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Sure, Vern, I can drop off here, for you and your people. Before I go, I want to hearten those that may be afraid in these times. The text you quoted of me is indeed not a government’s duty to carry out; it is, however, the duty of the citizenry when their consciences so incline them. For more than a millennium, the Western way has been for the state to administer justice, and the church to administer mercy. Recent decades of taxed mercy have not been motivated out of any desire on the taxpayer’s part to relieve suffering, though, and have instead served to blend these two distinct roles of church and state. Do not fear the loss of this! The American conscience is not leaving us as the state relearns its role - no, I believe rather it is reviving true after decades of derelict sleep.
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Jamaal, you have identified a key difference between a business's and a government's "Type II Waste". One entity is accountable to shareholders during its mission to please paying/potential customers, while the other is accountable to taxpayers during its mission to safe-harbor citizens. The business may exclude costs that would not benefit the majority of its customers, whereas the government shall not exclude reasonable costs for any of its citizens (e.g., think of the cost to feed prisoners). In its cost of operations, the business may rack and stack people within its pool of customers, e.g., putting high-paying customers first, infrequent customers second, and noncustomers last, as its shareholders demand. The government shall not do this to its citizens, according to the Preamble to the Declaration of Independence and to common decency dating back to Mosaic Law. I think under this logic the taxpayers can and should demand their government eliminate the cost of noncitizens, but as this is not within the realm of my job responsibility, I will leave it here only as the best example of my logic. Another example is any cost that is being justified currently to exert control over the actions of a separate sovereign state, based upon a prediction of what that state's leaders may do in the future. Notice I am giving no example of a cost affecting any of the government's citizenry. That, my friends, is where we can and must craft our trade. What is the similarly unfounded cost in your realm of job responsibility? Everyone should think small of this and allow the logic to scale itself up. Start with your own CO workload and practice applying this logic daily, so that, when you rise in the ranks to a workload that potentially costs the taxpayers a great deal, you can also save them a great deal. Wise, caring prioritization is the single most important skill a government employee can offer taxpayers. At the municipal level, would you justify the cost to heat an outdoor swimming pool in Fairbanks, Alaska? Where in your workload is that swimming pool? Most likely it is in a thoughtless decision not to use strategic sourcing due to "immateriality" of the cost in a proposal. I say stop that! Spend your time on the reduction of small costs now, so that your crafted practice 20 years from now may reduce large costs. And to current upper managers - hire your SESs and other fellow managers based on proven track records in this crafted practice.
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I think accountability is the answer. How about this idea. The DFARS PGI doesn't take rulemaking action to revise. Neither do DOD Instructions and certainly Defense Pricing and Contracting (DPC) memos don't. Yet when you read them, the working-level organization that is tasked to do the actual work is not mentioned under a "Responsibilities" section or anywhere else. The Director, DPC sends the memo to the highest level in the bureaucracy, and this creates a chain of events to delegate the action. One break in that lengthy chain, and the action loses its potency. Accountability is obfuscated by this exact mistake. Why don't these managers simply coordinate ahead of PGI, DODI, or memo issuance to exactly which low-level manager the upper managers will assign the action, and then name that person in the PGI, DODI, or memo? Can you imagine the excitement and effort that would draw out of that low-level manager?
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🤭This solicitation may result in the first-ever pre-award protest sustained on grounds of an undocumented evaluation criterion.
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Yes, because I don't know if "profit" here is used as a FAR Subpart 15.4 term of art. Seems more like it's being used in the P/L business sense.
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Say the contractor refuses after reading FAR 32.601(a)(1) and seeing the Schedule appears to entitle payment of the full fee. It simply listed the fee amount in dollars, so they invoiced a chunk of it each month (as opposed to billing an amount commensurate to costs). For lack of terms and conditions on it, they helped themselves, and the CO and COR obliged.
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Each of CyndiG's posts mention the fee. She received the below guidance on fee: What if the government paid the full fee already, via something written into the schedule IAW FAR 52.216-8(b): "Payment of the fixed fee shall be made as specified in the Schedule...". Can that full payment be factored into the fee negotiations on the next contract, or would that be prohibited by FAR 15.402 Pricing policy?
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@Vern Edwards I read this quote ending a section on socioeconomic programs and was left to wonder. Can you give an example of what cost you might see coming from FAR Part 19, Small Business Programs? The award would have gone to someone, so it's just not clear to me on its face. In fact, the exemptions to CAS and the DFARS Business Systems criteria, and to a lesser extent the government's reduced lead time for 8(a) and SDVOSB direct awards, all seem to counter your mentioned costs.
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Did the ASBCA get performance and delivery incentives wrong?
Voyager replied to FrankJon's topic in Contract Administration
A big reason is because you are now discussing deductive changes, and per FAR 1.602-2(d), a Contracting Officer's Representative: "(5) Has no authority to make any commitments or changes that affect price, quality, quantity, delivery, or other terms and conditions of the contract nor in any way direct the contractor or its subcontractors to operate in conflict with the contract terms and conditions." In the case of the withholds, the duty may be delegated to a COR for swiftness of action, which, if I am right about the time value of money, really matters to this concept. A deductive change, on the other hand, would require CO time and expertise and negotiations "to reflect the reduced value of the services performed" as you quoted from the clause above. Pricing the deleted work has its own host of case law and its own subheading in Administration of Government Contracts. It usually occurs toward the end of the contract after forbearance and extensions, unless the two parties plan for it. That's a tall order for this acquisition workforce. I guess given contract law and these standard FAR clauses, every contractor signs up for a deductive change and/or a withhold in theory, but the smart CO will solicit a nonstandard clause anticipating and describing one or both of these action in practice. -
Did the ASBCA get performance and delivery incentives wrong?
Voyager replied to FrankJon's topic in Contract Administration
I sense a lot of confusion about this concept's terminology within the halls of government. If that is the case, how do you think the commercial marketplace sees these negative performance incentives terms? Based on @C Culham's research, if these negative incentives are a governmental concept stemming from PBSA policy, then we should not rely on that in court. We therefore should not negatively incentivize or deduct our FFP contracts' prices. Instead, we can use the longstanding contractual practice of withholds. Sure, withholds are small sums and are usually clawed back, but not until the government has extracted some stipulated performance improvement. They do work as a matter of principle, and they also may be addressed in CPARS, making them doubly effective. They may also work practically, because they strike at the heart of a contractor's business. What do I mean by the heart of a contractor's business? In America, contractors strategize their profit margin on obtaining invoiced sums as early as possible, because we live under Capitalism and those sums can be invested wisely to obtain dividends on your negotiated profit. Consider this scenario: FFP proposal arrives in May 2024 including multiple subcontract quotes, each with 4% escalation in year 2 and 3s' performances Prime contract awarded in September 2024; subcontracts subsequently awarded FFP Prime contract says any invoice for periods where X performance measure is not met will include a withhold Invoice for August 2025 performance received, withhold decreases contractor's accounts receivable that would have made 7% returns on investment in stock market Meanwhile, accounts payable goes up in October 2025 to cover 4% cost of subcontract escalation As you can see, withholds have a ripple effect and, while your boss won't understand you fighting policy reviews for a nonstandard clause stipulating $15K off each invoice, your contractor counterpart sure will. There is a host of case law on withholds to help guide your contract crafting. See my prior post in this thread. If T&M, see the FAR 52.232-7 payment clause's terms allowing withholds too. Too often on the government side we don't see this time value of money (some may say we don't see the value of money at all, given our national debt!). -
Did the ASBCA get performance and delivery incentives wrong?
Voyager replied to FrankJon's topic in Contract Administration
A good answer to this question by Vern can be found in the Cibinic, Nash, and Nagle discussion on withholds in Administration of Government Contracts. Their use of the term "withholding" refers to an intra-contractual right that allows the government to refuse payment to which the contractor is not entitled. See Chapter 12, PAYMENT AND DISCHARGE, II. PAYMENT PROCEDURES, F. Withholding (pp. 1166-70 in my 4th Ed.). To me, a negative incentive is no afterthought to be arranged post-award. It should be the crux of the contract, upon which all offerors decided to offer and upon which there was then a mutual agreement of the parties, via negotiation. You can throw into your RFP the standard payment clauses like FAR 52.232-5 with its construction retainage terms and conditions, but without an additional, nonstandard clause assented to by the parties together setting up the negative incentive as a withhold amount and, if necessary, a sliding scale of reductions to that amount, you will likely find you only have an illegal penalty in a judge's eyes. -
Did the ASBCA get performance and delivery incentives wrong?
Voyager replied to FrankJon's topic in Contract Administration
@FrankJon I am just diving into this case this week. Do you think everything written after this statement at p. 3 in the decision is just poor justification for what the judge sensed to be a cardinal change? -
Stop. Just stop. That is unproductive diatribe. Have a little reverence for the mission, please. @LOML Please read and reread this article by @Vern Edwards instead of hanging out here any longer. Edwards, Vernon - Lifelong Learning, Cultivated Curiousity and Self-Interrogation.pdf (wifcon.com) Take its teachings to heart and you can be the smartest person at the table in a meeting about FFP cost breakdowns someday if you want. I say go for it.