Vern Edwards

I don't think it will settle the issue for Don, but it might shed some light.

The government could not impose a "fine." But if you could not perform within the contract telework restrictions they might (1) withhold payment on grounds of nonperformance, (2) pay something, but with a deduction for nonperformance, (3) seek a no-cost termination of the contract for convenience, or in the extreme, (4) terminate your contract for default (breach). Much depends on the type of service(s) you provide, the type(s) of employees involved, the types of contracts involved (firm-fixed-price, cost-reimbursement, time-and-materials, etc.), and the terms pertaining to the telework restriction. An attorney will want to know the facts about the contracts, the history and terms of the telework restriction and waiver, their importance to performance, how long the waiver has been in place, the content and date of the notification that the waiver is being withdrawn, and the nature and circumstances of your employee losses and what it will take to replace them. The attorney will be concerned to assess the reasonableness of the government's withdrawal of the waiver in light of all the facts.

@PATRICK3 So you want to (1) add the changes clause, then (2) issue a change order under the clause, and then (3) make an equitable adjustment for the change in a subsequent mod at a later date. And you want to know if you can do (1) and (2) in the same mod. Is that right?

I just realized that, but he hasn't responded to me.

@Don Mansfield@Lionel HutzSee Eyester, "NAFTA and the Barriers to Federal Procurement Opportunities in the United States," 31 Pub. Cont. L.J. 695, the section entitled, "Small Business Set-Aside Exemption," pp. 714 - 718. It might shed some light on your debate, esp. with regard to the interpretation of FAR 25.401(a)(1).

So you want to (1) add the changes clause, then (2) issue a change order under the clause, and then (3) make an equitable adjustment for the change in a subsequent mod at a later date. Is that right?

@here_2_helpThat's kind, but it's demonstrably untrue, and I really am old and intemperate. I'm embarrassed. Sitting here answering a few questions won't fix what's wrong with contracting today. I've tried to contribute by writing, but it has done little good. One of my last surviving mentors feels the same way. I honestly don't know what to do. The greatest book ever written about government contracting will go into its last edition this year. The three finest and most productive writers of government contracting reference works will produce no more. One has passed. One is ancient. And one is seriously ill. The last periodical publication devoted to practical matters will likely cease publication within a year or two, because it's very difficult to find knowledgeable, capable writers. I have tried to encourage some younger people to write, but to no avail. It's verging on impossible to find quality textbook materials suitable for novice and working level practitioners. The books still in print are prohibitively costly for individuals. I have been giving some away as gifts at my own expense in the one class I still teach occasionally. Agencies generally provide poor in-house training. The same is true of the official training institutions, and managerial devotion to their proper maintenance is weak if judged by more than words. There are some centers of excellence, but they are islands. We have a contracted-out government, so contracting and competence in its execution is extremely important to our nation's well-being. But our leaders are too short-sighted to invest in the kind of education and training we need to field a workforce that can interact effectively with an ever-increasingly complex environment. The FAR is over 2,000 pages. The DFARS is another 1,000. And they are just the tip of the iceberg. We are into the second year of a new presidency and still don't have an OFPP administrator (as far as I know). But even if we did the position has been so undermined as to be practically powerless. I have long known that things were bad, but, still, I was shocked when I read that NCMA contract management standard that Don posted and realized that it is now the basis for DOD and civilian agency contracting certification. I have been in something of a state of shock ever since. My own peers in terms of age and experience feel much the same. Thanks for the slap, H2H. I deserved and needed it. It was a sign. Again, apologies to all.

I apologize for being intemperate. If you are looking for answers, begin by admitting that you are ignorant, and teach yourself to write coherent questions. All learning and knowledge begins with questions. Questions that you ask yourself. Questions that you ask of others. If you are trying to learn, the most powerful tool in your "toolkit" is the ability to write a good question. And when you write one, don't bury it under a speculative preface. Again, I apologize. I'm frustrated at the state of our business. It's getting ever worse, and at great cost. Nothing seems to work to fix it, and for some of us old-timers, time is running out. Maybe it's time for me to check out of here again and check into chat room rehab. I'm getting too old and cranky for this.

As to your last comment, read the motto at the bottom of this post. I believe that. What I wrote was what I thought was good advice. I still think it's good advice. I was on your side, and you didn't annoy me. I just felt it was urgent, given the deadline, that you seek legal advice instead of chat room advice. But touché.

But the clause says: If the WTO GPA and FTAs apply, doesn't that contradict a broad interpretation of 25.401(a)(1)?

I think you are misinterpreting FAR 25.401(a)(1). I think that because I have read the Trade Agreements Act. It mentions small business only once, at 19 USC § 2511. That section reads, in pertinent part, as follows: I think that all 25.401(a)(1) means is that the Trade Agreements Act does not preclude the use of small business set-asides. I do not think it means that agencies cannot waive the Buy American Act with respect to countries with trade agreements when conducting a small business set-aside, which is all that FAR Subpart 25.4 and 52.225-11 do. If it meant that, it would mean that small businesses and the government would have to abide by the Buy American Act under a set-aside even when domestic construction materials are too expensive or unavailable. Think of what the implications would be for bonding, which is not an issue under supply contracts. But what do I know?

Ha! So Lionel has got you thinking. I told you that two days ago.

To what does your "NO" refer? Are you saying they are not clueless? Well, au contraire! If they haven't read the clause they are clueless. Paragraph (e) of that clause has been word-for-word the same for more than 30 years, except that 30 years ago the reference to "(d)" was to "(c)". If you are working on service contracts covered by the SCLS and do not understand the clause and how overhead and G&A work you are clueless and in over your head when talking about the price adjustment. The clause creates no significant practical issues or issues of accounting.

I don't recall this having been mentioned in any of the above, but noncompliance with the clause prescription at FAR 25.1102(c) for whatever reason would constitute a FAR deviation. See the definition of "deviation" at FAR 1.401(b): Of course, someone among you is almost certainly going to argue that using the clause in accordance with its prescription would be a deviation as defined at FAR 1.401(a), since you argue that its use is inconsistent with FAR 25.401(a)(1). Either way, someone among you could argue that whichever you decide to do you must proceed in accordance with FAR 1.403. See also FAR 1.405. Forgive me if any of this was mentioned in any earlier post. Seeking a deviation on the basis of the arguments presented in this thread might be a way to resolve the controversy. We work in a utopia of rules.

You won't find answers bickering here. I gave you the best answer you're going to get at this website several posts ago. If you want a better answer write to the FAR councils. I think the civilian agency council handles Part 25.

@WifWaf That's nonsense. You are delving into a matter that is clearly over your head. Price adjustment based on Service Contract Act wage determinations was a well-settled matter more than 40 years ago. The OP is just clueless, as are you.

I would ask for a meeting, right away, disclose my problems, and seek to negotiate a better way for both parties to manage the return to prior conditions rather than to arbitrarily declare March 31 as THE date. When did they notify you? I would definitely seek the advice of counsel, because I doubt that the Armed Services Board of Contract Appeals or the Court of Federal Claims would let them get away with it, unless they notified you of the March 31 return some time ago. Covid was a historically earthshaking event. It was beyond anyone's fault or negligence, except perhaps the president's and the Center for Disease Control's. After two years of massive disruption, it may well be arbitrary and capricious of the government to unilaterally set a date for the return to normalcy. You are not without recourse. Having said that, you will eventually have to solve the problem within a reasonable time and to your customer's satisfaction. Call a lawyer. And get off Wifcon. Your company needs professional advice. March 31 is right around the corner.

If I was the staff reviewer of the solicitation/contract file and you had inserted any clause in the solicitation/contract other than the one prescribed by FAR, I would reject your file and send it back unapproved. And I wouldn't engage in any Socratic Q&A or listen to your bs argument. And the next time one of your files came to me I would go over it with a scanning electron microscope. 👎 😁 🧐 😎

The rates will go down if the base is labor dollars.

In short, an increase in direct labor costs caused by an increase in wages and fringe benefits does not cause an increase in the indirect costs that are allocated as overhead and G&A. That's why the price adjustment clause does not provide for an increase in overhead and G&A. Nothing is provided for profit because the government simply does not want to pay more profit because of an increase in wages and fringes.

@KeithB18Yes. I like this quote from the page 9: And this from page 149: I don't think that's entirely true, because Congress and presidents like to add programs without adding people and funds to implement them. But when you trace the history of some procurement rules you'll see that the politicians launch a program, complain about the failures of implementation, then add more rules to enforce the first rule, and so on and so forth. Think of the small business limitations on subcontracting. Things have gotten out of hand. We have reached a worrisome state of governmental incompetence, in part because our politicians (I refuse to call them leaders) try to do too much through procurement rules and then don't provide the human resources and training needed to pull it off, assuming that it could be pulled off. It makes me question their sincerity. I think a lot of what they enact is for show, mostly with the next election in mind. Procurement plays an important role in government operations, and these political initiatives are choking the process. It's going to catch up with us. It's catching up with us now.

Some quotes, from which I urge you all to draw your own conclusions. From FAR 1.102-4(e): "Contracting officers should take the lead in encouraging business process innovations and ensuring that business decisions are sound." FAR 1.602-1(b): "No contract shall be entered into unless the contracting officer ensures that all requirements of law, executive orders, regulations, and all other applicable procedures, including clearances and approvals, have been met." From FAR 1.602-2: "Contracting officers are responsible for ensuring performance of all necessary actions for effective contracting , ensuring compliance with the terms of the contract , and safeguarding the interests of the United States in its contractual relationships." From FAR 1.603-2: "In selecting contracting officers, the appointing official shall consider the complexity and dollar value of the acquisitions to be assigned and the candidate’s experience, training, education, business acumen, judgment, character, and reputation." From FAR 15.405(a): "Taking into consideration the advisory recommendations, reports of contributing specialists, and the current status of the contractor’s purchasing system, the contracting officer is responsible for exercising the requisite judgment needed to reach a negotiated settlement with the offeror and is solely responsible for the final price agreement." From Penner Installation Corp. V. U.S., 116 Ct. Cl. 550 (1950): "Some contracting officers regard themselves as representatives of the defendant, charged with the duty of protecting its interests and of exacting of the contractor everything that may be in the interest of the Government, even though no reasonable basis therefor can be found in the contract documents; but the Supreme Court has said that in settling disputes this is not his function; his function, on the other hand, is to act impartially, weighing with an even hand the rights of the parties on the one hand and on the other." From "Postscript II: The Role of the Contracting Officer," by Vernon J. Edwards, The Nash & Cibinic Report (2010) "While on paper COs are powerful figures, in reality there are many socio-organizational constraints on their autonomy and on the role that they play in the acquisition process. Not the least of those factors is their lack of expertise. With few exceptions, the image of the autonomously decisive CO is a myth. Yet we believe that a CO who is respected for his or her knowledge, experience, and skill can exercise considerable, perhaps even decisive, influence over the decisionmaking process. That is, a CO can play a meaningful role, not by relying on formal authority, but on the power of reasoning, explanation, and persuasion. The ABA Section of Public Contract Law's upcoming conference would do well to ask how the Government can develop a corps of competent COs capable of exercising their formal authority. That is really the question of the day." From "Postscript II: The Role of the Contracting Officer—Addendum," by Professor Ralph C. Nash, Jr., The Nash & Cibinic Report (2010): "A CO must (1) be able to assist requisitioners in preparing work statements that allow effective procurement, (2) be as aware of procurement policies as agency staff personnel, (3) be able to separate legal advice from policy advice masquerading as legal advice, and (4) be fully able to deal with accounting and pricing issues. These are a lot of skills but traditionally our best COs have had them all. See our previous discussions in The Contracting Officer: Defining the Role, 10 N&CR ¶ 58, and Postscript: The Role of the Contracting Officer, 13 N&CR ¶ 15. But even with all of these skills, a person will not be able to fulfill the FAR role if he or she does not have the necessary personality trait of feistiness. A good CO has to be able to deal effectively with all of the other Government people that Vern describes but also has to strongly represent the Government's interests in dealing with contractors. This means negotiating to get the right price from the contractor most likely to perform well. It requires a strong person with considerable self esteem to effectively negotiate with contractors and agency personnel to arrive at the best business decision for the agency. It's a great job for such a person but a clerical job for one without the necessary skills and personality." From The Quality and Professionalism of the Acquisition Workforce, Report, House Armed Services Committee, May 8, 1990: "The contracting officer is the fulcrum of the acquisition process." From "Motivation Reconsidered: The Concept of Competence," by Robert H. White, Psychological Review, Vol. 66, 1959: "As used here, competence will refer to an organism's capacity to interact effectively with its environment. In organisms capable of but little learning, this capacity might be considered an innate attribute, but in the mammals and especially man, with their highly plastic nervous systems, fitness to interact with the environment is slowly attained through prolonged feats of learning."

@Lionel: I agree with your analysis of the TAA and I agree that 52.225-11 clause implements the BAA. I don't think think FAR 25.401(a)(1) has anything to do with it. But most importantly, I agree with ji20874 that the right thing to do is comply with FAR clause prescriptions.

I'm not sure what "when hired" means. Does it mean hired as an experienced contract specialist or when hired out of college?

@Lionel Hutz The relevant text of the Trade Agreements Act is in 19 USC § 2511(f): Next FAR 25.401(a)(1) says: What does that mean? It must mean that under a set-aside the CO need not do the things required and need not refrain from doing the things prohibited. I cannot think of what else it could mean. So, what does the subpart require and prohibit? What are the shalls and shall nots that do not apply to set-asides. There are nine sections within Subpart 25.4—25.400 through 25.408. (1) 25.400 states the scope of the part. It neither requires nor prohibits anything. (2) 25.401 lists exceptions and services excluded from the WTO/GPA. (3) 25.402(a)(2) says that the CO must determine the origin of services by country in which the firm providing the services is established. (4A) 25.403(a) explains a couple of things but does not say that anyone shall or shall not do anything. (4B) 25.403(b) explains the application of dollar thresholds. (4C) 25.403(c) says to acquire only U.S.-made or designated country end products or services unless no offers are received or the offers are insufficient. (5) 25.404 says that for certain acquisitions construction materials and services must be treated as end products. (6) 25.405 says certain construction materials and services must be treated as end products. (7) 25.406 says that certain agencies must evaluate Israeli offers without regard to Buy American restrictions/ (8) 25.407 says that the Trade Representative has waived Buy America statute for civil aircraft. (9) 25.408(a) specifies certain procedures the CO must follow when the WPO/GPA applies: (1) and (2)synopsize, (3) not include technical requirements designed to preclude acquisition of eligible products, (4) state the offers must be in English and in U.S. dollars, (5) notify unsuccessful offerors as required by FAR. It refers readers to FAR Subpart 25.5 for evaluation procedures. So that's it. That's all that does not apply to small business set-asides. How about we move on from FAR 25.401(a)(1).