Blog - Archive for September 2011
Posted on Wednesday, September 28, 2011 12:51:41 PM
We have written about best value awards and protests pointing with particularilty to FAR 15.308 in "Anatomy of a Successful Bid Protest". Yesterday, Judge Bush of the Court of Federal Claims (COFC) overturned a best value contract award, permanently enjoined the award and ordered the government to cancel or amend the solicitation. The ruling was based on a violation of FAR 15.308. The agency failed to conduct a proper best value analysis and to document the decision.
In the words of Judge Bush:
"The source selection decision statement here is nothing more than the unsupported adoption of the SSEB report, along with a conclusory assertion that the intervenor's proposal represents the best value to the government. The court has held that the SSEB failed to perform a proper best-value tradeoff analysis. The court further holds that the SSA's adoption of the flawed SSEB recommendation does not show that the SSA conducted a comparative assessment of proposals, in this case a best-value determination, as required by the RFP. Furthermore, the documentation requirements of FAR 15.308 were not satisfied by the SSA in this procurement. In so holding, the court has essentially set forth the core of its ruling in this case, i.e., that the source selection decision in this procurement, as manifested in the SSEB report and the SSA's award decision, was fatally flawed and cannot stand."
Well said, Judge Bush. The best value decision must:
And, the SSEB also must perform and document a best-value analysis.
As we have pointed out before, to find out just how the government arrived at its best value decision, you must seek assistance from someone outside your firm authorized to view the source selection documents under a protective order. We represent clients in such cases before GAO and the COFC. Contact us if you have a best value award issue or pass this along to someone you know who may be interested.
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Posted on Friday, September 23, 2011 5:24:23 PM
What is a tort? It’s a personal injury or property damage inflicted negligently or intentionally. If someone rear ends your car, he has committed a tort. Government contractors can be sued for the alleged torts they commit. The U.S. Government, however, as a sovereign, is immune unless one of the exceptions in the Federal Tort Claims Act applies. The Supreme Court has extended this sovereign immunity in certain cases to the government’s contractors.
Posted on Wednesday, September 21, 2011 3:01:00 PM
Secretary of Defense Robert S. McNamara thought they were the cat's meow. He ordered the military services to use incentive contracts instead of cost plus fixed fee contracts in 1962. They are complicated. Perhaps that is why they fell into disuse starting in the 1980's. But they are back. DOD has directed again that the military services use FPI firm target contracts instead of cost reimbursement contracts when it makes sense to do so.
This type of contracting is not for the faint of heart or brain. The FPI firm target contract is the most complex of all contracts in FAR Part 16. Contract managers and administrators need to know all they can about how the incentives operate.
Fortunately, there is a must read document on the subject which is still a great resource: Ralph Nash's Government Contracts Monograph on "Incentive Contracting". The paper can be downloaded free of charge from the Social Science Research Network at http://ssrn.com/abstract=1928629.
In simple, general terms, FPI contracts predetermine profit based on certain variables. The parties can tie profit to cost or to a combination of cost, delivery and technical performance. Profit becomes a mathematical formula which depends upon how things turn out in performance of the contract. The parties predetermine the formula upon which profit is based thereby objectively forecasting the ultimate profit position for the contractor.
The Monograph goes into considerable detail on how to negotiate and administer the geometry of the incentive structure. Chapter 2 is an absolute must read. Anyone who studies it carefully will be a master of the subject.
Welcome back, FPI contracting. But follow Ralph's advice carefully. These contracts only work if you work out the proper formulas.
A simple example: Target cost $100, target profit $10, ceiling price $120, sharing 50/50. If costs come in at $80, the contractor gets another $10 or a total of $20 profit (still within ceiling price). If costs are $120, contractor share of overrun is $10 so contractor gets no profit.
Posted on Monday, September 12, 2011 4:29:59 PM
OFPP’s policy letter on inherently governmental, closely associated with inherently governmental and critical functions, issued September 12, 2011, complements The Federal Activities Inventory Reform Act (FAIR) and contemplates changes to FAR Subpart 7.5 which currently covers inherently governmental functions. The letter raises significant issues of concern to the services industry and to small businesses, in particular.
Posted on Thursday, September 8, 2011 6:37:15 PM
We’ve heard complaints that best value awards often appear biased. The good news is most, if not all, of these awards are fairly made. The bad news is, any bias is built in. Best value is designed to be a subjective judgment in the end, if not all the way through the evaluation process.
Posted on Thursday, September 8, 2011 2:20:53 PM
We have often said, “Do not protest unless the government violates a statute or regulation.” We mean it. Bid protests are rarely, very rarely, successful without showing a statutory or regulatory violation. So let’s take a look at the skeleton and circulatory system of a successful bid protest.
Posted on Wednesday, September 7, 2011 3:23:55 PM
The first rule is not to protest unless the government has violated an acquisition regulation. The most common violation is the government’s failure to follow the announced evaluation factors.
Posted on Friday, September 2, 2011 3:18:11 PM
Let’s say you are a small to medium sized company with government contracts and subcontracts. You recognize you are in the most highly regulated industry in the world. You also know the regulations are more voluminous and complicated than the U. S. Tax Code. You understand there are profound differences between government work and your work in the commercial world. But you also have become familiar with how solid your accounts receivable have become and you have seen the positive impact government work has on your cash flow. Finally, things seem to be going well so what could possibly be missing?