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Found 8 results

  1. In commercial prime contracts, paragraphs (b) and (c) of FAR 52.212-5 each have a series of clauses listed that will apply to the contract if checked by the Contracting Officer (KO). Paragraph (e)(1) contains a list of clauses that must be flowed down to subcontractors regardless of any of the requirements listed in the paragraphs above. On several occasions I’ve seen instances where the KO does not check off a clause in either paragraph (b) or (c) that is listed in e(1) and that seems like the clause should be in the prime contract. For example, I’ve seen service contracts where the KO checks off a number of clauses in (c) but does not check (c)(2) for the Service Contract Labor Standards clause. Because it’s a service contract over $2,500 it appears the SCLS should apply, and as I read (e)(1), I should flow it down to a subcontractor, but the KO doesn’t appear to have included it in the prime contract by checking off (c)(2). Another example is 52.203-13 Contractor Code of Business Ethics, which is in the check-off list of (b) but is also listed as a mandatory flow-down in (e)(1). I’ve seen contracts in excess of $5.5M that appear to meet all requirements for the inclusion of 52.203-13, but the KO does not check this clause under (b)(2). Paragraph (e)(1), however, makes it a required flow-down to subcontractors assuming the subcontract meets the prescriptive requirements (i.e., is over $5.5M, etc.). In both my examples, if the KO didn’t check off those two clauses, they don’t appear to apply to the prime contract (without regard to the Christian Doctrine), but (e)(1) says I have to flow them down. I’m trying to understand the logic behind paragraph (e)(1) in instances where the KO doesn’t put a check mark next to a clause in either paragraphs (b) or (c), but the clause is listed in (e)(1) and it appears the clause would apply to the prime contract and thus should be flowed down as appropriate? It could be that the KO simply made a mistake in failing to check a clause that should apply to the prime contract (I’ve certainly seen RFPs/contracts where the clause is included full-text but none of the clauses in (b) or (c) are checked, but here they’ve gone through the process of checking a number of the (b) and (c) clauses but missed two that certainly seem applicable at the prime level). So for those clauses listed in (e)(1), this methodology of requiring a check off above but mandating the clauses in (e)(1) be flowed down leaves a confusing situation if apparently applicable clauses aren’t checked. For folks experienced at building commercial subcontracts, do you just flow down all the clauses in (e)(1) as applicable even if the KO didn’t check off one that seems like it should apply? Thank you for any insight you can offer.
  2. It is my understanding that GSA schedule contracts and orders at to be used to buy commercial items on commercial terms. Is that correct? If so, how is it that orders are allowed to contain non-commercial terms? I have government unique security requirements in mind, but anything unique to the government would seem to apply.
  3. I am working a Firm Fixed Price buy for a sole source item that has been determined commercial of a type. Because of obsolescence the part has to be redesigned (last bought in the 90's). The redesign effort involves NRE costs that are beyond the actual production costs and the contractor is only providing hours and a burdened rate for each labor category to support this NRE. I have backed into the numbers the best I can but my counter offer is less than half of the proposed price for NRE. The NRE total is for $850,000. Without more data I am at a loss. The contractor keeps claiming because this is a commercial buy they won't support their price with more data. Do I have any options to persuade them on the front end? What if I end up negotiating a price I am uncomfortable with to ensure supportability to our customer. Is there something I can do Post Award to validate the price or uncover their true cost so we can use that data on similar buys our office is working.
  4. Good Morning WIFCON Community, Scenario: I have a question regarding contractual authority on a FFP commercial services contract. This contract is for physician services paid at an hourly rate. The contract states that the annual quantity is 2,080 hours. We are at the end of the base period of performance, and the government only used 1,980 hours. I now need to modify the contract and de-obligate the excess funds. What authority do I have to modify the contract and de-obligate the excess funds? My Thoughts: I have only two options for modifying the contract to de-obligate the excess funds. The first option is a bi-lateral modification (supplemental agreement) under the authority of 52.212-4©. The second option is a partial termination for convenience under the authority of 52.212-4(l). Other than utilizing one of these two options, I don't see any other authority I have to modify this contract and de-obligate the excess funds. I have always treated these modifications as bi-lateral, as I don't think that the de-obligation of excess funds is an administrative action. In my opinion, changing the amount of hours and associated value of the contract explicitly changes the terms of the contract. Therefore, the only unilateral modification authority I would have to take such an action would be termination for convenience. Other Opinions: I have some folks suggesting that the de-obligation of funds is only an "administrative modification" or a "funding only modification," and that it can be done unilaterally - especially since that particular performance period is now over. Are there any additional authorities I might have to modify a FFP commercial services contract other than those I've outlined above? Thanks in advance for any insight you can provide. -VA1102
  5. I previously learned on this forum in this post that FAR 12.301 effectively limits the provisions/clauses to be used in commercial purchases to those provisions/clauses directly referenced in Part 12 (see FAR 12.301(d) where it says "Notwithstanding prescriptions contained elsewhere in the FAR, when acquiring commercial items, contracting officers shall be required to use only those provisions and clauses prescribed in this part"). As Don explained in that post, even if the prescription for a clause would normally apply to your award, you need not include it in a commercial award unless that clause is one of the few clauses listed in FAR 12. So you could effectively ignore the clause's prescription since 12.301 superceeds the actual prescription. Here is an example: 52.243-1 has the prescription "The contracting officer shall insert the clause at 52.243-1, Changes -- Fixed-Price, in solicitations and contracts when a fixed-price contract for supplies is contemplated". Just based on this prescription alone, it would seem you would want to put it in a commercial Fixed-Price award for supplies. However, since it is not a referenced clause within FAR Part 12, you actually should not include it in your award. To back up this determination, the FAR Clause Matrix in 52.3 has the Commercial Item column empty for this clause, thus showing it does not belong in a commercial award. The problem is that the FAR Clause Matrix in 52.3 is not consistant with the guideline set by 12.301. As an example (of which there are many), provision 52.204-7 has an "A" in the Commercial Item column of the FAR Clause Matrix. This would indicate that 52.204-7 is "required when applicable" in commercial item solicitations, based on its prescription. The prescription for 52.204-7 says "Except as provided in 4.1102 (a), use the provision at 52.204-7, System for Award Management, in solicitations." [Note that 4.1102(a) does not contain a commercial solicitation exception]. So should 52.204-7 be included in a commercial solicitation or not? 12.301 seems to say it should not be used, yet the Clause Matrix says it should be included in solicitations when applicable. Which takes precedence? If the Clause Matrix is correct and it should be included when applicable in commercial solicitations, why is 52.204-7 not listed in Part 12? Note that there are clauses in 12.301 that are "required when applicable" based on their prescription, so it is not as if 52.204-7 would be the only provision or clause listed in Part 12 that still needed its prescription evaluated before insertion in the commercial solicitation/contract. Edit: should be discrepancy, not discrepency, in the title. Looks like I can't change it at this point though.
  6. Many clause prescriptions specifically call out the fact that they should be placed in solicitations and contracts AS WELL AS Part 12 commercial solicitations/contracts. For example, the prescription for 252.232-7010 says "Use the clause at 252.232-7010, Levies on Contract Payments, in all solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items." However there are other prescriptions which do not include it. For example, the prescription for 52.222-50 says "Insert the clause at 52.222-50, Combating Trafficking in Persons, in all solicitations and contracts." Is there a rhyme or reason as to when prescriptions include the "Part 12" language and when they do not? Would I want to include 252.232-7010 in my Part 12 commercial contract, but not 52.222-50 because its prescription does not specifically call out Part 12 actions? Or would I include both clauses because 52.222-50 still does say ALL solicitations and contracts? If the latter is the case, why even specifically call out Part 12 actions in some prescriptions if you would still want to add a clause that didn't specifically call them out? Does the inclusion of the "Part 12" language in a prescription have anything to do with topics already being covered in the commercial clauses (e.g. 52.212-4)? For example, the prescription for 52.243-1 says "The contracting officer shall insert the clause at 52.243-1, Changes -- Fixed-Price, in solicitations and contracts when a fixed-price contract for supplies is contemplated." However 52.212-4 already has a section on changes, and since FAR 12.102© says "Contracts for the acquisition of commercial items are subject to the policies in other parts of the FAR. When a policy in another part of the FAR is inconsistent with a policy in this part, this part 12 shall take precedence for the acquisition of commercial items", it would seem uneccessary to include 52.243-1 in the award if 52.212-4 was already included. Perhaps the FAR consistantly includes the "Part 12" language in prescrptions because those prescriptions without it are already covered by standard commercial clauses and don't need to be added?
  7. Epiphany: Have you ever been told something, read something, and thought something for months, but then later concluded that what you were told and how you understood what you read was different from a plain reading of the text? The Commercial Item Itself: When you read paragraph (1) of the commercial item definition found in FAR 2.101, do you think paragraph (1) is saying that the proposed item itself must be either sold or offered for sale to the public [to qualify as commercial under paragraph (1)]? When you read paragraph (1) of the commercial item definition found in 41 USC Sec. 103 (http://www.law.cornell.edu/uscode/text/41/103), do you think paragraph (1) is saying that the proposed item itself must be either sold or offered for sale to the public? How many people do you know who say or think that only the "of a type" item must be sold or offered for sale for the proposed item to qualify as commercial under paragraph (1)? Are you familiar with any case law to support this? Points against "Of a Type": It may be in the best interest of the defense industry (and perhaps the government) to act as if paragraph (1) allows for an item that has never been sold or offered to the public to qualify as commercial under paragraph (1). But is that what it actually says? What would be the point of paragraph (2) if a proposed item could qualify as commercial under paragraph (1) based on another "of a type" item having been sold or offered for sale to the public? Would not paragraph (2) be largely redundant if this was true? Also, a proposed item could qualify for paragraph (1) or paragraph (3) because both address "of a type". When I held to my previous understanding of paragraph (1), I found it difficult to establish when a "modified item" should go under either paragraph (1) or (3). Conclusion: What do you think? Is it correct by definition for an item that has not itself been sold or offered for sale to the general public to be claimed as commercial under paragraph (1) of the FAR 2.101 commercial item definition? If not, do you think it is still pragmatically appropriate?
  8. Is there such a thing as a FFP/O&A contract type? I need to try out the following logic and argument. A hypothetical company has a FFP prime contract for DoD aircraft operations and maintenance with a CPFF CLIN for engine overhaul. The engine overhauls for the last four years have been subcontracted out to Vendor A. To speed up turn around on the subject contract, Vendor B (a separate, designated, overhaul facility for Vendor A) is being sole/source selected to alleviate Vendor A’s capacity constraints across contracts. The best sole/source justification for selecting Vendor B instead of incumbent Vendor A appears to be a simple application of 6.302-3( (iii) at the prime level to meet customer requirements for turn-around. Because the aircraft is sold commercially, these engine repairs are deemed to be commercial. However, neither Vendor A nor Vendor B is willing to commit to a FFP contract without a clause covering its O&A material cost. For each engine repair, material drives anywhere from 60% to 80% of the overhaul price. Vendor B has proposed 10% of its “estimated”, average, engine overhaul price as a flat labor charge and an additional 10% for mandatory supplies, kits, and tests. The additional 80% of its “estimated” price is based on actual material prices for services provided to other companies in the last two years. Vendor B has proposed the flat labor charge and mandatory supplies, kits, and tests as FFP; and has proposed the material charges as O&A (to be individually determined for each engine overhaul with no ceiling price.) Originally, the company wanted to describe its subcontracts with Vendor A as being T&M. Two seeming difficulties with this are FAR 12.207( (1) and FAR 16.601(d). The reason FAR 12.207( (1) seems problematic is that the company was not regularly soliciting more competition on its engine overhaul subcontracts after Vendor A became the established service provider. The reason FAR 16.601(d) seems problematic was that the company did not establish a ceiling price for each engine overhaul. Now, the hypothetical company wants to describe its proposed subcontract with Vendor B as being FFP due to an estimated 20% being fixed with Vendor B’s flat labor charge and mandatory supplies, kits, and test. The commerciality of the engine overhaul and the O&A estimate (not ceiling) is mentioned in the analysis. Is there any regulation similar to FAR 16.102( that would further support this commercial contract without running into difficulties due to FAR 16.301-3( and the 60%-80% O&A portion of the contract?
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