed to make it clear to such persons that SF 30 is used for modifications of both.

Next:

20 hours ago, Sam101 said:

So technically when a contract is not yet formed (no written acceptance or start of performance did not occur) in the case of a response to an RFQ the government may modify the "order that is not a 'contract' yet".

Emphases added.

What are you talking about?  Modify what order that is not a contract yet?

8 minutes ago, joel hoffman said:

In large programs, there should be fairly sophisticated contractor project controls systems/ personnel and earned value data available...

See FAR Subpart 34.2.

There has long been controversy about the "value" of earned value management. Conceptually, they make sense. But, as a practical matter, they are subject to manipulation by either party and for several reasons. They look good on paper, but do they work? Most of its most avid proponents seem to be EV consultants, EV teachers, EV software merchants, and members of Congress.

See, e.g.: "Enough Already, There is No "Value" in Earned Value Management," which is about the use of EV systems in agile development projects.

https://vitalitychicago.com/blog/enough-already-there-is-no-value-in-earned-value-management/

See also:

https://www.parallelprojecttraining.com/blog/earned-value-management-is-it-worth-the-effort-3/

https://smartprojex.com/rethink-earned-value-management/

These kinds of systems are never better than the organizations and people that use them.

23 hours ago, here_2_help said:

I imagine that the contracting officer would like to establish confidence in the contractor's number. If the contractor is asking for more funds today, how does the contracting officer know the contractor won't be back next week, asking for even more funds to complete the work?

I suspect that in many programs COs fund an overrun knowing with near certainty that the contractor will be back for more funds, they're just not sure exactly when and how much more they will need.

I think we need to be frank about some things. First, in theory we enter into cost-reimbursement contracts because we're cannot predict the cost  of contract performance with confidence. In theory, from day one there is at least a 50-50 chance of an overrun. We just can't predict how much the overrun will be.

In some cases the parties enter into the contract knowing full well that there is no chance that final incurred cost will be equal to or less than estimated cost. They have no idea what the final incurred cost will be. In large programs, the choice of contract type is political. In many cases the notice of an overrun is pro forma—everyone knew it was coming and nobody knows how much the incurred cost will be in the end.

In certain respects, "cost-realism" is a nonsense idea, it's main purpose being to hide reality from the public. In any case, with some exceptions, history shows that the government is no good at cost-realism analysis. It's another pro forma measure to keep the GAO happy.

What most COs believe and think they know about contract pricing arrangements is wrong, based on nonsense and naiveté.

13 hours ago, Cable said:

I did find a reference in the 2008 NDAA, Section 815(b), that required the Secretary of Defense "to modify the regulations of the Department of Defense on the procurement of commercial items in order to clarify that the terms 'general public' and `nongovernmental entities' in such regulations do not include the Federal Government or a State, local, or foreign government."  Although that provision was specific to DoD and in a section involving weapons systems (and doesn't address commercial marketplace or COTS expressly), not sure why the general public would be one thing to one agency but a different to all others.  That said, while it seems the DFARS did implement Section 815(b), Congress repealed 815(b) with the 2019 NDAA. Section 812, and so DoD removed the definition from the DFARS...

No need to continue the discussion on my account; again, appreciate the inputs.  

Here is the 2008 NDAA § 815(b):

Quote

Sales of Commercial Items to Nongovernmental Entities- Not later than 180 days after the date of the enactment of this Act, the Secretary of Defense shall modify the regulations of the Department of Defense on the procurement of commercial items in order to clarify that the terms `general public' and `nongovernmental entities' in such regulations do not include the Federal Government or a State, local, or foreign government.

DOD made that clarification in 2010, but then removed it, as explained in the final rule at 84 Fed Reg 12137, April 1, 2019:

Quote

DoD is amending the DFARS to implement section 812 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019. Section 812 repeals more than 60 obsolete Defense acquisition laws, most of which have been completed, have expired, or do not impact the procurement regulations. Of the obsolete laws listed in section 812, only one was implemented in the DFARS: section 815(b) of the NDAA for FY 2008 (Pub. L. 110-181). Section 815(b) required modification of the DFARS to clarify that the terms “general public” and “non-governmental entities”, with regard to sales of commercial items, do not include the Federal Government or a state, local, or foreign government. The clarification with regard to the terms “general public” and “non-governmental entities,” as used in the definition of “commercial item,” was added to DFARS 202.101, Definitions, via a final rule published in the Federal Register at 75 FR 51416 on August 20, 2010 (DFARS Case 2008-D011).

Since section 812 of the NDAA for FY 2019 repealed section 815(b) of the NDAA for FY 2008, this final rule removes the clarification of the terms “general public” and “non-governmental entities” at DFARS 202.101. No other changes are required to implement section 812 of the NDAA for FY 2019.

And according to the current lists, there is no open FAR or DFARS case to define or clarify "general public" or "commercial marketplace."

Neither the GAO nor a court has the power to define those terms. The can only infer their meanings based on an interpretation of a statute or regulation.

20 minutes ago, MileHighAcq said:

...there's a big gap between what the regs say and what we do in actual practice.

Noticed that, have you? 🤣

A universal truth. A principle of official life. A law of survival.

I should add that one response to an overrun might be to modify or partially terminate the contract, in which case the contractor might be required to submit a proposal and certified cost or pricing data. 

24 minutes ago, MileHighAcq said:

Based on a plain reading of this statement, it seems to imply that an action is only ratifiable if the contract would have been otherwise proper (i.e., followed all applicable regulations) except for the fact that it was someone without a warrant, or the appropriate warrant who made it.

That's exactly what it means. It doesn't "imply" it, it says it in no uncertain terms.

Of course, what it means in actual practice depends on contracting office management policy and judgment.

47 minutes ago, CharterParty said:

I think we have agreement the FAR does not require anything more than 1 number in the FAR 52.232-20 letter.   

The law of contracts requires both parties to act in good faith, and refusal to cooperate within reason during overrun analysis might be considered a failure to so act.

Assume a fully-funded cost-reimbursement contract.

If the contractor notifies the CO that there will be an overrun, the first question for the agency to answer for itself is whether to fund the overrun and require the contractor to continue to perform or decline to do so and terminate the contract.

In order to make a decision the agency and contractor should, at the least, determine (1) the estimated cost to complete and the realism of the estimate, (2) the cause(s) of the overrun (faulty initial estimate or problems during contract performance), (3) whether the causes(s) were transient and, if so, the likelihood of recurrence, or whether they are chronic, (4) the chance(s) of effective corrective action, (5) the risks of future overruns of various degrees of magnitude, (6) the availability of additional funding, and (7) the impact of termination on the larger program and on agency mission.

There may also be socio-economic and political implications, domestic and international.

It's more complicated if the contract is incrementally funded, but the basic idea is the same.

It is in the interest of both parties to cooperate during the analysis, and any refusal by the contractor to cooperate fully might be an indication of failure to make a "best effort."

The government's demands for information should be reasonable, keeping in mind that the contractor will be entitled to reimbursement of the costs of compliance. The contractor should promptly comply with reasonable requests for information.

The contractor's estimate is not a "proposal" (offer), and estimates are not certified cost or pricing data. But the contractor should willingly explain the bases for its estimate and share the information on which it is based and its assumptions and calculations.

@Evonan Thank-you.

Well, this thread is off and running, but it is not responsive to the OP's questions:

On 5/16/2023 at 9:31 AM, Cable said:

FAR 2.101's definition of commercially available off the shelf provides that the item is 1) commercial; 2) sold in substantial quantities in the commercial marketplace; and 3) sold to the government without modification (and is not bulk cargo). 

[1] Do I understand this definition correctly to require there be actual sales in a commercial marketplace as a prerequisite for an item to be considered a COTS product?  

[2] Assuming the substantial quantity threshold is met (whatever that means), are sales to a re-seller, who then sells to a governmental entity end user, sufficient to meet this prerequisite?

[3] Are there examples of companies correctly claiming their products to be COTS even though it does not sell those products to non-governmental end users, either directly or through re-sellers? 

In respons, Jacques said:

On 5/17/2023 at 12:36 PM, Jacques said:

A couple of the prerequisites for an item to qualify as a COTS item is that the item is a commercial product AND "sold in substantial quantities in the commercial marketplace."  While 41 USC 104 comes out of FARA (Pub. L. 104-106, § 4203) rather than FASA, the legislative history for FASA (passed close in time to FARA) suggests that sales to state and local governments would NOT count as sales "in the commercial marketplace."

I disagree with Jacques's inference that the legislative history of FASA indicates that sales to state and local governments would not count as sales in the commercial marketplace.

Quote

Commercially available off-the-shelf (COTS) item —

(1) Means any item of supply (including construction material) that is–

(i) A commercial product (as defined in paragraph (1) of the definition of “commercial product” in this section);

(ii) Sold in substantial quantities in the commercial marketplace; and

(iii) Offered to the Government, under a contract or subcontract at any tier, without modification, in the same form in which it is sold in the commercial marketplace; and

(2) Does not include bulk cargo, as defined in 46 U.S.C. 40102(4), such as agricultural products and petroleum products.

FAR defines commercial product in part as follows:

Quote

Commercial product means—

(1) A product, other than real property, that is of a type customarily used by the general public or by nongovernmental entities for purposes other than governmental purposes, and–

(i) Has been sold, leased, or licensed to the general public; or

(ii) Has been offered for sale, lease, or license to the general public;

(2) A product that evolved from a product described in paragraph (1) of this definition through advances in technology or performance and that is not yet available in the commercial marketplace, but will be available in the commercial marketplace in time to satisfy the delivery requirements under a Government solicitation....

Emphasis added.

I think it makes sense in the context of FAR to say that a "commercial marketplace" is one in which which goods are sold to the "general public." Thus, I think the meaning of general public is important. I think a key question is whether state and local governments are part of the general public, as that term is used in FAR. However, FAR does not now define "general public."

The term general public was used in acquisition regulations long before the FAR's publication in 1984 and long before either FASA or FARA, and Congress was well-aware of that usage. Prior to FASA/FARA, its principal use was in connection with exceptions from the application of the Truth in Negotiations Act of 1962 (TINA). For instance, in the 1982 Defense Acquisition Regulation one of the exceptions to the requirement for submission of certified cost or pricing data was when prices were based on "established catalog or market prices of commercial items sold in substantial quantities to the general public."" Here is how the regulation explained "general public" at 32 CFR 3-807.7(e):

Quote

"The General Public." An item meets this criterion when it is sold(i) to other than the Government (including FMS); (ii) to other than affiliates of the seller or (iii) for end use by other than the Government (including FMS).

Note: "the Government" with a capital "C," not "governments."

What about FASA/FARA? One of the topics addressed in FASA was the rule about submission of certified cost or pricing data. See Pub. L. 103-355 §§ 1201 - 1210 and 1251m -1252:

Quote

...making TINA requirements for civilian agencies substantially the same as those for the Department of Defense (increasing the threshold for submission of “cost or pricing data” to $500,000 and adding penalties for defective pricing). Provisions are also included that increase the threshold for cost or pricing data submission every 5 years beginning October 1, 1995. A new exception is added to the requirement for the submission of “cost or pricing data” for commercial items; the approval level for waivers is changed, and prohibitions are placed on acquiring “cost or pricing data” when an exception applies. The coverage includes a clear explanation of adequate price competition as required by the Act.

Quote

(v) General public. The general public ordinarily consists of buyers other than the U.S. Government or its instrumentalities, e.g., U.S. Government corporations. Sales to the general public do not include sales to affiliates of the offerors or purchases by the U.S. Government on behalf of foreign governments, such as for Foreign Military Sales. If the contracting officer can determine without requiring information from the offeror that sales are for Government end use, these sales need not be considered sales to the general public.

Emphasis added.

I don't see any reason to believe that "general public" meant different things with reference to different topics in the same piece of legislation.

The established catalog and market price exception has since been replaced by the commercial items exception.

Given this long-standing usage of the term "general public," usage that predated FASA and FARA by more than 10 years and of which Congress was well aware since it had long been applied to a Federal statute (TINA), I see no reason to believe that a single vague comment in the House report cited by Jacques should be interpreted so as to exclude state and local governments from the general public and, thus, commercial marketplaces. I find his inferential interpretation of the House report unconvincing. Moreover, the fact that general public and commercial marketplace are not defined in either statute or regulation allows COs to exercise considerable discretion. 

Now, I have provided my interpretation of "commercial marketplace" based on official interpretations of "general public," and I have cited the bases for my conclusions. Those bases include regulations published in the Federal register, which have never been disputed to my knowledge. Do I know the "right" answer? No, because in the absence of official definitions or explanations, I don't know that there is a "right" answer. As a CO I would use judgment and discretion. And given the preference for the use of commercial items, I would tend to be liberal in judgment and discretion.

Please excuse any typos. I'm struggling with my vision.

Vern

6 hours ago, joel hoffman said:

If the government can’t or won’t analyze a cost overrun, then they are incompetent and shouldn’t be issuing or administering cost reimbursement contracts. Its a serious breach of trust as stewards of the taxpayers’ money.

Tell us more. What should the analysis seek to learn?

@CharterParty Answers:

1. There is no rule in FAR about the documentation of a cost overrun. FAR 52.232-20 does not say. The CO may ask for details.

2. What requirements of FAR 15.2 are you talking about? It does not cover the "requirements" for revised estimates. It's about solicitation and receipt of proposals and information. Did you mean FAR 15.4? If so, it's not of much help either.

 3. It can be just one number. The clause does not require more.

4. FAR does not address CO/KO analysis of a cost overrun. But, presumably, the parties will discuss the matter and the CO will consult with his or her client. The requiring activity (client or "customer") should be actively involved.

The FAR is not a textbook. It is a book of rules. You need a copy of Cost-Reimbursement Contracting, 4th ed., by Cibinic & Nash, a very expensive book, or some other textbook on contract or project management.

59 minutes ago, Jacques said:

... the legislative history for FASA (passed close in time to FARA) suggests that sales to state and local governments would NOT count as sales "in the commercial marketplace."

Emphasis added.

What do you mean by "suggests"? Does it "suggest" of do you infer? Please cite the legislative history and quote the suggestive language.

12 hours ago, GABE said:

Looking for recommendations regarding checklists, to be utilized pre solicitation and pre award phase.

Recommendations for checklists for what kind(s) of acquisition(s)? For what purpose(s)?

1. Simplified acquisitions?
2. Sealed bidding?
3. Competitive negotiation? 
4. Noncompetitive negotiation?
5. Fixed-price contract acquisition?
6. Cost-reimbursement contract acquisition?
7. Time-and-materials contract acquisition?
8. Incentive contract acquisition?
9. GSA MAS ordering under FAR 8.405 without a statement of work?
10. GSAn MAQS ordering with a statement of work?
11. GSA MAS ordering with a blanket purchase agreement?
12. Single-award IDIQ contract ordering?
13. Multiple award IDIQ contract ordering under FAR 16.505?
14. Ordering against a requirements contract?
15. Architect-engineer contracting?
16. Acquisitions of supplies?
17. Acquisition of services? What kind?
18. Acquisition of construction?
19. Checklists for all of the above? Any of the above? Some of the above?
20. A single, universal checklist? Is it your impression that one checklist would work for all?

Checklists are very good things, but good ones are very difficult to develop. In our heavily-regulated business it takes deep know-how and extensive research.

I recommend that you follow Don's advice as a learning opportunity. But depending on what kind of acquisition you're thinking of, you'll have to look at a lot more than FAR 4.803, especially if you want it for the entire process leading up to contract award.

But here is a very personal suggestion: Read an essay by James Fenton entitled, "A Lesson from Michelangelo," which was published in the March 23, 1995 issue of The New York Review of Books. You can access it here:

https://www.nybooks.com/articles/1995/03/23/a-lesson-from-michelangelo/

You must register to read it, but you won't have to pay.

It's not about contracting. It's about art. You may wonder why I suggest that you read it. I suggest it because you posted in the Beginners' Forum. The lesson to be learned is: "Now go and learn the art of modeling before you learn the art of finishing." Consider it a gift from an old man who's almost done.

🤣 Well, I can see that I have evolved.

Carl, you have the memory of an elephant.

Frankly, I don't see how 52.222-46 can be applied during a competition for the award of a MATOC for varying services requirements. It has to be done when soliciting for individual task orders if it's to be effective.

The rule was established by OFPP in 1978, long before FASA and the emergence of MATOCs as important contracting devices.

But here's something even more interesting. I don't know of any standard clause that requires the contractor to actually pay professional employees in accordance with its professional employee compensation plan after award. Have I missed it?

One thing to check: Assuming that the billings should have been against the new contract, not the old, compare the contract prices and make sure that the correct prices were billed and paid.

15 hours ago, Fitz said:

... a contract from FY18/19 that is long since expired having 30+ invoices billed against it for services rendered after the expiry, (FY20/21). To clarify the POP of the original contract ended in Sept, 2019 and the payables technician continued to bill against it for services rendered well after the POP expiry while a follow-on contract to the same Vendor existed.

15 hours ago, Fitz said:

Am I on the right track?

No.

What you have described is a billing and payment error. You have not described an unauthorized commitment. Based on what you have described there is no need for a ratification or a D&F, but someone should write a memo to file.

The supervisor(s) of whoever approved those invoices in the contracting office should be reprimanded. The accounting office needs to correct its records.

On 5/12/2023 at 8:59 AM, Specialist123 said:

Upon review of the proposal, the awardee made a note in the price proposal narrative that services may not be available in those 2 locations due to local restrictions.  The price proposal was not reviewed by the technical team and the price analyst had not notated this anywhere. Award has bee made and orders are underway.   

The proposal was not incorporated into the award. The solicitations stated "In the Technical/Management volume, address the proposed approach to meeting or exceeding the minimum performance or capability requirements of each technical/management subfactor, as well as the risks in the proposed approach in terms of technical/performance, cost, and/or schedule." 

On 5/12/2023 at 8:59 AM, Specialist123 said:

Question: In this scenario, is the contractor still liable for the 2 locations or is the fact that the Government found their proposal to be acceptable and made award relieve contractor responsibility? 

@Specialist123 The answer to your question is a matter of contract interpretation. The contract must be interpreted as a whole, taking all parts into consideration. Moreover, industry practice and communications between the parties during and after contract formation may have a bearing on interpretation. See Administration of Government Contracts, 5th ed., Chapter 2.

The fact that the contractor made a statement in its proposal is of interest, but is not determinative. 

No one can provide a reliable answer to your yes or no question based on the extremely limited information you have provided, and more information in this forum will not be of much help. Any answer yes or no answer you get here based on what you have posted or may post in the future will be unjustified and unreliable.

17 hours ago, CFO said:

Other than a documented medical reason, are there any exceptions in JTF DOD travel regulations to allow a contractor to book business or first class over coach fare for travel to an international place, say Japan from NC? 

Yes. The JTR is available on line. Search it for "first class."

Fun fact: I searched the Federal Register for the phrase "proposed contract exceeding $15 million" and got no result.

15 hours ago, Contracts98754 said:

Does anyone have a good way to explain the difference between amend and modification? 

The terminology is traditional and quite old.

You amend (change the content of) solicitations. See the definition of solicitation in FAR 2.101. See also FAR 14.208 and 15.206. A change to a solicitation is a solicitation amendment.

You modify (change the content of) contracts. See the definition of contract in FAR 2.101. See also FAR Part 43. A change to a contract is a contract modification.

If you go back far enough you can find references in court decisions to contract "amendments." But at some point in history that term was abandoned and a distinction was made between amendments of solicitations and modifications of contracts.