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Posts posted by KME

  1. Why not create a FFP LOE and use this clause:


    Monthly Payments: The contractor shall be paid based upon level of effort (LOE) expended for all sites, plus travel, training, and surge support costs incurred. The amount of the payment for the monthly LOE expended shall be developed by multiplying the percentage the month's LOE for all sites represents of the total annual LOE for all sites times the firm fixed price.

    Assuming the total firm fixed price is $5,000,000, the total annual LOE for all sites is 56,640 hours, and the monthly LOE expended for all sites is 4,700 hours, the monthly payment would be $414,901 plus any travel and training costs and surge support.

    Monthly payment = [(monthly LOE for all sites/ annual LOE for all sites) X firm fixed price] + travel costs+ training costs+ surge support.

    Monthly payment = [(4,700/56,640) X $5,000,000] + travel costs + training costs+ surge support Monthly payment = (.0083 X $5,000,000) + travel costs + training costs+ surge support Monthly payment = $414,901 + travel costs + training costs+ surge support

    Total Payments: The contractor shall be paid the entire firm fixed price only if the contractor expends the entire LOE for all sites. If the entire LOE for all sites is not expended, the total of monthly payments to the contractor shall be a percentage of the FFP equal to the total LOE expended for all sites divided by the total LOE for all sites set out in Section B.

    Assuming the contractor expends 56,000 hours, the total payments to the contractor would be $4,943,502.50 plus any travel and training costs and surge support.

    Total Payments = [(total LOE expended / total Section B LOE) X firm fixed price] + travel costs + training costs+ surge support Total payments = [(56,000 / 56,640) X $5,000,000] + travel costs + training costs+ surge support Total payments = (.9887 X $5,000,000) + travel costs + training costs+ surge support Total payments = $4,943,502.50 + travel costs + training costs+ surge support

    Answer: because senior leadership is fixed on CPFF. Yes, we've noted that contract type is up to discretion of KO -- maybe approved by others (PARC, HCA, etc). Regardless -- decision is made -- it will be CPFF. Question is: how best to mitigate and is the schedule legal. That's the question of the original post -- is the schedule arrangement legal? Leadership believes cost plus contract will result in higher numbers of contractor employees in the que, waiting for vetting. They also believe FFP resulted in lower fill because the contract type drove rates down, which impacted (negatively) the fill rate. There are problems with that logic. But in the end -- that's the decision. Only by switching to cost plus, and specifically CPFF is leadership willing to go to the CofS of the Army re: vetting process.

    Again, thoughts on the schedule approach? Can we do that? Or must the FIXED fee be calculated on the basis of the estimated cost for the TOTAL requirement (100) at the time of award. If we can say that the fee is fixed at the time of award for each grouping in the schedule -- we're OK. Problem is: must fee be based on total, so that we must pay the total fixed fee, and not the total fixed fee for a lower level. (Which is why some are concerned that this is a cost plus percentage of cost arrangement, but with a cap - the cap being the fixed fee for 100).

  2. Joel,

    Based on the original post, the actual number of heads is determined by another government agency, based on criteria that are not disclosed to either the ordering agency or to the contractor. How that number of heads is estimated, and negotiated into a price, would seem to be a ... challenge.


    Yes it is. The agency vetting the employees is not (at least not directly) determining the number of heads required. That number is set by one or more Combatant Commands -- approved at Army level. Requirement sent to this contracting activity to fill -- this is part of reason KO is unwilling to move requirement from 100 to (something lower).

  3. KME,

    Let me get this straight. The government is perfectly fine entering into a FFP task order based on 100 heads, knowing that no contractor has ever, or is likely to ever in the future, achieve that staffing level? Yet, when contemplating a CPFF type for the exact same effort, you are concerned about the Fixed Fee associated with estimated costs being higher than actual incurred costs? That's where your concern lies?

    Do I have that correct?


    Well, when u put it that way ... :wacko: . Seriously, I've provided input to the contracting officer re: the requirement must be realistic. There is a lot more to all of this. In terms of the FFP-LOE contract. The contracting officer set up a system akin to what he'd like to do with this CPFF. He set up traunches and assigned a fixed price to each traunch. I have some issues with that -- but it's water under the bridge. Focus now is the CPFF set up with a schedule. (Again, recommended other contract type, or accept risk associated w/ CPFF (at current level) and changes up to 100).

  4. KME,

    Let me get this straight. It's a CPFF level-of-effort where the contractor is required to deliver a level of effort we'll call 100 time units. They deliver a fraction of 100, but the Government pays 100% of the fixed-fee.

    If that's right, then I would say that is wasteful. The percentage of fee paid should be linked to the percentage of the level of effort delivered. This principle is evident in FAR 52.249-6(h)(4)(i), which states that if the contract were terminated for convenience, the contractor would be entitled "a percentage of the fee equal to the percentage of completion of work contemplated under the contract." See also FAR 52.232-22(l).

    Why not take the fixed fee proposed, divide by 100, and pay that much fee for each time unit delivered?

    We agree, it is likely wasteful, which is the reason for the schedule with a graduated fixed fee. Re: dividing by 100 -- that is the idea of the schedule, but instead of a fee for each incremental unit increased, the fee is increased for batches of increased units (remeber, this is a service contract).

  5. Situation/Background: For various reasons, the contracting officer believes he must solicit a CPFF task order off a multiple award IDIQ. Discussions took place regarding using other contract types -- bottom line: while other contract types may be more suitable, the decision is: CPFF will be used. Following numbers are changed to make discussion easier and for other reasons. Requirement for 100 contractor employees (i.e. level of effort is 100). History: was originally CPFF, recompeted and is currently FFP. No contractor has ever met the requirement (100) - been as high as about 75 and as low as approximately 35 (currently at approximately 40). The need is unique and there are a limited number of candidates. Also (and most importantly now) - each employee must be vetted and approved by a separate Government agency. The vetting criteria is not disclosable to this agency or the contractors. There is a backlog of candidates to be vetted (approximately 30), but bottom line is: we only get a net increase of 1 to 2 per month due to attrition (employees decide to go elsewhere) and most candidates washing out via the vetting process.

    Problem: Waste. Fixed fee is paid based on the estimated cost at the time of award. We know that it is highly unlikely that contractor will ever reach the required 100 -- but we'll be paying fee for requirements never realized/met. Amounts are significant enough to question whether this approach is wasteful. (NOTE: contracting officer will not/cannot change the requirement to a lower number.)

    Proposed Solution: Contractor will propose a fixed fee schedule with a total fixed fee. For example: 0-40 employees, fee = 20 (proposed/negotiated); 41-50 = additional fee of X (proposed/negotiated); 51-60 = additional fee of X .... up to the total requirement of 100 (and the amounts of additional fixed fee in the schedule equal the negotiated total fixed fee). Once the contractor reaches a higher level (e.g., 51), they will be paid that additional fee. They can only become eligible to be paid the fee for any given block once (i.e., cannot keep going back and forth between 50 and 51, earning additioal fee each time the contractor gets the 51st employee working).

    Issue: Is this a cost plus percentage of cost arrangement (with a ceiling)?

  6. May be too late if you've got the proposal already, but use a Statement of Objectives instead of a Statement of Work and then the offeror's proposed PWS (which hopefully documents the innovative processes) becomes part of the contract. If you've already gotten the proposal, then the CO could incorporate all or parts or the proposal into the contract by reference. I say "or parts" because there may be something you all don't want to incorporate. But I'm not a CO, so will let those that are comment on the possibility of only incorpoating sections of an offerors proposal into a contract by reference. It may be an all or nothing thing.

    Nope, not too late. Q didn't relate to anything specific. I too am leary of incorporating a proposal -- you incorporate fluf, inconsistencies w/ PWS, etc.

    I would be interested in feedback re: how incorporating part of a proposal was executed: revise the PWS, add section H clauses, etc.? And, what unintended consequences folks have encountered. But, tks.

  7. The "ceiling" of the task order is $500K. I'm assuming the "cap" at the IDIQ level equates to the ceiling of $12M. A ceiling has meaning. I've always advised -- we cannot exceed it. I would look at either: A/ executing a mod and increasing the T.O. ceiling, IF within scope. If not in scope, then a justification is required; or B/ issuing another order (typically not too difficult if a single award IDIQ -- if multiple award, more hoops/time).

    Unless this increase (from $500K) together with other task/delivery orders exceed the IDIQ ceiling -- there's no change needed/required at the IDIQ level.

  8. This (below) is great feedback. Tks.

    It should be pointed out that if the contract has option years that are not funded, it is important not to remove the FAR 52.232-18 (Availability of Funds) clause from the contract.

    There is a series of ASBCA rulings from the 1980-1990s whch hold that an attempt to exercise an option and insert the FAR 52.232-18 when it is not present in the base contract constitutes an invalid option exercise. Lear Siegler, Inc., Management Servs. Div., 86-3 BCA ? 19,155; Holly Corp., 83-1 BCA ? 16,327; J.E.T.S., Inc., 82-2 BCA ? 15,986, aff?d in relevant part, rev?d on other grounds, ASBCA No. 28642, 87-1 BCA ? 19,569, aff?d sub. nom., J.E.T.S., Inc. v. United States, 838 F.2d 1196 (Fed. Cir. 1988), cert. denied, 486 U.S. 1057 (1988).

    However, if the FAR 52.232-18 is present in the base contract, it can be placed in the option exercise. Cessna Aircraft Co., ASBCA No. 43196, 93-3 BCA ? 25,912, motion to reopen denied, ASBCA 43196, September 7, 1995, aff?d sub nom, Cessna Aircraft Co. v. Dalton, 126 F.3d 1442 (Fed. Cir. 1998), cert. denied, 525 U.S. 818 (1998); United Food Services., Inc., ASBCA No. 43711, 93-1 BCA ? 25,462; Western States Management Services, Inc., ASBCA 37504, 92-1 BCA ? 24,663.

  9. Any authority on point (re: removing 52.232-18 once funds made available)?

    I was recently advised my contracting office planned to delete 52.232-18 from contracts once funding is obtained. I advised that's a bad idea. What happen's next FY (clause is not read into a contract per Christian Doctrine), chances that KO's will not add the clause if/when needed are high, etc. I've since heard from a KO that DFAS (Rome) will not make a payment if the clause is in the contract. I advised that our senior contracting officials need to engage DFAS and explore. Point: I've since re-read 52.232-18 and the first sentence got me thinking (a challenge!): "Funds are not presently available for this contract." My gut still says removing the clause is ... well stupid (I mean ill-advised), but I started to question myself (can the Govt make payments if the contract states "funds are not presently available for this contract"?). My experience - the KO merely advises the contractor, via MOD, that funds are available -- and that's it.

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