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Fara Fasat

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  1. The first step in the process is -- do you need a novation. "Do a novation' is usually the automatic response from the government whenever there is a change, but a novation is often not required. For example, if a legal entity is bought by another entity, usually in a purchase of all of its stock, but it remains the same legal entity as a subsidiary of the new owner, then a novation is not required. Look at 42.1204(b). There are other times when a novation is not required that the FAR does not address. This is when there is a corporate merger or conversion, and the performing entity remains essentially the same. There is also a situation known as a 'statutory merger or consolidation' that may not require a novation. These are more complicated and you need to contact a lawyer to review the case law and help determine if a novation is required. Be aware that your CO may not understand these, and will just default to 'do a novation.' It may take come convincing.
  2. Just attended a webinar presented by an established government contracts practice, and the subject of an NDC and the DoD memo came up. Here is their take: A prime can determine whether a sub is an NDC, but the prime must submit this determination to the CO, who then decides whether to accept the determination and allow the prime to treat the NDC's products and services as commercial items. Re-reading the memo, this sounds right. It's poorly worded, but the concluding paragraph does say that the CO uses his or her discretion about the treatment of NDCs, both at the prime and sub level. So ultimately, it's the CO who decides whether an NDC, either prime or sub, gets treated as a commercial item supplier. I also read this as saying that an NDC determination, and the treatment as a commercial item, are two different decisions. A prime or sub may meet the definition of an NDC, but the CO still has discretion on whether to treat the products or services as commercial. And Patrick, you still haven't answered whether you believe that not being subject to full CAS is an exception to certified cost or pricing data.
  3. Carl - why would negotiations negate the exemption for either commercial items or adequate price competition?
  4. Once again, competition occurred when two competitors submitted proposals, as long as price was a substantial factor in the evaluation. See 15.403-1(c)(1)) for the standards for adequate price competition.
  5. True, we did have to do much reading between the lines and interpreting. Ultimately though DawnS was asking why they shouldn't have to get COPD from the "non-winner", which she deemed a "non-competitive award." This entirely missed the point, as the competition had already occurred; the type of award did not change that.
  6. It seems that this discussion has gone off the rails. The question was whether there was adequate price competition, presumably for determining whether the exception to COPD was met (although this did not come out until much later). This could have been answered from the very first sentence from the OP: " Both suppliers submitted proposals. Therefore the standards for the 'adequate price competition' exception were met: two or more responsible offerors submitted offers, and award will be made on a best value basis where price was a substantial factor. Whether there was one award or a split award does not change this; the exception is based on the existence of price competition, not the award decision. Side note: calling one PO "non-competitive" because it didn't win makes no sense. Of course there was competition. Just because you lost doesn't mean you didn't compete.
  7. Would you please check the reference. 252.215-7010 goes from (b) to (1) to (i) and (ii). There is an (E) under (ii), but not an (e). There is a 252.215-7010(e). What are you referring to? This is a follow-up to my first response to you. Are you really saying that a sub is not required to submit certified cost or pricing data unless it is subject to full CAS?
  8. Are you advising your clients that not being subject to full CAS is an exception to certified cost or pricing data? That's not correct. The five exceptions are 1) adequate price competition, 2) prices set by law or regulation, 3) a commercial product or commercial service is being acquired, 4) a waiver has been granted, and 5) modifying a contract or subcontract for commercial products or commercial services. If your client is offering a commercial product or commercial service, then that is also a CAS exception, but you can be exempt from full CAS when offering non-commercial products or services too, simply by not meeting the threshold. But in that case, you would not be exempt from certified cost or pricing data. If you were being inexact, and meant that by not being subject to full CAS, they were an NDC, then your conclusion is still not correct. Being an NDC is not an exception to anything. It merely allows the CO (or a prime, according to the DPC memo), to treat the contract as a commercial item contract. The operative word is may treat; it is not required nor does it provide an exception.
  9. WifWaf -- Sooo, the commercial item definition is subjective, therefore DPC is wise to allow primes to ignore it in favor of the definition of an NDC, which is objective? Because of some theory of a negotiation standard? When I said you were trying too hard, that may have been an understatement. To all - I do want to correct a comment I made above. I said that the authority for COs only shows up in DFARS 212.102. Actually there is another place -- 252.215-7013, where it advises offerors that the government may treat items from NDCs as commercial items. However, consistent with what I have been saying, it is (a) only between the government and the offerors, (b) a provision, not a clause, and (c) does not get flowed down. Tell you what - here's what I will do. For the next few offers we submit where the prime requires a CI justification, we will show them the DPC memo and tell them we no longer have to. I will let this forum know how it goes. I won't use names, but among our customers are all the major defense contractors. I don't think it will be well received, but I'm ready to be surprised.
  10. Here's the wording from the statute (the 2016 NDAA, section 857): "‘‘Notwithstanding section 2376(1) of this title, items and services provided by nontraditional defense contractors (as that term is defined in section 2302(9) of this title) may be treated by the head of an agency as commercial items for purposes of this chapter.’’ Note - "by the head of an agency." That was implemented by DoD at 212.102(a)(iv), which gave COs that authority. It did not further delegate it to contractors. I think a contractor would have a hard time arguing against the clear words of the law and the implementing rule. The DPC memo is not a rule; it did not go through the rulemaking process; it is not a deviation; it is not in the contract. Look, my company is a sub in most cases. I would love to take advantage of this and not have to do commercial item justifications for every contract. Even better, not have to submit certified C or P data for non-commercial products. But for now I'm taking a wait and see approach.
  11. I think you are trying too hard to make 252.215-7010 fit your theory. Sure it has a flowdown requirement, but nowhere in the provision does it say that the CO (and when flowed down, the prime) may treat the supplies provided by an NDC as commercial products. That authority is in 212.102(a)(iv), which states: “contracting officers -- (A) … may treat supplies and services provided by nontraditional defense contractors as commercial products or commercial services.” 212.102(a)(iv) is DFARS text. As such, it is an instruction to the government, and is not a clause and does not get flowed down. Moreover, no clause or provision in the DFARS says the CO has this authority. It only shows up in 212.102. Therefore that authority cannot be flowed down. Yes, 252.215-7010(E) does say that as part of the information an offeror must submit when claiming the commercial item exception, an NDC must submit a statement that it meets the criteria, i.e. no CAS contracts in the prior year. But again, nothing in that provision says that the CO, let alone a prime, may treat the products of an NDC as commercial. (E) is an empty statement between a prime and a sub. If a sub submits the required documentation, it accomplishes nothing. So – can a prime treat a sub’s products as commercial? No. The statute does not authorize it; the explanation in the rule specifically says no, and 252.215-7010 does not authorize it. What more do you need? Oh, and unless someone comes up with other evidence, the DPC memo is wrong.
  12. What ambiguity? The response to comments specifically said that the authority did not extend to primes. The DFARS states that a CO may treat a contractor as an NDC, and says nothing about primes doing this for subs. The only ambiguity has now been created by the DPC memo, which purports to "remind" contractors that they always had this authority.
  13. When the NDC rule came out, the FR notice specifically said that the statue did not extend the authority to primes. I know of no statutory changes since then. What exactly is DoD "reminding" us of, if it first said that primes did not have the authority?
  14. 2 comments: First, the memo says it "reminds" COs that contractors may make NDC determinations for their subs. That's a bit disingenuous. DoD's position before this was that the authority to make a NDC determination did not extend to primes. Are they now pretending that it did? See the federal register notice for the rule (https://www.federalregister.gov/documents/2018/01/31/2018-01781/defense-federal-acquisition-regulation-supplement-procurement-of-commercial-items-dfars-case) and the response to a question about extending the authority to primes: "This authority was neither mandatory nor was it extended to prime contractor commercial item determinations for subcontracted items and services." I may have missed it, but I don't think the NDC determination authority has been given to primes since the publication of that rule. If it has been, then I withdraw comment #1. Second, other than the "reminder" sentence, the remainder of the memo talks about COs and offerors. No more mention of subs. You would think that if this were truly a reminder, it would go into more detail about a prime's responsibilities in making the determination. Instead, it simply restates the relationship and duties between a CO and an offeror.
  15. Not rhetorical at all. Most primes have their own standard subcontract terms that cover all the essentials -- delivery, invoicing, payment, etc. They all have purchasing departments, and they all a standard PO with their terms. Why include a FAR/DFARS clause for something that is already covered, and that may well be inconsistent? Of course, it takes some thought and effort to tailor the subcontract, so they don't bother. Or they resort to the "self-deleting" dodge.
  16. Please note that I didn't assert that without protests the government would be getting less than best value. I said that if that were the case, the cost of eliminating protests should be balanced against it. You have determined that there is no evidence the government was stuck with second-best goods, so eliminating protests outweighs it. In other words you have considered the reasons for the fence, determined that they don't justify the fence, and recommend tearing it down. Chesterton would approve.
  17. You're right, I should have been more specific that I was only referring to the one type of harm. There are others, and I do agree that we don't need the protest system to remedy those. For example, if there is a process mistake by the government (and there are many protests sustained on that basis), Vern's proposal is appropriate. Probably for most other protest grounds as well. My reservation is for acquisitions where the government gets less than it wanted. How do you remedy those ? That's one type of harm that is not remedied by just paying the costs of the losing bidder.
  18. Not really. You're extending what I said. There could be many reasons for allowing protests. That is just one, and it certainly would not apply in all cases. In many cases a protest is sustained because the process was flawed or rules were violated, and the same contractor wins again in the recompetition. Other grounds for protest are based on maintaining the integrity and fairness of the system, and probably don't result in a better product being selected. But in a case where fraud or corruption leads to the selection of an inferior product, then yes, eliminating protests leaves the government stuck with that inferior product. I'm saying that you have to understand the reasons for having protests in the first place. Somebody thought there was a harm to be addressed, and somebody created the protest system to address them. Were they wrong? Any reform must make the case that notwithstanding the harms, we are better off without the protests.
  19. By the way, the heavy metal band Iron Maiden used some Chesterton lines in one of their songs. Best endorsement I know of!
  20. Yes reform is needed, but is the answer to eliminate protests completely? What about the harm to the government? If fraud or corruption, or even just a poorly-conducted acquisition, leads to the government not getting the best product or the best services, how does "pay their costs" remedy that? Sure the harmed bidder gets compensated, but the government is stuck with a second-best, or worse, product or service. Should the government have to accept inferior products or services because we took an ax to the protest system? This leads back to my original post about understanding why there are protests in the first place. I refreshed my vague recollection, and the principle is known as "Chesterton's Fence", named for a concept introduced by English author and philosopher G.K. Chesterton. The most condensed version of this is: 'don't remove a fence until you know why it was put up in the first place.' Failure to address the reasons for its existence can lead to unintended consequences, or a worse situation than what existed before. Let's assume that one of the reasons for the protest system is to ensure that the government gets the best product or service for its money (excluding LPTA of course). If we simply pay off the losing bidder, we have left that harm in place. Are we better off by tearing down the protest fence and letting in the harm, or is that harm outweighed by the harm of the extra delays and costs of protests? It seems to me that a proposal to reform the protest system needs to take each reason for the existence of protests, and answer two things: 1 - is the reason valid, or can the acquisition system function adequately without fixing that reason via protests? If the reason is valid, then 2 - does the proposed reform maintain a remedy for the harm that protests addressed, or does it 'throw out the baby with the bathwater'? i don't know the answer. It may be that the harm from protests (delays, costs, etc) outweighs the occasional second-best product or service. After all, the commercial world survives without protests. But I think that the proposed reform needs to make that case. Chesterton would ask you - why was the protest system created in the first place.
  21. I am badly citing something I've read/heard before, but it says basically -- if you want to eliminate something, first you have to answer why it exists. In this case, why are bid protests allowed? They have no equivalent in the commercial world, so how do companies survive without it? As I have said in many classes - you lick your wounds, learn from your loss, and move on to the next opportunity. Before even addressing the costs, the delays, etc, you must address why protests exist, and then explain why the harm from removing protests won't outweigh the interests that are being protected. In other discussions on this forum, some have stated that government money is taxpayer money, and that COs have a sacred duty to use that money fairly. Is that the reason? Is that a better reason than the fiduciary duty a corporation has to its shareholders? Are there reasons other than making sure that taxpayer money is fairly handed out? I realize I'm just throwing out some thoughts, not solutions. But you're the deep researcher, not me. 😀
  22. It would be nice if we could rely on the CO's clause selection. Unfortunately a GAO study a few years ago found that in about 60-70% of acquisitions, the government used the wrong BAA/TAA clauses. I frequently see both BAA and TAA clauses in a contract, even though they are mutually exclusive.
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