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Patrick Mathern

Redacted invoices no longer acceptable for subcontract price analysis???

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This is a first: We have a client that has used redacted invoices for support of price analysis of a commercial item and the government customer sent the following response:

"A recent DoD OIG inspection just slammed an agency for relying on sales data that did not include customer names. We need to see customer names to perform a valid analysis."

I've requested this OIG report, but in the meantime, does anybody else have experience with this or have a copy of the OIG report that discusses this?   

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They haven't told us yet, but that looks like it would fit their assertion!  This PCO is WAY overstepping their bounds here in my opinion.  Subject OIG report is for a prime contract that was determined COTS and worth $1B.  In our case, we're talking about a subcontract that was determined commercial (and well documented, I might add) with value less than $1M.  

 

My case for pushing back rests on these facts plus application of 15.402(a)(3):  "Obtain the type and quantity of data necessary to establish a fair and reasonable price, but not more data than is necessary."

 

Exercising the client's subs in this way is unnecessary and wasteful.

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Not a dumb question at all - we aren't redacting the invoices.  It's the client's subs that are doing the redacting.  In aerospace and defense, one day you're a customer, the next day you're a competitor.  We see this quite a bit.

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Thanks Vern.  At the end of the day, the CO has the authority to request this information, but in this case specifically, there neither is a business nor risk case to justify that request.  The client has nothing to hide here - just too few hours in the day to fiddle with this type of request when there are other significant issues at hand requiring attention.  Paralysis by analysis...

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On what basis did your client (the prime) determine that the price being paid for the commercial item subcontract was fair and reasonable?

H2H

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What information is being redacted from the invoices?  If the sub does not want to share the redacted information with the prime, does it have an objection to sharing it directly with the government?

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We're currently dealing with a CO from DLA who is insisting on unredacted invoices for a commercial item. This is for a competitive solicitation. Nothing else is sufficient -- not the fact that there is competition, not a table of sales and prices, not redacted invoices. She claims it is required so that she can determine the price is reasonable. 

Our practice has been to submit redacted invoices -- when invoices are even required. Seemed to satisfy everyone in the past. Unfortunately there is nothing in 15.4 that would prohibit her demand, other than the admonition to not request "more than is necessary."

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Seems silly in a competitive procurement, but that's never stopped some COs from asking. The government sometimes conducts contract pricing as a kind of quasi criminal investigation and treats business "partners" like criminal suspects.

Where were you at the time of the murder? Who else was there? What's their name and address?

How much did you pay for that? Who'd you buy it from? What's their name and address?

Unfortunately, some companies have given the government reason to be suspicious.

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