here_2_help

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?

Yes. Yes we can. The system does not appear to require use of expensive attorneys, at least on the front end. I like that.

I apologize if this post is not responsive to Vern's question. I don't work in the government, only ever the private sector (contractors). It used to be the case that a degree inferred some ability to write and to critically think and to perform analysis. Not so much any more. Are those skills important for an 1102 position? Not for me to say. I will say that my first "real" job after completing college with a B.A. -- a liberal arts degree -- was at a large defense contractor. I was immediately interested in the subject of government contracting, and took classes at night in UCLA's Government Contracts Certificate program. One of my first classes was Cost/Price Analysis -- thought to be the hardest class in the series but I didn't know that when I enrolled. My point is: it wasn't hard. Not at all. It was just algebra and analysis. After my college coursework (again: liberal arts) I found the work easy and skated through the class; I didn't understand why my classmates struggled so. Then I found out that several didn't have college degrees and were trying to apply the high school algebra they'd learned years before and had mostly forgotten. Of course, this was decades ago and things have changed since then. I don't think I have any liberal arts folks on my staff; they are almost all Finance/Accounting types. They can run rings around me on a spreadsheet. But critical thinking and analysis? Missing in action.

My comment? Sarcasm.

Well, gentlemen, aren't we chipper today? I'm over here, applauding the folks who manage to get the job done within a system that would make Kafka weep.

I'll add to Vern's informative link with a caution that many contracting officers do not fully understand how to deal with unpopulated JVs. Nor do many contractors that form them! Questions to be answered ahead of time: 1. Which entity will do the accounting for the JV? Is that entity going to be submitting invoices on behalf of the JV? Does that entity have an adequate accounting system? 2. If the "subcontractors" to the JV are going to receive cost-type contracts, do they all have adequate accounting systems? 3. Does each "subcontractor" to the JV have the ability to calculate allowable indirect cost rates and to issue credible cost proposals suitable for negotiation? 4. How will profit be distributed to the JV members? How will any unallowable costs, incurred on behalf of the JV (rather than an individual member), be accounted for? I could go on. These issues, and others, should be sorted ahead of time so that the proposal can clearly explain to the government how it's all going to work.

If you require proposals in order to issue a TO, you should be prepared to pay for them. Having the ktr put the proposal prep costs in G&A shifts the costs to other customers who get no benefit from your ID/IQ. Also see CAS 402, Interpretation No. 1, quoted below: (Emphasis added, obviously.)