Don Mansfield

I love the comics. They summarize the topics well. Great design overall. Strangely, the words "realism" and "realistic" only appear in the title. It's more like a cost analysis handbook.

I don't agree, but let's not get sidetracked. I'm saying feel free to condition your answer with "Assuming nonprice factors are more important than cost..." or something similar.

Thank you for your response

I don't follow. If B's direct costs were lower, wouldn't their indirect costs be higher? Indirect costs = Total costs - Direct Costs

That's the question (in other words). Assume no distinction between offerors. Ignore fees in this problem.

I don't see how that would be relevant at this point, but you can make an assumption if you'd like.

There's no distinction between the offerors on nonprice factors. The best value decision comes down to cost. I ask that you sit this one out.

Scenario: A contracting officer is evaluating competitive proposals for a cost-reimbursement contract. As part of the evaluation, they will have to perform a cost realism analysis of the offerors' cost proposals. The solicitation did not specify that the Government would use any particular method of cost realism analysis--it just said that the Government would conduct cost realism and may adjust proposed costs for purposes of evaluation. The solicitation stated that the Government would use the tradeoff process to determine best value. The contracting officer receives two offers and determines the most probable cost for each. The results of their cost realism analysis are as follows: Proposed Cost Most Probable Cost Offeror A $100 million $105 million Offeror B $103 million $110 million The offerors are equal concerning nonprice factors, so the award decision comes down to cost. Questions: 1. Assuming the contracting officer's determination of the most probable cost is flawless, do they have enough information to determine the best value? 2. If not, what additional information should they consider? I'm not interested in challenges to the hypothetical or critiques of the problem. If you think you need more information just ask.

Ok, thanks

I can't explain the logic, but the Stop Work Order says to handle the increased costs in the termination settlement. The Termination clause says payment of fee is based on percentage of completion if the parties can't agree on a settlement. I don't see anything wrong with proposing additional fee and I don't think the contracting officer would be prohibited from including it in the settlement. However, I think you are asking about entitlement to the additional fee. If that's the case, I'm not seeing that entitlement.

What are you saying "no" to? Are you saying the contractor would be entitled to additional fee they would otherwise get if the SWO were lifted and performance continued? Or are you saying that the settlement of fee is negotiable?

Yes, assuming the percentage of completion was unchanged during the SWO.

No, the fee paid has nothing to do with incurred costs. All that matters is the percentage of work completed.

See FAR 52.249-6(h)(4)(i). Fee is paid based on percentage of completion of work.

I stand corrected.

I don't think overpayment is an ADA violation. ADA restricts obligation of funds in excess of appropriation.

If the vendor did not accept the order, there was no contract. The CO doesn't know that? Maybe show them FAR 13.004?

Why did the subcontractor do the work?

FAR 52.242-15 doesn't answer your question. It does not allow or exclude profit related to the costs incurred due to a stop-work order--it is silent. I think it's a matter of negotiation, not entitlement.

I would recommend contacting your Congressional representative and retaining an attorney.

Nice work @Guardian!

@Guardian I didn't see a question in your post, so I'm not sure what reaction you are looking for. I think your job is to terminate the contract. If that is too much for your conscience to take, tell your supervisor. Maybe they will be sympathetic. Good luck!

This thread suggests that there would be a market for "Sovereign Acts" insurance, which would cover losses on Government contracts caused by sovereign acts of the Government.

Yes. What would prohibit the contractor from proposing that, assuming the price was not higher than prices for comparable unrated orders?

Yes.