joel hoffman

What were the terms of your subcontract concerning limits, if any, on costs? Did you have a limit? Did you provide a proposal to the prime to do the work? When did you tell the contractor what your incurred costs are or were?

I am in Atlanta without access to my FAR this weekend. But to those who say that it is up to the Contractor's discretion what costs they charge the government and expect to get paid for on a cost contract, that's baloney. Costs must be reasonable and allocable to the contract. Back in the 1990's, Congress changed the law and it is reflected somewhere in FAR 31.2 to clearly state that there is no presumption that a contractor's costs are reasonable and that it the burden of the Contractor to prove that they are. If the government negotiated a cap on escalation, the Contractor has plenty of notice of the standard of reasonableness established. In my opinion, the Contractor would then have to justify anything over the cap. I would expect the Contractor to ask before exceeding the cap. Many old timer Government folks may never have realized that the law and FAR were changed at least 15 years ago. I still hear the myth that any cost is presumed to be reasonable and that the Government is stuck. They then pass this incorrect thinking down to the next generation. The trick is to establish a clear understanding whenever possible at the outset or during negotiations of the standard of reasonableness. But simply to say that the costs charged are up to the discretion of the Contractor is wrong.

Nope, it's included in the same trade-off analysis. There is a separate price analysis of the proposals and a trade-off comparison analysis, like normally done..

What would be wrong with it? Because having to go to such overly complex lengths to implement a GAO decision shows how ridiculous that decision is. Why can't you just evaluate the possibility that any of the line item services might be extended for up to six months and assure that prices are still fair and reasonable,as part of the price analysis. Then during the tradeoff analysis evaluate to ensure that the value (both technical and price) would still provide the best value if the temporary extension(s) are needed. After all, the extension is purportedly designed to cover delays in awarding replacement contracts. Why get so elaborate? Chances are good that if the prices were reasonable and provided the best combination of price technical value, a six month extension wouldn't change the relative value of the winning proposal, would it? The only scenario I can think of where it might be questionable is if the best value was a lot more expensive than another proposal and you'd want to ensure that it still made sense and provided the best value for a longer period (including the extension. If price is the most important factor (best value tradeoff with price most important factor or LPTA), a six month extension wouldn't change the relative order of value of the proposals.

Mike, FAR 42.1503(e) was rewritten after the July 2006 version of FAR to be consistent with GAO Decisions and position that FAR 42.1503(e) did not limit past performance evaluation periods in source selections to 3 years. That section related to collection and maintenance of the info. It used to read that agencies could not retained to provide source selection information for longer than three years after completion of contract performance. I had a copy of a decision from sometime in 2006 or 2007 which nixed the limitation, because I was involved in a debate with some Contracting Officers who mistakenly cited 42.1503(e) as a prohibition on evaluating PP for construction past three years but I cant find it offhand. Not only did the GAO disagree, but FAR 36201© requires retainage of pp ratings for 6 years for responsibility determinations. I did a GOOGLE search under GAO FAR 42.1503(e) and found numerous articles or cites. One GAO paper indicated that the info must be kept for at least 3 years after end of performance, not that the government is limited to evaluating performance to 3 years. Dont have the time to look at every link and copy the info tonite, but you can do a GOOGLE Search and read for yourself

Try these two: Systems Management, Inc, Comp Gen B-287032.4, Apr 16, 2001, 2001 CPD, ? 85 Cortland Memorial Hospital, Comp Gen B285890, Ma4 5, 2001, 2001 CPD, ? 48

Don, that doesn't make any sense to me. You will be evaluating mutually exclusive options.

And do we evaluate prices only, the technical merits of using that firm for a bridge period , both price and technical (best value)?

Don, I don't know the criteria for evaluating options to include the possibility that the contract may be extended at the end of either the initial period or any subsequent period. I would think that if the proposal was the best value for any of the full option periods, it would be okay for less than a full period. Maybe a statement to that effect would suffice Then, the only question should be "What if the final option period is extended?"

Barry, Although I didn't find any cases direct to your point, I find several plus the FAR Requirement to support the fundamental principle that the proposal must not deviate in a matrial way from the RFP requirements. See WIFCON Protest page at http://www.wifcon.com/pd15_305.htm. Here are some cites and background: "In negotiated procurements, a proposal that fails to comply with the material terms[2] of the solicitation should be considered unacceptable and may not form the basis of award." Nordic Air, Inc., B-400540, Nov. 26, 2008, 2008 CPD para. 223 at 3." See also FAR 15.206 (d), which requires the government to amend the solicitation if a proposal of interest deviates from the stated solicitation requirements. If you are in contracting you should know this. "Although the concept of responsiveness or ?an unconditional promise to comply with the terms of a solicitation,? does not apply directly to negotiated procurements, offers must comply with the material terms and obligations in a SFO to merit consideration. Gardiner, Kamya & Assocs., P.C., 1995 WL 19599, B-258400, 95-1 CPD ? 191, *2 n.1. Stated inversely, ?[a] proposal that fails to satisfy a material solicitation term is unacceptable and may not form the basis for an award.? Integrated Business Solutions, Inc. v. United States, 58 Fed. Cl. 420, 428 (2003) (citing Marisco, Ltd., 1989 U.S. Comp. Gen. LEXIS 719, B-235773, 89-2 CPD ? 8; Minigraph, Inc.-Recon., 1990 U.S. Comp. Gen. LEXIS 1350, B-237873.3, 90-2 CPD ? 492). " (Tin Mills Properties, LLC v. U. S. and Glenmark Holding, LLC, No. 08-375C, July 15, 2008) "It is a fundamental principle in a negotiated procurement that a proposal that fails to conform to a material solicitation requirement is technically unacceptable and cannot form the basis for award. See TYBRIN Corp., B‑298364.6; B‑298364.7, Mar. 13, 2007, 2007 CPD para. 51 at 5." (The Boeing Company, B-311344; B-311344.3; B-311344.4; B-311344.6; B-311344.7; B-311344.8; B-311344.10; B-311344.11, June 18, 2008) (pdf) So, I suppose you could conclude that if you award a nonconforming proposal and there is a protest, you will most likely lose.

Turn on your "cookies", refresh the screen and a "download" button will magically appear on the upper bar...

Don, GAO made the point that there is no evidence that the government evaluated the pricing for the extension period. Even if the extension option possibility affected the pricing, the government, according to GAO,would have to document evaluating it. Requiring a separate evaluation for a non CLIN contract extension at prices which were determined to be fair and reasonable for the contract period is novel and a real stretch of reasoning. In effect, you now will have to evaluate whether all prices are fair and reasonable twice.

I had a long answer written then accidentally hit the tab button - dang it - wiped it out. I'm not a lawyer. But I think that the premise of the article - incomplete contracts - might be really discussing risk allocation. My background is primarily in design and construction contracting, so my perspective might be different than someone in manufacturing, sales or services. However, there is pretty well developed risk allocation in construction contracting to allocate many risks to the party - theoretically - best qualified to manage it. The contractors often add some type of risk factor or contingencies and they look for weaknesses in the specs to hope to make up for later in changes. They also buy various types of hazard and risk insurance. I also thought that the example the author used to justify his position was kind of weak, albeit from my perspective. As a boy, I used to shovel and snowblow walks and driveways in Minnesota (my Alabamian wife calls it "Minnesnowta"). If my dad's snowblower was stolen - after killing me - he would have filed an insurance claim, I suppose or would have made me pay it back, if I didn't perish from the beating. OK - OK - I admit that my customers would probably have excused me from performance because they could easily find another kid to take over! But I didnt have a written contract, either. But - so could the contractor in the lawyer's example in the article. They could have gotten somebody to cover their contractual obligation, plus they would probably have insurance on their equipment, unless they were careless or ignorant. If they were intending to stay in business, then they would have bought another snowblower. So, where would one draw the line on leaving out some contingency in a construction contract, as an excuse to breach, where there are many shared risks and many allocated risks? I suppose you draw the line when it becomes too risky to continue. Then the bonding company wipes out what assets you have left after the default...

Longhornjoe, this wasn't a "bilateral mod". It is a unilateral action with the date of the KO's signature identified as the effective date. The KO is requiring the Contractor to acknowledge receipt but that doesn't affect the termination. I agree with Vern that proof of delivery by other means is the proper or best way to go...

Well, the Agency requested reconsideration and the GAO remains entrenched in its anal interpretation and application of the FAR to a temporary extension of services. See http://www.gao.gov/decisions/bidpro/4014722.htm for "B-401472.2, Department of the Army--Reconsideration, December 7, 2009" OOPS! Parkerr beat me to the punch while I was reading the reconsideration...

I don't necessarily disagree with Vern or dwgerald. This is a supposedly a termination for default, so the alternatives that dw discusses aren't relevant to this scenario. I asked three questions about the mod in order to gain more understanding of the details of the termination. If notice of termination has already been given, the mod should cite the effective date of the action as the date of the actual notice. Once the decision to terminate for fault has been made after careful consideration, the government should take decisive action to issue the N.O.T. and get the re-procurement process moving, in order to minimize the time and other cost impacts of getting the contract completed. The longer the government takes to finalize the action, the more delays and time associated costs. For construction contracts, there often will be supplies, materials and possibly equipment involved that require protection from weather and theft. There may be construction in progress that needs to be protected from the weather. The Bonding company will be reluctant to pay for liquidated damages during the time that the government takes to finalize the termination. So, time is of the essence and it is in all parties' interests to move swiftly. In this scenario, the government may have already issued a termination notice by other means and might have achieved mutual agreement on something contained in the mode. We don't know. However, I still believe that it is not wise to delay issuing the Termination notification using a bilateral vehicle. A TFD is not dependent upon mutual agreement, plus the KO must then rely upon the other party to sign the mod. It's difficult enough to get many contractors to sign and then return routine mods, even after agreement on the details. If I was the contractor, I'd most likely send the Termination mod to my lawyer and some might try to forestall the default. Maybe the KO only wants the contractor to acknowledge receipt of the mod - which it might or might not do. Longhornjoe didnt mention whether the Block 13 C. (supplemental agreement) was checked. If it wasn't, then it isn't necessarily a bilateral mod. Was 13 C. or another block checked, besides 13 E., Joe?

Deleted. Wasn't done typing. "Me no know. Me no tell. Me push button and it go like hell!" See my next post...

Geez. So does that mean the contract isn't terminated until the contractor signs and returns the mod? ??? Was there a notice of termination and what is the effective date on the SF30? I might add that it is sometimes difficult to find the contractor if they abandon the contract ("walk away from it"). I personally know of at least two interesting situations. One, where a government employee had to stake out a small contractor's home and serve him the termination, because he refused to pick up the certified mail. Another time, the KO actually served the contractor the termination through the open window of the contractor's pickup truck as he tried to run over the KO! Again, he wouldnt or couldn't receive the certified mailed TFD. Don't screw around with Terminations. Make it a unilateral instrument and make sure that the contractor actually receives it.

I'm curious what others think but no, I would still use unit prices. With sole source, I assume that you'd negotiate the unit price. Hope that somebody has an idea of the amount of effort necessary to service those instruments.

I am assuming that you are using some type of GSA Schedule, due to the thread you posted under. You don't know how many, but you know the minimum and maximum number per year. You also know the scope of services and know that the scope is the same for each instrument, so the scope of the service requirement is fixed. Why not use a unit-price contract arrangement (cost per instrument) and set up a BPA with one or more firms for repetitive needs? T&M or labor hour pricing arrangement wouldn't be appropriate when the scope of services for each unit is known and is essentially fixed.

Well, I guess 2stars figured this out on his/her own or else it wasn't a pressing problem.

Sue, I think Leo was trying to tell you that this topic area is intended for Contracting employment type questions, not contractor employee questions.

ANSWER: (My answers are based upon my experiences over 38 years with the Federal Government in DoD and 4 years in local and commercial contracting.) As I said earlier, our agency requires an admin mod to align the actual quantities with the estimated quantities at contract closeout. However, we don't have to issue a mod to pay for overruns (or underruns) during on-going construction as long as the overrun wouldn't cause the overall contract amount to be exceeded Iin other words, there should be some underruns in other bid items to off-set the overrun(s)). The answer to your question ultimately depends upon your agency's rules. In your case, if you have already made final payment, you need to ask if a reconciliation mod is necessary to balance the books. In theory, assuming that all line items using the same accounting classification or appropriation, you can make progress payments as long as underruns and overruns balance, so as not to cause the possibility of exceeding the available funding. In theory, you could also be sloppy and pay for overruns up to the contract price, but if additional funds aren't available to add to the contract when you need them, you may find yourself in an Anti-Deficiency Act violation. That's one reason that our agency requires us to reconcile the quantities and funding prior to final payment. Dont be sloppy in your contract administration. Theoretically, one can adjust quantities and add funding unilaterally with an admin mod, as long as the adjustment remains within the originally estimated quantity plus whatever range that any Variation in Estimated Quantity type clause cites, because it isn't affecting the rights of either party. So, assuming that the FAR Clause 52.211-18, Variation in Estimated Quantity is in the contract, one could theoretically issue an admin mod that increases or decreases the estimated quantity of an item by up to 15%. We include a statement that explains that the rights of the parties under the VEQ clause are not affected. If we dont know the final quantities yet, we also include a statement that the VEQ clause is based upon the originally estimated quantities. We are also assuming here that the variation is NOT due to any differing site condition, "Change" or any other change in the original scope of work. Having said that, the DoD computerized contracting system doesn't allow us to change the contract price via an Admin mod, so we must cite some clause to revise the price. Our Headquarters directed us to cite the VEQ clause in order to allow the program to change the price. That is really Hogwash, because the VEQ clause doesn't mention simple quantity adjustments - It is there to allow either party to seek a price adjustment under certain conditions, where actual quantities of work are outside the range and the overrun or underrun causes a change in the unit cost to the contractor to perform the work. ANSWER 2: The VEQ clause at FAR 52.211-18 does not cover revisions to estimated quantities. It is there to allow an equitable adjustment in the event that actual quantities vary from the estimated quantities plus the identified bandwith either side. If there is no VEQ clause in the contract, I'd say that the parties have agreed to pay for the actual quantities performed at the agreed unit price. There is no mechanism for either party to request a unit price adjustment or other line item price adjustment for overruns or underruns. This assumes that the variation in quantities isn't caused or covered by some other event or clause or isn't the result of a gross estimating error. For an underrun, theoretically, you are covered, unless your agency requires a reconciliation mod to match the final copntract cost to final progress in order to balance the books. ANSWER: see my answers above. ANSWER: See above. I'd say no mod is necessary for progress payments because you have enough funding in the underrun of line item D.6 to cover the overrun in item D.5, but your agency may require a reconciliation mod at some point. NOTE: All of the above answers assume that this is a Federal Contract, subject to the Federal Acquisition Regulations, not a state, local or private contract. It is a usually good idea to try to keep the quantities up to date on a fixed price contract in order to aid in contract administration and to aid overall management of progress vs. the theoretical 100% completion. If quantities are running all over the place in comparison with the estimates, you might not be able to keep up with actual progress. So, even though a mod might not be necessary for progress payment purposes, it behooves the contract administration office to keep up with the real requirements and with the contractor's progress against requirements.

As a correction to thye above, I remember that the Army SPS system didn't allow us to change the contract price using an Admin Mod. Anothyer tail wagging the dog problem with SPS. They instructed us to cite the VEQ clause in the Mod, even though that clause has nothing to do with administrative quantity adjustments when there is no entitlement to a "price adjustment.". The VEQ clause covers equitable adjustments for work outside the agreed quantity range of 85-115%, not simple quantity adjustments. So, in my opinion, one could do the mod unilaterally when no VEQ equitable adjustment is applicable. Administratively, that is really simple, even in the dreaded SPS.

I will be glad to help you but don't have time tonight, especially on the Blackberry. Will check on the computer tomorrow. The Corps of Engineers came out with a policy about 15 years.ago to adjust final quantities to actuals due to the data processing systems needs to match 100% final payments with with the contract price. If memory serves me, we did it as an admin mod for anything not requiring a VEQ adjustment, but we could also wrap it up in the same mod as the VEQ adjustments, when applicable.