Matthew Fleharty

ShawnT,

I think you cut your definition search a word short - look up the definition of the term "conditioned upon" and think about how that term is distinct from a limitation.  Then I'm confident you'll understand the difference/nuance and Vern's logic.

Edit: Even alternative definitions of "conditioned" might be worth considering, such as American Heritage Dictionary's (https://ahdictionary.com/word/search.html?q=condition)

Conditioned: To make dependent on a condition or conditions: Use of the cabin is conditioned on your keeping it clean.

The PBPs are dependent on performance outcomes, but limited by actual costs incurred.

44 minutes ago, lightbulb401 said:

Thanks for that info. I'm probably wrong about all this, but wanted to seek another opinion on this situation. 

You'd be surprised to hear that there are plenty of cases regarding underpayment and back wages...https://www.dol.gov/opa/media/press/whd/

For worker specific info, see the following link: https://www.dol.gov/whd/workers.htm  There is even a handy link on "How to File a Complaint."

In regards to the following:

16 hours ago, Bill Baxter said:

I'd really like us to focus on the central question:  In which a PTA is numerically larger than the ceiling price, causing the seller to be in a loss position for a period of time -- while costs continue to rise -- before the ceiling price is reached and the sharing of cost over-runs stops.

Now I think we have different conceptions of the PTA - since when does the PTA define the point where the seller is in a "loss position?"  The PTA is merely the point where the share ratio converts from X/Y to 0/100 - a seller could still be in a profitable position at a PTA.  For example, let's refer back to the authoritative source you cited.  In that example (Figure 3), at the PTA the contractor would still receive 5 profit...how is that a "loss position?"

Overall, I'm not sure how to answer your central question any better than Vern did.  A PTA is not a term of the contract and it's importance is only as significant as the parties choose to make it when negotiating the geometry of the FPI contract.

Maybe Bill has is axes or ratios mixed up...as the source he cited mentions, convention is to list the Government share in the numerator and the contractor share in the denominator while graphing profit along the y-axis and cost along the x-axis.  If convention holds, a 50/50 share line is not "flatter" than an 80/20 share line.

42 minutes ago, muddypuddles said:

Can I use FAR 13.5 procedures and ask industry for a "proposal"? I was advised that FAR 13 procedures should request Quotes, and FAR 15 procedures should request proposals.

Be careful receiving advise without a source or citation.  Read FAR 13.106 titled "Soliciting Competition, Evaluation of Quotations or Offers, Award and Documentation."  Notice the use of "quotations or offers" in the title and throughout that section.  Also see FAR 13.106-2(b)(1) which states:

Quote

The contracting officer has broad discretion in fashioning suitable evaluation procedures. The procedures prescribed in parts 14 and 15 are not mandatory. At the contracting officer’s discretion, one or more, but not necessarily all, of the evaluation procedures in Part 14 or 15 may be used.

Now refer to FAR 2.101 for the definition of "offer" which states:

Quote

“Offer” means a response to a solicitation that, if accepted, would bind the offeror to perform the resultant contract. Responses to invitations for bids (sealed bidding) are offers called “bids” or “sealed bids”; responses to requests for proposals (negotiation) are offers called “proposals”; however, responses to requests for quotations (simplified acquisition) are “quotations,” not offers. For unsolicited proposals, see Subpart 15.6.

So to answer your question directly, yes you can request a "proposal" under FAR Part 13 procedures...but ask yourself, considering the definitions and distinctions between quotations and proposals, are you asking for a proposal for the right reasons?

As for your evaluation approach, it sounds like you may be preparing to conduct an "essay writing contest" so I'll refer you to the following threads and posts by Vern Edwards which hopefully help you reconsider and/or inform your approach.  Remember, in fashioning criteria for evaluation of offerors, focus on those factors that are discriminators rather than merely following a template and doing whatever was done the last time the services were contracted for.

5 hours ago, C Culham said:

Matthew – I understand your comment but my read is this.  “Policy” at (b) has no and/or.  So each sentence stands on its own.

So the policy is –

Ratifications of any unauthorized commitment must follow (c) as this number (2) paragraph does not carve out any exceptions.

Extending to the discussion in this thread (5) is saying (noting that I am repeating myself) once ratified per (2) then follow Contract Disputes if the contractor files a claim again noting that an REA is sometimes a claim and sometimes is not.

C Culham,

I don't know what FAR you're reading - paragraph ( c ) is clearly applicable to ONLY paragraph (b)(2) and paragraph (b)(5) doesn't even use the word "ratify" or "ratification" it uses the terms "claims" and "processed."  I think Vern provided as good an explanation as possible and I attempted to show you through a different lens, though it seems you're stuck in your own beliefs (which if you take the time to think carefully, contradict themselves..."each sentence stands on its own").  So be it.

8 minutes ago, C Culham said:

Unconvinced and there are facts that support that there are others that have and will continue to agree.

Thanks for the exercise.

C Culham,

The ratification limitations you cite throughout your previous posts and scenarios are only applicable to FAR 1.602-3(b)(2), not FAR 1.602-3(b)(5).  See below:

Quote

(c) Limitations. The authority in subparagraph (b)(2) of this subsection may be exercised only when --

(1) Supplies or services have been provided to and accepted by the Government, or the Government otherwise has obtained or will obtain a benefit resulting from performance of the unauthorized commitment;

(2) The ratifying official has the authority to enter into a contractual commitment;

(3) The resulting contract would otherwise have been proper if made by an appropriate contracting officer;

(4) The contracting officer reviewing the unauthorized commitment determines the price to be fair and reasonable;

(5) The contracting officer recommends payment and legal counsel concurs in the recommendation, unless agency procedures expressly do not require such concurrence;

(6) Funds are available and were available at the time the unauthorized commitment was made; and

(7) The ratification is in accordance with any other limitations prescribed under agency procedures.

So why would you conduct those limitation tests when there is an unauthorized commitment that falls under FAR 1.602-3(b)(5) when the FAR makes it clear they are only applicable to FAR 1.602-3(b)(2)?

1 hour ago, ji20874 said:

Your scenario would require both procedures of FAR 1.602-3 and Subpart 33.2 -- but it is easy to see that this doesn't make sense -- what if the ratifying official approves the ratification but the contracting officer rejects the REA or claim (either before or after seeking ratification)?  No, it is best to read the text in a way that makes sense.  FAR 1.602-3(b)(5) does (NOT) say that a COR constructive change has to be handled under both procedures -- it simply says that such an action is handled under Subpart 33.2, period.

 

42 minutes ago, Vern Edwards said:

By the way, I'm (NOT) saying to pay the contractor in every case. I'm saying only to process the issue through the lens of FAR Subpart 33.2. If the CO thinks that the contractor should be paid, why do an REA and a ratification package? Sheer bureaucracy.

Not to be a nitpick, but for the benefit of those reading these forums I think you each forgot a "not" in the sections quoted above (I added the word in bold and underlined text where I thought it was accidently omitted).

3 hours ago, C Culham said:

Not on point but might be an assist......

http://www.gao.gov/assets/510/500749.pdf

C Culham,

The OPs question used the term "proposals."  Since there is a distinction with a difference between "bids" and "proposals" do you still find your hyperlinked decision pertinent to the discussion here?

In regards to the distinction between "bids" and "proposals" see the definition of "offer" under FAR 2.101:

Quote

“Offer” means a response to a solicitation that, if accepted, would bind the offeror to perform the resultant contract. Responses to invitations for bids (sealed bidding) are offers called “bids” or “sealed bids”; responses to requests for proposals (negotiation) are offers called “proposals”; however, responses to requests for quotations (simplified acquisition) are “quotations,” not offers. For unsolicited proposals, see Subpart 15.6.

Shall7,

Your assumption that contractors cannot (or should not, I'm not sure which) deliver educational value runs counter to the basic purpose of the federal procurement system as a whole...why is it not okay to use contractors for education/training purposes, but it is okay to use contractors for other services/requirements?  Shouldn't the Government just do everything itself rather than "throw money at the problem(s)?"  Where is the bright line?

I'll just add the following:

• I've been through the DAU courses, the Naval Postgraduate School's MBA program, as well as years of agency designed/delivered monthly training and the best contracting course I've taken was designed and taught by a contractor...so I don't share your concern in the slightest.
• The Government does not have a monopoly on contracting/acquisition information - the best publications, in my opinion, aren't even written by Government/DAU officials.  Should Government acquisition professionals not utilize those works and instead be tied to only DAU resources?

On 3/26/2017 at 0:10 PM, rsenn said:

     We recently lost on an LPTA proposal, and requested a debriefing.  The procurement was the first of series of very similar procurements, each for a different geographical area.

     We got beat on price, and I have no doubt that our proposal was technically acceptable, but clearly somebody else had a lower priced technically acceptable offer.

     We asked that the KO go beyond the minimum for debriefings as prescribed in the FAR and conduct a meaningful debriefing by telephone.  We specifically asked to discuss what constituted technically acceptable, especially the minimum necessary to be technically acceptable.  We intended to apply the lessons learned in the remaining procurements.

    The response was not meaningful.  It was a form letter that lined up with the FAR's minimum requirements.  It did not touch providing the information that we wanted about what constituted technical acceptability and the minimum necessary to be technically acceptable.

    Is there any way I can compel the government to provide a meaningful debriefing, either on this proposal or the next one that we lose?

   

Ultimately, it sounds like you were trying to engage in an exchange of hypotheticals with the CO regarding the bright line for what is technically acceptable/unacceptable.  If I were in that CO's shoes, I wouldn't do it either, primarily because with an LPTA acquisition the minimum technical requirements should be clear in the solicitation.  

I might also add that you should be careful what you wish for - if you did receive the debriefing answers you sought, to my knowledge, those answers are not binding for subsequent procurements.  Therefore, adhering to information obtained during the debriefing instead of Sections L & M could impede your ability to secure future contracts.

8 hours ago, rsenn said:

Yes, and I have done so on the follow up solicitations.  And the Q&A response is a cryptic sentence saying proposals will be evaluated according to the criteria in the solicitation.  The KO, or whoever is writing for him, avoids discussing where the boundaries of technically acceptable are.

As for your current Q&As, I hesitate to comment because you've provided no information regarding the content/quality of the solicitation or the content/quality of your question; however, I will say this: don't expect the Government to tell you how to propose.   Review the Evaluation Criteria in Section M  and, if they aren't clear, ask specific, clarifying questions in response to the solicitation.  If you're asking "what's the minimum technically acceptable..." I'm not surprised you're being referred back to the criteria in the solicitation which, in an LPTA procurement, should specify just that.

4 hours ago, bulgheroni said:

I am still not getting an answer to my question, which is, are there indeed other companies in the industry, who are currently awarding subcontracts and are subject to purchasing system reviews, who are using this specific reason to exclude subcontracts from the CPSR universe?  And if so, what is the basis for that decision? I would like to hear the reasoning from someone who is actually doing it.

Though you may not have received the answer you anticipated or wanted, I think the second half of your question was answered ("what is the basis for it?")...you might want to consider that, of those individuals who frequent these forums, many do not post/participate so you may not ever get an anecdotal response from a similarly situated person/company here.

There are exceptions to posting the solicitation at FBO.gov, see FAR 5.102(a)(5):

Quote

The contracting officer need not make a solicitation available through the GPE, as required in paragraph (a)(4) of this section when—

(i) Disclosure would compromise the national security (e.g., would result in disclosure of classified information, or information subject to export controls) or create other security risks. The fact that access to classified matter may be necessary to submit a proposal or perform the contract does not, in itself, justify use of this exception;

(ii) The nature of the file (e.g., size, format) does not make it cost-effective or practicable for contracting officers to provide access through the GPE; or

(iii) The agency’s senior procurement executive makes a written determination that access through the GPE is not in the Government’s interest.

In such a case, FAR 5.207( c )(17) applies, which states:

Quote

If solicitations synopsized through the GPE will not be made available through the GPE, provide information on how to obtain the solicitation

2 hours ago, C Culham said:

Not that it means anything but in reading this thread I picked up on the word "purchases".   So some additional questions might be appropriate.  Such as is this a simplified acquisition, simplified acquisition using simplified acquisition procedures (commercial item over the SAT)?   Noting as while FAR part 15 might apply, FAR part 13 may be the appropriate consideration on strategy.  

What would be the substantive differences in regards to determining a fair market price that concern you?  I don't see many differences between FAR 15.404-1(b)(2) and FAR 13.106-3(a)...

Vern's right about terminology, my mistake, though the fair market price is determined consistent with my previous reference.  See FAR 19.202-6 "Determination of Fair Market Price":

Quote

(a) The fair market price shall be the price achieved in accordance with the reasonable price guidelines in 15.404-1(b) for—

  (1) Total and partial small business set-asides (see Subpart 19.5);

  (2) HUBZone set-asides (see subpart 19.13);

  (3) Contracts utilizing the price evaluation preference for HUBZone small business concerns (see subpart 19.13);

  (4) Service-disabled veteran-owned small business set-asides (see subpart 19.14); and

  (5) Set-asides for EDWOSB concerns and WOSB concerns eligible under the WOSB Program (see subpart 19.15).

(b) For 8(a) contracts, both with respect to meeting the requirement at 19.806(b) and in order to accurately estimate the current fair market price, contracting officers shall follow the procedures at 19.807.

GABE,

Is this merely a hypothetical?  I only ask because for small business set-asides (except those which allow for sole source awards) there is a "Rule of Two" requirement to help ensure there is competition which should drive fair and reasonable pricing (though understandably not always).  That is also why there are multiple techniques one can use to evaluate whether or not a price is fair and reasonable.  In your case if a determination cannot be based on prior purchases for similar products, have any of the other techniques listed at FAR 15.404-1(b)(2) been considered?

If, however, the proper amount of price analysis has been performed and the price is not fair and reasonable, napolik's references are on the mark and I'd focus your attention/efforts there.

Sure, no disagreement if that was the intent behind your proposal as paragraph (2) is a more specific standard than just a "plan to offer it for sale."

Vern,

Appreciate the correction, I shouldn't use the word "claim" since it means something quite specific in the context of contracting (it's a bad habit left over from my debate years where we discussed argument structure in terms of "claim, warrant, impact").

That's an interesting solution, let me give some more thought to it, though I currently don't think the "plan to offer it for sale" portion would meet any of the commercial item definition's criteria (the other two would).

I went back and searched the Federal Register for the origins of the DFARS requirement for commercial item determinations on acquisitions over $1M and found the following (https://www.federalregister.gov/documents/2008/01/24/E8-1121/defense-federal-acquisition-regulation-supplement-commercial-item-determinations-dfars-case):

Quote

This rule will not have a significant cost or administrative impact on contractors or offerors, or a significant effect beyond the internal operating procedures of DoD. Therefore, publication for public comment under 41 U.S.C. 418b is not required. However, DoD will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should cite DFARS Case 2007-D005

I would agree, in part, that invoices (or additional information) should not be requested for items that could simply be verified via a Google search of the company name and product description, but then again, there are cases where a "commercial item" claim is made and the company does not readily advertise the item (i.e. a Google search of the company name and product description will not return adequate results).  In those cases, I believe a company should provide just enough information (no more, no less) to substantiate their claim that the item meets the criteria for "commercial item" in the FAR.  I don't believe that is an unreasonable request.

3 minutes ago, Vern Edwards said:

As for commerciality, you don't need to know the names of my customers. Look at the thing I'm offering to sell you and ask yourself if it seems like something for sale in the commercial marketplace. Is it really that hard to determine Mr. Bean Counter? I'm not selling F-35s or spares for F-15 engines on a sole source basis and arguing that an F-15 engine is the same type of thing as a 747 engine and that it's thus a commercial item. But you want to know my sales and how much of it came from the private sector and the names of my customers. 

Where is the criterion for "if it seems like something for sale in the commercial marketplace" in the FAR definition for commercial item?  The criteria I read in the FAR are all factually based.

I don't think that a CO should use the need to determine whether or not an item is commercial as a façade to request other than cost or pricing data (shame on those COs who do)...but a request for a non-redacted invoice to substantiate that the customer is either the general public or a non-governmental entity using the item in question for other than governmental purposes isn't unreasonable or an especially high hurdle to clear.

39 minutes ago, natavas said:

I apologize for not being clear. Government employees are certainly subject to a number of statutory and regulatory prohibitions related to the handling of confidential commercial and proprietary data and disclosure of such information outside of the Government.

I was talking about CID evaluations by prime contractors.  The concern is providing confidential pricing information of other customers, who may be the prime's competitors.   

Well that doesn't answer Don's question and it certainly ignores the situation at hand, namely the prime does not make the commercial item determination, the Contracting Officer does.  So if you're satisfied with the prohibitions in place for Government employees who handle confidential information (which applies to COs), it certainly begs Don's question: "What's the harm in giving the COs the pricing information they want?"

33 minutes ago, natavas said:

Giving pricing is not an issue but they always want unredacted invoices showing the customer and the end use, which is confidential information of our commercial customer. 

Are you familiar with 18 USC 1905 regarding disclosure of confidential information? https://www.law.cornell.edu/uscode/text/18/1905

The Government is asking for the customer information to make sure they are either the general public or a non-Governmental entity and the end use to make sure that the purpose is "for other than governmental" - those two criteria are straight from the FAR definition of commercial item...without that information how else would you expect someone to make an adequate determination that is grounded in facts?  I'd love to hear an alternative, but unfortunately it seems you're asking the agency to hit the "trust me" button...

19 hours ago, natavas said:

For a small woman owned business (OEM manufacturer), what is the true advantage for insisting on selling its product solely as commercial items? 

To state the question above differently: What is the true danger in selling as non-commercial items? 

An item or service either should or should not meet the definition of commercial item (with the exception that the item in question has never been sold before and a company is making the initial decision as to whether or not to offer the item solely to the Government or to the public).  I understand that there can be disagreement over whether or not an item is commercial and that there have been reversals of commercial item determinations, but I think that is a separate issue and conversation from what seems to be the position that companies have the luxury/ability to merely say a product is commercial or non-commercial when offering it for sale (a company can certainly make the claim, but I would expect it to be supported based on evidence relating to the definition of commercial item under FAR 2.101):

Quote

“Commercial item” means --

(1) Any item, other than real property, that is of a type customarily used by the general public or by non-governmental entities for purposes other than governmental purposes, and--

(i) Has been sold, leased, or licensed to the general public; or,

(ii) Has been offered for sale, lease, or license to the general public;

(2) Any item that evolved from an item described in paragraph (1) of this definition through advances in technology or performance and that is not yet available in the commercial marketplace, but will be available in the commercial marketplace in time to satisfy the delivery requirements under a Government solicitation;

(3) Any item that would satisfy a criterion expressed in paragraphs (1) or (2) of this definition, but for --

(i) Modifications of a type customarily available in the commercial marketplace; or

(ii) Minor modifications of a type not customarily available in the commercial marketplace made to meet Federal Government requirements. Minor modifications means modifications that do not significantly alter the nongovernmental function or essential physical characteristics of an item or component, or change the purpose of a process. Factors to be considered in determining whether a modification is minor include the value and size of the modification and the comparative value and size of the final product. Dollar values and percentages may be used as guideposts, but are not conclusive evidence that a modification is minor;

(4) Any combination of items meeting the requirements of paragraphs (1), (2), (3), or (5) of this definition that are of a type customarily combined and sold in combination to the general public;

(5) Installation services, maintenance services, repair services, training services, and other services if--

(i) Such services are procured for support of an item referred to in paragraph (1), (2), (3), or (4) of this definition, regardless of whether such services are provided by the same source or at the same time as the item; and

(ii) The source of such services provides similar services contemporaneously to the general public under terms and conditions similar to those offered to the Federal Government;

(6) Services of a type offered and sold competitively in substantial quantities in the commercial marketplace based on established catalog or market prices for specific tasks performed or specific outcomes to be achieved and under standard commercial terms and conditions. For purposes of these services—

(i) “Catalog price” means a price included in a catalog, price list, schedule, or other form that is regularly maintained by the manufacturer or vendor, is either published or otherwise available for inspection by customers, and states prices at which sales are currently, or were last, made to a significant number of buyers constituting the general public; and

(ii) “Market prices” means current prices that are established in the course of ordinary trade between buyers and sellers free to bargain and that can be substantiated through competition or from sources independent of the offerors.

(7) Any item, combination of items, or service referred to in paragraphs (1) through (6) of this definition, notwithstanding the fact that the item, combination of items, or service is transferred between or among separate divisions, subsidiaries, or affiliates of a contractor; or

(8) A nondevelopmental item, if the procuring agency determines the item was developed exclusively at private expense and sold in substantial quantities, on a competitive basis, to multiple State and local governments.

Additionally, while PepeTheFrog is right that the contracting officer ultimately makes the commercial item determination, a company can still ultimately choose whether or not to do business with the Government.  Basically, if the concern is that an agency is improperly making a determination that an item is non-commercial just to apply terms and conditions that would otherwise not be applicable, the easiest way one can avoid those burdens is to refuse to contract with that agency.  There may be other avenues a company can explore to adjudicate the issue, but I only have thoughts on that issue so I'll leave that discussion to any of the industry professionals whom frequent these forums to discuss how they might address the situation.

19 hours ago, natavas said:

It seems to me that the government and primes have a hard time or are unwilling to evaluate "commercial item" justifications. Occasionally, even if the prime has accepted the commerciality assertion, DCMA will do their audit or engage a third party (like the Navy Price Fighters), who reject the CID. All this results in solicitations being issued as FAR Part 15.

FAR Part 15 is not unique to non-commercial items...commercial items can also be procured under FAR Part 15 procedures (when combined with FAR Part 12).  Finally, there are a myriad of reasons why the Government and the prime may disagree on whether or not an item is commercial (by the way, it can go both ways i.e. a prime may argue that an item is non-commercial while the Government determines the item is commercial) - my only advice is to provide the proper support and a clear justification/argument based on the FAR definition and hopefully both parties will arrive at the same conclusion.

Todd,

CO's can delegate their authority - do a search for "Field Ordering Officers" for one common example (http://www.acq.osd.mil/dpap/ccap/cc/jcchb/HTML/Topical/foo.html).

The FAR Conventions, specifically FAR 1.108(b), may be helpful here:

Quote

Delegation of authority. Each authority is delegable unless specifically stated otherwise (see 1.102-4(b)).

FAR 1.102-4(b) states:

Quote

The authority to make decisions and the accountability for the decisions made will be delegated to the lowest level within the System, consistent with law.