Fara Fasat

Just for my understanding, if the IDIQ is awarded at the prices that were negotiated and agreed in 2020, as the OP stated, why would updated data be needed? I can see needing new data if you want to negotiate different prices, but why if they agree to the same prices? The requirement is to certify to the accuracy and completeness as of the date of agreement on price. They are now using the agreed-upon prices. True, some of the underlying data may have changed, but again, the award was at the agreed price. It is very likely that costs have gone up, but why force a change if the seller is willing to honor the old prices?

From the question I assume that the RFP lists the positions that are considered key, and the offeror names the people for those positions. What if the RFP requires offerors to list any key positions and personnel, who would then be subject to notice and approval by the customer of any changes? So do you list several people and take on the burden of notice and approval for any changes, or do you list few or none and risk an evaluation that you consider no position to be key?

Your facts are confusing. You talk about a "main company" but then say that both that and the company in Germany are "under" the same entity. Do you mean that both are subsidiaries of a parent company? Anyhow, it probably doesn't matter in the end. A SAM registration is required for each separate legal entity, and each separate division or branch of an entity. SAM considers a division or branch as a separate entity, even though in the legal sense it is not. Back when the ownership reporting came out, we questioned DLA about this, and their answer was that subsidiaries, divisions, and branches are all considered entities. The "owner" of a division is the next level up in the corporate hierarchy. Besides, from a practical standpoint, you want the Germany company to have its own registration even if it is a division and not a separate legal entity. All of its administrative information, address, banking information, points of contact, etc, will be different from that of the "main" company that you want to use. Just register it, and get an NCAGE too.

True, that would explain the result in this case. I lean the other way -- that the contracts changed hands on the effective date of the novation. That follows from the wording of the novation agreement, which says that after the effective date, the term "Contractor" in all contracts shall mean the transferee. Of course we don't know if they used the standard template, and there are likely other facts we are missing. After all, both parties had experienced law firms on their side, so it is unlikely that DynCorp was ineligible for the task order and no one caught it. We'll just have to leave it at "we don't know."

Neil, that article is informative and I have saved it for reference, but I don't think it applies to the novation of a government contract. From a quick read it looks like it discusses the circumstances in which a parent can be liable for the obligations of a subsidiary, i.e. piercing the corporate veil, when there is no assignment or transfer of the sub's contracts or obligations to the parent. In a novation, there is a formal transfer of the sub's (the transferor's) contracts and obligations to another party (the transferee) (in our case, the new owner/parent). The transferee takes on all obligations of the transferor, and the transferor is released. The standard novation agreement in FAR Part 42 basically follows this. So, back to Vertex. The GAO was a little ambiguous by saying that DCMA "approved" the novation "request", but it did cite the "DynCorp Novation Agreement." DMCA also directed individual COs to modify their contracts "to incorporate the Novation Agreement." I think there was a formal novation, not just an approval of a request, and it was signed by all three parties as it should be. If true, then all contracts, including the IDIQ, became Amentum's contracts, not DynCorp's. And so the legal issue is still unanswered: how did DynCorp get awarded a task order under an IDIQ contract that it no longer held? One possibility is that the assignment is not complete until an individual contract is modified to identify the new party. If the IDIQ had not been modified yet, then DynCorp might have been the holder still. The problem with that is that the novation agreement makes it a done deal. The following is in (b)(4) of the FAR template: "Following the effective date of this Agreement, the term “Contractor,” as used in the contracts, shall refer to the Transferee." That sure sounds like the contracts got modified right there; any individual contract modification is just an administrative update. Yeah I know, talk to an attorney. But I'm not looking for legal advice on how to proceed. I just noticed something that didn't sound right, and I'm interested in others' thoughts on the matter.

The GAO just released the Vertex decision, where it sustained a protest by Vertex of the award of a task order to DynCorp. The GAO held that the AF did not adequately document its evaluation of the impact of the purchase of DynCorp by Amentum. While decisions involving corporate ownership and structure are very fact-specific, I was puzzled by one thing. Brief chronology: Both DynCorp and Amentum were awardees of the IDIQ contract under which the TO was issued. The sequence of relevant events was, in order: Amentum bought DynCorp and held it as a wholly-owned subsidiary; DynCorp submitted a proposal for the TO; Amentum did not; all contracts held by DynCorp were novated to Amentum, including the IDIQ contract; the TO was awarded to DynCorp. Here's what I can't figure out. If all DynCorp contracts were novated to Amentum, then DynCorp no longer held the IDIQ contract when it was awarded the TO. Amentum held the IDIQ contract. Since they are separate legal entities (DynCorp was a wholly-owned subsidiary), the IDIQ was held by one legal entity and the TO went to another. Maybe we're missing some facts, but does that sound right? Can an entity be awarded a task order under an IDIQ contract that it no longer has, as long as it submitted a proposal while it held the IDIQ contract? Or is a contract held by a parent (Amentum) also held by all subsidiaries (DynCorp) even though they are separate legal entities? I don't think so, but I don't know much about corporate structure and ownership.

Has the prime inserted the DPAS clause - 52.211-15 - or incorporated the DPAS regulations (15 CFR 700) into your subcontract? If so you are required to meet the required delivery dates. Very few options for you. Look for some other leverage. And of course, contact a lawyer before doing anything.

Thanks. Could you also provide the link to the page this was on? I've been using https://www.acq.osd.mil/dpap/dars/class_deviations.html and https://www.acq.osd.mil/dpap/ops/policy_vault.html but the memo was on neither.

Has DoD revised its class deviation on enforcement of the vaccine mandate, to reflect the nation-wide injunction? The Dec 2 deviation (2021-O0009 rev 1) is the latest one I can find and it only addresses the 3-state injunction.

I think you will find that statement in every proposed rule. It's probably on a macro. 😄

I think that early in this discussion, someone said that there's no coercion. After all, the contractor has a choice. Sounds to me like the same kind of choice you have when being shaken down for protection money. "Nice little company you have here. Be a shame if you had to go out of business."

And thus we're on page 8. 🤣 Anyhow, I'm referring to those who have been commenting. I'll say 'most everyone.' Seriously, is there much more than can be said on this topic?

Everyone seems to be on board with 1 and 3 (substituting "information" for "evidence" in 3). For 2, I was simply trying to condense what Joel has been saying about his contracts, and that "review" means what he was saying about the pre-award evaluation. I can't comment further on it other than to say that the ability of a typical CO to recognize fraud doesn't make the statement invalid. I think there are some COs who are fully capable of suspecting when an SB is being used as a front on a set-aside contract.

I think the reason everyone seems to be talking past each other is that we are looking at different problems. Vern, ji, and maybe others, are concerned about the wisdom and practicality of doing continuous monitoring of the prime and its subs. It's a valid concern. Joel says there is a duty to fully vet the proposal and technical approach before making an award. Again, valid. I don't read in his posts a suggestion that continuous monitoring is required or should be done. I'm concerned about the fraud scenario, and allowing a contract to run to its end if it is clear there is fraud. Also what to do if it becomes obvious that the LOS cannot be reached by the end, even absent fraud. I'm confident that no one here would turn a blind eye to it and take a "no monitoring" approach in the face of clear evidence. Maybe we just need to stop digging in our heels, step back, and look at the big picture (did I miss any buzzwords?). Despite this topic reaching its 7th page, I think we can agree on a few key principles: monitoring the LOS throughout contract performance is neither required nor prohibited. If you have the time and the inclination, go ahead. due diligence before award should include a review of the offeror's understanding and compliance with the LOS requirements. It can also detect potential set-aside fraud. if evidence comes to light that suggests that all is not as it should be, the CO has a duty to investigate further. That may be simplistic, but it seems to be the Cliff's Notes version of what everyone is saying.

I'm on the contractor side, not government, so I don't know all the reasons why the government might or might not want to monitor compliance during contract performance and not take a "we'll fine them at the end" approach. But at least one sticks out in my mind. Every week, Koprince Law posts articles on fraudulently-obtained set-aside contracts. Sure, the government collected a fine, but in every single case, a deserving SB was denied the contract. Every day the wrongdoer performed was an opportunity lost forever for a deserving contractor. Had the government caught it, the CO could have terminated the contract and recompeted. There are tons of service contracts where a new contractor could step in and take over performance. Seems to me that's a good reason to do at least some monitoring during performance.

Too late. As in the recent AT&T commercial -- "It's happening." 😄

Actually there is a contract type in the FAR that is close to what you are asking, although not exactly the same. It is an Energy-Savings Performance Contract, or ESPC. It has its own statutory authority (42 USC 8287), and is implemented at FAR 23.205, although 23.205 simply sends you to the DoE ESPP regs, which are extensive. It has the features you mentioned -- performance is financed by an outside financier, and payment is based on achieving the savings guaranteed in the contract. It's not the general PFS authority you are looking for, since it is limited to energy saving projects by its special statutory authority, but if you are looking for ideas and experiences, the DoE web site has lots of reference material. Now, can you apply its concepts using an OT as the contract vehicle -- who knows?

It's a step in the right direction, but the definition would only apply to Part 19 and probably only Subpart 19.7. It would not apply to flowdown in general, where it would be much more useful.

Oh we have and we do. Posting here was just a check to make sure I'm not missing anything. By the way, when checking Neil's reference to the SBA regs, I saw something interesting - the SBA's definition of a subcontract at 134 CFR 125.3. It has two things that are lacking in the FAR's various definitions - a time element and what I will call a "carve-out." It's only a subcontract if the awarding party is already under contract with its customer (the time element), and the subcontract is for a part of the work that the awarding party has undertaken with its customer (the carve-out). In my opinion, that's a big improvement over the FAR's "supplies and/or services required for performance of the contract," which has led some CO's to call utility contracts 'subcontracts' because utilities are required to run the factory that performs the contract. Here's where it makes a difference: factories usually order materials, parts and components on a forecast, and make their products as the customer orders come in. Under the FAR definition the orders for materials, parts and components would be subcontracts; under the SBA definition they would not.

Yes, but in that same reg it states (at 13 CFR 125.(c)(1)(x)): "Except when subcontracting for commercial items, the prime contractor must require all subcontractors ... to adopt a subcontracting plan of their own...." A prime can only take credit for awards by lower-tier subcontractors with individual subcontracting plans, and a CI subcontractor isn't required to have a plan. Besides, as I said above, I've never had a prime use that as their reason. They always said a plan was required simply because the subcontract exceeded $750k.

Good to know the experts think the answer is no. Too bad some of our largest and (allegedly) most experienced aerospace and defense contractors think the answer is yes. Joel - I don't think it matters whether the prime is a FP or CR contract. The issue is simply whether the prime must require its CI subcontractor to have a plan. I see nothing in the text of the clause that breaks it down by type of contract (FP or CR). Neil - interesting point, but I didn't think primes could take credit for subcontractors awarded by their subcontractors. Even if they can, can't the prime accomplish that by simply having the sub report its small business awards rather than by flowing down the requirement to have a plan, with all the administrative burdens and risks that go with it? Besides, the primes I have seen aren't doing it for the credit. They just think they are required to flow down the clause. They never even see see the report, so they don't know the value of any SB subcontracts awarded.

Someone asked a similar a similar question a few years ago, and it got one somewhat cautious response. I'd like to ask it again more directly and see what anyone thinks. Over the years, I have seen numerous prime contractors' standard subcontract terms for commercial items, and many of them include 52.219-9, the requirement to have a small business subcontracting plan. I believe that a subcontracting plan is not required at all in subcontracts for commercial items. My opinion is based on the language in 52.219-9(j), which states: "Subcontracting plans are not required from subcontractors when the prime contract contains the clause at 52.212-5, Contract Terms and Conditions Required to Implement Statutes or Executive Orders-Commercial Items, or when the subcontractor provides a commercial item subject to the clause at 52.244-6, Subcontracts for Commercial Items, under a prime contract." Since all contracts should have one or the other of those clauses, a subcontractor providing a commercial item is not required to have a plan. Looking at it another way, the only subcontract required to have plan is under a non-commercial prime (which includes 52.244-6) and the subcontract is for non-commercial items. There are obviously a lot of people who think differently, because several large primes (who shall remain nameless) include 52.219-9 in their commercial item subcontract terms. Their reason is that FAR 19-704(a)(9) states that a subcontract plan shall include "... assurances that the offeror ... will require all subcontractors (except small business concerns) that receive subcontracts in excess of $750,000 ... to adopt a plan that complies with the requirements of the clause at 52.219-9, Small Business Subcontracting Plan." Also 52.219-9(d)(9), which states that an offeror's plan will include "Assurances that the Offeror ... will require all subcontractors (except small business concerns) that receive subcontracts in excess of the applicable threshold specified in FAR 19.702(a) on the date of subcontract award, with further subcontracting possibilities to adopt a subcontracting plan that complies with the requirements of this clause." Sure looks like conflicting instructions, but here are my thoughts: first, ignore the FAR text at 19-704. It doesn't go in a prime contract; only 52.219-9 does. Next, read 52.219-9(d)(9) and (j) together: (d)(9) says to require a plan of all subcontractors, but (j) narrows it by saying 'but not from subcontracts for commercial items.' So - is a subcontracting plan required from a commercial item subcontractor?

Thanks. By the way, in anticipation of the inevitable "have you read ...", I did review the DoD Government Charge Card Guidebook, and other materials at https://www.acq.osd.mil/dpap/pdi/pc/index.html . Nothing seemed to answer this question, although if someone can point to any relevant information I would be glad to review it.

The Government Commercial Purchase Card (P-card) can be used to make micro-purchases (see FAR 13.201 and 13.301). Presumably this means that a government P-card holder can make purchases from a seller online site or portal, as long as the purchase is authorized . Some of these sites require a user to set up an account before making a purchase. Question: can a government buyer set up an account in order to make a purchase from a seller site?

In 2003, OMB issued a memo regarding the use of Part 12 or Part 36 for construction. I'm paraphrasing, but it basically says that even though construction is commercial, Part 12 is inappropriate for construction and Part 36 should be used in most cases. It noted that Part 36 was already consistent with "customary commercial practices in the construction industry."