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My granddaughter recently lost a baby tooth in the ‘usual way.’ One morning, she felt the tooth begin to move the slightest bit. She wiggled it back and forth throughout the day and by dinner…Voile! Only one day later, she lost two more courtesy of her dentist to make room for the incoming ‘permanent’ ones. The Tooth Fairy kept the commitment of retrieving the lost teeth from under her pillow in a timely fashion – in this case staying up late on two consecutive nights – and rewarded her for pain and suffering with a selfie stick. (Wow, times have changed!)
This made me wonder, does the Tooth Fairy earn overtime for work performed in excess of a statutory number of ceiling hours or is that position salaried? (I’ve had a long term and continuing relationship with the Tooth Fairy, so I want to proceed carefully.) The question of overtime relates to the Fair Labor Standards Act (FLSA). The FLSA provides for a federal minimum wage, a standard 40-hour workweek, and pay at time-and-a-half rate for all overtime hours. The Act also includes several exemptions under which certain employees are not entitled to overtime pay. Currently to meet most exemptions, in addition to meeting a duties test, an employee must be paid on a salary basis at least $455 per week ($23,600 annually). There is a belief that payment of a salary is the only requirement to avoid overtime pay obligations. This is not correct. Also, a new regulation will more than double this minimum salary threshold later this year, but these are topics for tomorrow!
If the Tooth Fairy is not FLSA-exempt, there is a federal entitlement for a time-and-a-half rate for any hours worked in excess of 40 hours. Conversely, if the Tooth Fairy is FLSA-exempt, hours worked in excess of 40 hours weekly are considered Uncompensated Overtime (UCOT).
I’ve always had nagging concerns about UCOT – that it’s somehow a ‘bad’ thing – so I researched UCOT. The Regulation requires the solicitation provision at FAR 52.237-10 (Identification of Uncompensated Overtime) in requirements for technical or professional services which will be acquired on an hourly basis:
Uncompensated overtime means the hours worked without additional compensation in excess of an average of 40 hours per week by direct charge employees who are exempt from the Fair Labor Standards Act. Compensated personal absences such as holidays, vacations, and sick leave shall be included in the normal work week for purposes of computing uncompensated overtime hours.
FAR goes on to provide this example:
Uncompensated overtime rate is the rate that results from multiplying the hourly rate for a 40-hour work week by 40, and then dividing by the proposed hours per week. For example, 45 hours proposed on a 40-hour work week basis at $20 per hour would be converted to an uncompensated overtime rate of $17.78 per hour ($20.00 × 40 divided by 45 = $17.78)
The key to both the provision and the example might be the term ‘proposal’. If an offeror proposes UCOT, then it is part of its technical and pricing plan that should be evaluated during cost realism. What if a contractor does not propose UCOT yet incurs UCOT? Unforeseen situations requiring additional labor hours or surge efforts are not uncommon in professional service industries. In this situation, can the contractor invoice for these uncompensated hours? Invoicing – always a significant issue – becomes more important when fee is linked to achieving a level of effort. Can the contractor profit on UCOT hours?
UCOT is not illegal. How a contractor motivates its employees, both FLSA and FLSA-exempt, to satisfy employee and customer seems a matter for industry not Government. If you are pondering the loss of revenue on the part of the employee, consider that there may be other opportunities and means to compensate employees, such as additional benefits, compensatory time, or bonuses. As in so many other federal procurement matters, competition will affect retention rates of those who propose intentionally to overwork their employees. UCOT is discussed as a subtopic in Centre’s Federal Contract Basics Course.
As for the Tooth Fairy, there are an increasing number of ‘clients’ for whom Tooth Fairy must provide services. I know from experience that each ‘client’ has at least one parent and probably others (grandparents, for example!) standing by to ensure success. Tooth Fairy and I aren’t so close these days that we can discuss FLSA status, but I’d like to think with all those hours and all those satisfied ‘clients’ Tooth Fairy has earned many overtime hours as a non-exempt worker.
And Tooth Fairy, what’s a selfie stick anyhow?
About the Author:
Richard E. Zimmerman has more than 25 years of experience as a contracts professional both in Government and the private sector. His excellent background in FAR, Agency supplements, and their application over the procurement life cycle make him a critical resource for PMs, prime contractors, and subcontractors.
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"A question. Since before your sun burned hot in space and before your race was born, I have awaited a question."
Star Trek, the Guardian in “The City on the Edge of Forever.”
Early on in college I realized that questions were the gateway to learning. I didn’t put questions to my professors very often. I asked them mainly of myself, then learned by looking for answers. It took time, which was murder under the quarter system of the University of California. (I swear, I don’t think they were trying to teach us anything, just move us through the process.)
I learned that I had to ask good questions. Dumb questions (and there is such a thing as a dumb question) were the gateway to nowhere.
But what’s a good question?
I have long believed that the ability to ask good questions is one of the most important skills that a contract specialist must master. The ability to ask good questions is essential to learning the various facets of the work and to doing the work well.
Suppose you are planning to negotiate a sole source contract price and you have received a price proposal and certified cost or pricing data. You’ve conducted a preliminary cost analysis and developed a list of questions. The time has come for face-to-face fact-finding.
Your philosophy is that cost analysis is just reverse cost estimating. In order to develop a pre-negotiation objective you intend to disassemble the contractor’s cost estimate and profit objective, understand them, assess their reasonableness, put them back together and see what you get, then develop your negotiation plan.
You’re sitting in the contractor’s facility, across from their lead negotiator and the other members of its team. They are waiting for you. The intend to be honest. They will answer you truthfully, but they are not going to help you ask and they are not going to be forthcoming. If you want information, you are going to have to ask for precisely what you want.
So, what’s your first question?
* * *
Wifcon Forum long ago transitioned from a true discussion forum into a Q&A website, and much like someone passing through Elizabeth Kubler Ross’s stages of grief at the prospect of death, I have transitioned from shock, through anger and annoyance, to disappointment and depression, and finally to acceptance of what seem to me to be a lot of poor quality questions. I'm not the only one who thinks so. Some of us discuss the problem often, but behind the scenes.
What do I mean by “poor quality”? The best way to answer that is to show you some examples, all asked by persons who posted anonymously, without any user name, more than a decade ago. Here’s one from early 2003:Quote
We had a FP purchase order for support services that ended 9/30/02. We did not use all of the funds on the PO. We sent a final invoice to the gov't for the remaining money not spent.
I don't have experience with a FP Purchase Order so I hope you can clarify this for me.
The invoice references FAR Part 16.202-1 which states:
A firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the contractor's cost experience in performing the contract. This contract type places upon the contractor maximum risk and full responsibility for all costs and resulting profit or loss. It provides maximum incentive for the contractor to control costs and perform effectively and imposes a minimum administrative burden upon the contracting parties.
Is there another FAR part that allows for us to bill for the remaining funds? Thanks. I appreciate your help[.]
Here is another, from December, 2000:Quote
What is the standard to apply when calculating an equitable adjustment for a deductive change?
We have a situation where a change was made to a construction contract that reduced the quantity of an estimated quantity CLIN by approximately 50%. The contractor submitted a REA for the change. The REA was for a share of the cost savings that resulted from the deleted work. Essentially, the contractor is saying that he is entitled to share in the cost savings because he found a way to do the work more efficiently than originally planned.
I've never seen an approach to a deductive change like this. Is it proper?
Here is another, also from 2000:Quote
What paragraphs of FAR 52.212-4 can be used for modification authority in block C of the SF 30 when modifying a delivery order written against a commercial contract? If the Government does not accept nonconforming services, why would it not be appropriate for the CO to use 52.212-4(a), Inspection/Acceptance, to deobligate what now are excess funds. Second part to this question. When can the modification authority for a delivery order ride on the modification authority used for the basic contract when the revisions to a contract have to be carried over to the delivery order.
All punctuation as in originals.
I wish I could say that those are rare examples, but they are all too common. I could have used a few from last week, but I didn’t want to hurt anyone’s feelings.
I’m sure that those questions made perfectly good sense to those who asked them. They might make good sense to some of you who are reading this blog post. But not to me.
Okay, so what makes a question “good”? As it turns out, that is not as easy a question to answer as you might think.
I wanted to write a well-reasoned answer to my own question, which itself might be a dumb question, so over the course of the past several months I have read extensively and sometimes deeply in the theory of questions. (The theory has a name: erotetics) and the practice of questioning. It is an important part of logic, science, rhetoric, law, and semantics, and works range from the highly technical, such as Belnap, The Logic of Questions and Answers (Yale, 1976) and Harrah, “A Logic of Questions and Answers,” Philosophy of Science, Vol. 28 (1961) pp. 267-273, to those that are more readily accessible to nonspecialists, such as the entry, “Questions,” at the Stanford Encyclopedia of Philosophy, http://plato.stanford.edu., the entry “Questions,” in The Encyclopedia of Philosophy, Vol. 7 – 8, and in The Theory of Questions: Erotetics through the Prism of its Philosophical Background and Practical Applications, by Anna Brożek (Rodopi, 2011).
A search of the internet led me to a lot of advice about how to ask a good question. You can find an example of such advice (a pretty decent one) at this site:
You can find another example here:
The advice strikes me as sound, though not entirely satisfying.
Recently, however, I came across something that stopped me in my tracks -- a short article by Wendell Johnson (1906 – 65), “How to Ask a Question,” published in Journal of General Education in April, 1947, republished in ETC: A Review of General Semantics (Winter 1948), and published again in a retrospective in ETC: A Review of General Semantics (Fall 1983). You can find it here: http://www.jstor.org/stable/42576616?seq=1#page_scan_tab_contents, but you need a subscription or access through a university or public library.
It’s very short, only five pages, but dense. The author packed a lot of thinking into those pages. You have to read deeply. I have added it to my list of essential reading for contracting practitioners.
Because it may not be readily accessible by all, here are a few quotes to give you the flavor of the thing:Quote
Even among college upper classmen and graduate students one finds in varying degrees a naive belief that there are knowers -- that the way to get the answer to a question is simply to ask the man who knows it.
* * *
[T]he techniques of fruitful inquiry necessarily involve certain ways of using language, particularly in the framing of questions. Just any old string of words, arranged grammatically and with an interrogation mark at the end, won't do.
* * *
[A]n answerable question is one that implies the observations, or reliably reported observations, needed to answer it. Any question that does not meet this test -- any question, that is, for which no specifications are supplied as to the particular observational procedures to be used in answering it -- is to be classified as meaningless for purposes of fruitful inquiry, as nonsense from an investigative point of view. From a psychiatric point of view it may be richly meaningful, of course. This is to say that anyone who can analyze and interpret such a question in a way that clarifies the confusion of the one who asks it qualifies, to this extent, as a psychiatrist . Anyone who unhesitatingly answers the question, without recognizing its meaningless character, qualifies as surely as a fool . One may, with benefit, regard this as one of the more important items in that vast category known as useful but seldom used information.
* * *
The fundamental skill to be taught is that of specifying the procedures to be used in making the observations needed to answer any questions one asks -- and in specifying the terms in which the observations are to be reported . Except as the questioner provides these specifications, he can hardly expect anyone else to divine what he is asking, nor can he be depended upon to recognize the answer himself if by some odd chance it should appear.
But my favorite quote in the piece, and one of my all-time favorite quotes, is this:Quote
It is known almost as widely as it is disregarded that a fool is one who knows the answers to the questions that only a fool would ask. It follows that effective insurance against becoming a fool oneself lies in knowing what sorts of questions and answers these might be. It would appear reasonable to assume, on this basis, that a major responsibility of our schools and colleges is that of providing adequate instruction in the techniques of fruitful inquiry.
Yep, my question, "What is a good question?", was a fool’s question. So I’m going to refine it. That might take me a while. In the meantime, give Wendell Johnson's article a read. It will be well worth your time and thought.
Had you ever speculated on why April Fools’ Day seems to be such an important day for federal acquisition? After all, consider some of the regulatory and policy issuances on that day:
The Federal Acquisition Regulation (FAR) became effective on April Fools’ Day (1984).
The Federal Aviation Administration became exempt from the FAR on April Fools’ Day (1996).
The Office of Federal Procurement Policy (OFPP) memorandum on “Protests, Claims, and Alternative Dispute Resolution (ADR) as Factors in Past Performance and Source Selection Decisions” was issued on April Fools’ Day (2002).
Army Federal Acquisition Regulation Supplement (AFARS) Revision #25 was issued on April Fools’ Day (2010).
FAR Case 2010-015 on the Women-Owned Small Business (WOSB) Program was published in the Federal Register on April Fools’ Day (2011).
No doubt a little research would provide a number of additional examples.
Frankly, if it were me, April Fools’ Day would probably be the last day that I would pick for issuing important regulations or policy statements. That is one day that I would avoid like the plague. [Note: The last statement is not technically correct, I would go to greater extremes to avoid the plague than to publish an acquisition policy or procedure on April Fools’ Day.] Why not just wait a day, and avoid all the innuendo and snickering? After all, consider, April has 29 other days that are perfectly suitable for issuing regulations, policies, procedures, guidance and information.
Comparison of Major Contract Types
For example, on Monday, April 25, 2016, the Defense Acquisition University/Defense Systems Management College updated the Acquisition Community Connection with a revised version of its Comparison of Major Contract Types (i.e., Comparison of Major Contract Types - April 2016). [For those who would like a direct link: https://acc.dau.mil/CommunityBrowser.aspx?id=214513.] The new version better aligns with the terminology in the Contract Pricing Reference Guides, updates the charts on the reverse, and adds a chart on “Achieving a Reasonably Challenging but Achievable (RCA) Target Cost,” one of topics discussed extensively in the new Guidance on Using Incentive and Other Contract Types.
Over the years, various versions of the “Comparison” have been fairly popular (i.e., 94,863 Page Views and 80,840 Attachments Downloaded. Although, given the number of personnel in the Defense Statutory Acquisition Workforce Contracting Career Field, 29,690 as of the 2nd quarter of 2015, those Lifetime Activity numbers may not be all that high, relatively speaking.
The April Fools’ Day Announcements for 2016
So, it can be done. However, this April Fools’ Day (2016) Defense Procurement and Acquisition Policy (DPAP) elected to issue two important pieces of procedures/guidance to the Defense Statutory Acquisition Workforce:
Guidance on Using Incentive and Other Contract Types (April 1, 1016).
Department of Defense Source Selection Procedures (SSP) (April 1, 1016).
Both documents have their warts. For instance, the Guidance incorrectly identifies one of the two statutory references for limitations on negotiation of price or fee. The good news is that thee one applicable to the DoD was identified correctly. Running the Spelling and Grammar checker one last time would not have been amiss.
Warts aside, the results of this Better Buying Power (BBP) are somewhat disappointing. The Specific Action in the USD(AT&L) memorandum “Implementation Directive for Better Buying Power 2.0 - Achieving Greater Efficiency and Productivity in Defense Spending” was, “Director, DP will provide a draft policy guidance document on the use of incentives in contracting to the BSIG for review by July 1, 2013. The starting point for this document will be the DoD and NASA Guide, “Incentive Training (sic) Guide,” originally published in 1969.”
For those of you unfamiliar with the Incentive Contracting Guide, it was the last of a number of such guides published in the 1960s. That particular version of the Guide was 252 pages. By comparison, the new Guidance is 41 pages. About 40 % of the Guidance is devoted to negotiation of fixed-price incentive (firm target) (FPIF) contracts in a sole-source environment a discussion of Reasonably Challenging but Achievable Target Cost (RCA), which go hand-in-hand. The coverage for Time and Materials/Labor Hour (T&M/LH) Contracts amounts to a paltry nine (9) lines. Ask yourself these two questions, “How many sole-source FPIF contracts does the Department award? If ‘T&M is the least preferable contract type,’ where should the emphasis have been placed?”
For those of you who need guidance on structuring multiple incentive contracts the DOD and NASA Guide: Incentive Contracting Guide 1969 may be a better bet than the new Guidance. The good news is that it is still available on the Defense Acquisition University’s Acquisition Community Connection. [For those who would like a direct link: https://acc.dau.mil/CommunityBrowser.aspx?id=189615.]
The updated Source Selection Procedures are more than 505 longer than the previous version. The Procedures would have benefited from fact checking, copy editing and proof reading. Another warts issue.
Warts aside, for those of you who will be involved in DoD source selections that meet the thresholds in the Procedures, you will want to give it a thorough read. Among other things, you will see some new descriptions of adjectival ratings and a new source selection procedure in APPENDIX B, “TRADEOFF SOURCE SELECTION PROCESS: SUBJECTIVE TRADEOFF AND VALUE ADJUSTED TOTAL EVALUATED PRICE (VATEP) TRADEOFF.” The latter came about as the result of USD(AT&L) memorandum “Implementation Directive for Better Buying Power 2.0 - Achieving Greater Efficiency and Productivity in Defense Spending.” Under the heading of Better define value in “best value” competitions there was a Specific Action, “Director, DP will review the ‘Process Manual’ developed by the joint Service team led by the Air Force and present a recommendation for adoption with any recommended changes to the BSIG by July 1, 2013.” You need to read the entire section to understand the direction. No doubt you will see a good deal of discussion about VATEP percolating up.
Understand that although the Guidance and Procedures were issued on April Fools’ Day, they are no joke. Read them carefully, and implement them wisely.
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I'm looking for feedback on a tool that I'm creating for DoD. Basically, it would be a single document that would contain the FAR, DFARS, DFARS PGI, and DoD Class Deviations. The concept is similar to that used in the General Services Administration Acquisition Manual (GSAM), where both regulatory (GSAR) and nonregulatory information is integrated into one document and distinguished by shading. The main difference is the document that I envision also contains the FAR. I've attached a sample of what an integrated FAR subpart 1.1, DFARS subpart 201.1, and DFARS PGI subpart 201.1 would look like. Take a look and let me know what you think. I'd appreciate any feedback, but I'm particularly interested in the following:
1. Would you use such a tool?
2. Is there a better way to distinguish between FAR, DFARS, and DFARS PGI text than the use of shading?
3. Do you have any ideas to make the tool better (more useful)?
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All of us can probably agree that each year seems to go by faster than the year before. The older we become, the rate at which we age seems to increase. So now, with 2016 upon us, (and without providing a comprehensive listing of new contracting laws, statutes, regulations, personnel changes, or best practices during 2015), perhaps it’s best to simply summarize and reflect on what 2015 might signify regarding acquisition success. Let’s also not use the “R” word even though talking about acquisition reform keeps us blog writers and consultants busy.
Some initiatives that began with great fanfare are no longer around. The government almost “closed” again, although the list of program exceptions to shutdowns is now so large that many don’t notice. Those programs with greater lobbying power are essential, while many very worthy programs are used as pawns. Probably the greatest damage to government contracting, dwarfing any new legislative improvement, is the indecisive nature and short-term environment under which government programs must operate.
GSA launched initiatives in category management, including its acquisition gateway, eBuy Open and other initiatives intended to improve contracting officer market knowledge and vehicles available to meet specific needs and better leverage government buying power.
The Department of Defense says it’s at a 35-year best in controlling costs for major acquisition programs and bestowed a variety of 15 individual and five organization awards for the past year. Heidi Shyu stepped down as the Army’s acquisition executive and off of the acquisition “bus,” where she coined the analogy that all acquisition program “passengers” have a brake and steering wheel, but no gas pedal.
Legislation intended to improve the current process within information technology is underway and new legislation within DoD was passed. It will be sometime before it is clear how well these latest changes have performed.
Discussion with today’s acquisition leaders reveals a determination to do the right thing as best as possible despite the peripheral (beyond acquisition) system challenges at each step. This past year may best be remembered for cyber security breaches; new and enhanced multiple-crises emanating from the Middle East; successful space probes and retrieval; cyclones, earthquakes, and changing climates; gun violence from Tunis to California; and a never-ending political campaign.
For contracting managers, the faster nature of societal change and news cycles may mask the great strides being made to respond more effectively to ever-changing government requirements and outsourcing needs. Ineffective conference, education, and industry communication restrictions appear to be abating. However, lengthy debate over government salary, bonuses, or predetermined solutions to unresearched acquisition problems continues.
From a contracting standpoint, 2015 may not be momentous in terms of single legislation or headlines. However, the complexities and challenges of successfully navigating today’s acquisition environment—from reduced spending to cyber security to Federal Reserve policy to the sheer complicated nature of the business enterprise itself—continues to grow. The requirements are harder, and the solutions harder still. Contractors supporting the government (and indeed the government itself) have a more difficult time understanding how to prepare, respond, and execute to these ever-evolving challenges. From workforce to technology, uncertainty is increasing and proven solutions decreasing. A new workforce is growing up in an environment of more employment uncertainty, from challenges to the education they’ve received to the manner of training and on-the-job experience they need.
However, we should all be impressed by the professionals working within this environment and what they accomplish. They don’t have time to publicly write or promote their efforts, but they are there and are noble. The year 2016 promises to be no easier than 2015. Our contracting leaders and managers are up to the challenge, but let’s understand for ourselves the causes and concerns, offer our advice and support, and be part of the solution.
Michael P. Fischetti
National Contract Management Association
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The Competition in Contracting Act of 1984 requires the Government Accountability Office (GA0) to report to the U. S. Congress annually when government agencies fail to fully implement its bid protest recommendations. GAO has posted these reports on its website since fiscal year (FY) 1995. Initially, these reports provided little information but by FY 2004, GAO published its "Bid Protest Statistics" covering FY 2004 through 2001. I have added every one of these reports to the fiscal year numbers at the top of the bid protest statistics.
Beginning in its report for FY 2013, GAO began listing its "most prevalent reasons for sustaining protests" during the FY. This has continued for FY 2014 and FY 2015. Although the information provided does not include cases where an agency took corrective action before a formal sustained decision was reached, it does provided information on 227 sustained decisions. In that sense, it may provide some help whether you are trying to prevent a protest or whether you may protest a procurement.
Below is my ranking of the most prevalent reasons for sustained protests listed by GAO for FY 2015 through FY 2013:
- failure to follow the evaluation criteria (listed 3rd in FY 2015 and 1st in FYs 2014 and 2013).
- unreasonable cost or price evaluation (listed 1st in FY 2015 and 4th in FY 2013) and
- inadequate documentation of the record (listed 4th in FY 2015 and 2nd in FY 2013)
- unequal treatment of offerors (listed 4th in FY 2014 and 3rd in FY 2013)
- unreasonable technical evaluation (listed 5th in FY 2015 and 3rd in FY 2014)
This ranking also requires a caveat because the number of sustained protests varied significantly for FY 2015 (68), FY 2014 (72), and FY 2013 (87).
Other reasons for sustained protests GAO listed include
- unreasonable past performance evaluation (listed 2nd in FY 2015)
- flawed selection decision (listed 2nd in FY 2014)
In addition to listing the most prevalent reasons, GAO also gives 1 example decision for each of the most prevalent reasons it lists in a FY. For example, under unreasonable cost or price evaluation which GAO placed first in FY 2015, GAO lists Computer Sciences Corp.; HP Enterprise Servs., LLC; Harris IT Servs. Corp.; Booz Allen Hamilton, Inc., B-408694.7 et al., Nov. 3, 2014, 2014 CPD ¶ 331.
My listing of each decision that GAO provided as a most prevalent reason with a link to the decision is here.
To me, the most striking reason for GAO sustaining a protest is inadequate documentation. That can be prevented by a thorough review of what documents are provided in the evaluation and selection decision. If there is something missing, identify it and correct it. You can get more information on the documentation issue by looking at the Wifcon.com protest page FAR 15.305 (a)(3): Technical Evaluation - Documentation.
Another striking reason for sustained protests is the first that I list--failure to follow the evaluation criteria. One time a friend of mine was sitting on an evaluation panel for a GAO procurement that I had no involvement in at all. He had something extra he wanted to include in his evaluation of proposals and he asked me about it. Although I was stunned at the question, I simply told him that he must follow the evaluation criteria in the solicitation and if he had any questions he should ask the contracting officer--not me.
Before ending this entry, I will once again remind you that the information provided by GAO only includes sustained protests. These are decisions in which the agency digs in its heels and fights the protest to a final decision. As GAO explains, "agencies need not, and do not, report any of the myriad reasons they decide to take voluntary corrective action." What you see here may be the tip of the iceberg.
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The long-standing principle that the federal government had the same implied duty of good faith and fair dealing as any commercial buyer was put in jeopardy by a 2010 decision of the U.S. Court of Appeals for the Federal Circuit, Precision Pine & Timber, Inc. v. U.S., 596 F.3d 817 (Fed. Cir. 2010). There a panel of the court adopted a narrow rule seemingly limiting application of the principle to situations where a government action was “specifically targeted” at the contractor or had the effect of taking away one of the benefits that had been promised to the contractor. Although the decision concerned a timber sales contract not a procurement contract, when I wrote it up in the May 2010 Nash & Cibinic Report (24 N&CR ¶ 22), I expressed the fear that the reasoning would be subsequently applied to procurement contracts.
My fear was realized in a construction contract case, Metcalf Construction Co. v. U. S., 102 Fed. Cl. 334 (2011). In that decision, the judge described eggregious conduct on the part of the government officials that would have been held to be a breach of the implied duty of good faith and fair dealing under many earlier cases. However, the judge held that under the Precision Pine standard, the contractor had not proved that the actions were specifically targeted at the contractor. In the February 2012 Nash & Cibinic Report (26 N&CR ¶ 9), I criticized this decision but stated that I believed that even if the decision was affirmed on appeal, most contracting officers would not take this as a signal that the proper way to administer contracts was to abuse the contractor.
Fortunately, a panel of the Federal Circuit has reversed the decision, Metcalf Construction Co. v. U. S., 2014 WL 519596, 2014 U.S. App. LEXIS 2515 (Fed. Cir. Feb. 11, 2014). The court held that the lower court had read Precision Pine too narrowly and that “specific targeting” was only one example of the type of conduct that could constitute a breach of the implied duty of good faith and fair dealing. Importantly, the court also rejected the government’s argument that this “implied duty” only could be found when it was footed in some express provision of the contract. The court concluded that the correct rule was only that the express provisions of a contract had to be examined to ensure that they had not dealt with the conduct of the government; for if they had, they would override the implied duty.
This leaves us in a tenuous position with regard to the views of the Federal Circuit. We have one panel in Precision Pine stating a narrow rule, another panel in Metcalf Construction stating the traditional rule, and a third panel in Bell/Heery A Joint Venture v. U.S., 739 F.3d 1324 (Fed. Cir. 2014), ruling in favor of the government because the contractor had not alleged facts showing that the government had “engaged in conduct that reappropriated benefits promised under the contract” (which is part of the Precision Pine reasoning). Thus, it is difficult to state where the judges of the Federal Circuit stand. Hopefully, the court will agree to take either Metcalf Construction or Bell/Heery to the full court for an en banc review of the issue.
I’ve never been sure why the Department of Justice has so vigorously argued that the government should not be held to the same standards of conduct as a commercial buyer. Of course, persuading the courts and boards that a narrower standard should be applied to the government is a way to win litigated cases. But, in my view, encouraging abusive or non-cooperative conduct hurts the government as much as it hurts its contractors. I have taught for many years that in the long run the government benefits from actions that show industry that it is a fair contracting partner. A line of published judicial decisions that demonstrates that the government is not such a partner is one more of the many messages that tell companies they should sell to the government only when they can find no other customer. Surely, this is not the message that government agencies in need of products and services on the commercial marketplace want to convey to companies that can provide those products and services.
Many years ago when I came to Washington to work in the field of government contracting, I concluded that there was one major advantage to being on the government side of the negotiating table. That advantage was that I was under no pressure to extract money from the contractor by unfair bargaining or unfair contract administration. To me fairness was an integral part of the job of a government employee. I still believe it and teach it. Thus, no matter what the outcome of the good faith and fair dealing litigation, I will continue to urge government employees that fair treatment of contractors is the only way to go.
Ralph C. Nash
When I get older, losing my hair
Many years from now . . . .
When I'm Sixty-Four
John Lennon, Paul McCartney
Shortly after we celebrate our country's independence on July 4, 2013, Wifcon.com will end its 15th year on the internet. With much help from the Wifcon.com community, I've raised a growing teenager. When I started, I was 49 and my hair was so thick that I often shouted ouch or some obscenity when I combed it. Wifcon.com has existed in 3 decades and parts of 2 centuries. During that period, I've updated this site for every work day--except for the week or so when I called it quits. I remember the feeling of relief. I thought it was over. However, many of you convinced me to bring it back. Yes, just when I thought I was out, many of you pulled me back in.
As I mentioned in an earlier post, someone once told me that Wifcon.com was my legacy. I once had great hopes for a legacy. Perhaps, a great saxophone player belting out a solo in front of thousands of fans and seeing them enjoying themselves. Instead, here I sit in my solitude looking for news, decisions, etc., to post to the home page. For many years, my dog Ambrose kept me company. Now, my dogs Blue Jay and Lily stare at me and look for attention. With my sights now set realistically, I accept that Wifcon.com is my legacy. It's the best I could do.
Every now and then, I receive an e-mail from someone thanking me for Wifcon.com. They tell me how it helped their careers. These e-mails keep me and Wifcon.com going.
Send me a postcard, drop me a line,
Stating point of view
Indicate precisely what you mean to say
Yours sincerely, wasting away
Give me your answer, fill in a form
When I'm Sixty-Four
John Lennon, Paul McCartney
The thoughts in these e-mails won't let me quit. I still search each night for something to add to the site in hopes that it will increase your knowledge. If I find something new, I still get excited. Often, it feels like a self-imposed weight around my neck. What started as a release for my imagination has evolved into a continuing and daily addition to the contracting community. In the evenings, it is as if I'm Maillardet's automaton. I head over to my office, sit before the computer, and update. Then I send the updated pages to Virginia where it is accessed from around the world. Maybe I'm addicted to Wifcon.com; maybe I was born with the Wifcon.com gene.
If you haven't added the numbers, I'm 64 now. Wifcon.com and I are showing our age. I can comb the top of my head with my fingers. The ouches and other obscenities caused by my once thick hair are gone. A recent upgrade to the discussion forum requires that I turn the "compatibility mode" off on my browser. In that mode, I realized that Wifcon.com is ugly. I have current software for the needed future redo of this site.
I am Wifcon.com; Wifcon.com is me. It is my legacy and my albatross. As always, thank you for your support.
You'll be older too,
And if you say the word,
I could stay with you.
When I'm Sixty-Four
John Lennon, Paul McCartney