joel hoffman

Sheesh! I meant "nothing personal". There seems to be plenty of "offense" and "defense" in tonight's National Championship game.

Vern, I don't disagree with you regarding the old rules for discussions and competitive range not being any different for trade-off vs. LPTA pre-FAR rewrite. I noticed that the KO was trying to make some distinction between "best value" and "LPTA". I used to conduct LPTA source selections prior to the rewrite and we followed the same procedures for LPTA as for trade-off. However, I "remember" that LPTA was discussed separately from "best value" in the pre-FAR 15 rewrite and it was specifically included in new discussion of the "Best Value Continuum" , which defined it as a Best Value method. But I agree that it was covered by the same rules for discussions. I am in Ft Worth without access to my 1996 FAR, at home. This is all based upon memory tonight. I'm also trying to watch Auburn beat Oregon tonight (no offense).

Does your KO know that the LPTA was moved and described under the "best value continuum" as a BV acquisition method in the FAR 15 rewrite back in 1996-1997 time frame (15.101-2)? Where does the present FAR 15 distinguish this method from the trade-off method establishment of a competitive range and conducting discussions? Could your KO possibly be 14 years behind FAR?

Here is another new GAO Decisions on competition for Base Contract awards, which used price competition on a seed task order as the method for evaluating pricing in the initial construction IDIQ base contract awards. http://www.gao.gov/decisions/bidpro/403797.htm (B-403797, Tetra Tech Tesoro, Inc., December 14, 2010) This protest (NAVFAC in this case) ought to confirm that this is acceptable for price competition for construction type base ID/IQ awards. This doesn't necessarily have any correlation to ID/IQ's for services.

Are you still interested in an answer? I asked for a reason: " Does this happen to involve an "Early Contractor Involvement" or similar contract with USACE?" There is some training on these type contracts available. Yes, heck yes, there is a lot more to FPI contracting than is contained in the ASPM, especially one with successive targets. It takes a lot of project control expertise in cost management, schedule management, cost reimbursement type administration, and in general earned value management to actively manage (vs. just being along for the ride and being stuck with the resulting performance and cost). I don't guarantee that the available training is adequate (haven't attended or read the course material) but it would be essential for those becoming involved in the ECI method being used on certain USACE projects.

It is apparent that your exchange with this offeror constitutes discussions because you went beyond clarifications (15.306 ( a)) or simple communications (15.306 ( ) . If you didn't intend to be in discussions during this exchange and if it hasn't yet been done, the government must now determine a competitive range (15.306 ( c)) and conduct discussions per 15.306 ( d) and ( e). You don't have to ask everyone else to "verify their price" during discussions. If you had not intended to conduct discussions during this exchange, I suggest that you get some advice, including supervision, within your organization before doing anything else.

Hopefully, now that the Army consolidated most of its Real Property and relocatable building Regs into AR 420-1, there will be more knowledge concerning the intricacies of temporary, relocatable buildings and less inclination to abuse the funding sources. Several Stateside Installations also got into trouble with the GAO or the Army IG a few years ago over funding on some huge relocatable, temp construction building projects. I don't remember the specifics, but a friend of mine was involved on the USACE execution side of the mess.

Does this happen to involve an "Early Contractor Involvement" or similar contract with USACE? I agree with Vern.

Being a federal employee, I cant really comment on the wisdom or underlying philosophy of those in government who are trying to order a freeze on private firms' employee compensation on existing contracts. I don't know how it would be implemented.

Vel, with regard to the Mortensen and Caddell decisions, they were fairly controversial. But I hadn't been a fan of allowing simple, fixed percentage for field overhead on non-time related changes anyway. They essentially represented the same thing as a daily rate, only expressed as a percentage. Contractors would seek and be paid the field overhead as a percentage of direct costs as though all those costs were variable, when most of them were fixed (time related). Then when there was a time extension, they would repackage the same thing and ask for them as a daily cost. So, the contractor was probably getting paid two different ways for the same type costs, regardless of whether or not additional cost was actually involved/incurred. So, rather than allow a flat proposed percentage markup, I would ask the Contractor to identify its FOH costs. Then I'd look at those costs that were variable and we'd adjust the percentage on a case by case basis,. Sometimes we would agree to such a percentage to use on all routine, non-time related changes. If the Contractor could show other field office impacts such as some fixed cost affected by the change , we'd also allow that (e.g., a change required continued employment of staff that otherwise would have been released to other contracts). I dont like the Senior Deciding Groups approach because I think that the Senior Board got mixed up between contractors' cost accounting practices and their billing practices, but I don't know. Seems to me that all jobsite "indirect costs" are usually directly charged to the project. But they generally aren't charged to the various direct WBS type activities, such as "footings", "walls", superstructure", earthwork" or the like that many construction contractors track internally for earned value and estimating purposes. They are tracked in accounts such as "general conditions", although I belioeve that one can usually look into the accounts and come up with good estimates of variable and fixed type costs. Then, one must really analyze the behavior of field overhead costs to understand what is reasonable to pay in modifications. I don't know - it just didn't seem to be that hard to me. We were even successful at using similar methods on some huge construction contracts. I think that the ASBCA saw where the Contractor's were charging essentially the same costs two different ways rather than using the system that others and I were using. There was no consistency across our overall organization. But, back in the late 80's to early 90's, I taught a cost analysis course that used the method I described above. I never saw a dispute over its use in the Districts I worked in.

Vel, Actually, I was referring yesterday to the Mortenson Decision, wherein reconsideration by the ASBCA’s Senior Deciding Group went down an entirely new path. Thanks for providing the references so I could go back and refresh my memory. That decision essentially turned over long standing practice of many contractors of charging a flat percentage for changes without time extensions and charging a daily rate for those involving time extensions. There is a good summary at http://www.constructioninst.org/files/pdf/...3newsletter.pdf. The Caddell decision was a later decision that referred to the Mortenson precedent. However, your original question simply related to whether the prime and subs have to charge using the same method and I said no. Each firm would charge using its methodology, which should represent their delay costs.

It was in an article related to follow-on actions by the President to freeze pay for other fed employees beyond the first proposed or actual freeze. I cant find it this morning. It might have been a hard copy in my mail. I don't know.

According to an article I read somewhere this morning (in govexec.com? Or in WIFCON?), a freeze on M&O employee compensation was or will be included in the Executive Order that freezes the Federal Civil Service Employee wage/salary scales for the next two years. I'm busy working on my truck at the moment...

Vel, I don't see where this situation would violate the consistency rules, because subcontractor costs are treated as a direct cost to the prime, regardless of how various subs account for their fixed (time related) overhead costs. Then, each firm should treat their costs consistently. I know that there was a (court?) decision a few years ago which, in effect, ruled that a contractor had to treat field overhead consistently, whether or not a extended overhead was involved, but I always thought that the Court missed the mark on that one. That decision is inconsistent with the general rule that the impact on the cost of the change or delay to the contractor forms the basis of the price or equitable price adjustment. For instance, I don't agree that a fixed percentage is always applicable any more than a fixed daily rate is always applicable, regardless of whether or not there is a time extension involved. To me, one can "fairly" easily classify most field office costs as to the nature of the situation. There are variable costs (related to amount of work), fixed costs (time related) or semi-variable costs (some combination thereof). It may take some judgement (oh Gee - having to analyze something) and perhaps some give and take on some points (Geeze, do we have to negotiate?). But I never got stuck on settling field overhead issues to the point where the solution devised by the Court would be necessary or even make sense to me. In classifying the components of field overhead, we can be in harmony with the consistency rule. The case I'm referring to involved Caddell Construction Company and Kansas City District of the USACE, but I will have to look up the citation and get back to you. Regardless of the method used to calculate field overhead, I think that the answer to your question is that the sub can calculate one way and the prime can use another method, because we are dealing with the individual accounting systems of each firm. Ultimately, the sub cost is treated as a direct project cost to the prime contractor, right?

Having just come upstairs this evening from watching "Comedy Central" and drinking too much Jack Daniels, this whole thread seems to belong on that channel. The assumed precision of adjectival and especially numerical assigned ratings and assigned summary ratings using any kind of overall rating system to justify the "best value" tradeoff decision is initially hilarious reading - but is actually sad to me. What the heck difference is there really between an exceptional and exceptional minus (or whatever) rating? In a tradeoff decision, we should be primarily interested in drilling down to the underlying basis for the ratings - the relative strengths or advantages and weaknesses or disadvantages of the various proposals in making the tradeoff decisions. Then, for example, decide whether the relative advantages of one proposal would justify paying the additional price, when a higher "rated" proposal costs more than another qualifying proposal. We seem to want to make this into "rocket science" with all these formulas and other machinations, which seemingly provide some kind of justification for the selection decision. Having attended several Design-Build Institute of America national conferences, I also see state and local government entities that are just now venturing into "best value" competitions, justifying their "best value" selections, based upon formulas such as $/points or using other goofy mechanical formulas which nobody, owner or industry seem to understand, to justify their best value selections. Since few seem to understand the intricacies of the method, the industry more or less accepts the decisions and the state and local officials seem to be publicly happy with their justifications. When my former office used to use those numerical machinations back in the late 80's, industry seemed to accept the decisions. But in truth, my boss would come ask me (when I wasn't on a selection board) to go and read all the proposals and come up with some discussion points to help him explain in the debriefings why their firms weren't selected. That was pretty silly from my perspective. I like to evaluate "past performance" as a "proposal risk", rather than use the same rating system as other factors. Thus, a lack of "past performance" is rated as an "unknown risk" versus low, moderate or high risk of high performance for those firms that have a past performance history. What the heck is a "neutral" rating, anyway? I think that is almost meaningless. So a proposal could have an overall exceptional rating with "unknown proposal risk" if they cannot provide any kind of past performance rating by the owner. Then we look at the underlying differences between the quality proposals and their relative prices. Its usually not that hard to determine the "best value", at least for construction and design-build source selections. Supply and services might be more difficult to distinguish between proposers. But, Gee Wiz - we all make best value decisions in our every day purchases, usually without resorting to some silly numerical or adjectival summary rating. Even in Consumer Reports, one can look at the underlying basis for "factor" ratings in the accompanying articles or at the on-line, more detailed reports, then decide for themselves what they are willing to pay for a product.

What is "s/w" and what does it have to do with subcontracting?

It would seem that, to prevail in obtaining full payment, you'd also have to show that you provided all the services that the contract required and that the contract provides for a lump sum payment for the services rendered, irrespective of the actual number of hours you provided. The government can't terminate for convenience if you performed the full contract requirement and are due the remaining portion of a lump sum contract price for those services. Said another way, the government can terminate any remaining services not yet provided, as Vern explained. I think you earlier said that the government didn't fully order all the services that you agreed to provide during the telephone negotiations. You also never really clarified if there was a follow-up written proposal or other backup documentation that you saw before signing the contract, which captured the terms of the telephone conversation and agreement. I'm assuming that this was all conducted orally, then you signed a contract. As for signing a contract that didn't represent what you thought you had bargained for and agreed to, I think you'd have to prove some bad faith or fraud on the part of the government inducing you to agree to something else. You signed the actual contract, signifying agreement and acceptance of the written terms. Anyone capable of signing contracts is generally expected to know what they are agreeing to. As a disclaimer, I'm not an attorney and the above is just my opinion. I did take Business law courses years ago but am not an attorney.

Jose, it looks to me like you signed a contract that pays you only for services that are actually ordered, provided and accepted or those actually ordered and provided. I didn't see any provisions in what you shared, entitling you to a lump sum payment for the consulting services.

I'm going to chime in here and agree with both Don and Vern. Don has described the basic concept for pricing equitable adjustments for changes, as defined in Case law that is around 50 years old and Vern has described certain exception to the general rule.

Its appears that the contract isn't written the way that Jose understood the deal made over the phone. I believe that Vern is right. The Government will likely be able to get out of paying the remainder of the services portion of the contract.

Sorry. I was thinking of firm-fixed-price level of effort type contract as described in 16.207, not labor hour. According to 16.207-1: "A firm-fixed-price, level-of-effort term contract requires -- (a) The contractor to provide a specified level of effort, over a stated period of time, on work that can be stated only in general terms; and ( The Government to pay the contractor a fixed dollar amount."

Sorry. I was thinking of firm-fixed-price level of effort type contract as described in 16.207, not labor hour.16.207.1 says: "A firm-fixed-price, level-of-effort term contract requires -- (a) The contractor to provide a specified level of effort, over a stated period of time, on work that can be stated only in general terms; and ( The Government to pay the contractor a fixed dollar amount."

Rodolfo, even if you dont protest, Id suggest that you speak with the Government about your concerns.