Vern Edwards

https://www.law.gwu.edu/government-procurement-courses-and-degree-offerings See also George Mason University. Florida Institute of Technology. https://www.fit.edu/programs/acquisition-and-contract-management-ms/ There are a few others. Search!

Sorry for the edit while you were posting, Retread. Au revoir.

@Retreadfed Allowable, eligible... Whatever. 😀 It doesn't change my explanation of the DODIG's and the GAO's simile that a UCA is "effectively" like a cost-reimbursement contract until definitization, which explains why Congresss placed statutory limits on them. We use a lot of similes to explain things to people in our business. Remember when some people insisted that a T&M contract was a kind of cost-reimbursement contract. That was not even close to being true. Vern, is leaving the building. Going to France on Monday to spend a month on the Seine and the Loire in Spring. Y'all carry on.

No, the clause doesn't mention the cost principles, and I don't think I cited Part 31. (I see a quote box for me in your post, but no quote.) But see DCAA 17500 Audit Program for Progress Payment, Cost AP, Item 8: Emphasis added. https://www.dcaa.mil/Portals/88/17500 Audit Program for Progress Payment Cost AP.pdf?ver=1DtDHZB6nPAH_hdDTBOkgA%3D%3D See also DCAA CAM 14-200 Section 2 Audit of Progress Payments, 14-201 a.; Emphasis added. And see 14-202.1 d.: Emphasis added. The contractor will ultimately be paid the full contract price for acceptable performance, but, apparently, progress payments include only allowable costs pending liquidation. At least, that seems to be DCAA's position and has been my understanding. Maybe DCAA has a different definition of "allowable". https://www.dcaa.mil/Portals/88/Documents/Guidance/CAM/Chapter 14 Other Contract Audit Assignments.pdf?ver=CF-j6io9SKfawNSSXQpCwQ%3d%3d

Thanks, Joel.

I assumed it is common knowledge because I often falsely assume that contracting "professionals" understand self-interrogation. (Question: Why a UCA for a commercial item?) This thread is off the rails, as often happens at Wifcon Forum. Let's not forget the questions that started it. I presume that the first question has been answered. What about the second and third question? As to the second question, it is not a matter of "de facto authority". (Authority is the last refuge of the helpless.) It is a matter of business smarts. DFARS 217.7404-6 states: That is an instruction about how to negotiate. Why the instruction? It's there for the clueless. Smart, competent COs negotiating the definitization of an FFP letter contract would do that as a matter of course, as a matter of profit policy and commonsense business practice, because they know that before definitization an FFP letter contract "effectively" works like cost-reimbursement contracts, and they can explain why and how that is the case. And because some savvy contractors will take advantage of government ignorance and incompetence, while others are simply resigned to government slow motion. Smart people negotiating a UCA for the first time engage in self-interrogation, determine what they do and do not know, and then research and study like heck. But those persons seem to be rare. It seems that some people have never heard of Google Books and Google Scholar. Some people don't search DTIC. They spend their spare time watching "Ted Lasso" and "Monarch: Legacy of Monsters". (I liked "Lasso", but "Monarch" is for idiots. "Godzilla Minus One", on the other hand, is sheer genius, but it's not streaming yet.) So if you are negotiating an FFP contract price the guidance to the clueless is, first, to reward the contractor's assumption of risk with higher profit than you would agree to under a cost-reimbursement contract, but, second, if the contractor has incurred "a substantial portion" of the total cost by the time the letter contract is definitized, while the UCA functioned like a CPFF contract, then the contractor has not faced as much risk as it would have under an FFP contract and should not be rewarded with FFP-level profits. It's not about "de facto authority", it's just commonsense business practice. Wonder why we have so much regulation? Look around you. Okay, I hope that takes care of questions 2 and 3. Question 4 does not deserve an answer. This isn't high school. BTW, if you really want to understand the DODIG's concern about UCAs, go to Google Books and search for: "Acquisition Reform-1986." It's a transcript of a HASC hearing. Download it and then read pages 1-47, which are devoted to UCAs. Plenty of good background. (Question for the self-interrogators who cultivate curiosity: Why does the DFARS say that change orders are not UCAs?) The FAR is not a textbook. Most of the textbooks devoted to the practical sides of government contracting are legal hornbooks, like Formation of Government Contracting. They don't address and explain practical matters in any depth. You have to be able to gather info, put ideas together, think things through, follow the logic, and determine logical consequences. Competence is not handed to you on a platter. We old-timers have failed the younger folk to the extent that we have not taught them how to think things through, and to the extent that we have engaged in too much hand-holding. Knowledge and competence are the products of career-long struggle. Forgive any typos. I can barely see my screen.

@Retreadfed No. That's not what I said. I said: Just like under a change order. Assume an FFP letter contract. The contract must contains 52.216-24 and 52.216-25. The -24 clause limits the government's liability if the contract is terminated. The -25 clause prescribes a procedure for definitization, requires the contractor to submit a proposal, and, if the contract was awarded based on price competition (which in my experience would be unusual), a maximum negotiated price, assuming that the contract is not modified prior to definitization. Presumably, the contractor will want some kind of revenue flow during performance unless its is willing to provide its own financing. So it seeks progress payments based on costs, which will be anchored to the Government's maximum liability. See 52.232-16. At the time of award, the contractor is not obligated to complete the work for any specific amount, because the contract is undefinitized. So the contractor starts working, starts incurring costs, and eventually submits a proposal, which has been delayed due to government changes. The government initiates an audit and starts price analysis. The contractor submits a revised proposal, while still incurring costs, and the government has had to increase its maximum liability because it has changed the contract a few times. Oh, and all the while indirect cost rates are being adjusted. All of this is why Congress enacted legislation to try to limit and control the use of UCAs. See 10 USC 3371, which is why DFAR 214.74 exists. And don't forget the PGI 217.74. And all of that is why the DOD IG said what it did. Honest to God, I thought all this was common knowledge. BTW, here's the GAO in 2007: Here's from the Congressional Research Service in 2020: @FrankJon You're no newbie. You've been a member of this forum since 2016. Do your own research. (Heard of Google or Google Scholar?)

🤔😂 I'm going to let the regulars help you.

From the IG report: Emphasis added. What don't you understand about that? UCA is "essentially" a cost-reimbursement contract because it is undefinitized as to price. The contractor works pending price agreement and will be entitled to compensation for allowable costs incurrred until the parties reach final price agreement. For more info, see this: https://apps.dtic.mil/sti/tr/pdf/ADA432582.pdf and this: https://www.gao.gov/products/gao-07-559

@EZK81For an illustration of how price realism might work in the competitive placement of an order against a GSA schedule contract, see the GAO's bid protest decision in the matter of ManTech Advanced Systems International, Inc., dated August 14, 2023. To find that decision use the link below or go to Google or some other search engine and search for B-421560.4. The pertinent part of the decision with respect to your question is on page 4. https://www.gao.gov/products/b-421560.4

The "By placing an order" pricing language has been in the FAR 8.404 since 1997.

Depending on the text of the RFP, the lowest price of the range might not have been a limit. It might just have been the lowest price received. And if the agency had asserted that the lowest price of the range was a "limit" if might have been in trouble if the RFP had not stated that price realism would be an evaluation factor.

I found the phrase "competitive price range" in 25 GAO protest decisions ranging from 1962 - 2019, and in one COFC protest decision from 1999. I found the phrase "reasonable price range" in 15 GAO decisions, ranging from 1955 - 1994, and in four COFC decisions, 1991 - 2024. I did not read any of the decisions.

Oh. Them. Thanks.

@formerkoWhat organization? Is it a secret?