joel hoffman

This is a good question. An equitable adjustment, per the Government Contracts Reference Book, is essentially a price adjustment, based upon a change in costs, (whether an increase or decrease) plus a reasonable allowance for profit. The Supreme Court has ruled on the question of including a profit allowance in the term “equitable adjustment”. I don’t have the reference. This is distinguished from an adjustment to the contract price that is strictly based on a change in cost, without any reference in the basis of entitlement that would provide for an equitable adjustment of the contract price. It appears to me that there is a distinction in the paragraphs in 52.242-15 to the basis for entitlement between an equitable adjustment and a price adjustment for change in costs.

You can do a Search in WIFCON for warranty issue threads

I found al thread from 2023 - similar situation .ive dealt with is this over the years working for the Corps of Engineers hope this helps. Picking up daughter now at airport. Good night 🌙

I’ll check my edition of Administration of Government Contracts tomorrow.

It was not uncommon in my experience for Military installations to call contractors back under a warranty without inspecting and/or establishing the cause of the problem or that it was even related to the contract work.

We’ve discussed this before in the Forum and I believe that it’s discussed in the book Administration of Government Contracts. When the government directs a contractor to return pursuant to a warranty clause, the contractor returns and inspects the problem. If it is determined that it isn’t a warranty problem, then the government would be responsible for costs incurred by the contractor in complying with the government direction. Sackinator didn’t say that the roofing subcontractor fixed the non-warranty problem, only that it determined that the leak was unrelated to the contract work. “52.246-12 Inspection of Construction. (i) Unless otherwise specified in the contract, the Government shall accept, as promptly as practicable after completion and inspection, all work required by the contract or that portion of the work the Contracting Officer determines can be accepted separately. Acceptance shall be final and conclusive except for latent defects, fraud, gross mistakes amounting to fraud, or the Government’s rights under any warranty or guarantee”. 52.246-21 Warranty of Construction “Warranty of Construction (Mar 1994) (a) In addition to any other warranties in this contract, the Contractor warrants, except as provided in paragraph (i) of this clause, that work performed under this contract conforms to the contract requirements and is free of any defect in equipment, material, or design furnished, or workmanship performed by the Contractor or any subcontractor or supplier at any tier.” After final acceptance, the burden is on the government to establish that any failure is the responsibility of the contractor under either clause above.

Ah yes. That brings back memories of my first contract negotiations class in 1981. Our instructor was a retired GS-17. He said that the UK tendering and subsequent contract requirements were essentially a soft “starting place for discussions” (even after award). That was about 44 years ago.

Carl, not sure if you are making a connection of FAR to pre-FAR as “starting all over”. As I recall the FAR was intended to consolidate the DOD and several non-DOD acquisition regulations and to provide more uniformity, consistency and standardization to the various acquisition processes across the government. Much of the Defense Acquistion Regulations (DAR formerly entitled ASPR) were brought across as I recall, at least in my areas of engineering and construction contracting. Actually, the Defense Acquistion Regulations Council under the FAR Council (DAR Council) is probably the organization that promulgated the DAR. The Nash and Cibinic first edition of Administration of Government Contracts was published in 1981. The first edition of Formation of Government Contracts was published in 1982. The second edition of these books were published in 1985 after the FAR was effective in 1984.

Do the other governments have equivalent coverage to the US FAR Part 19 Small Business and the various Small Disadvantaged Business Programs as well as all the other social program requirements? Labor program requirements? Has everyone here ever seen the size of the US Department of Labor Headquarters in Washington DC ? It’s one of the largest. Not saying these are all bad programs but they do affect costs and add many pages to the acquisition regulations. Many State and local acquisition regulations serve much smaller jurisdictions, interests, scopes and programs. Many simply reference Federal requirements that are applicable to their jurisdiction, such as OSHA safety and health, EPA, etc…

I ran across this DBIA webpage on Federal Sector DB : https://dbia.org/federal/ Craig Unger is the guy that I recommended to you. Unger Security Solutions. Search “Craig Unger DBIA” and you will be able see his background, contact information and several websites. He was once the President of the DBIA. You can mention me as a reference if you write or call him to discuss any recommended approaches or possible assistance available.

I agree in principle with Carl. But the DBIA has owner members too. It’s pretty balanced. However, their contract format isn’t totally formatted for Federal Government contracts with the DB clauses, if you are a beginner. If you would like to hire a D-B coach/consultant for any phase of the acquisition from developing design criteria, developing the RFP, source selection and how to manage/execute the contract, I can direct you to an excellent person, who I’ve known for 25 years or so. He was the chief of Contracting for the Bureau of Federal Prisons successfully using DB for new Prisons. He teaches several different DB classes and has advised government owner teams for years. He is a Fellow with the DBIA. I don’t know if the USACE is still conducting the lifecycle D-B Course Classes. They allow outside agencies to attend. They have condensed it and were conducting it over the web a couple of years ago. Most of my fellow practitioners and teaching partners have retired.

My comments above concerning D-B were in response, to explain my opinion that the FAR is seriously lacking in guidance on how to effectively execute successful D-B programs. Particularly in defining the differences between the contractual roles, responsibilities and legal distinctions of the contract parties for traditional D-B-B and D-B acquisition approaches. The FAR and most agency written policies, procedures and practices were and still are written for traditional design-bid-build construction.

Many minor construction projects are examples of other than commercial acquisitions. The risk allocations and legal ramifications for private, commercial, state and local construction vary widely using industry or commercial terms and conditions- which may or may not be biased toward the specific industry. The few FAR clauses specifically applicable to construction establish traditional and consistent risk allocations, and terms. Regarding Design-build construction contracting, great, good average, mediocre and poor design-build practices and experiences abound both within and outside the government sectors. There is considerable amount of litigation in non-government D-B contracting and post contract completion situations. There are numerous organizations with their own model design-build contract formats and terms and conditions, which are often written to protect the interests of the organization and are sometimes conflicting or inconsistent with each other. I was a D-B practitioner for over twenty five years with the USACE, for a couple years before that in industry and even as far back with the Air Force in 1971-1972. I taught D-B for 20 years for USACE I was a member of the Design-Build Institute of America, until recently after full retirement, including the DBIA designation as Design-Build Professional® (DBIA®). I taught some classes for DBIA and made presentations at National DBIA conferences. I was on a DBIA Federal Sector committee, which advocates best practices for government D-B programs and projects. I was a member of the Program Management Team for the Military Construction (MILCON) Transformation Program for over ten years. We developed procedures and Model RFPs for performance-based and stream-lined acquisition, design-standards and execution for D-B projects for the ~ $50 billion Army Transformation Program.

What is an ATP? “Available to Promise”?

Depends upon what you are selling and to whom. Are you saying that you are a supplier to customers who are prime contractors on government contracts and are you referring to sales tax? I think so.

Not all simplified acquisitions are “commercial acquisitions”. Good luck with the Davis Bacon arena. In fact, the current $2500 threshold since (1933 I think) is lower than the original threshold (1928 I think). Going from memory; didnt refresh my search from a few months ago. And that ridiculous threshold isn’t based upon the labor portion of a construction acquisition. It includes the total cost, including equipment and materials and markups for indirect costs and profit…. There could be only a few labor hours involved…🤪 I don’t think that either abandonment would be practical. There are many areas where agency specific procedures and policies are unique or aren’t covered by the generic FAR. Some Examples off the top of my head are DOT/FHWA and Design-Build Construction. There is virtually no coverage in FAR of the vastly different roles and responsibilities of the parties in Design-Build vs. Design-Bid-Build. My agency attorney at the time (1996) that D-B was first addressed in Part 36 was the Part 36 DAR Chairperson. She said that the FAR coverage for D-B was limited to specific issues at the time. Plus the Committee members didnt really have much if any understanding of the differences between government furnished design roles, responsibilities and liabilities and when the Contractor is responsible for the design. Many other distinctions too.

I don’t think this is feasible on the scale necessary to successfully complete all required Federal acquisitions. And my primary question is still…will this reduce overall acquisition and lifecycle costs ? The spending deficits are unsustainable.

What is the expected benefit and specific outcomes? Making it easier to spend more money quicker? That’ll likely go over like a lead balloon unless the proponents can also establish that it will reduce annual expenditures…

Thanks again, Vern. 🤠

Absolutely ok. It’s a common practice in commercial renovation or repair projects when a firm visits your home, for instance. Some examples are door and window replacement projects, bathroom redo’s, etc.

This link is to a YouTube video of a Congressional Speech by Senator John Kennedy, which includes descriptions of some of the spending and contracts by USAID that have been discovered so far in an Agency Audit. You can skip the opening remarks and Rhetoric and go to the audit descriptions and amounts… “BREAKING NEWS: John Kennedy Breaks Down Federal Spending 'Line By Line' In Epic Defense Of Elon Musk” https://youtu.be/BA3ma1MeSIU Sure seems reasonable to me to be able to audit where and what $40 billion per year is being spent by USAID.

What are “illegal DEI and DEIA” policies vs. “legal Accessibility” policies…? Opinion - Thats what happens while one keeps campaign promises on the first day in office with questionable competent or adequate advice and knowledge of the scope of the executive order... Reasonable accessibility and accommodations go way back before - and yes, including the 2017-2021 timeframe. I wonder who actually composed all those day 1 and shortly thereafter EO’s. I seriously doubt if DT had the personal time to flesh out the necessary details…

Mixing a FFP prime contract with other than FFP subcontracts reminded me of a situation back in 1997 where the prime contractor on a Cost Reimbursement Major Systems Contract with a FFP construction Phase awarded a a major subcontract for the electrical installation on cost reimbursement basis. ______________________________ In early 1997, the Army awarded Raytheon Engineers and Constructors (REC) - technically Raytheon Demilitarization Company (RDC) - a Major Defense Systems Contract to Construct, Systemize, Pilot Test, Operate and Close a Chemical Weapons Demilitarization Plant in eastern Oregon. __________________________________ REC was one of the top ten US Engineering and Construction companies. The umbrella Systems Contract management and all other phases were priced as Cost Reimbursement Fixed Fee (CPFF) for well over a billion dollars. The initial phase was initially about $230 million FFP for construction and installation of about $150 million of Government Furnished Process Equipment (GFE). RDC was unable to award the electrical construction subcontract within its portion of the budget. They selected an electrical subcontractor working on the Hanford, Washington DOE Project in the Tri-City area on a Cost Reimbursement (CPFF) price basis. RDC’s budget problems may have been complicated by a supposed Corporate level, pre-award direction* to cut the proposal for the FFP construction phase by $20 million to help win the Systems Contract competition. RDC intended to directly manage and control the CPFF electrical sub’s schedule and workforce. However, they were dealing with a Hanford, Washington, Cost Reimbursement, Union electrician workforce. Virtually all of the decades long Hanford Project work, including Electrical, is priced on a Cost Reimbursement basis. __________________________________ The result on the Oregon project was a tremendous cost overrun of the electrical portion of the FFP construction phase due to major electrical trade labor force inefficiency. This electrical trade inefficiency also impacted the other FFP trades on the project to various degrees, as the electrical work was concurrent and interrelated with most of the other trade work. There were hundreds of electricians in the multi-thousand construction labor force. It contributed to delayed construction completion of the Chem-Demil Plant for almost a year. ______________________________ This was in direct comparison to construction of a very similar Chem-Demil Plant at Anniston Alabama. The scope and design of the two projects were essentially the same. Both plants also had essentially the same GFE process equipment, which was available and in local storage ahead of time. Both plants had virtually the same design changes after award. The construction phases for both plants began at about the same time. The construction phase contractor on that project was the non-Union arm of Bechtel. _________________________ *Someone who was on the RDC pre-award team personally revealed this to our project engineer, who told me about it.

Vern answered the question But - it takes additional 18 months after May 29 2025 (3, 6 month extensions after the next four months of contract duration ????) to award and transition a (another sole source?) follow-on ID/IQ contract??? Was a nine month transition period originally included in the current contract? From what you said there is still a fourth, one year, un-awarded option available. Just seems, from the limited info provided to be a weird approach to add 3, six month extensions. But Vern answered your question. Doesn’t matter if the ceiling is not being increased. It would appear that follow-on industry opportunities are being delayed, thus the justification for the out of scope (sole source) extension…

I don’t think this reference supports the perspective that the estimated or anticipated value prior to establishing the value of the action for awarding under simplified procedures…