here_2_help

Thanks I'll go check it out. I reviewed PGI 232 but not 204.

Yep. Contract is FFP.

Can a DOD contract establish progress payments by CLIN? As in, one or more CLINs will establish progress payments based on costs incurred, but not all of them. The other CLINs will be payment on delivery (DD250). (Asking for a friend.)

lyttekg, These questions are better referred to your agency counsel for resolution. Anything you received here in reply would carry little weight if your legal counsel had a different opinion.

If only there were some means of taking photographs at the site to document the initial condition as well as the condition after clean-up, and then transmitting those photos to the CO. Do you think the contractor might be able to equip the site manager with a cell phone? You know, the newfangled ones with cameras that transmit pictures via the internet? Would that work?

Some folks upthread don't seem to have grasped the notion that there will not be 100% site inspection prior to bid submission. It's just not feasible, according to our original poster. Reminds me of the NMCI (Navy/Marine Corps Intranet) award of the early oughts. EDS took the award knowing the risks -- one of which was that the existing local networks they were integrating were all of differing technology and sophistication -- and they did the work, suffering significant financial losses as a result. Ultimately the program was deemed to be a success and the infrastructure continues to be used today (according to Wikipedia).

If more COs understood these things, contractors' profit rates would plunge in a dramatic fashion. Contractors are very appreciative that almost nobody (including DCAA) ever checks the math on how those T&M rates were actually calculated, and the dynamics of how the cost components will change over the course of contract performance. This right here is amazing advice for the government folks; and I'm fairly confident almost nobody will follow it. And so contractors will continue to generate windfall profits thru pre-award and post-award manipulation of the cost side of the hourly billing rates.

I loathe the PWS approach to contracting but what can we do? I hope my thoughts were helpful.

So we have a PWS with an expected outcome (standard) and a fixed price (lump sum) for keeping the site at the standard. Customer is afraid the initial condition will not be as government as specified, which the contractor will rely upon to bid the FFP for the site. Customer wants to establish a unit price for the expected initial site deviation before the first REA is submitted. Not stated, but which I infer, is that the contractor may not have an accounting system adequate to account for its additional costs associated with the differing initial site conditions. Thus, the customer wants to have something in hand that does not rely on actual costs incurred. Something like a pre-priced unit of work (example: one week or one month of effort) that the parties can agree represents something fair & reasonable for the additional effort associated with moving the site from "what is" to "what was expected." In my mind, it works like this: (1) contractor arrives on site, (2) contractor performs initial assessment, (3) contractor determines that site is or is not at "standard", (4) if not at "standard" then contractor submits an REA based on the pre-negotiated amount (e.g., one week, one month, etc.), (5) contract price is modified. Seems to me like a reasonable approach. The critical point would seem to be the granularity of the "unit" of pricing. I suggest there be multiple units based on duration of the effort, ranging from 1 day to 1 month, depending on what the contractor encounters at the site, which should be documented in my Step 2, above.

Okay. I can take correction. But then, what in the name of all that's holy is the perceived benefit from Hightytighty's planned approach?

I'm looking back at the original post. First, our original poster hasn't returned to engage, so my tendency is to walk away from the thread. But I've been thinking about this one. Here Hightytighty has presented us with a sole-source ID/IQ contract award for services with a 5 year ordering period. Absent anything "unusual" the requirements of Truthful Cost or Pricing Data (aka TINA) would apply to the evaluation of each proposal submitted for each task order award, right? Thus, for the next 5 years or so Hightytighty is going to be doing a LOT of cost analysis and a lot of negotiating. That's a lot of work! Unless ... s/he can get the contractor to propose a set of fully burdened rates to be used throughout the ordering period. Then s/he would only have to perform cost analysis once, at the beginning of the ordering period, and s/he gets to say task order prices are fair & reasonable because they used the same rates that were subject to cost analysis way back then, and found to be fair & reasonable at that time. Think of all the future work Hightytighty is going to avoid! Again, our friend hasn't come back to engage so this may all be wild speculation on my part. But I'm speculatin' that's where s/he is coming from. P.S. - I realize the contractor is still going to have to disclose actual labor costs and actual overhead rates in order to comply with TCoPD (aka TINA) but I'm speculatin' Hightytighty is going to figure out a way to ignore that information or explain it away because the parties have contractually agreed-upon rates.

As somebody who often has to untangle the results of a botched contract type choice, I tend to agree with Vern's assertion (not that he needs my support). I'm dealing right now with an allegedly cost-reimbursement contract where the contractor was directed to submit proposed hourly billing rates each contract year for each individual performing work. Those rates were to include all indirect costs plus a "fee" ... and then were to be used for the year for billing purposes. Period. Yet somehow this is a cost-type contract and the auditors are deeply into this contractor's indirect costs, even though there is nothing in the contract or the course of dealing that would support the notion that actual direct and/or indirect costs would impact the authorized hourly billing rates. Lots of fun for me. Not so much for the contractor. (Note: The contract was not issued by an agency of the Federal government, though Federal funds were used.) Thus I echo and endorse Vern's comments that attempts to create FFP hourly labor rates (with a 5 year validity period) to be used for pricing FFP and T&M task orders and, ultimately, for billing work performed, is a bad idea. Far better (to my way of thinking) to establish pricing (whether T&M rates or a FFP amount) for each task order on an individual basis as the work is needed. Of course, that leads to the question as to who is paying for the task order proposals ... but that's a discussion for another thread.

I gather the problem is that the contracting office does not know how to properly evaluate cost & pricing data submitted by the apparently successful offeror and, further, does not know how to document cost and price analyses performed on that data. I work with contractors that have the same problem with respect to obtaining consent to subcontract or negotiating a prime contract price where subcontracting is a significant portion of the total estimated contract cost. Which is to say, contractors solve their lack of expertise by hiring consultants to help them. Do you have that ability? Can your contracting office bring in some outside assistance to evaluate the data and effectively document that evaluation? Hope this helps.

I offer the suggestion that one difference is that FPRAs "shall provide specific terms and conditions covering expiration, application, and data requirements for systematic monitoring to ensure the validity of the rates. The agreement shall provide for cancellation at the option of either party and shall require the contractor to submit to the ACO and to the cognizant contract auditor any significant change in cost or pricing data used to support the FPRA." (See FAR 42.17(c).) Thus, rather than locking into rates for a 5 year period, the FPRA only estimates rates for a 5 year period and may be changed/cancelled when the estimates are no longer valid. Further, I don't understand why you don't understand the contractor's concerns about locking into fully burdened labor rates for a 5 year period. Do you think the contractor can estimate its future years' labor rates? Will you permit use of a generous labor escalation rate so that the contractor can be sure to retain its current work force and attract new hires? And what about future years' indirect rates? Do you think the contractor feels comfortable estimating its overhead rates in the year 2020? --especially given the current budget situation? Let me turn this around for you. Why are you issuing an ID/IQ contract? Why won't you commit to a firm quantity of work that the contractor can count on? Why won't you issue a FFP contract for the 5 year PoP? See, it works both ways. You can't commit to a firm quantity but you want the contractor to commit to firm hourly rates. That's going to be a problem. Finally, I have a general question. Apparently contractors' proposals to establish FPRAs must include certified cost or pricing data. (FAR 15.407-3(c).) Fine. What then is the remedy for defective pricing with respect to the FPRA?

Looking forward to it! I've never been but we're thinking about a future London trip with a couple of days dedicated to Paris

Hey Vern, How was Paris? Will we get a blog article about your experience?

Don, Thank you for taking the time to create this helpful document. I am saving it to my hard drive under the title "Manfield's Matrix"

"-- Increase the speed and timeliness of acquisition processes by increasing the use of mechanisms for waivers and exemptions and offering incentives for quickly resolving concerns." I'm not in the government workforce ... but I'm guessing those that are may have an opinion on this interim recommendation.

I'm going to be unusually optimistic and assert, without any evidence whatsoever in support of my assertion, that the supervisory CO has assigned Sascha this project as an employee development exercise to help Sascha learn more about competitions and source evaluations. The supervisory CO knows what Vern and others know about such things, but wanted Sascha to delve into this topic, including researching relevant bid protests decisions, in order to grow professionally. H2H

Vern, I know you mean well but you are coming across like that guy in the brainstorming session who keeps criticizing other people's ideas. We seem to have differing ideas regarding the point of the thought experiment. In related news, your notion to roll-back CAS applicability is a great idea, except to implement it you will have to substantially rewrite FAR Part 31. Approximately 10 of the 19 Standards are invoked by the cost principles as a condition of cost allowability. If you have a contract with 52.216-7 then you are subject to a lot of the CAS requirements, including some of the more onerous Standards, even if you are a small business. Just sayin'

PepetheFrog, From my (outsider) perspective there are a number of problems with the Federal personnel system. Would some of them be fixed if it were easier to hire and fire? Absolutely. But to my way of thinking the real problem is a lack of leadership with respect to a "human capital" strategy at each department/agency. Taxpayers and Congress should demand that Secretaries and other leaders testify regarding their plans to attract and hire the right people, develop and retain the right people, and rightsize the staff as necessary. Then the leaders should be held accountable for the results against their plans. Accountable how? As in, no budget increases for non-personnel activities until personnel management improves. While we are dreaming ....

PepetheFrog, "It is very well to say that those who deal with the Government should turn square corners. But there is no reason why the square corners should constitute a one-way street." -- Justice Jackson, writing for the four Justices who dissented in Federal Crop Insurance Corp v. Merrill in 1947. I would ask SCOTUS to rehear a similar case and reverse its prior holding. I know I'm just a dreamer....

Vern if the Constitution were so clear we wouldn't need an implementing statute, enacted 100 years after the country's founding. So obviously there's something other than Congress' "power of the purse" going on. In my view, the ADA acts to give the government an "out" with respect to fulfilling its obligations under a contract to which it is a party. It permits the Federal government to enter into a contract and then welsh on the deal, using the excuse that Congress hasn't appropriated sufficient funds. As we all know and as you noted, the additional problem is that Congress has over the past decade or so proven unable to execute with any consistency its Constitutional duty in that regard. Rather than accept the status quo I advocated the position that a contract is a contract, and that doing away with the ADA would return the parties to a more equal footing. You don't like my position? Fine. Doesn't mean my point isn't valid. (Though I accept my suggestion would be rather difficult to implement.) Go now and enjoy Paris. Hoist a glass to von Steuben and to Koscuisko.

sdgovacct, As far as I know, there is no statute that requires a US-based travel agency to be used. The key point would be whether your company is able to show that the price paid -- the service fee plus whatever else -- is fair and reasonable. That being said, do you have any contracts that impose additional requirements? I wouldn't think you would, but you need to check. Hope this helps

Because compliance contributes to the creation of a myriad of additional rules and procedures and processes, and because it creates funding uncertainty for contractors. Funding uncertainty is one of the top contributors to suboptimal program/contract outcomes and impacts military readiness. That's not my opinion, it's the opinion of contractors and military leadership. "Eight years of continuing resolutions — and a year of sequestration — have caused budget uncertainty that has resulted in additional cost and time requirements for 'just about everything we do,' Chief of Naval Operations Adm. John Richardson told the Senate Armed Services Committee at a hearing on long-term budget challenges... " Yes, it's not just about the ADA, but the ADA is my starting point because I can't repeal Congress.