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About here_2_help

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  • Birthday 12/17/1960

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    No special interests, really. Kind of a jack-of-all-trades/master-of-none kind of person.

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  1. I'll listen when time permits. In the meantime, just looking at the title, "Risk Aversion Impedes ___ Development" makes me think irony is dead to the author(s). Of course it does. The entire acquisition system is based on risk aversion. Anytime somebody tries for boldness (e.g., Kelman) critics spring up from everywhere to snipe at the ones trying to change the culture.
  2. I would love to say this is a classic "delay & disruption" claim waiting to be filed (based solely on the parts I'm selectively quoting above). However, I can't say that, because of the other facts that I didn't quote, facts that make it seem as if the prime wasn't effectively managing its subcontractors because the items being procured were "commercial products." [Note: Interesting phrase that doesn't seem to match FAR definitions.] See my June 17 post for my thoughts about a prime contractor who doesn't effectively manage its subcontractors.
  3. Point taken. We are relying on the OP's knowledge of 15.403. Probably a necessary thing.
  4. Too late. The company already paid to get Congress & DoD off its back. It didn't really work, though, as the latest NDAA evidences.
  5. True. At least that was Transdigm's argument. "If you don't like my price, find another contractor." Unfortunately, it didn't work out for the company in the end. Let the record show that the DoD IG found a profit of 15% to be reasonable. Anything over? Not so much.
  6. I'm at a loss to understand why a 10% profit would not be considered reasonable when a T&M contract is essentially a fixed-price-per-labor-hour contract. Would you allow a contractor 10% profit on its costs on an FFP contract? Why treat T&M differently? As I stated above, I believe T&M is a more risky contract type (to both parties) than straight FFP. If I were the contractor I'd offer you an 8% fee on estimated costs if you award me a CPFF contract. Otherwise I'd stick with 10% and wonder why I wasn't getting 15%. After all, it's sole source. Who am I competing with on price?
  7. Let me tell you that a contractor's ability to forecast its direct labor costs is somewhat tied to things outside its control, such as the labor market. A contractor's ability to forecast its indirect rates is somewhat tied to things outside its control, such as its ability to forecast its future business base and its ability to know exactly how many new contract awards it will win and what their value will be. Thus, I take issue with your assertion that a T&M contract is "zero risk" for the contractor. In my view, it's much more risky than a FFP contract type, which permits the contractor to earn extra profit by more efficient operations than originally estimated. In a T&M contract, any change to the labor market or to the contractor's guess as to its future business base or to its ability to control indirect costs is likely to result in planned profit degradation. Plus, it can't earn any profit on the "M" side (by the terms of the clause) so its profit on labor hours needs to cover such things as unallowable travel costs. A 10% profit is entirely reasonable to my way of thinking, because it's really a percentage of the contract value not just burdened labor dollars.
  8. Thank you! So FAC 2020-06 is the reference. Implementing FAR Case 2018-007. FAR 3.1004(a), the prescription, states So, if I understand correctly, the implementation of FAR Case 2018-007 resulted in the applicable dollar threshold being removed from the clause and added to the prescription. There was not actually any change to the clause applicability. Got it. I suppose that change will make it easier to implement future inflation adjustments. Otherwise, I'm at a loss to understand why this was worth anybody working on and getting OIRA clearance. As Mr. Spock famously said, "A difference that makes no difference is no difference."
  9. In doing some research I noticed that the subject clause ("Contractor Code of Business Ethics and Conduct") is now dated June 2020. Did anybody see the FAC that modified the clause? Because I did not. I wasn't even aware there was an open FAR case. Thanks for any insights.
  10. It's amusing to me that I just finished telling a class that the single most important factor to achieving contract outcomes is management of subcontractors, that prime contractors cannot transfer performance risk to the subcontractors, and that prime contractors don't spend enough time on subcontractor risk management activities. And now here you are! My advice: Pay whatever amount the government demands as consideration for a contract mod to recognize the schedule slip and pray your CPARS doesn't accurately reflect your performance.
  11. Maybe it would have been cheaper, after all, to have leased the planes? Link to quote. Here's more: 150 experts to support the analysis. Legal reviews. Independent advisory council. Leadership support. All that for what was, in effect, a giant LPTA process that ended up with an aircraft that is years behind schedule, struggling with technical problems, and which has cost Boeing shareholders BILLIONS of dollars in cost overruns. Great job, team.
  12. I agree with you in general, but not fully. In a recent ASBCA case, the contractor's appeal was denied. Among the reasons cited for the denial was the contractor's failure to file the appeal within the required CDA time frame. The late filing occurred because the contractor thought it had to submit a formal claim to the contracting officer to receive a COFD that it could then appeal. The Board explained that such was not required when the contracting officer unilaterally established the contractor's final indirect cost rates. (Citations omitted.) I'm not trying to nitpick, but I believe readers need to understand that not all contracting officer administrative actions to determine the parties' rights require a separate claim for COFD in order to appeal. In this case, the contractor's belief that it was so cost it millions of dollars.
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