joel hoffman

Ok, Sam101 says that he issued a request for quotations (“it was an an RFQ in real life”) and that he had received quotations. I have no intention of educating you, Vern. But I will try to explain some differences between an offer and a quotation to Sam - at least of prices. After spending the day doing yard work, I pulled out my textbook from my two Business Law classes that I took in night school in 1982-1983 at Mississippi University for Women in Columbus, MS. Yes, I was one of the first “W-boys” at MUW, after a male nursing student won a lawsuit opening up the W for males to enroll for credit, not for simply auditing classes. It was in the Division of Business and Economics. My Professor was Dr.James G. Brown, a local Columbus Attorney. My source is Part 3 Contracts, Chapter 10, “The Agreement” in the textbook Business Law, Eleventh Edition (UCC Comprehensive Volume), published by South-Western Publishing Company, copyright 1980. The Author was Ronald A. Anderson with Contributing Authors Ivan Fox and David P. Toomey. One of the essential elements of a contract is an agreement. An agreement is formed when an offer is accepted. An offer expresses the willingness of the offeror to enter into a contractual agreement regarding a particular subject. It is a promise, which is conditional upon an act, a forbearance or a return promise that is given in exchange for the promise or its performance. To constitute an offer, the offeror must intend to create a legal obligation or must appear to intend to do so. When there is neither the intention nor the appearance of the intention to make a binding agreement, there is no contract. A price quotation, similar to a seller sending out circulars or catalogs listing prices is not regarded as making an offer to sell at those prices, but as merely indicating a willingness to consider an offer made by a buyer on those terms. The same principle is applied to merchandise displayed in stores with price tags and most advertisements. “For sale” ads in newspapers, etc. are -generally - merely invitations to negotiate and not an offer which can be accepted by a reader. There are exceptions but I’m using these as examples of “an invitation to negotiate”. I became aware then that - even when there is a sticker price on it or an ad for a car, when one goes into the dealership and asks them what their best price is, they will tell you to make an offer.** My instructor told us that everything with price tags or ads or catalog prices is theoretically, generally negotiable, unless it specifically says otherwise. “Price quotations, even when sent on request, are likewise not offers… in the absence of the existence of a trade custom which would give the recipient of the quotation reason to believe that an offer is being made….Whether a price quotation is to be treated as an offer or merely an invitation to negotiate is a question of the intent of the party making quotations.” I don’t disagree with Vern that it isn’t explained well. The FAR is a mishmash… And- many government contracting and other acquisition personnel are reluctant to or loathe negotiating. The FAR allows them to offer less than quoted prices or catalog prices and encourages them to seek price reductions. Yet many a discussion in the WIFCON Forum concern ways to avoid discussions or negotiating for better performance. Sad… Don’t Colleges of Business teach anything about commercial selling practices or the Uniform Commercial Code, etc.? ** Recently, there is a trend by auto dealers to set “no haggle” prices, which means they aren’t inviting you to make any other price offer. Those might be legally considered to be an offer that the dealer would have to live up to if you accept it.

I’m only going to say here that a quote is not an “offer” ; there are significant differences between quotes and offers; there are significant differences between best value trade-off and “best value” * LPTA processes; I quoted the requirements to define to the industry what is “acceptable” for an LPTA acquisition process; that concept should be obvious whether making a commercial or non-commercial purchase. *Please note that, before Part 15 was rewritten in 1996, as part of “Acquisition Streamlining”, the LPTA was not defined as a “best value” process. It was incorporated in the Part 15 Re-write as being within the “Best Value Continuum”. The Re-Write otherwise was re-miss in not addressing distinctions between the previously separate concepts of LPTA and “best value”.

I’m afraid that you are going to need to clarify your post. Your company won a “new project”. Is it an order under your GSA schedule contract? If yes, see also this site for further clarifications: https://www.gsa.gov/buy-through-us/purchasing-programs/gsa-multiple-award-schedule/schedule-features/contractor-team-arrangements What kind of “agreement” do you have with the other Company? If they are a sub, what do their GSA schedule rates have to do with their pricing? And if an order under your GSA schedule, did the ordering activity state that they have to approve subs before performing?

Sam, your initial post is quite misleading. It would have been nice to know that you were talking about commercial item/service “quotes”, not an LPTA Part 15, source selection process. You repeatedly referred to “proposals”, not “quotes”, “offerors” , not “quoters”, Part 15 source selection procedures, and case law for a Part 15, best value trade-off acquisition. EDIT: Quotes are not offers. The government makes an offer in response to a quote…

If this is the full extent of what you describe in the request for proposals, then it doesn’t meet the minimum requirements expressed in either the FAR or DFARS references provided above. Why would you expect industry to spend money and resources to prepare technical and price proposals without knowing what is “sufficient experience” or what is “relevant experience” ?

This was a best value trade off acquisition decision, not an LPTA acquisition decision. For LPTA, the government must clearly and comprehensively describe the minimum requirements. The government cannot subjectively judge the qualifications or non-price factors of one proposal as more desirable than another competing proposal. Thus, the government must provide enough information for each proposer to determine the minimum acceptability requirements to qualify for contract award. Price is the determining discriminator for the award. “DFARS 215.101-2-70 Limitations and prohibitions. a) Limitations. (1) In accordance with section 813 of the National Defense Authorization Act for Fiscal Year 2017 (Pub. L. 114-328) as amended by section 822 of the National Defense Authorization Act for Fiscal Year 2018 (Pub. L. 115-91) (see 10 U.S.C. 3241 note prec.), the lowest price technically acceptable source selection process shall only be used when— (i) Minimum requirements can be described clearly and comprehensively and expressed in terms of performance objectives, measures, and standards that will be used to determine the acceptability of offers; (ii) No, or minimal, value will be realized from a proposal that exceeds the minimum technical or performance requirements; (iii) The proposed technical approaches will require no, or minimal, subjective judgment by the source selection authority as to the desirability of one offeror’s proposal versus a competing proposal;” “FAR 15.101-2 Lowest price technically acceptable source selection process. (c) Except for DoD, in accordance with section 880 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115-232, 41 U.S.C. 3701 Note), the lowest price technically acceptable source selection process shall only be used when— (1) The agency can comprehensively and clearly describe the minimum requirements in terms of performance objectives, measures, and standards that will be used to determine the acceptability of offers; (2) The agency would realize no, or minimal, value from a proposal that exceeds the minimum technical or performance requirements; (3) The agency believes the technical proposals will require no, or minimal, subjective judgment by the source selection authority as to the desirability of one offeror's proposal versus a competing proposal; (4) The agency has a high degree of confidence that reviewing the technical proposals of all offerors would not result in the identification of characteristics that could provide value or benefit to the agency;”

If the contracts are both cost reimbursement types, then it isn’t complicated to track and invoice for the travel expenses associated with the appropriate contract that the employee is working on. Id be surprised if the KO directed you to charge the travel costs during the time that the employee works on the new contract to the old contract. Linda Y, What is the problem??? EDIT: Do you plan to invoice the old contract for your employee’s ongoing “TDY” travel expenses to work on the new contract after the period of performance of the prior contract? If the KO would allow that, it seems clear to me that the government would be augmenting the funding for performance of a new contract with funds from the earlier contract. “As explained in the Government Accountability Office (GAO) Red Book, “the objective of the rule against augmentation is to prevent a government agency from undercutting the congressional power of the purse by circuitously exceeding the amount Congress has appropriated for that activity.” In addition, Title 31, US Code, Section 1301(a), states that “appropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law.” End Quote. See, for example: https://www.dau.edu/acquipedia/pages/ArticleContent.aspx?itemid=8#:~:text=Another type of potential Anti,rather than a specific statute.

In addition to Vern’s questions, why would the government “extend” the contract to complete the trip? I’m assuming that you mean return the employee somewhere at the end of the first contract. Certainly, the employee(s) wouldn’t still be working on the new contract for you, if the new contractor doesn’t hire them. However, with respect to the original question, It seems obvious to me that, when an employee(s) works on a new contract, the employee’s labor costs and any associated “travel cost” incurred during that new period of effort* - regardless of the fact that it is continuation of a trip that began under a previous contract - should be allocated and charged to the new contract in the accounting system and for payment by the government. *If you’ve already paid for and charged the other contract for a round trip ticket, that might be an exception, depending upon the circumstances, the two contracts’ pricing arrangements, etc. I’m talking about costs incurred during performance of the new contract during a continuation of the original trip. That is what I think you are asking about. You posted this thread under the “newbie” discussion area. But please respond to Vern’s questions…

Then that portion of the travel costs would be charged to the government on the new contract. Otherwise using government funds from the prior contract for the new contract work would be augmenting the funding for work on the new contract. That generally is unauthorized, is an allocability issue and is a potential Antideficiency Act violation for the government.

This is not clear as to the purpose of the travel. What travel was scheduled at the end of the current POP and for what purpose was it incurred? What is the purpose of the continuing travel and associated travel costs? Where it is accounted for and/or charged depends upon the circumstances. Thus, a reason for my speculation.

Also speculating, that the initial travel costs and some of the daily travel costs were incurred for the predecessor contract and speculate that the “overlapping” travel costs “into the new contract” are being incurred for the purpose of “the new contract”. If so, I believe that they are allocable to the respective contracts for the purposes which they are incurred under each contract. The thread is under “For Beginners Only”, so I posted some of the general principles regarding allocating direct costs to the contracts based upon the purposes that they were and now are being incurred. I think that these direct costs need to be accounted for consistently with the purpose for which they are being expended.

Regarding CAS rules, I’m not up on those. However, I believe CAS is generally consistent with the above and probably even more specific than the general rules…

If you are asking about accounting for the (direct) travel costs and especially concerning billing the costs under the respective contracts, I believe that the costs generally must be allocated (i.e., “split”) to the respective contracts under which and for which they are incurred. See FAR Part 31 general discussion concerning allowability and Allocable Costs “31.201-2 Determining allowability. (a) A cost is allowable only when the cost complies with all of the following requirements: (1) Reasonableness. (2) Allocability…” “31.201-3 Determining reasonableness. …(b) What is reasonable depends upon a variety of considerations and circumstances, including- (1) Whether it is the type of cost generally recognized as ordinary and necessary for the conduct [of the contractor’s business or] the contract performance; 31.201-4 Determining allocability. A cost is allocable if it is assignable or chargeable to one or more cost objectives on the basis of relative benefits received or other equitable relationship. Subject to the foregoing, a cost is allocable to a Government contract if it- (a) Is incurred specifically for the contract; See also FAR discussion concerning consistency in accounting practices. You didn’t say whether these are fixed price or cost reimbursement contracts. However, it would seem that your accounting practices concerning where you account for these costs should be consistent and you should properly allocate the costs to the contracts under which and for which they are incurred. EDIT: From FAR 2.101 Definitions: “Direct cost means any cost that is identified specifically with a particular final cost objective. Direct costs are not limited to items that are incorporated in the end productas material or labor. Costs identified specifically with a contract are direct costs of that contract. All costs identified specifically with other final cost objectives of the contractor are direct costs of those cost objectives.”

Agree that they are different matter for entering the 1102 career field.

This refers to the Defense Acquisition Workforce Improvement Act (DAWIA) designations of Levels I, II and III in Contracting for acquisition.

…and from my experience with construction/design-build/A-E draft legislation, that’s not saying much either.

My first read earlier was - where is any real procurement experience or demonstration of acquisition qualifications for that position?

Noted. Just, trying to be somewhat polite to a new member after his first time posting.

As is seemingly often the case, an original poster will ask questions which are very broad without context, then not.respond to requests for clarification or more context. According to George’s profile, George joined, posted and last signed into the Forum on 5 April 2023.. George, 13 days later, are you still “Curious”? Please see : “By bob7947 April 18, 2018 in Before You Register, Before You Post, Instructions for Writing Your Question” Please see, in particular: “…4. Don't post and run! Sometimes, you will receive a response or a request for further information within minutes of your post. At least be ready to respond within the same day. If you are gone for too long, Members will forget about your post or get frustrated and not respond again. Stay engaged with them until you are satisfied.”

…is like this, for example, I assume? https://qualityops.com/lease-multifunction-copiers-baton-rouge/ …or https://www.gsa.gov/cdnstatic/General_Supplies__Services/GSA_MFD_Buying_Guide.pdf

Depending upon the primes reasoning, if they aren’t justified in withholding payment to the sub, you might be able to document it for reference in a future A-E selection. I’d recommend some research and discuss with your OC. If that is a possible course of action, you might consider that in any “encouragement” correspondence”, if you need to write an encouragement letter. Of course, coordinate with KO and OC.

Glad to help you!

Note that “we” don’t “certify” that the services provided, etc. Paragraph (a)(3) doesn’t mention any government certification. Paragraph (a) (3) isn’t applicable: (a)(3): “For any contract, whether the contractor’s certification of payment of a subcontractor or supplier accompanying its payment request to the Government is accurate.” I didn’t see any requirement for contractor certification of payments to subs in the above two referenced A-E contract clauses. But see paragraph (b): “ If, in making the determination in paragraphs (a)(1)* and (2)** of this subsection, the contracting officer finds the prime contractor is not in compliance, the contracting officer may- (1) Encourage the contractor to make timely payment to the subcontractor or supplier;” * Paragraph (a)(1) (construction contract) isn’t applicable. **See paragraph (a)(2): “(2) For a contract other than construction, whether the contractor has made progress payments, final payments, or other payments to the subcontractor or supplier in compliance with the terms of the subcontract, purchase order, or other agreement with the prime contractor”. So- you should see - for an A-E contract, there isn’t much you can do after final payment, other than “encourage” the contractor to pay its sub. I’m speculating that you probably don’t know whether or not there is any valid reason that the prime hasn’t paid the sub. If so, you haven’t made the required determination yet. Did you call the prime to discuss the sub’s complaint and get its side of the story?

Note that there is a big difference between the payment and prompt payment clauses for FP Construction and FP A-E contracts. There may be valid reasons or a dispute between the A-E and its sub regarding the non-payment. You said final payment was made last year. It is now April… Since you mentioned your Office of Counsel, you might be with the USACE. If so, USACE has plenty of legal support at District and HQ level offices and has policies regarding payment problems.

I believe that this is a legal matter between the A-E prime contractor and its subcontractor. Since the contract is closed out, your Office of Counsel should advise you what actions can be taken at this point. Since they rejected your letter, they should know what needs to be said. They should advise you what to say or write the letter. I’m assuming that these clauses apply to your contract. The A-E wasn’t required to certify that they will or did made payments to subs in order to be paid for progress or for the final payment. 52.232-10 Payments under Fixed-Price Architect-Engineer Contracts. 52.232-26 Prompt Payment for Fixed-Price Architect-Engineer Contracts.