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CPFF Term Contract and Fulfilling PWS Requirements

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I'm questioning case law because you said LPTA CPFF violates case law in your posts. Where does it violate case law?

Quote me.

By successful, I mean without sustained protests, without cost overruns, with successful performance and satisfied customers, to name a few.

Give us the name of the awarding agency and the contract number for a CR contract awarded by LPTA that is completed and did not overrun.

You're assuming that these cost overruns are because of LPTA.

Quote me. I make no such assumption and I have no personal knowledge of a single CR contract awarded based on LPTA. I know that overruns happen, but why they happen has to be determined on a case-by-case basis.

All of the above are distractions and have no bearing on the issue. That fact that you bring them up demonstrates the weakness of your argument. Actually, the nonexistence of an argument. You started out with an interesting, if unorthodox, proposition, but now you're descending into silliness. If you keep it up, I'll quit talking with you. It's up to you.

If you can provide fact as to why LPTA cost reimbursement does not work or actually results in overruns more than tradeoff.

I can't provide facts, and I haven't said that I have facts, because in 40+ years in contracting I have had no experience with CR contracts awarded by LPTA and don't know of any CR contracts awarded by LPTA. I did cost-reimbursement contracts for the Air Force and the Department of Energy. I asked around, and none of the friends I have talked to have had such experience either, although they have extensive experience with CR contracts in various agencies. My argument that to award a CR contract by LPTA is foolish is based entirely on doctrine, logic, theory, and judgement.

For now, I'll go off the facts I know and the extensive experience I have.

Well, I'm certainly open to being persuaded by facts. So tell us the facts about your extensive experience with CR contracts awarded by LPTA. Give us the contract numbers, award dates, the item or service acquired, the initial estimated cost, the realistic cost, and, if completed, the final cost. With extensive experience, surely you can provide us that, or some of that, for at least one contract. Even if you haven't worked one yourself, give us that facts about one you know about.

I don't mind debating about this with you based on doctrine, logic, theory, or judgement, which is all I've got, but if you're going to assert actual experience and facts, then you'll have to show them to me. If you can't, or won't, do that, then I'll have to assume that what you said about facts and extensive experience is just b.s. and that continued discussion with you is a waste of my time. Fair enough? I won't debate the law with you, because I don't think law is an issue. I've been very clear about that.

By the way, the protest decision to which you provided a link in Post # 23 concerned a task order competition. Task order competitions are not subject to the source selection rules in FAR Part 15 and are not relevant to this discussion. Please be more careful in the future before asking me to read something. And no more cases, please.

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I'm not addressing the legality of anything here, just floating a trail ballon. The cost realism analysis seems like a thin reed which is required to support a whole lot of weight.

  • They require a lot of knowledge from the Project Management side as to exactly how the Contractor will perform the work;
  • They are very subjective; and
  • Are therefore susceptible to pressure from within and without the contracting office; and
  • They are performed for requirements which, by their nature, are difficult to get a handle on (hence the CPFF contract type).

I'm sure there are many good cost realism analyses floating around, just worrying they are outnumbered by the bad ones. *In particular* Steward's are probably quite good since he has a track record of avoiding overruns, but the tool *in general* doesn't fill me with confidence about mitigating the moral hazard issues Vern raises.

Also, sorry for the premature posting- still getting used to the forum. Thanks!

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My argument that to award a CR contract by LPTA is foolish is based entirely on doctrine, logic, theory, and judgement.

I don't mind debating about this with you based on doctrine, logic, theory, or judgement, which is all I've got, but if you're going to assert actual experience and facts, then you'll have to show them to me. If you can't, or won't, do that, then I'll have to assume that what you said about facts and extensive experience is just b.s. and that continued discussion with you is a waste of my time. Fair enough? I won't debate the law with you, because I don't think law is an issue. I've been very clear about that.

By the way, the protest decision to which you provided a link in Post # 23 concerned a task order competition. Task order competitions are not subject to the source selection rules in FAR Part 15 and are not relevant to this discussion. Please be more careful in the future before asking me to read something. And no more cases, please.

Vern,

here are some facts based upon my experience with CR actions and some comparisons to actions being awarded as a trade off, or utilizing T&M/LH/FFP actions.

1. Comparison between previously competed actions one T&M, recompeted as a CPFF/LPTA netted in a savings to the Gov't of approximately 18%.

2. Competition for an CR action awarded trade off, resulted in a 26% premium being paid.

Both of these actions were for support, or " butts in seats" . Nothing special, just provide personnel to support OCO actions in areas of operations.

In the first case the COR had good oversight as to what was happening and monitoring what they were doing. The other case, well, lets just say the incumbent won.

So to make a blanket statement that it is foolish to award a CR action on LPTA is questionable. Without all of the facts and rationale why something is done, it appears that you are saying don't do it as we have not done it that way in the past. If that is what you are saying, then we are doing nothing but contracting by checking the box. I believe that there are some KO's that will make decisions based upon the situations and infomration available rather than by "that is the way we always do it"

There are reasons that actions are done that way and they can be successful if the KO and the COR are involved. If they sit back and ignore, yes you can have cost overruns quite easily.

As to the original post, it was never really explained why there were cost overruns.

Did the Government underestimate the effort?

Did the contractor decide to pay higher rates than what was proposed? ( this happens quite a bit, and if the COR/KO are not monitoring spend reports, then this will happen)

Did the contrator pay signing bonuses that were not part of their proposal?

From what it appears the contractor was given potentially a pws, with historical labor hours and categories to bid to, and they bid to those. so not really sure why they are in an overrun status. Not enough information given.

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airborne373:

First, I would never say that you should not do something because it has not been done before. You can't know what I've written over the past 25 years if you think that. I am generally thought in some circles to be a radical. No one who has read my work has ever thought me to be a conservative. I am a Tom Paine in matters of contracting, not an Edmund Burke.

Okay, as to your examples: Are you stating the savings based on final contract costs or award amounts? Time adjusted? Only final, time adjusted contract costs provide valid data. Award amounts are useless in that regard.

Also, have you made an analysis of the work done under each contract? Was it the same, or even comparable in detail? Because if you haven't or if it wasn't, then again I must say that your comparisons are not valid.

Statements of savings based on unanalyzed percentages (18%, 25%) are worse than useless.

In any case, I would expect a CPFF contract to be less costly upon completion than a T&M contract for the same work, for reasons I explained in my essay about T&M contracts posted at Wifcon. I would not expect that award of the CPFF contract based on LPTA to have had anything to do with it. T&M contracts provide contractors with a positive incentive to be inefficient. CPFF contracts do not.

I will stick with my "blanket statement" that the award of CR contracts based on LPTA is foolish, even stupid, which is a word I do not use often or lightly.

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I should add this from the memo Department of Defense Source Selection Procedures, issued by the Office of the Assistant Secretary of Defense -- Acquisition, Technology and Logistics, dated March 4, 2011, Appendix A, "Lowest Price Technically Acceptable Selection Process", para. A.5, "Price":

The LPTA procedure is applied to known, firm requirements, usually readily available in the commercial marketplace where a fair and reasonable price determination is based on adequate price competition.

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in regards to analysis over time, yes it was done over time. re-compete of a previous action, while not done with final audited costs, the analysis was done with invoiced amounts.

I guess we will agree to disagree on your blanket statement.

I have read your articles over the past 5 years, and into several of your archives, and for the most part I agree with you.

But i do take exception to your "blanket statement". In some situations yes, and in the right situation it is the correct and best choice.

CPFF term contracts/actions awarded on a trade off can be just as foolish and stupid in my opinion. (in the right situation)

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I will also add that I searched the GAO database and found only one reference to LPTA being used in connection with CPFF, and that was the protest cited by Steward, which was for award of a CPFF task order by the Department of the Army. See CACI Technologies, Inc., GAO Dec. B-409147, 2014 CPD ¶ 44. Task order selections are not governed by the FAR source selection rules. The Court of Federal Claims database included no instance of an acquisition in which a CR contract was to be awarded by LPTA.

I now know of one case of an RFP being issued to award a CFPP contract by LPTA, by the Air Force in 2011. I called the contracting office and they were not aware of it. It was below the dollar value that required review by the chief of the contracting office. They did not know off hand whether the contract was actually awarded pursuant to LPTA, and were shocked to learn that their office had issued such an RFP, because that would have been "stupid".

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interesting the selection you quoted from was from A5 which is price.

however there are other sections that discuss LPTA in the guide.

1.2 Lowest Price Technically Acceptable (LPTA) Source Selection Process (see FAR
15.101-2). The LPTA process is appropriate when best value is expected to result from
selection of a technically acceptable proposal with the lowest evaluated price.

and

A. 1 The LPTA process is appropriate when best value is expected to result from selection of the
technically acceptable proposal with the lowest evaluated price. LPTAs may be used in
situations where the Government would not realize any value from a proposal exceeding the
Government’s minimum technical or performance requirements, often for acquisitions of
commercial or non-complex services or supplies which are clearly defined and expected to be
low risk. The LPTA process does not permit tradeoffs between price and non- price factors.

and from A. 5

the PCO may conduct a cost analysis to support the determination of
whether the proposed price is fair and reasonable.

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airborne373:

The LPTA appendix speaks for itself. The other statements are general and I'm not sure why you refer to them. In any case, I just pointed out the policy. Have you spoken with anyone at DPAP about using LPTA for CR acquisitions?

I'm sticking with my blanket statement, and unless you have better data than you have presented, you have said nothing that changes my mind.

However, I would be interested in your view of what the "right situation" would be in which to award a CR contract via LPTA, assuming that the use of CR is appropriate pursuant to FAR 16.301-2. How would you argue for that in front of a skeptical source selection authority? That would be your best chance to change my mind.

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I will also add that I searched the GAO database and found only one reference to LPTA being used in connection with CPFF, and that was the protest cited by Steward, which was for award of a CPFF task order by the Department of the Army. See CACI Technologies, Inc., GAO Dec. B-409147, 2014 CPD ¶ 44. Task order selections are not governed by the FAR source selection rules. The Court of Federal Claims database included no instance of an acquisition in which a CR contract was to be awarded by LPTA.

I now know of one case of an RFP being issued to award a CFPP contract by LPTA, by the Air Force in 2011. I called the contracting office and they were not aware of it. It was below the dollar value that required review by the chief of the contracting office. They did not know off hand whether the contract was actually awarded pursuant to LPTA, and were shocked to learn that their office had issued such an RFP, because that would have been "stupid".

Those were protests. That alone does not mean that there were no awards of contracts done by LPTA for a CR action. I fail to see the purpose of that note.

as to the AF, you have provided anecdotal information. and they don't even know the status of it, so again I fail to see the purpose.

I have conceded that we will agree to disagree, as I am sure that in hindsight, I will do many things that are considered foolish and or stupid by others, just am I am sure that you have done the same.

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Me do something stupid? Perish the thought.

I pointed out the protests just as a matter of info. I don't think they prove anything. (Did I say they did?) Same for the USAF procurement. I had said earlier that I did not know of an instance. Now I do. I don't think that proves anything, either. (Did I say it did?)

I will wait for your post telling us in what situations you think LPTA for CR would be appropriate. I am open to persuasion. So far you have not made an argument, you've just said that maybe it would work and I should not reject it out of hand. OK, convince me. Or are you just going back and forth with me because you think somebody ought to?

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airborne373:

The LPTA appendix speaks for itself. The other statements are general and I'm not sure why you refer to them. In any case, I just pointed out the policy. Have you spoken with anyone at DPAP about using LPTA for CR acquisitions?

I'm sticking with my blanket statement, and unless you have better data than you have presented, you have said nothing that changes my mind.

However, I would be interested in your view of what the "right situation" would be in which to award a CR contract via LPTA, assuming that the use of CR is appropriate pursuant to FAR 16.301-2. How would you argue for that in front of a skeptical source selection authority? That would be your best chance to change my mind.

Vern,

yes the appendix speaks for itself, and you have to read it in total and not cherry pick what you want to read. You chose one section related to price. If you re-read section A.1 of the guide its states "often for acquisitions of commercial or non-complex services or supplies which are clearly defined and expected to be low risk."

As to CR and LPTA, my actions that have been done are in excess of $100M and I have determined that the provisions at 16.301-2 (a) are applicable.

but then again, I am in the TO arena, so I fall under 16.505 not 15.3. ( and I never stated that I did stand alone)

and FWIW, the OP is more than likely under a TO rather than a stand alone contract.

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Would you use a CR contract for services and supplies that are clearly defined and expected to be low risk?

So you have selected contractors for CR task orders using LPTA? Okay, why? What was the situation that made it appropriate? Come on! Quit with just bickering. Make a case like a pro! You're airborne!

I don't know what you mean by "the OP". To me, OP means outpost or observation post. Sort me out on that.

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If the OP was an observation post, I would be calling for fire for effect. LOL (OP original poster)

While i enjoy bickering to bicker, i will reply with a situation where i think it is appropriate. so dont think i am avoiding it.

unfortunately, I have to go off to a a meeting to have discussions as to why there are cost overruns.

and before you get the opportunity to state it, i did have a few landings where my cranial housing group became a point of contact.

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Well, me too on the cranial housing group thing. Serious concussion on my second blast at Benning. Poor PLF. Didn't say anything, because I was too close to graduating and was not going to recycle under any circumstances. Funny how hitting your head makes you sick to the stomach.

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Quote me.

You could not legally award a cost-reimbursement contract based on lowest proposed cost. That would violate FAR 15.404-1(d)(2) and GAO case law.

Right here. ^

But Vern, it's clear we are just not going to agree! I'm not sure why a task order that was awarded using LPTA on a CR contract type is not applicable to this debate? What exactly is the difference?

16.5 only precludes 15.3 and we are not debating 15.3. I don't see how that case does not apply. Many of us in the business today are well aware that the same concepts of FAR Part 15 are used in these large MACs that have tens to hundreds of contractors and compete million dollar specialized services and supplies not very differently than a "formal" FAR Part 15.

Your posts appear pro-tradeoff and I'm not going to instruct any customer of mine to pay a premium or as you allude to "do something more difficult than LPTA" if they find no value above what they define as the minimum acceptable criteria.

I don't see how, eitherway, LPTA or tradeoff eliminates the risk of cost overrun. Reduction of risk comes though cost realism based on an offerors unique approach and thoroughly managing and administrating the contract post award to target costs. The Government is not obligated to pay overruns.

LPTA on CR works. Have you ever heard the phrase, "Don't knock it till you try it?"

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No facts. More regulations. And my quote is correct.

You're wasting my time. I don't believe that you have "extensive experience" using LPTA to award CR contracts. I'm done with you. Talk to the hand.

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