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  1. I began working at a Navy working capital fund agency 10 yrs ago. The way the R&D contracts were set up completely different than they are now. The contracts back then provided maximum flexibility to meet our customers requirements. Fast forward to today, most people here (new) state how multiple aspects of the old contracts were not right or legal. We are now setting up the contracts completely different and I believe is in a way an annually appropriated agency does which decreases flexibility for our R&D efforts. The more I research I conduct the more I think it was OK to do. To add to the confusion is section 2330 of title 10, United States Code, the definition of services specifically excludes research and development, while in 37.101 of the FAR and elsewhere, research and development is mentioned in the list of potential activities that could qualify as services. Service or not a service? Anyway, I have a couple questions I was hoping people could shed some light on: 1. Nonseverable, CPFF Completion development contracts >12 or >18 month PoPs: Our customers here are unable to fully fund practically anything considering they have to go pitch their ideas out and hope sponsors fund them so it comes in piece by piece. Currently its stated we are not to incrementally fund these types of contracts. I understand the bona fide needs rule; however, does GAO B-277165 provide an exception and allow for incrementally funded nonseverable contracts? 2. Severable CPFF-Term (LOE) R&D contracts: A. I'm directed to set up these up with a base year with options for the subsequent 4 years. I believe GAO B-322455 allows us to remove the options for these types and have a 5 year PoP. Do you agree? This would allow for the acceleration/deceleration of the burn rate (IAW LOE clause) over each of the 5 years without the administrative nightmare (One year the LOE is used up early, next year LOE isn't used up, which then if its on a year CLIN, we would lose the unused LOE). Also, B-277165 will allow us to fund it appropriately, correct? B. If options are used, options used to be set up IAW FAR 17.204(f)(2). They used to look like this: "Option 1: 100,000 LOE, $10M, 12 month PoP. If exercised, will increase CLIN 0001." Was told this isn't allowed for options and you SHALL use different CLIN numbers for options. This then required dates, and wouldn't allow them to be exercised "at any time (inserted in 217-9)". At the end it would look like this: "CLIN 0001, 500,000 LOE, 60 month PoP." This would be allowable, correct? C. Directed to have a "Cost Only" CLIN for Travel, another for Material, or any other ODC for each year. We give the vendor amounts to propose in the RFP as the requirement's travel, material, etc isn't defined and is unknown at time of RFP. I agree with one of Vern's post's in Wifcon saying: "what the heck is the deliverable under these type of CLIN's? There isn't one. It's consumed by labor to perform and deliver CLIN 0001. ODC's shouldn't be separate CLIN's. People do it but are not correct. ODC's should or shouldn't be separate CLIN's? Another day I'll go into how we are making our R&D contracts (PSC Axx1-Axx5) as PBSA. 😞 A lot of information. I'd appreciate anyone's feedback of what I got right or wrong. Thanks.
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