govt2310

Thanks, Vern! Well, I just now looked at FAR 16.403. That talks about fixed-price incentive contracts. The scenario I am talking about is, can a "pure" fixed-price contract have these "incentives" in the PRS chart? I don't think so.

Yes, PRS is for "Performance Requirements Summary" under a QASP. I ask this because, I know it is possible to have "disincentives," such as monetary deductions, if PRS standards are not met. For example, for an IT Helpdesk services contract, if it says 99% of calls must be resolved within 24 hours, and the contractor only does 98%, and the PRS says for every 1% below the 99% standard the agency will deduct X amount of dollars from the contract. And all this can occur on a fixed-price contract. However, I thought that providing an "incentive" was NOT allowed on fixed-price contracts, because then it would not be a pure fixed-price contract anymore.

How can a fixed-price contract contain "incentives" on its PRS?

Thank you. I understand. Cheers!

Let's change the hypothetical. Let's say an agency has ODCs that are not for travel. Let's say the ODCs are "pass through expenses" for repairing a vandalized property. Like a solicitation for services to maintain a government property, or rather, a whole bunch of government properties. It is unknown what condition these properties will be in by the time the contractor takes them over to maintain and repair them. It is possible a property could have vandalism. So the solicitation provides a CLIN in Section B for "pass through expenses" to cover that potential situation. Say the agency provides a NTE ceiling on these "pass through expenses" that are considered ODCs of $5 million. Say the ODC CLINs here are again cost-reimbursement type. If a contractor has to hire another contractor to repair the vandalism, I would consider that second contractor a "subcontractor." So in this scenario, would you say FAR clauses 52.215-22 and -23 would apply right? And how does profit factor into this? Or doesn't it?

Reply to #19: Ok, that's a good point.

Reply to #17: That's a good question. I used to believe that airlines and such were NOT subcontractors. But when I read FAR 52.215-23(a), which sets forth "Definitions," it defines "Subcontractor" to mean "any supplier, distributor ,vendor, or firm that furnishes supplies or services to or for a prime Contractor or another subcontractor." It does not provide any exemption or exclusion of airline carriers, travel vendors, etc. But maybe it is just understood in the government contracting community that travel vendors are NOT subcontractors?

Reply to post #13: Hmm. I don't think so. That sounds like stuff that should be covered by overhead.

Reply to post #10: 1. No, I don't. However, I believe you are asking me this question b/c of what it says at FAR 15.408(n), which states that, for civilian agencies (yes, assume my hypo is about a civilian agency), the agency must include FAR clause 52.215-23, Limitations on Pass-Through Charges, in solicitations when: 1) the total estimated contract or order value exceeds the SAT, AND 2) the contemplated contract type is expected to be a cost reimbursement type. For my hypo, let's say the "total estimated contract" value DOES exceed the SAT, in fact, let's say the value is $50 million. So that is why the hypo says we are going to include FAR clauses 52.215-22 and 52.215-23. 2. No, we don't intend to allow "fee" on travel. 3. No, we don't intend to allow the KTR to add "indirect costs" to travel.

Hmm. Let's say a solicitation is supposed to have a fixed-price contract type. It also has travel cost CLINs. The agency decides to make those ODC travel cost CLINs as cost-reimbursement CLINs. So now the solicitation's overall contract type is a "combination" of both some fixed-price CLINs and some cost-reimbursement CLINs. Because of the ODC travel cost CLINs, according to Vern, the agency must also include in the solicitation the appropriate FAR clauses for cost-reimbursement contract type (see FAR 15.408(n); and it looks like this means including FAR clauses 52.232-20 or 52.232-22, also FAR 52.216-11, and also FAR 52.215-22, and FAR 52.215-23). Also, the agency would have to conduct a Cost Realism Analysis for these ODC travel cost CLINs. Now, both FAR clause 52.215-22 and 52.215-23 address "Limitations on Pass-Through Charges." They both say that "excessive" pass-through charges are not allowed. Logically, then, it appears that NOT excessive pass-through charges, meaning reasonable pass-through charges, are possible and are "allowed." FAR 52.215-22©(2) appears to imply that it is possible for an offeror to have "profit/fee" on "work performed by a subcontractor." Then at FAR 52.215-23(d), it appears to say that "excessive pass-through charges" are possibly "allowable" on contracts that are "fixed-price contracts." So, are the ODC travel cost CLINs in my hypothetical the same as the "pass-through charges" talked about in FAR 52.215-22 and -23? If so, would they be considered "reasonable" and "allowable"? Or would they be considered "excessive" and "not "allowable"?

To expand on this question: this question has come up for my folks in the past regarding other direct costs (ODCs). When we have seen ODCs in the past, like Travel Costs, someone always asks the question, do these ODCs turn this contract type into a Cost-Reimbursement Contract Type? I don't think they do. When we have Travel Costs in a solicitation, there is a boilerplate narrative we use and other agencies use that says that the Travel Costs cannot include profit, that they are true ODCs. We cite to FAR 31.205-46, which talks about only reimbursing for "actual costs." As ODCs are technically "cost-reimbursement" type of CLINs, this makes me believe that "profit" should not be allowed in cost-reimbursement contract types. But I want to make sure.

Are cost-reimbursement contract types supposed to include "profit"? I read in the JAG Deskbook that the answer is no. It says that, for cost-reimbursement contract types, if it is just a cost contract, no award fee/incentive fee, then "The government pays the contractor's allowable costs plus a fee (often erroneously called profit) as prescribed in the contract. What does that mean? If a contract is just a cost-reimbursement contract, no award fee/incentive fee, then it looks to me like only the "allowable costs" are allowed. And those allowable costs DO NOT include profit. Can anybody explain this to make sense?

Ah, here is a GAO case that answers this question: Solers Inc., B-409079, B-409079.2, Jan. 27, 2014: "When an agency evaluates a proposal for the award of a cost-reimbursement contract, or portion of a contract (such as a cost-reimbursement CLIN), an offeror's proposed costs are not dispositive because, regardless of the costs proposed, the government is bound to pay the contractor its actual and allowable costs . . . Consequently, the agency must perform a cost realism analysis to determine the extent to which an offeror's proposed costs are realistic for the work to be performed . . ."

Thanks, Vern. Yes, I believe that it would be unreasonable for an agency to NOT conduct a Cost Realism Analysis for the cost-reimbursement CLINs in a combination contract types solicitation.

It is my belief that, if an agency posts a solicitation with a hybrid contract type, say CPAF and FFP. meaning some CLINs are CPAF and some CLINs are FFP, then the agency must conduct a Cost Realism Analysis for the CPAF CLINs. However, I have a colleague who believes differently. They asked me where does it say Cost Realism Analysis must be done for those CLINs? All I can come up with is to say it just seems logical and fair to do it that way. That is not good enough for them. Anybody got anything else?

Say there is a solicitation. The basis of award is best value (Tradeoff). Past Performance is one of the non-price factors. The solicitation says the following in Section M for the Past Performance Factor: The Government may consider an offeror’s/joint venture partners’ contracts in the aggregate in the assessment of a confidence rating should the offeror’s/joint venture partners’ past and present performance lend itself to this approach. That is, an offeror’s/joint venture partner’s three contracts may by definition represent only a rating less than very relevant when each contract is considered as a stand-alone effort. However, when these contracts are performed consecutively and/or simultaneously (in part or in whole) and are assessed in the aggregate, the work may reflect greater magnitude of work and complexities and such may be reflected in the confidence assessment rating for the entire team. As a result of the recency, relevancy, and quality assessments of the contracts evaluated, one confidence assessment rating as described below will be assigned to the Past and Present Performance factor. I have never heard of "aggregating" as it is explained above. Can anyone shed light on this?

Oh wait, I already posted this question in August 2010 to the forum: http://www.wifcon.com/discussion/index.php?/topic/777-prime-gave-sub-control-over-govt-data-now-sub-wont-give-it-back-to-govt/?hl=privity But if anyone has any further insight, please share.

Can a solicitation prohibit a prime from subcontracting the work? Specific example: an agency needs to have a contractor "backup" government data on an IT services contract. In the solicitation, can the agency put language restricting the "backup" to the prime, meaning the prime contractor MUST do this themselves, and not utilize a subcontractor? The agency's concern: if a prime is allowed to make a subcontractor do the backup, if the prime and the sub get into a dispute, and then the sub refuses to give the backup data to the government agency, then the agency has no privity of contract with the sub. So the agency would have no contractual leverage to force the sub to cooperate. A colleague of mine believes such a prohibition in the solicitation would be viewed as overly restrictive and cannot be done. I disagree. I believe the agency's concern is reasonable. The concerns are a reasonable basis for the restriction. Thoughts?

FAR 37.602 addresses using a Statement of Objectives (SOO) instead of a SOW in a solicitation. With a SOO, the agency puts the SOO in the solicitation that simply spells out what results/objectives the agency is seeking. Then the offeror submits a proposal, and if selected for award, that proposal gets adopted into the contract as the SOW/PWS. In real-life practice, how would the agency craft the evaluation criteria for this? Let me illustrate the problem. If the agency does a LPTA, how can the agency determine whether a proposal is technically acceptable if there are no "requirements" in the SOW, b/c there is no SOW, just a SOO? Remember, FAR 37.6 states that the SOO never gets incorporated into the contract. The SOO does not provide "requirements," only "objectives." The contractor's proposal becomes the PWS with the requirements. If the agency does a TRADEOFF, how does the SSA realistically determine if one proposal is technically superior to another? Once again, we have no "requirements" in the original solicitation. In this scenario, let's assume that the evaluation criteria are TECHNICAL APPROACH and PRICE.

Thank you, Bob, for creating and maintaining the WIFCON site. It has been and continues to be a tremendously important learning resource for me.

What if it is not a LPTA but a Performance Price Trade-off (PPT)? If the apparent awardee is not the lowest priced offeror, but say, out of 10 proposals, #3 is the first proposal to have a rating of SUBSTANTIAL CONFIDENCE, which is the highest rating possible in the 5-tier adjectival rating system, and the agency wants to award to #3. In the SSDD, is it OK for the SSA to only address the actual tradeoff by comparing #3 to #1 and #2, who were obviously lower priced, but had lower Past Performance ratings? I mean, does the SSA have a duty to provide narrative providing a comparative assessment between #3 and the offerors #4 to #10, who were obviously more expensive and lower-rated on PP? As there is no tradeoff with these higher-priced, lower-rated proposals, what is there to say? And what happens in this situation: In a PPT, #3 and #4 have the same exact PP rating of SUBSTANTIAL CONFIDENCE. #3 is lower-priced. Can the SSA simply write in the SSDD that #3 is lower priced, so award goes to #3? GAO has held that, where a solicitation provides for Best Value via Tradeoff (and PPT is Tradeoff), a "proper evaluation" is not limited to a consideration of the proposal's adjectival ratings. Philips Healthcare Informatics, B-405382.2 et al., May 14, 2012. Further, GAO has held that SSAs should reasonably consider content of competing proposals and not just go by the adjectival ratings. See Trailboss Enterprises, Inc., B-407093, Nov. 6, 2012. Trailboss involved a Tradeoff as well. GAO stated: “. . . Evaluation ratings should be merely guides for intelligent decision making . . . and that therefore evaluators and SSAs should reasonably consider the underlying bases for ratings, including the advantages and disadvantages associated with the specific content of competing proposals . . .” GAO has held that proposals with the same adjectival ratings are not necessarily equal. Pemco Aeroplex, Inc., B-310372, Dec. 27, 2007. But I believe that case also involved Tradeoff. So if PPT is a type of Best Value "Tradeoff" source selection method, then, all of the GAO cases I cited above apply to PPT, right? So if two proposals have the same PP rating, the SSA cannot just say in the SSDD, hey we are going with the lower-priced of the two, the SSA has to actually provide narrative on the relative merits of the competing proposals. The SSA must talk about their actual Past Performance, what they did, how well they did it, how relevant it was, etc. I ask this because it appears that, in some GAO decisions on PPT, if you actually read the background of the cases, the agency was NOT doing a real PPT involving Tradeoff. Rather, there was no Tradeoff at all, but it was LPTA. For LPTA, the GAO has held that, where two proposals were "essentially equal" with regard to PP, and the agency simply awarded to the lower-priced proposal, the GAO found "no basis to question the agency's source selection decision." See American Environmental Services, Inc., B-406952.2 and .3, Oct. 11, 2012. So I am just trying to understand how detailed a SSDD has to be for a Tradeoff procurement v. a LPTA procurement.

How detailed does a LPTA Source Selection Decision Document (SSDD) have to be? I have seen where the TEP members/evaluators used an Evaluation Worksheet Template for each proposal. The Template had a simple grid chart with a column for "Acceptable" and a column for "Unacceptable" where they could enter a checkmark and also the page/section number of the proposal where the supporting language appeared in the proposal. There was no narrative allowed on the Template, unless a proposal was found technically unacceptable. In that case, the evaluator had a block of lines to write a narrative explaining why they found the proposal technically unacceptable on that particular criteria. Once the TEP report is finalized, it goes to the SSA, who writes the SSDD. Can the SSA simply write 1-2 sentences stating that the awardee's proposal is technically acceptable and is the lowest price? As there is no Tradeoff, then there really doesn't seem to be much to say. Does the SSA have a duty to "talk up" the contents of the awardee's proposal? What of the other offerors' proposals? The concern is that the SSA usually relies upon the TEP Report and pulls narrative from it. That works fine in a Tradeoff. But for LPTA, if the TEP members simply put checkmarks and marked the page/section of the proposal, with no narrative, what is the SSA supposed to do? The SSA has a duty to review the proposals themselves, but usually they do that and then still rely upon the TEP report in their SSDD.

Craigmccaa: I searched and was able to pull up this website which says what you said: that the Air Force PPT Guide was deleted in March 2013: http://farsite.hill.af.mil/reghtml/changes/afac/afac2013-0327.htm I do not see anything that says it was "replaced" or "superseded" by any new guidance on PPT. If anyone knows of any such, please post it here. Thanks again!

Craigmccaa: Thanks! This now make sense. And I cannot open AF documents either. When I go to farsite.hill.af.mil, I can see on the left side of the screen a list of acquisition regulations, the ones we all know. In the list is "AFFARS." Under AFFARS, there are two indented items: "AFMC MP/IG" and AFCA MP." However, they each have the "lock" symbol next to them, and when I try to click them, they won't open. One colleague of mine told me, the reason is, you have to be on a "dot mil" computer to access these Air Force documents. I am not on a military computer. So maybe that's why.

Note, although the Solicitation for the Luke & Associates GAO decision says at M.1.1 on p. 74 that it was a "PPT," in fact, it was a LPTA. If read all of Section M, you will see, there was no Tradeoff at all. And in the GAO decision, it expressly states that it was a LPTA.