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here_2_help

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Posts posted by here_2_help


  1. 2 hours ago, Vern Edwards said:

    Regulation is not "enacted" in the U.S. It is promulgated. See Black's Law Dictionary 10th.

    California’s five-year drought, which ended in 2016, had state officials scrambling to enact their own water restrictions.

    — Aryn Baker, TIME.com, "What It’s Like to Live Through Cape Town’s Massive Water Crisis," 8 Feb. 2018

     

    Proposals placed on the ballot will need support from at least 60 percent of the voters to be enacted.

    — Sun-Sentinel.com, "Florida constitution panel comes to South Florida," 6 Feb. 2018


  2. 2 hours ago, Vern Edwards said:

    Think about it this way--a "rule" cannot be imposed on a contractor until it (a) is a public law, or (b) is a properly promulgated regulation, or (c) is in a contract. Right?

    When it comes to a statute, an enrolled bill that has been sent to the White House does not become a public law until (a) it is approved by the president, (b) it becomes law without the president's signature (10 days after received by the White House), or (c) Congress overrides a presidential veto. So "the date of enactment of this section" has to be the date on which one of those actions has taken place. Right?

    I don't know, Vern. That's why I asked. You make it sound straightforward but lawyers are involved. When that happens, nothing is straightforward, in my experience.

    In particular I was concerned about "enacted into law" versus "enacted by regulation." I wondered if there might be some nuance I should be concerned about. Glad to see I have nothing to worry about.


  3. 14 hours ago, Retreadfed said:

    H2H. what is the source of your information concerning the DCAA guidance?  I check the DCAA website daily for new MRDs but they are getting to be few and far between now.

    MRD 18-PIC-001, dated 29 January 2018.

    FYI, DCAA doesn't post all its MRDs. The ones it chooses to post are released at a pace that I would consider to be very slow.

    PM me with your email address and I will send it to you.


  4. Honestly, I think a number of people are fed up with seemingly infinite extensions of incumbency because of reasons (some legit, others not so much). This is what you get when you don't get contracts awarded timely.

    And I didn't see anybody here up in arms about measuring PALT. In my view, that's another message from our fiends (sic) in Congress that they believe (rightly or wrongly) that acquisition results can be improved, in terms of timely contract awards.


  5. Section 803(g)(3) of the 2018 NDAA states:

    Quote

    With respect to qualified incurred cost submissions
    received on or after the date of the enactment of this section,
    audit findings shall be issued for an incurred cost audit not
    later than one year after the date of receipt of such qualified
    incurred cost submission.

    (Emphasis added.)

    What does that mean in layperson's terms?

    Does that mean when the bill was signed into law, or when somebody issues implementing regulations, or what?


  6. The key issue, which both Vern and Joel have already noted, is that we do not know if the contractor must deliver hours by specified individual, or by defined labor category, or simply by anybody with the basic qualifications. The reason this matters is that individuals do get sick and take leave, but companies do not. In other words, the government may reasonably expect the contractor to have additional personnel on hand to fill in when people get sick or take leave, such that the required hours are still delivered.

    If individuals (e.g., key personnel) are being specified, you bid their actual expected availability at their actual expected pay rates; but if not then you bid the hours as specified and make sure you have the workforce available to deliver those hours. The latter approach includes blending of expected pay rates to calculate a composite average.


  7. Twice now I've developed first-time SB plans for contractors. Twice now the companies wanted the plans but they didn't want policies, procedures or anything that would show HOW the goals were going to be reached. They didn't want any changes to their org structures. They wanted the plans to show their prime, or their contracting officers, but that was all.

    Depressing.


  8. 46 minutes ago, animalspirits said:

    Assuming that OGC finds that the three part test is met and the gift may proceed, are there any other regulatory or legal issues that would prevent the contractor from competing in upcoming procurements?  I have concerns regarding the appearance of impropriety, but I need to base my analysis on cited sources.

     I'm having a hard time understanding why this "offer" would be entertained. The only thing I could come up with is that the agency feels that it has fallen short of its bid protest quota, and needs to create more reasons that disappointed bidders will file protests.


  9. 1 hour ago, StePa said:

    The parts (w/ minor mods) are only sold to the Prime but are all catalog parts for our company (w/o the minor modifications).

    Can you please clarify? Do you sell the same type of parts, without the minor mods that are "customarily available in the marketplace", to customers other than this prime? If so, can you demonstrate that? Can you demonstrate that the mods you make are, in fact, "customarily available in the marketplace"?


  10. 1. This is a legal question. I'm not a lawyer! But I suspect a lawyer would tell you that the company needs to disclose all facts. Right now, there is an intention to explore a future sale, but no deal. There does not seem to be even an identified buyer. Is the intent to explore a possible future sale a fact? Maybe.

    2. What information could the company include at this point? Obviously, as the deal develops there will be more information; but right now? Not much. Just an intent to find a suitor and to explore a possible future sale if the price and terms are right. Seems pretty vague to me.

    3 and 4. There are recent bid protests on this topic, having to do with Lockheed, SAIC, and Leidos. And those are just off the top of my head. You should research them.

    Hope this helps.


  11. 16 hours ago, Jamaal Valentine said:

    Wildly different than what the interim report suggested. I wonder what changed. Team makeup, resources, accountability?

    From my interactions with certain team members, this was always the intention. They told me they were going bold. (In candor I didn't take them all the seriously.)

    I suspect they needed to get their ducks aligned before going public with some of these recommendations.


  12. 1 hour ago, Vern Edwards said:

    H2H:

    I thought you were going to point to DCAAM 9-405.2a, for which I can find no rationale. The definition of subcontract in FAR 15.401 does not appear to be based on whether a transfer is at cost or at other than cost.

    If an item from an affiliate is treated as a make by the prime, and if the prospective prime must submit certified cost or pricing data, then the affiliate's data is submitted as part of the prime's. If an item from an affiliate is treated as a subcontract, then the rules about subcontractor submission apply.

    I'm honestly confused by how one would transfer a commercial item at cost, unless the costs were compliant with FAR. At least, I've never seen it.

    The DCAA CAM position you cited to is what I have historically believed to be the case and it's what I was stating before you challenged me. However, I would never ever cite to a DCAA CAM position to support any argument I would make (I know better than that). If I can't find support for my position in the FAR or agency supplements then I am forced to admit I cannot support my position.

    All things considered, I think you articulated my (supportable) position much better than I did. Unsurprisingly.


  13. Busy today so I'll summarize.

    1. There are three conditions that must be met in order to use the 31.205-26(e) exception:

    (1) It is the established practice of the transferring organization to price interorganizational transfers at other than cost for commercial work of the contractor or any division, subsidiary or affiliate of the contractor under a common control; and (2) The item being transferred qualifies for an exception under 15.403-1(b) and (3) The contracting officer has not determined the price to be unreasonable.

    All three conditions must be met.

     

    2. If those circumstances apply, then 15.401 says "“Subcontract” (except as used in 15.407-2) also includes a transfer of commercial items between divisions, subsidiaries, or affiliates of a contractor or a subcontractor (10 U.S.C. 2306a(h)(2) and 41 U.S.C. 3501(a)(3))."

     

    3. My view is that normally intercompany work is a make, as per 15.407-2(b) but transferring commercial items activates the overriding definition quoted above, making the transfer a buy. I may have overreach in stating that the arms-length buy requires certified cost or pricing data so I withdraw that assertion.


  14. 10 hours ago, Lukevan said:

    Here_2_Help: Thanks much for your responses.  Those are helpful. 

    1. You are almost correct. The part where you need work is your statement that you won't need certified cost or pricing data. See FAR 15.401 definition of "subcontract".

    Follow-up: I read the referenced clause and understand our parent costs would be considered subcontract costs.  That's helpful.  Does that fact undercut my understanding that if they provide services to us based on Price, we still would not have to provide certified cost and pricing data for them if we can establish if we can establish there was adequate price competition or that we are acquiring a commercial service from them (per 15.403-1(b))?  I feel like maybe I'm missing something. 

    2. You need to establish price reasonableness, so the normal method is to compete against third parties. How often? Depends on the volatility of the item's price in the marketplace.

    Follow-up: I understand in general that we nearly always have to show how our proposal prices are reasonable and that competition is the primary way.  Presumably we could also do it by showing they have a commercial practice of charging the proposed prices (or higher prices) to commercial customers, so that the Government is assured it is receiving commercial items at or below normal commercial prices charged by our parent? 

    3. Most accounting systems have a G/L account for intercompany transfers (IOTs) and a procedure for how they are costed. Also the Disclosure Statement wants to you disclose your IOT practices (if you are subject to full CAS). You can add profit (if you are bold) but expect your customer to balk. You can apply G&A if that is your practice. If you are on a TCI allocation base then DCAA expects the cost to be in the G&A base (See DCAA CAM Chapter 8 regarding CAS 410.)

    Follow-up: We are not yet subject to full CAS, but the day is coming.  By TCI I think you mean Total Cost Input?  Because we haven't prepared a CAS yet, is it appropriate to establish a practice by developing a cost policy on this issue?  The very few times we've bid with their costs, we have not applied G&A in our proposal as we didn't understand we could.

    Again, thanks very much for your responses.

    1. The point is that when a contractor uses the exception within 31.305-26(e) and transfers at price, that converts the transaction from "make" to "buy". Thus you are subject to TINA and the rest of FAR Part 15 that implements TINA. If you have an exception to obtaining certified cost/price data, so be it. But if you can't find an exception then you have to comply.

    2. Not exactly. When you take advantage of the exception within 31.205-26(e) then you must establish price reasonableness (though the way it's worded is odd). You have to convince a CO that your price is reasonable, using one of the techniques available for doing so. Simply asserting that your affiliated company is selling the items to your division at its established commercial price (or less) won't be sufficient (in my opinion). You have to have data. Perhaps historical price data will be good enough, but if your affiliated division offers unrecorded discounts (e.g., trial offers, loaners, etc.) then that won't do it.

    3. Yes, TCI = Total Cost Input. Yes, now is the time to establish your transfer pricing and burdening practices for your IOT transactions.


  15. 2 hours ago, Vern Edwards said:

    The language of FAR Part 16 is very old. It predates the FAR by decades. It is not scientific language. It was written in another time in view of older market arrangements. Business people invent new business arrangements all the time to meet changing market needs. FAR itself is not consistent in its use of the terms firm-fixed-price and fixed-price. It was not written by scientifically-minded people or by particularly good writers. If we are not flexible and willing to think things through and try things out, we are not serving the needs of the organizations we support or the public at large.

    You are, quite literally, establishing that the FAR language is "arcane" and knowable only to a very few. I consider that to be a problem.


  16. 1. You are almost correct. The part where you need work is your statement that you won't need certified cost or pricing data. See FAR 15.401 definition of "subcontract".

    2. You need to establish price reasonableness, so the normal method is to compete against third parties. How often? Depends on the volatility of the item's price in the marketplace.

    3. Most accounting systems have a G/L account for intercompany transfers (IOTs) and a procedure for how they are costed. Also the Disclosure Statement wants to you disclose your IOT practices (if you are subject to full CAS). You can add profit (if you are bold) but expect your customer to balk. You can apply G&A if that is your practice. If you are on a TCI allocation base then DCAA expects the cost to be in the G&A base (See DCAA CAM Chapter 8 regarding CAS 410.)


  17. 14 hours ago, Vern Edwards said:

    FAR is not holy writ.We're supposed to be business people, not high priests.

    The more I read this thread, the more depressed I get. We've had post after post, discussing the meaning of "firm, fixed-price" and whether the FAR means what it says, or if (instead) the FAR means whatever the contract drafter interprets it to mean.

    1102's can't get it right. ASBCA Judges can't get it right. What hope does the average business person have?

    Words have to have meaning, and the meaning has to be comprehensible using plain language and non-legal dictionary definitions, under rules of interpretation adopted by the Federal Circuit. The parties entering into a contract need to have a common understanding and, historically, that understanding has been provided by definitions found in the FAR.

    This is part of the problem with the acquisition system. This is one of the reasons why companies will not sell to the DoD if they have other options.

    We cannot fix things and train people until and unless there is a common understanding of what terms mean. This thread beautifully illustrates just how hard a task that is.


  18. 8 minutes ago, GregJ said:

    There has been communication with PCO, however she is unwilling to make changes to certain clauses listed in the RFP. Upper management want's to be sure she cannot execute a unilateral without at least having dialog about these changes.

    Has upper management ever heard of the Changes clause?

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