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Don Mansfield

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Posts posted by Don Mansfield


  1. 10 minutes ago, joel hoffman said:

    As mccmark indicated above, it wasn't deemed necessary to publish the SCR for public comment.

    Do you think the higher-ups in USACE even thought about 41 USC 1707? I'm not arguing that the clause in question should have been published for comment (I can't open that link), but I can' find a single USACE provision or clause in Title 48 of the CFR. Chapter 51 of Title 48 only lists three clauses:

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    5152.208-9001   Industrial preparedness planning.

    5152.245-9000   Government property for installation support services (fixed-price contracts).

    5152.245-9001   Government property for installation support services (cost-reimbursement contracts).

     

     


  2. No, you're correct. However, you're incorrect in thinking that DPAP is responsible for you getting an error message.

    For some reason, some people just can't accept that if a DFARS provision or clause is not listed in DFARS 212.301(f), then it's not required in a solicitation for the acquisition of commercial items. They seize on prescribing language that says "Insert this clause in all solicitations and contracts..." and become stuck. They don't get the concept that regulations must be read as a whole. I recently had a former student e-mail me with the same dilemma--her legal counsel sent back her solicitation because it didn't contain some DFARS clauses, including DFARS 252.225-7048. This is what her legal counsel wrote:

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    With regards to the clauses previously recommended for consideration, while we understand that these clauses are not specified in Part 212 or the DoN CI Matrix provided by I&L, the prescribing language and the statutory requirements take precedence (not all portions of the DFARS are updated concurrently and sometimes it leaves contradictions; also, DFARS Part 212 does not have language similar to FAR Part 12 that specifically states that any clauses not included are excluded unless the KO elects to include).  Additionally, while there may be a concern regarding imposition of requirements on contractors such that commerciality of the procurement is threatened, when we make recommendations for clause inclusions we consider whether the clause prescribes some kind of process requirement for the contractor (such that additional costs may be intrinsically levied) or whether the clause is merely information to the contractor to ensure they are protecting themselves and comply with all applicable laws. 

    For example, with respect to FAR 252.203-7002, Requirement to Inform Employees of Whistleblower Rights, the prescribing language is "Use the clause at 252.203-7002, Requirement to Inform Employees of Whistleblower Rights, in all solicitations and contracts."  The clause requires the Contractor to inform its employees in writing, in the language of the predominant workforce, of their contractor employee whistleblower rights and protections under 10 U.S.C. 2409.  203.900 applies to DoD instead of FAR subpart 3.9.  It is intended to protect employees of contractors from reprisal from reporting items such gross mismanagement of a DoD contract or waste etc.  It is intended to encourage contractor employees to report fraud, waste, and abuse without fear of reprisal.  It applies to all contracts and grants awarded by DoD.  The only exception is I see in 10 U.S.C. 2409 is for contracts involving work in the intelligence community.  Even though this may not be in your commercial solicitation preparation guide, I see nothing under the statute that exempts DoD from putting this provision in commercial solicitations.  I recommend that you include.

    With respect to DFARS 252.209-7004, Subcontracting with Firms that are Owned or Controlled by the Government of a Country that is a State Sponsor of Terrorism, the prescribing language is "use the clause...in solicitations and contracts with a value of $150,000 or more."  The clause is intended to cover those entities listed as ineligible in the "exclusion" section of SAM and the contractor's responsibility to comply is independent of this clause.  I don't see any exclusions applicable to DoD and recommend you include.

    With respect to DFARS 252.225-7048, Export Controlled Items:  The prescribing language is " Use the clause at 252.225-7048, Export-Controlled Items, in all solicitations and contracts."  In DFARS 225.7901-3, DoD policy recognizes it is the interest of both the Government and the contractor to be aware of export controls as they apply to DoD Contracts and that it is the contractor's responsibility to comply with all applicable laws and regulations.  The clause informs the contractor that they must comply with all applicable laws and regulations regarding export-controlled items.  The contractor's obligation to comply with these export control laws is independent of this clause.  This clause (1) puts the contractor on notice of their responsibility and (2) requires them to pass along this notice to any subcontractors.  I do not know if any of the supplies involved in ballistic vests are subject to export controls.  Even though this may not be in your commercial solicitation preparation guide, I see nothing under the statute that exempts DoD from putting this provision in commercial solicitations.  Moreover, as the potential for export controlled items exist under this contract, I recommend that you include.  

    With regards to DFARS 252.204-7003, this clause is really intended to protect the Government and place the contractor on notice that control of Government information is not relinquished to the contractor.  Per the describing language, recommend this be included.

     

    This is what I wrote back to her:

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    Your legal counsel is misunderstanding. The attached Federal Register notice explains that, by law, the DFARS must contain a list of contract clauses that are authorized for use in contracts for the acquisition of commercial items (see the first page of the attachment and the responses to the questions starting on the second page). If a clause is not on the list, it is not authorized for use in contracts for commercial items. That list is now contained at DFARS 212.301. Each time a clause is added to the DFARS, the DAR Council makes a determination of whether the clause should apply to the acquisition of commercial items. If the determination is to apply the law to the acquisition of commercial items, then the determination will appear in the Federal Register notice of the final rule.

    Your legal counsel errs in believing that a statute must contain an exception for commercial items for a law to be inapplicable to contracts for commercial items. That's not how it works. Pursuant to the Federal Acquisition Streamlining Act of 1994, no acquisition law enacted after October 13, 1994, applies to the acquisition of commercial items unless the FAR Council (for laws implemented in FAR) or DAR Council (for laws implemented in the DFARS) makes a written determination that it would not be in the best interest of the Government to exempt acquisitions of commercial items from the law's coverage (41 U.S.C. 1906).

    The final rules incorporating DFARS 252.203-7002, 252.209-7004, and 252.225-7048, into the DFARS did not contain such a determination, so these clause weren't added to the list at DFARS 212.301. In fact, the final rule incorporating DFARS 252.209-7004 (79 FR 45666-01) stated:

    "The clause at 252.209-7004 is not prescribed for use in the acquisitions of commercial items. This clause implements paragraphs (d) and (e) of 10 U.S.C. 2327, which were enacted in 1997 (Pub. L. 105-85) (subsequent to the Federal Acquisition Streamlining Act of 1994), and therefore were inapplicable to the acquisitions of commercial items and COTS items, unless a determination was made that it would not be in the best interest of the Government to exempt these acquisitions from applicability of the statute."

    I'd be happy to explain this to your legal counsel. This has been the law for almost 23 years.

     

    So, when her legal counsel saw the FR notice and read 41 USC 1906, they realized their mistake...is not what happened. They responded by saying the statutes that the DFARS clauses in question implement take precedence over the DAR Council determination. This person has a law degree and is the member of a bar in some state. Sad.

    fr_2011-D056 (1).pdf


  3. Although not directly on point, this article contains a good description of the agency practice of imposing nonlegislative rules as if they are legislative rules. In terms of acquisition, this is similar to the implementation of local policies via local clauses. The description for the motives and consequences of such behavior would seem applicable to acquisition:

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    Doubtless more costly yet is the tendency to overregulate that is nurtured when the practice of making binding law by guidances, manuals, and memoranda is tolerated. If such nonlegislative actions can visit upon the public the same practical effects as legislative actions do, but are far easier to accomplish, agency heads (or, more frequently, subordinate officials) will be enticed into using them. Where an agency can nonlegislatively impose standards and obligations that as a practical matter are mandatory, it eases its work greatly in several undesirable ways. It escapes the delay and the challenge of allowing public participation in the development of its rule. It probably escapes the toil and the discipline of building a strong rulemaking record. It escapes the discipline of preparing a statement of the basis and purpose justifying the rule. It may also escape APA publication requirements and Office of Management and Budget regulatory review. And if the agency can show that its informal document is not final or ripe, it will escape immediate judicial review. Indeed, for practical reasons it may escape judicial review altogether. One can readily understand how a governmental instrument so quick, cheap, largely unchecked and low in risk, and yet so effectual, may tempt some agencies to slight the APA's mandates.

    Note that 41 USC 1707 imposes publication for acquisition rules, not the APA.


  4. There probably is no authority. This is likely an example of stealth regulation through the use of "local clauses". I checked the Federal Register and the CFR and found no such clause. If the clause has a significant effect beyond the internal operating procedures of the agency or has a significant cost or administrative impact on contractors or offerors, then 41 USC 1707, as implemented by FAR 1.301( b ) and FAR subpart 1.5, requires that it be published for comment in the Federal Register and codified in Title 48 of the CFR.  DoD must follow the procedures at DFARS PGI subpart 201.3. If you bring this to the attention of the contracting officer, they probably won't know what you are talking about. They will probably think that you are misunderstanding something.

    Agency avoidance of the rulemaking process is quite common throughout the Federal Government. In acquisition, I would say that it's the norm. One paper found that compliance with rulemaking requirements tends to be directly related to litigation risk. I would say the risk of an agency getting sued by a prospective or actual contractor for its failure to comply with 41 USC 1707 is very low. Instead of suing, contractors are more likely to absorb additional costs or administrative impact imposed by a local clause and pass them on to the Government in the form of increased prices. 

    One last thing. Courts have declined to enforce clauses that should have gone through rulemaking, but did not. See La Gloria, 56 Fed. Cl. 211.


  5. 1 hour ago, Vern Edwards said:

    Don:

    How are such determinations made? Are they made on the basis of objective assessments of recorded measurable empirical data or are they based on subjective, anecdotal "feedback"? If objective, who validates the measurements and assessments? How are causal determinations made? Are the data and verification reports published?

    Vern

    Ok, Mr. Facts and Data,

    All the support you need is in our Annual Report. You can save yourself some time by just searching for the term "acquisition outcome". After reading it, you may think that 33.85% is too conservative.


  6. Hi, Vern,

    Such determinations are based on an assessment of what others are likely to believe without becoming suspicious. Having said that, I'm going to revise my number to 33.85%. If "objective assessments of empirical data" include cherry-picking, then the answer to your question is "yes".  Although, an "objective assessment of empirical data" and a "subjective, anecdotal assessment" is really a distinction without a difference. 


  7. 21 minutes ago, kevlar51 said:

    To add to this, Contract Specialists I'd work with were constantly in multi-week training seminars. Yet I'd absolutely never see any changes in outcomes, because training all gets forgotten when they get back to whatever procurement culture their agency has fostered over the decades.

    Things are much different now. When contract specialists return to the workplace after multi-week classroom training, acquisition outcomes improve by an average of 53.9% in terms of cost, quality, and delivery. These gains are directly attributable to multi-week classroom training.


  8. 21 hours ago, contractor100 said:

    Commercial or not, contractors should have to offer some specific solution!

     

    1 hour ago, contractor100 said:

    I've had plenty post award!  Where we actually determined what work we would do.

    So, you should have the opportunity to offer a specific solution, even though you haven't yet determined what work you would do.

    I wonder if that would make sense to someone who knew nothing about Government contracting.


  9. In DoD, COs are supposed to follow DFARS 232.072-2(b):

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    The contracting officer shall obtain the following information to the extent required to protect the Government’s interest.  In addition, if the contracting officer concludes that information not listed in paragraphs (b)(1) through (b)(10) of this subsection is required to comply with 232.072-1, that information should be requested.  The information must be for the person(s) who are legally liable for contract performance.  If the contractor is not a corporation, the contracting officer shall obtain the required information for each individual/joint venturer/partner:

     

                  (1)  Balance sheet and income statement¾

     

                        (i)  For the current fiscal year (interim);

     

                        (ii)  For the most recent fiscal year and, preferably, for the 2 preceding fiscal years.  These should be certified by an independent public accountant or by an appropriate officer of the firm; and

     

                        (iii)  Forecasted for each fiscal year for the remainder of the period of contract performance.

     

                  (2)  Summary history of the contractor and its principal managers, disclosing any previous insolvencies--corporate or personal, and describing its products or services.

     

                  (3)  Statement of all affiliations disclosing¾

     

                        (i)  Material financial interests of the contractor;

     

                        (ii)  Material financial interests in the contractor;

     

                        (iii)  Material affiliations of owners, officers, directors, major stockholders; and

     

                        (iv)  The major stockholders if the contractor is not a widely-traded, publicly-held corporation.

     

                  (4)  Statement of all forms of compensation to each officer, manager, partner, joint venturer, or proprietor, as appropriate¾

     

                        (i)  Planned for the current year;

     

                        (ii)  Paid during the past 2 years; and

     

                        (iii)  Deferred to future periods.

     

                  (5)  Business base and forecast that¾

     

                        (i)  Shows, by significant markets, existing contracts and outstanding offers, including those under negotiation; and

     

                        (ii)  Is reconcilable to indirect cost rate projections.

     

                  (6)  Cash forecast for the duration of the contract (see 232.072-3).

     

                  (7)  Financing arrangement information that discloses¾

     

                        (i)  Availability of cash to finance contract performance;

     

                        (ii)  Contractor’s exposure to financial crisis from creditor’s demands;

     

                        (iii)  Degree to which credit security provisions could conflict with Government title terms under contract financing;

     

                        (iv)  Clearly stated confirmations of credit with no unacceptable qualifications; and

     

                        (v)  Unambiguous written agreement by a creditor if credit arrangements include deferred trade payments or creditor subordinations/repayment suspensions.

     

                  (8)  Statement of all state, local, and Federal tax accounts, including special mandatory contributions, e.g., environmental superfund.

     

                  (9)  Description and explanation of the financial effect of issues such as¾

     

                        (i)  Leases, deferred purchase arrangements, or patent or royalty arrangements;

     

                        (ii)  Insurance, when relevant to the contract;

     

                        (iii)  Contemplated capital expenditures, changes in equity, or contractor debt load;

     

                        (iv)  Pending claims either by or against the contractor;

     

                        (v)  Contingent liabilities such as guarantees, litigation, environmental, or product liabilities;

     

                        (vi)  Validity of accounts receivable and actual value of inventory, as assets; and

     

                        (vii)  Status and aging of accounts payable.

     

                  (10)  Significant ratios such as-

     

                        (i)  Inventory to annual sales;

     

                        (ii)  Inventory to current assets;

     

                        (iii)  Liquid assets to current assets;

     

                        (iv)  Liquid assets to current liabilities;

     

                        (v)  Current assets to current liabilities; and

     

                        (vi)  Net worth to net debt.

     

     


  10. After reading the Federal Plain Language Guidelines, assess how well the FAR Councils did here:

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    If an emergency or unanticipated event interrupts normal Government processes so that proposals cannot be received at the office designated for receipt of proposals by the exact time specified in the solicitation, and urgent Government requirements preclude amendment of the solicitation, the time specified for receipt of proposals will be deemed to be extended to the same time of day specified in the solicitation on the first work day on which normal Government processes resume.

     


  11. 1 hour ago, LucyQ said:

    This has happened to us before - that is our only evidence. They have an IDIQ contract saying it will include many requirements and they only ever plan to contract out a few of those requirements. Yes, I know they're allowed to have a ceiling but by adding scope that will never come and knowing that price is a portion of the factor, this will make (at least my Boss) have to lower her price to offer a price discount based on all this work that won't come. 

    Is the agency explicitly directing you to rely on government estimates in arriving at your prices? If so, the agency will be liable for inaccurate estimates. See Admiral Elevator v. Social Sec. Admin., CBCA 470 07-2 BCA ¶ 33,676


  12. here_2_help,

    36 minutes ago, here_2_help said:

    Maybe I'm missing something, but doesn't the CO have to enforce the clauses in the contract? Are you saying that the CO has a duty to object to the inclusion of an official agency clause when the agency directs that clause to be incorporated into a contract, or that the CO must refuse to enforce the contract as agreed-to by the parties?

    What you're looking at should not be described as an "official agency clause." It's a local clause developed by a suborganization of an agency that has not been vetted through the rulemaking process like a FAR or DFARS clause. It's not contained in Title 48 of the CFR. Don't be fooled by the fact that the contracting activity is identified and it's dated. Such clauses have been held to have no contractual effect, even though they are agreed-to by the parties. See, for example, La Gloria Oil&Gas Co.v.U.S., 56 Fed.Cl. 211 (2003).

    In my opinion, a CO should always treat local clauses with some suspicion. Usually, they are someone's great idea within a contracting office to solve an immediate problem. However,  they aren't always thought through.

    If a CO doesn't have the authority to waive amounts due by law, a local clause is not going to give it to them.


  13. Does the contracting officer have the authority to waive amounts due to the Government? For example, some COs will waive an amount due to the Government at contract closeout if that amount is below a certain dollar figure. Here's an example of such a clause accomplishing that purpose:

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    EXPEDITING CONTRACT CLOSEOUT (NAVSEA) (DEC 1995)

    (a) As part of the negotiated fixed price or total estimated amount of this contract, both the Government and the Contractor have agreed to waive any entitlement that otherwise might accrue to either party in any residual dollar amount of $500 or less at the time of final contract closeout. The term "residual dollar amount" shall include all money that would otherwise be owed to either party at the end of the contract, except that, amounts connected in any way with taxation, allegations of fraud and/or antitrust violations shall be excluded. For purposes of determining residual dollar amounts, offsets of money owed by one party against money that would otherwise be paid by that party may be considered to the extent permitted by law.

    (b) This agreement to waive entitlement to residual dollar amounts has been considered by both parties. It is agreed that the administrative costs for either party associated with collecting such small dollar amounts could exceed the amount to be recovered.

     

    I see the wisdom of such a clause, but my question is whether the CO has this authority.


  14. According to the DFARS, the public can make recommendations for FAR and DFARS changes directly to the DAR Council. From DFARS 201.201-1(d)(ii):

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    The public may offer proposed revisions of FAR or DFARS by submission of a memorandum, in the format (including all of the information) prescribed in paragraph (d)(i) of this subsection, to the Director of the DAR Council.

     


  15. This is what I would write:

    "I can only record an obligation for the amount of the obligation created by the task order. If you want to commit the funds that were not obligated, then you should speak to the financial management folks because I don't have that authority. If you need any help, let me know."

    I prefer to assume the engineer is just ignorant of the rules, not that they are knowingly intent on doing something illegal. Help them solve their problem.

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