Vern Edwards

All: This is not in response to any particular post. I have not read every post in this thread, but based on those that I have read, I think a poorly written opening post has led us into the weeds. You've all heard of "terms and conditions." Black's Law Dictionary, 11th ed., defines condition as follows: In contract law there are two kinds of conditions: conditions precedent and conditions subsequent. Here is how the Restatement of the Law, Second, Contracts 2d § 250 explains those terms: That language is a little awkward. Here's how Black's Law Dictionary defines condition precedent: FAR 52.232-18 is a classic example of a condition precedent. We have a contract, but before any duty to perform arises the contractor must receive notice and the contracting officer must confirm it in writing. Use of FAR 52.232-18 is prescribed in FAR 32.706-1: That's it, and it's very specific. You can't just use the clause whenever you like. Any other use would be a FAR deviation as defined in FAR 1.401(a). Now, I think the confused OP's question ("Does FAR 52.232-18 Availability of Funds, allow authority to issue an award to a task order under a single award IDIQ.") was whether the use of the clause in an IDIQ contract applies only to the basic contract or to both the basic contract and each order issued thereunder. Well, FAR 52.216-18(b) says: As far as I'm concerned, case closed. The question from the OP has been answered. Now, if the basic contract does not include 52.232-18, may the CO insert that clause in an individual order? Tell me, where in the standard terms of an IDIQ contract does it say that a CO can insert a FAR clause into an order that is not in the underlying contract? I don't know of any standard FAR clause that authorizes a CO to do that. But if a CO does that, and we know that ignorant, careless, or willful COs do, and if the contractor acknowledges or performs without objection, then I think a court might go ahead and enforce it. However, silence is not necessarily acquiescence. I think that's the point that Carl (C Culham) made in his last post. Finally, in addition to FAR 32.706-1, see FAR 32.703-2(b). What circumstances would warrant applying FAR 52.232-18 to an individual task order? We should have told the OP to rewrite his or her question in English and then provide some background information.

Are you asking if it is legal for you, a contractor, to assign points to cost, or are you asking if it is possible for you to do it? Or are you asking something else?

Why wouldn't there be time for a remedy? See 13 CFR § 125.6(g).

To be frank, I'm no longer sure. The reason I say that time from identification of need to contract award is not the most important measurement of timeliness is because it's too all-encompassing. You can measure it. That's easy. But it's hard to figure out what the measurement means in any given case. How long should it take to develop a description of a requirement—a list of deliverables and a specification or a statement of work? How long should it take to develop a solicitation? How long should it take to select a contractor and make an award? During planning, the answers to those questions will always be, "It depends." It depends on the requirement, on the organization conducting the acquisition, on the people conducting the acquisition, and on the situational context. But it's easy to say afterward that a process took too long. I say it all the time. In manufacturing, the purpose of building a factory is to create an artificially controlled environment in which to conduct a highly repetitive process for which it is then possible for industrial engineers to set valid standards for cost, quality, and time. I don't think that's easy to do for the acquisition process. There are too many uncontrollable conditions. What do you do with a process measurement if you are not producing a standard product under standard conditions and lack valid standards of comparison? During my entire 47 years in this business, PALT has always been an issue, and the lack of widely-accepted process standards has always been the problem with PALT. The standards have always seemed arbitrary, and they often were. You can try to categorize acquisitions and set category standards, but once you get past the purchase of standard supplies and services, most acquisitions are unique to some extent. If you don't have process standards that process managers accept as fair and valid, then your measurements, and critiques based on them, will largely be for naught. Go ahead and measure, if you insist, but it won't do you much good. The most important process measurement is one that is both pertinent and for which you can set a fair valid standard. Acquisition is not done in a factory. I doubt that you'll agree with me. But did I answer your question? Does the answer at least make sense?

No, that's not the important thing.

It might be helpful at this point to review the FAR coverage of contracts conditioned upon the availability of funds. And:

@Constricting OfficerWhat do you mean by "separate contract"? Are you saying that a within-scope change to contractual work is severable work? Contractual severability (aka, divisibility) is a legal concept. See Administration of Government Contracts 5th ed., pp. 809 -810. If when you say "separate" you don't mean that change orders are severable from the rest of the contract, what do you mean?

@Don MansfieldWhile most people think that the contracting office is responsible from receipt of proposals through contract award, I think that the analysis and evaluation of proposals is what takes the most time during that phase, and that is the joint responsibility of both the program office and the contracting office, and so should be distinguished from Step 2, which is primarily the responsibility of the contracting office. Make sense?

Here's a question: Suppose that a fixed-price contract contains the Availability of Funds clause, and after award the CO duly notified the contractor in writing that funds are available. Does the clause automatically apply to every change order issued subsequently? Are change orders not binding until the CO notifies the contractor in writing that funds are available? A change order is a contract as defined in FAR 2.101. Should the CO include a statement in change orders that FAR 52.232-18 does or does not apply?

This thread illustrates the value of top-notch expertise among COs and contract specialists. The Availability of Funds clause was not designed with IDIQ contracts specifically in mind. (I made a quick search for a case "on point," but did not find one.) I have traced the current clause to a 1963 Air Force regulation, but it probably originated before then. The clause anticipate one contract, not many, as is the case under IDIQ contracts, with each order being a "contract." I suspect that the clause applies not only to the basic contract, but to each order, as well. But I do not KNOW that a board or the COFC has or would rule that way. In these days of massive use of IDIQ contracts, a top notch CO might have anticipated this question—and others like it arising from other clauses—when writing the solicitation for the contract and written a Section H or commercial item clause that addressed the matter. Problem solved. We work in an IDIQ world these days, and apparently will for the foreseeable future. But the FAR councils have not made appropriate adjustments to the FAR that take into consideration the many new questions that have arisen since FASA was enacted in 1994 and changed almost everything. Since they are not thinking, COs must, because nobody else will. I think that ji20874 and C Culham gave good advice. (Stalking you again, Carl.)

Organizations engaged in R&D might pursue government work as a way to fund their enterprise. Profit may not be a primary concern. I started out in R&D, and many firms large and small were happy for a chance to pursue a line of investigation at government expense.

If you say so.

@Patrick MathernPatrick, is DOD short of firms wanting its contracts? Anyway, my understanding is that firms that do not want to do business with the government are put off primarily for other reasons, like government intrusiveness and data rights policy. @here_2_helpI have posited no theory in that regard, and I have not said thatprofit is not an incentive. Do you need to be taught what a theory is? I can recommend some explanatory text books. I said I have never thought that the WGL were an incentive. I still don't. And I have explained what I think an incentive is and how it is supposed to work. I can recommend some theoretical explanations of them. You have not explained the mechanism by which a higher pre-negotiation profit objective affects post-award performance. As for your anecdote, my thought is that the subcontractor either underestimated its costs or accepted a below-cost price, not that the price did not include enough profit. You're welcome to believe what you like. I know that studies of incentive contracts by Dr. Fisher of Rand, Prof. Kennedy of Notre Dame, and the GAO have concluded that there is no proof that post-award profit incentives work as advertised. Some people, like you and Patrick, think that profits on government contracts are too low, and that all would be better if they were higher. Well, you two are industry advocates. Some think that profits are too high. They are industry critics. Profits on defense contracts have been studied and debated for decades. I think I have a copy of every single study and congressional hearing in which defense profits were discussed, and I don't know whether they are too high, too low, or just right. But I know that you are not going to persuade anyone to set a policy calling for higher profits on government contracts with ridiculous anecdotes like the one you related in your last post.

@here_2_helpH2H, you quoted me and say you disagree. In the quote I make five assertions. I'm trying to pinpoint your disagreement. I have never thought of them as an incentive. I think that is the core of your disagreement. You think they are meant to be and should be but are not. I think of an incentive as a contingent reward offered in return for something. The idea is to give someone a reason to do something they otherwise would not do. If so, then how do weighted guidelines motivate? They are used to develop a pre-negotiation profit objective when cost analysis must be performed. By what mechanism do they work as an incentive during contract performance? Or do you think that, as a general proposition, setting high(er) contract prices or fixed-fees during contract negotiation will motivate contractors to do better during contract performance than they otherwise would? If that's what you think, then I say you can't prove it. But I am open to any evidence you can produce. I said evidence, not theory. I've read plenty of theory about the role of profit in our kind of economy and in contracting. I will weigh evidence, but I won't debate theory. That's for the young and idealistic. After almost 50 years of reading about profit policy, I won't even discuss theory.

I don't think there is a mark to miss. The WGL are just a "structured" analytical device. They are "guidelines." They are only as useful as the user is thoughtful. I've never thought of them as incentivizes.

@RetreadfedYou're quite right, and upon reflection my expression of agreement was enthusiastic, but not thoughtful. Good question. OK, everyone: what do we want to know and manage? I think we want to know and manage how long it takes for the acquisition system to satisfy requirements. That being said, I think acquisition, as defined in FAR 2.101, takes place in the following three acquisition administrative phases and lead times, each with the following outcomes: From submission of a need by a user to a program office until completion of a procurement package (including a specification or statement of work and other necessary documentation) by the program office. Let's call it procurement package lead time. From submission of the procurement package by the program office to a contracting office until issuance of a solicitation by the contracting office. Let's call it proposal solicitation lead time. From issuance of the solicitation by the contracting office to award of a contract by the contracting office and the program office. Let's call it contract formation lead time. After contract award, the time required to deliver supplies, complete the performance of a task, or commence performance of an on-going service, would be considered production or performance lead time. What do you think?

I can't.

PALT is Procurement Administrative Lead Time. It does not include production lead time. When measuring PALT, lead time ends with contract award. If you measure to delivery of the product you're measuring Procurement Lead Time, which includes administrative and production lead time—Procurement Administrative Lead Time.

The first official version of the Weighted Guides Method was published in the Federal Register on Nov. 23, 1963, Defense Procurement Circular (DPC) 5, 28 Fed. Reg. 12555 - 12561, which amended 32 CFR 3.808-2.

I'm sure it has been! Every solicitation and contract includes involves unique provisions and terms that someone must develop and write. I don't think we're close to automating the preparation of such material. I have long believed that contract specialists can provide value added by writing or helping to write statements of work. Someone must assist program offices in the development and description of evaluation factors, and write proposal preparation instructions. And there is much more to contracting than document preparation. But there are many micro-purchases and simplified acquisitions, tens of thousands, that could and should be automated.

@formerfedThe link is to a paper about automated contract writing, i.e., document preparation. But contract specialists do more than that. Don't they?

They are the ones who don't understand. I'm not sure that T&M is the right kind of contract for your purposes, but here is a suggested T&M line item structure. One possibility among several. 0001 - Migration Support IAW the Statement of Work - 1 - Job - Ceiling Price $... 000101 Labor Category A - (Est. Qty. ____, Unit: HR, Hourly Rate $___, Est. Cost $____) 000102 Labor Category B - (Est. Qty. ____, Unit: HR, Hourly Rate $___, Est. Cost $____) 000103 Materials (Est. Cost. $ _____) Or something like that. I presume that you are familiar with FAR Subpart 4.10 and, ideally, with DFARS 204.71 and DFARS PGI 204.71. All the estimates should add up to the ceiling price. You could use two contract line items with exhibits for labor and materials instead of informational subline items.

@Witty_Username Thanks for a very insightful post! I agree with you about time from identification of need to delivery. Another complicating factor in that concept of PALT is changes in the conditions that give rise to the need (for example, opponent strategy, tactics, and weaponry) and changes in technology.

@FreyrIs the contract for just one job or for various work to be performed from time to time within a period of performance?

@Don MansfieldWhen I post, I do not do so to please you. I don't really care what your question was. I posted what I wanted to say. But now I will answer your question. I do not know of any statute or regulation that expressly requires a small business prime to get small business representations from its subcontractors. However, not every contractual obligation is express, and I think I could make a persuasive argument in court that such a requirement could be inferred from other clauses in the contract, including FAR 52.219-8 and FAR 52.219-14. Among other things, I think failure to require subs to make representations could be an indication of bad faith.