WifWaf

It directs HCAs to submit nonratifiable commitments to GAO, but that would then restrict the exercise of the extraordinary emergency authority granted by Public Law 85-804 (50 U.S.C. 1431—1434) to the secretariat level, per FAR 50.102-3(e)(1)(iii):

Does GAO handle claims, or are they under COFC jurisdiction?

The "commercial item" definition was always a negotiation standard. A negotiation standard is briefly described in the below link: https://www.pon.harvard.edu/daily/salary-negotiations/the-power-of-standards-how-not-to-negotiate-your-salary/ Between the people at DOD and at prime contractors that negotiate proposals, the veracity of whether or not an item is "commercial" is often only tenuously obtained. This is why a later NDAA had to mandate "no givesies backsies" on CIDs - because adherence to the commercial item definition was usually in the eye of the beholder. Each beholder independently found the definition to be subjective, rather than objective. Just look at it - and try to do so intently. Think back to the last CID you wrote that was challenged by DOD, and how simple it seemed to you. Your counterpart, likely approaching the proposal with a compliance-with-the-law mindset, was left unable to judge compliance with this gobblety-gook: The DPC memo is wise enough to realize this, and to apply that same experience to this new negotiation standard. Look and see, the standard is objective! Not having to define "evolved from" or take any sort of training to try and judge compliance (just to seem, by the way, like a tyrant during negotiations)? Sign me up! I will do the price analysis and move onto the next cost element, thank you very much. Yes, that's much better.

The Federal Register's ambiguity was that its prefatory statements said the authority is not extended to primes, yet further down its DFARS amendment can be read to indeed extend the authority to primes, by the DFARS 252.215-7010(e) flowdown provision. In essence the Council's response to that comment failed to eliminate the commenter's rightfully identified ambiguity. The statute is silent on the matter. From the effective date of that rule on, now, every affected solicitation's ambiguity is that the -7010 provision's flowdown requirement can reasonably be perceived to allow offerors to use a NDC commercial exception on their subs, instead of just the FAR 15.403-1(b) exceptions cited in FAR 52.215-12. In 2022 I said the removal of the flowdown provision would clear up the ambiguity. Instead, the recent DPC memo goes the opposite direction and doubles down on the Federal Register's ambiguity. If you believe the -7010 provision can only be read one way and is practicable on its face, then you may say there is no ambiguity. But I think the DPC memo is proof that is not the case.

Yes, I'm sure they coordinate, but the result of all that coordination in 2017-18 was an ambiguity between the rule's prefatory statements and its amendment of the DFARS. Practitioners must have been following the DFARS provision rather than the prefatory statements. Conduct of the parties may prevail in deciding an ambiguity. It's been six years.

Are you referring to the Director, DPC, or to the DAR Council? Government by bureaucracy means one unelected official is not accountable to the others' statements, unless some sort of charter (e.g., the U.S. Constitution) establishes a check and balance making one beholden to the other. Can you identify one here? I think you may have missed the memo. If one analyzes it to have a proper introduction, body, and conclusion - as mandated in Chapter 7 of Department of the Air Force Handbook (DAFH) 33-337, The Tongue and Quill Guidance Memorandum, dated 14 Dec 2023 - then the memo not only explicitly addresses subcontractor NDC determinations in both the intro and the conclusion (quoted below), but also implicitly addresses them in the body.

In the following memo the Director, DPC, states, "[T]his memo reminds Contracting Officers (COs) that contractors may make an NDC determination about their suppliers and subcontractors, so long as the suppliers and subcontractors meet the definition of an NDC, as defined in 10 United States Code (U.S.C) § 3014." (Emphasis added). https://www.acq.osd.mil/dpap/policy/policyvault/USA000996-24-DPC.pdf Until case law challenges it, this statement settles a debate from the above thread. The holes in DOD COs' noncommercial subcontract arguments make it not worth delaying award. Instead, I will foot-stomp my advice to COs: "[R]ead, as your DFARS PGI 215.403-1 instructs, the DOD Guidebook for Acquiring Commercial Items Part B: 'Pricing Commercial Items'. Be ready for sole-source contractors to challenge you by saying there is no requirement in your solicitation for their subcontractor to submit cost data...So embrace the challenge of having to throw out your old process and templates where the sub submits a cost build-up and gets audited, and begin gathering market research on your upcoming subcontract costs instead." Whether Congress intended this, or if, instead, the rule's promulgators were unclear about contractors' authorization to make NDC determinations, would be up to the courts to decide. Don't count on it - just do the price analysis!

Revisiting this thread because the latest FAR Final Rule to arise from an Executive Order is a case study in civic action. It shows what happens when the public simply acquiesces to the regulators. Compare its comment I located here (at regulations.gov, Tracking Number ln9-m78q-sml9) that does not shine FASA's light on the FAR Council's proposed rule: ...To this one (at regulations.gov, Tracking Number luh-gcv4-yszk, also viewable here) about the instant thread's Proposed Rule, that does shine FASA's light on it: I will be interested to read the FAR Council's response when the instant one goes to Final Rule. The two distinct groups may have their individual motives for commenting, I understand. I, on the other hand, am only interested in furthering a just society. So far, we have the FAR Council's response to the first comment above, which I provide below. Once the second one receives its response, I will edit this post or start a new thread in the "What Happened" Forum here.

Humility. It has its perks. Applicable at all stages of a career (and beyond).

Well, CAAC will have to concur on a set of clauses that is a moving target, unless these kinds of Proposed Rule comments prevail. Meantime, COs can tailor, but only up to a certain point. Am I correctly inferring you would not check any of the 107 possible clauses "to implement provisions of law or Executive orders" that the CO can incorporate into a commercial contract where the clause says "[Contracting Officer check as appropriate]" in paragraphs (b) and (c) of FAR 52.212-5? After all - and drastic as it seems - that is essentially what the 809 Panel recommended the FAR Council do, in Volume 1 Appendix F, Tables, F-5 through F-8.

I understand the existing tailoring allowance, but my question gets at the statutory requirement the Section 809 Panel said is not being met by any of the clauses in FAR 52.212-5 nor DFARS 12.301 (and I view FAR 12.301(d) and DFARS 212.301(f) to be the same marching orders to COs). The Panel said the FAR and DAR Councils were applying their clauses to commercial items, despite the fact that that the statutes and E.O.s being promulgated were silent on the matter of commercial item applicability. This is counter to 41 U.S.C. § 1906 (FAR) and 10 U.S.C. § 2375 (DAR) requirements. Is the above comment the right one to further the 809 Panel’s Recommendation? Specifically, this one: And this one:

I would like to highlight a comment I found on a Proposed Rule here, on regulations.gov: “Title VIII, section 8002 of the Federal Acquisition Streamlining Act of 1994 stated that the FAR shall contain, ‘a list of contract clauses to be included in contracts for the acquisition of commercial end items. Such list shall, to the maximum extent practicable, include only those contract clauses – (A) that are required to implement provisions of law or executive orders applicable to acquisitions of commercial items…; or (B) that are determined to be consistent with standard commercial practice.’ Therefore, please include an exception in the proposed FAR Part 12 clause prescription, for commercial product and service industries in which the Contracting Officer determines the Proposed Rule's clausal requirements are not standard.” (Emphasis my own) Whereas OFPP’s FAR Case in question, No. 2023-021, seeks to add the prescription to its proposed FAR Part 22 clause into FAR 12.301, this comment appears to follow the Section 809 Panel’s Volume 1 Recommendation 2, “Minimize government-unique terms applicable to commercial buying,” instead. I can appreciate this commenter’s search for a practical way to make our government enforce FASA. Is this comment the right one to further the 809 Panel’s Recommendation, or does it misunderstand the intent of the Panel? Or, does it not go far enough?

For perspective, BAH consistently falls in the top 25 of the Defense News Top 100 Defense Companies each year, with about 70% Defense revenue. Total revenues of $8.4B in 2021.

A whistleblower led DCAA and DOJ to allege under the False Claims Act that Booz Allen Hamilton (BAH): Allocated indirect costs that supported Booz Allen’s commercial and/or international businesses to Government contracts and subcontracts that should have been allocated to commercial and/or international contracts or should have been treated as unallowable costs…; Created and maintained indirect cost pools that included commingled costs supporting both (i) commercial and/or international contracts and (ii) Government contracts and subcontracts, and by virtue of such commingling allocated indirect costs disproportionately between commercial and/or international contracts and Government contracts and subcontracts, and thus were not in compliance with the CAS or FAR, including but not limited to the homogeneity and proportionality requirements in CAS 418 and the allocability requirements in FAR 31.201-4; Used costs and cost rates that included indirect costs supporting Booz Allen’s commercial and/or international businesses to seek inflated payments and reimbursements under its Government contracts and subcontracts, and failed to disclose current, accurate, and complete cost or pricing data related to such costs resulting in inflated prices for Government contracts and subcontracts; Submitted inaccurate and/or misleading statements (including but not limited to in its CAS Disclosure Statements) regarding the methods by which it accounted for, and the nature of, indirect costs supporting its commercial and/or international businesses; and Shifted employees and work relating to its commercial and/or international businesses between Responsibility Centers in violation of the requirements of the FAR and CAS, thereby creating and maintaining indirect cost pools that were not in compliance with FAR or CAS resulting in misallocations of indirect costs to government contracts. A9ciwbp5_sjmaca_bro.tmp (justice.gov) The resulting settlement was for $377,453,150 covering 10 years of alleged noncompliance. These allegations happen a lot at the DCMA Cost and Pricing Center in my experience, but they don't usually result in a settlement remotely close to this sum. Recommend DCAA auditors and DCMA Cost Monitors examine their audit report findings for similar allegations, and coordinate with the BAH CACOs and DACOs to learn the details of why this case worked out in the Government's favor. veritas numquam perit

“This report concludes that the Department does not find a need to modify its weighted guidelines structured methodology of arriving at objective profit positions for negotiation.” I guess this report could go in the What Happened forum series concerning this thread:

This is FAR 15.406-3, "Documenting the negotiation." See also: 15.404-1, "Proposal analysis techniques." Contract Pricing Reference Guides (dau.edu) These sound like commercial products and services, in which case your reprieve is you generally get to use price analysis instead of cost analysis. Again, my responses here are focused on what happens after you've competed your subcontract.

Having been through the ringer last decade trying (from the DCMA side) to get a contractor's disapproved purchasing system to meet an acceptable corrective action plan, I suggest you answer your question 1 by writing a handbook section that lays out your company's thinking on the matter - and then be done with it. In this way treat practicality like reasonableness, which is defined at FAR 31.201-3 with two succinct theoretical paragraphs that beg the practitioner to justify his/her actual practice with a memo that points back at this theory. The memo simply has to make objective sense applying theory to the instant facts and circumstances. With that done and over with, you really need to focus on the DFARS criteria surrounding your question 2. I would be highly concerned about the CPSR team judging the adequacy of your cost and price analyses. These are always where talks with my contractor broke down. I will provide you a sample corrective action request from a document I kept, below. Study very hard what is, in your market, an "adequate" cost analysis if you want to avoid being disapproved on these grounds:

@ContractJockey Know your sources... That one is stealing, apparently foreign, and sounds robotic. I will foot-stomp:

Mr. Edwards, I am reminded of you in nearly every enlightened book I read these days. For example, I thought of your contributions to this forum when recently rereading this passage from Haidt, Jonathan and Lukianoff, Greg: See The Coddling of the American Mind: How Good Intentions and Bad Ideas are Setting up a Generation for Failure. Penguin Press, 2018. Your contributions to the cause of scholarship here will be missed. Those of us that do not live by the whimsical, postmodern standards of the day are all going to have to step up and learn how to do this right, for truth's sake.

So when push comes to shove, and the lack of billets filled force this do-more-with-less ethos, the best managers should have previously learned and come up the ranks in their offices so well that they can navigate where best to start to skimp on enforcement - be it an obscure, agency-level regulation, or perhaps things OFPP issued and doesn’t enforce, e.g., Performance-Based Contracting and nonpersonal service language crafting in the PWS. There’s a list of all admin functions that DCMA supervisors could examine in FAR Part 42 and DFARS 242 but they’d have to know their office-level implementations of each function. Either way, my point is that this it is management’s role, not a practitioner’s role, to decide where to cut.

Thanks for your thoughtful openness, CO.

I am sure this is sarcasm but I would send your thanks right up the flag pole if it were real. You can instead thank the managers that assigned 200 contractors, which totaled nearly 2000 contracts or assistance instruments worth $2.5B, to a GS-12, and whom then had the audacity to track the approval of each business system though data metrics 4-6 levels above my supervisor. That sort of reasoning - "we have to satisfy our internal customers (PCOs)!" - becomes insanity as you scale its application up.

Or, were you told the world is a better place because you're in it. I am a Millennial and I am very curious about my peers' upbringings. Were you ever taught to put hard work into doing things, e.g., being right and moral, or were your caretakers and teachers assuming you were already a righteous and moral person that society was just waiting to corrupt, you think?

Lalala I don’t hear you 🙉 So anyway, I relied on market forces… Okay, in reality assumptions were made on my part to manage a 200-contractor workload. Not saying I was doing the taxpayer a great service, but we had to make risk-based decisions and approve some accounting systems without audit reports - or even any real knowledge of their rate structures!

This is where I was going to go once the thread was ripe for it. For DOD contracts meeting the prescription at DFARS 242.7503 - for example all CR/T&M contracts - ACOs must make the determination of a contractor's compliance with DFARS 252.242-7005(c) System Criteria. These criteria include, "(4) A logical and consistent method for the accumulation and allocation of indirect costs to intermediate and final cost objectives", and "(12) Exclusion from costs charged to Government contracts of amounts which are not allowable in terms of Federal Acquisition Regulation (FAR) part 31, Contract Cost Principles and Procedures, and other contract provisions," and, "(18) Accounting practices in accordance with standards promulgated by the Cost Accounting Standards Board, if applicable, otherwise, Generally Accepted Accounting Principles." The ACO's determination is based on a DCAA audit report usually. As a DCMA geographical ACO, I was always excited to have a commercially viable mid-size business in my portfolio, because I could trust market forces to appropriate its indirect cost rate structure. Once many contractors got large and savvy enough though, new OH pools come out of the woodwork for their government-only business. As a rule of thumb we are to be permissive in assessing the structure (others have alluded to this permissiveness above), so unless I knew their commercial lines well, I would have to dedicate much time to figuring out if the government line, under monopsony conditions, was being treated the same as the commercial line, under free market conditions. An example of this difficulty might be, IAW one of the System Criteria quoted above, figuring out if the government line is compliant with FAR 31.203(b), which requires, "No final cost objective shall have allocated to it as an indirect cost any cost, if other costs incurred for the same purpose, in like circumstances, have been included as a direct cost of that or any other final cost objective." What do I (or even the auditor for that matter) know about the "purpose" of costs incurred for their commercial work?