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Everything posted by here_2_help

  1. Vern, we disagree regarding the importance of employee morale. We disagree that morale is unimportant, or that it can be affected by little things, such as providing disposable plates and plastic silverware. We disagree that the Department Defense is suffering from a loss of cutting edge technology, as so many bright young folks opt for high-tech jobs in places such as Silicon Valley instead of joining the Federal civil service or joining a government contractor in a research & development capacity. We disagree that this little thing, this ankle-biter of a decision, doesn't matter. Because I believe that it does matter. It's a symptom of something bigger. If the Department of Defense ever wants to regain its high-tech leadership, if it ever wants to start attracting the next Feynman, then it needs to address these sorts of things. Young people with STEM degrees have options, and right now working for the DoD is close to the bottom of their list. Don't take my word for it. Any Google search will turn up lots of citations discussing industry's anxiety about where the next generation of STEM employees are coming from.
  2. There is no FAR clause, but there is a DFARS clause. 252.242-7005. It requires the contractor to have an adequate purchasing system, if any awarded contract contains the DFARS clause 252.244-7001. 252.242-7005 specifies the remedy for any business system that is found not to be adequate. There is a mandatory payment withhold.
  3. A couple of thoughts. Take 'em for what they may be worth. 1. The contractor has already (or will be very very soon) prepared an official corrective action plan with milestone dates. It's what happens when a contractor business system gets disapproved. The cash flow impacts imposed by the government on large prime contracts awards tends to ensure that the contractor implements the CAP with a sense of urgency. 2. The timing of when the CPSR team returns for a re-review and re-assessment of the system approval is not within the control of the subcontractor. Any milestone date they would provide would be a guess, at best. 3. You are concerned about a focus on trying to regain approval of the purchasing system negatively impacting the focus on subcontract performance. So why in the world would you want to impose additional burdens on the subcontractor at this time. Why would you want to have the company submit another CAP to you and have them attend meetings with you to monitor progress? Isn't that counterproductive to your concerns? 4. The subcontract you awarded contains all remedies for late performance or non-performance. I would suggest that unless you have terms that permit you to do what you want to do (i.e., request a CAP and monitor progress against the CAP), you refrain. You might find yourself with a REA or claim submitted for the additional costs associated with your additional requirements. 5. Further, you cannot transfer performance risk to subcontractors. You, as prime, are already responsible for contract performance to your government customer. The most you can do is to sue the subcontractor or impose liquidated damages (if permitted by your subcontract). 5. What, specifically, are the risks you are trying to mitigate by imposition of additional requirements? If the issue is a critical item such that a second source is not feasible, then you already had the risk of non-performance yesterday before the subcontractor's purchasing system was disapproved. What has changed? Nothing. If the subcontractor's performance is critical to your program performance, and you weren't already monitoring your subcontractor's performance yesterday, why is today going to be different? Despite Neil's comments I think you are very much overreacting. If nothing else, you are stepping into the government's role of reviewing, assessing, and determining the adequacy of the subcontractor's purchasing system. Why in the world would you want to do that? Do you also want to audit the subcontractor's final billing rate proposal on behalf of the DCAA? (See the LMIS ASBCA decision from December 2016.) Again, just my point of view.
  4. Adding to Vern's questions -- What are your concerns? What risks do you see, against which you would like assurance? Fundamentally, I don't see ANY ADDITIONAL way to "ensure performance" because any contract/subcontract you have already awarded requires performance. Do you think another signed letter is somehow going to reduce the risk of nonperformance? I don't think so. I'd like you to answer Vern's questions so I know where you're coming from, but I don't think you're going to get to where you say you want to go. +++ Let me add that contractors fail CPSRs frequently. Sometimes for tickey-tack reasons and sometimes for very valid systemic reasons. It happens; and it happens to the biggest contractors as well as the smaller contractors. Not much changes, except for consent requirements. Plus the contractor then dedicates a portion of its purchasing team (and leadership team) to developing and executing a corrective action plan, instead of spending time doing purchasing.
  5. Tracking LOE in FFP subcontracts

    This doesn't strike me as an unreasonable request. You have a CPFF Term contract. To augment your workforce you engaged a consultant. The COR wants you to track the consultant's labor hours as if they were your own labor hours and count them as if they were your own labor hours. The fact that you awarded a FFP consultant subcontract would seem to be irrelevant. (It might also be unreasonable in certain circumstances. What if the consultant finished the subcontracted work in half the expected time?) Why are you pushing back so hard? What don't you want the COR to know?
  6. Vendor Capability Questionnaire

    What is the statutory or regulatory authority that would compel a contractor to respond?
  7. And people wonder why the best and the brightest want to work in Silicon Valley (or equivalent) where this question wouldn't even arise. Anything (within reason) that improves morale and/or reduces employee non-work time and/or reduces employee non-work stress will be provided. Why? Because those companies want their employees focused on the work in front of them. How much money was spent adjudicating this decision? How much time was taken from other, presumably more important things? We talk about fixing defense acquisition but this is a symptom of the dysfunction, right here.
  8. Specific Performance

    "A fair and reasonable price is (1) simply the (2) price that a (3) prudent and (4) competent buyer would be willing to pay given (5) available knowledge of the market conditions." Jamaal, I counted five assumptions in the declarative sentence quoted above, any of which I could challenge, especially in the defense acquisition environment. You make it sound so simple and yet we have multi-year solicitations and multiple bid protests and post-award litigation that belies the simplicity of it all. My favorite is assumption (2), divorcing price from proposed/negotiated costs. I would purely love life if we could "simply" submit proposed prices and then, using available knowledge of the market conditions, the CO would determine which price was the right price to pay, regardless of the costs we expected to incur. How can we make this happen? Yours in jest, H2H
  9. Staying in vs leaving

    First, industry's perception of the competency of the office should be irrelevant to the individual government employee's decision whether to stay in that office or to depart. Second, industry really doesn't care how inept (or ept) government employees are, so long as they do their jobs fairly and impartially to the best of their ability. I sometimes run across government employees and think to myself "Dang I wish they worked for the contractor"--but of course I cannot even hint at that. Less frequently I run across government employees and think to myself "How do they keep their job?"--but of course I cannot even hint at that either. However, the most common reaction is "meh" -- so long as the individuals do their jobs reasonably well and reasonably impartially, industry is usually good. And believe me, industry does not tend to form judgments about offices or components very often. (Except DFAS.) It's when government employees depart from the rulebook (whether documented in FAR, an agency supplement, or in the contract) that industry starts to care. Thus, requirements do matter to industry, but only to the extent that they are (a) reasonable, and (b) implemented consistently and fairly. Other than that, industry mostly keeps its nose out of government business and tries to perform its contract(s) to the best of its ability, and it hopes the folks on the government side are doing the same thing.
  10. Specific Performance

    Vern, I suspect you meant that cite for Jamaal.
  11. NDAA for FY 2018

    And yet we keep trying, Commission after Commission. Study after study. Don Quixote ain't got nothin' on the acquisition reformers.
  12. NDAA for FY 2018

    I meant no offense. The process seems opaque to me. The responses to public comments received seem to be perfunctory if not misleading. The priorities seem to be set by others and not be the Committee(s). The rule-making seems to be driven by an agenda that does not have the best interest of the acquisition workforce at its center. Further, what you describe sounds like a process ripe for streamlining. Again, no offense meant. Perhaps things have changed since you worked there.
  13. NDAA for FY 2018

    Bob, I suspect you are asking the wrong question. A better question could be: "Should FAR and agency supplement rule-making be subject to the whims of lifetime bureaucrats who have allegiance to their immediate bosses rather than to the acquisition workforce?"
  14. NDAA for FY 2018

    Maybe Congress noticed that the DAR Council isn't implementing prior NDAA statutory directions with the alacrity that they may have expected.
  15. NDAA for FY 2018

    Bob, Thank you for this analysis. You provide a very important service, one that I rely on. H2H
  16. Ethics and Transparency

    If you look closely at my WIFCON avatar, you can read a quote that I thought was powerful enough to warrant reiteration as much as possible: "The culture of any organization is shaped by the worst behavior the leader is willing to tolerate." Option 1: Become an agent for change. This is the hardest road, but the one with the most payoff at the end. It's risky and, if you don't succeed you might regret taking this path--but it's the honorable thing to try. Option 2: Become an agent for the OIG. Gather evidence. Report your co-workers. Remember your higher allegiance is to the country and the taxpayers. There's no payoff here, except the knowledge that you helped to rid the workforce of some bad people. Option 3: Get out. Don't wait for a new job to arrive, just get out now. If you have skills you should find a job fairly quickly--especially if you are willing to relocate. Save yourself because you can't save anybody else. Option 4: Keep your head down and shut up and do your job to the best of your ability, knowing that you are surrounded by people who are incompetent at best and law-breakers at worst. But at least you have a paycheck and benefits. There's no honor here, but you are surviving. Hope this helps.
  17. How ironic. Just 4 years ago I was dealing with DCAA questioning "idle time" charged by engineers to overhead (while awaiting clearances to be issued, among other things). The basis of the questioning of the costs was that the contractor should have put those engineers to work doing something else -- anything else. Sweeping the floors was an example of what DCAA considered to be a better use of the engineers' time. That was in the audit report.
  18. Well, I suppose the customer could challenge a change using any pretext it could come up with, simply because it didn't like the result.
  19. Retreadfed, Assuming the contractor was unaware that it would make the change when it priced the contracts, upon what basis would the government be able to challenge the change in G&A base? What contract clause would give the government that basis?
  20. If I understand the situation correctly, you are a small service provider with several T&M and cost-type contracts. You have one FFP contract. For some reason, the FFP contract incurred a larger-than-expected ODC, which is skewing your G&A rate -- i.e., the actual G&A rate is lower than expected because the G&A base is higher than expected. As a result, revenue is lower than expected on the cost-type contracts as well as the "M" part of the T&M contracts. Do I have that right? Assuming I've got it close to right, then of course you are picking up margin from the lower G&A applied to the "T" part of the T&M contracts as well as to the FFP contract. So although revenue may be lower than expected, profits should actually be higher than expected. That's not necessarily a bad thing. What can you do about it? Well ... 1. Since you are not a CAS-covered contractor, you can change your G&A allocation base anytime you want to. So go ahead and change the G&A allocation base from Total Cost Input (TCI) to single element (labor dollars) and now your G&A rate is allocated more evenly across your contracts. You don't even have to notify the government that you are making such a change, but it might be courteous to let your contracting officer(s) know. 2. Or you can create a special G&A allocation for your single FFP contract, using the procedures discussed at CAS 410-50(j). You don't have to be CAS-covered to create a special allocation, but it will help to follow the CAS rules if you choose to do so. Here's a link to Karen Manos' article on the topic: http://www.gibsondunn.com/publications/Documents/Manos-SpecialAllocationsUnderCostPricingStandards-CostsPricingAccountingReport-9-2011.pdf 3. Or you can acknowledge that projected rates and actual rates are rarely the same thing, no matter how hard we try to make them that way. Take your lumps and learn from them. Finally, you might want to hire a good consultant to help you with these types of matters, as they are sure to crop up again. Hope this helps.
  21. Are you subject to CAS?
  22. Indirect Ceiling Rate Adjustments

    I'm interested in the quoted bit above. What does "non-billable" mean in this context? What does contract type (FFP) or prime versus subcontract have to do with labor charging? What I'm trying to say is that non-billable direct labor is still direct labor and the indirect rates should not vary based on whether direct labor is billable or not. Contract type should not impact the direct vs. indirect decision; you must treat all contract types the same and charge the same functions as direct labor regardless of contract type.