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metteec

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Everything posted by metteec

  1. One thing that has always baffled me is the ambiguity in FAR Section 15.503(a)(1) vis-à-vis FOIA Exemption 4 (Trade Secrets): The courts have consistently applied the "National Parks" test under Exemption 4 of the FOIA to determine if information is releasable to the public: Most Contractors claim Exemption 4 to prohibit releasing their unit prices, including labor rates. There have been a few cases regarding this conflict, namely McDonnell Douglas Corp. v. NASA, 180 F.3d 303 (D.C. Cir. 1999), then later Essex Electro Eng'rs, Inc. v. U.S. Secretary of the Army, No. 09-372 (D.D.C. Feb. 26, 2010). In McDonnell Douglas, a public interest group requested labor rates on McDonnell Douglas' contract for satellites. They successfully convinced the D.C. Court of Appeals that release of their labor rates would cause competitive harm, but there was no analysis in that opinion to quantify the harm. The Court accepted the argument on its face. Similarly, the U.S. District court in Essex held "[a]ctual harm need not be demonstrated" to prevent the release of unit prices under Exemption 4. Reading FAR Section 15.503 further, paragraph (e) does limit release of some information during debriefings, including anything "exempt from release under the Freedom of Information Act (5 U.S.C. 552)." However, when reading the regulations as a whole makes me question why unit prices were included within paragraph (a)(1). Based upon the two cases I mentioned and paragraph (e), the only time it would be allowable to release unit prices would be if the Contractor agreed to it, and I think we will be hard-pressed to find many occurrences of a Contractor willing to release their pricing. As an interesting side note, going back to the original 1983 version of the FAR, the section in question used to be FAR Section 15.1002. In this version, there was no requirement to make public available items, quantities, and any stated unit prices after award. The change did not come until the 1997 Rewrite, though I could not find the CAAC discussion related to the change.
  2. Is this a conflict of interest

    Jason, nice summary in your previous post. Concerning the Home Use Program, to my knowledge, DOD started that practice with its Enterprise Software Initiative (ESI) in 2002. ESI consolidated the procurement of thousands of software products under a single software umbrella with multiple software providers. It offered home use licenses for several of those products to DOD employees. Again, to my point, offering government employees discounts or benefits is routine, a standard commercial practice, and widely accepted. We should not throw those DOD contracting officers in jail.
  3. Is this a conflict of interest

    Matt, paragraph (b)(4) of paragraph 4 excludes opportunities and benefits to an entire class of government employees. Therefore, a discount to all federal employees is NOT a gift, and does not violate paragraph 4. Regarding paragraph 7, it depends on how you interpret “private gain.” I was unable to find any legal definition for private gain. The dictionary definition of private gain is an increase of wealth for only one particular person or group of people. While you could argue that based upon the definition, a benefit to only government employees falls under a benefit to only a “group of people,” but that group would be huge (millions of people). I think the scope of a government employee-wide discount is so huge that it would not be a private gain. Once those affected by the discount becomes large enough, it is no longer a private gain. For example, what if the firm instead offered a discount for all D.C. citizens? You could try to read that as being a private gain because it would apply to only a group of people. However, by interpreting paragraph 7 in context with paragraph 4, the intent was that once the discount applies to a large enough class of people, it no longer becomes a prohibited practice. In the immediate case, there is no indication that the OP solicited the discount. The business offered the discount on its own volition, and after it already received the contract. What would be wrong with a response such as, “thanks, but agency policies prohibit us from accepting a discount that applies to the agency. However, 5 CFR §§ 2635.101(b)(4) states… Would all government employees, regardless their agency, be able to receive the discount?” On the other hand, I do see an issue of negotiating a discount for all government employees conditioned upon receiving a contract. We have a fiduciary responsibility to the taxpayer to achieve the best value to the government. Government employee discounts contingent upon contract award creates the appearance that the Contractor might factor those discounts in its offer and not represent the best value. But a discount offered not contingent upon a contract, and offered freely to all federal employees? That frequently happens and widely accepted. Regardless, it is always best to consult with your agency’s ethics official.
  4. Is this a conflict of interest

    Vern, as Matthew stated, the citation is 5 CFR §§ 2635.201-2635.205 (b)(4): I dare not speak for the thoughts of all my fellow Americans, yet it is a common commercial practice to offer discounts any one that is a Federal Employee. In fact, GovExec offers a webpage dedicated to such discounts: http://www.govexec.com/federal-news/2013/10/gimme-my-discount/29165/. One of the best kept secrets is that hotels, including some outside of the United States, will extend to government workers and military personnel the government rate for personal travel. Commercial firms like to target government workers because they represent a stable source of business, with decent salaries and uncanny job security. I see little difference to businesses that target veterans, retirees or first-time homebuyers.
  5. Is this a conflict of interest

    I would ask the Contractor to offer that same discount to all Federal Government employees. If they agree, then an ethics issue does not exist. It is customary for companies offer all federal employees discounts. A certain insurance company represented by Pepe's archnemisis comes to mind.
  6. Fully Burdened Rates for FFP Orders

    The Contractor is hesitant to provide fully loaded FFP labor rates because it must guess what its costs are up to five years after award. As a thought experiment, try to guess what your hourly rate is in five years, and be willing to stick with that rate regardless of changing circumstances. Difficult indeed. I am not sure I agree that negotiating these rates is "deeply stupid." There are some industries where this is common practice, particularly those where prices are not expected to change significantly or there is sufficient historical trends to justify the pricing arrangement. Many agencies successfully use this arrangement in information technology contracts, with rates increasing consistent with the DLA BLS Employment Cost Index. I agree, however, that using fully-loaded rates in markets facing significant pricing variances is less than ideal. Perhaps a better option would be to use a fixed price with economic price adjustment. This would 1) be less risky for the contractor; 2) increase the probability the agency would pay realistic prices for the services it received; 3) avoid a high-risk contract type; and 4) potentially reduce the amount of administrative effort to determine the price fair and reasonable (depending on the contract value and circumstances, remove the need for cost and pricing data, cost analysis, CAS, etc.).
  7. Contract Claim - Commercial Item

    If the Government plans to complete the contract, it should issue a supplemental agreement to extend the contract, including consideration for the Government-caused delays. Otherwise, if the Government does not plan to complete the contract, it should terminate the contract for its convenience and the Contractor should follow the instructions in the termination notice.
  8. I could not disagree more. The small business preference programs incentivize job creation and provide a major source of income to the American economy. You want a study? Take a look at this... In 2014, small businesses in Maryland had a marginal tax rate of 49.1-percent. No state in the union had less than a 40-percent average marginal tax rate for small businesses. You may be interested in this chart from the Tax Foundation on the tax burden on small businesses: http://taxfoundation.org/blog/small-businesses-and-their-income-tax-burden Now, compare that to the tax burden of other than small businesses that the Government typically works with. Between 2008 and 2010, Lockheed Martin had a marginal tax rate of 20.2-percent. Raytheon had a 13.7-percent marginal tax rate. AT&T, 8-percent. Boeing, despite its billions in Government contracts, had a NEGATIVE 1.8-percent marginal tax rate because of its deferred taxes. These numbers are from Citizens for Tax Justice research (source: http://ctj.org/ctjinthenews/2013/04/the_huffington_post_here_are_the_effective_tax_rates_of_17_companies_pressuring_congress_to_cut_corp.php) Those small businesses represent major sources of income for millions of American citizens. Further, small businesses are more likely to invest their revenue further into their communities and businesses. Small businesses typically do not have access to the high-class accountants available to large businesses. That means less money funneling through foreign banks, tax shelters, and questionably legal tax loopholes. By investing in small businesses, you are investing in America. Are there flaws in the small business programs? Do some small businesses exploit the internal controls on subcontracting and commit fraud? Sure. But that happens with large businesses, as well.
  9. Similar to what Bob Antonio was saying, there is controversy about the 14th Amendment's equal protection clause and small business preference programs (particularly gender and race-based classifications in government contracts). The key Supreme Court case is United States v. Virginia, 518 U.S. 515 (1996), also known as the VMI case.
  10. GSA OASIS REVIEWS

    What's good: - The contract has everything and the kitchen sink on it. In December 2003, the Combined Joint Task Force 7 got into hot water for using the GSA FSS to purchase interrogation services. They should have used OASIS (sarcasm). - With the number of large and small businesses, you should never have a hard time getting a quotation. - Variation in businesses. There are lots of different small businesses and variation in small businesses to meet your agency's small business goals. - The tiered fee schedule makes it great for agency's that place large orders. 0.75-percent is industry standard. OASIS drops down to 0.1-percent if your order amount is high enough. Not so good: - OASIS is a GWAC, which means you need to provide fair opportunity to all contract holders. With so many vendors, for non-esoteric services, the number of quotations you receive for A&AS could be high. You need to create a down-select for your evaluation methodology. Otherwise, you will have to evaluate twenty quotations, which is not fun. On a procurement I issued, we had 17 quotations and we used a down-select to drop to 5. - Lack of flexibility with repetitive purchasing. You cannot setup a blanket purchase agreement, basic ordering agreement, or indefinite delivery contract. Only task orders. The best you can do for repetitive purchasing is a task order with options. - Prices: I have found other GWACs, such as GSA Alliant, to be more competitive in terms of price. Your results may vary.
  11. FAR Part 5.1 5.101 Methods of disseminating information.

    I am reading the paragraph differently: Your options are to display: 1) in a public place; or 2) by an appropriate electronic means, an unclassified notice of the solicitation or a copy of the solicitation satisfying the requirements of 5.207(c). You are correct. There is no definition of "an an appropriate electronic." Per the dictionary definition of those words, use your computer or similar device to display the notice somewhere public in a method that makes sense. Does your our agency have a forecast on its website? You could put the information there. Is there a website forum where contractors of a particular trade visit? Post it there. Post it electronically any where that makes sense.
  12. Under a fixed price contract, the review of a Contractor's technical understanding through review of proposed price(s) is normally called a "price realism analysis." They are allowable, but not mandatory, for fixed price contracts. Per Unisys Corp., B‑400340.5, B-400340.6, Jan. 20, 2010, 2010 CPD ¶ 45 at 9: In order to conduct a price realism analysis, however, the Solicitation must clearly state that the agency will conduct one. Source: Arctic Slope Mission Services, LLC B-412851, B-412851.2: Jun 21, 2016, [amongst about a million other cases] When comparing a price realism analysis to a cost realism analysis, see Ball Aerospace & Tech. Corp., B-402148, Jan. 25, 2010, 2010 CPD ¶ 37: It is confusing to apply the term "cost realism analysis" to a fixed price contract. A cost realism analysis typically is more involved than a price realism analysis. For example, in a cost realism analysis, you care about: - Quality of the Offeror's cost estimating system and existence of forward price rate agreements; - The Government's probable cost; and - Offeror's understanding of the technical requirements. Conversely, in a price realism analysis, the only thing that is really important is if the Offeror understands the technical requirements.
  13. From your supervisor's perspective, a five-year contract offers stability and consistency to your customer and his management, and less work for his staff. He likely does not want you to have to recompete this requirement each year because that is time consuming. Further, he probably wants you to issue a five-year 8(a) contract because it is 1) less time consuming to award that a competitive contract; 2) provides small business credit; and 3) less risky to receive a protest. I do not know your unit's workload this Fiscal Year, or what your supervisor is thinking, but sometimes managers need to realistically balance quality versus time to ensure the business unit runs effectively, especially at the end of the Fiscal Year. This may result in not awarding the optimum contract, but instead the best contract considering the circumstances. It seems to me that you are concerned about including prices for items that will change significantly overtime. If you are buying all the same brand, many companies have discount bands (e.g. Class M products are discounted 30%). Many other agencies and corporate consumers use discount from list rather than unit prices in their contracts. Using a discount from list gives you a baseline for new products that you already determined fair and reasonable when you first award the contract. For example, for Cisco products, a quick Google search will tell you what other customers typically receive. So rather than negotiate specific prices for items that are likely going to change and become obsolete, why not negotiate discount from the Contractor's published list price? Another idea is you could include discount tiers where you discount increases the more that you purchase over the life of the contract.
  14. 1) Yes, GSA has already determined the prices fair and reasonable, though Pepe makes a good point for DOD. 2) In addition to asking for a discount from their FSS price, also include a labor category(ies) that you anticipate purchasing and provide estimated quantities for evaluation purposes only. Have each Vendor propose their labor category from their GSA FSS that meets your requirements and compare competitive prices. I respectfully disagree with PepeTheFrog that discounts from the FSS contract are a bad idea, provided this is a true multiple-award BPA. Per FAR 8.405-3(b), you need to provide fair opportunity for each call order over the MPT. If you have a mini-competition each time you have a requirement, the discount percentage only serves as a maximum price. The competition between BPA holders will ensure prices remain fair and reasonable.
  15. FAR 5.203(h)

    Yes, some agencies still have annual forecasts. They are typically on agency's OSDBU or procurement website. For example (not classified): http://www.mrmc.smallbusopps.army.mil/pages/pdf/FY16_AAF_with_cover.pdf
  16. Contract Clause Alternates

    An example of including two versions of the same clause is a software requirement where the Contractor must provide both restricted use code and limited rights for software. An agency may require restricted use access to a software's security authentication code under FAR Clause 52.227-14, Rights in Data-General [Alternate III]. However, FAR Clause 52.227-14 [Alternate I], could also included for other software delivered under the contract where the agency did not require the code, but only required limited rights to the software. Thus, you have two versions of the data rights clause in the same contract. In this instance, it makes sense to identify in the solicitation/contract the clause that applies to each requirement. However, if the contract required all restricted rights software, include only FAR Clause 52.227-14 [Alternate III], not any other variations of the clause.
  17. Claim vs. Ratification

    It would be prudent to reject the goods or services upon delivery and notify the Contractor of its error in a reasonable amount of time. Instead, it seems like the agency made a soufflé, threw the eggs at each other, and cooked some on the sidewalk. Not to be cocky, but after all that, the Contractor has an eggspectation of getting paid.
  18. What type of support do you need? Standard in the industry is that you complete an Return Manufacturer Authorization (RMA) via an online form, then mail your device back (at your expense) and a few weeks later you get a refurbished unit back. Have important PII on your hard drive? Too bad, you do not get to keep it. Want to speak to a real person? Good luck with that. Did someone drop the laptop into the toilet (yes, it has happened)? Sorry, that is not covered. It would be important to identify things like: * Length of warranty; * Telephone support hours and location of call center; * Method of warranty service (depot versus on-site); * Acceptable methods to report warranty issues; * If depot maintenance, responsibility for shipping costs; * If depot maintenance, whether replacement shipped in advanced of receiving failed device; * If on-site, security clearance requirements; * Return to Service Times (time from reporting warranty issues to issue being fixed); * Control of hard disk drives; and * Accidental damage coverage.
  19. Sew What?

    Let's assume for a second that there was a US Government, and that the order was "an unlimited order for as many flags as she could make." My initial thought is no. Here's why: - There was no sum certain. In order for a common law contract to exist, you need to have a mutual agreement between two or more parties for performance of said contract in exchange for something of value. The direction provided by Ross did not indicate how Betsy Ross would be reimbursed. Col. Ross should have issued an unpriced purchase order pursuant to FAR Subsection 13.302-2, and indicated a realistic monetary limitation. - Because of the close relationship between Col. Ross and Betsy Ross, a personal conflict of interest may have occurred. We should look into whether the Continental Congress has a mitigation plan or waiver on file pursuant to FAR Section 3.1104. - Betsy Ross was not registered in SAM.gov and no waiver is on file pursuant to FAR Section 4.1102 (though an exception may apply). There are a couple of unknowns that may contribute to the legality of the issue: - Did Col. Ross have authority to place the order? I have always understood Robert Morris, the Superintendent of Finance, to be the country's first Contracting Officer, not Ross. This could have been an authorized commitment with Morris issuing a ratification completed pursuant to FAR Subsection 1.602-3. - Value of the contract. I looked in FPDS-NG and CPARS but could not find any evidence of the order (obviously another of Col. Ross' oversights). Further, there is no evidence of Betsy Ross in the Small Business Dynamic Search Tool. If the order was above the micro-purchase threshold, Col. Ross may have violated the Small Business Act. - Whether funds were available. The fledgling US Government was broke. It was borrowing money from most large European powers, and it did not have authority to levy taxes. The Government could have made the case that Betsy Ross knew or should have known that there was a reasonable expectation that it was not able to pay.
  20. Dissolving Small Business Set Aside SAP

    Unless you are the VA, where 38 U.S.C. 8127(d) requires a set-aside for all contracts and delivery/task orders where two or more small veteran-owned business concerns will submit responses at a fair and reasonable price (SC Kingdomware Technologies, Inc. v. United States, No. 14-916 (2016)).
  21. Dissolving Small Business Set Aside SAP

    You say that it was a GSA set-aside, which I assume was under the GSA Federal Supply Schedules, FAR Subpart 8.4. Then you say that this was a simplified acquisition which is under FAR Part 13. Which is it? Also, when you say "posted" the requirement, I am assuming that you mean that you posted it onto GSA eBuy. Is that correct?
  22. Sale of Government Property

    I recommend reviewing the GSA Federal Management Regulation (FMR), formally the Federal Property Management Regulation, at 41 CFR Part 102-39. Absent of any specific law, regulation or waiver from GSA, DOD and civilian agencies follow the FMR for the disposal of personal property (DFARS Subpart 217.70 and FAR Subsection 45.604-4, respectively). The FMR has significant limitations on an agency's ability to sell personal property directly. The FMR allows agencies to: * Transfer: Conduct direct transfer of equipment to another federal agency, including GSA; * Abandon: Abandon or destroy excess personal property when an authorized official of the agency makes a written determination that the personal property has no commercial value, or that the estimated cost of its continued care and handling would exceed the estimated proceeds from its sale; or * Exchange: Exchange or sell similar items, when acquiring replacement property, and apply the exchange allowance or proceeds of sale in whole or in part payment for the property acquired. Only GSA has authority to sell government property outside of an exchange or other exceptions mentioned. See FMR Part 102-35, Disposition of Personal Property, and 102-39, Replacement of Personal Property Pursuant to the Exchange/Sale Authority, for more information: http://www.gsa.gov/portal/ext/public/site/FMR/file/FMRTOC.html/category/21856/hostUri/portal
  23. "Safeguarding" has to be taken in context with the entirety of the rule. Per the rule, "[t]he intended purpose of the rule is to provide basic safeguarding of covered contractor information systems" (ibid). Therefore, safeguarding in the comment response quoted by Don refers to safeguarding of a covered contractor information systems. The security of information (the data) on that system is a narrower scope than safeguarding of the entire information system (the hardware, software, components, network, environment, etc.).
  24. ​Safeguarding applies to the contractor information system, not to specific information within the system. Information security applies to only securing the information. Therefore, informational security is narrower than safeguarding. For example, you could secure information by encryption and redundancy You safeguard through authentication; securing information (methods identified previously); limiting network availability; hardware/software; or physical security. Information security is one aspect of safeguarding an information system. The FAR Council got it right.
  25. Contract life

    See this thread: http://www.wifcon.com/discussion/index.php?/topic/1864-expiration-of-a-contract/
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