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The government wants to come sit at our contractor location to "get insight" on how we execute the effort. They plan to sit a couple of days a week and we have an understanding that they are also sitting at a competitor's location who is doing similar work. Don't want to seem like we are not being a team player, but what are the disadvantages of this? Any FAR guidelines of which I should be aware? Other than requesting payment for the seat, do I seek an NDA with the Gov?

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Please clarify. Services? IT or something similar?

Cant answer your question very well because we dont know the specific reason or purpose for the government observation on your contract or what they would be observing.. If there is company proprietary information at stake that you don’t want the government to know about, well that is a disadvantage. 

I have some experience with two of my top construction management employees sitting in with major construction contractor field management teams on a daily basis., even attending their daily meetings. It involved working with  production and project controls (cost and schedule)  teams. They were able to effectively act as integrators and liaisons between government and contractor teams. They were able to observe, evaluate and offer advice to both government and contractor. They could help expedite questions, answers and decisions. They could observe and comment on real time earned value management production. Of course, it didn’t hurt that one of my guys had been a TVA field construction manager with in nuclear plant construction and major fossil fuel plant rehabs, directly working with the contractor field office production teams. For both TVA and our projects the contractors were among the top ten US construction companies. 

It was amazingly effective for relations as well as expediting solutions, communications and speeding up answers. 

And yes- they worked on both FFP and CR contracts.

We have also had personnel making extended visits to A/E offices for over the shoulder reviews, coordination, liaison, etc. Both for CR and FFP contracts. 

 

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18 hours ago, CyndiG said:

The government wants to come sit at our contractor location to "get insight" on how we execute the effort. They plan to sit a couple of days a week and we have an understanding that they are also sitting at a competitor's location who is doing similar work. Don't want to seem like we are not being a team player, but what are the disadvantages of this? Any FAR guidelines of which I should be aware? Other than requesting payment for the seat, do I seek an NDA with the Gov?

I will presume that your contract is for services.

See the inspection of services clauses, e.g., FAR 52.246-4, Inspection of Services—Fixed Price (Aug 1996):

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(c) The Government has the right to inspect and test all services called for by the contract, to the extent practicable at all times and places during the term of the contract. The Government shall perform inspections and tests in a manner that will not unduly delay the work.

Emphasis added. Most government contracts include inspection clauses with language. Contracts for commercial items ordinarily do not, but see FAR 12.208 about in-process inspection.

If your contract is for commercial items and does not provide for government inspection at all times and places, and if you decide to let them sit in, you should (1) negotiate a protocol agreement with the government and with its individual personnel about conduct while on your premises (e.g., recording, photographing, sexual harassment, and offensive behavior and speech) and about disclosure limitations, and (2) instruct your personnel about confidentiality, fraternizing at the office, and after hours social engagements with government personnel. Most government personnel are honorable, but don't be naive.

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I agree with Vern. However, I would suggest negotiating a similar agreement even if the inspection of services clause is applicable.

For the construction contracts I mentioned, it was voluntary cooperation on the part of the contractors. It was done.as part of the Partnering process concerning complexities of the projects, critical schedules and trying to bilaterally determine the impacts of large changes on workforce productivity and schedules. It evolved into the other mutual benefits to schedule, productivity, communications, etc.

The contractor’s liked the process. So did the government.

EDIT: as for “disadvantages”, without knowing anything about the purpose/reason or what they would be observing, I couldn’t answer that.

If the same personnel are observing two competitors, obviously there must be confidentiality agreements with the mutual understanding that violation of confidentiality would   Involve legal repercussions.

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CyndiG, is there a reason why you posted this thread and your questions under the Contract Pricing discussion area? 

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51 minutes ago, joel hoffman said:

I agree with Vern. However, I would suggest negotiating a similar agreement even if the inspection of services clause is applicable.

If I were the contracting officer in that situation I would not negotiate or sign any such agreement. If the contractor had wanted such an agreement it should have negotiated it into the contract before award.

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@CyndiG - Without knowledge of the specifics of the entire contract and noting comments so far my thoughts. 

 If a service contract, if a clause that allows in-process inspection and if a performance-based contract that carried information regarding what the governments performance assessment (inspection) activities would be and the request to "get insight" was not alluded to as part of those activities or in the contract as a whole you might have more emphasis to discuss/negotiate the want of the government.

At a minimum even with consideration of a possible clause like that already mentioned in the contract and not a performance based contract a request to the government to mutually establish, in writing,  the ground rules for the "get insight" effort seems a very prudent to me.  While the clause allows a right to government such right must be exercised in a practicable way for both parties to the contract.  Making ground rules request and communicating and getting understanding on the finalized ground rules in a business like manner would would go a long way in establishing good faith of both you and the government with regard to the "get insight" effort.

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1 hour ago, C Culham said:

@CyndiG - Without knowledge of the specifics of the entire contract and noting comments so far my thoughts. 

 If a service contract, if a clause that allows in-process inspection and if a performance-based contract that carried information regarding what the governments performance assessment (inspection) activities would be and the request to "get insight" was not alluded to as part of those activities or in the contract as a whole you might have more emphasis to discuss/negotiate the want of the government.

At a minimum even with consideration of a possible clause like that already mentioned in the contract and not a performance based contract a request to the government to mutually establish, in writing,  the ground rules for the "get insight" effort seems a very prudent to me.  While the clause allows a right to government such right must be exercised in a practicable way for both parties to the contract.  Making ground rules request and communicating and getting understanding on the finalized ground rules in a business like manner would would go a long way in establishing good faith of both you and the government with regard to the "get insight" effort.

Carl, I agree with you. One of my former Division Chiefs was a huge proponent of and led the development of the formal “Partnering”   process for the USACE in 1989-1992 timeframe. It is now a mandatory USACE policy that formal or informal “Partnering “ be offered for the contractors to voluntarily participate in on every A/E, construction or design-build contract. I think it is used on major service contracts, too.

One purpose is to be able to mutually develop processes and procedures where not otherwise prescribed to mutually benefit and facilitate relationship building and effective communications, resolve conflicts, take advantage of contractors standard business , admin and project controls systems when feasible. 

 

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21 hours ago, CyndiG said:

The government wants to come sit at our contractor location to "get insight" on how we execute the effort. ... Other than requesting payment for the seat, do I seek an NDA with the Gov?

On what basis would you charge the government for a seat? What contractual provision permits you to do that? How would you calculate the amount to be billed? Would it include a share of your indirect costs? Profit?

Yeah, I'm not seeing it.

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16 minutes ago, here_2_help said:

On what basis would you charge the government for a seat? What contractual provision permits you to do that? How would you calculate the amount to be billed? Would it include a share of your indirect costs? Profit?

Yeah, I'm not seeing it.

I wondered about that, too. Maybe I’m totally misunderstanding the scenario. CyndiG posted this thread under Contract Pricing discussion area. 

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45 minutes ago, here_2_help said:

On what basis would you charge the government for a seat?

See 52.246-4:

Quote

(d) If the Government performs inspections or tests on the premises of the Contractor or a subcontractor, the Contractor shall furnish, and shall require subcontractors to furnish, at no increase in contract price, all reasonable facilities and assistance for the safe and convenient performance of these duties.

 

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Either CyndiG hasn’t signed in or hasn’t visited the site in over 22 hours. Some speculation going on here, including me.

Hello, CyndiG... 

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52.246-2 Inspection of Supplies (if applicable):  (d) If the Government performs inspection or test on the premises of the Contractor or a subcontractor, the Contractor shall furnish, and shall require subcontractors to furnish, at no increase in contract price, all reasonable facilities and assistance for the safe and convenient performance of these duties.

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CyndiG appears to have been a drive-by poster or else has found an answer. 

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Okay. With CyndiG having left the building, can we create any value in this thread?

Two contract clauses have been referenced here (52.246-2 and 52.246-4). I'd like to explore the concept of "reasonable facilities and assistance." What does that mean in this context?

For example, CyndiG the government would like a long-term presence in the contractor's facility where, "a couple of days a week," they will attempt to "'get insight' on how we execute the effort."

Does that effort, as described, constitute a reasonable inspection or something else? Is is (perhaps) an attempt to illicitly obtain the contractor's proprietary production process information or other trade secrets? What distinguishes a reasonable inspection from something else? 

Let's move on, and suppose that DCMA wants to put a Contract Management Office (CMO) in the contractor's plant. The CMO would house not only quality inspectors but contracting officers and functional specialists. What contract clause requires the contractor to provide the government with free facilities potentially worth many thousands of dollars?  Ditto for DCAA resident offices in contractor facilities. What contract clause requires the contractor to provide the space? Doesn't the DoD have appropriations to be used to provide its personnel with appropriate facilities?

Anyway, just some thoughts that ran through my mind as I pondered what CyndiG was really asking about.

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Thanks you for all the responses. Sidetracked with multiple proposal activities, but finding these answers helpful. My apologies for not posting this in a more appropriate forum. A bit more data. this is a services contract with a DDO customer. FAR 52.246-4 is not in our contract.

here 2 help: On what basis would you charge the government for a seat? We typically charge this customer to sit in our space - we are giving up company space that could be utilized by our own performers, why wouldn't we? What contractual provision permits you to do that? What clause precludes me? How would you calculate the amount to be billed? Chop up square footage, apply facilities rates, any other needs, dedicated entrance, network activity, conference room space,  etc. Would it include a share of your indirect costs?  yes. Profit? maybe

That concept was the least of my ask. I was more focused on whether there is precedent for the type of agreement/NDA to which Joel/Culham allude.  I like the idea of a partnering process. Just didn't want to approach the Customer if this was prohibited somehow. Looks like FAR 52.246-4 would be restricting, but does not apply here.

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4 hours ago, CyndiG said:

I was more focused on whether there is precedent for the type of agreement/NDA to which Joel/Culham allude. 

Why do you care about a precedent? What if there is no precedent?

The question is whether it is a prudent thing to do. What's best for your employer?

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23 hours ago, CyndiG said:

That concept was the least of my ask. I was more focused on whether there is precedent for the type of agreement/NDA to which Joel/Culham allude.  I like the idea of a partnering process. Just didn't want to approach the Customer if this was prohibited somehow.

There is a precedent - protecting your processes and therefore your business model. If the government wants to observe anything the company is doing that is proprietary in nature then have them sign a piece of paper that says they can't tell anyone not associated with the administration/performance of your contract. 

23 hours ago, CyndiG said:

How would you calculate the amount to be billed? Chop up square footage, apply facilities rates, any other needs, dedicated entrance, network activity, conference room space,  etc.

You could do this, but will it be that much of an inconvenience? Are they intending to come onsite with a laptop and sit in a conference room or are they asking for three furnished offices, bay windows, on the 10th floor and planning to hang family photos? Bid difference.

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Constricting: Thank you for the input. inherently agree on your sentiment on precedent - mostly checking for anything that conflicts with that idea.

Somewhat of an inconvenience to the team being able to speak freely about how we innovate an execute with the Govie onsite all day twice a week, so worth the inconvenience to the Gov to reconsider making this a habit. Not at all an inconvenience to us to bid or bill.

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