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joel hoffman

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Everything posted by joel hoffman

  1. OOPS. I did misread your scenario. I will answer but not tonight. I just got home from TDY and leave again first thing in the morning. I want to see my wife. I will need to read up on it. I'll be home Friday night and will look after that. There is a difference though. In the original scenario, the contractor did what it proposed to do. In the second situation, it didn't do what it proposed to do. However, I need to read Nash and Cibinic and the files I have collected.
  2. When I worked in Germany, construction contracts were in the German Mark and were paid with Marks. The US fixed the exchange rate for programming purposes and used a currency fluctuation account to pay or collect the difference between the number of dollars budgeted and needed to pay the contract. If the programmed exchange rate was 1.8 marks per dollar and the current rate was 1.5 Marks per dollar, the 0.3 marks came out of the currency fluctuation account. That was in the 1980's. We didn't generally contract in dollars.
  3. In your scenario, the prime subbed the work when it said in its proposal that it was going to self perform it. In this case, the prime did exactly what it said it would do in its proposal. However, the sub failed to perform (according to the information provided) and had to be replaced. In your scenario, the change in strategy may have affected the price that the government should have paid. The government audit might be able to show that the contractor had possession of or had solicited a proposal from the sub before or during negotiations nut failed to disclose it. If such a proposal showed that it should have been less expensive to subcontract the work, but the prime priced it as though it were going to self perform at a higher cost, there might be defective pricing.
  4. Vern, my position had nothing to do with the type scenario that you described. Suppose that the government has awarded a firm fixed price contract and that the contractor was required to submit and certify cost or pricing data. Suppose further that the contract includes the clause at FAR 52.215-10, Price Reduction for Defective Cost or Pricing Data (OCT 1997), and 52.215-12, Subcontractor Cost or Pricing Data (OCT 1997). Now suppose that the Contractor subcontracted a portion of the work to a firm, which submitted cost or pricing data per the clause. The subcontractor has been working, however has failed to meet its obligations; performance was unsatisfactory. In order to meet its contract obligation, the contractor terminates the non-performing subcontractor and replaces it with another subcontractor. I'm saying that the the new sub's proposal information is not cost or pricing data. Since it is not cost or pricing data, it need not be certified as such nor provided as such to the government. Now, regarding your scenario, it might be cost or pricing data. The Contractor has changed the circumstances of performance by subcontracting, in lieu of self-performing the work. I'd have to research my sources to determine whether or not the government could collect for defective pricing, but that is a separate issue. The government's track record hasn't been too good at recovery for contractor actions initiated after award of the contract. The government might have to show that the prime intended to subcontract the work at the time of negotiations or certification, but I'd have to research further.
  5. My last post was in response to one earlier today from Retreadfed addressed to me which continued the debate that I had decided to quit arguing about. By the time that I finished my response and posted it using this accursed Blackberry, there were several posts in between.
  6. Retreadfed, you know that we won't agree on this. I had decided to quit arguing aout it. I agree that it says what it says. Ok - in fact I never disagreed or denied that if data is cost or pricing data, then the contractor must obtain it from a sub. You keep repeating the same thing over and over again. I said that if it is "cost or pricing data", as intended by the statute to be used to support a specified negotiated contract action, then the contractor must obtain it. This effort costs the prime and the sub real money and resourcess. Seemingly stupid as much government requirements are, there is usually some specific purpose for them. "Cost or pricing data" were intended to have a purpose - in order to aid the government in its negotiations on larger contract negotiations or specific modifications for which TINA is applicable. It has to be certified to put some mark of "honesty" on it and to help hold the firms accountable for its content. The basic question then is this. Is a proposal from a replacement subcontractor, which is the contractor's responsibility in order meet its obligation to the government on the FFP contract "cost or pricing data"? If the proposal isn't related to the cost that the taxpayers are paying or "should have" paid for the contract or a specific applicable mod, then I think that wouldn't be defined as "cost or pricing data". Yes, it is still "data", but in this case, I would argue that it only bears a relation to the FFP contractor's actual cost to get out of the mess that its non-performing sub got it into. It bears no relation to the deal that the government and the contractor struck or to the accuracy or truthfulness of that negotiation. Your argument appears to be that this is automatically "cost or pricing data" because it is pricing information related to the agreement between the follow-on sub and the prime, regardless of whether or not it has any effect on what the government "should have paid" for the contract price. My argument is that this reasoning is a stretch. In trying to apply your reasoning to some possible negotiated FFP construction scenarios, I can't accept the automatic application of your definition of "cost or pricing" data. Say that something unforseen happens on the jobsite that is the risk responsibility of the FFP prime. This would be the same concept as the contractor being responsible to successfully complete the work that it hired the non-performing sub to perform for it . I can provide a real example from my experience in Saudi Arabia. We had a FFP contract for a large university campus building on one of our project sites. We contracted, via an out of scope supplemental agreement to add an additional similar building. There was cost or pricing data in involved in pricing the mod. One night a fire broke out in the new building and damaged a significant share of the in-progress work on the building. In replacing the damaged work, the prime hired some of the work done by another contractor due to time and resource limitations. The TINA threshold was then $100k, which this subcontract and the increases to its other subcontracts all exceeded. Using your argument, it would seem that the pricing of the new negotiated subcontract and perhaps the mods to the other subcontracts would constitute "cost or pricing data" that the prime must obtain from the subs and perhaps provide to the government, even though this work was strictlty the responsibility of the prime contractor and for the purpose of completing the contract work. I would say, that like the replacement subcontract in the example in this thread, the government wasn't concerned about didn't decide or really care how the contractor contracted to fix the damage, as long as it met the contract technical requirements. It was not concerned about prices the prime paid to the new sub or the other subs. Those were matters which did not affect the price we paid for the building and quite frankly, on a FFP contract, were internal contractor affairs and were none of the government's business.
  7. Because, if such subcontract proposals on FFP contracts are really "cost or pricing data", as they are on cost reimbursable or cost rederminable type contracts, there should be guidance on what to do with it or what it can be used for. All I found is where DCAA says - as it said way back at the date of my Briefing Papers article - that it isn't going to audit it because there is no benefit to the government.
  8. Yes, but my question is where is the guidance to the government on what to do with it? 15.404-3 (cee) deals with information used to price the prime contract. The only guidance I can find for covers what to do with subcontractor pricing as part of the proposal, not for replacement subcontracts or subcontracts that are newly solicited after the contract or mod date. Plus, the guidance to the contractor on the "how to submit it" is to include it as part of its cost or pricing submission.
  9. Vern, do you know where I can find guidance on the requirement for the FFP Contractor to furnish subcontractor cost or pricing data to the government for subcontracts or what the government is supposed to do with it, when not part of the contractor's certified cost or pricing submission for a contract action? I could only find instructions in FAR Table 15-2, II A(2) to include data from prospective subcontractors as part of the Contractor's cost or pricing data and submission for a proposal. I looked in FAR and DFARS Parts 15, 42, and 44. Of course, there is guidance on cost reimbursement prime contracts. I also checked the DCAA Contract Audit Manual. In 9-106.1, it generally states that DCAA wont expend audit resources on such subcontractor pricing proposals, unless the government may benefit from a price reduction.
  10. The provision is FAR 15.215-20, Requirements for Cost or Pricing Data or Information Other than Cost or Pricing Data.
  11. "FAR 52.215-12 requires the prime contractor to obtain cost or pricing data from subcontractors. That clause can only become effective after the prime contractor and government have agreed on price and the prime contract has been awarded. As I understand what you are saying, because pricing data that does not affect the negotiation of the price of the prime contract, that data cannot be considered cost or pricing data. If that is the case, what is a prime contractor required to obtain from subcontractors to be in compliance with 52.215-12 and to give meaning to the clause" Retreadfed, I cant make a general statement that covers all circumstances. However, the Contractor has to obtain cost or pricing data from its actual or prospective subs for a contract action, where exemptions don't apply. It must be current as of the date in the certification and in some cases, must be updated as of the date of certification of current cost or pricing for the contract or mod. I dont have the FAR with me tonight, but I seem to remember there being a provision covering the contract negotiation, in addition to the clause. What I'm trying to tell you is that cost data created after award of the prime contract or modification are not always (maybe never) "cost or pricing data" for purposes of that contract action. Cost data created long after the action in this situation is not cost or pricing data for the contract action. If it were, then the prime would have to obtain it and submit it under the appropriate circumstances. By the way, modifications certainly occur after contract award, so the clause would apply to negotiate mods meeting the applicable TINA thresholds and conditions. According to at least one case, GSBCA 15871 Viacom, Inc., September 21, 2005: "The relevant cost or pricing data is that data in existence at the time of price negotiations. McDonnell Aircraft Co., ASBCA 44504, 97-1 BCA 28,977, at 144,315 (contractor has no duty to supply accurate and complete subcontractor cost data created after prime and subcontractor have reached agreement on price); Aydin Monitor Systems, NASA BCA 381-1, 83-1 BCA 16,500 at 81,997 (1983), reconsideration granted on other grounds, 84-2 BCA 17,297; see United States v. Davis, 803 F. Supp. 830, 863 (N.D.N.Y. 1992); aff'd in part, rev'd in part sub nom. United States v. General Dynamics Corp., 19 F.3d 770 (2nd Cir. 1994); Plessey Industries, Inc., ASBCA 16720, 74-1 BCA 10,603, at 50,277 (citing Paceco, Inc., ASBCA 16458, 73-2 BCA 10,119 (data created between cost and pricing data certification and award date not cost or pricing data that was required to be submitted) (in TINA context, duty to disclose complete, accurate and current data extends only to the date of price negotiations). We have found as fact that price negotiations were concluded on December 19, 1984. Finding 27. Thus the relevant ending date for transactions which were to be submitted as cost or pricing data was December 19, 1984, not July 1, 1985. Therefore, any Westinghouse discount data that existed only after December 19, 1984, was not cost or pricing data that Westinghouse was required to submit to the Government." In our situation, the contractor replaced a subcontractor with a substitute, after performance was underway, supposedly for failure to perform. I am assuming that it was necessary for the contractor to succeed in or least to try to recover satisfactory contract performance. I am assuming here, as the basis of my argument, that neither the "cost data" that the replacement sub submitted to the prime in order for the prime to negotiate the new subcontract or the prime's intent to replace the original sub with a new sub existed at the time of agreement or the prime's certification of current cost or pricing data. So, such data is not "cost or pricing data". This action was unrelated to the price the government paid for the work. There is no use arguing any further. You keep asking me to generally define what is "cost or pricing data" and to generally define when a contractor has to obtain it. I'm only trying to tell you that, in this instance, the "cost data" was created (long) after the date of the certification of complete and accurate cost or pricing data, long after the agreement on the contract action, and (supposedly, long) after contract performance. There is no indication that the Contractor intended to replace an actual sub with a new sub at the time of its certification or at the time of agreement on negotiations or even as of contract award. This specific information, which either supports a subcontractor's proposal or even the negotiated replacement subcontract is not "cost or pricing data" and it certainly isn't related to the price that the government paid for the contract. The Government certainly can't use such late information for a price reduction. There are cases all over the place that the government has lost, because of acts subsequent to the certified cost or pricing data for the contract and subsequent to contract or modification award, not constituting defective cost or pricing data. If a contractor has quotes for steel for a construction contract that it wont need for a year, it might propose a cost based upon the steel quote with some risk factor applied for future cost escalation, because steel fabricators and suppliers will typically refuse to forward price structural steel that far in advance. When the time comes to purchase the steel, the contractor may go back to its regular supplier or fabricator and the price may be more or less than the originally proposed price, based upon current market conditions. However, the actual steel pricing data is not "cost or pricing data". For that matter, the original proposed pricing information maight not be "cost or pricing data", either - at least the judgmental risk factor placed upon a short term steel quote. There certainly isn't "defective cost or pricing" in either the original daqta or the actual data, if the price comes in less than estimated at the time of contract negotiations.
  12. Vern, ok, I agree that case law will go beyond the wording in the FAR. I'm trying to make that point elsewhere but some are hung up on literal reading of FAR. I think that the courts may have gone too far, tipping the balance against the interest of the public in favor of firms that simply want a competitive advantage for the next or follow-on contract, but so be it. It would seem pretty easy to claim "competitive harm" to keep anyone else from knowing the contract price, simply because there is a unit price. It would seem that the firm should have to show that someone can deduce the elements of internal company finances to demonstrate competitive harm.
  13. This isn't a cost contract, so my commemts are and have been directed to fixed price contracts. The point made in the articles and by me is that the the replacement subcontract would not be related to the contract action for which the C and P data was required. Therefore the proposal for such replacement subcontract isn't "cost or pricing data" as defined by TINA. Since it isn't C and P data, there is no need to submit it. I understand your argument. If it were C and P data, the prime would have to obtain it per the clause.
  14. I forgot to clarify. The prime contract in my example was negotiated and the prime ws required to certify its cost or pricing data back at the award.
  15. Vern, the title of the thread refers to a FOIA request, which I obviously overlooked. Since the request for the info is a FOIA request, I agree that the KO should follow the outlined procedure you refer to. It is unbelievable that someone who expended the time and cost to participate in a competition had to resort to a FOIA request to find out who won a $25,000 lawn maintenance contract and what the price was. Apparently the KO's boss eventually agreed with Brian, provided the answer and said "all you had to do was ask"...
  16. Retread, you are arguing the wrong point. I don't disagree with you that the prime needas to obtain C or P data from actual or prospective subs during the prime contract award process and that that information is useful and relevant. This thread concerns a replacement subcontractor who was supposedly neither an actual or prospective sub at the time of negotiations or award of the FFP contract action. In fact, this sub has no relation to the contract action for which the C or P was required. In fact, this decision to replace a non-performing subcontractor isn't a contract action at all.. Now, I answered your question, so please answer mine. Let me make it clearer. If a prime doesn't solicit a subcontract for say - painting, for two years after the FFP construction contract was awarded and he wants to then use a SB painter that he just found out about, does he have to submit cost or pricing data from his negotiations with that sub? The sub was never a prospective sub until now. The prime contract price was based upon an estimate by the prime at the time of award.
  17. Retread, thanks. I'm going by what I think my sources tell me. In addition, nearly all the articles that I have being reading refer to cost or pricing data "during negotiations" of the prime contract, regardless of what the clause literally says. The purpose of TINA is to aid the government in negotiation of the contract or mod at hand. It was not intended to provide the government, as Vern hinted, some information later developed that it might be able to use to help price subsequent mods. Those mods will stand on their own as separate contract actions. If a FFP contractor doesn't solicit and award a negotiated subcontract until several years after the contract date, I'm sure you would read the clause to require the prime to obtain cost or pricing data from the negotiations with the new sub. That subcontract bears no legal relationship on the certified cost or pricing data obtained from the prime contractor back when the contract was awarded and serves no purpose. I provided two case citations and two articles which, I think, discuss that very point, however, you are stuck on reading a literal translation of the contract clause. Vern, was right. This thread is a hoot. I may well be wrong, but at least I tried to find some material which puts all this into some context. TINA has a purpose. That purpose is not served by forcing a FFP contractor and its late hired subs to provide information with no relationship to its certified cost or pricing data that formed the basis for the original contract action.
  18. Vern, I am saying that the information provided to the prime by a prospective in a takeover subcontract is apparently not cost or pricing data, per two Briefing Papers that I have retained over the years. My information may well be out of date, because of subsequent changes to the statute and to the FAR in this area and/or case law. The article I cited earlier in support of my opinion was a 1993 Briefing Papers. I looked through my files and also found an 89-11 Briefing Papers 1, by Kent R Morrison and Robert T. Ebert. I realize that there are later revisions to the FAR etc., concerning dates of certification. However, one of the citations used in that article has been used as late as 2005 (see below). They said in the October 1989 article: "Date of Price Agreement As for the third element in the definition, the Act provides that a fact is cost or pricing data only if it is significant "as of the date of agreement on the price" of a contract or a contract modification. [FN 86] Pursuant to the FAR, the date of price agreement is the "shake hands" date- the day when the price negotiations are concluded. [FN87] Consequently all significant facts exisiting as of the shake-hands date constitute cost or pricing data, while facts occurring after that date are not cost or pricing data, even if they are available prior to certification or contract award.[FN88]" Here are the footnotes: [FN 86] 10 USC 2306a(g) [FN 87] See FAR 804-4(a) 1996 version: "When cost or pricing data are required, the contracting officer shall require the contractor to execute a Certificate of Current Cost or Pricing Data shown following this paragraph (a), and shall include the executed certificate in the contract file." (Note: current FAR 15.406-2: "When cost or pricing data are required, the contracting officer shall require the contractor to execute a Certificate of Current Cost or Pricing Data using the format in the paragraph, and shall include the executed certificate in the contract file.") The Certificate is essentially the same as the 1996 version. The instructions for the certificate used to say to insert the date when the price negotiations were concluded and price agreement was reached or, if applicable, another date (now reads: "...an earlier date") agreed upon by the parties that is as close as practicable to the date of agreement on price. The date of the signature was (and still is) the date of signing, which should be as close as practicable to the date when the price negotiations were concluded and the contract price was agreed to. [FN88] See Paceco, Inc, note 78, supra. [FN 78] Paceco Inc., ASBCA 16458, 73-2 BCA 10119 Unfortunately, I dont have access to 73-2 BCA unless I drive uptown to the Federal Courthouse Law Library. I found this footnote to a 2005 GSBCA Appeal decision 15875 with VIACOM, INC. - SUCCESSOR IN INTEREST TO WESTINGHOUSE FURNITURE SYSTEMS: "Paceco, Inc., ASBCA 16458, 73-2 BCA ? 10,119 (data created between cost and pricing data certification and award date not cost or pricing data that was required to be submitted) (in TINA context, duty to disclose complete, accurate and current data extends only to the date of price negotiations)."
  19. "Those of you who have claimed that commercial items are in some kind of special category in this regard, or that grounds maintenance prices cannot be trade secrets, and that it is ridiculous to refuse to release prices, do not know what you're talking about and should be ignored. The Department of Justice has issued extensive guidance about what should be done prior to the release of possibly protected information, and that guidance is consistent with what I have been saying. See http://www.usdoj.gov/oip/foiapost/2005foiapost17.htm. That guidance spells out extensive steps to be taken prior to releasing such information:" Vern, please quit stating that I have claimed that grounds maintenance prices cannot be trade secrets. I never said that and in fact told you that. I said that I doubt if they would be and further that nobody said that they were. By the way, the guidance that you refer to is for steps to take in the event of a FOIA request for release of "such information". I dont think that Brian ever mentioned a FOIA request. Being that the Solicitation provision states that, in the event of a debriefing, the overall price will be disclosed, I would think that an offeror would have to put the government on notice that the contract price cannot be disclosed in a debriefing.
  20. Retread, you didn't answer my question. Suppose you make the Contractor obtain this information. What benefit do you think that the Government might obtain from requiring that this information on this particular contract be certified as current cost or pricing data?
  21. Did you Google it? Try this link. "We have attached a copy of the CAS Working Group Papers for your use in the interim: http://acc.dau.mil/simplify/ev.php?ID=3220...mp;ID2=DO_TOPIC "
  22. "Based upon all of this, I don't see how you arrive at the conclusion that cost or pricing data are not required for subcontracts awarded afte agreement on the price of the prime contract." I never said that no sub proposals obtained or settled after the contract or modification award require the submission of cost or pricing data or that it does or doesn't have to be certified. My opinion pertains to this replacement contract. I am assuming that it is the result of poor performance by the subcontractor initially awarded the work and that performance has been started and is ongoing. It has no bearing upon the price proposed by the prime or its initial sub nor upon the contract price that the government will pay for the work. Retread, you are entitled to your opinion as am I. I maintain that, in this situation, any basis for pricing the replacement subcontract long after the contract action has no bearing upon the price that the government paid for the contract. Therefore, the information is not "cost or pricing data", as defined in the TINA statutes. The Truth in Negotiations Act has a purpose and intent to help the government in its negotiations. It supposedly provides an administrative means to recover excess costs that were the result of "defective cost or pricing data", without having to prove all the criminal elements of fraud, deceit or false statements/claims under those statutes. For instance, you don't have to prove criminal intent to lie, steal, cheat, etc. I dont see any useful purpose in requiring a prime to require its replacement sub to provide certified cost or pricing data" that doesn't meet the intent or the definition of cost or pricing data as it affects the CONTRACT price. I believe that the referenced "Briefing Papers" article said the same thing. Technically, even if the contractor decides, after awarding a subcontract, that it can get a better price somewhere else, then somehow just terminates the initial sub and signs a cheaper subcontract, there wouldn't be defective cost or pricing data. The cost or pricing data for both the prime and its initial sub was current as of the date of the agreement of both the contract and subcontract. Generally (there are exceptions), the contractor can look for better deals later (unfortunately for both the government and for the subcontracting community). TINA generally focuses on what the contractor or its subs knew or intended at the time of negotiations, not what they might learn later on how to improve the profit margin. Now, if you insist on being a faithful government paper pusher, more power to you. But, please don't complain about the workload or why contractors think we are stuffed-shirt, unthinking bureaucrats. What benefit do you think that the Government might obtain from requiring that this information ON THIS PARTICULAR REPLACEMENT CONTRACT be certified as current cost or pricing data?
  23. Vern Edwards: "You think that there is less ground for protection in a procurement of commercial items. I say that there are greater grounds. Joel thinks that grounds maintenance is too prosaic a service to justify trade secret protection of prices in a private transaction. I say that he has stated no rational basis for that position." I said that I understand the legal basis for withholding price details. I did say that I doubt that there are any trade secrets. I also said that the government never said that there were any trade secrets. If there are, then the government should determine whether or not there are and ought to provide a reasonable explanation why it wont even identify the contract price. That is not an unreasonable public request. The FAR says to provide the evaluated award price (and to identify the winner) in a debriefing, if given. Its an awfully big stretch to go from protecting trade secrets to keeping the award price secret. What is funny to me at this point is how nobody here seems to have examined the reasons the KO provided for withholding the contract price. To say that the price is part of the proposal, thus protected, is goofy, when the FAR says to disclose it when debriefing unsuccessful offerors.. The FAR citation she provided (24.202) doesn't make sense to me. Paragraph (a) isn't applicable. If she means that the price is part of the proposal, so cant be disclosed, that contradicts the debriefing requirements to identify the contract award price. Paragraph (bee) doesnt apply because the contract price wasn't obtained pursuant to 15.403-3(bee). Paragraph (cee) doesnt apply either. No reason was given for not identifying the winner. The goofy excuses that the KO provided don't make any sense at all, based upon the scenario outlined. As it turns out, there is more to the story that the questioner started trickling out yesterday. So, who knows what the real reason is? Ok, experts, please tell me what she meant and why she refused to disclose the price and winner's name, base on the information Brian provided. Please explain where she indicated that the price is a trade secret or otherwise would harm either the government or the contractor.
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