here_2_help

“A committee is a life form with six or more legs and no brain.” Robert Heinlein

Let me agree with Vern that the original question is unclear. Is natavas asking "After selection but before completion of price negotiation for a single-source contract that we are told requires submission of certified cost or pricing data, may a subcontractor claim its items are commercial items, even though it did not make such an assertion at the time of proposal submission?" Because that's what I suspect is at the bottom of this inquiry.

Jamaal, I think the real question should be: Are supervisors and SESs and HCAs reading the FAR?

Bob, Thanks for doing my homework for me! With respect to the Preambles, please check closely -- are they the preambles issued by the CAS Board AFTER CAS was incorporated into the FAR, or are they the original preambles from the 1970's? My memory says the former not the latter. I agree that CAS should not be in FAR. The original intent was a bit more objective and independent. They were certainly never intended to be contracting regulations. But times have changed, I guess. Side note: I'm going on TDY for the next few days and won't be participating here.

Last time I looked (and it's been a while), there were some other items related to CAS that you cannot find in the online FAR Part 99. I'm talking about The Preambles -- especially the preambles from the original CAS Board, from before incorporation into FAR Part 99. These are the two items noted in 30.101(c)(2)(i) and (ii), as quoted below. Further, at one point you could request a written copy of the preambles -- from the OFPP, if memory serves. Again, I'm going from memory but I don't think 30.201 still notifies users of the option of requesting a written copy of the preambles; it's the CASB rules/regulations/standards only. I did obtain a written copy of the preambles from the Government back in 1999 and still have it today. As far as I know, I received the last remaining copy, because when I requested another copy a few years later, I was told they no longer existed.

Vern, There are many third party seminars available, as I'm sure you knew already. Do you have an opinion on the seminars founded by Dr. Karrass? H2H

What makes DOD especially unique (if you'll permit me that grammatically incorrect phrase) is that Congress keeps on "improving" it through targeted legislation, causing the DFARS to vary widely from the rest of the FAR and FAR Supplements. The DFARS is, in several important areas, a separate entity unto itself. Some think it's time to recognize that difference and make it formal. Examples offered in support of my assertion: Executive Compensation cost allowability and Business Systems Administration.

"Advanced technologies are adopted once they have met federal security specifications, and the cost for adoption is justified by the replacement costs of previously procured technology." Interesting assertion. Care to provide support? To my way of thinking, the controversy between Palantir and DCGS is not explained by either Federal security specifications or a cost analysis/justification. For those interested, here's a link to an article from about a year ago on the controversy. https://gcn.com/articles/2015/03/31/dcgs-a-palantir.aspx H2H

Yeah, those two are going to be hard in today's environment. Don't forget to train the peer reviewers and the Boards of Review who will want to be involved at every step "to ensure consistency." Or -- and I'm just spitballing here -- we could consider eliminating peer reviews and Boards of Review as SOP process steps, and not only empower the warranted COs but also hold them accountable for their decisions.

Is this approach -- which I favor -- the opposite of LPTA? Is it "Best Qualified, Reasonably Priced"? Will it lead to higher negotiated costs than would be the case under LPTA? If not, why not? Because I suspect the criticisms aimed will involve price. H2H

It's been a long time since I worked on SF 255's but as I dimly recall we (as contractor) never had a problem with source selections that used them. Granted, it tended to be a resume war, but it was a fight that we thought was adjudicated relatively fairly. The only contretemps I can recall was when a competitor stole our retired General and used him against us. H2H

Oh Navy -- there you go, scaring the small businesses! Just to keep you on your toes, would you care to provide support for your assertion that a split-out of a Purchase Order to various contracts (and other cost objectives) must be "in reasonable proportion to the benefits received"? Where does that requirement come from and how does it get applied to direct material costs? H2H

NJRobe, Interesting thoughts. I'm not saying you're wrong, but you cannot know those are the documents required. Let me give you a quick example: Contractor has a Delegation of Authority with an Approval Limit based on dollar value. Original award funding was within first level supervisor's authority to approve, but the new incremental funding exceeds the supervisor's delegated authority. What documentation is now required? Or: Incremental funding includes funding for work scope not in original bid. What documentation is now required? You don't know because you cannot know. You don't know the contractor's policies, procedures and practices. H2H

Thanks Retreadfed! Yes, the item(s) sought under the contract are covered by ITAR ... H2H

I have been asked to dig into the UK Single Source Contract Regulations. The SSRO rules apply to a large defence contract awarded without competition. When applicable, the SSRO rules supersede the long-standing MOU between the UK MOD and the US DOD regarding contract costs and audit. I realize that almost nobody has experience with these newly promulgated rules but I'm looking for any inkling of a policy position out of DOD on this issue. For example, has anybody heard whether DCAA will be performing audits IAW the UK SSRO rules, or will the UK auditors be coming to the US to perform audits? To me this ought to be a big deal, but I'm learning it's not because the big defense contractors have set up UK subsidiaries who know how to comply with the rules, which are the equivalent of the Part 31 Cost Principles and CAS merged together, written in British. For them the US entities simply transfer costs and it's up to the UK entities to scrub them. I will not be so fortunate. Anything?

jcb2k, I don't think I would go with the percentage method applied to dollars, unless the percentages were backed-up with actual quantities. How many units -- exactly -- do you need for IRAD? Ditto for each customer contract. Anything else just seems like corner-cutting. H2H

Vern, This is a bit out of my wheelhouse. Let me see if I can restate the situation and then move forward from there. Contractor A submits a proposal for a fixed-price contract. In that proposal are categories subject to SCA wage determinations. The contractor proposed labor costs that apply the wage determinations to the labor categories covered by DOL. The contractor and government agree on a price, which may or may not have included labor costs that were costed at the appropriate SCA wage rates. (I say that because they could have settled on a bottom-line price to resolve negotiation differences.) If that's correct -- and if it's not correct then anything else I'm about to say will be nonsensical -- then the contractor is obligated to perform the contract and deliver the product at the agreed-upon price, unless there is a contract clause (such as 52.222-43) that establishes conditions for a price adjustment. After contract award, two things happen: (1) the contractor finds that in order to perform it needs a different labor mix than originally proposed, including new labor categories not originally proposed but subject to the SCA, and (2) the DOL issues a new wage determination impacting some (or all) of the proposed labor rates plus the new labor rates needed to perform the work. Now the contractor has to propose a contract price adjustment IAW 52.222-43. If I were that contractor, I would identify all impacted labor hours "to go" from the effective date of the wage adjustment. I would perform an Estimate to Complete (ETC) and Estimate at Completion (EAC) using the two sets of labor rates -- the original non-adjusted rates ("EAC 1") and the newly adjusted rates ("EAC 2"). I would compare the EAC 1 to the original contract price to identify any at-completion profit or loss. I would compare EAC 1 to EAC 2 to show the impact from the new wage determination to my projected actual labor costs. I would submit an REA for the difference between EAC 1 and EAC 2, as adjusted for any loss on the contract identified from comparing EAC 1 to the original contract price. Hours incurred before the effective date of the wage adjustment would be included in both EACs, but as unadjusted actuals. The adjustment would impact the Estimate TO Complete (and hence the Estimate at Completion) but not the actuals already booked. (For those who may not know, the formula for calculating an EAC is Actual Costs + ETC = EAC.) My approach would include the impact of the new wage determination on all "to go" contract labor hours, whether originally proposed or not. Not sure if that makes sense because (again) not my specialty. But that's how I would approach it. If I'm way off base, please take the time to correct me so I'll learn something today! H2H

jdb2k, There are a number of problems associated with your company's approach to procurement (as I'm sure you know) but I'll limit myself to addressing your question. I have seen, many times, a single P.O. that aggregates requirements from many cost objectives. It's frequently done for efficiency and, sometimes, to achieve volume discounts. As invoices are processed, the costs are allocated to the benefiting cost objectives based on requirements identified on the P.R./P.O. That said, normally the percentages relate to the quantity of items. To use your example, I wouldn't expect to see 35% of a quantity of 10, because that's 3.5 units and nobody is buying or selling less than a full unit. This approach carries its own problems, including proper flow-down of prime contract clauses and DPAS ratings, but I've seen it done many times. So long as the percentages used relate to full units rather than partials, I don't think you'll have a cost accounting problem (assuming you are not buying to inventory as well as to all the other cost objectives in your example). Hope this helps. P.S. One day your company President is going to learn about segregation of duties and why the requester does not also identify the source and determine the price and approve invoices. That will be a bad day for your company President. H2H

Vern, Are you asking, "How do we evaluate value?" because that's what it seems like to me?

A long time ago a COTR found a novel method of helping his contractor comply with the SCA. Every time a new wage determination came out, he directed the contractor to demote employees so that their pay didn't have to be increased; therefore, there was no need to mod the contract. At the end of the day, the contractor had to pay a fairly substantial settlement and the COTR didn't fare very well either. My apologies if this anecdote was off-topic. For some reason the memory popped into my mind as I was reading this thread.

Evaluate. "form an idea of the amount, number, or value of; assess" Synonyms: assess, judge, gauge, rate, estimate, appraise, analyze, examine, get the measure of Now, to think about the question ...

Vern, this thread has been about Diminishing Manufacturing Sources and technological obsolescence. MV2009 was inquiring about the necessity for a redesign, which can happen if a purchased part has been discontinued by the supplier and there is no equivalent part available in the marketplace. The redesign and associated cost impact are submitted via ECP and must typically be approved by the customer. In that context MV2009 was noting the contractor's "valid point" that a rejected ECP and a requirement to perform anyway puts the contractor in a tough -- nearly impossible -- spot. That was the context of my question back to MV2009.

MV2009, If the government rejects the contractor's ECP and that rejection negatively impacts performance, wouldn't the contractor have a potentially valid claim for delay & disruption or something similar?

tjsmith57, I'm fairly confident I know the reason you haven't received any replies to your post. The answer to your question is highly dependent on your company's procurement policies and procedures. As in: A compliant procurement file is one that meets the stated requirements of your company's command media. If your company doesn't have written policies, procedures, standards, and instructions then you are in a world of hurt and I shouldn't think you will pass your CPSR. There are consultants who specialize in helping such companies and a quick search on LinkedIn will identify them for you. Now, what if somebody had answered your question and provided you with a very detailed list of required items -- e.g., purchase requisition, purchase order, documentation of sources sought, documentation of price evaluation or cost analysis if required, sole/single source justification if required, documentation that EPL (or whatever it's called these days) was checked, documentation of executed reps/certs, documentation of insurance/bonds, evidence that all public laws were complied with, etc., etc. -- well, what good would that do you? The CPSR team would show up and they'd have their own opinion and might write you up ... your only defense would be that somebody on WIFCON told you that was good enough so the CPSR reviewer(s) should accept that. Trust me, that's not going to work out for you. You can solve your company's problem by hiring the right consultant and listening to them. I don't think you can solve it by listening to somebody on the internet. Hope this helps.

An ancillary question would be in relation to the contractors' contribution to the University Center. Would it be an unallowable contribution, or an allowable expense because either (1) there is a project whose output creates a quid pro quo for the funds provided, or (2) it is a method for identifying and recruiting top-notch engineers (a very scarce commodity in the A&D industry these days)? (Question based on real-world discussions with DCAA auditors)