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  1. @joel hoffman We have so little data that is not judgmental that I guess I'm erring on the side of caution. I was reading all these post audit findings and it seems like auditors and contracting officers can expect even outdated information that wasn't used to develop the price if the government feels it SHOULD have been used to develop the price. Hence my whole terror at the concept of "complete".
  2. My takeaway from @Retreadfed and @joel hoffman is that you're not in dispute, but slightly different definitions of data maybe? When I submitted my cost and pricing data, in the format of Table 15-2, it added up to my proposal total. The spreadsheet included actually certifiable cost and pricing data, my judgmental data, and all of my other assumptions for cost and pricing (including profit). It showed clearly how I arrived at our price which I think was ultimately Joel's point. I think retreadfed is saying that not all data is treated equal and while all certifiable data should be submitted, it doesn't have to be used. I think his examples mimic my situation. I did a relatively small order three years ago for the same product so I have to provide that data. But it would be inaccurate to use that data in my cost and pricing calculations for the current order being proposed.
  3. @joel hoffman I'm really sorry for the confusion. When I said a DCAA inspection, I meant a DCMA inspection of our last order before delivery. I only mentioned it to show how difficult these types of audits/inspections can be for those inexperienced in dealing with them. I have NO IDEA where I am in negotiations for this order. I submitted an original response to the RFP and was notified since I was the sole offeror, I had to submit certified cost and pricing data. I asked for exception to certify as a NTDC. There were also some requests to use alternate parts for a couple that were obsolete. They said they'd research and get back to me. In the interim, I revised our proposal to include other than certified cost and pricing data in the same format as certified (Table 15-2) in the hopes that in going to the greatest level of detail possible, it would expedite the process once the obsolete part replacements were approved. At that point, they still hadn't resolved the obsolete part request. However, this week they have approved our part replacements and I am updating my proposal again to respond to the amendment. They've asked me to certify in that proposal, but i have continued to ask to be treated as commercial and not certify my data. I am in no way concerned with truthfulness of our data. I am only concerned with "completeness" and more specifically, if audited, how do I prove that it was complete? What information SHOULD I have that I might not that will cause me to fail an audit? Either way, I will definitely make it crystal clear what parts of my data are judgmental, but then "completeness" means I have to have data showing how I arrived at those judgements and I don't know that I have that adequate to respond to an audit. That's my only concern with certifying the data. I keep going back to the fact that there is a reason someone made NTDC able to get an exception from this data and thinking I am definitely the type of company it was designed for...despite having no idea what the actual risk is! So, I don't know if the government approves our price, I don't know if I should be sweeping our data or what that means. I don't know if we've been in negotiation or if negotiations have started or if negotiations are complete. The only response is "please certify your data". I'll try to ask these questions Monday when I have my second telcon in four months with them. I think the assumption is that we know how to navigate this process when we clearly don't. @Retreadfed I definitely appreciate the help from you all! I'm going to be honest, I really don't understand what you're saying in regards to separating our proposal from our data and it sounds important! Isn't the FAR Table 15-2 how we submit our certified data and that leads directly to our proposal price? I don't see how to separate those two things.
  4. @joel hoffman My apologies, yes I meant DCMA inspection. I just mentioned it to show how inspections have greatly impacted us in the past, predominately because I wasn't expecting something so thorough. Also, when you're small and inexperienced, you don't know when you can tell the inspector enough is enough. You are correct that our product likely cannot be considered commercial, but the NTDC is allowed to be treated AS IF our products and services were commercial without a determination that they are. After @Retreadfed got me straight, that is the path we are asking the buyer to take, but it is at the contracting officer's discretion. @formerfed They seem pleased with our uncertified data as sufficient for pricing analysis. They just want us to certify it. With what I know now, when they first reached out for market research, I should have stated that we can supply the product, but only if we were treated as if our product was commercial and referenced 252.215-7013. This would have made everyone's life much easier. As it is now, the buyer has done all the work for Part 15 purchase, I've done all the work of generating certified cost and pricing data, and now I'm trying to get them to go Part 12 instead which maybe means they start all over? They see that I've done all the work for certified data, have accepted the data, and can't understand why I won't just certify it so we can close this out. I'm hesitant because all of the legal blogs designed to help people respond to audit say "the best way to not lose an audit, is to not be auditable". My plan is discuss one final time with the buyer to at least consider our request to implement NTDC supplied product to be treated as commercial and explain why it's not trivial for us to certify the data. If they say no, we'll have to decide if certifying is in our best interests and either retract our proposal or certify our data. The folks on the forum have me convinced it's not the end of the world to certify, but the internet horror stories have an alternate view. If the audit process didn't sound so subjective, I think I'd be just fine, but I read one case where a pre-award audit stated defective data was unlikely, post-award audit found it to be defective, but then the ASBCA sided with the vendor. To me, that shows that you can do it right from start to finish and still be drug through a long audit, likely have significant legal fees to appeal to the ASBCA, etc. For a small business, just the process not the penalties if we lose, could shut us down for weeks!
  5. @Neil Roberts I did engage a CPA to help me categorize our costs so it was somewhat helpful. I don't think I did a good job explaining how small we are or how much our business operations will change AFTER this award. @Retreadfed Ok, I think you convinced me by going back to the legal code. It sounds like my only hope of not certifying is getting treated as if commercial on various clauses, but that the exception request is only an instruction of how to request that, not a separate exception outside of the commercial one. I'm struggling with it being so easy to comply with the other stuff I'm reading online of some very aggressive auditors finding fault that is later overturned if a company fights it, but I really hope you're right. @joel hoffman this was a post award / predelivery inspection. It was of our quality management system which was thankfully done via email, but then three onsite visits at various stages of construction. I thought it was overkill and it kept forcing us to stop production right near the end of our work so it was very disruptive. Very nice guy though! On a related note, I read online that in 2022 they really increased the random DCAA post award audits from prior years. I think DCAA is really trying to do more audits overall. Thank you all again, I guess at least now I can clearly ask the buyer without getting caught up in the exception and/or more confidently certify our data assuming I give them everything.
  6. @Retreadfed DFARS 252.215-7010(b) is titled "Exceptions from certified cost or pricing data." (1) In lieu of submitting certified cost or pricing data, the Offeror may submit a written request for exception by submitting the information described in paragraphs (b)(1)(i) and (ii) of this provision. The whole purpose of (b) is to list all the exceptions from certified data and it includes an exception for NTDC with their CAS current/history as the basis for claiming that exception. (c) explains what is required for certified data and (d) does the same for uncertified data. @joel hoffman We had a DCAA auditor spend about 3 full days inspecting our last order which was a major blow to my schedule and it was for an order under $500k. He never found any issues, but just the inspection, which I didn't adequately account for, was not trivial. I'm trying to envision the admin/financial version of that and it gives me nightmares! I'm not worried about being dishonest. I'm worried that I won't have documented an assumption or a calculation sufficiently to be accepted and they'll find a way to find us delinquent. Again, the fear is of my ignorance of the process, not the process itself. I'll research how to avoid defective data. I have to be honest, reading this does not give me a happy feeling: https://www.cohnreznick.com/insights/what-is-defective-pricing-what-does-an-auditor-look-for Must be current, accurate, and complete. How will I know if they're complete until I'm audited? Does my accounting system or cost estimation system even meet the standards for being complete? How would I know? If we're found to be deficient, we'll pay price change plus interest.
  7. @Retreadfed thank you for clarifying on needing to supply underlying data to go into predicted data. FAR 52.215-20 is NOT in the solicitation. 252.215-7010 excepts NTDC from cost and pricing data based on their lack of CAS. Thank you for clarifying on 15.403-5. I've had a hard time distinguishing between contract clauses and CO instructions. Many clauses aren't in the solicitations, but are part of FAR/DFARS so I'm not certain what applies. @Neil Roberts and @joel hoffman I concede that (E) falls under the commercial items and services and that might sink my case. However, it makes zero sense to have an exception for NTDC under the commercial exception. Why would NTDC need an exception if they're already excepted as commercial parts and services? My guess is that it was intended to be 252.215-7010(b)(iii) so that it stands coequal with "prices set by law" and "commercial". That's the only thing that makes logical sense if you research the intent of the NTDC exception (bringing in other suppliers of non-commercial products and services by recognizing small business suppliers won't have the same administrative infrastructure as traditional defense contractors). I guess it would take pairing 252.215-7013 (Supplies and Services Provided by Nontraditional Defense Contractors) which allows (but not require) CO to treat NTDC as if they were commercial and 252.215-7010(b)(ii) which makes commercial parts and services excepted (as well as NTDC excepted). Again, no logical reason to have NTDC excepted if CO already has the ability to treat NTDC as commercial which has its own separate exception.
  8. All, I really appreciate the feedback and I think you've convinced me that certifying the data isn't as problematic as I was expecting. I wanted to respond to everyone's points so far in case future questioners run across this thread, but there doesn't seem to be a magic bullet for this situation like I was hoping! @joel hoffman Thank you for clarifying. I think my biggest hesitation is that other than my material and subcontracting costs, which have defendable quotes, I don't know if I have the right documentation to defend an audit. It's based on a best estimate from previous jobs, but I don't know what an audit requires having never been through one. If my best estimates, as communicated in my proposal, are sufficient then that does take some pressure off of certifying. DFARS 252.215-7010 wasn't in the solicitation, but it referenced by 252.215-7008 (Only One Offer) which was. I will ask that it be added along with FAR 15.403-5 (Instructions for submission of certified cost or pricing data and data other than certified cost or pricing data). @Neil Roberts It's not a personal concern on certifying the data as we're so small that we're all intimately involved. I just don't want to recommend to our team, including our owner, that we certify and then it come back to bite us. Sometimes all it takes is one mistake to put a small business out of business for good. @General.Zhukov I imagine your assessment is pretty accurate. The buyer's team laughed when I said I didn't need to certify until I pointed out the clause excepting NTDC and then they were kind of intrigued because they'd never seen it before. They said they needed to research it, but that was months ago and they still seem to be expecting me to certify. They haven't firmly denied my request yet, but I think it's holding up progress toward award. It seems clear to me that my company is excepted per 252.215-7010 and further that FAR 15.403-5 clearly states that even if certified, excepted company data will be treated as uncertified. In my mind, that makes an audit either less likely or easier to defend. Further, if "certifying" just means this is the best info we have right now and doesn't hold me to changes once we start producing our product, that also seems to reduce the impact of certifying. Perhaps we've already incurred the most difficult part of certification by providing our data in the same format as certified data. Again, thank you all for your advice!
  9. @Retreadfed what other facts are relevant for an exception for NTDC other than whether or not we're NTDC? What nuance am I missing? Do other exceptions, like commercial products and services have to prove anything other than they're commercial? I fully understand that CAS is not an issue here and I think the buyer concurs. I do appreciate the emphasis on ensuring we're submitting data that are current, complete, and accurate. If I only have to defend that what I have submitted adheres to those requirements as of this moment, perhaps certifying isn't as onerous as I'd thought. I do still hesitate that someone thought it important enough to carve out exceptions for the requirement for a variety of suppliers, including NTDC. Someone way more familiar with this than me thought that certifying data might prevent companies like ours from supplying DOD if we didn't have an exception. I still cannot fathom how any company would ever submit to a requirement when something specifically exempts it. I did take your advice and ask the buyer if they require anything beyond what we've submitted to process our exception. It is not the first time we've done so which is why my question for this forum was if I should be doing more or doing it differently. @Neil Roberts I cannot verify if our accounting method meets GAAP as I am not familiar with those requirements. We use software typical for very small businesses that don't routinely perform work for the government. It has been sufficient for our intermittent, smaller FFP contracts with the government. I thank you for understanding that this is a reason why I'm hesitant. I think everyone assumes anyone who does business with the government has dedicated CPAs/accountants, but in our case it has not been cost effective. We do plan on upgrading our system if we win this contract. If we were audited, I have quotes/email/etc. that I could provide on how we generated our estimate. What I won't have is a high grade accounting system that shows how we estimated our labor pools, rates, etc. @joel hoffman we absolutely know how much it costs to make something that we sell, but of course certified cost and pricing data asks for MUCH more than that. Even other than certified can ask for data in the same format as certified, which is what we provided in an effort to ensure the buyer has what they need in the format they need (although they didn't specify a format). All we asked is that it not be required to be certified data. It isn't necessary to treat these items as commercial, but per the FAR, they could. And that would also negate the need for certified data. Interestingly enough, everyone understands and readily accepts the exception for commercial; so what's the pushback for the exception for NTDC? I do appreciate everyone's feedback especially if my concerns are excessive or irrelevant based on how this stuff actually works. That being said, why is the answer to my question on how I communicate to the buyer that we want to exercise our clear exception met with pushback? I could certify our data, but why on earth should I if I don't have to? Why does this specific exception, which should apply to nearly every small business in the US, not merit the same consideration as any other? Shouldn't I advocate for my business to not unnecessarily accept costs and risks, even if they're trivial to larger businesses? As I considered just caving and certifying the data, I read FAR 15.406-2(e) and 15.403-4(c) which state that if an exception is later found to apply, the data must not be considered certified cost and pricing data, even if we certify it. Perhaps that further reinforces @Retreadfed point that certifying is really not a major issue?
  10. Thank you for your response Retreadfed, I really appreciate it. Can you help me understand your feedback a little better? Are you saying that our interpretation of the NTDC exception is incorrect or are you saying that certifying cost and pricing data is not as big a deal as I'm expecting? My key concern is that I don't know what I don't know. I have shown what I read as a clear and direct exception, but the responses I'm getting from others, including yours, has me concerned I'm missing something. Do we not qualify for an exception in your estimation? If we do qualify for exception, but I certify our data anyway, I am subjecting our company to a potential audit and price reductions right? With no experience with either of those possibilities, I'm unsure how concerned I should be that my current accounting system is capable of meeting the reporting requirements of an audit, how much the audit would cost us, or what the potential outcome of an audit could do to our small business. My point being that my understanding is that certifying data is significant and has some potentially very expensive repercussions. Maybe these are overblown concerns based on inexperience, but I don't think they are without some merit. I can't imagine most companies voluntarily open themselves up to these types of risks if they meet any other exception.
  11. This is my first Wifcon post so I apologize if my question suffers from my inexperience and I appreciate any info this forum can provide! If I should repost under the beginners section, please let me know. BACKGROUND: I am the proposal lead for a very small company that produces equipment for the US Navy. Our past orders have been under $500k so we are not experienced with many of the contract requirements for larger orders. We are currently bidding as a prime on a FFP solicitation over the $2M threshold, which has increased our proposal pricing requirements. Our product is not commercial, but we have never worked a CAS required contract as either a prime or sub. I think the solicitation was full and open, but we are the only source of these materials so we were the Sole Offeror. No cost/price data format requirement was provided by the contracting officer, but the buyer has been very patient with me as I went from only high level pricing information, which was sufficient for our past orders, to eventually providing Other than Certified Cost and Pricing Data in the same format that certified data is required, but without the certification statement. They acknowledge that as a small business, we are excepted from CAS, but have stated that that doesn't mean we can't certify our data. I don't think they've firmly ruled anything out, but we don't seem to be progressing in our negotiations as they research our exception request. QUESTION: We are in negotiations with the buyer, but with my inexperience, I'm afraid I'm not adequately communicating or justifying our position that we cannot provide Certified Cost and Pricing Data due to our non-CAS compliant accounting system and that we should not have to due to our nontraditional defense contractor status. The buyer and our PTAC advisor both seemed unfamiliar with the clauses that we provided seeking exception. Is there a better way we could communicate or defend our position that other than certified cost and pricing data should be sufficient? Are there additional resources we could provide the buyer to help explain our case? Am I reading the FAR and DFARS incorrectly? Key DFARS Clauses to Justify our Exception: DFARS 202.101 definition of a nontraditional defense contractor (NTDC) that we definitely meet DFARS 252.215-7010 (especially (b)(ii)(E)) which states that NTDC qualify for an exception from certified cost or pricing data DFARS 252.215-7013 which states that NTDC supplies and services can be treated as if they were commercial (although this is not required) Final Thoughts: Since we're the sole offeror and our bid is over the dollar thresholds, I absolutely understand the need for the buyer to get the data they need to ensure our pricing is fair and reasonable. However, I think our company is the exact reason that the NTDC exceptions were created. We have the technical manufacturing ability to provide material to the DOD that they can't get anywhere else, but we lack the administrative infrastructure to do so in the same way as the traditional defense contractors. We would love to complete this work and honestly, I'd probably certify the data if that's what it took to win the job, but as i understand it, we literally cannot do so with our current non-CAS compliant accounting system. I'd hate to put our company in legal jeopardy, especially if DFARS appears to have already provided a solution for companies like ours for this exact situation. However, I acknowledge that I'm not a FAR/DFARS expert so if I'm misreading or misunderstanding anything, I'd greatly appreciate a recalibration!
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