joel hoffman

I agree that the contractor is probably due an adjustment of some sort, but the decision appears to be based on obsolete law, refers to unabsorbed overhead, and refers to an incorrect interpretation of the standard Variation in Estimated Quantities Clause. In the instant case, the State Department used a custom Variation in Quantity clause. The CBCA referred to the FAR Variation in Estimated Quantities Clause (52.212-11) in its analysis. The Court mentioned the purpose of the VEQ Clause was to prevent windfalls or losses due to excess quantities or underruns. It cited the language in Burnett v. US ("26 Cl. Ct. at 303") and the Corps of Engineers Board of Contract Appeals' Bean Dredging Corp. Decision, "ENGBCA 5507, 89-3 BCA, 22,034, at 110,824". Those cases essentially involved the principle of re-pricing overruns, based upon actual costs. Those cases were rejected by the US Court of Appeals back in 1993. US Court of Appeals rejected the holding in Burnett in the Nov 4, 1993 Decision of Foley Company v. US, "11 F. 3d 1032". Instead, it reaffirmed what I term the "Victory Principle" (Victory Const. v. US, 510 F. 2d 1379, 206 Ct. Cl. 274 (1975)). The Victory Principle doesn't allow re-pricing. Instead, the party seeking an adjustment has to show that the cost to the contractor per unit outside of the estimated band (85-115%) was increased or decreased solely as a result of the variation in estimated quantities. It doesn't seem to matter whether or not there was a windfall or loss on the work, so the excess or underrun isn't priced at actual costs plus markup. We have traditionally looked at recovery of 85% (75% in the instant State Department case) of certain fixed and one-time costs for underruns, as well as anything else that the contractor can justify as an increased cost due to the underrun. Examples include higher unit costs due to the "learning curve", waste materials, mob and demob costs, fixed field office costs, etc. We haven't looked at paying "underabsorbed" or "unabsorbed" home office overhead on the un-earned quantities, instead added HOOH onto the additional unabsorbed direct and other indirect costs. This Court seemed to extend the application of unabsorbed or unearned home office overhead to underruns. There may be some discussion of this new case in Nash and Cibinic Reports or elsewhere - I don't have access to those type reports anymore. However, I thought it was strange that the CBCA would refer to case law that has been since rejected. With the Foley Decision, we got away from the Bean Dredging and Burnett logic way back in 1993. The pendulum may be swinging back, but I don't think that a Board of Contract Appeals can overrule Appeals Courts. Of course - I'm not a lawyer or a paralegal. My last Business Law course was in night school in 1983.

It was lacking any meaning or point, as asked - inane. Nobody but the questioner knew until three days later that he or she was referring to a time and materials contract.

Sorry to be acerbic, AAC. The question was inane in the manner which you asked. Your question was so broad that it would take an essay to answer it. I didn't understand the point of your question. "Fee" can be applied to materials or it can be excluded, depending upon the situation. There - I believe that I responded more politely your original question. Materials could be involved in most contract types and pricing arrangements (supplies, services, A-E, construction R&D, FFP, CP, T&M, etc.). In FAR talk, the term "fee" is generally associated with cost reimbursement contracts (The Government Contracts Reference Book, 2nd Ed., by Nash, Schooner, Obrien). However, people often refer to "profit" as fee, which could be associated with various FFP contracts. In an A-E contract, "fee" is referred to in Federal Law as the price for various professional services. And in the commercial world, "fee" could mean many different things, including "costs", "markups" or the price for something. DHS referred to certain costs as fee, herein. So, who could tell what the heck you were asking? In the future please be more specific when asking for advice. If you ask a question, please be prepared to promptly clarify if someone needs more information to answer. Responders often go to lengths to do some reasonable amount of research before responding. To answer your question would have taken a research paper. You asked the question late Thursday night or early Friday morning, two people asked for clarification and it appears that you didn't followup until Sunday**. So - sorry, but it is really aggravating when folks ask fuzzy questions, then don't bother to followup when others need clarification or more detail. I wasn't going to waste time researching or otherwise trying to answer such a "shotgun" (with an open choke) question. **I do salute you for apparently reading and responding to my post on a Sunday, which is a day off in many places - unless, of course, you are in the Middle East in a Moslem country. There, "weekends" fall on Thursday and Friday, with Sunday being a regular workday.

What an inane question. Are we supposed to guess what type contract and/or pricing arrangement is applicable or is this just a general interest question?

Formerfed, experience may be important. However it takes much more than experience to be competent. Experience doing things wrong or using poor or outdated guidance, learned from incompetent supervisors, supervisors that haven't kept up with acquisition changes and reform, etc. is worse than not having any experience. I had a couple of examples which infect our organization but have decided not to describe them. However, they are widespread across our entire organization. Suffice it to say that a lot of KO's and their supervisors apparently don't know that FAR Part 15 was rewritten in major ways, over 12 years ago.

Is this contingency no longer necessary?

Deleted - pulled the trigger too soon...

Just curious. Since cost, such as fuel, and rates see, to change, would you want to fix them in a BPA? Wouldn't you want to compete something like helicopter services on a call basis? What do you compete among equal prices, for instance - availability?

They want to keep the same contractor for an additional year until they can get a the next follow-on contract in place. The next contract will have more scope than the existing contract.

Its not a variation in estimated quantities, because you are apparently adding work that wasn't included in the original scope of work indicated in the contract drawings. I am assuming that the drawings indicate where sidewalks are to be constructed. That will probably answer your question. I'm curious, though. Roughly how much additional quantities of sidewalks are involved and is this a small percentage of the existing scope?

Maybe I'm missing something here. Why cant you have a FFP line item for travel or better yet, have them include the travel cost in the price for the course? You know when the course will be and where...??? As for the IGCE, how are you going to use it? If you include a range of flight and other time related travel costs in the IGCE, if you are going to use it to evaluate reasonableness, you can apply the range to the proposals that you are looking at, knowing where the particular firm is from. The IGC is only an estimate - why cant it be adjusted if some new information comes up? Why would you want to hire somebody from Alaska and pay that much more to travel to the East Coast if there are other firms that can do a good job for much less cost? Seems like this is overkill, anyway. Can't you hire someone based on qualifications and a reasonable overall price, including proposed lump sum travel cost?

Matt, in USACE, we developed a contract clause and teach that the contract consists of the terms of the RFP, as amended through award, and the Accepted proposal. The final design documents, developed after award, are contract deliverables, which must conform to the contract requirements (i.e., the RFP and the accepted proposal). In case of conflict between the contract documents, the order of precedence is 1) anything within the accepted proposal which specifically exceeds the RFP requirements (must still meet the RFP requirements) becomes the new minimum requirement, 2) the minimum requirements of the of the RFP and 3) the remainder of the accepted proposal. The deliverables are not part of the contract but must conform to the contract. This does leave some flexibility for contractor adjustments during construction. Designs aren't perfect, plus sometimes the designer adds features which aren't contractually required, and/or aren't available, and/or available within the design-builder's budget, etc. While many of the non-contractual "niceties" do get incorporated, some might be have to be sacrificed or modified during construction. The design details weren't specifically part of the specific contract bargain at contract formation. We have also developed a clause that puts some contractual controls on deviations from the accepted design. The contractor's designer of record (DOR) must review and technically approve all proposed deviations and government concurrence is necessary prior to adoption. The design-builder must also track all approved deviations in the design documents and the as-built documentation The government reserves the right to non-concur if the deviation prejudices or otherwise impacts the government, such as interior design finishes, where the government has ordered the furnishings and fixtures in accordance with the accepted design. Any proposed deviation from the the accepted contract proposal or the RFP requires both DOR and Government approval and a contract modification. The Government doesn't have to agree to the change to the contract. The government won't pay for any increased cost of a deviation. Decreases are subject to a credit change. Yes, we have some battles. But, we have found that the above ground rules seem to work pretty well, when understood and applied. When we have good contractor and government teams and with implementation of our partnering processes, we seem to be able to work all or most of those issues out.

- Matt, I believe that an ACO who is an engineer or architect in USACE must have the same Defense Acquisition Workforce Improvement Act qualifications and training that an ACO who is an 1102 must have to get the same level KO warrant. Level II DAU certification is required, although many obtain Level III certification. Those of us who were GS14 and above were also members of Army Acquisition Corps. The 13's and below were usually Acquisition Corps Eligible, if they aspired to higher level positions. The mandatory refresher training requirements are also applicable. Plus, all ACO's and COR's must take yearly Appropriations Law and Ethics, etc. training. In addition, the ACO's who are engineers or architects have additional technical training and will have probably had construction contract specific training. Then there is the required training for those who are supervisors. If the ACO is a Resident or Area Engineer, he/she must also be a Registered Architect or licensed Professional Engineer and keep up with any state required continuing education requirements. Most states require 4 years of engineering or architectural experience, in addition to the various pre-PE licensing levels and pass all the licensing tests. There is a move on within the college community to change to a five year curriculum for future engineers and architects. I haven't kept up with the latest DAWIA quals but a KO (including ACO) must possess a Bachelor's degree and have at least 24 semester hours of business curriculum from an accredited institution, plus whatever number of years experience in contracts is required (I don't remember how many). Our ACO's have KO warrants with certain authorities, including modification authority on FFP construction contracts under specific clauses up to various limits. I think the maximum mod authority is still $500k, unless it has been adjusted for inflation. The ACO's duties also include that of Contracting Officer's Representative (COR), although there can also be separate COR's, who aren't ACO's. It depends upon individual District policy, but as contract administrator's, we negotiated modifications, claims and even new sole source negotiated contracts. Pre-negotiation objectives and settlements were subject to the ACO's approval or subject the KO's approval, for actions which exceeded the ACO's authority. The ACO or PCO would review and approve pre-negotiation objectives and post-negotiations packages, as applicable. In addition, there was legal coordination and review at various monetary levels and for claims. Some Districts centralize negotiations of larger actions, many don't. Some of us also ran competitive source selections under the PCO's supervision. I joined civil service with USACE in 1980, after four years outside engineering and construction experience and after my Air Force civil engineering time. According to NAVFAC personnel that I spoke with in early USACE training classes, there were no NAVFAC ACO's at all in the field. I believe that every modification had to go back to Washington DC. for at least KO execution. I don't know who negotiated them. Back then, our KO's for construction contracting were all Military Engineer Officer's (the District Engineer and/or their Deputies). The field offices had "Resident Contracting Officer's" (this was predecessor to the ACO), who were engineer's or architects with certain required contract administration training. The Contracting shop folks were the KO's for service, supply and (I think) A-E contracts. This all changed with DAWIA, when construction PCO responsibility went to Contracting and RCO's became ACO's with DAWIA training. New ACO's had to meet full DAWIA qualifications, while most of the existing RCO's met the Grandfathering criteria but still had to take the DAWIA training. I thought that the USACE-wide contract training was better than most of the required DAWIA courses back in the 1980's and 1990's. I'm probably prejudiced, because I taught some of the USACE-wide training, like Cost Analysis, Estimating for Modifications and Claims, Contract Admin., local contract admin courses and seminars, etc. I know that our PCO's are more qualified now than "back in the day" and we seem to have less claims with our current ACO Cadre, so I suppose that DAWIA seems to be working. I know that there are a currently LOT more qualifications to be an ACO/Resident Engineer now, between DAWIA and licensing requirements, than years ago. Fortunately, I was a PE prior to my employment with USACE. I will say though that my RE's and Area Engineers were highly qualified, experienced engineers and contract administrators/RCO's/COR's.

Aw, y'all quit whining about whining. A person's opinion is often based upon their perspective. The progream that I retired from a couple of years ago required management and advisory services at many locations over a period of years. There was no way to reasonably estimate number of trips or even when or where travel would be required. In addition, we sometimes travelled from one TDY location to another. We even ended up traveling to various contractor home or division offices. The original post indicated that travel seemed to be indeterminent in nature. That was my perspective. Vern makes a good point that what seems to be indeterminent may just be laziness on the part of the customer...

Aw, quit whining, y'all. For the time being, the First. Amendment allows folks to speak their mind. Even though this is a private forum, I would hope that it wouldn't be THAT restrictive.

What is a "level of production by skilled labor"? In general terms, at least explain what is being produced. Is this repair, maintenance, construction or what? As stated above, unit-priced construction contracts are common in commercial, local and state government construction projects. Typical projects are utilities and transportation. It is also common on horizontal Civil Works construction and dredging contracts. Also used for painting and other type maintenance or repair contracts. Generally, the scope is known but not all quantities might be accurately known before execution, so unit-priced items with estimated quantities are mixed with lump sum items. These type contracts are considered FFP when the overall scope is "fixed" at award. I think NASA also uses unit-priced items, such as launch support services, mission operations, mission recovery, etc.on a per mission basis. Is this a DOD or NASA contract? I may have missed it above...

Matt, our RE's also farm out submittals when necessary, similar to the Air Force, It depends upon the level of technical expertise in the RE office. Most are ACO's. Some might work for an Area Engineer, who may be the ACO. We occasionally have an 1102 ACO in the field office, more likely on cost contracts. I'm curious. Why does NAVFAC incorporate the design into the contract? For instance, what happens if there is a design error or omission in the design-builder's design that has to be fixed? Does someone initiate an engineering change, change order (or whatever term NAVFAC uses for a change to the contract)? How does it get incorporated into the design or contract? If it costs more to fix, does the government pay? Time extensions, etc.? Is there any room for Contractor flexibility in the final design? Yes, I was an ACO.

Matt, our RE's also farm out submittals when necessary, similar to the Air Force, It depends upon the level of technical expertise in the RE office. I'm curious. Why does NAVFAC incorporate the design into the contract? For instance, what happens if there is a design error or omission in the design-builder's design that has to be fixed? Does someone initiate an engineering change, change order (or whatever term NAVFAC uses for a change to the contract)? How does it get incorporated into the design or contract? If it costs more to fix, does the government pay? Time extensions, etc.? Is there any room for Contractor flexibility in the final design?

Vern, that makes more sense to me.

Yes, I understand all that. The light bulb that turned on concerned a supposed great need or statutory requirement to tie down every little facet of travel as a fixed price, supposedly because FFP is a better deal for the government or something. Then, we might well pick the best firm, with little regard for the best overall price. Next we should negotiate travel details to maybe save a few bucks. Gee, is overall price important or not important? Or is only tying down the travel cost so important? Makes me chuckle at what seems to be ironic. Oh, but it is a "no-brainer", isn't it...

Aha, I see your point about picking one firm to negotiate final prices with! Edit: Let me think about that for awhile. Seems funny that we go to all these lengths to tie down all pricing to FFP for some unknown reason (we say "because it is required". But why is it required? Because congress is worried about costs?) , then we pick one firm to negotiate with. Could that indicate, hey pricing might not be so important, qualifications or something else might be more important than the miniscule details of pricing that we seem to be insistent about? Just seems contradictory to worry about tying down all pricing details if price isn't that important. If price were really so important that we have to even fix travel costs, why not discuss final price with more than one firm?

Vern, Part 15 doesn't apply to everything. I never said that it does. DFARS 208.405-70 applies to FSS orders, implementing Section 803 of the Defense Authorization Act for FY2002. Paragraph (3)(bee) says that each order exceeding $100,000 shall be placed on a competitive basis, unless the requirement is waived per the exceptions in FAR 8.405-6. DFARS says to make the notice of intent to purchase the service to as many schedule contractors as practicable. It says to reasonably ensure that offers will be received from at least three contractors that can fulfill the requirements. It also says that at least three offers should be received from contractors who can fulfill the requirement, unless the KO can document that, through reasonable efforts to find other firms, no other firms that could fulfill the requirement could be identified... I admitted that I'm no expert on FSS orders, but for orders exceeding $100,000 looks like DoD agencies must try to compete orders. How practical is it to negotiate unit prices for travel with multiple firms? For orders under $100k, I wonder how much travel would be involved, anyway. It might not be enough to fool with on a unit priced basis, considering that it might have to be modified later. Or sure, if you're dealing with one firm, go ahead and negotiate unit prices if you want to. Heck, it isn't that darned difficult to review a couple of travel invoices on a small order, anyway. My reference to DCAA was merely to explain that professional auditors don't even scour every piece of paper and review in detail every line in proposals or invoices. They use sampling techniques. If the so called experts don't go to that detail on the big buck acquisitions, does a voucher examiner have to on every voucher that includes travel? Besides, I sure as heck can speed read a hotel bill to see what was in it, if I had to.

I wasn't the one who recommended Mr. Drabkin. To the extent that the OFPP Administrator has any influence over anything, I think that there would be change in philosopy, that's all. If that is good, okay. If it is "rogue-like", I'm not sure that it would be good. I'm not going to go any farther here with any of those suggested thus far.

Based upon my impressions from several years ago, as well as a couple hours listening to him in the DAU class, Mr. Drabkin has a more liberal view of the FAR and perhaps Procurement Statutes than the OFPP did. The GSA has "streamlined" government contracting with the various government-wide Part 8, ID/IQ contracts, its for fee business enterprise centers (or whatever they are called), etc. I don't know if he was responsible for or had anything to do with the contracting debacles where centers were taking on all types of customers and issuing all types of orders beyond the scopes of their contracts, but they were certainly using some "out of the box" thinking... I'd say that his philosophy would be projected in any role that could affect Government-wide acquisition policy.