here_2_help

Quote

Avoid having your ego so close to your position that when your position falls, your ego goes with it.

One of Colin Powell's Thirteen Rules of Leadership

I've been thinking about this. What if -- and I know it's a BIG What if --

What if the Pentagon created a Mentorship program for contractors? Don't have primes mentor subs; have acquisition officials in the Pentagon or elsewhere in the DoD actually mentor companies.

• 1. Application process, focusing on WHY DoD should mentor these companies.
• 2. Review and vetting. To identify and exclude companies that, among other things, might have unsavory FOCI.
• 3. Certify companies as being official DoD proteges.
• 4. Exempt proteges from the competitive process; enable sole-source awards to certified Pentagon protégé firms
• 5. Other benefits TBD.
• 6. Partner and mentor and build a long-term relationship.

Now, I know there are hundreds of reasons that the above will be a nearly impossible challenge. Statutes, regulations, CICA, etc. Got it.

But what if?

52 minutes ago, Vern Edwards said:

That's been the goal for at least 30 years.

Yes. But this time they mean it.

Allegedly.

Quote

A group overseen by the deputy defense secretary is working aggressively to address the “pain points” faced by small companies who want to work with the Pentagon, according to Heidi Shyu, the under secretary of defense for research and engineering.

She said she presented to the deputy defense secretary a collection of issues she heard during meetings with small companies.

Kathleen Hicks, the No. 2 civilian in the department, said, ‘This is great. Let’s go tackle this,’” and then brought in other Pentagon offices, including acquisition and sustainment, the chief information office and the chief digital and artificial intelligence office, among others, Shyu said.

Now, those offices are tackling a variety of issues, from security clearance issues to workforce challenges. Hicks is holding monthly meetings on their progress, Shyu said.

The goal is to “simplify our contracting so we can award small companies much quicker, rather than taking many, many months,” she added. “We absolutely are trying to tackle a lot of acquisition pain points.”

Quote

To take advantage of the needed capabilities offered by technology startups, the military has to focus more specifically on a smaller number of companies to nurture, the Air Force’s top officer said Saturday.

The article is here

Quote

Major General Robert Barrie, the Army’s Program Executive Officer for Aviation, said the initial dollar figure will allow Bell to continue onward with the preliminary design of the aircraft and deliver “virtual prototypes of a potentially model-based system.”

“There are zero aircraft being procured in the initial portion,” the two-star general said. If the aircraft moves into production, though, the program could soar up to $70 billion over its lifetime.

If I'm understanding the article correctly, the Army competed two designs and, prior to finishing the Preliminary Design Review, chose the winning design based on ... actually I'm not sure what the evaluation criteria were. The article talks about prototypes but the initial award seems to clearly indicate that the design didn't even get past PDR and all prototypes were or will be "virtual" so now I'm confused. No one is actually buying anything that flies at this point in time, it appears.

Then the article quotes a politician who mentions something about fuel range but how do you measure the range of a "virtual prototype of a potentially model-based system"?

I dunno. The Army picked a winner. Somehow. Good for them. I hope the next-gen copter is awesome.

If the contract does not require you to provide notification then you do not have to. 

The manufacturer has incentive to estimate life on the low-end, so that it won't be sued if its equipment fails too early. On the other hand, I think it's a reasonable assumption to believe that the Rate Book takes into account actual history.

Does the contractor have any actual equipment life history to support its position?

When you award the CPFF Completion CLIN, what makes you think you will be able to control who charges what contractor hours to the CLIN? Point to a clause in your contract that gives you that authority, please.

Back in the 90's the max value of our ID/IQ was doubled. We still hit the new ceiling, but they wouldn't double it a second time.

No, I don't know how the CO justified it. But we were glad to accept it.

Quote

Surely, one of the basic tenets for attorneys advising and representing a Government agency is to prevent the publication of a protest decision that tells the public that the agency is totally incompetent in carrying out its mission of procuring goods and services to meet what often are urgent needs.

Sick burn, bro.

To be clear, the quote above did not come from Mr. Edwards.

1 hour ago, Timbo said:

A Subcontractor submits expenses to Prime contractor for Defense Base Act insurance and airfare with regards to a specific contract.   The prime reimburses the sub and then submits these costs for reimbursement requests to the government.  When the prime is reimbursed from the government are there any scenarios where this reimbursement would be considered revenue to the prime?  

To Vern's point, I have a hard time thinking about scenarios where government payment's to the prime would not be considered as prime contractor revenue/sales.

The subK incurs costs and submits an invoice to the prime. The prime pays the invoice, incurring a cost -- presumably recording the cost as an element of cost of sales. The prime submits an invoice to the government for its costs, which now include the subK's costs that it paid. The government pays the prime's invoice, which is treated as revenue/sales.

The difference between the revenue recorded and the cost of sales recorded is the contract's gross margin.

Serious question: Assuming that adequate competition is obtained, the contractor T.O. proposals would not be subject to TINA, correct?

Second question: Who pays for the proposal prep costs?

Yes. Yes we can. The system does not appear to require use of expensive attorneys, at least on the front end. I like that.

I apologize if this post is not responsive to Vern's question. I don't work in the government, only ever the private sector (contractors).

It used to be the case that a degree inferred some ability to write and to critically think and to perform analysis. Not so much any more. Are those skills important for an 1102 position? Not for me to say.

I will say that my first "real" job after completing college with a B.A. -- a liberal arts degree -- was at a large defense contractor. I was immediately interested in the subject of government contracting, and took classes at night in UCLA's Government Contracts Certificate program. One of my first classes was Cost/Price Analysis -- thought to be the hardest class in the series but I didn't know that when I enrolled. My point is: it wasn't hard. Not at all. It was just algebra and analysis. After my college coursework (again: liberal arts) I found the work easy and skated through the class; I didn't understand why my classmates struggled so. Then I found out that several didn't have college degrees and were trying to apply the high school algebra they'd learned years before and had mostly forgotten.

Of course, this was decades ago and things have changed since then. I don't think I have any liberal arts folks on my staff; they are almost all Finance/Accounting types. They can run rings around me on a spreadsheet. But critical thinking and analysis? Missing in action.

1 hour ago, bob7947 said:

Chipper?  It's gallows humor.

My comment? Sarcasm.

Well, gentlemen, aren't we chipper today?

I'm over here, applauding the folks who manage to get the job done within a system that would make Kafka weep. 

I'll add to Vern's informative link with a caution that many contracting officers do not fully understand how to deal with unpopulated JVs. Nor do many contractors that form them!

Questions to be answered ahead of time:

1. Which entity will do the accounting for the JV? Is that entity going to be submitting invoices on behalf of the JV? Does that entity have an adequate accounting system?

2. If the "subcontractors" to the JV are going to receive cost-type contracts, do they all have adequate accounting systems?

3. Does each "subcontractor" to the JV have the ability to calculate allowable indirect cost rates and to issue credible cost proposals suitable for negotiation?

4. How will profit be distributed to the JV members? How will any unallowable costs, incurred on behalf of the JV (rather than an individual member), be accounted for?

I could go on. These issues, and others, should be sorted ahead of time so that the proposal can clearly explain to the government how it's all going to work.

If you require proposals in order to issue a TO, you should be prepared to pay for them. Having the ktr put the proposal prep costs in G&A shifts the costs to other customers who get no benefit from your ID/IQ. Also see CAS 402, Interpretation No. 1, quoted below:

Quote

9904.402-61 Interpretation.

(a) 9904.402, Cost Accounting Standard - Consistency in Allocating Costs Incurred for the Same Purpose, provides, in 9904.402-40, that “ * * * no final cost objective shall have allocated to it as a direct cost any cost, if other costs incurred for the same purpose, in like circumstances, have been included in any indirect cost pool to be allocated to that or any other final cost objective.”

(b) This interpretation deals with the way 9904.402 applies to the treatment of costs incurred in preparing, submitting, and supporting proposals. In essence, it is addressed to whether or not, under the Standard, all such costs are incurred for the same purpose, in like circumstances.

(c) Under 9904.402, costs incurred in preparing, submitting, and supporting proposals pursuant to a specific requirement of an existing contract are considered to have been incurred in different circumstances from the circumstances under which costs are incurred in preparing proposals which do not result from such specific requirement. The circumstances are different because the costs of preparing proposals specifically required by the provisions of an existing contract relate only to that contract while other proposal costs relate to all work of the contractor.

(d) This interpretation does not preclude the allocation, as indirect costs, of costs incurred in preparing all proposals. The cost accounting practices used by the contractor, however, must be followed consistently and the method used to reallocate such costs, of course, must provide an equitable distribution to all final cost objectives.

(Emphasis added, obviously.)

A recent COFC opinion offered what I thought to be a rather unique definition of a contractor's standard recordkeeping system for purposes of determining the amount of money owed during a Term for Convenience of a commercial item/service contract.

Quote

(l) Termination for the Government’s convenience. The Government reserves the right to terminate this contract, or any part hereof, for its sole convenience. In the event of such termination, the Contractor shall immediately stop all work hereunder and shall immediately cause any and all of its suppliers and subcontractors to cease work. Subject to the terms of this contract, the Contractor shall be paid a percentage of the contract price reflecting the percentage of the work performed prior to the notice of termination, plus reasonable charges the Contractor can demonstrate to the satisfaction of the Government using its standard record keeping system, have resulted from the termination. The Contractor shall not be required to comply with the cost accounting standards or contract cost principles for this purpose. This paragraph does not give the Government any right to audit the Contractor’s records. The Contractor shall not be paid for any work performed or costs incurred which reasonably could have been avoided.

 I had always believed that the above bolded phrase was intended to distinguish the systems of commercial entities from the systems of traditional government contractors, who invest in developing government-unique systems (including accounting systems) to meet the myriad of requirements for contracts awarded outside of Part 12 procedures.

Silly me.

Quote

As the court understands the regulation, however, a regular, organized method for tracking relevant costs is required. The method chosen need not be 'elaborate[,] costly[,] and burdensome,' as plaintiff argues it necessarily would be. Id. Here, the problem is that plaintiff merely describes a vast collection of documents, some of which reflect post hoc estimates, rather than a systematic or organized method of tracking costs relevant to a particular project. Indeed, it appears that plaintiff has pieced together the voluminous evidence in its possession precisely because no standard system for tracking the relevant data was in place.

In fact, as the Judge noted, the plaintiff had an accounting system (Quickbooks). Apparently, the plaintiff failed to show the Judge how its system was used to track costs.

Anyway, I thought this opinion was ... interesting. I would have thought that Quickbooks would have been sufficient for a commercial item/service contractor.

Thought I would close the loop on this. Upon further discussion, it turns out that "Legal" didn't say. It was a policy position from the Chief. The Chief prefers cost-type contracts because ... why? I don't know. We were willing to go FFP and take the cost risk.

Anyway, Legal didn't say. The Chief did.

On 10/30/2022 at 7:18 AM, bob7947 said:

h_t_h:

In the normal course of Wifcon.com business, I noticed an old article published on Wifcon.com from many years ago.  I noticed it because It was the most popular article viewed on Wifcon.com in September 2022. 

h_2_h ---- it was one of your articles.

Yes, I have published many articles in the past. I think I published four on Cost, Price & Accounting Report over the years.

I write fewer now, to be honest. Vern is right, I need to do more. 

1 hour ago, Vern Edwards said:

 I disagree. The audience is there, but they can't afford those publications.

We're not that far apart, Vern. There is a (small) audience for in-depth discussions and analyses, sure. They want what you write but they can't afford to subscribe. (And thank you for often making your articles available to the public.) But it's hard to publish in-depth articles when NCMA's membership covers a wide spectrum of folks, from state/local government buyers to prime contract buyers to commercial buyers. For example, I was just speaking with somebody who's planning to join NCMA in a few weeks or months; she's a buyer for the local school district. She's not looking for--nor is she ready for--a deep dive into, say, FAR Subpart 15.4.

In my view, Contract Management aims for a low common denominator that will be of general interest to the majority of its readers. I quote from current Editorial Guidelines below regarding what the Editors are looking for.

Quote

Contract Management (CM) magazine is the National Contract Management Association’s flagship publication for people and businesses working in the buying and selling communities of both the public and private sectors. With a circulation of 20,000, CM is a monthly magazine written and edited specifically for contract management professionals. Each issue provides comprehensive reporting on issues and trends relevant to contract management of all shapes and sizes.

Common article topics include, but are not limited to: alternative disputes resolution, commercial contracting, construction contract management, environmental contracting, information technology, e-commerce, e-business, education, grants management, health care contracting, international acquisition, program management, small business, state and local government contracting, and professional development.

6 minutes ago, REA'n Maker said:

The NCMA magazine is also mainly filler and sadly lacking in substance.

True but, in fairness, the audience is not there for in-depth analysis.

2 hours ago, Contractor500 said:

My question is whether the Prime can actually pay us less for an hour of on-call duty which should be labor. They want us to bill this as an ODC, but since this is labor, can I say that we must bill this to labor and not as an ODC? Is there something in the FAR that backs this up? Not sure if something like this is allowed. So, would like your thoughts on this. Thanks. 

First of all, yes. The prime can ask you to bill less than you actually incur. (This assumes that you actually incur $102.31/hour for your employee's labor. See ji20874's post.) You don't have to agree, but the prime can ask.

Second, if you were CAS-covered I would say that you have to be consistent in your cost accounting practices. Labor over there must be treated as labor everywhere. But you're not CAS-covered. Are there burdening differences between labor & ODC? I don't know your accounting system so I couldn't say. But if the transformation from labor to ODC changes the burdening, and your are required by 52.216-7 to submit a final billing rate proposal at the end of the year, then you may have an argument as to why that's a bad idea.

I would suggest you get a consultant in to assist you with these types of questions ...