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GSA has finally acted on the request from customer agencies and industry partners to allow Order Level Materials (OLMs), frequently called Other Direct Costs (ODCs), into the Multiple Award Schedule (MAS) program.
GSA is proposing to amend the General Services Administration Acquisition Regulation (GSAR) to establish special ordering procedures per FAR 8.403 (b). These new procedures will clarify the authority to acquire OLMs when placing an order or establishing a BPA against a Federal Supply Schedule contract.
As background, currently most commercial Indefinite-Delivery/Indefinite Quantity (IDIQ) contracts have the flexibility to acquire OLMs. This authority extends to contracts awarded pursuant to FAR Part 12 and orders awarded pursuant to FAR Subpart 16.5 and 8.4. However; Subpart 8.4 was never updated and as a result the ability to acquire OLMs was never fully implemented in the MAS program.
The proposed GSA rule includes some of the following amendments (a full list can be found in the proposed rule):
- Add to GSAR 515.408 (c) that “offerors are not required to complete the commercial sales practices disclosure for order level materials”
- Prohibiting order-level materials from being the primary basis of the order
- Limiting the total value of order-level materials to 33 % of the overall order value
- Require the order-level materials to be purchased under a separate Special Item Number (SIN) to allow GSA to monitor sales and evaluate use
- Requiring the ordering activity contracting officers to determine that all prices for these materials are fair and reasonable
- Include controls to ensure any ceiling increases have been justified and approved in accordance with FAR 8.405.6.
The final rule will only apply to the following GSA Schedules:
- Federal Supply Schedule 03 FAC: Facilities Maintenance and Management
- Federal Supply Schedule 56: Buildings and Building Materials/Industrial Services and Supplies
- Federal Supply Schedule 70: General Purpose Information Technology Equipment, Software, and Services
- Federal Supply Schedule 71: Furniture
- Federal Supply Schedule 84: Total Solutions for Law Enforcement, Security, Facilities Management, Fire, Rescue, Clothing, Marine Craft, and Emergency/Disaster Response
- Federal Supply Schedule 00CORP: All Professional Services
- Federal Supply Schedule 738X: Human Resources and EEO Services
The proposed GSAR rule was published September 9, 2016 and is open for a 60 day comment period.
About the Author:
Executive Director of Contracts and Consulting
Maureen Jamieson has more than twenty-five years of experience managing federal contracts. She is highly experienced in solving client pricing problems and implementing effective pricing strategies for placing products and services on GSA Schedule contracts.
The post GSA Proposes New Rule Allowing Other Direct Costs into Schedules Program appeared first on Centre Law & Consulting.
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An offeror’s failure to provide the type of past performance information mandated by a solicitation led to the offeror’s elimination from consideration for a major GSA contract.
A recent GAO bid protest decision highlights the importance of fully reading and adhering to a solicitation’s requirements–including those involving the type of past performance or experience information required.
GAO’s decision in Dougherty & Associates, Inc., B-413155.9 (Sept. 1, 2016) involved the GSA “HCaTS” solicitation, which contemplated the award of multiple IDIQ contracts to provide Human Capital and Training Solutions across the federal government. The solicitation was divided into two Pools based on the offeror’s small business size status. The GSA established a target of 40 awards for each Pool.
The solicitation provided for award based on best-value, and included a requirement for past experience, which stated:
For an Offeror to be eligible for consideration under a given Pool, the Offeror shall have performed six Relevant Experience Projects [REP], with four of those Relevant Experience Projects under a NAICS Code that corresponds directly to a NAICS Code in the Pool being applied for… Each Relevant Experience Project shall meet the minimum requirements prescribed in Section L.5.2.2.
The solicitation also warned potential offerors that their experience “must be substantiated by ‘evidence within a verifiable contractual document,’ adding that an offeror ‘shall only receive credit…if the Government can validate the information,’” and that failure to meet the experience requirements “may result in the proposal being rejected.” Under the terms of the solicitation, an offeror could meet the experience requirements by “submitting for each relevant experience project: a single contract; a single task or purchase order, or a ‘collection of task orders’ that had been placed under a ‘master contract vehicle.” Finally, the solicitation required for each project that an offeror submit either a single contract/task order/purchase order, or a combination of task orders, “but not both.” The solicitation stated that “f the Offeror submits the single contract and the task order(s)/purchase order(s) awarded against it, the single contract and the task order(s)/purchase order(s) shall not be considered.”
The GSA received 115 proposals. Dougherty & Associates, Inc. was one of the offerors; it submitted a proposal for both Pools. In supporting one of its required experience projects, DAI reference a subcontract between DAI and a prime contractor under an Office of Personnel Management contract. DAI also submitted three purchase orders that had been issued under the subcontract.
The GSA sought clarification from DAI regarding this experience project. The GSA noted that the project contained three separate purchase orders and “was not identified as a ‘collection of task orders’ … It’s unclear how these 3 orders are linked.”
DAI responded by stating that “[w]e did not submit this relevant project as a collection of task orders.” DAI explained that the prime contractor had used purchase orders throughout the period of the subcontract and that “[t]he purchase orders were submitted, as required by the RFP proposal submission instructions, as contractual documents to substantiate … DAI’s scope of work, [key service areas], relevancy, period of performance and project value.”
The GSA subsequently notified DAI that its proposal had been eliminated from consideration. GSA explained that the experience project in question “contains three separate purchase orders and was not identified as a ‘collection of task orders.'”
DAI filed a GAO bid protest. DAI argued that the GSA had improperly eliminated DAI based on an unreasonable reading of DAI’s proposal.
GAO explained that the solicitation required that for each of the six relevant projects “an offeror must submit either a single contract/task order/purchase order, or a collection of task orders–but not both.” GAO continued:
Here, notwithstanding these provisions, DAI submitted its OPM subcontract–along with purchase orders issued under that subcontract. Further, DAI acknowledges that the subcontract, itself, does not substantiate the various experience requirements . . .. Finally, DAI declined to comply with the solicitation requirements regarding a collection of task orders/purchase orders–despite the agency’s notification that it was unclear that the purchase orders DAI submitted were sufficiently related.
GAO denied DAI’s protest.
Dougherty & Associates, Inc. serves as a reminder to fully read and follow the specific requirements of a solicitation to a T–including those involving experience or past performance. While this is true in any solicitation, it is especially so in the case of a large multiple-award IDIQ like HCaTS with dozens (or hundreds) of offerors. In these cases, agencies may be trying to more easily whittle down the playing field, and may be all the more inclined to reject proposals for what seem like minor variances from the terms of the solicitation.
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An article in today's (Sept. 27, 2016) Wall Street Journal, "Amazon's Newest Ambition: Competing Directly with UPS and FedEx," the paper reports that Amazon is creating its own delivery system in response to rising shipping costs. An interesting comment:Quote
To constrain rising shipping costs, the online giant is building its own delivery operation, setting up a clash with its shipping partners...
Amazon’s goal, these people say, is to one day haul and deliver packages for itself as well as other retailers and consumers—potentially upending the traditional relationship between seller and sender...
Inside the company, executives describe, in the words of one senior official, how Amazon “is building a full-service logistics and transportation network effectively from the ground up.”
Amazon’s push into the shipping sector reflects a willingness among today’s powerful tech companies to defy the traditional constraints of business and leap into new ones.
This seems to be a departure from the business model that developed in the 1980s and 1990s, in which a business identifies and focuses on its core competencies and outsources everything else. https://www.caycon.com/blog/2012/10/focus-on-core-competencies-and-outsource-the-rest/
There has even been talk about outsourcing core competencies. http://www.supplychain-forum.com/documents/articles/Premus & Sanders.pdf
Goodness knows, the military has been accused of doing core competencies during the wars in Afghanistan and Iraq. https://www.brookings.edu/articles/outsourcing-war/
The government has pursued the outsourcing model (in its governmental way) for three decades now, and not without problems, as reflected in the misguided foray into "performance-based" contracting. Outsourcing has been administratively costly and time-consuming and has produced somewhat dubious results.
Does the article about Amazon and its comment about the willingness of powerful tech companies to defy traditional business constraints suggest that we might be witnessing the return of an old business model within some industries?
We've had the revolution. Are we seeing the beginnings of reaction? Has the cycle come full circle? Or are we just seeing a bold move by a bold entrepreneur, the kind of thing the government can't do.
Say, isn't the OFPP Administrator going to Amazon? Maybe some of you should check to see if she's accepting resumes.
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A key challenge to improving acquisition is defining what good contracting really is—and the proper skill sets necessary for those working within it. There are many different views on this topic that show up in various legislation, course curricula, job descriptions, and a variety of professional certifications across public- and private-sector agencies, firms, and associations. These include large government contractors; Defense Acquisition University; Federal Acquisition Institute; colleges and universities with supply chain, contract management, and business programs; corporate training criteria; and all manner of nonprofit standards and certifications. Unlike many other professions, there is no universally agreed upon “Good Housekeeping Seal of Approval” that gives those working in or contemplating entry into contracting a universally adopted set of competencies for today’s acquisition manager. Instead, “good contracting” and its skill sets are defined (if at all) piecemeal, employer by employer, segmented by type and size of organization.
However, there are models in use today that could be a starting point. For example, the Volcker Alliance recently published a list of fundamental skills and experience required for those responsible for public procurement, based on interviews with procurement officials and academic experts, leveraging their expertise to develop a competency model and evaluate the current public procurement workforce against those competencies.
Very close to this model, with perhaps more depth and historical iterations, is the Contract Management Body of Knowledge (CMBOK), maintained by the National Contract Management Association. The initial compilation began with a job analysis of functions performed in public- and private-sector contracting. Now in its fourth edition, the CMBOK is a comprehensive standard that includes definitions from within the field, practices and processes, and the procedural steps applicable to contract management generally and to the commercial and government sectors in particular.
Other organizations related to the field offer certifications based on smaller standards or high-level competency models. How difficult would it be to align these models more closely, recognizing their similarities? Are the basic principles of contract/procurement/supply chain/acquisition so unique to each sector, devoid of any overlap or redundancy? Or is it simply the case that depending on where the function is performed, some competencies require a greater or lesser degree of knowledge, experience, complexity, emphasis, or prominence?
As is often the case, most organizations consider themselves unique, different, one of a kind, etc. However, aren’t the skill sets required for effective acquisition uniform, regardless of sector or employer? Leveraging the overwhelming numbers working in this field (known as strategic sourcing when involving purchasing power) could create a large, influential “market” of existing and potential professionals. This would drive competency-based education and training at the university level and offer lucrative, flexible career opportunities to entice people into the field earlier and convince them to stay longer.
At the federal level, this might limit the routine attempts to legislate competencies and skill sets only pertinent to the U.S. government, (leaving large and small organizations throughout the nation to figure it out for themselves, depending on a smorgasbord of competency models to choose or ignore).
An agreed to standard can emanate from existing competency models and professional communities, with the leadership of existing professionals in the field and existing professional organizations. It’s likely that some could view such collaboration as a threat, affecting existing business models and profit centers. However, aligning the profession together will bring far greater improvement and efficiencies to private and public sector costs of doing business, so the sooner the process begins, the sooner the fruits of this labor will be realized.
Michael P. Fischetti
National Contract Management Association
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It’s time we rethink our approach to the training problem. Our traditional approach is to dictate a blueprint of training classes that must be followed in order to obtain prescribed levels of certification. To put it in acquisition terms, we’ve been using a design specification. What if we were to use a performance specification instead? What might that look like? Before answering these questions, we should identify what it is we are trying to achieve with training.
The purpose of training is to make the trainee proficient in performing one or more defined learning objectives by means of specialized instruction and practice. A learning objective consists of three parts—an action, a condition, and a standard. For example, someone new to federal contracting will likely receive training to select FAR provisions and clauses (action) given a set of facts about an acquisition and access to the FAR (condition) (the implied standard would be “correctly”). It follows that if an individual already behaves in the prescribed way under the prescribed conditions to the prescribed standard, then training would be unnecessary for that individual—they’ve already attained the learning objective.
Under the “design specification” training model that we currently use, there is an implied assumption that an individual cannot attain the requisite learning objectives without following the prescribed blueprint of training classes. Further, there is no method of demonstrating the attainment of the requisite learning objectives prior to the prescribed training classes. As a result, everyone must take the required training classes, regardless of individual necessity. Considering the resources involved in carrying out such a program, this is an expensive proposition.
While the implied assumption of the “design specification” training model may prove true in some cases, a more reasonable assumption would be that some individuals need to follow the prescribed training blueprint and some do not. Those that do not would include those that have already attained the requisite learning objectives by other means and those that could without following the prescribed training blueprint. Thus, the challenge would be to identify those that don’t need a particular training class before requiring their attendance at the training class.
What if we borrowed the thinking behind performance-based acquisition and applied it to the training problem (i.e., a “performance specification” training model)? That is, instead of dictating how the workforce is to attain requisite learning objectives, we specify the requisite learning objectives (performance outcomes) and method of assessment, and let the workforce decide how they are going to attain them. Some workforce members may choose a program of self-study, others may study in informal groups, some contracting offices may develop their own ongoing training programs, etc. Still others may choose to follow the existing blueprint of training classes. Regardless of how one attains the requisite learning objectives, all are held to the same standard using the same method of assessment.
For an illustration of how such a model might look, consider the profession of actuarial science. Beanactuary.org contains the following description:
Like other top-ranked professions (such as law and medicine), one must pass a set of examinations to achieve professional status as an actuary. Unlike other professions, in actuarial science you’ll have the opportunity to work as an actuary while completing the examination process—employers often allow study time during working hours, pay exam fees, provide internships, and even award raises for each exam passed. Though, to get the best start on a rewarding career, many soon-to-be actuaries begin taking exams while still in college. Of those that do, most achieve associateship in three to five years. All candidates acquire a core set of knowledge from required preliminary exams. The preliminary exams and Validation by Educational Experience requirements are the starting points for an actuarial career.
To attain an “Associate of the Society of Actuaries” (ASA) designation from the Society of Actuaries, one must pass exams in probability, financial mathematics, models for financial economics, models for life contingencies, and construction and evaluation of actuarial models. In addition, there is one required e-Learning course and a required one-day seminar in professionalism. After attaining the ASA designation, one typically pursues a “Fellow of the Society of Actuaries” (FSA) designation within one of six specialties: corporate finance and enterprise risk management, quantitative finance and investment, individual life and annuities, retirements benefits, group and health, and general insurance. To attain the designation, the FSA candidate must take 3-4 more exams unique to the specialty, complete four e-learning courses, and attend a three-day case-based fellowship admissions course that requires each candidate to deliver an oral presentation on a topic within the field. In case you weren’t keeping track, that’s a total of four days of required attendance in classrooms to achieve the highest designation in the field. In contrast, DoD contract specialists must attend 32 days of classroom training to attain the lowest level of certification.
What if to attain level 1 certification in contracting, one had to pass exams in, for example: acquisition planning, contracting methods, contract types, socioeconomic programs, and contract administration, and attend a one-day seminar on ethics? After level 1, contract specialists would choose a specialty in which they would pursue Level 2 certification. Specialties would be, for example, major system acquisition, research and development contracting, construction and A/E contracting, service contracting, IT acquisition, acquisition of commercial items, contract administration, etc. To attain Level 2 certification, contract specialists would have to pass a series of exams unique to that specialty. For example, to attain Level 2 certification in service contracting, there would be exams on specification of service requirements, source selection for services, pricing services, and service contract administration. There could also be a Level 2 admissions course where the candidate would have to submit and present a paper on a topic related to their specialty.
If nothing else, use of the performance specification training model would cost less than the design specification model currently in use. I would go as far as to say that, on the whole, the workforce would be at least as competent as it is now.
What’s your opinion? We’d like to know.
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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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