joel hoffman

Fara, Carl didn’t suggest that…

Competitively negotiated procurements with adequate price competition (or commercial products or services) - as discussed here- would generally qualify for an exemption from submission of certified cost or pricing data. I often conducted price discussions in competitive acquisitions. At the most I might occasionally ask for some “data other than certified cost or pricing data”.

Thursday, 6 Jun 2024 at 02:13 PM, @KJKD posted: “FFP contract - major equipment contracted. can you take money left over and buy something someone who proposed messed up on (supposed to be qty 5), then move money around to make up for it?” ________________________________________ @JKJD, your initial post makes little sense to me. How can anyone answer your question without speculating about it or the scenario/context? Please relax, think about it and clearly explain the situation and then phrase your question. For example: What type of FFP contract is it? Commercial products? Supply contract? GSA Federal Supply Schedule/Multiple Award Schedule, etc.? Where is the money left over and from what action? Is there less than a quantity of five pieces of equipment? What is the mistake and who made it? Can you move money around (from where? To where?) to “make up” for what?? I am assuming that a contract has been awarded. Is that correct? Thanks

Ah, good catch, Carl. I missed it and nobody asked. Even if the subcontract is for a commercial product or commercial service, my previous comment is applicable and the prime isn’t bound to simply accept the second “supplier’s” prices because they were based upon competition.

The exemption from submission of cost or pricing data doesn’t mean that the prime doesn’t have ensure that the subcontract prices are fair and reasonable, especially if the second firm’s prices are significantly higher than “the winner’s” prices for the same effort or products. Of course differences in non-price (e.g., technical approach) could affect prices… The exemption is only applicable to certified cost or pricing data, not “data other than certified cost or pricing”.

The initial post seemed to indicate to me that the program office wanted to make a split award and wanted to know why it couldn’t be done. And it appeared that the Original Post was referring to split awards at the prime contract level. We asked for more context. DawnS then revealed that the solicitation was at the subcontract level and that the solicitation mentioned the possibility of split awards. This was the first mention of subcontracts… The mention of certified cost or pricing data indicates that there would likely be negotiation involved with respect to the second vendor. Why would one ask for CCOPD to determine whether a competitively submitted price is fair, reasonable and acceptable? Why would one ask for CCOPD unless they intend to negotiate a proposal? Why would one ask for CCOPD to bargain/negotiate a competitively submitted price? The bottom line is that there is an exemption to otherwise applicable CCOPD if you are negotiating competitively submitted prices with one or more firms for awards to those firms.

Sorry for my edits but please see my last edited reply…

The competition exemption from CCOPD can certainly apply to multiple awardees. The second firm is still “successful” in obtaining an award, just “not as successful” as the first one However, if you (and/or the Gov’t. Program Office) aren’t satisfied with the second awardee’s prices, you could bargain with them for better pricing. Since you weren’t sure whether or not CCOPD was required, you obviously would have the right under your issued solicitation to negotiate with one or both vendors, correct?. And If you aren’t satisfied with the non-price portion of the second firm, could you also bargain for better performance under the terms of the subcontract solicitation? The CCOPD exemption under 15.403-1(b)(1) would still apply due to adequate competition.

Well, this appears to be a completely different scenario than initially described. However, your solicitation mentioned the possibility of split awards. Prices were competitively obtained. I don’t see why there is a need for certified cost or pricing data from either firm. They would both be competitively obtained awards.

I will echo Vern’s question. Some more context is necessary. Whether or not you can even make a split award or a partial award to one of the vendors without further interaction with both firms would seem to be dependent upon what the “competitive solicitation” described as the basis of award. That would seem to me to be applicable regardless of the type or size of the solicitation. For instance, if the solicitation says something like “Award will be be to the [firm[ [offeror] [vendor] which provides the best value…”, to make a split award or a partial award of the scope is a modification of the initial basis of the solicitation initially sent to the two firms. It would be a change to the ground rules of the competition If so, then, as a minimum, I’d think that you will need to amend the solicitation to allow and describe a split or even a partial award. It appears to me, based upon the limited information provided and your question, that what the program office is requesting is a modification to the scope and quantity of possible business that the initial solicitation described and/or was based upon. Maybe one or both firms would not be interested in a partial, shared award for a smaller scope/amount/nature of business than you initially solicited. Or maybe their prices would be different (higher?/lower?). [EDIT: Where does the original poster mention subcontractors in this thread]?

In addition why is this posted under the Subcontracts and subcontract management discussion area?? It belongs under “contract award” or some other similar discussion area.

What I don’t understand is, unless this was a competitive (8a), single award ID/IQ , it should have initially been negotiated for at least the Time and Material base year. And you are obviously negotiating an option year price. Why hasn’t anyone asked the procuring agency during the initial negotiation or now during the current negotiation how to apply the set “combined rate”? Was the rate initially negotiated? If the rate is “vague” I would (have) certainly discuss(ed) it with the agency during negotiations… I don’t think anyone here can answer your initial questions but the agency should be able to. Assuming this is a sole source negotiated contract with negotiated option year pricing, it could justifiably be set-up as T&M base year followed by FFP option years. We dont know what type of “engineering” effort or products are involved.

The OP has not said that this was a MATOC or a competitive set-aside contract. Carl, 1. What is your concern about 13 CFR 124.404? 2. 13CFR 124.505(a)(4): “(a) What SBA may appeal. The Administrator of SBA may appeal the following matters to the head of the procuring agency: …(4) The terms and conditions of a proposed 8(a) contract, including the procuring activity's NAICS cod designation and estimate of the fair market price.” The contract is already awarded. We don’t know what the agency solicitation/RFP for the 8(a) IDIQ engineering contract stated the possible pricing methods could be. 3. 13 CFR 124.510(b)? The OP already said that the subcontractor is a similarly situated entity. The limitation on subcontracting is not applicable to a similarly situated subcontractor here, is it? 4. 13 CFR 124.514: I don’t necessarily see a problem with pricing options, post award, here. “…(2) If the concern is still a Participant and otherwise eligible for the requirement on a sole source basis, the procuring activity contracting officer may negotiate price and exercise the option provided the option, considered a new contracting action, meets all regulatory requirements, including the procuring activity's offering and SBA's acceptance of the requirement for the 8(a) BD program.”

What is the wording of the 36% stipulation? Please quote it. My inclination is that it doesn’t apply to subcontracts but please quote the stipulation in the contract.,

I agree with that. I think I asked such a question earlier today.

So, you may think that commercial entities don’t include incentives or other terms in contracts to encourage or incentivize on-time performance or delivery, when such is deemed critical? I will venture a guess that timely performance is more often then not a primary goal and objective in the commercial marketplace.

For DOD A-E contracts or for construction contracts with contractor provided design (e.g., design-build contracts or standard construction contracts with a contractor designed building system(s)) , see DFARS 227-7107 “Architectural designs and data clauses for architect-engineer or construction contracts” paragraphs .(a), (b) and (c). This provides the prescription for contract clauses regarding non-exclusive (a) or exclusive (b) Government rights to the data pertaining to the design and the design-products. A clause pertaining to the government’s rights to shop drawings (including any design furnished) is prescribed in (c). The clauses are: 252-227-7022 Government Rights Unlimited 252-227-7023 Drawings and Other Data to Become Property of the Government 252-227-7033 Rights in Shop Drawings

I remember such concerns that early delivery could result in additional storage and other costs, plus possible problems with aging/deterioration in storage or early commencement of warranties, etc. Just in-time delivery of parts and assemblies in industry is very popular these days. I imagine that cost as well as cost impacts for early or late deliveries are important for manufacturers. An additional net $.10 or $1.00 cost per each of 50,000 or 1,000,000 vehicles is extremely important to manufacturers. How do manufacturers structure their supplier contracts for on-time deliveries? Obviously, I’m not an industrial engineer or efficiency expert. Those are the experts in these areas.

Did you mean “is it okay…”? I would presume that the government’s expectation is to receive the product(s) on-time. i don’t know what the vendor’s delivery expectations would be. Yes, if it provides some additional value. Otherwise, I would likely disagree with paying a bonus price incentive for earlier than required delivery performance. I agree. The price should presumably reflect meeting the required delivery date. The specific concerns expressed in the original post are over this specific contractor’s past performance history of late deliveries and the resulting impacts to the government and programs if this delivery is late. As this is a sole source acquisition from the OEM source, the vendor will preumably have the opportunity to price the product to consider what it will take to ensure on-time delivery. Of course, it can also price the order in advance to simply cover intended or unintended late delivery liquidated damages… So, are there other non-monetary incentives available to consider?

Are you working for or representing the government contracting agency or are you a non-government, A/E contractor/prospective A/E contractor? If government, are you preparing a solicitation OR - is there an existing contract with clauses in it? In other words, what is the specific context of your request for guidance or insights? Correct. Yes, FAR Part 27 AND any applicable Agency supplements would provide guidance and prescriptions for clauses, as specifically applicable to the project design products. The government’s rights and/or contractor’s rights depend upon the specific circumstances. What is your general or specific question regarding intellectual property rights for design copyrights? What agency are you with or dealing with?

If the government will suffer damages for late delivery - which is your apparent concern, you could alternatively study FAR subpart 11.5 and consider liquidated damages for a commercial item or supply contract. One has to be careful in how they implement such an approach. For a positive incentive, do you want to pay more (is there any benefit) for early performance? If so, then a delivery performance incentive (16.402-3) (plus and minus) could be the answer. Do you want to pay a performance bonus for on-time performance?

Im assuming that you are referring to AMS = “Acquisition Management System” for the Federal Aviation Administration (FAA). Please see Rules for Posting , rule #16: “16. Abbreviations are to be kept to a minimum--preferably none at all--so that others can interpret a post and respond to it intelligently.” Thank you.

Why can’t you modify proposed, unfinalized Blanket Purchase Agreements ?? Get it straight now, not try to amend multiple BPA’s later. Some players might not agree to amend the terms their agreement or may withdraw prior to finalizing the agreements. BPAs are not contracts but agreements to use to solicit purchase orders.

Bob, by “consolidate the FAR, are you referring to development of a “Federal Acquisition Regulation” that would consolidate the numerous individual agency procurement regulations? I remember that the initial FAR was finalized or published sometime in 1983 for implementation/adoption in 1984. I found several references to the Commission on Government Procurement, including “Recommendations of the Commission on Government Procurement- A Final Assessment to Congress by the GAO” Call Number: JK1673 .U54 1979 on aLibrary of Congress Catalog web search page. However, I apparently have to be an “account holder” to request a copy or view it. Is there somewhere to view or download this report? https://guides.loc.gov/federal-government-contracting/understand-past https://catalog.loc.gov/vwebv/searchBasic https://catalog.loc.gov/vwebv/search?searchCode=AUTH%40&searchArg=Recommendations+of+the+commission+on+government+procurement+&searchType=1&limitTo=none&fromYear=&toYear=&limitTo=LOCA%3Dall&limitTo=PLAC%3Dall&limitTo=TYPE%3Dall&limitTo=LANG%3Dall&recCount=25 sorry- my search results aren’t displayed in the links above.

Then the OP stated: My interpretation, thus my responses, focused on modifications or change orders “in the context” of a Part 12 acquisition. My question in response to the original post, which @viceversa hasn’t answered, asked if viceversa was referring to “negotiating modifications that involve a change in the contractors costs?” I assume that the context of the original acquisition would primarily employ price analysis. Thus, I assume that the question in the OP pertains to negotiations of changes or other types of price modifications. The OP hasn’t engaged in the conversation or addressed my opening question to clarify the context of the question regarding application of FAR part 31 to “negotiations”.