joel hoffman

"You'd spend that much checking receipts". Give me a break! The DCAA doesn't even check every receipt for crying out loud. They use sampling techniques. I've yet to see one of our 1102's track every receipt. I'm not even sure that they check math in receipts.

I guess it is a matter of perspective. Does the government set the unit prices? Who is the "we" in "We set it at $500"? Since DOD can't normally just pick one FSS contractor to negotiate an order with (not counting sole source 8(a)), how do you make all these great detailed arrangements in a competitive ordering situation? By the way, somebody has to review and agree with quantities for all those great unit priced items in the invoices, too, unless "We" just skip that step in contract administration.

Boof, are you referring to Contractor 123's acquisition or one of yours?

Well, if Drabkin took over, you'd very likely see changes. Years ago, in my Con 3?? something DAU class in DC, the Deputy Counsel to the OFPP Administrator and Mr. Drabkin were guest lecturers. It was obvious to me that he didn't agree with some of the Administrator's policies at the time. From 1978 to 2001 Shay Assad worked for Raytheon. In 1998, Assad was Executive Vice President (Contracting), also serving as the Chief Operating Officer of Raytheon's Engineering and Construction business sector. He was the CEO at the time it was sold to the Washington Group in 1999. A simple Google search will lead you to much information about the aftermath of that deal...

Vern, I don't disagree with you. The Government should be able to estimate certain travel for individual projects. But, since (at least DOD) must compete orders, I doubt if there would be much, if any, joint planning or individual negotiations prior to the order.

Carl, I admit that I'm no expert on FSS contracts or task orders. I believe that this is a base FSS contract clause, which describes overall contract terms that have to be refined or framed within individual orders. It appears to say that order terms for travel under the contract might be established as either fixed price or some type of reimbursable arrangement. I think I indicated that in my post yesterday. When I write ID/IQ contracts, some clauses prescribe specific terms and conditions applicable to all task orders, while others frame or outline terms of various options that might be applicable to individual orders. Does this one do that? I don't think it is prescriptive. It merely indicates what is allowable under individual orders, which must describe the specific requirements.

The contracts are for "program/project management support type" services. From the business management side of the house, there may be practical problems with pricing travel as a lump sum item on such contracts. I'm assuming in some cases that the contract doesn't state the amount of travel or number of trips required. If the contract does state an estimated or assumed amount of travel, then we may have to micromanage the line item; if the number of trips isn't necessary, do we initiate a credit change? Obviously, if the number exceeds the estimate, we'd have to do something to increase funding, regardless of the type of contract pricing mechanism. Who determines how much travel is necessary? The natural inclination of a contractor, if the risk is now on the contractor to control costs, is to stay within the budget. If the Contractor decides whether or not a trip is necessary or how many can go and how long the employees can stay to support the client, the client will have little control and may not be satisfied with the level of on-site services provided. If it is a mutual decision, the Contractor may reluctant to send people any more than minimally necessary. If it is the Government's perogative to ask for on-site representation, can the Contractor argue that the trip isn't necessary or send the B team instead of the best (assuming they are paid more than the B Team)? How does the Government determine what is a reasonable number of trips to demand (request, require, etc.) and how would the Contractor respond? Unit-pricing of what can be determinable can help alleviate these practical problems. However, I would think that it would be much more practical for the Government and or the Government/Contractor team to manage the amount of travel within a budget, that can be easily adjusted to fit the actual needs of the program. The Government could request the Contractor's presence, the Contractor could suggest or request trips or the team could mutually determine what presence is necessary. As to the practical aspect of reimbursements, Government employees have traveled for years, being reimbursed on the JTR basis. If travel were based upon FFP, the Contractor still has to manage its budget and account for expenses, so the administrative costs aren't much lower, than submitting reimbursement invoices. I suppose the government voucher review process would be more complicated, but probably not that much. The reviewer can do sample full blown reviews and could used simpler reviews in between. When JTR or similar limits are imposed on travel costs under a reimbursable/no fee arrangement, there is a natural inclination for the Contractor to control costs. Yes, I am aware that the Contractor's overall performance may reflect how well it cooperated on sending the troops out to support the client.

After all of this, the problem remains how to price travel. To the extent that any of it can be determinable, you could establish unit prices. To the extent that it isn't determinable, I'd go along with Vern's original advice: "I?m lining up with our Marine. There is no ?answer? to this question. There is only what you can and will do as a practical matter. Why not (no pun intended) say that travel will be priced on a fixed-price basis through order-by-order agreement on the location and duration of anticipated travel, subject to adjustment? If more or less travel is needed, then mod the order. I did that for years under small R&D contracts, and it worked fine. You can also price travel on a fixed-unit-price-by-day basis, to include airfare. That takes some negotiating, but it can be done if you've got the skills. (Of course, creative fixed pricing and negotiation are lost skills in today's contracting.) You can negotiate a plus/minus unit price adjustment clause, too. Of course, information technology has made issuance of a mod a nightmare. There is entirely too much pricing of travel on a cost-reimbursement basis, but if I couldn?t it any other way, then I would make travel a cost-reimbursement/no fee line item. Period." Why? FFP is not appropriate for circumstances where price or scope isn't determinable and where attempting to establish a FFP for an indeterminable item would place undue risk on one or both parties. Indeed, if "time and material" contract type is allowed under 12.207 (bee), with great caution and subject to the restrictions therein, the FAR apparently provides the possibility of pricing indeterminant incidental items/ODC on a commercial contract, including travel using other than fixed pricing. The FSS clause discussed above (C-FSS-370 CONTRACTOR TASKS / SPECIAL REQUIREMENTS or something like it) is apparently in the Base ID/IQ FSS schedule contract. As I read it, this clause does not definitely restrict pricing of travel to fixed price, if it isn't feasible to do so. If there were no alternative to fixed pricing of travel, the clause would say so. If there were no alternative to 12.207(a), there would be no paragraph (bee), allowing Time and Materials contracting. Travel can be a component of Time and Materials. It seems that the lawyer is, in effect, either saying that you cant use the FSS Schedule contract or he/she is saying you must use FFP to contract for travel costs, which you indicated are an indeterminant service. That is my problem with what the lawyer says. He/she seems to be urging you to do something that could be contrary to good business practice or that is inappropriate for fixed price contracting. There has to be a way to price travel - if it is indeterminant - other than on a lump sum or unit priced basis and the FSS contract seems to provide for that exception in the C-FSS-370 clause. I wouldn't kill the lawyer, but I would ask them what solution they would recommend to price an indeterminant,incidental travel cost item.

"Joel says the lawyer is dumb, but doesn't say why. " I never said that "the lawyer is dumb". The lawyer may be brilliant However, the idea that you must contract a fixed amount for for travel, if the travel requirements or locations are indeterminate is dumb, in my opinion. I believe you need to be prudent and find a smart way to control travel costs, while relieving either party of unreasonable, unknown risks. The lawyer's argument appears, from the first post, to be that any cost reimbursement line item would make the contract type a cost reimbursable type contract, no matter how small the item is. "Our legal dept. has advised us that we cannot do this, referencing FAR 16.301-3b which states that the use of cost reimbursement contracts is prohibited for the acquisition of commerical items. My argument is that having one CLIN as reimbursable should not make the entire contract cost-reimbursable. Their response is that having one cost-reimbursable CLIN would cause the entire action to be a non-commercial contract because commercial contracts can only be FFP/FFP with EPA/T&M." If our contracting system is that rigid, we are in big trouble. Reminds me of the inability of the leadership of a certain county to adjust to changing situations in WWII, which helped defeat them. The same thinking persisted in the 1980's, while I worked and lived there. "That can't happen because the rule says this..." Talk about Lemmings (e.g., 80 car pileups on the (freeway), because something that "couldn't happen" if everyone following immediately behind each other at 140 kmph follows the rules, happened)! The unthinkable alternatives often weren't considered. The US, on the other hand, was usually able to change course when necessary...

If your counsel is telling you that you must contract for travel on a lump sum or some unit cost basis for indeterminate amount or places of travel, that is dumb! If you are an 1102, you are supposed to be the business expert, right?

Red, have you read FAR 16.505 (Bee)? There is a requirement for postaward debriefings when the task order exceeds $5 million. See, in particular: "(Bee) Orders under multiple award contracts— (1) Fair opportunity... (iii) Orders exceeding $5 million. For task or delivery orders in excess of $5 million, the requirement to provide all awardees a fair opportunity to be considered for each order shall include, at a minimum— (A) A notice of the task or delivery order that includes a clear statement of the agency’s requirements; (Bee) A reasonable response period; (Cee) Disclosure of the significant factors and subfactors, including cost or price, that the agency expects to consider in evaluating proposals, and their relative importance; (D) Where award is made on a best value basis, a written statement documenting the basis for award and the relative importance of quality and price or cost factors; and (E) An opportunity for a postaward debriefing in accordance with paragraph (Bee)(4) of this section." "(Bee)(4) Postaward Notices and Debriefing of Awardees for Orders Exceeding $5 Million. The contracting officer shall notify unsuccessful awardees when the total price of a task or delivery order exceeds $5 million. (i) The procedures at 15.503(Bee)(1) shall be followed when providing postaward notification to unsuccessful awardees. (ii) The procedures at 15.506 shall be followed when providing postaward debriefing to unsuccessful awardees. (iii) A summary of the debriefing shall be included in the task or delivery order file." Note (Bee) refers to the letter B

Yep, thanks for the correction, Don. Sorry for not looking up the term...

Sue, are you actually identifying which MATOC this is to the contract holders in your RFP, which I assume is a letter? At any rate, I was taught to always identify the contract number in any correspondence to the applicable contractor(s). Inasmuch as there is no implied authority in government contracting, if an unauthorized person requests a proposal without the knowledge or constructive knowledge of the authorized KO, a firm expends funds in preparing and responding with a proposal, the firm would have no recourse if the action was improper or somehow canceled. At the very least, one would think that the government should be competent enough to know the contract number of the contract they are taking an official action under. Tell the PM to 1) provide you the contract name and number, 2) provide the name of the KO or ACO and 3) read the contract before requesting a proposal for a task or delivery order!

Normal wear and tear is expected even under a warranty. As long as the bulbs, as a group or trend, aren't burning out prematurely, that would be considered normal wear and tear or a maintenance responsibility. The clause 52.246-21, Warranty of Construction, doesn't include unconditional warranty that nothing will wear out within one year. Unless light bulbs are "defective" (the warranty is for defects in materials, workmanship or design furnished), then the government is responsible for normal maintenenance and replacement. I was taught in one of my quality assurance classes, almost 30 years ago, that light bulbs were required to be "new" at acceptance. Thus, lights used during construction were to be replaced for acceptance. That was long ago, though. I don't remember if our guide specs at the time specified this or if this was based upon deductive reasoning from the Material and Workmanship clause that required all new materials and equipment unless otherwise specified. That would usually be a very high cost. If contractors were required to take out and replace all bulbs used during construction, we would theoretically pay for those labor and thrown away material costs anyway, resulting in a lot of waste.

Vern, the problem is that most clerks don't have any authority to negotiate with you or me. In one of my Business Law courses, we learned that posted prices are negotiable, not set. However the employee must have authority to bargain, which they don't and most clerks cant override the price scanner to change the price. They must make up any difference between the till and the cash register tape. Smart ones will put out a "penny dish" to collect odd cents to help out those who are "2 cents short".

Yeah but unless you are at a gas station or a store with a penny jar, you cant buy lots of things without the last two cents to pay for it. The last two cents might mean they wont sell it to you. That is a sign that the clerk will have to make up the difference.

Vern, I don't totally agree with you. Our organization has huge periodic technical conferences. Many of these are joint service conferences. We couldn't afford to put these conferences on without sponsors (Industry Booths) helping defray the costs. In my opinion, they are very important conferences. They offer wide opportunities to provide required professional continuing education in order to meet professional licensing requirements. They offer opportunities to present or introduce state of the art scientific, architectural, engineering management, environmental, O&M, etc. studies, lessons learned, papers, etc. to a wide audience. Many of the exhibitors also provide professional presentations. The downside, in my opinion, is what Dwight Eisenhower warned us about at the end of his Presidency in 1961, to guard against the acquisition of unwarranted influence by the "Military-Industrial Complex". We tend to get too cozy with those firms that we do frequent business with.

I tend to agree with Vern, here. And a partial Convenience Termination would clean up the contract to avoid future claims. This would be especially important if the contract admin team changes over the course of the contract. However, it looks like another agency has the contract (Defense Fuels Agency, perhaps?). What is "WAWF"?

The advantage of being able to not exercise the option is "killing the turkey", so they won't keep coming around trying to drum up business. Then it's "Goodby, good luck elsewhere and good riddance."

Response: The program manager has overall responsibility for the acquisition plan but uses the responsible professionals to develop it and must coordinate with Contracting and Small Business advocates. From FAR 7.104(a): "...In developing the plan, the planner shall form a team consisting of all those who will be responsible for significant aspects of the acquisition, such as contracting, fiscal, legal, and technical personnel. If contract performance is to be in a designated operational area or supporting a diplomatic or consular mission, the planner shall also consider inclusion of the combatant commander or chief of mission, as appropriate. The planner should review previous plans for similar acquisitions and discuss them with the key personnel involved in those acquisitions. At key dates specified in the plan or whenever significant changes occur, and no less often than annually, the planner shall review the plan and, if appropriate, revise it." See FAR 7.104 ©: "© The planner shall coordinate with and secure the concurrence of the contracting officer in all acquisition planning. If the plan proposes using other than full and open competition when awarding a contract, the plan shall also be coordinated with the cognizant competition advocate. (d) (1) The planner shall coordinate the acquisition plan or strategy with the cognizant small business specialist when the strategy contemplates an acquisition meeting the dollar amounts in paragraph (d)(2) of this section unless the contract or order is entirely reserved or set-aside for small business under Part 19. The small business specialist shall notify the agency Office of Small and Disadvantaged Business Utilization if the strategy involves contract bundling that is unnecessary, unjustified, or not identified as bundled by the agency. If the strategy involves substantial bundling, the small business specialist shall assist in identifying alternative strategies that would reduce or minimize the scope of the bundling. (2) (i) The strategy shall be coordinated with the cognizant small business specialist in accordance with paragraph (d)(1) of this section if the estimated contract or order value is? (A) $7.5 million or more for the Department of Defense; ( $5.5 million or more for the National Aeronautics and Space Administration, the General Services Administration, and the Department of Energy; and © $2 million or more for all other agencies. (ii) If the strategy contemplates the award of multiple contracts or orders, the thresholds in paragraph (d)(2)(i) of this section apply to the cumulative maximum potential value, including options, of the contracts and orders." "

Vern, FAR 16.500 (d) applies to ID/IQ contracts in general. Yes, I said "see also 16.505(a)(8)", which applies to multiple agency ID/IQ's.

longhornjoe, the requirement is to pick the most highly qualified A-E firm for a task order (FAR 16.500(d)), consistent with Subpart 36.6 (see FAR 36.602), using qualifications based evaluation criteria consistent with 36.602-1 (see below). See also 16.505 (a) (8), also quoted below. Once the firm is selected, then we request their proposal, evaluate it and negotiate a fair and reasonable price, but the selection is qualifications based. FAR 36.602-1 -- Selection Criteria. "(a) Agencies shall evaluate each potential contractor in terms of its -- (1) Professional qualifications necessary for satisfactory performance of required services; (2) Specialized experience and technical competence in the type of work required, including, where appropriate, experience in energy conservation, pollution prevention, waste reduction, and the use of recovered materials; (3) Capacity to accomplish the work in the required time; (4) Past performance on contracts with Government agencies and private industry in terms of cost control, quality of work, and compliance with performance schedules; (5) Location in the general geographical area of the project and knowledge of the locality of the project; provided, that application of this criterion leaves an appropriate number of qualified firms, given the nature and size of the project; and (6) Acceptability under other appropriate evaluation criteria." FAR 16.505 (a) (8): "In accordance with section 1427( of Public Law 108-136, orders placed under multi-agency contracts for services that substantially or to a dominant extent specify performance of architect-engineer services, as defined in 2.101, shall? (i) Be awarded using the procedures at Subpart 36.6; and (ii) Require the direct supervision of a professional architect or engineer licensed, registered or certified in the State, Federal District, or outlying area, in which the services are to be performed." As soon as you ask for the detailed technical approach, including data which, when combined with contract unit prices, is used to evaluate the potential cost to the government, you are evaluating price or cost. The industry also knows or senses that cost or price is a competitive evaluation factor, using such tactics. I'm surprised that industry puts up with it.

Duh, yes I do think that. Why do you want the detailed information, including ODC and travel costs, plus the number of hours and manpower information? Its a rule of thumb that one doesn't ask for information in a competition that you won't evaluate.

You can't use price as a selection factor in competing task orders for A-E services.