joel hoffman

Is this a billing rate or a formal mod to the contract?

Ahh, now I understand your point. If this is a billing rate, subject to adjustment for actuals and/or audited rates, then my above posts do not address that situation.

August, does it matter with respect to lacylu's question? What if this is a FFP contract and modifications are being priced or the contractor is willing or offering to renegotiate down option prices, citing a willingness to lower its overhead rates, pass through or subs' rates? Is lacylu is wondering if the contractor must "overcharge" other contracts, to make up for the "undercharging" on the instant contract? There would be no legitimate accounting basis to raise rates charged on other contracts, to make up the difference, if the contract is being negotiated and the rates have to be substantiated. But, of course, the firm can set rates on competitively bid contracts as market conditions allow.

Why is it a problem? First of all, it is a myth that companies would charge the same rate across the board. For one thing, there are perfectly legal elements of cost that either not allowable for a certain federal contract or are not allocable to a certain federal contract that may be perfectly legitimate to charge other commercial contracts due to various FAR restrictions or types of contracts. And why can't a contractor decide to lower the rate it charges on a contract as a business decision? And what was the basis for the original rate anyway?

I'd agree with using the latter approach. I don't know if the county has to use the FAR clauses and DBA wage rates when using a federal grant. I know that we used to with FmHA, though (1978 era). The Grant should spell out procurement requirements.

My suggestion is to have the locals contract the work. However, they should either issue separate awards for the site work and for the building or segregate the work within the same solicitation. It will definitely save the locals a lot of money and a lot of grief. In doing the latter, I'd require the site work to be completely segregated from the building work and utilities work within the 5 foot line of the building. Use local clauses, contract conditions, local wage rates (if applicable) and labor provisions for the locally funded portion. Use the Federal FAR clauses and labor rates for the DoD funded work. Also use 2 separate bid schedules. When I was a consulting engineer in Wisconsin, our local community received a Farmers Home Administration development grant for some development work. On one project, we were able to segregate the part of the work that was locally funded from the FmHA funded scope. We combined the 2 projects within one solicitation but used local clauses and conditions and Wisconsin's prevailing wage rates for the local work. State mandated wage rates were lower than the DBA wage decision, for the local work. The local work was the same type work as the FmHA funded work. For the FmHA work, we had to use the Federal contract clauses, wage rates and forms. We used separate bid schedules for the local and for the Federal work. Guess what? The Federally funded work cost almost twice as much as the locally funded work. This was all civil work for constructing municipal streets, sidewalks and utilities, so all bid items on both bid schedules were unit-priced. We were able to match our other locally contracted unit prices for our locally funded (homeowner assessed) work. The Fed work was much more expensive (about double the locally funded work), but was in line with what I had experienced in the Air Force a couple of years before getting out into the private world. Any time we had federally funded projects, there were strings attached. We had to essentially use all the FAR construction clauses and DBA wage decisions for Federally funded work. The Fed funded projects ALWAYS cost more than similar private or municipal work. The downside might be the schedule, if site work has to be performed prior to building work. However, the work itself is distinguishable, so I would think that it would be natural for different crews to be performing the site and the building work. Therefore, I'd write in the combined contract a requirement to coordinate the 2 areas of work and that they could be performed concurrently, to keep the labor forces segregated between projects. Supervision is salaried, so that wouldn't be as much a problem. For the separate contract approach, if schedule was critical, thus requiring concurrent work, I'd include requirements to coordinate and cooperate between the two concurrent contracts. I'd require the site grading and access to be ready and available for the building work to commence by some definite period or date. It can be done. The trick is to write an effective contract or contracts to keep the separately funded work segregated. I think that the worst approach would be to totally integrate the site and building work under the Federal contracting rules and regulations. That will most likely raise costs for the locally funded site work. EDIT: I think I misread the scenario, so my recommended approaches may not be feasible.. I thought the funding was 20% local and 80% DoD. Sorry. Apparently all of the funding is federal money. The locals probably can't contract for the 80% DoD share of the work, can they? Also, If the grant is paying for the "local share", then the grantee may have to comply with Federal contracting rules and use D-B wage rates, etc., if they contract for the site work. I don't know.

I am not an attorney and you should consult one one. I have worked construction claims for many years. If you arent ready to issue a COD on the entire claim, but recognize merit on a portion of it, I don't see why yopu must issue a partial COD to pay and/or negotiate and pay it while waiting for more information to decide the remaining issues as to entitlement. But, if part of a claim is not in dispute and you are satisfied with the quantum, I recommend paying it as soon as possible to reduce interest expense to the Taxpayers. To do that, I would recommend documenting what you are doing in a letter accompanying the partial settlement modification. State why you are paying it. State that this portion of the claim does not necessarily reflect the Contracting Officer's decision on the overall merit of the claim. State that review and final decision are still pending on the remainder of the claim, etc. Sometimes we use the meritorious portion of a claim in negotiations to help persuade the Contractor to drop non-meritorious portions. I dont know your circumstances or negotiating position. However, the goodwill gesture on your part might work favorably in settling the remaining portion, later. You may need to negotiate the portion that you intend to pay, if you can't segregate it from the other claimed costs and/or if you don't intend to pay the full amount of the portion that is not in dispute. Of course, you can also state that the interim modification is subject to adjustment, if the audit might affect the amount (e.g., G&A rates, labor rates, etc.). That should protect the Government's rights concerning the rest of the claim, will help the Contractor and should reduce interest costs. Whatever you do, pay the mod, ASAP.

Noob, please understand the difference between the Contractor charging a cost to a contract (in this case a FFP contract) and the cost being considered compensable. The discussion concerns a request by a government PM for information outside the scope of the contract, which the Contractor's on-site PM voluntarily fulfilled, but ended up spending 20 hours of effort. The basic discussion here concerns how the PM should charge its time within the firm's accounting system. In this case, it appears that the customer wouldn't be charged for the out-of-scope cost (the Contractor won't request an equitable adjustment), because it isn't allocable to the authorized scope of work for the contract and it was requested, not directed. As another example, assume that the Government had a new, out of scope requirement that it had approval to add to one or more existing contracts, using an exception from full and open competition in FAR Part 6. Depending upon the circumstances, we'd might ask one firm for a proposal, to which it could voluntarily agree to prepare and provide the proposal for the new, negotiated work or decline. The work would probably be added to the contract for administrative convenience but is not a "change", because the Government could not direct it under the Changes clause. Another option might be a compete the new work among a few firms with existing contracts, perhaps to add to their existing contracts. The Government could ask for competitive proposals and the firms would have the option of competing or not. You wouldn't allow the firm or firms to directly charge the Government for their proposal prep costs against their existing contracts would you? Here, the discussion concerns how the Contractor should charge its cost for the PM's efforts within its accounting system. I think that there was a consensus here that the Government wouldn't be charged the cost for the PM's 20 hour effort. Does that make it clearer to you?

Shadow, in anticipating further questions: The D-B labor rates are minimums. A contractor can pay more than the minimum Davis Bacon Wage rates. They often do. A price adjustment for an option is necessary only if 1) a revised wage decision requires a wage increase over what the contractor would already be paying or 2) if the contractor reduces what it would have otherwise be paying to take advantage of lower D-B rates, if applicable. I have actually seen some D-B rates go down. I have not seen a contractor actually cut wages, though. We see the payrolls. Hope this helps.

See FAR 22.404-1 -- Types of Wage Determinations. "(a) General wage determinations. (1) A general wage determination contains prevailing wage rates for the types of construction designated in the determination, and is used in contracts performed within a specified geographical area. General wage determinations contain no expiration date and remain valid until modified, superseded, or canceled by the Department of Labor. Once incorporated in a contract, a general wage determination normally remains effective for the life of the contract, unless the contracting officer exercises an option to extend the term of the contract (see 22.404-12)..." "...( Project wage determinations. A project wage determination is issued at the specific request of a contracting agency. It is used only when no general wage determination applies, and is effective for 180 calendar days from the date of the determination. However, if a determination expires before contract award, it may be possible to obtain an extension to the 180-day life of the determination (see 22.404-5((2)). Once incorporated in a contract, a project wage determination normally remains effective for the life of the contract, unless the contracting officer exercises an option to extend the term of the contract (see 22.404-12)." Now read: FAR 22.404-12 – Labor Standards for Contracts Containing Construction Requirements and Option Provisions That Extend the Term of the Contract. I presume that you can find this through WIFCON "Rules and Tools" links. Hope this answers your initial questions.

Yes, it is an interesting question. It would appear that the 2nd definition from the Webster On-line Dictionary covers the requirement - "to present or propose to another for review, consideration, or decision; also : to deliver formally <submitted my resignation>" Thus, the recepient would probably have to actually receive the document, upon "presentation" or "delivery". But I still wonder why someone would actually mail a request for a debriefing without sending it electronically...

I don't know the answer to your question. But how often do firms request debriefings these days by US Mail without also emailing or faxing the request? The firm would appear not to be in any hurry to be debriefed, if it only mailed a request for a pre-award debriefing, without also faxing or e-mailing it. Geez, even in the "old days", 20-25 years ago, firms and the Government communicated by Western Union, if time was of the essence.

Aah, Wikipedia...

Mrbatesville said "Since the above stated was mentioned in the proposal..." What that means I don't know. But it appears that either the cost of the SWPP or the scope for this effort or both were included in somebody's proposal... However, mum is the word from MB.

Hey, Charlie - join the club! I suggest that you grow thicker skin, like me. I've got callouses...

mrbatesville, you are not very clear. I'm having to read between many lines to guess at what the scope of the contract is and what type of contract it is. Please be more clear about what type of contract this is and the scope of work involved. An A-E firm is the contractor but for what type contract? Who is the subcontractor and what does its scope include? Is it an A-E contract in connection with the separate drilling of a well? Is it a construction contract for drilling of a well? Is it a construction contract in connection with an existing well? When you say "develop a report for the design and construction of a well water filtration system", are you talking about developing the design and installing a well screen in a new well or designing a separate filtration system for an existing well or something else? You said that "the above stated was mentioned in the proposal". "What" was mentioned? In whose proposal was it mentioned? Was this a negotiated (A-E or construction) contract? You mentioned Permits and Responsibilities Clause (FAR 52.236-7). This clause is prescribed for construction contracts, not A-E contracts. If this is an A-E contract, the firm should have provided a proposal with a breakout of hours and other estimated fees. I feel that the A-E firm should have known what is required in order to estimate the efforts involved in the scope of work. If "the above stated was mentioned in the proposal", what are you in disagreement about? If this is a construction contract, the Permits and Responsibilities clause is supposedly in the contract. If "the above stated was mentioned in the proposal", then what are you in disagreement about? The ultimate answer to your question requires much more and clearer description of the circumstances.

What is the "Schedule of Values"? Is it a price breakdown of the various activities that must be included in the project network or bar chart schedule? If so, I disagree with waiting to issue the notice to proceed until after this has been approved. This is a contract administrative compliance requirement that should be completed during contract performance. We specify such requirements in the Progress Schedule specification section. A contractor would probably include such efforts under "general conditions".

The topic concerns new proposed contracts. I think that the advice given seems to be the answer. However, I would also disclose the essential differences between the new and old companies. In other words, you'd need to explain what has changed. It wouldn't seem appropriate to claim or to otherwise impart the old firm's experience, past performance or capabilities to the new firm if the new company doesn't have those assets and capabilities any more. If that part of the company was sold, how would the new company have those same capabilities?

Yes, they both are, along with most of the O and D front lines, who are mostly seniors, I think.

Vern, he would be a senior next year. He announced a few days ago that he is not going pro because he doesnt want to take a pay cut - (NOT).

The media and others often loosely refer to a contractor or subcontractor employee as a "contractor". So, one cannot always interpret the term as applying only to firms or independent contractors. I doubt that the media always bothers to determine the precise status of a contracted employee, subcontractor, independent contractor, etc., when writing or reporting general news stories.

I agree with Vern. In addition, your RFP should contain (see 15.209 (a) solicitation provision 52.215 with either basic provision paragraph (f) (4) or Alternate I . This paragraph would allow or indicate that discussions are contemplated, depending upon whether basic or Alt I is used. It also mentions the competitive range. It would seem that this paragraph would contain additional info if "various GAO decisions" required such.

Dude, having been one, I think you are too picky.

If I get a chance to check the FAR Archives this week, I will. Right now, I have to celebrate. That was amazingly close! A great game between true numbers one and two!!!!! Great game Oregon. War Eagle!!!!!!!!