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Vern Edwards

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Everything posted by Vern Edwards

  1. That's not correct. Among other things, TINA is not an "administrative" remedy and it was not intended to be an alternative to criminal prosecution. It is strictly a contractual remedy unless a false claim in involved. Defective pricing might be entirely inadvertent.
  2. Rickover was not instrumental in the enactment of TINA, which happened in 1962, following the lead of the Air Force in 1959. TINA was a response to DOD's emphasis on the use of incentive contracts. The GAO and Congressman Carl Vinson were instrumental in the enactment of TINA. See Roback, "Truth in Negotiating: The Legislative Background of P.L. 87-653," Public Contract Law Journal, (July 1968). Rickover was instrumental in the creation of the Cost Accounting Standards Board, 1968 - 1970. See Pownall, "An Empirical Analysis of the Regulation of the Defense Contracting Industry: The Cost Accounting Standards Board," Journal of Accounting Research, (Autumn 1986).
  3. If I were the contracting officer in that situation I would not negotiate or sign any such agreement. If the contractor had wanted such an agreement it should have negotiated it into the contract before award.
  4. I will presume that your contract is for services. See the inspection of services clauses, e.g., FAR 52.246-4, Inspection of Services—Fixed Price (Aug 1996): Emphasis added. Most government contracts include inspection clauses with language. Contracts for commercial items ordinarily do not, but see FAR 12.208 about in-process inspection. If your contract is for commercial items and does not provide for government inspection at all times and places, and if you decide to let them sit in, you should (1) negotiate a protocol agreement with the government and with its individual personnel about conduct while on your premises (e.g., recording, photographing, sexual harassment, and offensive behavior and speech) and about disclosure limitations, and (2) instruct your personnel about confidentiality, fraternizing at the office, and after hours social engagements with government personnel. Most government personnel are honorable, but don't be naive.
  5. Thirty-six years old and overdue for the grave. Outdated and demented: 10 U.S.C. § 2304 and 41 U.S.C. § 3301.
  6. Sit down and talk it out. Like business people have done for—how long, centuries?
  7. Why do you think the program office wants to do administrative work that you think is your job?
  8. I don't think something in 1962 can mimic something in 2021. I think it's the other way 'round. 😎
  9. That's not what I was talking about. DTC was a program in which the government would specify the requirement as something like: "Design a bomb that will blow the enemy to bits and cost no more than $50,000 per unit to produce." (Design to Unit Production Cost)
  10. Go to https://www.govinfo.gov/app/collection/cfr then scroll down to 2012, then scroll down to Title 13, and then go to 125.6(e)(7).
  11. You're welcome, Joel. I think that what you were talking about was a form of design-to-cost, which was an old DOD policy used mainly in weapon system development and is still used in design-build contracting and in commercial design projects. You don't read much about it in government contracting anymore. For those interested in design-to-cost (DTC), there is plenty of material about it available by Googling the term.
  12. I want to emphasize that my remarks pertain to contracts for services, especially long-term and complex (multi-function/multi-task/situation-dependent) services, such as contracts for various types of support services. I won't write a lengthy treatise here, but long-term and complex service contracts are invariably incomplete. Such contracts require the contractor to respond to contingencies, but the SOW cannot describe every contingency that may emerge in the course of performance. Contract law has long been grounded in the presumption that contracts are complete, and government contract policy and contract clauses reflect that notion. But legal scholars and economists now recognize that contractual completeness is often an impossibility. There is now an extensive literature in the fields of law and economics about incomplete contracts, and I wrote about it at Wifcon in the past. One American economist, Oliver Hart, won the Nobel Prize in economics for his work on incomplete contracts. One result of the recognition of contractual incompleteness has been the emergence of the concept of relational contracts. Ralph Nash and I wrote a long article about relational contracting for the Defense Acquisition Review Journal in September 2007, entitled, "A Proposal For A New Approach To Performance-Based Services Acquisition," pp. 352-363. https://www.dau.edu/library/arj/ARJ/arj45/ARJ45_complete.pdf, in which we stated: And it is for those reasons that I urge readers here to be cautious about disclosing budgets or estimates in RFPs, because budgets and estimates may not, in and of themselves, communicate the realities of contract performance, and because those realities might not be known or knowable at the time of proposal preparation. Disclosure of budgets and estimates might mislead, rather than inform, unless accompanied by appropriate supplemental information, advisories, caveats, and disclaimers. Incumbent contractors and others familiar with an agency's objectives, operations, and behavior, and with the actual conditions or performance, will know more about the truth, because they have lived it or seen it. They will know about the kinds of contingencies that might arise during the course of performance and the kinds of adjustments that might have to be made during performance, and are thus wise to the limits of budgets and estimates. But it may be hard for uneducated contracting officers and "technical" personnel to acknowledge and explain the inability of their solicitation and contract documents to communicate the government's "true" requirements. Be cautious. That is the only point that I want to make. And conduct discussions during source selection. Google "incomplete contracts" and "contract incompleteness" if the idea interests you. See "Overcoming contractual incompleteness: The role of guiding principles," by Frydlinger and Hart, at https://voxeu.org/article/overcoming-contractual-incompleteness-role-guiding-principles. And read, "The Many Futures of Contracts," by Ian R. Macneil, 47 S. Cal. L. Rev. 691 (1973-1974). It's a great and influential legal essay, written by the father of relational contracting.
  13. The process can't negate that. An incumbent's advantage is hard-earned.
  14. Here is an interesting article from The Dickson Law Review of Penn State University: The Contracting Officer: his Authority to Act and His Duty to Act Independently, 70 Dick L. Rev. 333, 1965 - 66. (Note the date on the article. It was written before passage of The Contract Disputes Act of 1978.) https://ideas.dickinsonlaw.psu.edu/dlra/vol70/iss3/5/ A quote: "Only when the contracting officer, who is the central figure in the procurement process, acts independently, responsibly and fairly, can both the Government and the contractor achieve economy and efficiently." Is the contracting officer still "the central figure in the procurement process"?
  15. Here's a headline from a 1962 issue of Aviation Week and Space Technology: "Defense to Speed Development, Cut Costs: Services ordered to revamp research, procurement procedures to reduce lead time and avoid overruns" And so it goes.
  16. No. At least 30 media opinionators have offered differing views.
  17. Some additional thoughts: If you are thinking about revealing an estimate, are you going to reveal the constituent details, such as the amounts included for materials (including the bill of materials) and subcontracts, labor, other direct costs, indirect costs, and profit? Are you going to reveal the age of the estimate? Would you show how you allocate the estimate by SOW task? Or are you going to reveal just the bottom line? If you are thinking about revealing a budget (funding), are you going to reveal the bases for its development and when it was developed? (Maybe two years or more before issuance of the solicitation.) Are you going to include a caveat in the RFP to the effect that the government does not represent the estimate to be reliable or that the budget represents the anticipated cost of performance. Will you say that the government does not indemnify the successful offeror from injuries caused by government estimating errors or budget insufficiency? Will you say that the government takes no responsibility for estimating errors and omissions and budget shorfalls? ji20874 said, "If the budget estimate is too low, offerors will say so and the agency can adapt." Maybe. Hopefully. But are you going to provide a way for them to tell you that without the risk of being eliminated from the competition? Are you going to give them time to tell you before submission of proposals, or must they do so only with submission? If you reveal the budget or estimate in the RFP, are you going to conduct discussions with offerors in the competitive range in order to go over the government's estimate or budget and their proposals and try to reconcile any differences and discuss uncertainties and risks and how they might be resolved during contract performance? I'm writing these things so the people who come here to learn won't think it's as simple as just putting some dollar amount in a solicitation. Don't get me wrong—I'm not opposed to the idea, but I think it must be done professionally.
  18. BTW, see FAR 36.203, Government estimate of construction costs, paragraph (c).
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