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15 hours ago, here_2_help said:

Paystubs are not facts. I think that's fairly clear.

It's not clear (proven) to me that pay stubs are not facts. That is just your assertion. Prove it.

Here's the Black's Law Dictionary definition of fact:

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fact (15c) 1. Something that actually exists; an aspect of reality <it is a fact that all people are mortal>. • Facts include not just tangible things, actual occurrences, and relationships, but also states of mind such as intentions and the holding of opinions. 2. An actual or alleged event or circumstance, as distinguished from its legal effect, consequence, or interpretation <the jury made a finding of fact>. — Also termed historical fact. 3. An evil deed; a crime <an accessory after the fact>.

If a fact is something that actually exists, and if a pay stub actually exists, then the pay stub is a fact, is it not? It is an aspect of reality. Is it not?

FAR 2.101 defines cost or pricing data as facts. You appear to take the position that facts are information, but that the documents or other physical records on which the information is recorded are not facts. Thus, the contractor must submit and certify the accuracy, completeness, and currency of information. They need not submit and certify documents and records. Is that your position?

What I find interesting is that you seem to be saying that the contractor need not submit the actual pay stubs, but need submit only a transcription of some kind, with some info redacted. It seems to me that such an approach would increase the risk of inaccuracy in a submission and thus the risk of defective pricing and false claim litigation. Why take such a laborious, risky approach. And why worry about disclosing personal information on pay stubs to the government, which undoubtedly already has or has access to such information in other contexts?

I think what you said about a distinction between pay stubs and facts is interesting. I am not saying that you are wrong or that I disagree. I simply have doubts, and I am saying that you have not proved your point. You have not given the readers here sufficient reason to believe that pay stubs are not facts in the context of TINA. What you said is not true just because you said it. I presume that you have some defective pricing case law in support of that proposition. Can you cite a case in which a board or court held without being overruled that a document or other record of a fact is not itself a fact, is not cost or pricing data for that reason, and thus need not be submitted and certified?

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Vern, I'm not claiming to be a lawyer, but is it possible that the statutes and regulations are incorrectly using the term "fact" when the more precise term should be "factual evidence"? From my layperson reading, a Trier of Fact determines the facts of a case based on evidence presented. The facts are conclusions based on evidence, and are not evidence themselves.

If facts exist outside of evidence in support of them, wouldn't they be beliefs instead of facts?

In any case, when I prepare a cost estimate I use as many facts as possible. In order to determine those facts, I rely on documents (evidence). Sometimes I use judgment. When I submit a cost estimate subject to Truthful Cost or Pricing Data requirements, I tell the contracting officer how I developed my costing and price, and I tell them what evidence I relied on and when I used judgment. When DCAA comes in to audit my cost estimate, they ask for evidence to support my assertions--my "facts". They decide whether or not the evidence supports my assertions regarding the "facts". If I told the contracting officer I was using judgment, they will ask for technical assistance to express an opinion regarding the reasonableness of my judgment.

I may be wrong but that's the way it's worked for more than 30 years.

In my view, it would be unfortunate if the Trier of Fact were to henceforth be known as the Trier of Paystubs.

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help:

I don't think it's a matter of the statutes and regulations having used the word fact incorrectly.

Let's think this through. The question is whether a pay stub or other payroll record is a fact and is thug cost or pricing data.

Here's how 10 USC § 2306a(h) defines cost or pricing data:

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(h)Definitions.—In this section:

(1)Cost or pricing data.—

The term “cost or pricing data” means all facts that, as of the date of agreement on the price of a contract (or the price of a contract modification), or, if applicable consistent with subsection (e)(1)(B), another date agreed upon between the parties, a prudent buyer or seller would reasonably expect to affect price negotiations significantly. Such term does not include information that is judgmental, but does include the factual information from which a judgment was derived.

 

Neither the statute nor FAR define fact, but the definition of cost or pricing data in FAR 2.101 says:

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Cost or pricing data are factual, not judgmental; and are verifiable.

I.e., what makes something a fact is that it is true or false. Thus, an estimate or decision is not a fact, but the existence or nonexistence of an estimate or decision is a fact. When you said that you rely on factual evidence when you prepare a cost estimate, someone else would say that you rely on facts, one of them the fact that relevant estimates (judgments) were made in the past.

More generally, a fact is something that is known to exist or to have existed at some time in the past. You've already seen the definition in Black's. Here's how the American Heritage Dictionary of the English Language defines fact:

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1. Knowledge or information based on real occurrences: an account based on fact; a blur of fact and fancy.

2. a. Something demonstrated to exist or known to have existed: Genetic engineering is now a fact. That Chaucer was a real person is an undisputed fact.

b. A real occurrence; an event: had to prove the facts of the case.

c. Something believed to be true or real: a document laced with mistaken facts.

3. A thing that has been done, especially a crime: an accessory before the fact.

4. Law A conclusion drawn by a judge or jury from the evidence in a case: a finding of fact.

 

By that definition, the payment to Bob Jones is a fact; the statement that Bob Jones was paid $XXX.XX is a fact; and the record of the payment to Bob Jones, say, a pay stub, is a fact.

According to the entry on "facts" in the Stanford Encyclopedia of Philosophy:

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What might a fact be? Three popular views about the nature of facts can be distinguished:

A fact is just a true truth-bearer,

A fact is just an obtaining state of affairs,

A fact is just a sui generis [unique] type of entity in which objects exemplify properties or stand in relations.

 

That sure clears things up.

I did some research into boards of contract appeals decisions and law review articles and found no indication than anyone has argued about the form in which cost or pricing data are submitted--whether facts are information, documents and other records, other things, or all of the foregoing. The usual disagreement over fact is whether specific information was factual in nature or judgmental.

FAR requires "submittal" of cost or pricing data, either actually or by specific identification. The boards and law review articles discuss "disclosure." Submittal and disclosure issues usually involve documents or records of some kind. The instructions in FAR Table 15-2 make many references to documents and records. I can pretty well guarantee that if, during negotiations, a contractor's representative orally communicates a fact accurately, but submits a document that inaccurately communicates information about the same thing, the contractor will be found to have submitted defective data. Whether the defective data will be found to have caused the price to be increased is another matter. 

I think that if a contractor asserts to the CO that Mr. Jones was paid such and such for his work during a specified period of time, the contractor will have made a statement purported to be fact, which constitutes a submission or cost or pricing data. In addition, the making of the statement is a fact. If the statement is true it is not inaccurate or noncurrent. But if the contractor has a payroll record for Mr. Jones during that period and does not submit it, either actually or by specific identification, then the contractor's cost or pricing data have been incomplete, and the contract will have been defectively priced. The contractor can argue that the defective pricing did not cause the contract to be overpriced and that there should be no price reduction, because the contracting officer knew the fact at issue. The contractor should be okay assuming that the contractor can prove that the CO knew the fact at issue. On the other hand, if the payroll record that was not submitted shows that Mr. Jones was paid a lesser amount, then there will be trouble.

Bottom line: I don't think it's useful to debate whether a pay stub is a fact or is evidence of a fact I think that by almost every definition of fact, evidence of a fact is itself a fact. In any case, I haven't found any defective pricing case in which the outcome turned on that issue. The issue has been whether information, however conveyed by whatever medium, is something that is verifiably true or false or merely a matter of judgment.

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I agree with Vern.  The key is that a paystub contains factual information, i.e., information that is verifiable.  While the statute and FAR contain the word "data," I learned a long time ago that laws, regulations and contracts mean what the courts say they mean.  In MRS Manufacturing, the Court of Claims said 

Situations wherein accurate, complete, and current information is known to the contractor and not known to the Government can certainly be avoided if such information is physically delivered to the Government and the information's significance to the negotiation process is made known to the Government by the contractor. We do not hold that both of these conditions must always be met before a contractor can be said to have submitted the required information to the Government. We conclude, however, that if a contractor possesses accurate, complete, and current information that is relevant to negotiations [*182]  with the Government, and he neither physically delivers the data to the Government, nor makes the Government aware of the information's significance to the negotiation process, then he has not fulfilled his duty under the Act to furnish such information to the Government.

It is clear from this that the Court was equating "data" with "information."  This seems to have influenced later decisions concerning defective pricing and what is cost or pricing data.  The boards and courts have been consistent in treating documents that contain factual data or information that can impact price negotiations as  cost or pricing data.  See, for example, Texas Instruments, 87-3 BCA 20195.  This is consistent with the purpose of requiring the submission of certified cost or pricing data, i.e., disclosure of all the facts necessary to place the Government in a position equal to the contractor with respect to making judgments on pricing as stated in several defective pricing decisions.

H2H, in regard to ghost employees, see DCAA MRD 13-PPD-012(R)July 18, 2013.  You might find it interesting.
 

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15 hours ago, Retreadfed said:

In MRS Manufacturing, the Court of Claims said 

Situations wherein accurate, complete, and current information is known to the contractor and not known to the Government can certainly be avoided if such information is physically delivered to the Government and the information's significance to the negotiation process is made known to the Government by the contractor. We do not hold that both of these conditions must always be met before a contractor can be said to have submitted the required information to the Government. We conclude, however, that if a contractor possesses accurate, complete, and current information that is relevant to negotiations [*182]  with the Government, and he neither physically delivers the data to the Government, nor makes the Government aware of the information's significance to the negotiation process, then he has not fulfilled his duty under the Act to furnish such information to the Government.

We do love to go down these semantic rabbit holes here, don't we.

According to the court's decision, quoted above, facts = information.

What is information?

My entire point is that the contractor has fulfilled its duty when it discloses its facts in accordance with the requirements of FAR Table 15-2, unless the CO requests additional information necessary to support the determination of price reasonableness. If I have told you that Employee Number 1 makes $100,000 in annual salary, that is a factual disclosure, and I have met by disclosure obligation.

Pieces of paper may be facts, but the contractor has flexibility to disclose those facts in the manner it chooses, consistent with FAR requirements. Once facts/information have been disclosed, any further inquiries about those facts fall into "verification" (at least in my mind). The verification activity would appear to have the purpose of confirming or refuting the contractor's assertion regarding the veracity of the facts/information it disclosed. I think it used to be called "fact finding" but I'm not sure if that term is used anymore.

In any case, if you want paystubs to be certified cost or pricing data, then fine with me. I've already agreed that the government has audit rights with respect to certified cost or pricing data. Please do not take the next step of stating that the contractor has violated its disclosure requirements if it has failed to submit paystubs as part of its disclosure package.

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15 hours ago, Retreadfed said:

H2H, in regard to ghost employees, see DCAA MRD 13-PPD-012(R)July 18, 2013.  You might find it interesting.

Retreadfed,

Thanks for the reference. I'm familar with that MRD. It was required because DCAA didn't perform its MAAR audits consistently when it stopped performing its audits of contractor proposals to establish final billing rates. It's tough to interview employees who left the company (or passed away) years ago.

As you probably know, GAGAS 6.04b requires audit conclusions to be based on adequate ("sufficient and appropriate") evidence, and there were some concerns that maybe DCAA was taking so long to perform its audits, once it got around to performing them, that the information it was relying on was no longer adequate. (See DoD OIG audit report number D-2011-6-011, Sept. 21, 2011.) Thus, to address the concerns raised by the IG, the MRD was issued to give auditors additional procedures that would help to make the old information more adequate. To my knowledge, nobody has yet opined on whether or not the additional procedures correct the basic problem documented by the IG. (I should note that it was a DCAA auditor that first raised the issue by calling the IG Hotline.)

To your point, yes. I see that "existence" is still an audit test. In my recent experience, though, the "existence" part of the audit is of lesser importance than the "interview" part of the audit.

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20 hours ago, here_2_help said:

In any case, if you want paystubs to be certified cost or pricing data, then fine with me. I've already agreed that the government has audit rights with respect to certified cost or pricing data. Please do not take the next step of stating that the contractor has violated its disclosure requirements if it has failed to submit paystubs as part of its disclosure package.

From Table 15-2, Note 1:

Quote

The requirement for submission of certified cost or pricing data is met when all accurate certified cost or pricing data reasonably available to the offeror have been submitted, either actually or by specific identification, to the Contracting Officer or an authorized representative.

"All." Some cost or pricing data are likely to be duplicative, that is, contain the same info. But it doesn't matter. "All." Now, once the CO has been made aware of some information, failure to disclose duplicative cost or pricing data, while defective pricing, shouldn't have caused the price to be increased. Thus, you have defective pricing, which is the failure to submit accurate, complete, and current cost or pricing data. But the defective pricing will be without effect, and there should be no price reduction.

20 hours ago, here_2_help said:

Pieces of paper may be facts, but the contractor has flexibility to disclose those facts in the manner it chooses, consistent with FAR requirements. Once facts/information have been disclosed, any further inquiries about those facts fall into "verification" (at least in my mind). The verification activity would appear to have the purpose of confirming or refuting the contractor's assertion regarding the veracity of the facts/information it disclosed. I think it used to be called "fact finding" but I'm not sure if that term is used anymore.

That's not good thinking if it means that the contractor gets to pick and choose what is cost or pricing data. "ALL." The submission of certified cost or pricing data must be accurate, complete, and current. You start playing pick and choose, distinguishing between fact and evidence, and distinguishing between disclosing and verifying, and and sooner or later you're going to make a mistake and omit something you shouldn't have. Then, years later, after the original players have moved on, retired, or died, you might have to pay big bucks to an attorney. All it takes is for DCAA to conduct a defective pricing audit and discover something that they think was not previously disclosed. All of a sudden a routine process gets intense, and expensive. See DCAAM 14-116.3:

Quote

Once the auditor has established the baseline for audit, the next step is to compare the certified cost or pricing data in the audit baseline to all accurate, complete, and current cost or pricing data reasonably available to the contractor prior to agreement on price, or another date agreed upon between the parties. Differences found identify potential defective pricing.

Oh boy. Here we go. It might come to nothing, but then again...

These rules are not altogether logical and clear. That's why courts and boards have to fill in gaps. Most people preparing proposals are not experts in these rules, and they shouldn't be taught or advised to parse the rules to do things like distinguish between facts and evidence. It's fun to discuss that sort of thing at Wifcon, but in real life, if you have to provide certified cost or pricing data keep it simple, just give them "all" of it. The stuff you're sure about and the stuff you're not. 

The original question was answered long ago, way back at the very first response.

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