joel hoffman

Moved comment a conversation. I won’t bore everyone with the details. Bob’s Blog articles are fascinating and I can personally relate to them.

Retreadfed, we’re out of state this weekend on family business. I will respond next week. Have a good weekend!

Example 1: if it is “apparent that the per unit cost for later procured items is less than the disclosed, average unit cost computed using the actual [historical] labor costs” then the disclosed cost or pricing data used to price the contract isn’t “accurate, current or complete.” - to me it would be considered defective cost or pricing data. You are aware that the current cost will be lower than the disclosed cost. It isn’t Truthful. Example 2: “The way I understand Joel's position, Y would be required to base its proposal on the new and lower quote although Y does not intend on using that vendor.” That is not my position. As long as you explain the circumstances and disclose that you aren’t going to use the lower priced vendor in your second example , that is not defective pricing. You disclosed the vendor’s pricing that you intend to purchase and why you didn’t use the lower price.

Why do you have to provide data that is inapplicable to your price? You could mention it then say that it isn’t applicable because…

Who was the source of the briefing you referred to? Yes, DoD organizations or specific offices often use a team to perform the Performance confidence evaluations.

@StewardIf you evaluate that as a consideration (add evaluation criteria considering frequent protests) under an factor and you don’t select the firm, what good is it? You said they will protest “almost every time” they aren’t selected… I don’t think that you will accomplish anything other than provide another grounds for a protest, right?

Gosh, just saw this tonight! I’d better check the Blogs more frequently. I was still in the Air Force in 1974 but spent 10 years in Huntsville with USACE from 1997-2007 and have several NASA friends there. Your story is fascinating, Bob! Thanks for sharing it. And yes, I remember meeting you at the GAO building - (Also the USACE HDQTRS) actually it was across the street at the Architecture Museum. It was nice meeting you.

Wow, I just saw your Blog entry, Bob. Thank you. It was fascinating. It did raise one question in my mind. It seemed to me that Thiokol’s long term costs could also be effected by a learning curve adjustment . Thus, even though it may not have addressed it in its proposal, the effect should be similar. At any rate, your experience was fascinating!

Are you speaking of a specific group (in a DoD component?) or the Performance Confidence Assessment Process that DoD uses? Please clarify your question. Thanks.

EDIT: I missed where @Atlas STS stated that 252.215-7010 is not in the solicitation. Atlas did refer to that provision. The initial solicitation included or should have included the provision at 252.215-7008 Only One Offer. This provision specifically refers to the provision at 252.215-7010. That provision refers to Table 15-2… If 252.215-7010 wasn’t in the initial solicitation, the government should have amended the solicitation to include it after receiving the only one offer. Table 15-2 specifies how to provide cost or pricing data or data other than cost or pricing data. The government could have specified alternative format in lieu of Table 15-2.

I agree with formerfed here. I would hope that the DCMA knows what they are doing. They should have amended the solicitation to give the proper instructions for submitting cost or pricing data and/or data other than cost or pricing data. Do NOT certify cost or pricing data until after negotiations are (conducted?) , completed and there is an agreement on the price. Good luck.

@Atlas STS, I am curious. Of course, we don’t know much from your posts about the nature or or what type products you are producing and wish to be considered as commercial products. Q: Have you manufactured and sold these products to commercial or other non-government buyers? Q: Since you are the only respondent offeror to the solicitation are you the only source for these products? I’m sorry for your confusion concerning the DoD acquisition processes, especially the negotiation process when you are a sole offeror for products. I suggest that you review the DFARS PGI 215.4 Contract Pricing and its sub parts. It covers many aspects concerning sole offerors to a solicitation and pricing of commercial products or non-commercial products . https://www.acquisition.gov/dfarspgi/pgi-215.4-contract-pricing It isn’t as simple as the two provisions you have relied on in your approach to the buyer agency to have them considered to be commercial products. I hope you also better understand what the nature and purpose of data to support your proposed pricing for a $2 million dollar Defense contract is. It is definitely relevant. It has a direct correlation to your pricing, whether or not it is considered to be “cost or pricing data” subject to the Truthful Cost or Pricing Statute and implementing regulations. In simple terms, it is essentially a price breakdown, explaining the basis of your price proposal as a sole offeror to a DOD acquisition. For DoD, there is no presumption of anticipation of adequate price competition for an exception to an applicable requirement to provide cost or pricing data for a non-commercial product or service. Even if there is sales data for the same products to commercial or government agencies, the government would have to be able to compare and/or distinguish any market pricing differences between this sale and previous sales.

I won’t go into detail concerning the cost principles in FAR Part 31 Contract Cost Principles and Procedures for non commercial products and services other than to say here: FAR 31.102 and 31.103 state that the applicable parts of Part 31 and agency supplements shall be used in the pricing of negotiated fixed-price contracts and subcontracts whenever cost analysis is performed (15.404-1(c), as required by 15.404-1 (a)(3) and as allowed in 15.404-1(a)(4) for contracts for commercial products and services.) See also the Pricing policy at 15.402 (a) and (b).

The statement “That price does not have to have any correlation to the cost or pricing data submitted to the government” is wrong. FAR 15.408 describes the requirements for submission of cost or pricing data. The government should have amended the solicitation to add the provision at 52.215-20 Requirements for Certified Cost or Pricing and Data and Other Than Certified Cost or Pricing Data when it required the sole offeror to provide cost or pricing data -and/or data other than cost or pricing data. This provision also specifically incorporates Table 15-2 of FAR 15.408 and instructions by reference, unless the government specifies an alternate format. The 15-2 format clearly requires a breakdown of the specifically identified proposed costs and specifically identified profit in the proposal. If the DOD agency wants you to provide certified cost or pricing data OR EVEN DATA OTHER THAN CERTIFIED COST OR PRICING DATA for a negotiated acquisition with a sole offeror, then it must amend the solicitation and provide applicable instructions.

That is a very debatable statement but I’m not going to spend the time to debate you. The short answer is that, for a sole source negotiated contract action, cost or pricing data and/or judgmental and other data are required to support the basis of the price proposal presented to the government. The purpose of whatever data you provide to the government is to support the proposed price in order to establish a fair and reasonable price for the contract. “That price does not have to have any correlation to the cost or pricing data submitted to the government.” That is a dangerous assertion that can cause Atlas STS a lot of trouble. if that were true, then there is no reason to submit C and P or any other data to support the proposed price for negotiations. Atlas, see, for instance, https://www.fai.gov/sites/default/files/CPSG_Activity44.pdf

@Atlas STS, Sorry - One more clarification… It’s DoD policy to negotiate single proposal responses to solicitations. So, even if “they” are in the process of simply accepting your proposed price as “a price agreement”, subject to certification, those ongoing “discussions” you have referred to amount to pre-award “negotiations”. You can revise or withdraw your offer any time prior to award. It appears that their present position is that you must certify before award. Thus, the on-going discussions amount to negotiations.

@Atlas STS, if you aren’t comfortable enough with your submitted price and the supporting data for the proposed price to justify and certify it, you certainly have the opportunity to negotiate and update/revise/clarify it before finalizing the contract negotiations. Edit: [You are not locked in to your original proposal even if “they” aren’t actively negotiating the actual price with you but merely want you to “certify” it before awarding the contract. The act of certifying it signifies that a negotiation has taken place.] Truthfulness shouldn’t be dependent upon whether or not you have to certify it.

@Atlas STS, I apologize for editing my last response this morning after you last visited the site yesterday, shortly after I posted it. Please review my edited post, thanks!

Good Gracious, @Atlas STS, I WISHED we could have had pre-award audit support for much larger acquisitions than this one. The DCAA just wasn’t available. I’d almost be willing to bet money that - since they aren’t auditing your proposal, they won’t bother to post audit it either. If you think that your data is truthful, I respectfully suggest you quit worrying about it. P.S. “complete” essentially means you didn’t omit factual information that you are aware of that would affect the price Edit: P.P.S In reading your last post, you said that “they” (Navy? DCMA?) “seem pleased with our uncertified data as sufficient for pricing analysis”. And “They just want us to certify it.” Have you actually negotiated and settled upon the price?? It appears that they are “analyzing” the price, prior to start or completion of price negotiations (?) There is no certification required until after you negotiate and settle on the price. If you are worried about any aspect of your proposed pricing data, you can revise the proposal and continue or start negotiations, before certifying it upon conclusion of negotiations. And make sure that you clearly identify any judgmental aspects of the proposed pricing , preferably-prior to - or otherwise during negotiations - but prior to concluding negotiations. The reason that I ask these questions is that you have previously inferred, in response to my observations on the probability of a DCAA post-audit, that DCAA spent three days visiting your company in a post audited. You later explained that the visit and interaction was simply DCMA administering the contract. it is important that we better understand the actual stage of the price negotiations (if any) to interpret your explanation and concerns. You are saying that they have enough info to analyze the price but they want you to certify the cost or pricing data. Certification ONLY occurs after negotiations are complete. Firms have performed “sweeps” (reviews) of the accuracy and currency of their cost or pricing data after negotiations, but before certifying it. They have occasionally come back to notify us and revise some aspect of their proposal after the sweep… 🤠

I would agree with that postulate, formerfed.

@Atlas STS I’m a bit confused. Can you elaborate somewhat, please? You said that the audit was a pre-delivery inspection of your “quality management system” plus three on-site inspection visits at “various stages of construction”. Do you fabricate or manufacture systems, equipment, modular construction or something? I didn’t know that DCAA auditors inspect quality management systems but I don’t know everything about manufacturing operations either… Edit: Ah, your original post said that your company “manufacture[s] equipment for the Navy”. If the Navy is your customer, not for commercial sales, then would your equipment be commercial products? I would question that premise… However, if you are going to manufacture the same items, then you may indeed have some cost and pricing history. Of course, that is not to say that the cost or effort would be the same for follow on production after tooling, set-up and initial production, tweaking, learning curves, etc.

Wow, three work days auditing a $500k order. No wonder they don’t have the resources to perform pre-award audits of construction contracts and mods, or to audit claims, etc… Sheesh. Edit: @Atlas STS was this a post award audit?

Realize also that they revised “TINA” to “Truthful Cost or Pricing Data”. So if you are truthful, you shouldn’t worry too much… 🤠

Based upon my experience over the past 25 plus years, we weren’t able to get much if any DCAA audit assistance on larger proposal amounts than what you identified here. That included requests for desk audits of G&A or audits of key subs by their plant DCAA auditors. I don’t think that their workload or resources are any better today… I miss the days when we had our own USACE auditors up to the mid 90’s for civil works projects and resident, in Kingdom DCAA auditors on our Saudi Arabian Assistance Program in the 1980’s.

@Atlas, an audit of certified cost or pricing data appears to be the cause of your primary anxiety from rereading your posts. Let me try to put you at ease. I don’t think that the odds of a post-award audit by DCAA on a FFP contract for $2 million are very high these days. And a pre-award audit would be on uncertified data. I doubt if DCAA will bother to agree to perform an audit on this low a price. Even if they do a pre-award audit, you don’t certify cost or pricing until after agreement on the contract price. There is no such thing as “defective uncertified cost or pricing data”. Unless you are obviously, grossly lying, the auditors would likely simply question costs or state that they are unsupported during a pre-award audit. I think your concerns are unrealistic here, especially if you identify the judgmental aspects of your proposal estimate.