Jump to content
The Wifcon Forums and Blogs

LucyQ

IDIQ Decision

Recommended Posts

You know how contractors have to certify things like accurate, current & complete cost or pricing data? Or that the indirect costs in the final billing rate proposal are free of expressly unallowable costs?

I'm proposing that every UCA issued from now on must contain a certification, signed by the CO and one level higher, that the UCA is NOT being issued because of concerns about expiring funds, and that the signatories agree that they will use best efforts to definitize the contract within the statutory limits. Under penalty of perjury.

Would that be too overwhelming of a step? Or is the status quo just fine with everybody?

Share this post


Link to post
Share on other sites
On 9/29/2017 at 10:15 AM, REA'n Maker said:

One other legitimate UCA circumstance where "no one was at fault" was what we had to deal with in the 1990's:  defense contractors constantly being bought/sold /merged, which caused havoc in the negotiation process.  You could hardly crack a proposal open before it was pulled back because guys like GE Aerospace became Martin Marietta became Lockheed Martin over a time frame measured in months (test gear for the F-14 IRST in my case, i.e., not even terribly complicated).  All of whose C&P data required some level of DCAA blessing before we could conclude negotiations.  Hence, a UCA until the CAS issues were resolved.

Adam Smith's fault I suppose?

In the 20 year-old anecdote that you put forward to justify the status quo, the fault was the CO. Instead of negotiating the CO relied like a crutch on DCAA to tell them what to do. ("... C&P data required some level of DCAA blessing before we could conclude negotiations.") No, it didn't. The CO was under no obligation to request field pricing assistance. That was a choice. And it was obviously a poor one.

Share this post


Link to post
Share on other sites
3 hours ago, here_2_help said:

In the 20 year-old anecdote that you put forward to justify the status quo, the fault was the CO. Instead of negotiating the CO relied like a crutch on DCAA to tell them what to do. ("... C&P data required some level of DCAA blessing before we could conclude negotiations.") No, it didn't. The CO was under no obligation to request field pricing assistance. That was a choice. And it was obviously a poor one.

Where do you get this idea that the CO is some almighty with unilateral authority to do whatever he/she pleases?  The CO is only a CO because he/she has a certificate of appointment from some higher authority - usually in the case of UCAs, that higher authority is also the CO’s clearance authority and the CO has to obtain that individual’s approval prior to definitizing the contract action (per the regulations, local procedures, AND to keep his/her certificate of appointment and job).  That clearance authority typically requires field pricing assistance whenever the DFARS PGI says the CO should obtain it.  So foregoing field pricing assistance isn’t necessarily a choice the CO can make on his/her own.

Share this post


Link to post
Share on other sites
19 hours ago, here_2_help said:

You know how contractors have to certify things like accurate, current & complete cost or pricing data? Or that the indirect costs in the final billing rate proposal are free of expressly unallowable costs?

I'm proposing that every UCA issued from now on must contain a certification, signed by the CO and one level higher, that the UCA is NOT being issued because of concerns about expiring funds, and that the signatories agree that they will use best efforts to definitize the contract within the statutory limits. Under penalty of perjury.

Would that be too overwhelming of a step? Or is the status quo just fine with everybody?

No. The status quo is not fine. I propose the repeal of 10 U.S.C. § 2326. It should never have been enacted. It is nothing but Congressional micromanagement of the Executive Branch, and it is entirely ridiculous in terms of its underlying expectations and timeframes. Congress itself has made routine compliance impracticable through its legislative malpractice.

If you want to complain about something, complain about Congress's perennial failure to authorize appropriations and appropriate funds in a timely manner.

Share this post


Link to post
Share on other sites
19 hours ago, here_2_help said:

In the 20 year-old anecdote that you put forward to justify the status quo, the fault was the CO. Instead of negotiating the CO relied like a crutch on DCAA to tell them what to do. ("... C&P data required some level of DCAA blessing before we could conclude negotiations.") No, it didn't. The CO was under no obligation to request field pricing assistance. That was a choice. And it was obviously a poor one.

Those assertions are not just false, they're absurd. The decision to get field pricing support is not merely a matter of CO personal choice when definitizing large UCAs.

I deeoly respect your knowledge of government contract costs and pricing, but it has failed you in this matter. You clearly do not understand bureaucratic and programmatic practice within government contracting activities. You're in over your head in this topic, and there's no reason to further entertain or debate your ideas about it.

Share this post


Link to post
Share on other sites
3 hours ago, Vern Edwards said:

Those assertions are not just false, they're absurd. The decision to get field pricing support is not merely a matter of CO personal choice when definitizing large UCAs.

I deeoly respect your knowledge of government contract costs and pricing, but it has failed you in this matter. You clearly do not understand bureaucratic and programmatic practice within government contracting activities. You're in over your head in this topic, and there's no reason to further entertain or debate your ideas about it.

You are right. I don't understand them. All I have to go on is the FAR. I accept that's limited knowledge but what else can I go on, since I'm not a government employee?

"The contracting officer is responsible for evaluating the reasonableness of the offered prices. ... The contracting officer may request the advice and assistance of other experts to ensure that an appropriate analysis is performed. ... The contracting officer should request field pricing assistance when the information available at the buying activity is inadequate to determine a fair and reasonable price."

I don't see any imperatives in the quote above. In my opinion, the FAR language gives the CO discretion. If agency policy takes away that discretion, then that's a problem. If the CO has discretion but uses it poorly, that's a problem

Further, I accept my modest proposals in this thread may seem absurd to contracting professionals ... but we have to start somewhere. I would start by empowering the CO and then holding the CO accountable. I realize the PM has a critical role to play, so I would hold the PM accountable as well.

We have to start somewhere. Saying that we need to start with Congress, all 535 of the legislators, is just as absurd as anything I've posted.

Vern, I accept that you are done debating these points. Honestly, I never expected to gain any serious traction. Acquisition reform is too hard because the system is too complex and the practitioners are too entrenched in the way it's always been done.

Share this post


Link to post
Share on other sites
10 hours ago, here_2_help said:

I don't see any imperatives in the quote above. In my opinion, the FAR language gives the CO discretion. If agency policy takes away that discretion, then that's a problem. If the CO has discretion but uses it poorly, that's a problem.

 

10 hours ago, here_2_help said:

I would start by empowering the CO and then holding the CO accountable. I realize the PM has a critical role to play, so I would hold the PM accountable as well.

Our two proposals may be absurd, but they're absurd for different reasons. Yours is absurd due to content. Mine is absurd due to process.

I just do not think that you appreciate the complexities of the issues that can arise during definitization of a UCA.

I once negotiated large dollar value letter contracts for development of spacecraft ground systems and other projects. The dollar values were such that some needed approval by a three-star, four-star, or even Secretary of the Air Force. Some of my PNMs and other file documents had to be reviewed by local contract review committee and JAG and sometimes by headquarters contract review committee and JAG. The idea that I could or would perform cost analysis and conduct negotiations without getting field pricing support would have been rejected out of hand by all levels of review.

Furthermore, you must understand that field pricing support can be a political issue involving with CACOs, ACOs, and DCAA. They might have issues of their own with the contractor (FPRAs and other transactions) that must be coordinated with contracting officers in various contracting activities. To leave them out would be unacceptable at many levels. The FAR is not the only consideration. Go to DPAP's webpage and read some of the policy documents.

Your proposal would cover contracts for which definitization proposals can be enormous--hundreds of millions to billions--with very large and complex companies that wield extraordinary market and political power, such that no CO could perform a decent cost analysis without field pricing support. 

The issues in such transactions are often multi-faceted and complex. It is naive to think that COs are little dictators who can act entirely on their own. They might be such on small dollar contracts for run of the mill stuff. But large, programmatic transactions have bureaucratic implications that you do not seem to understand or acknowledge. To say that COs who rely on DCAA are weak and rely on crutches when they don't have to is just not fair. It indicates that you don't understand what goes on in the real world of real organizations. Really, I'm dumbfounded by some of the things you are saying about CO responsibility with respect to UCAs. Many of the COs handling them are top of the line, top notch people. The very best. They are not missing deadlines because of negligence.

I was late on a few UCAs in my time, and I always had a good reason for it. If a CO is negligent or incompetent, then they should be disciplined or replaced in the normal course of management. But to recommend that they should be "personally liable" (whatever that means) when they miss a deadline is to recommend flat out bad policy.

Do you want to see how complex the issues can be? Read United Technologies Corp. - Pratt & Whitney Aircraft Group, Government Products Division, ASBCA 27830, 90-2 BCA ¶ 22772. Thirty-eight pages that'll make your head spin. The decision section begins: "The dispute between the parties involves their failure to definitize fully a letter contract. In pricing these contracts, they could not agree whether independent research and development as well as bid and proposal costs (IR & D/B & P) allocable to this contract were subject to the advance agreement ceilings between the United States Department of Defense and appellant."

Share this post


Link to post
Share on other sites

Below is proposed Section 823 from the next NDAA.  It must go to conference before it is passed so this is only a possibility.  This may be of interest.  

---------------------------------------------------------------------------------------------------------------------------------

SEC. 823. LIMITATION ON UNILATERAL DEFINITIZATION.

     (a) Limitation.—Section 2326 of title 10, United States Code, is amended—

          (1) by redesignating subsections (c), (d), (e), (f), (g), (h), and (i) as subsections (d), (e), (f), (g), (h), (i), and (j) respectively; and

          (2) by inserting after subsection (b) the following new subsection:

     “(c) Limitation On Unilateral Definitization By The Contracting Officer.—The following limitation applies to all undefinitized contractual actions with a not to exceed value of $50,000,000 or greater:

          “(1) If agreement is not reached on contractual terms, specifications, and price by a date certain, as required under subsection (b)(1), the contracting officer may not unilaterally definitize those terms, specifications and price over the objection of the contractor until—

               “(A) the head of the agency approves the definitization in writing;

               “(B) the contracting officer provides the written approval to the contractor; and

               “(C) the head of the agency notifies the congressional defense committees of the approval.

       “(2) The contract modification unilaterally definitizing the action shall not take effect until 60 calendar days after the congressional defense committees have been notified under subparagraph (C) of such paragraph.”.

     (b) Conforming Regulations.—Not later than 120 days after the date of the enactment of this Act, the Secretary of Defense shall revise the Department of Defense Supplement to the Federal Acquisition Regulations to conform with the amendments made by subsection (a).

 

Share this post


Link to post
Share on other sites

From last year's NDAA (the DFARS does not currently reflect these changes):

Quote

SEC. 811. MODIFIED RESTRICTIONS ON UNDEFINITIZED CONTRACTUAL ACTIONS.

    Section 2326 of title 10, United States Code, is amended--
            (1) in subsection (e)--
                    (A) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B);
                    (B) by inserting ``(1)'' before ``The head''; and
                    (C) by adding at the end the following new paragraph:
    ``(2) If a contractor submits a qualifying proposal to definitize an undefinitized contractual action and the contracting officer for such
action definitizes the contract after the end of the 180-day period beginning on the date on which the contractor submitted the qualifying
proposal, the head of the agency concerned shall ensure that the profit allowed on the contract accurately reflects the cost risk of the
contractor as such risk existed on the date the contractor submitted the qualifying proposal.'';
            (2) by redesignating subsections (f) and (g) as subsections (h) and (i), respectively;
            (3) by inserting after subsection (e) the following new subsections:
   ``(f) Time Limit.--No undefinitized contractual action may extend beyond 90 days without a written determination by the Secretary of the
military department concerned, the head of the Defense Agency concerned, the commander of the combatant command concerned, or the Under Secretary of Defense for Acquisition, Technology, and Logistics (as applicable) that it is in the best interests of the military department, the Defense Agency, the combatant command, or the Department of Defense, respectively, to continue the action.

``(g) Foreign Military Contracts.--(1) Except as provided in paragraph (2), a contracting officer of the Department of Defense may not enter into an undefinitized contractual action for a foreign military sale unless the contractual action provides for agreement upon contractual terms, specifications, and price by the end of the 180-day period described in subsection (b)(1)(A).
     ``(2) The requirement under paragraph (1) may be waived in accordance with subsection (b)(4).''; and
            (4) in subsection (i), as redesignated by paragraph (2)--
                    (A) in paragraph (1)--
                          (i) by striking subparagraph (A); and
                          (ii) by redesignating subparagraphs (B), (C),
                      and (D) as subparagraphs (A), (B), and (C),
                      respectively; and
                    (B) in paragraph (2), by striking ``complete and meaningful audits'' and all that follows through the period and inserting ``a meaningful audit of the information contained in the proposal.''.

 

Share this post


Link to post
Share on other sites
On 9/30/2017 at 2:20 PM, here_2_help said:

In the 20 year-old anecdote that you put forward to justify the status quo, the fault was the CO. Instead of negotiating the CO relied like a crutch on DCAA to tell them what to do. ("... C&P data required some level of DCAA blessing before we could conclude negotiations.") No, it didn't. The CO was under no obligation to request field pricing assistance. That was a choice. And it was obviously a poor one.

"Shall" does not imply "choice": 

15.403-4  Requiring certified cost or pricing data (10 U.S.C. 2306a and 41 U.S.C. chapter 35).

(a)(1) The contracting officer shall obtain certified cost or pricing data only if the contracting officer concludes that none of the exceptions in 15.403-1(b) applies.

 

Nor is it a 20-year-old "anecdote"; it is a 100% valid and relevant scenario to this day, particularly in DoD.

The CO did make many, many judgement calls based on imperfect information, as was his job.  I myself was very adept at explaining in a PNM how DCAA misinterpreted a specific cost treatment; I was the one having the ongoing negotiations after all, and DCAA had only one shot at it. But spit-balling is not an option when procuring a developmental item/major system.    

Perhaps you didn't understand the core point: the CO could do nothing about a contractor who pulled back a negotiated Part 15 proposal due to the fact that the contractor could not certify the C&P data (or even GAAP for that matter),  i.e., they didn't have a priced proposal on the table.   The fleet wasn't going to wait to deploy until the bean counters worked their magic, and negotiating with yourself is generally considered poor trade-craft... :huh:

(PS - If any CO "relied like a crutch on DCAA", they'd spend their entire career hopping around on one leg. )

Share this post


Link to post
Share on other sites

So, absent some additional conditional qualifier such as "when", what Is the imperative meaning of the term "shall" followed by "only if"?

Take the example given, what all is the Contracting Officer required to refrain from doing and/or do by the language found at FAR 15.403-4 (a)(1)?

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×