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Everything posted by MAY-D-FAR-B-WIT-U

  1. I actually stumbled onto this post looking for answers to a separate but closely related question. Assuming you can have a FPI with EPA, would you make adjustment before or after applying the incentive geometry to the target cost? I have a Navy contract applying it before and a CG contract applying after? Any benefit from the Government or Contractor's perspective to either strategy? EPA Adjustment before calculating profit (b) The Total Final Price shall be established by adjusting the total final negotiated cost determined in paragraph (d) (1) of the Incentive Price Revision–Firm Target clause of this contract by an amount for profit or loss determined as follows: (i) Subtract the amount determined in accordance with the contract requirement, “Economic Price Adjustments” (EPA) adjustment (positive or negative) to calculate the EPA adjusted total final cost: then: (ii) Calculate the amount for profit or loss as follows: WHEN THE TOTAL FINAL NEGOTIATED COST IS: THE AMOUNT FOR PROFIT OR LOSS IS: Equal to the total target cost‑‑‑‑‑‑ Total target profit. Greater than the total target cost‑‑ Total target profit less (see below) percent of the amount by which the total final negotiated cost exceeds the total target cost. CLIN 0100: 30 percent CLIN 0200: 40 percent CLINs 0300,0400, 0500, 0600, 0700, 0800, 0900, and 1000: 50 percent Less than the total target cost‑‑‑‑‑ Total target profit plus 50 percent of the amount by which the total final negotiated cost is less than the total target cost. (iii) The Total Final Price shall be the sum of: (A) the EPA adjusted total final negotiated cost, calculated in accordance with paragraph (i) above, and (B) the amount for profit or loss calculated in accordance with paragraph (ii) above; provided, however, that in no event shall the total final price exceed the Ceiling Price set forth in Section B of the Contract. Adjustment After (v) The sum of the projected final cost, the projected final profit and the applicable EPA amount (positive or negative) shall be the final billing price
  2. These are common with Navy Shipbuilding contracts and less common with Coast Guard contracts but my thought is this lines up with 16.203-4(d) and is not a deviation. The EPA is pegged to BLS indices and projections (usually from IHS Global Insight) and are incorporated into the contract and adjustment is made based on the percentage difference between the projections and actual index once published and usually contain an adjustment band say 3-5% where no adjustment is made. d) Adjustments based on cost indexes of labor or material. The contracting officer should consider using an economic price adjustment clause based on cost indexes of labor or material under the circumstances and subject to approval as described in paragraphs (d)(1) and (d)(2) of this section. (1) A clause providing adjustment based on cost indexes of labor or materials may be appropriate when- (i) The contract involves an extended period of performance with significant costs to be incurred beyond 1 year after performance begins; (ii) The contract amount subject to adjustment is substantial; and (iii) The economic variables for labor and materials are too unstable to permit a reasonable division of risk between the Government and the contractor, without this type of clause. (2) Any clause using this method shall be prepared and approved under agency procedures. Because of the variations in circumstances and clause wording that may arise, no standard clause is prescribed.
  3. ji20874, would you need a D&F for this type of contract per FAR 16.401(d)?
  4. Joel We discussed the use of award fee mostly due to the situation you described above, ship repair will have a good amount of unforeseen work that will have an impact on schedule and subjectively evaluating all the factors outside the control of the contractor that impacted the ability to meet the schedule before awarding the incentive will be beneficial. Ultimately the administrative burden of the award fee and anticipated difficulty getting buy-in form the ACO side led us to leaning more towards something more objective while addressing how delays will be handled.
  5. We are looking at the possibility of structuring a FFP contract with a delivery incentive for a ship repair contract and there's a debate as to whether there needs to be a target cost, target profit, target price, ceiling price, and share ratios for this kind of contract as a way to satisfy the requirement for a cost incentive or constraint. A part of the confusion may be due to the fact that we keep calling this a FPIF where the IF portion is to incentivize schedule only. My interpretation of FAR 16.202-1 leads me to conclude that this is still a FFP and a FFP satisfies the requirement for a cost constraint. "The contracting officer may use a firm-fixed-price contract in conjunction with an award-fee incentive (see 16.404) and performance or delivery incentives (see 16.402-2 and 16.402-3) when the award fee or incentive is based solely on factors other than cost. The contract type remains firm-fixed-price when used with these incentives." Another way I have tried to look at it is as an FPIF with a 0/100 over and under share ratio, and target = ceiling. My question is, does a FFP satisfy the requirement for a cost constraint? Let me know why you agree or disagree. We need to make a case to our level above that this can be done without a FPIF geometry and also argue that a FFP satisfies the requirement for a cost constraint. I am hoping someone here has examples, GAO cases, case law, that they can point to. Also, i thought i read a chapter on incentive contract in Formation of Govt Contract that a FFP meets the requirement for a constraint but, I don't have a copy handy. Another part of this conversation is per FAR 16.202, the type of contract we're proposing is a FFP, should the requirement for a D&F under 16.401 (d) apply? This second part is probably purely academic as there's no chance it will fly in my organization but just wanted to get some thoughts on this. Just in case anyone is wondering, the plan is to have a positive incentives only and use liquidated damages to take care of late delivery while making sure the relationship between , incentive, LD, inspection and acceptance clauses is clear. For example: June 1 $ 1,500,000 fee July 1 $1,000,000 fee Aug 1st $0 fee Delivery Date per contract After Aug 1 : liquidated damages kicks in Your feedback is appreciated.
  6. The contractor is working under the current period which expires in a couple of days.
  7. There are government employees on the program who are working and they expect the support to continue because they have the funds. I am also considering the possibility of someone simply sending an ATP to the contractor saying funds are available and proceed with the terms of the option period. With the exception of finding someone with a warrant who isn't furloughed, does anyone foresee a problem with this?
  8. My concern is a third party (possiblly one of the offerors during the award) would be happy to see the contract die and have another opportunity at the requirement in a recompete. I am thinking if I was a third party, I would argue that failure of the government to exercise the option means the contract is dead and should be recompeted regardless of the intent letter. The intent letter itself says the letter is not an obligation and does not commit the government in anyway. Maybe am just trying to anticipate a solution for a problem that does not exist. ji20874, Can a third party challenge the belated option exercise?
  9. The current option period of a contract is set to expire, we have previous year funds to exercise the next option period and we sent out the intent letter before the shutdown, but due to the shutdown, there is no staff available to obligate the funds. I am looking for any legal precedent or GAO decisions that will allow us to revive the contract, assuming this shutdown will not be over until after the current period expires. Thank you.
  10. My agency is issuing a 10 year IDIQ, and the 5 year ordering period limitation applies to my agency (nothing in regulation states this can be waived, otherwise we would have include a 10 year ordering period in the D&F for the 10 year PoP). We will like to modify the clause in 52.217-9 to extend the ordering period using the language below, and we have a few questions 1. Should this be moved to section H as an H-Clause? or does the phrase "substantially the same" at the beginning of the clause imply this kind of change is authorized per "52.104" 2. Would it be cleaner just to have a 5 year base and 5 year option? 3. When its time to exercise the option to extend the ordering period, does 17.207 (c ,d,&e) come into play at all? 4. Will the simple change below work or are we missing something? Thank you. Option to Extend the ORDERING PERIOD of the Contract (Mar 2000) (a) The Government may extend the "ORDERING PERIOD" of this contract by written notice to the Contractor within _____ [insert the period of time within which the Contracting Officer may exercise the option]; provided that the Government gives the Contractor a preliminary written notice of its intent to extend at least ___ days [60 days unless a different number of days is inserted] before the ORDERING PERIOD expires. The preliminary notice does not commit the Government to an extension. (b) If the Government exercises this option, the extended "ORDERING PERIOD" shall be considered to include this option clause. (c) The total duration of this ORDERING PERIOD, including the exercise of any options under this clause, shall not exceed ___________ (months)(years).
  11. @FrankJon, You second post answered most of my questions and although I pride myself on being able to research different topics and drawing a conclusion, you response shows me that I have a long way to go and I need to learn to be patient when seeking answers and dig even further. Thanks for taking the time. @Vern Edwards I also read "negotiated contracts" to mean RFP i.e. FAR 15 and did not think the provision will apply to orders under 16.505 but the FAR definition (A contract awarded using other than sealed bidding procedures) made me second guess myself and scratch my head a little bit. @Retreadfed I am guessing by "IDIQ contract" you are referring to orders under an IDIQ. While I do understand the logic in your response, we sometimes insert additional provisions when competing orders under 16.505 and in this case, we have. included additional provisions and making the decision not to include 52.222-46 because it's a provision will just be selective reasoning. I am not saying its right or wrong to include provisions in orders under 16.505 but i remember a post by Vern in which he stated that "IDIQ contracts were originally designed to be used to buy pre-specified and pre-priced products and simple services". Now we have IDIQ's used my multiple agency and sometimes we need to bring in agency specific provisions. Just to clarify a few points, The evaluation called for in the provision was completed during the award of underlying IDIQ contracts and the maximum rates were fixed for all IDIQ holders during award. FrankJon makes the point that "Doing the evaluation required by this provision at the IDIQ level in a multiple award setting doesn't achieve much because the risks it is supposed to mitigate will return once the task orders are competed". This is important in my case for 2 reasons 1) we encourage offerors to provide a discount to the IDIQ rates and 2) Because the IDIQ is used by a few agencies, it permits deviations from the standard labor categories in the IDIQ to accommodate everyone. In our case, about 30% of our labor categories are deviations ( all requiring higher education and experience) from the standard labor categories. These deviations are new labor categories that were obviously not evaluated at the IDIQ level. Thank you all for your input, I think I have enough information to recommend a course of action to my KO.
  12. Thanks FrankJon, my initial question is to find out if 52.222-46 applies to orders under 16.505 when the evaluation required by the clause was already performed during the award of the IDIQ? I then read the prescription for the clause a second time and saw that it only applies to "negotiated contracts", which led to my next question and maybe resulted in my confusing post.
  13. Is a task order competed among multiple IDIQ holders considered a "negotiated contract" or does a negotiated contract only refer to contract awarded using FAR 15 procedures?
  14. I really appreciate all the responses, in digging and getting more people (program office) involved, the SOW was specifically written to give them flexibility to assign a variety of work to the contractor. The COR informed me that tasks are generated mostly on a daily/weekly basis and occasionally monthly, and are then assigned to contractor personnel. It seems we got what we paid for (support) but we will still proceed to discuss availability issues with the contractor. We also bounced around the idea of having a task list that will be incorporated into the task order on a monthly basis and seeing if the contractor will be okay with including this in the SOW. You posted to the forum for beginners, so I assume that you are a beginner in contracting. Since you are a beginner, I hope that you have learned something from the responses that you have received here---not about the answer to your question, but about the nature of contracting. I will not recommend a contract type for your requirement, but I will say that it sounds like it should be some form of level-of-effort type. Vern, I downloaded the DAU contract type chart and reviewing all the contract types, I agree with your statement but LOE type contracts are frowned upon here. The other possibility I think might work is an IDIQ, but some of the tasks are so small and the administrative burden may not be worth it. I am hoping I can apply the lesson learned here to my new requirement. @FrankJon and @Jamal, The OASIS IDIQ has the non-commercial clauses but our TO has commercial clauses. The statement below is from section I1 in the Oasis IDIQ contract " "In accordance with FAR 52.301, Solicitation Provisions and Contract Clauses (Matrix), the OASIS master contracts cannot predetermine all the contract provisions/clauses for future individual task orders. However, all Applicable and Required provisions/clauses set forth in FAR 52.301 automatically flow down to all OASIS task orders, based on their specific contract type (e.g. cost, fixed price etc), statement of work, competition requirements, commercial or not commercial, and dollar value as of the date the task order solicitation is issued. However, the OCO must identify in the task order solicitation whether FAR Part 12 commercial clauses/provisions apply or not apply. Furthermore, the OCO must identify any Optional, and/or Agency-Specific provisions/clauses for each individual task order solicitation and subsequent award. For Optional and/or Agency-Specific provisions/clauses, the OCO must provide the provision/clause Number, Title, Date, and fill-in information (if any), as of the date the task order solicitation is issued " Thank you all and if I get any interesting advice from legal today, I'll be back to update the post.
  15. Thank you all for your responses....This is a contract for commercial services where the contractor supplements the government effort in several technical areas and in many of the positions, the contractor staff have a higher technical expertise. The SOW does not list specific task but general areas where support will be required, I’ll give an example which I have altered a bit. a) The contractor shall provide support to include the following technical areas: Propulsion Systems, Electrical Systems. b ) The contractor shall provide SME in Design and Construction of XXXXX. The contractor shall assist in development of system specifications, engagement with industry The sow does not detail the exact work to be performed just the technical and subject areas where the work will performed. The contract does call for monthly deliverables that list the work that was performed, interestingly, the contract also requires the contractor to include a breakdown of labor hours and labor categories but the contractor has never complied with the LCAT and hours part. It is not so easy to answer the questions 1)was the performed? and 2 ) what exactly did the contractor bill for that was not performed? In the absence of the contractor the Government employees picked up the slack and performed the work, the best I got from the COR was that because the contractor employee was unavailable the technical drawings were not completed Two more contractor employees just left and due to the very technical nature of the work they are struggling to fill the positions We are now going to legal to see what we can do. I am new to this agency and I have a new requirement that very much mirrors this one and the SOW Is even less definitive on the nature of the work. I don’t think we selected the right contract type and I would like to read your comments and hopefully help guide me on the right path sorry for the long post but wanted to provide as much detail as possible
  16. We have a FFP TO awarded again a GSA Oasis Contract (16.5 not 8.4), the contract has a SOW to provide support services in different areas (PM, Acquisition, Logistics, e.t.c.) and payment is made monthly for 1/12th of the total price. The total value of the contract was determined by estimating the number of hours needed for different LCATS. Although the labor hours and labor rates were never incorporated into the contract, we have bilaterally made several changes to the contract, increasing and decreasing the estimated hours required to provide the support needed. One of the CORs (contract supports several programs and we have 2 CORs) just notified us that one of the contractor personnel was only at his duty location about half the time in the last few months and he was completely absent last month. The contractor invoiced and was paid in full for both months. The COR kept track of the exact hours worked, but I am not sure how much good this does with a FFP contract. I asked the COR to identify the section in the SOW that was not performed due to the absent employee, which he did , but I have been told by more experienced Specialist and KO's that there is nothing we can do but ding them in a CPARS because its a FFP TO. Do we have any recourse to recoup an of the money paid or at least negotiate some consideration. The TO has 52.232-1 and has 4 option years left. I welcome and appreciate all input.
  17. My agency is in the process of awarding a part 8 BPA along with the first two TOs. The BPA-PWS is so general and reads more like a SOW and we are worried all offerors will simply restate all the task/services listed in their quotes and say, yeah we can do that --no real discriminator for a technical factor. For instance, one of the services listed is PMO support and the BPA-PWS simply lists all the activities in the PMBOK. The two task orders on the other hand have some meat and will allow us to identify those who can truly perform the work. Our plan is to evaluate the task orders first and award the BPA to 3 - 5 of the highest rated quotes. My goal here is to obtain some feedback on the potential pitfalls of not evaluating the BPA at all, or maybe having 3 evaluation factors TO1, TO2 and BPA with the BPA being the least important factor. Another possibility is to perhaps eliminate technical as an evaluation factor in the BPA and really drill down on PP and experience but this is not favored by many. If any one has gone this route and has a sample ITO that would be very helpful.
  18. Thanks to everyone for your input. I think Joel highlighted what I was missing, I was fixated on the price part that I wasn't really using non-price factors in my reasoning and justification.
  19. @ Todd Davis, thanks for the knowledge. I talked to another CO who just told me the story of a CO who exercised the option on salt without a price analysis only to find out the price of salt had dropped significantly. @ Vern, What kind of hourly rates do you have? Direct labor rates (employee payment), which don't include indirect costs and profits, or burdened rates, which do include indirects costs and profits? If burdented rates, what do they include beside direct labor rates? Vern, These are fully burdened rates (discounted GSA prices) and are FFP contracts. We negotiate how many hours will be needed for the requirement and generally use the changes clause to add more hours if needed.
  20. Vern, My first thought was that a formal analysis requires following the requirement in 15.404-1(b) while an informal is more of a simple price check, less detailed. After reading through that section of the FAR, I believe the difference is simply the level of detail and the techniques describe can 15.404-1(b)(2) can be used with varying detail. Looking forward to your input.
  21. Joel, My problem is I can always find prices higher and lower than the option pricing for the labor categories, which is why I think the GSA CALC may be an option showing the option price is within 1 SD of the average pricing of the labor category. I always use the higher prices in my memo to justify the option pricing is the most advantageous offer but I can't help but think this memo is BS. Let me also add that price is almost never the most important evaluation factor. Thanks for your input.
  22. Some contractors are more efficient than others, have a better solution or approach to the service, or are willing to reduce market pricing to obtain more work or keep a labor force employed, etc. Todd Davis, Thank for your response, Based on the highlighted response, do some Contracting Officers require their technical personnel to re-evaluate the technical proposal to see if the solution is still cost effective? i.e. do we have an Engineer IV preforming a task that could be performed by an Engineer II. Another question that comes to mind, how can the CO/KO determine if other identified source can perform the work without getting some detailed information about their capabilities especially when price was not the most important evaluation factor during award. This sounds like determination (1), which I know I need to avoid if possible. My idea was to use the ECI to support determination (2). I think I may be over analyzing as usual, options must be exercised in accordance with the terms of the BPA and the procedures of FAR Subpart 17.2, I must make a determination based in (1) (2) or (3) and (2) & (3) seem to be the more logical options. Thanks for the input.
  23. My contracting office requires an informal price analysis before the exercise of all option. About 90% of all our actions are BPAs and TOs against FSS, and 99% of all actions are for services (professional services not subject to SCLS). I intend to make an argument that memos documenting the informal analysis is not necessary for a majority of our actions based on the following reasons. 1. These options were competed at the time of award and considered fair and reasonable 2. Options prices are generally discounted GSA pricing which has been determined to be fair and reasonable 3. Hourly labor rates for professional services rarely go down based on Employment Cost Index (ECI) table on the BLS site. O ur informal price analysis generally involves going on GSA to find hourly rates that are lower than the rates negotiated for the option periods, and using this information to satisfy 17.207. I understand why this would be necessary when buying products, especially commodities that could fluctuate in pricing but I am struggling to see why this is necessary for FSS professional services hourly rates. I have been an 1102 for only one year and I do not want to come-off as an idiot when I make this argument, this is why I am hoping wifconers can pick apart my argument and provide me with some missing points. The best answer I got from my Contracting Officer is that we once had a Group Manager(Branch Head) who came from another agency and required an informal price analysis for all options. I also think GSA CALC may be a better option for an informal price analysis as it provided an average price and standard deviation for a labor category. All comments will be very much appreciated. ECI.pdf
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