here_2_help

Thank you!

Assume progress payments based on costs incurred to be liquidated as units of production are delivered and accepted.

Normally, when I think FPIF, I think "contractor overrun" -- but here's a new one (for me): the contractor is actually significantly underrunning because of unexpected production efficiencies realized during the multi-year procurement (for production, not services). The contractor is worried because it believes that the CLINs are now over-priced. As it delivers, it's billing more than will be the case when the Incentive Fee formula is used to determine the final price. That's a great situation from a cash flow perspective, but not so much from a revenue recognition perspective. The contractor is convinced that, at the final Incentive Fee reckoning, it will have to send its government customer a Very Large check, which it would very much rather not do, even though it means that the government is basically giving it a nice, interest-free, loan at the moment. Instead, the contractor would like to reprice CLINs to recognize the underrun. However, the contracting officer is reluctant. Is there something I should know to understand why repricing CLINs on an FPIF contract -- to recognize an underrun and to prevent what could be perceived as an over-billing -- is not favored? Thank you.

Nobody has land lines anymore. If you work in an office that has land lines, move on. It's a sign of regression

Text first to see if the person is available. Then call. That is proper etiquette.

The heart of the question seems to be the type of subcontract(s) that the prime will award. Will they also be FFP with a separate cost-reimbursable travel CLIN? It is not necessary that the subcontract type must match the prime contract type. For example, a subcontractor can receive a FFP subcontract and then it won't matter what its own travel costs are because there will be an invoice that says "subcontractor costs" with no further breakdown. We don't know if that will be the case, but it could be. Thus, the correct answer depends on the type of subcontract awarded. From a purely competitive standpoint, having the subKs each bid their own travel costs increases the proposed price, even if those costs show up as "subcontractor costs" not travel. Why would you do that in a competitive acquisition?

Key discussion points being: - If the contractor delivers the customer may not be available to perform inspection and acceptance - If the contractor delivers and obtains acceptance, there may be no staff in the payment office to process the invoice

The topic title asks "how to T4D a micropurchase." Not T4C. Terminate for Default. That was the premise. In what way did the vendor fail to perform -- especially if 20% of the acquired services have been delivered? We're talking about $10,000 here, right? Let it go, man -- unless you feel the Government has been defrauded in some way. In which case, refer it to the appropriate authorities for action.

I would hazard a guess that, at the micro-purchase threshold, it's simply cheaper not to terminate the contract. I might be wrong (because that would be a common sense position) but that's my guess.

I will add that, in a CPFF contract, the fixed fee is, literally, fixed. It does not change when you add a new subcontractor, unless there is something else going on, such as a change in the required work. The profit rate you negotiate with your subcontractor is strictly between you and the subK. Whatever the subK bills you becomes "cost" to your prime contract.

Seems to me that the "customer" is equating spending money (as reported on progress payment financing requests) with making technical progress. Have we forgotten the lessons learned from the A-12 debacle already? (Yikes!) There are other means to determine the contractor's technical performance. Monthly reports (CDRLs) are one means of doing so. Second, if this "big" contractor doesn't want progress payments, there must be some other reason. Why? Because "cash is king." Every contractor in the world wants--or should want--enhanced cash flow. They will frequently trade profit for enhanced cash flow. My thought is that there must be some other (unstated) reason for not wanting progress payments. For example, FFP without progress payments avoids most if not all auditor scrutiny. If the contractor is trading cash for a lack of auditor scrutiny, that would signal to me that the contractor has something to hide. At a guess, they have an accounting system issue. (I.e., use of progress payments requires an "adequate" accounting system as determined by DCAA auditors.) FFP means that the accounting system issues remain unobserved and unknown. After all, if the price was fair & reasonable, nobody really cares what the contractor is spending. Though another possible reason for denying progress payments is that the contractor is making a huge windfall profit and it doesn't want USG to know, as a huge underrun against planned/negotiated costs would smell like defective pricing and--again--the auditors would be brought in to see what was really going on. (You can always bring in the auditors afterwards, for a post-completion "truthful cost or pricing data" audit.) Those are my thoughts, for what they may be worth.

CAS clauses flow-down by the express direction of the language. In 52.230-6(l), the clause states: Thus, the prime flows-down to 1st tier negotiated subcontracts that are CAS-covered. The clause is now in the 1st tier subcontract. Should that subcontractor award a negotiated CAS-covered subcontract to the next tier, the clause--by its express language--must flow. Now the 2nd tier subcontract has that clause and the 2nd tier subcontractor must comply.

I'm wondering what services the subK will be providing to the prime, and whether the staffing levels can be assured by means other than contract type. For example, can you create a clause that mandates a certain LOE with appropriate damages (liquidated?) for failing to maintain. Or maybe a CPIF type where the incentive fee is tied to the prime's award fee %. Just some thoughts.

The Federal Travel Regulations probably do not apply in full to a contractor's travel. The FTR does, however, provide a good guideline as to what contractor travel costs may be reasonable for a CO to approve. The FTR discusses when "actual" expenses may be used in lieu of locality per diem rates for lodging.

Today's main page has a link to an interesting ASBCA decision where the contractor not only received a contract extension for COVID-related delays, but was also awarded compensation for the additional costs it had to incur. A key part of the decision was to note that the contractor was not prevented from delivery of CLIN-required rental items; the pandemic required the government to use those rental items for longer than originally planned. Even though the CLIN was FFP, the contractor was entitled to be compensated for its additional costs.

The contract language controls the duties/responsibilities/rights of the parties.

On today's WIFCON front page, there is a link to CAAC Letter 2023-04 (CAAC Consultation to Issue a Class Deviation From the Federal Acquisition Regulation (FAR) Regarding the Small Business Administration (SBA) Memorandum, “Impact of Recent Court Decision (Ultima Servs. Corp. v. Dep’t of Ag. (E.D. Tenn.)) on the use of the 8(a) Program”).

I don't know but it very much seems to me as if Judge Bonilla completely misread eSimplicity, even though he actually cites to it on Page 7 of the opinion.

Can you mod the follow-on contract to take accountabilty for the items? That, to me, seems like the correct approach, given the direction from both the government and the prime contractor. One you have established accountability, then you can begin the disposition process.

We have a rule where I work: if you use an acronym, you must be able to explain what it stands for if challenged. It's my rule. And I challenge people all the time.

All I can say is that my companies have had their buyers check the excluded parties website (manually), print out the results showing the date checked, and stick the printout in the purchase file. Okay, nowadays they do this electronically by attaching the screenshot to the electronic PO. But still, I have not worked with a company that outsourced this process. That's not to say that it couldn't be outsourced; however, my companies thought that making the excluded parties check was an essential function of being a buyer and they expected their buyers to do it. Apologies for not being more helpful.

I'm a bit confused. How is the contractor currently complying with requirements related to responsibility determinations and excluded parties? Are the searches being done by hand, or are they not being done at all? Also, I'm not sure how an Approved Supplier designation plays into CPSR compliance. I don't know all the (many) adequacy criteria off the top of my head, but I don't recall one associated with having an Approved Supplier list. Hopefully, you can enlighten me on that one. If the issue is that being designated as an Approved Supplier means that future responsibility determinations and/or excluded party searches don't have to be performed, I don't think that's the case.

Let's note that the qui tam relator (whistleblower) received $69 million as part of the settlement. I don't know how much of that goes to the attorneys, but I imagine it was still a very nice payout.

Hi Jiggy, Absent a request for extraordinary relief, I don't see how you obtain any such modification.