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Vern Edwards

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Posts posted by Vern Edwards

  1. On 4/4/2024 at 1:59 PM, chadinark said:

    [I]s there any type of education program or civilian-equivalent FAC-C certification that a non-gov't employee job seeker can obtain?

    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!

  2. @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.

  3. 1 hour ago, Retreadfed said:

    It was the use of the word "allowable" that had me spun up since to me, allowable denotes application of the cost principles in FAR Part 31 while 52.232-16 does not incorporate the cost principles.

    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:

    Quote

    The objective of progress payments is to provide the contractor with interim financing for a percentage (stated in contract) of allowable costs incurred for undelivered and uninvoiced items.

    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.;

    Quote

    Interim contract financing is available on certain fixed price contracts during the predelivery period as a percentage of allowable costs adjusted as discussed in this section. Financing is interest-free, but the amount is subject to limitations specified in the contract.

    Emphasis added. And see 14-202.1 d.:

    Quote

    The contractor can request progress payments as work progresses, but not more frequently than monthly. The amount of each progress payment is computed by (i) applying the rate stipulated in the progress payment clause of the contract (DFARS 252.232-7004) to the cumulative total allowable costs under the contract as shown in the contractor's books and records (see 14-202.4); (ii) plus financing payments to subcontractors or other divisions of the contractor's corporate office (see 14-205h); (iii) less the sum of all previous progress payments. The contracting officer is responsible for approving progress payment requests.

    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

     

  4. 2 hours ago, FrankJon said:

    Why would any of this be common knowledge among today’s practitioners if the use of UCAs is so limited?

    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.

    On 4/3/2024 at 12:51 PM, FrankJon said:

    Questions:

    1. Why does DoDIG assume that all UCAs are cost-reimbursement contracts? Where does the FAR or DFARS support this assertion? I see clause 52.216-26, but that is only required when a cost-reimbursement definitive contract is contemplated. 
       
    2. Assuming the contract is definitized on time in accordance with paragraph (d) of clause 252.217-7027 and the CO does not include any other terms authorizing the adjustment of profit, what gives the Government de facto authority to adjust a contractor's profit in accordance with DFARS 217.7404-6? 
       
    3. Since unilaterally adjusting profit is not compatible with commercial procedures and utilizing weighted guidelines is not compatible with simplified acquisition procedures, would the inclusion of commercial terms in the UCA and the application of FAR subpart 13.5 procedures to the definitized contract action negate the requirement to follow DFARS 217.7404-6?
       
    4. Since "substantial portion" is not defined by the DFARS, it seems to me that the CO has total discretion to determine when the 217.7404-6 analysis applies, depending on her definition of "substantial" under the circumstances. Am I missing something?

    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:

    Quote

    When the final price of a UCA is negotiated after a substantial portion of the required performance has been completed, the head of the contracting activity shall ensure the profit allowed reflects—

    (a) Any reduced cost risk to the contractor for costs incurred during contract performance before negotiation of the final price. However, if a contractor submits a qualifying proposal to definitize a UCA, and the contracting officer for such action definitizes the contract after the end of the 180-day period beginning on the date on which the contractor submitted the qualifying proposal, the profit allowed on the contract shall accurately reflect the cost risk of the contractor as such risk existed on the date the contractor submitted the qualifying proposal;

    (b) Any reduced cost risk to the contractor for costs expected to be incurred during performance of the remainder of the contract after negotiation of the final price; and

    (c) The requirements at 215.404-71 -3(d)(2). The risk assessment shall be documented in the price negotiation memorandum.

    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.

  5. 18 hours ago, Retreadfed said:

    Vern, I'm confused by this statement.  Can you clarify it for me.  Are you saying that as work progresses on the UCA, that the contractor can bill the government for its incurred allowable costs?  I see that if FAR 52.216-26 is in the UCA, however, if the definitized contract is anticipated to be FFP, 52.216-26 should not be in the UCA.

    @Retreadfed

    No. That's not what I said. I said:

    Quote

    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. 

    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:

    Quote

    All UCAs are essentially cost-reimbursement contracts until definitized, as contractors are reimbursed for all incurred costs that are reasonable, allocable, and allowable during the undefinitized period. This contract type places the greatest cost risk on the government.

    Here's from the Congressional Research Service in 2020:

    Quote

    [U]ndefinitized contract actions, such as letter contracts, can be useful when an agency must move quickly to award a contract. Generally, it may take less time to draft a letter contract (or other types of undefinitized contracts) because these types of contractual agreements do not include all of the terms and conditions usually found in a procurement contract. As GAO has noted, the downside to using undefinitized contract actions is that they “can pose risks to the government, such as when contractors lack incentives to control costs before all contract terms and conditions are defined.”

    @FrankJon

    16 hours ago, FrankJon said:

    If you'd like to point me to an authoritative discussion or rule on UCAs and letter contracts, I'd gladly read it.

    You're no newbie. You've been a member of this forum since 2016.

    Do your own research. (Heard of Google or Google Scholar?) 

  6. 3 hours ago, FrankJon said:

    I had a requirement for severable, commercial services. I loaded the UCA with commercial clauses as well as UCA- and letter contract-specific clauses I felt applied.* The contractor indicated it would view this as a labor-hour arrangement until definitization, and I saw no issue with this since the work provided an hourly benefit to the Government. In 252.217-7027 paragraph (b), I requested a FFP proposal. The contractor submitted a timely FFP proposal with two CLINs, one covering the UCA period, the other covering post-definitization work. The UCA period included LCATs, fully-burdened rates, and actual hours worked. The post-definitization period included the same LCATs and fully-burdened rates, but with estimated hours. Using FAR subpart 13.5 procedures, I determined the rates to be fair and reasonable and proceeded immediately to award the definitized contract.

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

  7. 3 hours ago, FrankJon said:

    Why does DoDIG assume that all UCAs are cost-reimbursement contracts? Where does the FAR or DFARS support this assertion? I see clause 52.216-26, but that is only required when a cost-reimbursement definitive contract is contemplated.

    From the IG report:

    Quote

    UCAs are agreements that allow a contractor to begin work and incur costs before the Government and the contractor have reached a final agreement on contract terms, specifications, or price. Once a UCA is awarded, the contractor immediately begins working and the Government must reimburse the contractor’s allowable costs during the undefinitized period. As a result, a UCA is essentially a cost-reimbursable contract during the undefinitized period. When the contractor and Government agree on contract terms, specifications, price, and profit, the UCA is then definitized.

    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

  8. 7 hours ago, EZK81 said:

    But this does not preclude a price being unrealistic if it is too steeply discounted, correct? 

    @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

  9. 15 minutes ago, EZK81 said:

    We initially had determined a lower price, but increased it because we thought our bid would be deemed non-compliant if it didn't fit into their range. Looking back, that was obviously a bad decision.

    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.

  10. 22 hours ago, EZK81 said:

    I've never seen a contracting office provide a competitive price range on an LPTA procurement. Is this a done thing? 

    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.

  11. 8 hours ago, Don Mansfield said:

    I think the most remarkable part of the Logan decision was the DEA's rotation procedure.

    I agree.

    But is award of orders by rotation a competitive procedure? (Is rotation the same as, or a type of, "allocation"? See FAR 16.505(b)(1)(ii)(B).)

    And since DEA awarded only one BPA per geographical region they must have awarded orders without comparing competitive quotes. If so, was that a competitive procedure? Was it maximum practicable competition?

    8 hours ago, Don Mansfield said:

    [N]obody protested before quotes were due. When Logan tried to protest the rotation procedure after establishment of the BPAs, the protest was untimely.

    Logan's (aka Envirosolve) attorney was a single practitioner. Their name appeared as representing a protester in only nine GAO decisions, all between 1999 and 2017. In one of those nine they represented an intervenor. In three of them they represented Logan versus the DEA. Of the nine protests only one was sustained in full (one of the Logan cases), and one was sustained in part (involving a different client). They represented two clients in three COFC protests between 2004 and 2007. They succeeded only once, partially, on a motion for discovery.

    They represented six clients (including Logan (as Envirosolve) in 20 BCA cases, in seven of which they represented the same client and in six of which they represented another client. The outcomes were mixed. Several were settled before coming before the board. I did not read them all.

    I cannot help but wonder how Logan might have fared had they hired an attorney with extensive bid protest experience. What issues and arguments  might a more experienced protest attorney have presented based on facts we don't know about? Also, the impression I have of GAO is that it does not always have a lot of patience with inexperienced lawyers.

    Be careful not to read too much in, and rely too much on, a single GAO decision that has never been cited on-point after eight years. But feel free to innovate experiment. 😀

  12. Unless I missed something, all Logan boils down to is that if you conduct a competition to establish BPAs and get competitive quotes, you don't have get new quotes from the BPA holders for each order. You can just use the quotes you already have. That strikes me as nothing more than common sense. I presume DEA included price lists in each BPA and that the work was fairly standard from one order to the next.

    Were the BPAs in Logan agreements or contracts? Take a look at footnote 4:

    Quote

    The RFQ also included a “minimum guaranteed amount” of work for each BPA holder for each contract area. AR, Tab 3, RFQ No. DEA-06-R-0002, at 4-6.

    Did the agency obligate funds to cover the minimum?

    There were untimely protest issues that the GAO did not consider. See footnote 6. There may have been protest issues that were not raised. 

    I don't like the Logan example because I think conducting competitions is a lot of work and protest-risky. Protests cost money and delay awards. We know that competitions under FAR Part 13 have generated sustained protests largely due to needless use of FAR Part 15 procedures.

    In 2006 JAN Army Law 9 (2008), in a description of the Logan decision, the author, a Lieutenant Colonel, described the DEA's BPAs as "noncompetitive." He did not explain why. Maybe he was thinking that BPAs were competitively established but that the placement of the orders was done without competition, which appears to have been the case. No need for new quotes, but shouldn't the quotes have been compared before awarding orders? It appears that they were not. The GAO dismissed that thought with a couple of simple sentences:

    Quote

    In this case, DEA complied with the statutory requirement to obtain maximum practicable competition when it established the BPAs for these small purchases. Under these circumstances, there is no requirement that DEA compete among the BPA holders each individual purchase order subsequently issued under the BPAs.

    Why not?

    I think that is a questionable statement. GAO might rethink that in dealing with a protester armed with experienced lawyers from a large firm.

    But if, as ji20874 suggests, an agency has top-notch people to think through and work out potential issues, plot a good course, and steer the thing through the rocks and shoals, they should give it a try.

    Experiment, by all means. What do you have to lose?

  13. The decision by GSA to adopt the term "BPA" in connection with schedule contracts created a lot of confusion. Before his death in 2005, Professor John Cibinic criticized that decision in "Contracting Methods: Square Pegs and Round Holes," The Nash & Cibinic Report, September 2001.

    I think that conducting competitions for the "award" of SAP BPAs is a needless complication of simplified acquisition. It is not clear to me what practical advantage there is in such a process. I think GSA's hijacking of the term has poisoned the well of common sense. But I am open to be educated.

  14. Just now, C Culham said:

    I would add clarity that I believe you are referring to FAR part 13 BPA's. 

    Yes. I'm talking about FAR Part 13 SAP BPAs, not the GSA FSS 8.405-3 things ("Schedule BPAs").

    Under the terms of 31 USC 3551 and FAR Part 33, protests are complaints about contract actions. See GAO's protest rules, 4 CFR 21.1(a):

    Quote

    An interested party may protest a solicitation or other request by a Federal agency for offers for a contract for the procurement of property or services; the cancellation of such a solicitation or other request; an award or proposed award of such a contract; and a termination of such a contract, if the protest alleges that the termination was based on improprieties in the award of the contract.

    Emphasis added. SAP BPAs are not contracts.

    Moreover, synopsis of a competition for multiple SAP BPAs does not free an agency from the statutory requirement to synopsize "each" contract action conducted thereafter. Any prospective order (or "call") against a SAP BPA that meets the criteria in FAR Part 5 must be synopsized. The existence of a SAP BPA provides no exception.

    However... Practice generally precedes regulation, and many new practices are based on faulty interpretations of the regs. I do not doubt that buyers today are using SAP BPAs in ways that the regulations do not contemplate.

    Anyway, I am still in the dark about what ji20874 and Don like so much about Logan with respect to BPAs. To me, what it says about maximum practicable competition is just a common sense reading of the FAR. Under Part 13, competitive quotes are competitive quotes, no matter how you got them. Having received competitive quotes through its (seemingly) pointless BPA competition, the agency did not have to get new quotes when placing orders against the BPAs. Big whoopee. (Apparently, the BPAs included prices. Agencies have been issuing "priced BPAs" since I entered contracting in 1974. They did that in order to permit no KO "ordering officers" to place calls without having to determine fairness and reasonableness.)

    I suspect that the agency in Logan may have been confused about the difference between SAP BPAs and Schedule BPAs.

    Another Wifcon wild diversion.

     

  15. I think establishing BPAs competitively might make you vulnerable to protests when you place orders ("calls") against the BPAs. Is rotating vendors consistent with competition? How do yo explain paying a higher price just because someone has come up on rotation? If you're going to do that, what was the point of the original competition?

    And remember, an order against a BPA is contract action, and each one that meets the criteria in 5.201(b) must be synopsized. I don't think you can restrict the competition to BPA-holders.

    A SAP BPA is just a charge account. It is not a contractual instrument.

  16. 11 hours ago, C Culham said:

    So what do you think?  Should an agency that competitively established multiple BPAs simply extend the BPA's established in the competition if the BPA's had a set "performance period" which has ended/expired and neither the BPA(s), nor the solicitation, carry or carried language, options or otherwise, that the BPA's would be extended beyond the stated performance period? 

    Well, if you're going to conduct competitions for SAP BPAs when you don't have to, why not conduct new competitions when they expire?

    BTW, I do not think GAO has protest jurisdiction over actions to establish or extend BPAs. See 31 USC 3551 and the definition of protest in FAR 33.101.

    Logan was not about the establishment or extension of a BPA.

  17. Why use competitive procedures to establish multiple BPAs? Why not just do market research and then enter into BPAs with vendors you like? Then seek competitive quotes from them. Maximum practicable competition is not full and open competition.

    Again... A Part 13 BPA is just a charge account, a billing arrangement. That's all it does for you. It's not a contract.

  18. I don't understand what there is to like so much about the Logan decision. That decision has been cited only four times, and never about the BPA competition issue. A few agencies have established priced BPAs for decades. Logan is just common sense in such cases.

    And I don't understand how the Logan decision answers my question: Why synopsize a competition for BPAs  when such competitions are not contract actions? What would it do for you?

    Clue me in, fellas.

     

  19. @Sascha KemperYou're welcome! One more thing. Let me explain in a little more detain about FAR 6.001.

    On 3/20/2024 at 12:59 AM, Sascha Kemper said:

    FAR part 6.001 states that it is not applicable to Part 13.

    Here's what FAR 6.001 says about Part 13:

    Quote

    This part applies to all acquisitions except—

    (a) Contracts awarded using the simplified acquisition procedures of part  13 (but see 13.501 for requirements pertaining to sole source acquisitions of commercial products or commercial services, under subpart  13.5)...

    Emphasis added.

    Now look a the definition of acquisition in FAR 2.101, which begins:

    Quote

    Acquisition means the acquiring by contract with appropriated funds of supplies or services (including construction)... 

    Now look at the definition of contract in FAR 2.101, which begins:

    Quote

    Contract means a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds... 

    FAR Part 13 BPA's are agreements, not contracts as defined by FAR. They are not purchase orders. They're supposed to be "charge accounts", i.e., billing arrangements. They anticipate future buys, but don't buy anything. Orders (or "calls") may or may not be made later. They are paperwork reduction devices. Thus, the creation of a BPA is not an acquisition. (Who knows what GSA's stupid BPAs under 8.405-3 are. I am not addressing them.)

    Thus, nothing in FAR Part 6, which applies to "all acquisitions", applies to Part 13 BPAs, including FAR 6.001(a), which applies only to contracts awarded using SAP.

    So if you want to create or extend a BPA you can stop reading 6.001 after "This part applies to all acquisitions..." It's not paragraph 6.001(a) that takes us off the hook, it's the prefatory phrase.

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