here_2_help

I don't know a regulation or clause that gives a CO authority to direct the contract type between a Prime and SubK. However, the SubK may have to be submitted for consent in advance of award, right? So ... it seems to me that the Prime should be prepared to justify the contract type used. Also, I wonder if the Prime understands WHY it wants to award a T&M SubK instead of a CPFF one. What is the big benefit?

Don, I find myself in the position of once again disagreeing with your advice. Unless the contracting officer with cognizance over this contract is also the same contracting officer with cognizance over the contractor's final billing rate proposal and negotiation of final billing rates (see 42.705-1), I don't believe they have authority under 42.704 to issue a unilateral indirect rate determination. I base my position on the language at 42.704(a). I note that the original poster used the term "telework" which seems ambiguous. Does telework mean the contractor's employees are working from their own homes, or does it mean they are working from their offices at the contractor's facilities? I don't know. I also don't know whether the contractor is maintaining office space for its employees since they are not working at the government's facilities. That is a key unknown fact. If the contractor maintains office space for its employees then it would be reasonable and appropriate for it to bill the contract at higher indirect rates that include its facilities costs. To me, this issue should have been raised and addressed by the parties back in 2020, when the contractor began teleworking routinely. Now, here we are, two or three years later, trying to fix something that I'm not even sure is a problem. The contract appears to be silent regarding the ratio of onsite and offsite work -- though the parties must have had a notion as to what that ratio was when they negotiated the contract's estimated cost. At this point, given the facts presented, I don't see a way for the contracting officer to force the contractor to change its billing rates. What's likely to happen is that the contractor will burn through its funding quicker than the parties intended ... and the contracting officer will then have leverage to force a change in contract terms (i.e., a third billing rate for teleworking employees) as a condition of either providing more funding or exercising the next Option Year. There will also be an opportunity in the CPARS rating to make any displeasure known.

You know, the FAR addresses this point (somewhat). The theory is, when the government provides facilities then it's duplicative for the contractor to allocate to that same contract indirect costs that contain the contractor's facility expenses.

Given: (1) A choice between two rates and only two rates; and (2) The rate to be used is dependent on the location where the work is actually performed; and (3) The PWS expressly gives the contractor discretion to determine the work location. Then I don't see how did you reached your conclusion, Don. What about the situation makes use of the contractor's facility offsite rate "unreasonable"? Please cite to FAR 31.201-3 in your response.

In June, 2018, DCAA issued MRD 18-PSP-002 on the audit of contractor "Long-Term Agreements" (LTAs). The MRD contained a FAQ Section: (Emphasis added.)

You find Government Contractor M&A targets the same way you would any other acquisition target.

CiyaSoft Corp., ASBCA Nos. 59519, 59913, 6/27/2018. (Emphasis added.)

I don't really doubt you're correct in your assessment of the situation. But to me, what you are saying is that when the government enters the marketplace to acquire commercial items, it is unable to conform to standard marketplace practices and standard terms and conditions. In my mind, that kind of makes a mockery of the entire "commercial goods" and/or "commercial services" concept. If a buyer can't accept what the marketplace is offering, then the notion of market-determined price reasonableness goes out the window.

I don't see it that way. However I have already caveated that I'm not an expert in how DoD does PBPs. In my view, the tool is telling the DoD CO to negotiate the lower price of $91,066,434 if the contractor is permitted to use PBPs instead of progress payments based on (adjusted) costs incurred. I would expect the amount obligated to be equal to the price of the contract awarded.

I guess I'm just naïve. If the goal is to buy commercial items, why don't the holders of the GPCs just do a Google (or Bing) search for what they need? Why does the Gov't. require a unique system to replicate what the market already provides?

With respect to performance-based payments, DoD mandates the use of a "tool" (spreadsheet) that takes into account both the contractor's interest rate on its borrowings as well as the A-94 interest rate. No I don't know the rationale for doing so. Most of how DoD implements PBPs is a mystery to me. I just know that the spreadsheet exists and can be accessed by those who need to use it.

Are we talking about cost-based customary progress payments or are we talking about performance-based payments? This reader is confused.

One of Colin Powell's Thirteen Rules of Leadership

I've been thinking about this. What if -- and I know it's a BIG What if -- What if the Pentagon created a Mentorship program for contractors? Don't have primes mentor subs; have acquisition officials in the Pentagon or elsewhere in the DoD actually mentor companies. 1. Application process, focusing on WHY DoD should mentor these companies. 2. Review and vetting. To identify and exclude companies that, among other things, might have unsavory FOCI. 3. Certify companies as being official DoD proteges. 4. Exempt proteges from the competitive process; enable sole-source awards to certified Pentagon protégé firms 5. Other benefits TBD. 6. Partner and mentor and build a long-term relationship. Now, I know there are hundreds of reasons that the above will be a nearly impossible challenge. Statutes, regulations, CICA, etc. Got it. But what if?

Yes. But this time they mean it. Allegedly.

The article is here

If I'm understanding the article correctly, the Army competed two designs and, prior to finishing the Preliminary Design Review, chose the winning design based on ... actually I'm not sure what the evaluation criteria were. The article talks about prototypes but the initial award seems to clearly indicate that the design didn't even get past PDR and all prototypes were or will be "virtual" so now I'm confused. No one is actually buying anything that flies at this point in time, it appears. Then the article quotes a politician who mentions something about fuel range but how do you measure the range of a "virtual prototype of a potentially model-based system"? I dunno. The Army picked a winner. Somehow. Good for them. I hope the next-gen copter is awesome.

If the contract does not require you to provide notification then you do not have to.

The manufacturer has incentive to estimate life on the low-end, so that it won't be sued if its equipment fails too early. On the other hand, I think it's a reasonable assumption to believe that the Rate Book takes into account actual history.

Does the contractor have any actual equipment life history to support its position?

When you award the CPFF Completion CLIN, what makes you think you will be able to control who charges what contractor hours to the CLIN? Point to a clause in your contract that gives you that authority, please.

Back in the 90's the max value of our ID/IQ was doubled. We still hit the new ceiling, but they wouldn't double it a second time. No, I don't know how the CO justified it. But we were glad to accept it.

Sick burn, bro. To be clear, the quote above did not come from Mr. Edwards.

To Vern's point, I have a hard time thinking about scenarios where government payment's to the prime would not be considered as prime contractor revenue/sales. The subK incurs costs and submits an invoice to the prime. The prime pays the invoice, incurring a cost -- presumably recording the cost as an element of cost of sales. The prime submits an invoice to the government for its costs, which now include the subK's costs that it paid. The government pays the prime's invoice, which is treated as revenue/sales. The difference between the revenue recorded and the cost of sales recorded is the contract's gross margin.

Serious question: Assuming that adequate competition is obtained, the contractor T.O. proposals would not be subject to TINA, correct? Second question: Who pays for the proposal prep costs?