joel hoffman

In addition to FAR 36.101 ( c ), do you plan on funding these contract line items separately, with appropiate funding? Will they be options, subject to funding? (By the way, the disabling of emoticons in the full editor doesnt' seem to always work)

I believe that USACE only reimburses DCAA for Civil Works (CW) funded or other non-Military funded audits. Most USACE construction funding is for Military work. There are few large CW projects these days but there are lots of smaller CW and work for others projects. Leo, unless DCAA has changed in the past 10-15 years, they still might not be well qualified to audit CW type construction contract actions that require use of the USACE Equipment Ownership and Operating Cost Manual for owned construction equipment (FAR 31.105(d)). The same goes for construction contract audits of firms which own their construction equipment but are primarily or exclusively using rented construction equipment on a project (same FAR reference) . After losing our internal CW auditors or for DCAA audits on some military projects that included contractor owned equipment, I always had to send DCAA an information paper that I developed for all construction contract audits within our District. The paper covered direct and indirect cost areas to look for and adjust when the USACE Owned Equipment rates were in the contract. It also discussed how to treat G&A and other proposed or claimed direct and indirect costs when rented equipment was being exclusively used. Many government negotiators weren't (aren't?) familiar with the details in FAR 31.105(d), either, which is part of the problem. DCAA always expected a detailed technical analysis, but much of this type detail is cost analysis - which would normally be performed after the audit. We were spoiled when we had our own CW auditors because they were familar with construction audits and associated cost details. One couldn't usually rely on DCAA to be as thorough as our auditors were. I know that some other organizations use the USACE Equipment Ownership and Operating Cost Manuals, too. The same problems with understanding and implementing FAR 31.105(d) may well be prevalent there, too. One of our former auditors is a WIFCON contributor. I think he would agree with me...

As I stated above, I think that - simply by the wording of the requirement - the total cost of contract performance for labor in the denominator would include the prime's G&A on those costs, including both prime and subcontracted labor. If one were negotiating the cost of the contract or any mod involving subcontracted labor, the contractor would apply some form of it's G&A rate to the other costs to determine the total contract cost for labor. Although it might be nice to have a cookbook formula, I don't think it is necessary.

Correcting myself above:: "The question appears to be whether, in addition to the subcontractor's cost of performance incurred for labor (which includes direct and indirect labor costs per 13 CFR 125.6( e)(2), does the "cost of the [prime] contract" for the sub's labor include the prime's G&A cost?" In addition to what I said above it seems to me that the subcontract labor's share of the prime's G&A* would be a cost that is incurred for labor on the contract. *when a prime normally charges G&A to subcontracts

I haven’t gotten into the fray earlier as far as trying to answer the question and I'm not commenting on the AAP program. I haven’t had the time to do full research. I don't KNOW the answer to the specific question asked, which seems to concern limitations on contracting for services. The question appears to be whether, in addition to the subcontractor's cost of labor (which includes direct and indirect labor costs per 13 CFR 125.6( e)(2), does the "cost of the [prime] contract" for the sub's labor include the prime's G&A cost? I used to develop and maintain the methodology for my organization to determine compliance with the Limitations on Subcontracting clause's limits on subcontracting for construction contracts and I coordinated it with the SBA regional office back in the 1990's. Compliance for general construction does include G&A on the contractor's share of the work (less the cost of material**) as well as its G&A on the rest of the work (less materials) for sake of comparison - if the prime normally charges G&A on subcontract costs in its accounting system***. I brought it up because I question why the philosphy of determining the prime's share of a services contract cost for a labor comparison should be different than determining the prime's share of the cost of the construction contract, less materials. I think it would be logical to include G&A on subcontracts - again, if the prime contractor normally charges G&A to subcontracts - because that would be part of the contract cost for having the sub perform that labor, using similar logic as on a construction contract. However, I haven’t researched case law on it. Including the prime's G&A, if normally charged in its accounting system on subcontracts, would increase the contract's cost for subcontracted labor, thus probably making a sub's comparable labor more expensive than if it were prime's labor. So what? That's consistent with logic used in a construction contract comparison. Of course, contracting rules aren't always logical. ** The reason materials were excluded for construction was that primes often try to take credit for self performance by buying materials for subcontractors to install. But that is another discussion. *** I have dealt with some construction companies that don't charge G&A to subcontracts. Some of these firms also do a lot of A-E and other service contracting.

KME, if that's part of the proposal and if it makes sense, why wouldn't you want to accept it? Could you do it as an advance agreement?

A "Proposal Strength", in my experience and as you stated above, is a evaluation term. One cannot necessarily incorporate all "strengths" into the contract because many are intengible. For instance, "strong experience" or "extensive, relevant experience" that was evaluated as a "strength" cannot be incorporated into a proposal. Similarly, a "high confidence" past performance rating may be considered a "strength" but one cant incorporate it into the contract. A narrative that exhibits a strong, clear understanding of a contract requirement under a factor that is rated as a "strength" isnt something that one would stictly incorporate per se nor can one strictly enforce it. It may be an intangible benefit and might serve as ammunition in a dispute over contract interpretation. And occasionally, we don't want and/or can't afford and/or just dont want to pay for some offered features that exceed the minimum requirements. We use the term "betterments" to describe TANGIBLE features in a proposal that meet or exceed the contract requirements which the government accepts in the final proposal. A betterment is something offered in the proposal that could be a stated government desirable/preferred feature or a contractor initiated feature. Sometimes government preferences are actually listed as option CLINs. We have used this terminology in design-build acquisitions since the late 1980's in my organization (in source selections and in task order competitions since the 1990's) where we evaluate proposed preliminary designs and quality of offered materials and building systems and in some competitively negotiated construction acquisitions where quality of materials or systems were factors in the selection. We incorporate the technical proposals into the contract and use a contract term/condition/special contract requirement to establish an order of precedence after award. Betterments become the new contract minimum requirement, followed by the solicitation requirements, then the rest of the accepted proposal, in the event of a conflict discovered after award. And yes, we are supposed to evaluate proposals and have the duty to reasonably ensure that the proposal complies with the miniumum solicitation requirements in order to make an award.

That is correct, but not since mid 2007 or so. After critiquing some of the answers for a few years back in the late 1990's and early 2000's, I was asked by AAP if I would be willing to take over the A&E and Construction Contracting Topic Area. Since I had direct access to numerous resources at that time, I agreed. One must be careful about complaining if one isnt willing to help fix something. It was like ignoring the old military adage - "Never volunteer!" Some times the questions are as inane or obscure as the answers. I usually tried to contact the questioner and obtain more details and also find out which service they worked for. Many of the answers were partly or fully dependant upon a specific Branch's policies or supplements. At any rate, I asked the current site moderator to review this thread...

You asked: "Am I wrong to believe that a government clause, even at agency level, should reflect more care and precision in choice of words?" Answer: Probably not. Qualification: You didnt identify the clause or provide the wording of it.

Sorry, Voxx, I misread your post concerning 52.212-4 ( c). However, you did say "For unilateral changes I just check box B (which claims that 43.103(b ) is the authority" Because the FAR Changes Clause is not used in such commercial contracts, where is the general authority to issue "unilateral changes" to such contracts other than modifications addressed in or alluded to in various paragraphs under 52.212 Terms and Conditions? Some of those situations might require bilateral agreement to change the contract's terms and conditions.

Voxx, I don't see how "52.212-4 -- Contract Terms and Conditions -- Commercial Items. ( c) Changes" authorizes any unilateral changes. There may be other terms such as Disputes or Novations or name changes. However, I dont think that silence concenring possible other changes in ( c) actually authorizes unilateral changes under that term in ther clause. That paragraph authorizes changes in terms or conditions via bilateral agreement.

"52.212-4 -- Contract Terms and Conditions -- Commercial Items. ( c) Changes. Changes in the terms and conditions of this contract may be made only by written agreement of the parties." What gives you the right to issue a unilateral modification under this term of a commercial contract?

While Don may be technically right concerning when cost analysis is "required", it might be "necessary" for the government to perform cost analysis even when certified cost or pricing data are not required. See FAR 15.404-1(a)(4) for example: "(4) Cost analysis may also be used to evaluate data other than certified cost or pricing data to determine cost reasonableness or cost realism when a fair and reasonable price cannot be determined through price analysis alone for commercial or non-commercial items." In addition, for DOD, there is an open DFARS Case 2011-D013 "Only One Offer", which is still winding its way through. It is referenced on the WIFCON Rules and Tools page. It mentions the possible need to perform cost analysis on non-competitive offers below the TINA thresholds. I dont know if it would specifically apply to modifications. Regardless, if one is modifying a cost type contract, I think that it would often be prudent to perform cost analysis techniques on such proposals regardless of the TINA thresholds.

mdtpham, I'm not saying that site work for 2 new projects couldn't be added to an existing contract by means of a bilateral supplement agreement. I am curious how such work could be directed as a "change order " under the Changes clause. It is possible that the work could be added via a bilateral, out-of-scope modification, after meeting the requirements for an exception to full and open competition. Perhaps there was a misunderstanding concerning the terms used. As for "unpriced change orders", this is discussed under DFARS, 243.204-70 Definitization of change orders, not under DFARS 217.74. Many offices incorrectly refer to unpriced changes as "UCA's" from old 217.74 language from years ago.

As far as I can tell, the term "workplan" comes from the service contracting world. Some organizations have issued service contracts for work that really involves A-E services and/or construction for design of new or modifications to real property or real property installed equipment and systems. I see the term as a camouflge for developing partial designs or "design criteria" to be used for construction. In my opinion, it is improper to use price competion for design efforts, using a MATOC for "services". I would agree with you that such scope of work definition and/or design criteria development should be done under some type of A-E contract vehicle, such as a an A-E ID/IQ. This is A-E services, not a "service". It is also improper, in my opinion, to use the workplan task order to develop a budget, rough order of magnitude estimate, cost proposal, etc. for that same contractor to perform the associated construction work. This is essentially a phased approach to implementing design and construction, whereupon the government hires one firm to develop the scope of work with or without some type of construction pricing being included in the original task, and/or then develop some type of price for the scope of work, then allow the government to issuye an option for construction or follow on task order for construction. There are numerous variations to this scheme but they often circumvent the Brooks Act procedures for procuring design services. Phased approaches to obtaining design and then issuing options or task orders for construction do not constitute authorized "design-build" acquisition methods, either. FAR 36.209 says:"36.209 -- Construction Contracts With Architect-Engineer Firms. No contract for the construction of a project shall be awarded to the firm that designed the project or its subsidiaries or affiliates, except with the approval of the head of the agency or authorized representative." Issuing a task to a firm to prepare the scope of work, then develop or finalize the price, is a violation of 36.209 in my opinion. There is an imminent official update to an agency regulation that will discuss such practices. My suggestion would be to use in-house or an AE ID/IQ to develop what constitutes a "workplan", or partial design, design criteria, etc., with a ROM estimate for decision making, then use a MATOC or SATOC to issue the construction task, including any further design-development or refinement, if necessary. This assumes that the workplan is for more than very simple repairs or minor non-structural alterations, etc. That is seldom the case, though.

Mdtpham, your answer is more interesting than what I thought you originally indicated. I thought you said that they added the site work for one project to an existing contract which included the scope of site work for another building. That raised a question in my mind as to how the site work for the second building was within the scope of the contract for the first project. Now you are telling me that they added the scope of both sites to an existing contract for a third building project as a change order. I'm mildly curious why the government would have the right the add the scope of work for 2 separate building sites to another contract for one or more specific buildings by means of a change order under the Changes Clause? Is that within the original scope of the larger contract? Just because an existing contract includes paving work, for example, doesnt meant that one can just go out and add paving of additional parking lots all over an installation under the Changes clause. As another example, consider a painting contract for 25 buildings. One cant just go out and add more buildings to that contract using a change order just because "painting" is the scope of the contract.

Vern, I just noticed that you have updated your post #10, above. I was primarily curious about how "DODCO", who I am assuming is a contracting officer at DOD level or at one of the Services, would rank order proposals using a numerical evaluation approach.

What do you mean by "the expired phase" and are they needed to cover obligations that occurred during "the expired phase"?

mdtpham, are you indicating that the KO added the separate scope of the site work for the second, separate project to an existing contract for the first project, using the Changes Clause? That is very interesting.

DODCO, One must consider price in the trade-off comparison, as Vern already explained above. How would one simply rank order proposals using a mechanical, numerical evaluation approach without going through some type of qualitative cost/technical trade-off comparison between the various proposals? Would you score price then add to the quality points? What does that tell you? How would you correlate points per dollar to quality points? Do you divide the price by the technical points ("$/Point" ratio)? That's a goofy method that our organization abandoned 20 years ago. In addition, we must comply with AFARS, which has prohibited scoring price for years (5115.305 -- Proposal evaluation. (a) (1)) and has prohibited using numerical weights for non-price factors since 2004 (5115.304, ((2)(D))

Carl, I see now that you were referring to the statement "That would include set-asides for service disabled veteran owned small business concerns. If the procurement was set-aside for SDVOSBC's, then the clause should be in the contract. " As Vern did say in the first sentence, in accordance with the language of FAR 19.508(e), the limitations on subcontracting clause must be included in all solicitations and contracts if any portion of the requirement is set aside for small business concerns. I think this is a case where existing FAR coverage didn't keep up with the addition of more set-aside programs for various specific small business categories. It seems that Congress isn't consistent in drafting new categories of small business or small, disadvantaged business type set-asides.

Ca- a subcontractor is not a joint venture partner. You said that the Small Disabled Veteran, Small business prime contractor has a small buisness subcontractor - if I read your acronyms correctly. Thus, 13 CFR 125.6(h)[actually, it is 125.6(i)- there is no 125.(6)(h)(i)] doesn't apply here. Neither would 13 CFR §121.103(h)(3).

Good point, Don. I had noticed that the other day but forgot. My comments above apply to SDVOB set-asides. Ca2cs, what type of set-aside was this? If it was a small buisness set-aside, I think that the 52.219-14 clause, Limitation on Subcontracting is mandatory by Law. It would probably be incorporated by operation of law, anyway. I'm in California, but my folder on this topic is back home.

Note that a joint Venture as an entity may fulfill the self-performed work requirement, without the SDVO small business performing the required percentage. Under 13 CFR 125.6((5): "In accordance with §125.15((3), the SDVO SBC joint venture must perform the applicable percentage of work." Under FAR Clause 52.219-27 (d)," A joint venture may be considered a service-disabled veteran owned small business concern if— (1) At least one member of the joint venture is a service-disabled veteran-owned small business concern, and makes the following representations: That it is a service-disabled veteran-owned small business concern, and that it is a small business concern under the North American Industry Classification Systems (NAICS) code assigned to the procurement; (2) Each other concern is small under the size standard corresponding to the NAICS code assigned to the procurement; and (3) The joint venture meets the requirements of paragraph 7 of the explanation of Affiliates in 19.101 of the Federal Acquisition Regulation. (4) The joint venture meets the requirements of 13 CFR 125.15(" 13 CFR 125.15( says: (Joint ventures. An SDVO SBC may enter into a joint venture agreement with one or more other SBCs for the purpose of performing an SDVO contract. (1) Size of concerns to an SDVO SBC joint venture. (i) A joint venture of at least one SDVO SBC and one or more other business concerns may submit an offer as a small business for a competitive SDVO SBC procurement so long as each concern is small under the size standard corresponding to the NAICS code assigned to the contract, provided: (A) For a procurement having a revenue-based size standard, the procurement exceeds half the size standard corresponding to the NAICS code assigned to the contract; or (B ) For a procurement having an employee-based size standard, the procurement exceeds $10 million; (ii) For sole source and competitive SDVO SBC procurements that do not exceed the dollar levels identified in paragraphs ((1)(i)(A) and ( of this section, an SDVO SBC entering into a joint venture agreement with another concern is considered to be affiliated for size purposes with the other concern with respect to performance of the SDVO contract. The combined annual receipts or employees of the concerns entering into the joint venture must meet the size standard for the NAICS code assigned to the SDVO contract. (2) Contents of joint venture agreement. Every joint venture agreement to perform an SDVO contract must contain a provision: (i) Setting forth the purpose of the joint venture; (ii) Designating an SDVO SBC as the managing venturer of the joint venture, and an employee of the managing venturer as the project manager responsible for performance of the SDVO contract; (iii) Stating that not less than 51% of the net profits earned by the joint venture will be distributed to the SDVO SBC(s); (iv) Specifying the responsibilities of the parties with regard to contract performance, source of labor and negotiation of the SDVO contract; (v) Obligating all parties to the joint venture to ensure performance of the SDVO contract and to complete performance despite the withdrawal of any member; (vi) Requiring the final original records be retained by the managing venturer upon completion of the SDVO contract performed by the joint venture; (3) Performance of work. For any SDVO contract, the joint venture must perform the applicable percentage of work required by §124.510 of this chapter. (4) Contract execution. The procuring activity will execute an SDVO contract in the name of the joint venture entity or SDVO SBC. (5) Inspection of records. SBA may inspect the records of the joint venture without notice at any time deemed necessary.

Ah,the Robinson-Patman Act. I had hand written that into my textbook back in 1983 under the discussion that I mentioend above. As the links that Vern provided above describe, this is something that a good lawyer would have to delve into and make sense of...