SAP Modification PNM

[myfrogleaps]

I am being told that a PNM is required for all modifications. I thought PNMs were not required for FAR Part 13 mods under SAT. I would appreciate hearing other people's thoughts on the subject.

[Matthew Fleharty]

Whenever someone tells you there is a "requirement" they should be able to show you the statute, regulation, policy, etc. for said "requirement."  Otherwise, don't believe everything you hear - there is too much unfounded procurement lore in this profession (https://fcw.com/blogs/lectern/2017/06/dont-reform-procurement-eaves.aspx?admgarea=TC_Opinion).  Also see the post where I pulled that article from:

 

[Todd Davis]

I agree with Matthew. 

Also, an agency or office may have an agency FAR supplement or a local policy/standard operating procedure or practice that may require it.  For example, our agency requires that modifications affecting price include documentation of the basis for determining the price is fair and reasonable.  This is not the PNM described by FAR Part 15, but serves a similar purpose.

Even if a PNM is not required by the FAR or your agency, the basis for the price change should be documented and demonstrate that the amount of the adjustment is considered fair and reasonable.

Lastly, while not specifically referring to a PNM, FAR 4.803 does describe the type of documentation that is to be included in a contract file, when applicable.  This includes a "record of negotiation" and "documents supporting modifications issued by the contracting office."

[Guest Vern Edwards]

1 hour ago, myfrogleaps said:

I am being told that a PNM is required for all modifications.

WHO told you? Your boss? 

[Desparado]

What was the reason for the modification?  Did you enter into negotiations for some reason?  If something happened that caused you to go into negotiations, I can see where your agency/boss may require a PNM.  A PNM for "all modifications" is overkill and just stupid.

[FrankJon]

This could very well be a case of confused terminology, as well. I've heard at least a handful of COs (usually the more seasoned ones) in my career refer to any price reasonableness determination and/or award memorandum as a "PNM."

[Guest Vern Edwards]

On 1/3/2018 at 12:28 PM, myfrogleaps said:

I am being told that a PNM is required for all modifications. I thought PNMs were not required for FAR Part 13 mods under SAT. I would appreciate hearing other people's thoughts on the subject.

If the mod entailed a spec and/or price change, then you must document the negotiation of the mod.

See, generally, FAR 13.302-3. Has the contractor commenced performance or did it make a written acceptance? If so, you have a contract, and you need the contractor's written agreement to any negotiated price change. That means that the mod is a negotiated contract. See FAR 15.000. If the mod is a negotiated contract, then you must comply with FAR Subpart 15.4, which includes 15.406-3, Documenting the Negotiation. A PNM doesn't have to be long. In some cases a half page might do.

See also FAR 4.801.

[joel hoffman]

Concur with Vern.

It makes sense to me that if you are modifying any contract, you should be able to justify why, how you did it, how you determined that the price and or time adjustments were necessary and reasonable, etc. for the record.  Anyone that has ever had to review,   Close out, take over administration of, settle disputes , investigate, etc. contracts or contract actions would understand the need to document all contract actions taken. 

Contracting officers, specialists, administrators, etc. should understand this and realize that if you die, retire, get sick, transfer, get promoted, get investigated, have to justify your actions, etc. - someone else should be able to review and or take over administration of the contract, and be able to track the status of all actions from award onward. You are hired and entrusted to spend someone else’s money. 

That should be taught in the very most basic Contracting 100, 101 or whatever. I was told that on my very first day working for the government as a contract administrator.