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ron vogt

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Everything posted by ron vogt

  1. What are you reading?

    Just finished the first Spenser book of the post-Parker era, "Lullaby." Robert Parker died last year, but Spenser will live on in authorised books by another author. It was actually very faithful to the style and tone of the series, even, if I dare say so, better than Parker was doing in his last few books. I got the impression that he was dialing it in towards the end, and this book was a refreshing rejuvenation of the series.
  2. Commercial Information Technology

    Thanks. Reminds me of the line in Blazing Saddles: "You're on your own." I also did an initial search in Lexis, but didn't want to wade through a few hundred cases that simply used the words "information technology." I did find a Procurement Lawyer article written shortly after the exception entered the FAR. It too only repeated the definition, and then spent the rest of the analysis on substantial transformation. The author's reasoning was that the TAA threshold was $193,000, and few ITprocurements would ever be below this. Unfortunately, the construction TAA threshold is about $8m, which many construction projects will fall below. This makes the issue a very real one on a construction project. I've had several projects where we had to decide whether the equipment met the IT definition. COs won't help - they just punt it back to us.
  3. Commercial Information Technology

    Original issue: need guidance on the definition of "information technology" for purposes of the BAA exception. Did some digging, but hit a dead end. Here's where I went so far: The BAA IT exception showed up in the FAR in January 2006. However, all it did was reference the IT definition in 2.101. Checked the history of the IT definition. The original definition talked about equipment or systems that stored, manipulated controlled, etc. data or information. It included computers, ancillary equipment, software and firmware. In December 1997 (FAC 97-03, FAR Case 96-319, 62 FR 64914), a significant exclusion was added, which remains in the current definition. It excluded equipment that merely contains embedded IT that is an integral part of a product, but for which the principal function is not the storage, manipulation, etc. of data. Examples were HVAC equipment and medical equipment that contains IT, but whose principal function is not data manipulation. However, the definition was amended with no explanation or analysis, even though the FR notice indicated that 12 comments had been received. That's where we are today. There is a big gap between a computer system and a thermostat. Both contractors and contracting officers need to know whether equipment meets the IT definition and is exempt from the BAA. For example, a contractor might be installing a security system as part of a building renovation or even new construction. Is it exempt? Or maybe a sophisticated building management system - would it meet the definition of IT and be exempt, or would it be considered a glorified thermostat? The FAR and the Federal Register are no help, so any other guidance would be appreciated.
  4. Commercial Information Technology

    I would like to know more about the definition of information technology, but that article is not particularly helpful. First, it does not address the definition of information technology, other than repeating the definition. The article focuses primarily on substantial transformation. More importantly, it makes some statements that I consider suspect. For example, it states: "The BAA does not apply to subcontractors when an agency acquires commercial items." I do not know of a commercial item exception to the BAA, nor do I believe there was one in 2005 when the article was written. There is a waiver of the component test for COTS items, but that is not the same thing. Furthermore, for construction contracts, the BAA (or TAA) applies to all items of construction material installed in the project, no matter what tier of subcontractor provides it. However, I'm always ready to learn something new, if anyone knows that there is such an exception for commercial item subcontractors.

    Here's my prediction -- "Any clause that doesn't apply is self-deleting." Good luck.
  6. TAA Application to a Zero Price Item

    So where are we now. We know this much from Whynot's post: the acquisition value is over $203,000 and is subject to the WTO GPA, the TAA purchase restriction applies, and his product is considered foreign, i.e. not US-made or designated country. He also says that the product is part of a solution, whatever that means. We also don't know whether this is at the offer stage or Whynot has a contract and is about to deliver a noncompliant product, but it sounds like he's trying to structure an offer to get around the purchase restriction. I think we've agreed that because this is subject to the WTO GPA, shifting around the prices won't matter. Compliance is based on the country of origin of the product, not the price. Furthermore, dropping the price of that product $0 won't make this a "non-acquisition." However, there are still some possibilities. Whynot has said that the product is not TAA compliant, but is he sure that it needs to be? There are situations under which an individual product in an acquisition can be foreign. For example, if award will be made only on a group of line items, the entire offer is considered domestic if the price of the domestic end products are at least 50% of the total offer price. See example 2 at FAR 52.504-4(. In addition, for construction contracts, the FAR defines an entire emergency life safety system as a single product, regardless of how the individual parts of it are brought to the site. That means the system can be domestic even if some individual parts are foreign. There is more to consider. Whynot says this is for a "solution." He should confirm whether any origin requirements apply to every individual product, each line item, or the entire acquisition as a whole. There is some complicated case law on systems and what the origin test applies to. Don also suggested that lowering the price might work if this were not subject to the WTO GPA, i.e. under $203,000. That raises interesting issues, but this is already long enough.
  7. TAA Application to a Zero Price Item

    Unless your contract is for this product only, then the entire contract is the "acquisition" and the noncompliant product is just one of the products being acquired. Shifting around the prices will not evade the fact that your product is being acquired under that contract. Even if the contract is only for this product, lowering the price (and the entire contract) to 0 runs into the prohibition against augmenting appropriations. In short, without specific statutory authorization, an agency cannot accept free products or services. I wouldn't use that argument. If, as you've said, you've explored all other options, there's no need to go into any other approaches here.
  8. TAA Application to a Zero Price Item

    True. I was trying to keep the post short and simple and didn't want to get into a minimim threshold. My point is that by lowering your contract value below the TAA threshold, you get into stricter requirements, which is the opposite of what Whynot is trying to accomplish.
  9. TAA Application to a Zero Price Item

    By "remove the TAA restriction" I assume you mean that you would lower the value below the TAA threshold. For a couple of reasons, I don't think that will do what you want it to do. The TAA threshold is based on the value of the acquisition, not individual products. The TAA applies when the acquisition is over $203,000 for supply contracts, and $7,804,000 for construction contracts. Because the threshold applies to the value of the entire contract, not individual products, I don't see what good it would do to offer single items at $0. Are you trying to bring the value of the entire contract below the threshold? If that is your plan, then another problem is that your logic is backwards. If your plan is to offer the noncompliant item at $0 and thus bring the entire contract value below the TAA threshold, then the BAA would apply. The BAA has an even stricter test (domestic end product vs. US or designated country end product). If your product could not meet the TAA test, it certainly would not meet the BAA test.
  10. What are you reading?

    Finished "Blood Meridian" a couple of weeks ago. Grim, very grim. But I consider my reading experience to be broader because of it.
  11. While helpful, that memo only provides guidance on "substantial transformation." The use of the word "manufactured" in the title only refers to "manufactured goods", which is the term ARRA uses to describe what the Buy American requirement applies to. It is the same as the term "construction material" in the FAR. For ARRA grants and other financial assistance going to non-federal government projects, OMB has adopted "substantial transformation" as the standard for determining whether a manufactured good was produced or made in the US. The DOE memo reflects that. The FAR implementation of ARRA's requirements is not so straightforward. The FAR has long used both "manufactured" and "substantially transformed," which probably have different definitions as noted at the start of this thread. "Manufactured" is used when the Buy American Act applies, for determining whether a product is "domestic." "Substantial transformation" is used when the Trade Agreements Act applies, for determining the country of origin of a product. Here's where it gets more complicated. For a supply contract over the trade agreement threshold, you can deliver a product that is either manufctured in the US, or substantially transformed in the US. Not so for construction contracts. For construction contracts over the trade agreement threshold, a product from the US must meet the full "domestic" definition ("manufactured" in the US and 50% US content). Only construction material from a designated country can use the substantial transformation test. When ARRA came along, it only applied to construction projects, so the FAR had to decide what test to use. I'll skip the interim rule and go straight to the final version. The FAR has decided to use the "manufactured" standard, since that is consistent with the Buy American Act and has a long-standing record of interpretation (so they claim). Also, construction material always had to be domestic, so "substantial transformation" has never been applied to US construction material. So there's the problem under ARRA. For a US-government project subject to the FAR, the construction material must be "manufactured" in the US. For a US-funded project (not US-government owned), the manufactured goods must be "substantially transformed" in the US. I am very much interested in any reference materials on the differences between those two tests. Most reference materials I have only address this in generalities.
  12. What are you reading?

    I just started reading "Blood Meridian", which was recommended on some government contracting blog. What happened to the author's typewriter? Did the quotation mark keys break off?
  13. What are you reading?

    Vern, Not yet, but they're on my list. I try not to read more than 1 or 2 in a row from the same author. Some author's style gets stale and sounding the same, and it ruins some of the pleasure. Parker can get that way, so I need some variety. Before Parker it was a Carl Hiaison book, and a Nelson DeMille before that. Most of my pleasure reading is before going to bed, and I only last about 3-4 pages. Then the next night I have to reread the last page, so I'm only advancing at about 2-3 pages per night. That makes it hard to finish a paid-by-the-word book.
  14. What are you reading?

    One of the books he wrote before he died just came out, and his last one is in editing now. The big mystery is whether we finally find out Spenser's first name.
  15. What are you reading?

    One of the Spenser books by Robert Parker. The title doesn't matter. They're all fun to read. If you had asked a couple of weeks ago it would have been Milton Cross' "Encyclopedia of the Great Composers." Timing is everything.
  16. construction material

    Thank you Joel, that is exactly what I have been getting at. It just got sidetracked by discussions on COTS and other things. Also, it didn't seem like some agreed with the concept. There may not be definitive proof in the way of GAO and board cases, but if a CO accepts it at a site, I'm not looking for more. I am happy to agree with Vern and "leave it at that."
  17. construction material

    I definitely see a difference between a single product and a system, and I think it has an impact on how you evaluate construction material when it is a system that is treated as a single item. A single product, as most construction material is, is either manufactured, or gets its final assembly, in one place. It is composed of components that generally are not completed, usable items on their own. They are boards, cases, wiring, screws, connectors, flanges, etc. They have no stand-alone function other than as components of something else. In fact the definitions of "manufactured" and "substantially transformed" include the concept of the components being changed into something that is different in form and function. Short version: components go into one end of the factory; finished product comes out the other end. A system, on the other hand, is composed mostly of products that are finished, stand-alone products on their own. They are smoke detectors, alarms, control boxes, panels, etc. They come from many different factories as finished products, and they do not come together until they reach a construction site. Furthermore, they don't come together in the sense of a product in a factory. They are connected by wires across all the rooms and locations in a building. The FAR treats this system as a single item, a product. Logically, it is no more a single item than an electric grid is a single item, even though every part is connected to the rest by wires. Concentually though, if you look at the building as the factory, and the connection and wiring as the assembly, then that item, the system, was manufactured at the site. Furthermore, the components of that single item, the system, are the individual products that go into it. If at least 50% of those products, by cost, were made in the US, then the system has met the rest of the BAA test. My authority? I searched bid protest cases for any references to "emergency life safety system"? None. I also searched board and claims court cases. None. I'm left with the FAR's definition, and what I believe are the conclusions you have to draw from it.
  18. construction material

    Thanks, but Rule concerns a single product and is inapplicable to our discussion (btw, it's 878 F2d). The question here is where is a system, that may consist of several if not hundreds of individual products, manufactured? To use our fire alarm system again, a smoke detector is a single product. If this was a supply contract, that product by itself would have to meet the BAA domestic test. But under the FAR definition of construction material, the entire system, consisting of smoke detectors, alarms, annunciators, strobes, control panels, etc. is "evaluated as a single and distinct construction material regardless of when or how the individual parts or components of those systems are delivered to the construction site." Where is that system, consisting of all of those parts, manufactured?
  19. construction material

    That's correct. A COTS item does not need to meet the component test. It only needs to be "manufactured" in the US. However, the COTS issue is a side issue from the original question. The complication that started this topic is how to apply the BAA tests to an emergency system, which is treated as a single item. If an entire fire alarm system is one item, where is that "item" manufactured? I haven't yet heard anyone unequivocally agree that it is the construction site, so if it's not the construction site, then where is it? Where this gets interesting is in the FAR's implementation of the Recovery Act at clauses 52.225-21 through 24. The FAR carried forward its definition of construction material, and an emergency system as a single item. The Recovery Act has no component test, so it only asks where the item of construction material was manufactured. If a system's place of manufacture is the construction site, and that site is in the US, then all emergency systems are automatically compliant. Note that this only works under the FAR's definition of construction material, not for anything else funded by the Recovery Act.
  20. construction material

    Just to be clear, I'm not saying that the place of manufacture of each product is considered to be the construction site. I'm saying that for purposes of the BAA test, the place of manufacture of the system has to be considered the construction site. I think we are forced into that becuase of how an entire system is defined as a single item, and that item has to be manufactured somewhere for purposes of the BAA test. I also think it would be rare for an entire emergency safety system, treated as a single item, to meet the COTS definition. The individual products in that system are likely to be COTS, but I doubt that a whole system, piece for piece, would be the same as another. The FAR COTS definition requires the item to be the same, without modification, as one sold commercially.
  21. construction material

    Joel, I think the whole point of this topic is how you apply the standard Buy American Act test to emergency systems, since they are treated as single items. If a fire alarm system could meet the COTS definition (and I doubt it), then the component test is waived, and the item (system) only needs to meet the "manufactured in the US" part of the test. See the definition of domestic construction material at FAR 25.003. That brings us back to the original question, which is how and where a "system" is manufactured for purposes of the BAA test. I maintain that the system, as a single item of construction material per the definition, is "manufactured" where it is assembled and installed in a building. Yes, that is somewhat artificial, but how else do you apply the BAA test to a system, since the definition of construction material tells you to look at the system as a single item?
  22. construction material

    Joel, I appreciate the response, but I'm afraid I just don't understand what you're saying. As I read the original question, it asks how you apply the BAA test to an emergency life safety system, which is defined as a single item no matter how the individual products are brought to the site. Here's the definition: "However, emergency life safety systems, such as emergency lighting, fire alarm, and audio evacuation systems, that are discrete systems incorporated into a public building or work and that are produced as complete systems, are evaluated as a single and distinct construction material regardless of when or how the individual parts or components of those systems are delivered to the construction site." The first part of the BAA test is that the product must be manufactured in the US. This is fine for a product, but where is a system "manufactured?" I would say that the assembly, installation, and connection in a building is the "manufacturing" of the system, and if that occurs in the US, then it satisfies the first part of the BAA test. The second part is the component test: the cost of components manufactured in the US must exceed 50% of the cost of all components. If the item being evaluated is an entire system, then it seems to me that the components of this system must be the individual products that are brought to the site. The evaluated cost is the acquisition cost "including transportation costs to the place of incorporation into the end product or construction material." Any product could come from a non-US source, as long as the overall US-made component cost exceeds 50%. To Carl's point, I agree that you won't know whether you have remained above 50% until you know the content of the installed system. However, it shouldn't happen very often. Usually the quantities of individual components are known in advance, and any indeterminates, like wire, should be a small percentage of the overall cost. Nothing "becomes" domestic after installation; you simply don't know the final total cost of components until you know what you have used. You could also reduce any uncertainty by making sure your US content is well above 50% so that the final tally of non-US products does not take you below 50%.
  23. construction material

    Are you saying that each item individually has to meet the test for domestic construction material? What about the definition that says the entire system is treated as one item, no matter how the individual products are brought to the site?
  24. construction material

    No, not counting the labor. The test for domestic construction material has two parts. The first is that it has to be "manufactured" in the US. Since the entire system isn't really an item that is manufactured, I think you have to count its assembly and installation in the building as its manufacture. Do you agree with that?
  25. construction material

    I would agree with that interpretation. If the whole system is one item, then it is "manufactured" in the US because the system is put together in a building located in the US. The individual products (e.g. alarms, smoke detectors, strobes, etc.) are then the components of the item (system), 50% of which must be manufactured in the US. It would be comforting, though, to have a CO confirm that interpretation.