Source: http://www.wifcon.com/discussion/index.php?/profile/2-vern-edwards/&do=content&all_activity=1&page=315
Timestamp: 2018-08-16 18:22:57
Document Index: 430225898

Matched Legal Cases: ['art 15', 'art 15', 'art 24', 'art 12', 'art 12', 'art 12', 'art 12', 'art 12', 'art 12', 'art 15', 'art 12', 'art 15', 'art 12', 'art 15', 'art 8', 'art 13', 'art 16', 'art 15', 'art 12', 'art 15', 'art 12']

Vern Edwards's Content - Page 315 - The Wifcon Forums and Blogs
Everything posted by Vern Edwards
Vern Edwards replied to midas's topic in Contract Pricing Including CAS & Allowable Costs
Joel: The rules about prime contractor submission to the government of cost or pricing data obtained from subcontractors are at FAR 15.404-3©. The rules are the same for all contract types.
Joel, You have muddied up the waters pretty badly, and the more you have explained, the muddier the waters have become. I understand what you're saying, but I think your reasoning has cast you into a deadly definitional spin from which you cannot recover. You are right that there is no use in arguing further. By the way, the problem is not with the Briefing Papers, but with your understanding of them and of the subcontractor cost or pricing data clauses. If (a) the prime contract contains one of the subcontractor cost or pricing data clauses, ( if the TINA threshold is met, and © if no exception applies, then the prime must obtain "cost or pricing data" from the replacement sub. The data will have no relevance for the original pricing of the prime contract, but they are "cost or pricing data" nonetheless, and may be relevant to future pricing actions. Poor midas.
Joel: Here is the text of the contract clause at FAR 52.215-12, Subcontractor Cost or Pricing Data (OCT 1997): That clause goes into a government prime contract. As a contract clause, it is effective after award of the prime contract, by which time the government and the contractor will have reached agreement on the prime contract price (unless the contract is a letter contract). The clause thus expressly requires that the prime obtain something called "cost or pricing data" from subs after the pricing and award of the prime contract, and that the prime require such subs to obtain something called "cost or pricing data" from their own subs after the pricing and award of the prime contract.Now, it should be clear to all that defective data submitted by a subcontractor after the pricing and award of the price contract cannot have affected the pricing of the prime contract and is not cost or pricing data for that purpose. But why would it not be cost or pricing data for the purpose of pricing actions that might take place in the future? If such data are not cost or pricing data under any circumstances, then why the clause?
Vern Edwards replied to brian's topic in Contract Award Process
Joel: Brian's story about what happened to him is irrelevant, as is what is unbelievable to you. You don't know why the CO refused to release the information, and you don't know why the CO's boss eventually released it. I draw no conclusions from that story. What is relevant is that, FAR notwithstanding, federal courts have found that some pricing information is protected in some circumstances and that release of the information in those circumstances is improper. FAR 15.506(d)(2) says to release the "overall" price, including "unit prices." FAR 15.506(e) says not to release trade secrets or commercial and financial information that is "privileged." FAR 52.212-1 and 52.215-1 say that the government will release "overall" prices, but make no mention of unit prices. Those provisions are as clear as mud. FAR says many things that the courts have declared to be wrong, and part of being a professional is being sufficiently up to speed to know when the courts have done so. Informed persons know that releasing "constituent" and "line item" prices is wrong in some cases and would violate the Trade Secrets Act. I don't like the idea that the prices in government contracts may have to be withheld from the public. Years ago, at this website, I urged that Congress enact a law to the effect that all government contract prices are public information, except in the case of classified contracts. In the absence of such a law, you, Carl, and everybody else must accept the reality that the courts will protect some prices. (Your notion that prices might be protected from a FOIA request, but must be released during a debriefing, is absurd.) Every contracting officer must understand that in some circumstances it is necessary to check with the winner before releasing its prices during a debriefing, notwithstanding the instructions in FAR Subpart 15.5 and personal opinions about what the public is entitled to know. COs who do not understand that, and who do not act accordingly, might be in for an unpleasant surprise. It shouldn't be that way, but it is. Your outrage at this situation, while perhaps understandable, is beside the point. Fools walk in... COs should seek legal advice before releasing constituent or line item prices during a debriefing. If a contract contains two or more line items, then I see no problem with releasing the "overall" sum of line item prices. But if a contract contains only one line item, and if releasing the total line item price would enable others to ascertain the line item unit price, then the contracting officer should, in my opinion, refuse to release the price without the winner's concurrence, unless instructed to do so by higher authority. He or she should, instead, advise the firm being debriefed to submit a FOIA request, and explain why that must be the case despite the FAR debriefing provisions. FOIA requests should be processed in accordance with agency regulations.
Carl: You have not presented a good argument. FAR Part 15 and FAR Part 24 apply to procurements under FAR Part 12 pursuant to the express terms of FAR Part 12. I have pointed that out to you several times now. I'm sorry if you can't get it. As for your cherished mentor, I don't care what he or she might think about this. I care only about what FAR says and what the courts say. Joel: You took such a strong position against the idea that grounds maintenance prices might be trade secrets, with no explanation whatsover, that it amounted to an absolute denial. So I won't stop saying it until you admit that you have stated no grounds for your position. My read of the DC Circuit's decisions is that the overall price must not be disclosed if such disclosure would reveal constituent or line item prices that warrant protection. The contracting officer cannot know whether they warrant protection without consulting the winner. That's my stand. A CO should not release such a price without first contacting the winner.
bremen: FAR 52.212-1 and 52.215-1 say that the government will release "the overall evaluated cost or price." The problem is that the courts have raised a red flag to the effect that "constituent" or "line item" prices may be protected. If there is only one line item, and if the unit and quantity are known, then the overall price will reveal constituent or line item prices. In my opinion, if the CO plans to release constituent or line item price information he must put the offerors on notice of his intention and give them an opportunity to object. carl: I would not release a constituent or line item price that is "based on" a catalog or market price, because it might include an unpublished discount that the seller does not want disclosed to its competitors. I'm telling you again: commercial prices are not necessarily public prices. They may be confidential between seller and buyer. Really, Carl, that should be obvious to an experienced buyer or seller. As for prices obtained through sealed bidding, I think the prices are public by statute and there is no issue.
Reading this is a hoot. midas asked a seemingly simple question: [T]he open question is whether or not the replacement subcontractor needs to provide cost and pricing data to the Prime? The answer to that question is no. But midas asked the wrong question. The question should be: Is the prime obligated to obtain cost or pricing data from the replacement sub? The answer depends on (1) whether the prime contract includes the clause at FAR 52.215-12 or 52.215-13, (2) whether the replacement subcontract would exceed the TINA threshold, and (3) whether any of the TINA exceptions apply. The sub, if asked for the data by the prime, can refuse, in which case the prime must decide what to do. There is no law requiring a sub to provide the data, only a clause requiring the prime to obtain the data. Joel has caused some confusion because he decided to talk about whether defective pricing by the replacement sub would entitle the government to a price reduction based on the initial prime contract price. I think Joel has answered that question correctly. The problem is that the answer is not responsive to the question. I think Joel is incorrect to say that data from the sub cannot be cost or pricing data. I understand his logic, but his logic isn't valid. It is also incorrect to say that the prime need not obtain the data because the data cannot affect the initial prime contract pricing action. The data could affect subsequent pricing actions between the government and the prime. In any case, as retreadfed has pointed out, it doesn't matter whether it will ever affect a pricing action or not if the prime is contractually obligated to obtain cost or pricing data from subs. To reiterate: The prime may be obligated by its contract with the government to request cost or pricing data from the prospective replacement sub. The prospective sub is not obligated to provide it, but its refusal to do so may result in the loss of the subcontract.
brian: That would be my advice, unless the award was made through sealed bidding, in which case I think that there is no question that the prices can and will be revealed upon request. Of course, a CO might say in the solicitation that the government intends to release the price(s) of the winner during postaward debriefings and upon request and that competitors must submit their quotes or offers based on that understanding. I see no reason for refusing to disclose the name of the winner.
I don't know what that contracting officer meant, and I don't care why she refused to disclose the price. My point is that a circuit court of appeals has ruled on several occasions that prices can be protected information that should not be released. In light of those decisions, no contracting officer should release such information until he or she has checked with their FOIA advisor. Those of you who have claimed that commercial items are in some kind of special category in this regard, or that grounds maintenance prices cannot be trade secrets, and that it is ridiculous to refuse to release prices, do not know what you're talking about and should be ignored. The Department of Justice has issued extensive guidance about what should be done prior to the release of possibly protected information, and that guidance is consistent with what I have been saying. See http://www.usdoj.gov/oip/foiapost/2005foiapost17.htm. That guidance spells out extensive steps to be taken prior to releasing such information: Any advice to a CO to simply release constituent and line item pricing information during a debriefing for the reasons that you and Carl have given is reckless and should be ignored.
Difference Between Consent and Approve
Vern Edwards replied to Whynot's topic in Contract Administration
Absent an official definition, an ordinary dictionary definition should do. "Consent" means to give permission. "Approve" means to agree or accept as satisfactory. Defined in those ways, the two words are not synonymous. Of course, context can affect meaning.
Carl, I do not believe that FAR 24.202 protects contract prices from disclosure, whether overall prices or unit prices. FAR 24.202 is not the issue with respect to disclosure of prices. The issue is the case law of the DC Circuit. The DC Circuit has held that "constituent" or "line item" prices (not just line item "unit" prices) are protected under certain circumstances. Canadian Commercial Corp. and Orenda Aerospace Corp. v. U.S., 514 F.3d 37, at 40. Now, you say: I say that if a CO is asked for consitutent or line item prices during a debriefing she faces a dilemma. If she releases it, and it turns out to have been protected, then there will be a problem. In my opinion, she would be a fool to release the information on her own initiative. In my opinion, the proper thing for her to do would be to explain to the loser that such information has been found to be protected under some circumstances, that she is not sure whether those circumstance exist in the case in question, but that prudence dictates that she not disclose the information until there has been a formal determination in accordance with the agency's FOIA procedures. She should then tell the loser that if it wants the prices it must submit a FOIA request in accordance with the agency's FOIA procedures. She should provide the loser with a copy of those procedures, and assure the loser of prompt handling of any request received. You think that there is less ground for protection in a procurement of commercial items. I say that there are greater grounds. Joel thinks that grounds maintenance is too prosaic a service to justify trade secret protection of prices in a private transaction. I say that he has stated no rational basis for that position. I say again that your interpretation of FAR Part 12, as stated in your earlier post of today, is fundamentally unsound, and an excellent example of how not to read a regulation. I'm astonished to get such a reading from someone as knowledgeable as you.
Carl, I am frankly astonished by your last post. You are so wrong, and so obviously wrong, that I see no point in continuing a dialogue with you about this matter. When FAR 12.102? says that procurements of commercial items are subject to the policies in other parts of the FAR unless those policies are inconsistent with Part 12, it is nutty for you to say that failure of FAR Part 12 to mention another part gives creates an inconsistency with that part. If we were to follow FAR 12.102? and your logic, we would have to believe that Part 12 must restate every policy in every other part. I will let the readers look at what we have said and at FAR and make up their own minds. Sorry. Vern
The court in Canadian Commercial Corp. and Orenda Aerospace Corp., stated the rule quite succinctly" Among other reasons, there should be no disclosure of "constituent" or "line item" prices if it would cause substantial harm to the competitive position of the firm from which the information was obtained. Before releasing any such info the CO should contact the firm whose information has been requested. You can pooh-pooh this all you want, but as a businessman I understand why some firms in some markets do not want to disclose their prices. A firm that competed for a specially-tailored government grounds maintenance job may have given the government prices that it does not want disclosed to its competitors because it would harm its competitive position in the future. Instead of being sarcastic, you could try reading the case law. Saying that a position is ridiculous is not an argument. The government can reveal unit prices if the contractor does not object. If the contractor does object, then someone in the government (not the contracting officer) must decide whether to release the info despite the objection. If that is the decision, the contractor can file a reverse-FOIA suit. This nondisclosure rule does not apply in sealed bidding, in which public bid opening is mandated by statute.
That's no kind of argument. If aircraft maintenance prices can be trade secrets, why can't grounds maintenance prices be trade secrets? Do you know some rule that we don't know about what can and can't be trade secrets?
Carl, You said: I believe that you are wrong. Here is FAR 52.212-1, Instructions to Offerors -- Commercial Items, with respect to debriefing: Here is FAR 52.215-1, Instructions to Offerors--Competitive Acquisitions, with respect to debriefing: How, exactly, are those different? Both quote FAR 15.506(d). What did you mean when you said: Not stipulated? What do you think FAR 52.215(f)(11) is saying? In any case, you don't seem to understand that FAR Subpart 15.5 applies to commercial item acquisitions, per FAR 12.102( and ?, which read as follows: Where, exactly, are the inconsistencies between FAR Part 12 and FAR Part 15 when it comes to debriefings? Now here is FAR 15.506(e): Do you say that 15.506(e) does not apply to acquisitions of commercial items? If so, on the basis of what FAR text? Do you think that contracting officers must release trade secrets or confidential manufacturing processes and techniques when giving debriefings in commercial item acquisitions? Do you think that they must release the names of individuals providing reference information about an offeror's past performance during a debriefing in a commercial items acquisition? See FAR 24.202(a). Do you think that 10 U.S.C. 2305(g) and 41 U.S.C. 254b(d)(2)? do not apply to commercial item acquisitions? So far, all you have done is assert, assert, assert. You have not once proven any of your assertions by reference to specific regulations. You have, in fact, been consistently wrong on the text. Now, I am prepared to acknowledge an error if you can show me the textual basis for your assertions. P.S. The GAO will not consider protests about an agency's failure to give a debriefing or to give an adequate debriefing. That is a long-standing (circa 1986) position of the GAO. See The Ideal Solution, LLC, Comp. Gen. Dec. B-298300, 2006 CPD ? 101, footnote 2:
Basic Agreements and Individual Orders
That was my intent. However, my answer was not entirely correct. There are rules that kick in when a contractor's aggregate awards cross a certain threshold, e.g., EEO. So, awards under BAs and BOAs are individual contracts, but you do have to aggregate total awards for purposes of compliance with some rules. That is true whether the awards were under BAs/BPAs or not.
Carl, Up to now your argument has been that FAR Part 12 and FAR Part 15 are different in terms of disclosure rules. You've been wrong about that since Day One. Now you are reduced to mixing your metaphors and pleading "come on," which plea I take to be an appeal to common sense. I suppose that the common sense implication is that prices for something as commonplace as grounds maintenance cannot be trade secrets. I see no reason to rely on your opinion in that regard.
Vern Edwards posted a blog entry in Vern Edwards' Blog
GWU Professor Steve Schooner and his colleague Chris Yukins have written an article that Bob has posted on the Wifcon homepage: Public Procurement: Focus on People, Value for Money and Systematic Integrity, Not Protectionism. In it they say: I agree. Unfortunately, most Federal managers think that rebuilding the professional acquisition workforce means hiring as many people as they can, as fast as they can, while they can, and developing better PowerPoint training, which are exactly the wrong things to do. Here are some ideas: 1. Hire the right workforce to do the work at hand, which means more purchasing agents (GS-1105s) and procurement clerks and technicians (GS-1106s) and fewer contract specialists (GS-1102s). Overwhelmingly most contracting work consists of simplified acquisitions, placing orders against existing contracts, making routine contract modifications, and performing routine administrative and clerical tasks. That work does not require much knowledge of the FAR, does not entail cost analysis or complex price analysis, does not entail providing "business advice" to program personnel, and does not require a bachelor's degree with 24 hours of business credits. The people doing most of that work will never "advise" a program manager, write a complex acquisition plan, design an incentive contract, grant consent to subcontract, determine CAS compliance or defective pricing, issue a change order or negotiate a complex equitable adjustment, resolve data rights issues, or write a contracting officer's final decision. Be realistic: most people in contracting will spend their careers cranking out simple purchase after simple purchase, and most of them will be satisfied with that work most of the time. Stop overselling the work to college graduates who are looking for something more than that. 2. Take the rules about ordering and purchasing--mainly Subpart 8.4, Part 13, and Subpart 16.5--out of the FAR and put them in a separate chapter of Title 48, Chapter 100, to be called the "Federal Purchasing Regulation." Provide clear instructions for expeditious and administratively economical contractor selection and order placement. Make chiefs of contracting offices ensure that simple work is done simply and quickly, and not by using labor intensive and time-consuming FAR Part 15 contractor selection procedures, and hold them responsible for using wasteful procedures. 3. Provide the right training. For instance, most contracting folk are buying commercial items, so teach them how prices are set in the commercial sector instead of teaching them about learning curves and cost analysis, which few of them will ever use. Stop wasting time and money teaching everybody to do things that only some of them will ever do. 4. Develop better and specialized training for people who will be doing truly complex work. Make the training demanding and fail students who do not perform well in class. Let's face it, some people will not be able to cut it when it comes to the complex work. Let's identify them early on and make purchasing agents out of them, instead of complaining later about their incompetence. 5. Free the people doing complex work from administrative and clerical drudgery, so they can focus on the important contracting tasks and problems. Give them clerical and administrative support. By "complex," I mean awarding and administering contracts for noncommercial supplies that require higher-level contract quality requirements, and contracts for facility operations and maintenance services, program support services, large-scale research, and major systems development (IT, space, and weapons). Those people should be advising program officials, preparing acquisition and source selection plans, writing proposal preparation instructions and special contract terms, designing incentives, determining cost allowability and CAS compliance, performing cost and profit analyses, negotiating data rights, enforcing contract terms, negotiating nonroutine contract modifications, and resolving potential disputes. They should not be writing synopses and inputting data to FPDS. 6. Distinguish contracting officers from purchasing agents and establish government-wide standards for contracting officer appointment. Give purchasing agents appropriate contracting authority to handle simplified acquisitions and to place orders against existing contracts. 7. Establish an elite Contracting Officer Academy in Washington, DC, to provide advanced training to persons nominated for high level contracting officer appointments (very large dollar value and unlimited authority). 8. Establish a small, elite corps of SES-level "super" contracting officers, appointed by OFPP and permanently assigned to OMB, and available for temporary assignment to agencies in order to conduct acquisitions of national importance and unusual complexity. 9. Develop a job series for specification and statement of work specialists, and hire and train people to interview users about their needs and to write contract specifications and statements of work. The time is long since past to stop expecting people to gain those developmental and writing skills on a part time basis by giving them half-baked manuals and websites and sending them to two-day seminars. 10. Develop a job series entitled, Contracting Officer's Representative/Contracting Officer's Technical Representative and train specialists to monitor contractor performance and perform quality assurance and related functions. Being a COR/COTR is not a part time, secondary job for specialists in other fields. It is a full time job. I believe that these steps can significantly improve contracting operations and results in the long term, but none of this can happen unless OMB takes charge. The individual agencies lack vision and won't do it. They take the short term view, and will rush out and hire as many 1102s as possible, send them to the same half-baked training that contract specialists have received for years, and then use more people than necessary to do things inefficiently and ineffectively. In short, they would ruin a whole new generation. The president's chief of staff, Rahm Emanuel, has supposedly said: "Never allow a crisis to go to waste, they are opportunities to do big things." That's a motto for our time. We have a chance to fix much that is wrong with acquisition generally and contracting specifically. Let's do it, so that later we won't echo Lord Jim's lament: Ah! what a chance missed!
Vern Edwards commented on Vern Edwards's blog entry in Vern Edwards' Blog
San Diego? San Diego is not a distraction? It can be at the Shepardstown WV training center.
Carl, Sorry, but that dog won't hunt. FAR Part 12 and FAR Part 15 are not in conflict with respect to debriefings. In fact, the word "debriefing" does not appear in Part 12. Thus, FAR 12.102( applies, and FAR 15.506(e) is applicable to commercial item procurements. FAR 52.212-1 and 52.215-1 are the same on the topic of debriefings. So far, you have not established any ground for the assertion that procurements of commercial items should be "viewed in a different light" when it comes to reverse-FOIA objections to the release of purchase order price. Arguably, there are more grounds to object to the release of commercial prices than for noncommercial prices, especially if the commercial prices are discounted. I do not read the FOIA decisions of the DC Circuit as applicable only to procurements of noncommercial items. But I agree with you that brian should file a FOIA request if he wants to see the prices and the CO refuses. I presume that the agency will deny the request as a matter of course, unless the contractor voices no objections.
Carl, How so? What's the difference? FAR 52.215-1(f)(11) requires release of the same information. What am I missing?
Vern Edwards replied to ERS's topic in Subcontracts & Subcontract Management
Under an FFP LOE contract, the contractor promises to deliver a stipulated level of effort, e.g., 1,000 hours, doing work of a certain kind, in return for a firm-fixed-price. The contractor is not paid by the hour, or for completion of the work, but for delivery of the stipulated number of hours. The contractor is entitled to payment of the price only upon delivery of the level of effort. Under an L-H contract, the contractor is paid by the hour until specified work is completed or the contractor reaches the ceiling price, whichever comes first. If the contractor has not completed the work by the time it has reached the ceiling price, the contracting officer may increase the ceiling price and require the contractor to continue working.
Don is right, Joel. The DC Circuit's decision precludes the release of "constituent" or "line item" prices. It views those prices as trade secrets. A line item price includes a unit, quantity, unit price, and total amount. Generally, all offerors will know the unit and the quantity, thus by releasing the total amount the government is giving competitors the info they need to calculate the unit price, which is the trade secret to be protected. Thus, if a PO has only one line item, release of the PO total price will disclose the protected trade secret. I don't like this, but that's the way it is. The DC Circuit has affirmed its position three times, and the court's most recent decision showed some impatience with the Air Force's insistence. All of you should remember that improper disclosure of a trade secret is a federal crime.
On March 4, the White House Office of the Press Secretary released a memo from the president to the Heads of Executive Departments and Agencies⎯Subject: Government Contracting. Here are some highlights and my reactions. BFOTO. (Brilliant for Observing the Obvious, pronounced: buh-foe′-toe.) Uh, Mr. President, you might want to consider that we were seriously attacked in 2001, then we began fighting a couple of wars in nasty far away places, and then we had a really big hurricane, which was followed by a host of unusually intense natural disasters⎯fires, floods, and tornadoes?⎯all of which tend to call for urgent contracting, which makes planning hard, which tends to mean more noncompetitive and cost-reimbursement, time-and-materials, and labor-hour awards. I mean, these haven't exactly been "normal" times of late. Yeah? So? What's new? Just as we thought! Noncompetitive awards are not okay. Unless they are. Oboy. More "guidance" from the top, when what we really need is leadership and smart, bold action. Okay, so they're rounding up the usual suspects. Look, I think our new president is a very smart guy who has a lot of very smart folks working for him, and I wish them all well, but from a professional's point of view, the memo is silly. I'm going to be generous and assume that it's merely for public consumption and is not reflective of the quality of thinking about contracting operations that we can expect in the future. I still have hope. Heck, it's only a memo. Let's not give up too soon. (With appreciation to DJ Bleckley for "BFOTO.")