joel hoffman

Thanks, Shauna. It appears to be inappropriate and/or contradictory. It also says that it is Performance Based Service acquisition (50% or more is PBA) Do you know which line items are applicable? Also said it was competitive, Best Value Tradeoff with four offers but Cost or Pricing Data were required???

As I previously said, it’s not a commercial product or commercial service contract under FAR Part 12. Then, FAR Part 12 isn’t applicable to the contract described herein. The services are of the type that would otherwise be “commercial services” if priced as FFP.

I think that there should be a payment clause in the contract in addition to the DFARS clause at 252.232-7003 Electronic Submission of Payment Requests and Receiving Reports. See paragraph (f) of that clause: “(f) In addition to the requirements of this clause, the Contractor shall meet the requirements of the appropriate payment clauses in this contract when submitting payment requests.” The scope of Subpart 232.70 - “ELECTRONIC SUBMISSION AND PROCESSING OF PAYMENT REQUESTS AND RECEIVING REPORTS “prescribes policies and procedures for submitting and processing payment requests in electronic form to comply with 10 U.S.C. 4601 (procedures for submitting and processing electronic invoices). It would appear that you aren’t fully complying with the statement of work requirement to work 40 hours per week, Thus you may be partially non-compliant with the terms of the contract but appear to be invoicing for work that is specifically required by the contract.

Carl, sorry, I should have clearly stated that, yes- you can use a non- Part 12 service contract to acquire cost reimbursable services of the type that would otherwise be “commercial services” if priced as FFP.

*Added by me. Perhaps the reason for not using a Part 12/13 Commercial Services format here are the prohibitions at FAR 16.301-3 (b) and FAR 12.207 (a) against using such format for acquisition of commercial products or services priced as cost reimbursement. I mentioned the FAR 12.207 (a) prohibition early on in this thread but it wasn’t acknowledged or challenged. Instead, everyone here seems to wonder why it isn’t structured as a Part 12/13 commercial item contract. 16.301-3 (b) “The use of cost-reimbursement contracts is prohibited for the acquisition of commercial products and commercial services (see parts 2 and 12)“ “12.207 Contract type. (a) Except as provided in paragraph (b)* of this section, agencies shall use firm-fixed-price contracts or fixed-price contracts with economic price adjustment for the acquisition of commercial products or commercial services.” * discusses conditions for use of time and materials contracts for acquiring commercial items and services. As another example, most of the products commonly incorporated into most construction contract building or horizontal utility projects are “commercial” products (as opposed to Federal Spec specific items for instance). There used to be “Federal Specifications” (FEDSPECs) and/or Military Specs (MILSPECs) for almost anything back in the day before commercial specs were widely standardized**. That doesn’t make a construction contract a commercial product or services acquisition, because of many other factors that affect the cost or price of the acquisition. So why can’t you have a service contract for such services when the Part 12 formats aren’t applicable due to the type of pricing used.? Yes, you can use a non Part 12 service contract for cost reimbursable services. Non Part 12 service contracts were used for decades before Part 12 was developed. Part 12 commercial item contracts accommodate simpler means to acquire common industry standard products and services (when priced as FFP or certain T&M) , as opposed to requiring government specific, specified products and services. ** I remember reviewing product submittals for toilet partitions that had specific Federal Specifications or Military Specs, comprising several pages of detail. Heck, there were FED or MIL specs for screws and nails, even! We also had Federal Specs for almost any kind of soil tests, Portland Cement Concrete, Asphalt Cement and Coal Tar Cement paving materials and mixtures, density testing services and many other services. Now the industry standard specs are usually adequate.

Someone else said that, not the original poster.

@shaunaMSACM, thanks for the link. I’m out of town and it’s very difficult to try to read the solicitation on my cell phone where I am. I read the description of the intended services but will read the details later. However, my original post asked how a commercial products or commercial services contract for inspecting and refurbishing a ship can be priced as cost reimbursement? And the change clause cited is for fixed-price (task orders). I’ll read the details…

Are you asking: 1. if an original cost reimbursement contract task can be modified to use the “new technology? or as an alternative, 2. Can the task can be transferred from the original contract (by deletion change? or a partial termination for convenience?) and added to an existing “follow on” contract that is using the new technology ?

Is the QA function required to be full-time when work is being performed and is the work being performed on-site or off-site? Edit: One point is that, regardless of the limitations of the contract language, if the employee’s full cost of salary and fringes, etc. is being charged directly to the FFP portion of the contract in the company’s accounting system, there is no extra COST to the company for performing the cost reimbursable tasks. Then the company is double charging…

*Does the contract require full time quality assurance? What is the role of a quality assurance test manager? I don’t believe that the contractor incurred any additional cost for the person who performed the additional tasks, assuming that you have verified who performed the task and that the tasks were performed during normal duty hours. You have the right to find out who performed the tasks. The contractor proposed and is essentially charging you in the FFP contract price for a full time employee. Is that correct? Now the contractor is charging you again for some of that same person’s time. That is double charging in my opinion. Under cost reimbursement, the contractor has to be able to show that it incurred a cost to perform the task. I don’t think that the contractor can prove that there is any additional cost incurred to perform those reimbursable tasks if it is already paying the person and charging it to the contract in its accounting system. Is the person an hourly or salaried employee? If salaried, it (probably?) already incurred a cost to the contract that it supposedly included in the contract price. Did you say whether the employee is working full or part time on the job? Is this an on-site or off-site employee? I may have missed that For a cost reimbursement CLIN, It is the contractor’s responsibility to justify the additional cost to the contract to be reimbursed. You didn’t say that it is a time and material CLIN. I didn’t see where you or the COR/KO required the contractor to or where the contractor substantiated the additional cost to be reimbursed.

The “agency” includes the KO, too. There is an acquisition team.

I have never heard of a “unilateral agreement”. An agreement consists of concurrence by the contract parties concerning some matter. Do you mean a unilateral decision by the government to determine entitlement to an excusable delay and establish or deny a time extension?

How is a contract or task order when acquiring products or services priced as cost reimbursement or cost reimbursement with fixed fee a FAR commercial product/service contract? ” 12.207 Contract type. (a) Except as provided in paragraph (b) of this section, agencies shall use firm-fixed-price contracts or fixed-price contracts with economic price adjustment for the acquisition of commercial products or commercial services.” (b) (1) A time-and-materials contract or labor-hour contract (see subpart 16.6) may be used for the acquisition of commercial services when…”

Who was the scholar and what is the source ? Did I miss it?

Way to go, Carl. Putting this in perspective, is the government worse than the myriads of ridiculous terms and conditions imposed every day by businesses. What I think is especially ridiculous are all the exceptions written into the warranties, etc. that you can’t read until you buy the product and open the package…

@formerfed, is this the article:

Did you mean to say something, formerfed? 🤠

LOML has disengaged from the thread after 3 September, leavingw many responders’ questions unanswered and much speculation. I suggest we not waste any more time continuing to respond…

Please clarify. What does “below the market that is offered by the owner” mean? Are you saying that the lease price is below the market price and is reasonable in amount? Please clarify. Are you saying that it would be included in the G&A pool and that it “is” (already)(?) or did you mean “ it will be”(?) the “main office” of the contractor? Where is the firm’s “main office”now? Does the “main office” serve the contractor’s other contracts too (I.e., the total cost denominator for G&A includes the total cost of company sales or similar designation)? Just need to understand the full context of the scenario. Thanks.

🙏🙏🙏🙏

Is “now” before finalizing the task order or after bilateral agreement and issuance? If before, II definitely would agree with the contractor. If the contractor agreed with the requirement during the negotiation of the task order and later balks, I’d disagree… ————————————- On FFP construction contracts for lump sum CLINs, the Corps of Engineers for decades has required and obtained rather high level breakdowns of the CLIN values - to assign to schedule activities for tracking progress and for preparing progress payment invoices. It might include percentages of labor and materials and sometimes mobilization share of the CLIN price. If a lump sum activity was subcontracted, they would provide that value and any high level breakout. But I’ve never seen a requirement for reporting detailed actual costs for the direct and indirect “costs” for invoicing on lump sum CLINs. We’d use the percent progress performed. I do remember one large RR bridge and trestle project where the subcontract cost for the bridge fabrication and materials was more than the entire CLIN price for the installed bridge. So they had to prorate the subcontract cost for the fabricated bridge materials, shipping and installation for progress estimates. Of course they made up that underbid item on other parts of the project.

Looking forward to your upcoming article, Vern. The 1980 GAO memo to OFPP is very informative and mirrors much of my arguments. Even then, GAO was indicating that there was no need for “protection” for organized labor for small, relatively insignificant projects below the then $10,000 simplified acquisition limit, let alone a $2,000 threshold. Such contracts were reserved for small business firms. Those firms generally aren’t unionized and are burdened by administrative costs and manpower resources to comply with D-B. The GAO said that the D-B protections were designed for workers on large project [not minuscule projects that would likely be performed by non-union employees anyway]. Sorry for rambling. I’m done now.

As an example, the Davis-Bacon threshold was higher ($5000) 93 years ago than it is now. They lowered it 89 years ago to $2000. That’s longer than anyone here has lived. Trivial? That’s an understatement. A dollar then was worth over 20 times what it is today. Today a dollar can buy about 4.4 cents of what a dollar could buy back then. My dad earned $1 a day plus meals and a cot in his Army run CCC Camp in 1933. $2000 was equivalent to 2000 man days of work. 🤪

Carl, when you have to use multiple trades to perform a tiny amount of work…which is reserved for small business firms anyway, it’s not practical for Unionized contractors. So there is no need to “protect” or promote union labor on such small jobs. But it probably will be the same for Longer time. Common sense isn’t evident here.