CONTRACTING OFFICER
UNLIMITED WARRANT BOARD
You are the PCO for a major missile program under which costs have
recently been increasing worryingly. Your management has been
briefed and is well aware of the contributing factors, and the
consensus is that some of the blame for increased costs is on the
government and some is on the contractor. During one meeting, a
Program Manager says, "We might as well prepare ourselves for a
Nunn-McCurdy breach." What is a Nunn-McCurdy breach and what
sorts of tools do you have as a PCO to lower the risk of having such a
breach? - ANSWERS-The Nunn-McCurdy Amendment in the United
States 1982 Defense Authorization Act and made permanent in 1983,
is designed to curtail cost growth in American weapons procurement
programs.
It requires notification of the United States Congress if the cost per
unit grows of more than 15% beyond what was originally estimated,
and calls for the termination of programs with total cost growth
greater than 25%, unless the Secretary of Defense submits a detailed
explanation certifying:
1) the program is essential to national security, that no suitable
alternative of lesser cost is available,
2) new estimates of total program costs are reasonable, and
3) management structure is (or has been made) adequate to control
costs.
,Contracting tools to avoid Nunn-McCurdy infractions include
anything that motivates cost controls, such as FPIF or CPIF contract
CLINs; EVM; Engineering Change Proposals; well-defined and
communicated requirements; etc.
Your PM approaches you with a requirement for customized
packaging materials for BLU-121. He provides an estimate of $109K
and says he understands the requirement will need to be competed
because no justification for sole source exists to the best of his
knowledge. He mentions that the work of a particular large business
in California is noteworthy, and he wants to call them to let them
know to be looking out for the sources sought and RFP once we post
them to FBO. Is this a good idea? - ANSWERS-Not particularly,
because FAR 19.502-4 requires all acquisitions between $3,000 and
$150,000 to be set aside for small businesses if there is a reasonable
expectation of competition.
•After releasing a sources sought synopsis and having 4 SB
respondents, you release a SB set aside RFP for the effort. After
waiting the appropriate length of time, you receive only 1 offer. The
PM says, "Well, I guess we'll have to re-open the competition to
include large businesses, right?"
What do you say?
A: DFARS 215.371-4 Exceptions to the "Only One Offer" Rule,
except SB set asides from requiring Cost of Pricing Data.
Bonus Question: What are other exceptions to that rule?
,A: Acquisitions less than or equal to SAT;
contingency/humanitarian/peacekeeping; R&D using BAA; and A&E
service contracts.
• You are the PCO on a Fixed Price contract for missile stands. The
stands were designed by the government and are built to print by the
contractor. The first batch of 5 stands was delivered last week and
there are rumblings in your office that something is wrong with them.
They fall over when the wind blows too hard. DCMA inspected the
stands and agrees with the contractor that the specification was
followed precisely. Your PM asks you to tell the contractor to put the
production on hold until a fix can be determined. How do you
proceed? - ANSWERS-Call the contractor and advise of the situation
and attempt to work toward a plan to minimize costs while the
imminent solution is being devised. If the contractor is not willing to
slow work on his own, you should consider a stop work order (FAR
42.1303) which should be issued "only if it is advisable to suspend
work pending a decision by the Government and a supplemental
agreement providing for the suspension is not feasible."
Issuance of a stop-work order shall be approved at a level higher than
the contracting officer.
What information needs to be included in a Stop-work Order? -
ANSWERS-(1) A description of the work to be suspended;
(2) Instructions concerning the contractor's issuance of further orders
for materials or services;
(3) Guidance to the contractor on action to be taken on any
subcontracts; and
, (4) Other suggestions to the contractor for minimizing costs.
You receive a proposal for a sole source $50M FFP effort. Your
Contract Specialist sends it over to Pricing for their assistance in
reviewing the proposal for adequacy. The buyer comes to you and
says "Pricing advises this proposal does not comply with FAR Table
15-2." What does that mean? - ANSWERS-Far Table 15-2 provides
instructions for preparing a contract pricing proposal when certified
cost or pricing data are required. The proposal should follow the
instructions listed in that section of FAR.
FAR Table 15-2 requires "a time-phased breakdown of direct labor
hours, rates, and cost by appropriate category". The proposal cost
elements are broken out by year (2014, 2015, etc). Would you
consider this to meet the requirement of the FAR Table 15-2? -
ANSWERS-It could meet the intended requirement, but good
judgment indicates that rates probably vary some within a 1-year
period and so the contractor should provide either monthly/quarterly
rates, or an aggregate with an explanation that's what they're doing.
Your office receives an urgent FMS requirement and after a few days
discussing how to satisfy it, your team arrives at the conclusion that a
UCA is the only acceptable course of action. Your Contract Specialist
comes to you with the DFARS and points to a passage that states "The
following undefinitized contract actions (UCAs) are not subject to this
subpart. However, the contracting officer shall apply the policy and
procedures to them to the maximum extent practicable (also see
paragraph (b) of this section)—(1) UCAs for foreign military sales"
The Specialist gets you thinking—there are compelling reasons for
avoiding some of the specified regulations listed in that section of
UNLIMITED WARRANT BOARD
You are the PCO for a major missile program under which costs have
recently been increasing worryingly. Your management has been
briefed and is well aware of the contributing factors, and the
consensus is that some of the blame for increased costs is on the
government and some is on the contractor. During one meeting, a
Program Manager says, "We might as well prepare ourselves for a
Nunn-McCurdy breach." What is a Nunn-McCurdy breach and what
sorts of tools do you have as a PCO to lower the risk of having such a
breach? - ANSWERS-The Nunn-McCurdy Amendment in the United
States 1982 Defense Authorization Act and made permanent in 1983,
is designed to curtail cost growth in American weapons procurement
programs.
It requires notification of the United States Congress if the cost per
unit grows of more than 15% beyond what was originally estimated,
and calls for the termination of programs with total cost growth
greater than 25%, unless the Secretary of Defense submits a detailed
explanation certifying:
1) the program is essential to national security, that no suitable
alternative of lesser cost is available,
2) new estimates of total program costs are reasonable, and
3) management structure is (or has been made) adequate to control
costs.
,Contracting tools to avoid Nunn-McCurdy infractions include
anything that motivates cost controls, such as FPIF or CPIF contract
CLINs; EVM; Engineering Change Proposals; well-defined and
communicated requirements; etc.
Your PM approaches you with a requirement for customized
packaging materials for BLU-121. He provides an estimate of $109K
and says he understands the requirement will need to be competed
because no justification for sole source exists to the best of his
knowledge. He mentions that the work of a particular large business
in California is noteworthy, and he wants to call them to let them
know to be looking out for the sources sought and RFP once we post
them to FBO. Is this a good idea? - ANSWERS-Not particularly,
because FAR 19.502-4 requires all acquisitions between $3,000 and
$150,000 to be set aside for small businesses if there is a reasonable
expectation of competition.
•After releasing a sources sought synopsis and having 4 SB
respondents, you release a SB set aside RFP for the effort. After
waiting the appropriate length of time, you receive only 1 offer. The
PM says, "Well, I guess we'll have to re-open the competition to
include large businesses, right?"
What do you say?
A: DFARS 215.371-4 Exceptions to the "Only One Offer" Rule,
except SB set asides from requiring Cost of Pricing Data.
Bonus Question: What are other exceptions to that rule?
,A: Acquisitions less than or equal to SAT;
contingency/humanitarian/peacekeeping; R&D using BAA; and A&E
service contracts.
• You are the PCO on a Fixed Price contract for missile stands. The
stands were designed by the government and are built to print by the
contractor. The first batch of 5 stands was delivered last week and
there are rumblings in your office that something is wrong with them.
They fall over when the wind blows too hard. DCMA inspected the
stands and agrees with the contractor that the specification was
followed precisely. Your PM asks you to tell the contractor to put the
production on hold until a fix can be determined. How do you
proceed? - ANSWERS-Call the contractor and advise of the situation
and attempt to work toward a plan to minimize costs while the
imminent solution is being devised. If the contractor is not willing to
slow work on his own, you should consider a stop work order (FAR
42.1303) which should be issued "only if it is advisable to suspend
work pending a decision by the Government and a supplemental
agreement providing for the suspension is not feasible."
Issuance of a stop-work order shall be approved at a level higher than
the contracting officer.
What information needs to be included in a Stop-work Order? -
ANSWERS-(1) A description of the work to be suspended;
(2) Instructions concerning the contractor's issuance of further orders
for materials or services;
(3) Guidance to the contractor on action to be taken on any
subcontracts; and
, (4) Other suggestions to the contractor for minimizing costs.
You receive a proposal for a sole source $50M FFP effort. Your
Contract Specialist sends it over to Pricing for their assistance in
reviewing the proposal for adequacy. The buyer comes to you and
says "Pricing advises this proposal does not comply with FAR Table
15-2." What does that mean? - ANSWERS-Far Table 15-2 provides
instructions for preparing a contract pricing proposal when certified
cost or pricing data are required. The proposal should follow the
instructions listed in that section of FAR.
FAR Table 15-2 requires "a time-phased breakdown of direct labor
hours, rates, and cost by appropriate category". The proposal cost
elements are broken out by year (2014, 2015, etc). Would you
consider this to meet the requirement of the FAR Table 15-2? -
ANSWERS-It could meet the intended requirement, but good
judgment indicates that rates probably vary some within a 1-year
period and so the contractor should provide either monthly/quarterly
rates, or an aggregate with an explanation that's what they're doing.
Your office receives an urgent FMS requirement and after a few days
discussing how to satisfy it, your team arrives at the conclusion that a
UCA is the only acceptable course of action. Your Contract Specialist
comes to you with the DFARS and points to a passage that states "The
following undefinitized contract actions (UCAs) are not subject to this
subpart. However, the contracting officer shall apply the policy and
procedures to them to the maximum extent practicable (also see
paragraph (b) of this section)—(1) UCAs for foreign military sales"
The Specialist gets you thinking—there are compelling reasons for
avoiding some of the specified regulations listed in that section of
