Vern Edwards

This was the question PaulaC asked in the first post; It now appears that PaulaC thinks she asked this question: Those are different questions. In answer to PaulaC's second question: FAR makes no mention of "no cost extensions," so there is no FAR clause that expressly allows for "no cost extensions." But the common law and several FAR clauses provide legal bases for granting a contractor a time extension at no additional cost to the government. I don't know whether any of the FAR clauses are in your IDIQ contract. I have long thought that skill in the construction and transmission of interrogative sentences (questions) is at the heart of much professional contracting work. For instance, I think that the work of performing cost and price analysis and of proposal evaluation are largely matters of constructing good questions and question transmissions. Construction and transmission of good questions is like target shooting. The right sight picture (sight alignment) and the right trigger squeeze are the keys to hitting the target. The right words, the right sentence construction, and proper question transmission are the keys to getting the information you want. If I have learned anything at Wifcon over the years, it is that constructing good questions and question transmission messages is something that many of us don't take seriously enough and don't do well. Constructing good questions and transmissions is an essential part of our professional art---essential to requirements analysis, source selection planning, preparation for contract negotiations, and dispute resolution, among other tasks. They don't teach that art at DAU and FAI, but they should. Maybe they think we learn it in high school or college, but we don't. There are plenty of books about asking the right questions, but very few about asking them rightly. Of course, internet and other electronic communication practices have made us sloppy. If I were younger, I would try to write a book about how to construct questions and transmit them properly. I'm not getting younger, so that's not going to happen. But maybe one of you young'uns will write that book. You'll make money if you write a good one. A lot of people know that there is a problem.

The phrases "no cost extension" and "no cost time extension" do not appear anywhere within the FAR System, which includes the FAR and the agency FAR supplements. However, the FAR System contains various general references to time extensions in various contexts. For example, DFARS 204.7501(b) says, in part, "Contracting officers shall not exercise an option period or extend the period of performance on a contract, task order, or delivery order, unless the contract has a current (i.e., not more than 3 years old) CMMC certificate at the level required by the contract, task order, or delivery order." The phrases "no cost extension" and "no cost time extension" do not appear in the GAO Red Book. One or the other of the two phrases appears in 64 board of contract appeals decisions, 6 Court of Federal Claims decisions, 2 Federal Circuit decisions, and three GAO protest decisions. Cibinic, Nash, and Nagle discuss time extensions generally in Administration of Government Contracts, 5th ed., pages 514-521. They discuss the measurement of time extensions in pages 518-519. Cibinic and Nash discuss time extensions generally in 35 articles published in The Nash & Cibinic Report between January 1988 and January 2020. I do not know of any official limitation that applies specifically to "no cost extensions" or "no cost time extensions." Do you have another question?

It might violate some cybersecurity provision in the statement of work or a cybersecurity clause elsewhere in the contract. If it does, your company could be in real trouble. It might also violate some data or software rights clause. Get authorization in writing from the CO before doing that. There is no way that anyone at Wifcon Forum can answer that indirect question. And based on your posts, I would say that while ji20874 has given you good advice, I don't think that you will be able to figure much out by reading the government property clause. So ask the CO, in writing, whether the government would compensate your company. Tell him or her how much money you're asking about.

FAR 6.001(e)(1).

On reflection, I think that some hybrid combinations will not work with the standard FAR payment clauses, and in such cases a deviation would be needed.

Thanks, Don! I suspect that many if not most COs would agree with you. I don't know the "correct" answers. I think that what I described is a "hybrid" combination of types described in FAR---FFP and CPFF. I don't think a deviation is needed. But I think the possibility that many would believe they need approval to deviate is an example of what Mike Wooten (former Administrator of Federal Procurement Policy) called "friction" in the acquisition system.

@Don Mansfield Imagine a contract that would work as follows: The agency will specify a service task. The parties will negotiate an estimated number of hours, a fixed performance fee, and a ceiling price. The agency will pay the contractor only upon successful completion of the work. The contract is for completion, not best efforts. The amount to be paid for acceptable performance will be the lesser of (a) allowable incurred costs plus the performance fee or (b) the ceiling price. The clause at FAR 52.232-1 will apply if the total of allowable incurred costs and fee equals or exceeds the ceiling price. The clauses at FAR 52.216-7 and -8 will apply below the ceiling price. The contract will not include the limitation of cost clause at FAR 52.232-20. Questions: (1) Do you think such a contract is among the types already described in FAR Part 16? (2) If your answer is yes, which type? (3) If the answer to the first question is no, do you think the CO must seek an approved FAR deviation in order to enter into a contract of that type? I'm not trying to set you up for an argument. I just want to understand your interpretation of FAR 16.102(b).

Clearer than the FAR? Joel, I don't think so. They were almost identical.

My point was that the wording of FAR 16.102(b) is logically absurd.

@Don Mansfield Here's something to think about---a quote from the Armed Services Procurement Regulation (ASPR) of 1974, the year I entered the contracting world. Citation: 32 CFR 3.401(b): Haven't we made progress!

@Don Mansfield Think about this, from FAR 16.102(b), which consists of two sentences: 1. "Contracts negotiated under Part 15 may be of any type or combination of types that will promote the Government's interest, except as restricted in this part (see 10 USC 2306(a) and 41 USC 3901)." Then, in the very next sentence: 2. "Contract types not described in this regulation shall not be used, except as a deviation under Subpart 1.4" Now, is a combination of contract types itself a contract type? If so, does the FAR describe every possible combination of contract types? If not, does that mean that a contracting officer may not use any combination of contract type that is not already described in the FAR without a deviation? If so, what combinations of contract types does the FAR describe? Are there any combinations of contract types that we can use without a deviation?

FAR Part 16 is not well-adapted to the kinds of contracts, especially service contracts, being awarded today. Agencies are jury-rigging pricing arrangements that suit their needs, call them what they will. But some of those arrangements are ill-devised, because people at the working level don't get the pricing education that they need. It is fruitless to look in FAR Part 16 for solutions to all of today's contract pricing needs, and it is silly to insist that agencies squeeze their practical adaptations into Part 16's ancient "type" descriptions, which have changed little since my first days in contracting, almost 50 years ago. Unfortunately, we will get no solutions from OFPP and the FAR councils. What we need is a critical study of the pricing arrangements that agencies are actually using and a catalog of the modern pricing problems encountered in the field, developed by people who understand, which means people other than the go-to usual suspects (Rand). FAR Part 16 needs a rethink (not a rewrite), and we need a policy brain trust of creative adapters and forward thinkers to take the point.

@here_2_helphelp, you're gonna ruin the fun. 😂

Cumbersome. Unimaginative. But, whatever.

You could easily make provision for that. If the parties can think of and agree to a solution, they can implement it contractually. None of this is hard, if the parties are willing to put their brains to it. Once you understand the core problem, uncertain demand, you can fashion a contractual solution. It ain't rocket science.

They could write an "LOE" contract that includes an option for periodic incremental increases in the LOE. It wouldn't be a "traditional" LOE contract, but it might work.

I don't know of any reason why the parties could not negotiate a clause that provides for adjustment based on actual demand.

I think the acquisition in question is for some kind of support service. What follows is based on that assumption. We all (should) know that a contract may be of any type or combination of types. The issue in this case seems to be the buyer's inability to forecast demand and the decision to pay for services performed at fixed and burdened hourly rates. It can be hard to establish "burdened" labor rates (unit prices) when demand is uncertain, because "burden" is generally allocated on the basis of expected demand. Burden includes fixed costs, variable costs, and semi-variable costs. The fixed and semi-variable costs are the problem. If the parties underestimate demand, the contractor may overly absorb fixed and semi-variable costs, which become additional profit past the break-even point. If the parties overestimate demand, the contractor may not fully absorb those costs, and might make less profit or even lose money. If you are going to pay a contractor at fixed rates for hours worked, then the problem is the same whether you call the contract L-H or FFP-LOE. In my experience, the government usually (but not always) underestimates demand for support services.

Whatever. Every year there are millions of stories in the world of contracting. This has been one of them.

The problem appears to be that you cannot forecast your demand, and so you're paying by the hour at "fully" burdened labor rates. Your agency is a gold mine. I'll bet your contractor is investing in Bitcoin.

Hey, man, I know the story of how you got that rank. You earned it. Marshal Zhukov it is from now on.

Thanks, Carl. Your reference is very good. I am surprised that I cannot find a definition of employee in 13 CFR 125, except for the HubZone program.

Carl, Is there a definition of employee in 13 CFR 125.6? I didn't see any mention of 1099s in d)(3). Did I miss it? Are you referring to the mention of "independent contractors"? Just questions. Not a challenge.

See FAR 22.101, Labor relations. It's appropriate to be interested in offerors' labor relations, more so on some jobs than others. But requiring that a contractor hire union labor? I think that's above a CO's pay grade. It strikes me as bordering on a political decision. Any consideration of proceeding with such a requirement should be vetted by lawyers and reviewed and approved by (much) higher-ups.

What would be the justification? What would be the response if someone challenged the requirement as unduly restrictive of competition? Why would the government require union labor?