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Don Mansfield

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Posts posted by Don Mansfield


  1. In light of all the interesting things to talk about in acquisition--see, for example, OMB's new memoranda about acquisition--why are we still talking about whether or not to use a particular solicitation provision in an RFQ when everyone seems to have conceded that the provision is not suitable for RFQs?

    We're into the third page of this discussion. Aren't we smarter and more interesting than this?

    Vern,

    If everyone who issues an RFQ on a SF 1449 is incorporating an unsuitable solicitation provision, then I would say that is interesting.


  2. jtolli,

    You said that the contract doesn't include any payment clauses, but then you said that it does include FAR 52.212-4. Did you look at the title of paragraph (i) of 52.212-4?

    According to the contract, after the contractor has worked 1,920 hours are they still required to do something (e.g., complete a project) or have they fulfilled their commitment?


  3. Vern, I don't disagree.

    However, as part of the exercise, a DAU instructor illustrated developmemnt of a profit objective and how to handle FCCM within the ob jective. We were taught the DFARS method as an alternative to the FAR method. I knew that something didn't look familiar to me and was wondering what DAU is currently teaching.

    joel,

    When using the DD Form 1547 to develop a prenegotiation profit objective, FCCOM is not included in the total cost objective (Block 20)--as required by FAR 15.404-4( c )(3).


  4. In such a scenario, if the prime contract does not include the clauses at FAR 52.215 requiring cost and pricing data, is the prime contractor still required to obtain cost or pricing data for non-commercial items over $650,000 from subcontractors?

    No. See FAR 15.403-4(a)(1)(ii).

    Does the answer differ if the subcontractor was identified as a teammate in the prime contractor s proposal against which the contract was awarded?

    No.

    I read FAR Part 15 and FAR 15.404-3, says the contractor is required to do cost analysis, but it does not condition that only when required in our contract.

    Read it again. It does not require the prime contractor to perform cost analysis on all subcontracts.


  5. I think that Vern is correct. The rule in ( c )(3) applies to the development of a prenegotiation profit/fee objective, while the rule in ( c )(4) applies to the amount of fee the contracting officer can negotiate. Developing a prenegotiation profit/fee objective is not the same as negotiating profit/fee.

    Consider the following example. A contracting officer is developing a prenegotiation profit objective using the numbers above. The CO excludes FCCOM from the cost objectives when applying profit factors as required by ( c )(3) and comes up with prenegotiation profit objective of $150,000.

    During negotiations, the Government and the contractor agree to the estimated costs as proposed. However, the contractor offers some concession (let's say Government-purpose rights to some of its proprietary data) if the CO is willing to pay $151,500 in fixed fee. Can the CO make the deal? To answer this, we have to apply the rule which limits what the CO can negotiate. That rule states:

    For experimental, developmental, or research work performed under a cost-plus-fixed-fee contract, the fee shall not exceed 15 percent of the contract?s estimated cost, excluding fee.

    The applicable rule says "estimated cost", it does not say "estimated cost excluding facilities capital cost of money." 15% of estimated costs ($1,010,000) would be $151,500.

    Thank you all for playing.


  6. Another interesting thing about the OMB memo is that it assumes that agencies have been following, and will now continue to follow, SBA's regulations regarding parity between the HUBZone and SDVOSB programs:

    Pending the completion of the legal review of the GAO?s decisions by the Executive Branch, the SBA?s ?parity? regulations should not be disregarded by contracting officers, and Federal agencies should not, as a result of the GAO?s decisions, be compelled to prioritize HUBZone small businesses over 8(a) BD or SDVOSBs. Instead, until the legal review is completed, Federal agencies should continue to give active consideration to each small business program pursuant to their pre-existing contracting practices and ?parity? policies.

    There is no acknowledgement that the FAR gives priority to HUBZone set-asides over SDVOSB set-asides and sole source actions. This raises the question: If a contracting officer intended to ignore the HUBZone priority in the FAR, wouldn't they be required to obtain approval of a FAR deviation?


  7. You are a Government contracting officer and you are negotiating a cost-plus-fixed-fee contract for research work and have come to an agreement with the contractor on the following elements of his cost proposal:

    Estimated Cost (excluding FCCOM): $1,000,000

    Facilities Capital Cost of Money (FCCOM): $ 10,000

    What is the statutory maximum fee (in dollars) that you can agree to under this contract?

    A. $150,000

    B. $151,500

    Here is a relevant excerpt from FAR 15.404-4( c ) that may help you answer the question:

    (3) Contracting officers shall use the Government prenegotiation cost objective amounts as the basis for calculating the profit or fee prenegotiation objective. Before applying profit or fee factors, the contracting officer shall exclude any facilities capital cost of money included in the cost objective amounts. If the prospective contractor fails to identify or propose facilities capital cost of money in a proposal for a contract that will be subject to the cost principles for contracts with commercial organizations (see Subpart 31.2), facilities capital cost of money will not be an allowable cost in any resulting contract (see 15.408(i)).

    (4)(i) The contracting officer shall not negotiate a price or fee that exceeds the following statutory limitations, imposed by 10 U.S.C. 2306(d) and 41 U.S.C. 254( b ):

    (A) For experimental, developmental, or research work performed under a cost-plus-fixed-fee contract, the fee shall not exceed 15 percent of the contract?s estimated cost, excluding fee.


  8. VA Junior CO,

    The terms "Fixed-price", "cost-reimbursement", "time-and-materials", etc. are used to describe a contract's pricing arrangement. The terms "definite quantity", "requirements" and "indefinite quantity" are used to describe a contract's delivery arrangement. A contract's delivery arrangement and its pricing arrangement are two different, unrelated, aspects of the contract.

    Let's say you have a baseball. The baseball is white. The baseball is round. Both are true statements about the baseball, but they describe different aspects of the baseball--one statement describes its color, the other its shape.

    So, you could have a contract with a fixed-price pricing arrangement and an indefinite delivery arrangement (i.e., Definite quantity, requirements, IDIQ) and you could have another contract with a fixed-price pricing arrangement and a definite delivery arrangement. This would be like having one round ball that was white and another round ball that was black.


  9. My apologies for not getting back to everyone sooner. I value the comments. I provided some response and will check back soon to respond to anymore comments.

    The contractor and the Government just discovered the estimates for contract years 5/6 through 15, was faulty. We are currently in year 5 of the contract, so starting now through the end of the contract, the estimates are faulty. Although these costs represent an increase it will not result in a cost overrun as the contractor has succesfully managed the contract costs. The additional costs have not been incurred yet, but will begin in the next month or two.

    NptAcq,

    Why do you say that the estimates were faulty? Did the estimator fail to consider reasonably available information when making the estimates? Did they miscalculate something? Or is it more accurate to say that the costs turned out to be higher than what the Government reasonably expected them to be when they made the estimate?


  10. Vern,

    Part of the reconsideration states the following:

    ...while an agency?s interpretation of a statute it is responsible for implementing is entitled to substantial deference--and, if reasonable, should be upheld--an agency interpretation that is unreasonable is not entitled to deference. Id. (citing Blue Rock Structures, Inc., B‑293134, Feb. 6, 2004, 2004 CPD para. 63 at 8).

    Are you saying that GAO should defer to an implementing agency's interpretation of a statute even if that interpretation is unreasonable?

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