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One of the things I first noticed when we drove from Marshall Space Flight Center (MSFC) to our hotel was a sign post that looked like a corkscrew with a road sign on top. Someone told me: "A tornado did that." How could wind do that? I was about to find out.
It was April 3, 1974. When we left MSFC after work, there was a strange feeling in the air. One that I have never forgotten. In fact, I stll feel if it is there after all of these years. There was no wind, no noise, just a stillness. Nature was waiting for something. As we approached our hotel in Huntsville, there were people on second floor balconies looking towards the southwest. What was that about?
We went straight to dinner that night and knew something was wrong but we didn't know what it was. In the restaurant, the television was turned to a channel that had only white noise. Everyone was watching it. Later, I found out they were using the Weller Method of TV-Tornado Detection. We asked the waitress: what's going on? "Three tornados went north of us and hit Jeff and Toney." Jeff and Toney were small villages just north of Huntsville. We quickly finished dinner and I went back to my room to watch the weather on a local television station.
The guy doing the weather was just finishing his coverage of a tornado that went south of Huntsville. Tornado to the north of us, tornado to the south of us, and the night was still young. As I noticed a storm on the television near Decatur pass over the Tennessee River, the weather guy said the worst was over and returned us to the regular programming. Decatur is southwest of Huntsville and Huntsville is northeast of Decatur. In between them is the Huntsville International Airport. But what about that tornado that just crossed the Tennessee River?
I didn't have to wait long for an answer. Within minutes, the weather guy was back on television telling us about the tornado that was taking aim on the Huntsville Airport. He showed us the hook pattern in the storm that indicated it was a tornado and then reported that the tower at the airport had been evacuated and a tornado was crossing the runway. The weather guy still didn't mention Huntsville and we were directly in the tornado's path. I wasn't waiting for the weather guy. That tornado had Huntsville in its crosshairs and I wasn't waiting for the weather guy to tell me. I looked around the room and saw the bathtub and two sofa cushions I could use. I jumped in the bathtub and put the cushions over my head. Then I waited. Finally, the weather guy said that the tornado was on University Drive. I was on University Drive too! Then the power went out. I slipped down into the bathtub and waited to die. I continued to wait for a few minutes. Then I got tired of waiting and looked out the window. As I looked out, I could see power generators exploding on the top of Monte Sano mountain which was in back of our hotel. The tornado missed me by 1/4 mile but mowed though Huntsville just east of me.
I had survived the 1974 Super Outbreak of tornadoes that stretched from Ontario, Canada to Alabama. One police officer, who saw the tornado that went through Huntsville, said it was one large tornado and two smaller ones on each side of the main tornado. They flew in formation and left devastation behind. All through the night, I heard ambulances. It's not a good feeling. I knew Huntsville had been hit hard but I didn't know how bad it was. The next day, we went to MSFC where some windows were blown out of the Administration building. Some furniture was on the ground and there were long white sheets of what looked like cloth hanging out of some of the windows. After work, we found a place to eat on University Drive and passed by a 1,000 foot-wide path of destruction left by the tornado. It was on both sides of the street. I remember a hotel that looked much like the Tourway Inn where I stayed. This hotel was demolished but a flimsy free-standing yellow wood wall was left standing. The tornado sent several things through the wall that I could identify. For example, I could see the outline of a bathroom sink that passed through the wall. Don't ask, much like the cork-screw sign post, I still can't figure it out.
Over the weekend, I drove up to Monte Sano mountain. From the street, I could see a path cut through the trees. The cut was cleanly done as if the tornado was giving the woods a manicure. It even took the tops of the trees with it.
At the end of April, I drove home to Maryland. I can remember several things about my drive to Huntsville but I cannot remember one thing about the drive home. Maybe, I was just glad to get home.
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Describing Contract Type: Watch What You Say
Consider the following exchange between two people:
QuoteSpeaker 1 (asking Speaker 2): What type of car do you drive, foreign or domestic?Speaker 2: I drive a red car.
Obviously, Speaker 2's answer is not responsive to Speaker 1's question. Speaker 1 wanted to know about a particular aspect of Speaker 2's car: its origin. Speaker 2 described a different aspect of his car: its color. While Speaker 2's statement about the color of his car may be true, it doesn't tell us anything about the origin of his car.
Easy enough, right? Ok, let's try another one. Consider the following exchange between two contract specialists:
QuoteContract Specialist 1: Is Contract X a fixed-price or cost-reimbursement contract?Contract Specialist 2: Contract X is an indefinite delivery contract.
Is Contract Specialist 2's answer responsive to Contract Specialist 1's question? No, the answer is no more responsive to the question than Speaker 2's answer was to the question of whether his car was foreign or domestic. Why? In this exchange, Contract Specialist 1 wanted to know about a particular aspect of Contract X: ts compensation arrangement. Contract Specialist 2 described a different aspect of Contract X: its delivery arrangement. While Contract Specialist 2's statement about the delivery arrangement of Contract X may be true, it doesn't tell us anything about the compensation arrangement of Contract X.
Make sense? If so, see if you can spot anything wrong with the following passage of an article on contract types that recently appeared in the December 2010 issue of Contract Management (see Government Contract Types: The U.S. Government?s Use of Different Contract Vehicles to Acquire Goods, Services, and Construction by Brian A. Darst and Mark K. Roberts):
QuoteFAR Subparts 16.2 through 16.6 describe 11 different permissible contract vehicles. These vehicles can be subdivided into three different families:- Fixed-price contracts,
- Cost-reimbursement contracts, and
- Other contract vehicles that can be used when the quantity of supplies or services cannot be determined at the time of award (i.e., indefinite delivery, time-and-materials (T&M), labor-hour (LH), and level-of-effort contracts) or where it is necessary for the contractor to begin performance before the terms and conditions of the contracts can be negotiated (i.e., letter contracts).
Do you see anything wrong? Notice that the first two "families" are categorized by compensation arrangement. However, the third family contains a mix of terms used to describe compensation arrangement (T&M/LH), delivery arrangement (indefinite delivery), the extent of contractor commitment (level-of-effort), and a unique term used to describe a contract that is not definitive (letter contract). The way this passage is written implies that an indefinite delivery contract, a level-of-effort contract, and a letter contract are necessarily different (belong to a different "family") from a fixed-price or cost reimbursement contract. However, an indefinite delivery contract or a level-of-effort contract will have a compensation arrangement. The compensation arrangement can be fixed-price, cost-reimbursement, T&M/LH, or some combination thereof. A letter contract may or may not have a compensation arrangement when it is issued. You could conceivably have a letter contract that had a cost-reimbursement compensation arrangement, an indefinite delivery arrangement, and that provided for level-of-effort orders. As such, the authors? categorization of contract types makes as much sense as categorizing cars into three families?foreign, domestic, and red.
Incentive Contracts? Not What You Think They Are
Consider the following simplified description of a compensation arrangement:
QuoteThe buyer agrees to pay the seller $100,000 to provide a specified quantity of medical transcription services. If the accuracy of the transcriptions exceeds 99%, the buyer agrees to pay the seller an additional $5,000.Does the preceding describe an incentive contract? Many would say yes, because the arrangement provides for an incentive--specifically, a performance incentive. However, that would be incorrect. Just because a contract contains an incentive does not mean that it is an incentive contract. FAR 16.202-1 contains the following statements in a description of firm-fixed-price contracts (similar statements pertaining to fixed-price contracts with economic price adjustment can be found at FAR 16.203-1.
QuoteThe contracting officer may use a firm-fixed-price contract in conjunction with an award-fee incentive (see 16.404) and performance or delivery incentives (see 16.402-2 and 16.402-3) when the award fee or incentive is based solely on factors other than cost. The contract type remains firm-fixed-price when used with these incentives.[bold added].
Further, FAR 16.402-1(a) states:
QuoteMost incentive contracts include only cost incentives, which take the form of a profit or fee adjustment formula and are intended to motivate the contractor to effectively manage costs. No incentive contract may provide for other incentives without also providing a cost incentive (or constraint).Thus, it's not enough for a contract to contain an incentive to be an incentive contract. It must contain a cost incentive (or constraint).
In the aforementioned Contract Management article, an endnote references FAR 37.601(3) and misinterprets this paragraph as--encouraging the use of incentive-type contracts where appropriate. Here's what FAR 37.601(3) actually says:
QuotePerformance-based contracts for services shall include-(3) Performance incentives where appropriate. When used, the performance incentives shall correspond to the performance standards set forth in the contract (see 16.402-2).
The authors have made the mistake of assuming that a contract that contained a performance incentive was necessarily an incentive contract. In fact, when acquiring services FAR 37.102(a)(2) states the following order of precedence:
Quote(i) A firm-fixed price performance-based contract or task order.(ii) A performance-based contract or task order that is not firm-fixed price.
(iii) A contract or task order that is not performance-based.
As shown above, a firm-fixed-price contract would take precedence over an incentive contract.
A Genuine Misunderstanding
In a discussion of additional contract types and agreements, the Contract Management article contained the following statement (which caused me to stop reading and start writing):
QuoteT&M and LH contracts are varieties of indefinite-delivery contracts and provide procuring agencies with the flexibility to acquire recurring services or when the amount of the effort required to deliver an end-item is uncertain.Huh? T&M/LH is a type of indefinite delivery contract? I'll let you readers ponder that one.
The article concludes with a plug for the authors-two-day course in, you guessed it, types of contracts. I will pass.
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David S. Black, Eric S. Crusius, Terry L. Elling, Jeremy D. Burkhart- Read more...
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In Innovative Technologies, Inc., ASBCA No. 6186, 62185, the Armed Services Board of Contract Appeals (“ASBCA” or the “Board”) held that, despite the federal government’s failure to include or incorporate the McNamara-O’Hara Service Contract Act (“SCA”) FAR Clause 52.222-41 (the “SCA Clause”) in the contract, the contractor was required to comply with the SCA and not entitled to an equitable adjustment for all costs it incurred from a $1.5 million settlement with the U.S. Department of Labor (“DOL”) for its noncompliance.- Read more...
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At the beginning of Fiscal Year 2008 John Krieger and John Pritchard, two professors at the Defense Systems Management College, Defense Acquisition University, were kicking around the topic of Acquisition Reform. They reflected on what Jim Nagle wrote in the Epilogue to A History of Government Contracting, "If someone were asked to devise a contracting system for the federal government, it is inconceivable that one reasonable person or a committee of reasonable people could come up with our current system. That system is the result of thousands of decisions made by thousands of individuals, both in and out of government. It reflects the collision and collaboration of special interests, the impact of innumerable scandals and successes, and the tensions imposed by conflicting ideologies and personalities."
They reflected that those thousands of decisions were like putting bandages on the acquisition, contracting and procurement processes. Every time a piece of legislation is passed to “fix” the acquisition process, it’s another bandage. Every time a change is made to the Federal Acquisition Regulation (FAR), it’s another bandage. Every time a change is made to the Defense Federal Acquisition Regulation Supplement (DFARS), it’s another bandage. Every time a procurement or contracting policy memorandum is issued, it’s another bandage.
They joked about that being a great visual aid for the classroom. (Remember classrooms, the places you went to learn before COVID-19?) And the joking became reality. They started with a golf ball, and added a bandage for each new law, executive order, regulation, guide handbook, etc. And it would grow, and grow, and grow. “Acquisition Reform and the Golf Ball” was born that day.
The story of the golf ball was chronicled each fiscal year, and reported in the National Contract Management Association’s Contract Management (CM) after the end of each fiscal year. That is each year up until the report on the results for Fiscal Year 2020, when CM declined the latest installment in the series. Although John and John sought publication elsewhere, there didn’t appear to be a good fit, which brings the latest iteration, “Acquisition Reform and the Golf Ball—A Baker’s Dozen,” to Wifcon.com. (See attachment.)
Acquisition_Reform_and_the_Golf_Ball_Bakers_Dozen_-FY2021-_Wifcon.com_v2.docx
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In Fiscal Year 2022, 1,595 bid protests were filed with GAO. While that seems like a large number, it pales in comparison to the number of federal contracts the federal government awards in a given year. On average, the government awards over 11 million contracts per year. That’s a lot of acquisitions that are not subject to any feedback from outside the agency. But things might change now with the new rule that the FAR Council enacted. Today, we’ll take a look at what this entails.
Back in 2015, the Office of Federal Procurement Policy tested out a simple survey system for offerors to provide feedback on the acquisitions process. It was quickly realized that a lot of contractors were displeased with aspects of this process. But, prior to that point, there was no way for a contractor to provide feedback that would be reviewed by someone other than the contracting officer, who probably wouldn’t want to share any negative reviews with their higherups. The FAR Council (DoD, GSA, and NASA) realized what we just noted above: The vast majority of contracts are never protested, and any feedback could be kept under lock and key by the contracting officers. This is not conducive to a culture aimed towards improving the federal acquisitions process. As a result, the process then began to introduce a new survey program, called Acquisition 360, as a means of letting contractors provide feedback on the preaward and debriefing process.
Fast forward to today. The FAR Council has issued a final rule to get this feedback process started. With this system, offerors can comment on their experiences with the preaward process and the debriefing process. To clarify, this system is not for feedback on contract administration matters. The rule creates a new contract clause, FAR 52.201-1, Acquisition 360: Voluntary Survey. The clause will state:
(a) All actual and potential offerors are encouraged to provide feedback on the preaward and debriefing processes, as applicable. Feedback may be provided to agencies up to 45 days after award. The feedback is anonymous, unless the participant self-identifies in the survey. Actual and potential offerors can participate in the survey by selecting the following link: https://www.acquisition.gov/360.
(b) The Contracting Officer will not review the information provided until after contract award and will not consider it in the award decision. The survey is voluntary and does not convey any protections, rights, or grounds for protest. It creates a way for actual and potential offerors to provide the Government constructive feedback about the preaward and debriefing processes, as applicable, used for a specific acquisition.
Unsurprisingly, the program was mostly welcomed by contractors. There is one big caveat, however: The rule itself will not be mandating that clause be included in any contracts. Commentors attempted to convince the FAR Council otherwise, and the response was:
While actionable feedback is desired, it is equally important that participants understand the survey is completely voluntary and will not impact the outcome of a specific acquisition. Adding language to further encourage survey use may confuse participants or compel a response out of fear that not responding would preclude the opportunity to participate in an acquisition.
We admittedly find this response puzzling. It is unclear how requiring contracting officers to provide contractors with information on how they can provide feedback in Acquisition 360 would be confusing or somehow give contractors the impression they must provide feedback. Indeed, the FAR Council’s statement seems to not even be responsive to the actual assertion: It reads as though the FAR Council believes the commentator was stating that contractors should be forced to provide feedback, rather than that contracting officers should be forced to make offerors aware of Acquisition 360 for the acquisition. It’s more likely that many agencies were not keen on the idea of telling contractors how they can critique their acquisitions.
That said, there is nothing preventing agencies themselves from requiring their contracting officers to include the clause. No doubt many agencies will take this well and require it of their officers. However, we suspect that some agencies will be reluctant to implement it, and so the FAR Council may want to circle back on this after some time has passed to see how much it is being utilized.
Additionally, offerors and the public should not expect access to any individual instance of feedback submitted through Acquisition 360. The information will be retained for internal government use, although the government is considering producing generalized data sets based on the combined survey responses. In any case, the FAR Council reasons that “the open-comment fields present the possibility of personal or private information being disclosed, if entered voluntarily by a participant.” As such, “review and redaction of comments would be necessary prior to publication to prevent the unintentional release of personal or private information.” This position is understandable, but at the same time, we think the government should consider balancing this out with its other aim of transparency when it reviews how this program is working.
Overall, we think the feedback system idea is good, and we think it can help improve the acquisition process. That said, we are concerned that agencies and contracting officers also have a substantial incentive to not utilize it: Why make potential critics aware of how they can provide criticism? However, we expect that this will be utilized by many agencies. After all, DoD implemented its extended debriefing process on its own, and that has helped improve its acquisitions. In any case, we think this is a step in the right direction. Contractors: If you want to provide feedback on the acquisition process for a solicitation you bid on, keep in mind Acquisition 360. The newest version of the system goes into effect on September 22, 2023.
Questions about this post? Email us. Need legal assistance? Call us at 785-200-8919.
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The post Watching the Watchman – New FAR Rule Opens Door to Further Feedback on Acquisition Process first appeared on SmallGovCon - Government Contracts Law Blog.- Read more...
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For the first time in 40 years, the Department of Labor (DOL) updated its interpretation and implementation of the Davis-Bacon and Related Acts in new final rules.
DOL’s new final rules concerning the prevailing wages and fringes contractors must pay their workers on federal and certain federally funded construction projects and published in the Federal Register on August 23, 2023 (88 Fed. Reg. 57526) are, in some respects, a throwback to 1982. In other respects, the new final rules attempt to create robust and new enforcement tools and procedures untethered to the plain language of the Great Depression-era Davis-Bacon Act or any subsequent Related Acts.
For a detailed guide of the new regulations, please consult our 14-page report. It organizes the new regs under four main headings:
- Changes to the ways in which prevailing wages will be calculated and how wage determinations will be prepared and updated by DOL;
- DOL’s self-proclaimed expansion of its enforcement of the Davis-Bacon Act to all “development statutes”;
- Changes to key definitions and terms employed or implicated by the Davis-Bacon and Related Acts; and
- Changes to DOL’s enforcement tools to ensure contractor and subcontractor compliance.
Contractors and subcontractors on projects covered by the Davis-Bacon and Related Acts—and possibly also Inflation Reduction Act projects—should be aware of DOL’s now final regulatory changes and take appropriate steps to ensure compliance once the new regulations take effect.
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Fastest 5 Minutes: Claims and False Claims Act
This week’s episode covers a Federal Circuit decision about jurisdiction under the Contract Disputes Act, a claim for additional costs relating to COVID related delays, and a False Claims Act settlement touching on cybersecurity and self-disclosure, and is hosted by Peter Eyre and Yuan Zhou. Crowell & Moring’s “Fastest 5 Minutes” is a biweekly podcast that provides a brief summary of significant government contracts legal and regulatory developments that no government contracts lawyer or executive should be without.
Listen: Crowell.com | PodBean | SoundCloud | Apple Podcasts
The post Fastest 5 Minutes: Claims and False Claims Act appeared first on Government Contracts Legal Forum.
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Late last year, the United States Office of Management and Budget (OMB) published a memorandum, M-22-18, that required federal agencies to comply with the guidelines regarding ensuring the safety and integrity of third-party software on federal information technology systems. This memorandum applied to the use of firmware, operating systems, applications, cloud-based software and general software.
The memo requires federal agencies to comply with the National Institute of Standards and Technology (NIST) guidance, as detailed in President Biden’s cybersecurity Executive Order 14028, and stipulated that agencies “only use software provided by software producers who can attest to complying with the Government-specified secure software development practices, as described in the NIST Guidance.”
The memo instructed agencies to collect a standardized self-attestation form from all software contractors before deploying their products. Initially, each agency will identify the software and collect the self-attestations forms. The end goal is to create a government-wide central repository of all software-related information, to shore up any cybersecurity vulnerabilities.
I wanted to provide you with a brief update on where the NIH Information Technology Acquisition and Assessment Center (NITAAC) is in the self-attestation process and make you aware of some key dates that will impact your company.
NITAAC is working with the OMB to determine the formal agency posture on this matter. We also are working to finetune the process for our communications requirements, as it relates to collecting the self-attestation forms.
In the meantime, contractors should be aware of the following key dates:
- June 11, 2023: NITAAC deadline to collect self-attestation forms from critical software providers.
- September 14, 2023: NITAAC deadline to collect the forms from all software providers on the NITAAC networks.
- TBD: If needed, NITAAC will request a software bill of materials or other artifact(s) that demonstrate conformance with secure software development practices.
You will hear more from NITAAC as we get additional clarity, however, I wanted you to know you are not in this alone. I understand that this request presents several challenges on your end, in terms of staffing and the additional labor required to conduct and submit the self-attestations.
We face those same challenges at NITAAC. One of the biggest obstacles being faced on the federal level is that of time. The reality is that the government likely will not be able to produce and distribute the attestation forms in a timely manner. Unfortunately, if we cannot do so, this administrative burden will fall upon our contract holders, as you will then need to develop your own forms.
I can’t promise that this process will be smooth, as there are several variables at play, but what I can promise is that we will be as transparent as possible and will make it our business to provide you with timely and relevant updates.
I value our partnership and look forward to attesting the safety, integrity and security of all the software our contract holders provide to the federal government. This will become just one more example of the high-quality, best in class service agencies can expect from the NITAAC Contract Holders.
We will discuss this further on our next Contact Holders’ call.
To read the Executive Order, visit https://www.nist.gov/itl/executive-order-14028-improving-nations-cybersecurity. To learn more about the OMB Memo, visit https://www.whitehouse.gov/wp-content/uploads/2022/09/M-22-18.pdf.
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CIO-SP3 and CIO-SP3 Small Business Open for Business
There is an adage that simply says, “Perfection is attained by slow degrees; it requires the hand of time.” This adage is quite apt for the Chief Information Officer-Solutions and Partners 4 (CIO-SP4) solicitation. In our ongoing quest to bring to market the best Government Wide Acquisition Contract (GWAC), we’ve, unfortunately, had to wait on the hand of time. Although waiting has admittedly caused me both frustration and impatience, it has not stopped NITAAC from continuing to provide any federal agency, government-wide, with an easy, cost-effective and accessible method for acquiring information technology for citizen services or mission delivery.
If there is no other takeaway from this month’s Director’s Corner, please understand that we are open for business and both the CIO-SP3 and CIO-SP3 Small Business GWACs are available, and will continue to be available, for agency use. Both GWACs have been extended through April 29, 2024, to ensure there is no gap in contractual coverage between CIO-SP3 and CIO-SP4. The extension allows our customers to continue to acquire mission-critical information technology on our fast and cost-effective GWACs through the remainder of the fiscal year. Rest assured, we are ready and capable of fulfilling all your task and delivery orders to ensure all your mission-critical information technology (IT) needs are met.
NITAAC was developed specifically by the government for the sole purpose of speeding up IT acquisition for the government. I am grateful we have provided acquisition support to virtually every federal agency, department and program in the federal government since we launched over 25 years ago as part of the Clinger-Cohen Act. No matter how large or how complex your IT challenges may be, you can count on NITAAC contractors to get IT done quickly and get IT done right. From operations and maintenance of legacy systems to complex, emerging technologies like Cybersecurity and Artificial Intelligence (AI), NITAAC contractors are ready to help federal agencies excel.
As we head into the end of the fiscal year and approach buying season, NITAAC is here to help you. Our three GWACs, CIO-CS, CIO-SP3 and CIO-SP3 Small Business have everything you need to get IT done, from a pool of highly qualified contractors to robust labor categories, multiple task areas and a multitude of socioeconomic categories to help you meet your goals. NITAAC is your one-stop shop for all things IT.
The perfection of CIO-SP4 has not changed the one fundamental value every NITAAC team member upholds and that is our commitment to customer service. Customer service is not something we take for granted. We've geared our operations around your needs, so whether you are just beginning a solicitation and need help with research, or you’ve already placed a task or delivery order on one of our vehicles, NITAAC is committed to making sure you get answers faster, so you can keep your acquisitions and mission critical IT needs on tracks. This commitment to service is something we will continue through the close out of CIO-SP3 and the introduction of CIO-SP4.
I invite you to experience our customer service firsthand. To obtain a complimentary, Technical Assessment of your Statements of Work, Statement of Objectives and Performance Work Statements, or to simply learn more about all the ways NITAAC can help you exceed your IT goals, contact our customer support team at NITAACsupport@nih.gov.
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