DoD Implementation of NDAA 2012 (PL 112-81 ), Sec 808, Para ( c )(1) and ( c )(2)

The deviation is implementing paragraphs ( c) (1) and ( c)(2) of the NDAA for FY 12.

Paragraphs (1) and (2) are separate paragraphs. They do not conflict.

Paragraph (1) does not apply to commercial items or to competitions. It does apply only to labor rates and overhead rates not yet formalized as of 6 June 2012. There is no waiver available to the Military Dept Secretary or to the Head of a Defense Agency.

Paragraph (2) applies to "annual price", not to rates, paid for the same or similar services. It also provides for waivers by the Secretaries or by the Defense Agency Heads. Expect the waivers to be used frequently.

I do not agree that the paragraphs do not conflict. Granted, the law and the waiver are rife with ambiguity, but the second paragraph in a plain English reading has the effect of nullifying the ostensible limitations of the first paragraph - and it is not clear that the conditions of the first paragraph apply to the second paragraph.

In any event, I agree with the statement, "Expect the waivers to be used frequently." Barring greater clarification of the law, I am sure this will be the pragmatic approach.

Para (1) applies to labor and OH rates; para (2) to prices.

The paragraphs of the law cannot be clarified. If the 6 June memo is to be clarified, watch for something in the PGI.

In the meantime, check with your service or department rep in charge of implementing the 6 June memo.

I realize what the two paragraphs may have intended to address - they just haven't done it in a way that makes the direction clear, or even feasible. For instance, "price" is inclusive of labor, OH, and all other cost elements in its make-up. Any natural market pressure upwards in the latter will most certainly create an increase in the former.

This is what happens wnen the attempt to lower government contracted services cost is addressed through an attempt to unnaturally reverse the natural cost progression of a free market enconomy . . . instead of, for instance, reforming program requirements.

As to checking with those in charge of implementation . . . you're talking to one of them! That's why I'm trying to sort this out!

Call the POC on the 6 June memo.

This is what happens wnen the attempt to lower government contracted services cost is addressed through an attempt to unnaturally reverse the natural cost progression of a free market enconomy . . . instead of, for instance, reforming program requirements.

Pseudo Milton Friedman nonsense. The policy letter simply tells COs not pay more than a certain amount for services. That is not "an attempt to unnaturally reverse the natural cost progression of the market economy." The policy does not constitute price controls. It does not force anyone to sell anything to the government at a government controlled price. It is absolutely appropriate for a big player in a market to say, "This is all I'm going to pay. No more." The question is whether the big player can make it stick.

This presumes the scope of the services has not changed in two years and enjoys apples to apples pricing. I do not see that kind of stability in my programs. Even if it were to be apples to apples, there is a second presumption (if one is anticipating success in using the tactic) that the government market is a must-have for the services provider. Not the case in my programs. . . . or as you say, "the question is whether the big player can make it stick". Hardly a game of chance I would want to play - given the choice.

Well, so much for exchanging economic theories. I am more interested in what other practicioners may be encountering, or concluding, as they deal with this new requirement. Anyone else in the high-dollar services arena?

(1) Unless rates are otherwise established by law, negotiation objectives for labor rates

and overhead rates not as yet formalized by the date of this deviation, for other than the

acquisition of commercial items or competitively awarded contracts or task or delivery orders

awarded to a contractor in fiscal year 2012 or 2013, shall not exceed labor rates and overhead

rates paid to the contractor for the same or similar contract services petformed under contract

with procuring DoD component in fiscal year 2010; and

(2) Any contract or task or delivery order awarded to a contractor in fiscal year 2012 or

2013 that provides for continuing services at an annual price that exceeds the annual price paid

by the DoD component concerned for the same or similar services in fiscal year 2010 shall be

approved in writing by the Secretary of the Military Department or Head of the Defense Agency

prior to contract award or order issuance.

I encourage you to re-read your excerpt with emphasis on the bolded. Since when has the DoD ever required that the only price we can agree upon is our objective position in a negotiation? Further, paragraph 1 applies to sole source situations. They are attempting to reign in costs in what they feel that they are overspending on. If I worked for a defense contractor and my boss told me that I could not accept anything below 14% profit, how is that different from what this policy does? It tells us that we cannot accept more than what the Government paid in 2010.

As far as I know, our agency is still attempting to interpret how we are going to comply. But, since you are looking for a more theoretical approach it seems, you are contradicting yourself. You claim it goes against free market economy swings in prices, and then claim you are a high dollar services buyer. Logic dictates that if you are a high dollar services provider (i.e. high demand), you would expect to see lower prices if you are buying more. Just because your negotiators aren't leveraging this to there advantage does not mean that they couldn't, especially when establishing multiple award IDIQs.

And, I'd encourage you to look at how you came up with your pricing from FY11 and FY12 from 2010, as the COL in the United States has not drastically risen, even in the DC area. Are your negotiators just using the standard, oh lets just add 3% inflation tactic? If so, you've been paying too much. The latest BLS data from the end of 2011 showed a roughly 1.6% increase in COL per year from 2009-2011, which is roughly half of what many people think is just the normal. It is their fault if they are not researching it further and just accepting it for what it is.

And, I completely disagree with your blanket statement of:

Even if it were to be apples to apples, there is a second presumption (if one is anticipating success in using the tactic) that the government market is a must-have for the services provider. Not the case in my programs.

Are you insinuating that many of these companies could do without the Government money they are getting, especially from DoD? If so, I'd really encourage you to go look at just how much the DoD spends on services each year, and then come back here and tell me how these companies would absorb that kind of blow if the Government just stopped contracting with them. This is why everyone in private industry is freaked out because of the Sequester, because it would be a drastic blow to all companies who contract with the Government, esepcially with DoD.

I think responsible contractors have already begun to factor the economic climate into their pricing by lowering escalation significantly. If a contractor is sensitive to the Government pay freeze, they will not escalate at 3 percent. 2% currently seems reasonable to me. Agreeing to revert to older/lower LH or T&M rates and holding steady for an additional year out will mean that the contractor is agreeing to out years of declining profit. It is unlikely that a contractor would willingly agree given the funding squeeze and potential for declining revenue.

I have heard from DOD Contracting Officers that say they are instituting a contractor salary freeze for the next option period on cost reimbursable type contracts. Specifically, they have directed contractor to invoice at the same rates next period as they have in the current period. To me that seems misguided, unworkable, and contrary to the FAR.

Contractors are bound by CAS to invoice for actual costs, and if a company gave an employee a raise in January, they can't agree to invoice for that employees services at a lower rate now.

Are these KOs misunderstanding this directive? Are they merely attempting to control funding in response to the potential sequestration?

I think responsible contractors have already begun to factor the economic climate into their pricing by lowering escalation significantly. If a contractor is sensitive to the Government pay freeze, they will not escalate at 3 percent. 2% currently seems reasonable to me. Agreeing to revert to older/lower LH or T&M rates and holding steady for an additional year out will mean that the contractor is agreeing to out years of declining profit. It is unlikely that a contractor would willingly agree given the funding squeeze and potential for declining revenue.

I have heard from DOD Contracting Officers that say they are instituting a contractor salary freeze for the next option period on cost reimbursable type contracts. Specifically, they have directed contractor to invoice at the same rates next period as they have in the current period. To me that seems misguided, unworkable, and contrary to the FAR.

Contractors are bound by CAS to invoice for actual costs, and if a company gave an employee a raise in January, they can't agree to invoice for that employees services at a lower rate now.

Are these KOs misunderstanding this directive? Are they merely attempting to control funding in response to the potential sequestration?

Unless labor and overhead rates have not been formalized as of 6 June, contracting officers are wrong if they are directing that invoiced costs in an option period cannot exceed costs for the current period. Suggest that they contact the POC for the memo.

I guess my original point was that the NDAA and the resulting DPAP memo are attempting to "hold the line", or even "move back the line", on services contracting cost by placing cost control responsibility on the hapless contracting officer in a way that flies in the face of marketplace economic realities. The CO is obliged to set negotiation objectives at cost levels that are two years old and/or actually negotiate net, bottom line prices at two-year-old expectation levels. This is notwithstanding any actual history that may have seen costs move upward by reason of any number of factors, including Federal regulation. It is obvious that Federal price controls cannot be mandated on industry. Thus, the contracting officer is potentially put in a position of impossibility of performance - with arbitrary, roll-back price objectives in lieu of a "fair and reasonable price" that reflects reality.

Yes, I believe heads of agency will be getting quite a few requests for waiver.

I guess my original point was that the NDAA and the resulting DPAP memo are attempting to "hold the line", or even "move back the line", on services contracting cost by placing cost control responsibility on the hapless contracting officer in a way that flies in the face of marketplace economic realities. The CO is obliged to set negotiation objectives at cost levels that are two years old and/or actually negotiate net, bottom line prices at two-year-old expectation levels. This is notwithstanding any actual history that may have seen costs move upward by reason of any number of factors, including Federal regulation. It is obvious that Federal price controls cannot be mandated on industry. Thus, the contracting officer is potentially put in a position of impossibility of performance - with arbitrary, roll-back price objectives in lieu of a "fair and reasonable price" that reflects reality.

Yes, I believe heads of agency will be getting quite a few requests for waiver.

You are wrong. To get the correct interpretation of Ginman's memo, call the POC.

napolik:

How is he wrong?

napolik:

How is he wrong?

I responded earlier today to the post by gboyle dealing with contracting officers' attempts to prevent the payment of higher labor and overhead rates during option years. Contracting officers cannot do this.

I participated in meeting with the memo's author, and I asked specifically if para (2) applies to options in current contracts. It does not.

rafieldjr rambling post in response to my post makes no sense to me. If it is supposed to address gboyle's question, it is wrong. Moreover, rafieldjr draws broad inferences about the memo's content. From what I have read and discussed about the memo, he is wrong.

The memo contains two separate paragraphs dealing with two different circumstances. It is based upon the words in statute, and in a Carter 3 June memo, which are fraught with different interpretations. Having sat in the meeting and listened to the confused interpretations of the memo, I believe any interpretation of the memo should be confirmed with DPAP prior to applying it to specific proposals or contracts.

Thanks.

I think responsible contractors have already begun to factor the economic climate into their pricing by lowering escalation significantly. If a contractor is sensitive to the Government pay freeze, they will not escalate at 3 percent. 2% currently seems reasonable to me. Agreeing to revert to older/lower LH or T&M rates and holding steady for an additional year out will mean that the contractor is agreeing to out years of declining profit. It is unlikely that a contractor would willingly agree given the funding squeeze and potential for declining revenue.

I have heard from DOD Contracting Officers that say they are instituting a contractor salary freeze for the next option period on cost reimbursable type contracts. Specifically, they have directed contractor to invoice at the same rates next period as they have in the current period. To me that seems misguided, unworkable, and contrary to the FAR.

Contractors are bound by CAS to invoice for actual costs, and if a company gave an employee a raise in January, they can't agree to invoice for that employees services at a lower rate now.

Are these KOs misunderstanding this directive? Are they merely attempting to control funding in response to the potential sequestration?

The CAS do not reqjuire a contractor to invoice for actual costs. They only require a contractor to account for costs in a certain way. Whether a contractor bills for costs that are properly accounted for is a different matter. For example, overrun costs on CAS covered cost reimbursement contracts can be measured, assigned and allocated in accordance with the CAS, but the contractor cannot bill for them until and unless additional funds are added to the contract. Similarly, nothing requires a contractor to bill the government for all costs it has incurred even if it is permitted to do so under the contract.

The memo contains two separate paragraphs dealing with two different circumstances. It is based upon the words in statute, and in a Carter 3 June memo, which are fraught with different interpretations. Having sat in the meeting and listened to the confused interpretations of the memo, I believe any interpretation of the memo should be confirmed with DPAP prior to applying it to specific proposals or contracts.

Very revealing. I don't need to hear any more than that. "DPAP -- We have a problem."

I guess my original point was that the NDAA and the resulting DPAP memo are attempting to "hold the line", or even "move back the line", on services contracting cost by placing cost control responsibility on the hapless contracting officer in a way that flies in the face of marketplace economic realities.

I was not a participant in any discussions with the author's of either the June 3 or June 6 memos. I do recognize, however, that both memoranda equate to cost cutting measures. Simply put, DoD activities are to endeavor to spend less when it comes to contracting for services. Most of us "hapless" contracting folks should have seen such directives coming down the pike the first time the word "sequestration" was used in 2011. Why do people construe that the meaning to be ascribed is a government mandate that it will not pay anymore despite what may be a fair and reasonable price? When did re-examining needs and descoping become taboo terms? For that matter, in an economy that is barely growing and has high levels of unemployment, how does anyone continue an existing contract without thinking seriously about recompetition in lieu of exercising an option containing price escalation?

I don't understand why the June 6 memo should cause any distress. It seems reasonably clear to me, as clear as I would want it to be. There is no way I'd ask for further clarification.

The memo contains two provisions. The first is a limitation on certain negotiation objectives, nothing else. The second requires higher level approval of any deal for a new contract or order "for continuing services" with an annual price that exceeds the annual price paid in 2010 for "the same or similar services." That's it. The memo says nothing about "waivers."

Many negotiators, as agents, must get their principal's approval of their negotiation plans and tentative agreements. That is all that the memo requires. If the agent cannot reach agreement within the principal's limits he or she passes the word up through channels and waits for instructions. What's the big deal? Real estate agents do it all the time. If they can't get the deal the buyer or seller wants, they make suggestions. A CO should be at least as competent as the average real estate agent.

In this case, the principal, DOD, is limiting the bargaining authority of its agents -- contracting officers. That is a classic negotiation tactic. When I negotiated contracts for the Air Force I asked for such limitations. They are limitations on the power to make concessions. Only a fool does not want such a limitation. The negotiator can look at the guy or gal across the table and say, "I cannot agree to pay more." What happens next depends on the respective skills of the negotiators. The memo leaves the parties free to come up with any number of solutions.

Some of the grumbling in this thread, whining, actually, is pathetic. I agree with MBRown: Times are hard and everybody has got to bite the bullet. I guess I don't find the memo bothersome because I came up during a time and in an organization when most contract prices were established through negotiation instead of competition. We were expected to solve problems and make deals, and that's what we did. When we couldn't get a deal within the limits set for us we made a plan, got it approved, and went back to the table. That's what they pay COs for.

This June 6, 2012 DPAP memo is a train wreck. You do not control costs by limiting rates and prices, I think someone in the past several hundred years of government contracting would have thought of this if it made sense. You control costs by limiting the scope of the effort. There are so many problems with this concept of using rates (and prices) since 2010 (CAS being one of them as the person had stated above, funding, FPP vs Cost Type, etc). Anyone 'in the trenches' would realize the problems with this bologna are endless.

I too was surprised there has not been a large outcry in the procurement community over this. The day I became aware of this memo June 12, 2012. I thought it would have been retracted by the end of that week. I am sure once someone tries to negotiate using this bologna (especially on a FFP contract), industry will fight and win.

This memo will be retracted, it is complete nonsense. I also am confident that the two individuals within this memo (Gomersall and Ginman) will be promoted very soon for their complete lack of sense in issuing this bologna.

This June 6, 2012 DPAP memo is a train wreck. You do not control costs by limiting rates and prices, I think someone in the past several hundred years of government contracting would have thought of this if it made sense. You control costs by limiting the scope of the effort. There are so many problems with this concept of using rates (and prices) since 2010 (CAS being one of them as the person had stated above, funding, FPP vs Cost Type, etc). Anyone 'in the trenches' would realize the problems with this bologna are endless.

I too was surprised there has not been a large outcry in the procurement community over this. The day I became aware of this memo June 12, 2012. I thought it would have been retracted by the end of that week. I am sure once someone tries to negotiate using this bologna (especially on a FFP contract), industry will fight and win.

This memo will be retracted, it is complete nonsense. I also am confident that the two individuals within this memo (Gomersall and Ginman) will be promoted very soon for their complete lack of sense in issuing this bologna.

Don't shoot the messenger!

DPAP is obligated to implement the paragraphs (c ) (1) and (c ) (2) of Section 808 of the NDAA for Fiscal Year 2012.

See wifcon.com/dodauth12/dod12_808.htm

This June 6, 2012 DPAP memo is a train wreck. You do not control costs by limiting rates and prices, I think someone in the past several hundred years of government contracting would have thought of this if it made sense. You control costs by limiting the scope of the effort. There are so many problems with this concept of using rates (and prices) since 2010 (CAS being one of them as the person had stated above, funding, FPP vs Cost Type, etc). Anyone 'in the trenches' would realize the problems with this bologna are endless.

Infoseeker:

That is an extreme overreaction, and I'm being nice. And spare us the "in the trenches" business. That's just saying that if you are not at the working level you cannot appreciate the effect. Bull.

First, the memo does not say anything one way or another about descoping. That is left to the requiring activities and the contracting offices to decide. It simply mandates negotiation objectives. Big deal.

Second, when you are dealing with an industry and have leverage because of your size, one way to reduce your costs is to force the industry to reduce its costs. You can do that by saying that you want them to roll back their costs and prices. Bargaining will determine all outcomes. If you think that large players in the commercial sector do not do that you are out of touch.

The memo does not require that COs do anything but set certain negotiation objectives and seek approval of certain contract prices. I think that what we're seeing in this thread is the reaction of people who are used to getting prices through competition and FSS and other IDIQ contracts. COs have long been accused, with good reason, for not doing enough negotiating, and that's what we're seeing in overreactions like yours and some of the others.

And it's baloney, not "bologna."

Disagree with your disagree 100% on all issues.

Let us see how long this bad memo takes to be retracted. It is only a matter of weeks/months because it is not in touch with reality. It was created by people who are 'not in the trenches.'

You do not control costs by limiting rates and prices, I think someone in the past several hundred years of government contracting would have thought of this if it made sense.

This is a very interesting statement. I suppose perspective is the issue. I agree that the amount of investment needed to produce and deliver an item or service does not necessarily decrease, if the price paid for that item or service decreases. Further, I support the notion that a price ceiling might have the effect of creating shortages or deteriorated quality, while price floors might have the opposite effect. However, I read nothing in the subject memoranda that sets a ceiling on the price paid for a given service. I did not see a price control put into effect. Rather I read the implementation of a law setting a ceiling/limit on the aggregate amount available for obligation with guidance for objectives and approval levels. Nothing in this is a price control. It is a budget control (i.e., the Government may only spend up to X dollars in the aggregate) for the purchaser to follow when going to market.

Will a limit on the aggregate amount available for obligation reduce the amount available to be paid to the entire potential pool of obligees? Certainly. Will a limit on the aggregate amount available for obligation reduce the quality or quantity of services acquired? Perhaps. Then again, buyers and sellers can often arrive at creative solutions to perceived problems.

And it's baloney, not "bologna."

Excuse me, Monsieur, but I fear you have been captured by the barbarian Anglocentrics. Baloney is an anglicized version of the Italian word Bologna.

I don't want to create another source of disagreement with the positions you have taken in this thread, but I fear that, if I don't challenge you, you will be saying that the famous spaghetti maker is Chef Boyardee, not Chef Boiardi.

Signore,

Baloney (or boloney) is the correct spelling for: foolish or deceptive talk; nonsense, humbug; bologna is the spelling for a seasoned smoked sausage made of mixed meats, which is also spelled baloney by barbaric Americans. Check the Oxford English Dictionary; Oxford Dictionary of English; and the American Heritage College Dictionary, among others. Bologna is not the proper spelling for the meaning Infoseeker intended. I doubt he was talking about sausage. What he has been saying is baloney.

Disagree with your disagree 100% on all issues.

Let us see how long this bad memo takes to be retracted. It is only a matter of weeks/months because it is not in touch with reality. It was created by people who are 'not in the trenches.'

Baloney.

Apparently, Infoseeker is so deep in the trenches that he doesn't realize that the limitations imposed by the memo are actually imposed by statute, Pub. L. 112-81, Sec. 808. The memo implements paragraphs ( c)(1) and (2). Here is the statutory language:

wifcon.com/dodauth12/dod12_808.htm

SEC. 808. TEMPORARY LIMITATION ON AGGREGATE ANNUAL AMOUNT

AVAILABLE FOR CONTRACT SERVICES.

(a) L**IMITATION.—Except as provided in subsection (, the total**

amount obligated by the Department of Defense for contract services

in fiscal year 2012 or 2013 may not exceed the total amount

requested for the Department for contract services in the budget

of the President for fiscal year 2010 (as submitted to Congress

pursuant to section 1105( of title 31, United States Code) adjusted

for net transfers from funding for overseas contingency operations.

( E**XCEPTION.—Notwithstanding the limitation in subsection** (a),

the total amount obligated by the Department for contract

services in fiscal year 2012 or 2013 may exceed the amount otherwise

provided pursuant to subsection (a) by an amount elected

by the Secretary of Defense that is not greater than the cost

of any increase in such fiscal year in the number of civilian billets

at the Department that has been approved by the Secretary over

the number of such billets at the Department in fiscal year 2010.

( c) G**UIDANCE.—Not later than 60 days after the date of the**

enactment of this Act, the Secretary shall issue guidance to the

military departments and the Defense Agencies on implementation

of this section during fiscal years 2012 and 2013. The guidance

shall, at a minimum—

(1) establish a negotiation objective that labor rates and

overhead rates in any contract or task order for contract services

with an estimated value in excess of $10,000,000 awarded

to a contractor in fiscal year 2012 or 2013 shall not exceed

labor rates and overhead rates paid to the contractor for contract

services in fiscal year 2010;

(2) require the Secretaries of the military departments

and the heads of the Defense Agencies to approve in writing

any contract or task order for contract services with an estimated

value in excess of $10,000,000 awarded to a contractor

in fiscal year 2012 or 2013 that provides for continuing services

at an annual cost that exceeds the annual cost paid by the

military department or Defense Agency concerned for the same

or similar services in fiscal year 2010;

(3) require the Secretaries of the military departments

and the heads of the Defense Agencies to eliminate any contractor

positions identified by the military department or

Defense Agency concerned as being responsible for the performance

of inherently governmental functions;

(4) require the Secretaries of the military departments

and the heads of the Defense Agencies to reduce by 10 percent

per fiscal year in each of fiscal years 2012 and 2013 the funding

of the military department or Defense Agency concerned for—

(A) staff augmentation contracts; and

( contracts for the performance of functions closely

associated with inherently governmental functions; and

(5) assign responsibility to the management officials designated

pursuant to section 2330 of title 10, United States

Code, and section 812( of the National Defense Authorization

Act for Fiscal Year 2006 (Public Law 109–163; 119 Stat. 3378;

10 U.S.C. 2330 note) to provide oversight and ensure the

H. R. 1540—193 implementation of the requirements of this

section during fiscal years 2012 and 2013.

(d) D**EFINITIONS.—In this section:**

(1) The term ‘‘contract services’’ has the meaning given

that term in section 235 of title 10, United States Code, except

that the term does not include services that are funded out

of amounts available for overseas contingency operations.

(2) The term ‘‘function closely associated with inherently

governmental functions’’ has the meaning given that term in

section 2383((3) of title 10, United States Code.

(3) The term ‘‘staff augmentation contracts’’ means contracts

for personnel who are subject to the direction of a government

official other than the contracting officer for the contract,

including, but not limited to, contractor personnel who perform

personal services contracts (as that term is defined in section

2330a(g)(5) of title 10, United States Code).

(4) The term ‘‘transfers from funding for overseas contingency

operations’’ means amounts funded out of amounts available

for overseas contingency operations in fiscal year 2010

that are funded out of amounts other than amounts so available

in fiscal year 2012 or 2013.

Infoseeker, shouting from the trenches where he is keeping his head below the parapet, thinks the memo will be withdrawn in "weeks/months". I don't see how, unless Congress repeals the law or the Secretary of Defense intends to lead a coup d'etat.

Signore,

Baloney (or boloney) is the correct spelling for: foolish or deceptive talk; nonsense, humbug; bologna is the spelling for a seasoned smoked sausage made of mixed meats, which is also spelled baloney by barbaric Americans. Check the Oxford English Dictionary; Oxford Dictionary of English; and the American Heritage College Dictionary, among others. Bologna is not the proper spelling for the meaning Infoseeker intended. I doubt he was talking about sausage. What he has been saying is baloney.

The poster said he was negotiating with bologna. I have negotiated with bologna as well as mozzarella and prosciutto. However, the value was below $10 million, and they were commercial items. So, the 6 June memo was inapplicable.

I have a technical question regarding the June 6 "Class Deviation." From what FAR/DFARS section or requirement is DoD deviating? Could it be that this is another DPAP Policy memo that has been issued in the guise of a deviation?

Good question. I've wondered that myself and I've asked around, but nobody knows the answer.

I have a technical question regarding the June 6 "Class Deviation." From what FAR/DFARS section or requirement is DoD deviating? Could it be that this is another DPAP Policy memo that has been issued in the guise of a deviation?

DFARS 215.406-1 Prenegotiation objectives.

Vern,

That gigantic cut and paste thing you did - that is pure bologna.

This memo will be withdrawn very soon. As soon as the people in the trenches (private industry and KOs) have to deal with this, the insanity and nonsense of it will SHINE like a piece of bologna on fire in a dark room.

Keep those goofy citations out of this, it will be removed soon. Once again, the trenches will prove to be correct, as they always are.

Infoseeker:

Boy, you really have gone off the deep end. Why should I keep the citation out? The memo itself says that it was issued to implement the statute I cited. You're losing it, Info. Try to hang in there until we can medevac you out.

Where DO you get your sensational similes? "Shine like bologna on fire in a dark room"? Really?

I just tried to burn a piece of bologna. Nothing. Wouldn't catch fire, much less shine. I tried both dry and wet. Is there a secret?

DFARS 215.406-1 Prenegotiation objectives.

I don't see a deviation from that section which merely refers yo to the PGI. If anything, the "deviation" is an addition to the PGI.

... it will SHINE like a piece of bologna on fire in a dark room.

I just tried to burn a piece of bologna. ...

Sweet, Garlic,or Oscar Mayer?

I'm not sure. I don't eat bologna, but there was some in the fridge from a catered party. I don't know what brand it was.

It was kind of old. Could that be why it didn't shine/burn? Shining bologna. I'd like to see that. Imagine if the Blade Runner script could be rewritten:

"I've seen things you people wouldn't believe. Attack ships on fire off the shoulder of Orion. I watched c-beams glitter in the dark near the Tannhäuser Gate. Shining bologna. All those moments will be lost in time, like tears in rain. Time to die."

I have a technical question regarding the June 6 "Class Deviation." From what FAR/DFARS section or requirement is DoD deviating? Could it be that this is another DPAP Policy memo that has been issued in the guise of a deviation?

Sometimes DPAP issues things that they call "class deviations" that are technically not deviations at all. Another example is Class deviation 2012-O0006, Update to Accelerated Payments to Small Business. Conversely, DPAP sometimes issues things they call "policy memos" that are really class deviations. I don't know why they do this.

Sometimes DPAP issues things that they call "class deviations" that are technically not deviations at all. Another example is Class deviation 2012-O0006, Update to Accelerated Payments to Small Business. Conversely, DPAP sometimes issues things they call "policy memos" that are really class deviations. I don't know why they do this.

In this case, the 6 June memo addresses negotiation objectives. And, it is implementing legislation. It makes sense to me to implement legislation affecting DoD Prenegotiaiton Objectives by issuing a deviation to the DFAR section addressing Prenegotiaion Objectives for DoD.

Am I full of bologna?

It could be a deviation as defined at FAR 1.401(f), in which case there would be no specific rule from which the policy deviates. The memo says that the subject matter will be incorporated into the FAR or DFARS unless it is rescinded. My guess is DFARS.

I called around yesterday to people in DC to ask if the statute is any kind of major problem and no one seemed to think that it is. No one knew of any repeal effort. I've still got a couple of calls out, and if I learn anything I'll post it.

napolik, I've never known you to be a big fan of bologna. You're mostly a mozzarella di bufala, pizza, and seafood guy, with the exception of the occasional steak when in Toscana or Crystal City. You're probably full of octopus or some really horrid-looking Mediterranean fish from time to time, maybe salami, but not bologna.

Just learned that there is a plan to clarify the June 6 memo to answer some questions about its meaning. It appears that there is widespread misunderstanding among COs of both the statute and the memo. The memo won't be rescinded.

The Senate version of the FY 2013 NDAA would extend the rule into FY 2014.

Thanks for posting that, Vern. Infoseeker and I eagerly await the more careful re-reading of the "deviation", to be following by the gesture of the hand clasped over the agape mouth, and the muffled utterance, "What were we thinking?!..." Perhaps it will be found that the "misunderstanding" of those whiney COs reading plain English will be best "clarified" by rewriting the law and its implementing memo.

By the way, I have been at this for 39 years (contracts, program, and operations management, government and industry). I have done plenty of negotiating - on narrow to broad charters. I get it. This subject has nothing to do with that - it has to do with a nonsensical piece of guidance that represents a growing tendency out of Base Camp Beltway to those of us on on the LZs and FSBs (I'm also a Vietnam vet).

One. More. Time. We are talking about statute. The DOD policy memo merely implements the statute pending inclusion in FAR or DFARS. The guidance provided by DPAP was largely dictated by statute. Are you complaining about the statute or the DPAP implementation?

If you're complaining about the statute, you're wasting your breath. You have a problem to solve, so start solving it.

If you're complaining about the DPAP implementation, be specific. What's bothering you? Does the memo depart from the statute? How so? Do you not understand it? What part?

I would not ask for clarification. The statute and the memo leave some wiggle room. Perhaps intentionally. The clarification might not.

Instead of complaining, why don't we focus on figuring out what the statute and DPAP guidance say?

1. The limitation is not on individual contracts, but on contract services "in the aggregate." The exact amount of the limitation is will be hard to determine, because it is not specified in absolute terms. Thus, there are no Antideficiency Act risks for contracting officers.

2. The limitation does not apply to contract services for overseas contingency operations and to contracts"relating to" research and development. Those are rather broad exceptions and cover a lot of contracts.

3. The limitation is not absolute, but can be exceeded as "elected" by the Sec. Def., within limits.

4. The guidance dictated by the statute and revised by DPAP is designed to help attain the goal in the aggregate and sets no limits on the amounts negotiated for individual contracts.

5. The DPAP guidance does not apply to contracts covered by the the Service Contract Act, contracts for commercial items, and to competitively awarded contracts.

Some practical concerns being expressed by PCOs that I have heard:

1. Paragraph (1) of the memo makes reference to "...rates paid to the contractor for the same or similar contract services performed under contract with procuring DoD component in fiscal year 2010". (Note: The emphasized language was not in the statute.) DPAP uses DoD Component as a broader context in its various memos than the contracting activities it lists in the DFARS 202.101. (No defintion of DoD Component exists in the DFARS.) Several DoD Components (e.g., Navy, Army) are rather large entities with multiple Heads of Contracting Activity which often have smaller procuring activities thereunder. So how will a PCO at one Navy buying activity know the rates of same or similar services paid in FY10 to a contractor under any contract/order across the entire Navy?

2. The same concern applies to paragraph (2) with regards to the annual price (not rates) paid in FY2010. How would a PCO find this out and how could a Secretary of MILDEP or Head of Defense Agency verify?

3. Paragraph (1) can be interpreted to mean a specific contractor and how the FY12/13 to-be-negotiated rates compare to FY10 rates paid to that same contractor. Can paragraph (2) be interpreted the same way? I say yes. Even if it is ambiguous, a PCO simply applies the notion of "contra proferentem" so if the drafters of the statutory/regulatory/policy language aren't nonambiguous they should not blame the folks for how they interpret the language but use more specific, exact language. However, applying that same approach for interpreting "DoD component" in paragraph (2) to mean HCA level or lower-tier procuring activity likely wouldn't be taken by the HCAs or lower-tier procuring activities without knowing how the waiver authority (SPEs) would interpret it and the SPEs are trying to work that out with the DAR Council know.

Until the PGI language comes out, HCAs, lower-tier procuring activities, and PCOs are left to their own discretion. The PCOs are the ones executing the contracts/orders so they need to exercise their independent business judgment when interpreting the existing statutory and class deviation language. This is what we have to do when statutory/regulatory/policy language that is ambiguous.

Until the PGI language comes out, HCAs, lower-tier procuring activities, and PCOs are left to their own discretion. The PCOs are the ones executing the contracts/orders so they need to exercise their independent business judgment when interpreting the existing statutory and class deviation language. This is what we have to do when statutory/regulatory/policy language that is ambiguous.

Bingo. And if you're lucky you won't get clarification any time soon.

So is this the new, acceptable norm? When ambiguous, confusing direction comes out of Washington, contracting officers should revel in the opportunity to leverage the uncertainty by using their best business judgment? Is this the Mad Hatter's tea party?

--and, in anticipation of the claim that it is our responsibility to interpret language rife with multiple interpretations, as that is a basic responsibility of practicioners of contract law - no, I'm sorry, it has NOT always been this way. This is a new era of blatant ambiguity and impracticality that I have not seen before.

Here's what SHOULD happen: DPAP should go to the Hill with a well stated petition to have the law changed to something that makes sense - something that doesn't merely rely on testimony that services represents a low hanging fruit ripe for the cost-saving picking (see the Wifcon marginal notes for Section 808). They should then implement the rational law in the normal fashion, such as not to engender the kind of general confusion that we now see. What a concept.

Sorry, Vern and Napolik, the emperor has no clothes.

Sure, DOD should go to Congress if it wants the law changed. In the meantime, the law is there, whether you or anybody else likes it or not.

Keep in mind that the heart of the statute does nothing more than limit aggregate obligations by DOD. It does not limit obligations of any particular DOD component (Army, Navy, Marines or Air Force), or of any contracting activity, or of any contracting office. DOD has to figure out how it will comply and extend instructions to its subordinates. Congress ordered DOD to issue guidance and said that the guidance must say particular things. Beyond that, it is up to DOD to decide how it will comply. Until then COs should read the guidance, decide what it means, and go forward as best they can until given other instructions. It will take time for DOD to sort things out and guidance will be evolutionary. Deal with it.

I hope you keep posting in the way that you have, because it gives me the opportunity to show our young people how a professional should respond in this situation, which is to think, plan, and act, not to complain, whine, and make cryptic predictions of imminent doom. They have two models to follow: you, on the one hand, and Napolik and me on the other. They can choose.

Yes, they can, Vern - straight talk or bureaucratic balderdash.

To our younger contracting practitioners:

When behind enemy lines, lost, alone, and in the dark, head toward the sounds of battle. Don't just sit there waiting for someone to find you and tell you what to do.

Here is some straight talk: Sec. 808 of the NDAA for FY 2012 and the DPAP guidance that followed are nothing. TINA and CICA were much worse. What does "cost or pricing data" mean? (We're still litigating that issue.) What is adequate price competition? What constitutes discussions in source selection? What does "full and open competition" mean? When FASA was enacted, there were the people who sat around complaining that the definition of commercial item was unclear. We're still arguing about what is a claim more than 30 years after passage of the Contract Disputes Act of 1978. You are in the wrong business if you need perfect clarify from above before you can act.

In every case, there are complainers and there are people who think, make a decision and a plan, and move out. You can be one or the other. Choose.

In time there will be clarifications, adjustments, changes in direction, and reversals. Deal with them when they happen. Until then: Improvise. Adapt. Overcome.

The memo has been incorporated into the DFARS. There have been a few tweeks. See here:

http://www.gpo.gov/fdsys/pkg/FR-2012-06-29/html/2012-15569.htm

I pulled the final rule from the Federal Register on 29 Jun 12 and furnished it to my supervisory contracting officers asking if we should implement it by adding the provisions IAW the prescriptions. I was told emphatically that until our HQ told us what to do, that we were not to take any action prescribed in the final rule. I find this amazing. The final rule is a final rule - the DFARS has been updated. We are a DoD agency. Now we have to wait until our HQ tells us to do what the DFAR update already tells us to do and until then, we are operating without the directions prescribed by the new provisions.

The Federal Register announcement at the end of Napolik's link does not relate to NDAA 2012, Sec 808. It pertains to the "only one offer" policy.

The memo has been incorporated into the DFARS. There have been a few tweeks. See here:

http://www.gpo.gov/fdsys/pkg/FR-2012-06-29/html/2012-15569.htm

I posted on the wrong thread. See "Competitive becomes sole source action" under The Contract Award Process Thread.

To our younger contracting practitioners,

Refiledjr is correct. Learn how to differentiate between balderdash and straight talk.

Sure there are always ambiguities in life, but when crap like this comes out that is outlining a clear path to nonsense (using 2010 rates, COME ON!!), make some noise and try to affect change.

This will be retracted soon, as I stated.

You mean repealed, not retracted. It's law. Congress does not retract a law, it repeals it. Retracting the DPAP memo won't accomplish much, because it is just mandatory implementation of the statute.

Just obtained a copy of a letter dated May 11 from the Under Secretary of Defense for Personnel and Readiness, Jo Ann Rooney (Acting) to Representative Maurice Hinchey of the House of Representatives in response to a letter signed by Hinchey and 130 other representatives on March 26. Here is what the Under Secretary said about Section 808:

Cap spending on service contracts -- The Department is committed to complying with and implementing Congressional direction, in section 808 of the FY2012 NDAA, to limit aggregate spending on service contracts. Guidance - developed jointly by my office and the offices of the Under Secretary of Defense. Comptroller (USDC ) and the Under Secretary of Defense for Acquisition, Technology, & Logistics (USD(AT&L) - has been prepared for signature by the Deputy Secretary of Defense to comply with section 808. This guidance will limit total obligations for contracted services, directing that they do not exceed FY2012 enacted levels and for FY2013, the budget request. Additionally, guidance issued by the Deputy will direct that any instance of inherently governmental work found to be performed under contract be immediately in-sourced to government perfonnance or divested, and that Components reduce obligations for staff augmentation contracts and contracts for the performance of functions closely associated with inherently governmental functions by 10 percent in FY2012 and FY2013.

Doesn't sound like DOD is planning on asking for repeal of Section 808. Judging from the letter from Congress, with is attached to the Under Secretary's letter, Section 808 is part of a movement to cut the use of contract services and going back to using civilian employees.

I do not see anything in Rooney's remarks that pledges allegiance to 2010 price levels. In fact, this appears to want to deflect that notion by merely signing up to the obvious: don't exceed 2012 enacted levels and the 2013 budget, no contracting for inherently governmental work, reduce support services contracting, motherhood and apple pie. We already knew all that and what's more - it's within the realm of the possible!

In fact, the silence in Rooney's remarks on the 2010 pricing bogey is deafening!

This makes the whole DoD treatment of Section 808 even curiouser. --Sorry, far from "case closed".

rafieldjr,

Did you review the conference reports on Section 808, found in the WIFCON analysis? I think it explains what Congress was thinking and how DOD leadership's remarks led to the statutory direction. (Thanks Bob, for continuing to provide such a useful service.)

From the contractor's point of view, it's a pain to work with the CO's to help them show compliance. But then again, many things these days are a pain, such as trying to negotiate prices without an FPRA to rely on. Somehow, we all manage to get the job done regardless of the obstacles Congress and USD (AT&L) put in our way.

H2H

In fact, the silence in Rooney's remarks on the 2010 pricing bogey is deafening! This makes the whole DoD treatment of Section 808 even curiouser. --Sorry, far from "case closed".

The case is never closed.

Rooney's memo predates DPAP's, which does invoke the 2010 pricing bogey. Moreover, Rooney invoked the 2012 "enacted levels." The enacted level is the 2010 budget request. If you are suggesting that DOD simply will not comply, I have no response. What can anyone say to that?

Did you review the conference reports on Section 808, found in the WIFCON analysis? I think it explains what Congress was thinking and how DOD leadership's remarks led to the statutory direction.

Yes, I did, and alluded to the same in post #48. The history is not mysterious, only the logic.

The case is never closed.

I'm glad that is established - perhaps there is hope after all!

Rooney's memo predates DPAP's, which does invoke the 2010 pricing bogey.

So, Rooney's memo really doesn't have much significance to the point of the discussion - the 2010 bogey.

If you are suggesting that DOD simply will not comply, I have no response. What can anyone say to that?

Will not . . . or can not? I project the latter.

Will not . . . or can not? I project the latter.

And why do you project so? Have you had a discussion with your programs to see if it is feasible to tone down the requirement to become compliant with your 2010 spending levels on services? Have you assessed the requirements to see if all of them are truely necessary? Have you talked to the contractor to see if anything can be done to find savings?

I'm thinking not, because there is always a way to accomplish something. You have simply either not looked hard enough, or do not care enough to try. You'd rather complain about it than finding a way to accomplish it. Your contractors will be the first to tell you where you could save money on your requirement and what is costing you the most.

When has any case in contracting ever been closed? Everything goes around and comes back again.

Rooney's memo expresses DOD's intention to comply at a level higher than DPAP, which I think is significant.

Will not: I think you just said that you do not believe DOD does not intend to comply.

Cannot: What's compliance? The precise amount of the bogey is not clear. We may not ever know whether DOD complied with precision. However, that does not mean that DOD will not follow through on the guidance that Congress enacted and that DPAP issued in compliance with statute. COs will still have to set certain pre-negotiation objectives and seek higher level approval for certain contract prices.

If you had merely said that the law is stupid, that full compliance will be difficult if not impossible, and that the law will be a minor nuisance to a few COs, I would have agreed with you. My reaction to you has been prompted by (1) your BS "free market" comments in Post # 5, (2) your seeming lack of understanding that the DPAP memo was required by statute and that there is not much DPAP can do about it, and (3) by your overall reaction to s statute/policy memo of very limited applicability, which strikes me as self-defeating. A better approach would be to quit complaining and to try to figure out how best to go on with the work. If you have been in this business for 39 years as you claim, then you have either seen much worse legislation and guidance or you haven't been paying attention. Why come out so strongly about this relatively mild nuisance?

Perhaps I'm just used to reading, analyzing, and writing about legislation, regulation, and policy. Maybe I'm under reacting, but I just don't find this temporary measure to be all that surprising what with all the concern about contract services that has been expressed for over a decade now. And I simply don't see the statute or the DPAP guidance as being all that big a deal when you read them closely. If you think this is bad, then you must have been buying pencils and toilet paper when DOD went through the spare parts pricing scandal of the mid-1980s and Operation Ill-Wind, not to mention the infamous 1983 DOD Directive 7640.2, "Policy for Followup on Contract Audit Reports," which had a big effect on DOD COs and generated a lot of trade press and even law review articles. And how about the cyclical contract type policies and GSA's most favored customer clause? And shall we discuss the Cost Accounting Standards? They had a much bigger effect than Sec. 808 will have.

In your first post you expressed surprise at the lack of reaction to Sec. 808 in the trade press. You're right, there hasn't been much of a reaction. Now, why do you think that is?

I think you and Infoseeker have gone off the deep end about this. Someone of your tenure and experience should be writing about how to deal with it, rather than spending so much time complaining about a done deal temporary budget measure. You should be smiling and shrugging. Instead, you are every leader's nightmare -- the morale eroder. I feel very sorry that after 39 years all you can teach our young apprentices is how to gripe. Really, I feel sorry for you. To me this is just another challenge, and not a particularly big one. I can think of many ways that a smart CO can deal with it.

Have you thought about what volunteer work you can do after you retire?

Wow, what a bunch of double talk bullcrap. Thank goodness people like you are not in the field. Stay on point, that memo says use 2010 rates, if do not read that into it, you are an idiot. Read it, it is not that long.

Here is the point, (1) that memo is crap, written by people not in the trenches that know nothing about how things work. (2) Because this affects private industry and common sense, it will be withdrawn.

Its that simple. Keep your insults to yourself, you are one misguided fool that is for sure.

And why do you project so? Have you had a discussion with your programs to see if it is feasible to tone down the requirement to become compliant with your 2010 spending levels on services? Have you assessed the requirements to see if all of them are truely necessary? Have you talked to the contractor to see if anything can be done to find savings?

Well, then, that is a different discussion, isn't it? --It certainly has nothing to do with getting "same or similar services' at two-year-old prices. You're talking "workarounds" necessary to exercise damage control for poor policy.

Look - all of these arguments in defense of/apology for this garbled law/policy are wholly reliant on a combination of irrelevancies, assumptions about intentions of drafters, belief that regulatory language does not have to say what it really means - sprinkled with occasional ad hominem attacks. Since when did we decide we had to settle for such slop?

No one has to defend the policy -- we just have to implement it as best we can.

I see this as a challenge -- a challenge where we can excel, if we try -- our political masters are asking us to use 2010 rates as the starting point for our negotiation objectives -- an objective is something we TRY to achieve -- our agencies have to do something to lower our contract prices, and harder negotiations by contract specialists should be part of that solution.

Look - all of these arguments in defense of/apology for this garbled law/policy are wholly reliant on a combination of irrelevancies, assumptions about intentions of drafters, belief that regulatory language does not have to say what it really means - sprinkled with occasional ad hominem attacks. Since when did we decide we had to settle for such slop?

rafieldjr:

No one has defended the statute. No one has said that the statute is clear or wise. The DPAP memo needs no defense, since the main part of its content was dictated by Sec. 808, paragraph ( c). DPAP's memo issued the required guidance and exempted some contracts from the pre-negotiation objective requirement. The law simply is the law and everyone's energies are best devoted to coping instead of complaining, although I must admit that you complain with aplomb.

As for your "since when" question, the answer is: Since March 4, 1789.

Infoseeker:

I'm a fool, no doubt about it, but not misguided. If people like me were in the field, tomorrow we'd have a Section 808 Friday the 13th Pre-negotiation Beer Party, with skits and door prizes, Including t-shirts and coffee mugs that say: I've gone Section 808! under a picture of Alfred E. Neuman and his motto: What, me worry?.

We'd give you the wrong address.

Well, then, that is a different discussion, isn't it? --It certainly has nothing to do with getting "same or similar services' at two-year-old prices. You're talking "workarounds" necessary to exercise damage control for poor policy.

Look - all of these arguments in defense of/apology for this garbled law/policy are wholly reliant on a combination of irrelevancies, assumptions about intentions of drafters, belief that regulatory language does not have to say what it really means - sprinkled with occasional ad hominem attacks. Since when did we decide we had to settle for such slop?

They aren't work arounds, that is called adapting to changes and moving on. Just because you are so set in your ways that you can't possibly change how you operate doesn't mean the rest of the work force is.

Addressing the last portion of your reply, your entire argument is based on an asusmption you have made in interpretation of this memo, which omits things such as the obvious: this is mere policy guidance implementing a law. This isn't DPAP putting out guidance out of no where, they are merely doing what they were told to do by Congress, so this memo isn't going to be retracted, because it cannot be.

No minds are going to be changed by anything anyone says in this thread. One stream is simply pissed off about the statute and the guidance and that's all there is to it. I understand where they're coming from. The other stream thinks the law and guidance are at worst a manageable short term nuisance and that we should just get on with it. We've gone back and forth at least a half dozen times. Interesting contrast in points of view.

I have now encountered my first exposure to a misapplication of this deviation. A contracting activity has issued an RFP for an R&D contract (R&D contracts are exempt from the required guidance by Sec. 808). The award will be made competitively and is for a new requirement that was not in existence in FY 2010. Some of the effort required will be performed by individuals who are subject to the SCA. The contracting officer has asked all offerors to submit their 2010 labor rates for all employees and 2010 indirect cost rates (most of which probably have not been finalized yet because of the DCAA backlog).

This is some indication that the Deviation needs clarification.

DOD does not need clarification to prevent that kind of misinterpretation. It needs intelligent and literate men and women for its contracting corps. No amount of clarification would be enough to prevent the kind of stupidity that you describe.

Sure, DOD should go to Congress if it wants the law changed. In the meantime, the law is there, whether you or anybody else likes it or not.

Keep in mind that the heart of the statute does nothing more than limit aggregate obligations by DOD. It does not limit obligations of any particular DOD component (Army, Navy, Marines or Air Force), or of any contracting activity, or of any contracting office. DOD has to figure out how it will comply and extend instructions to its subordinates. Congress ordered DOD to issue guidance and said that the guidance must say particular things. Beyond that, it is up to DOD to decide how it will comply. Until then COs should read the guidance, decide what it means, and go forward as best they can until given other instructions. It will take time for DOD to sort things out and guidance will be evolutionary. Deal with it.

I hope you keep posting in the way that you have, because it gives me the opportunity to show our young people how a professional should respond in this situation, which is to think, plan, and act, not to complain, whine, and make cryptic predictions of imminent doom. They have two models to follow: you, on the one hand, and Napolik and me on the other. They can choose.

I hope you keep posting in the way that you have, because it gives me the opportunity to show our young people how a professional should respond in this situation, which is to think, plan, and act, not to complain, whine, and make cryptic predictions of imminent doom. They have two models to follow: you, on the one hand, and Napolik and me on the other. They can choose.

I choose rafieldjr content and style.

I'm surprised. After all, the statute has "the force and effect of law." Then again, I'm not surprised at all.

DOD does not need clarification to prevent that kind of misinterpretation. It needs intelligent and literate men and women for its contracting corps. No amount of clarification would be enough to prevent the kind of stupidity that you describe.

Vern,

Your posts seem to reflect an idealistic approach that every CO in every agency perfectly understands every piece of guidance that is given and implementation is always by the letter of the law. That has never been the case. While Infoseeker is a little abrasive, I think he captures exactly how this will be read, which is a mandate to use FY10 rates.

I can't necessarily blame the CO's on this one. There is certainly an R&D contract exception buried by reference in the law, but the law uses the 10 USC 235 definition of service contracts (which excludes R&D) and not the FAR Part 37 definition, which does not exclude R&D. So the CO's are getting guidance that simply says start with FY10 rates for service contracts over $10M, but no guidance that clarifies the specific defintion of service contract for them. CO's aren't going to dig that far into the implementing documentation to figure out what they need to do (nor should they).

I have a practical example. We are entering into negotiations on a contract that should easily meet the R&D exception. First Gov't offer includes FY10 rates (which I have no problem with as a starting point). After I explain the Gov'ts misinterpretation and hold our FY12/13 rates I was told there was no R&D exception and that the rates were non-negotiable. Pushback on my end resulted in the Colonel calling the General Manager of my company.

fieds32:

I don't think I ever said that every CO in every agency perfectly understands anything. In fact, I think I have been pretty consistent over the years in saying that some COs don't understand much of anything, much less understand anything perfectly. I don't think that I understand everything perfectly. In many cases, there is no perfect understanding to be

I am idealistic in thinking that more COs ought to understand more things better. I think that should be the training goal. But I don't think the Sec. 808 memo or Sec. 808 itself is a crisis or as big a problem as some make it out to be, but I'll be the first to admit that many COs will get it wrong.

Vern

If I am understanding Vern's thinking -- COs are dumb and they need very dumb, incorrect, vague memos from their leaders to get them to think.

The bottom line is that when this thread started, everyone should have supported that the misguided memo is insane and foolish and the subject would be over. Two to three responses and the thread ends. It would have served its purpose in bringing to light this insane policy so that the field would not be blindsided when industry calls and mentions this ridiculous policy.

The home page of WIFCON is incredible with the summarizations of the articles and the other valuable pieces of information. I assumed that because the Home Page is so incredible, I assumed that the forum was equally of high quality. It is not, it is a bunch of pseudo-intellectual jokers that are out of touch with how things work. This forum mirrors the current state of this country's procurement abilities - broken.

. . . Aaand Vern furnishes the image to go next to "pseudo-intellectual joker" in the dictionary. Laugh if you want Vern, but Infoseeker's depiction of the emperor with no clothes is pretty dead-on. Maybe some time out of the classroom and in the trenches for a reality check is in order.

When I came here as a new participant, it was with the honest belief that I would find seasoned, thoughtful analysts of the acquisition art with whom I could converse on a patently defective piece of legislation and companion regulation. The idea was to put heads together on damage control, as well as perhaps generate a head of steam of rational thought that might result in a correction of the big goof. Instead, I found cheerleaders for a broken system, defensive bureaucrats, and self-satisfied masters of the gratuitous slur . . . and a few honest souls. I was actually taken aback by the haughty and sneery reception. Took a few iterations to get acculturated. Got there, 'though.

Guess I'll put the question to Facebook next time. The results couldn't be any worse.

rafieldjr:

You and Infoseeker are essentially complaining that not everyone agrees with you. Because they don't, you say that you are not finding seasoned, thoughtful analysis of the acquisition art at Wifcon Forum. That's the extent of your complaint. So if people have a different point of view they are pseudo-intellectuals? What a crock.

I have tried more than once to take an analytical approach to both the statute and the regulation, only to have you and your buddy return to rant some more. You didn't come here to analyze. You don't want to think it through. You don't want to find a way to deal with it. You want a sympathetic audience for your whining.

You are not contributing to solutions. You are part of the problem. Complaining does not help. It's pointless and it hurts morale. Nothing good comes from it, except the self-satisfaction of getting it off your chest. How does it help your fellow contract specialists?

If you don't like the quality of the postings at Wifcon Forum you can stay away. Facebook will be glad to have you.

Did anyone see this? http://www.acq.osd.mil/dpap/policy/policyvault/USA003691-12-DPAP.pdf

DPAP rescinded the Class Deviation and issued another one yesterday.

Now there are eight pages instead of one. Note that the guidance does not apply just to contracts for the same or similar services.

Given the level of anger exhibited in this thread in reaction to the first memo, some folks had better be on watch for the possibility of workplace violence.

Now there are eight pages instead of one. Note that the guidance does not apply just to contracts for the same or similar services. Given the level of anger exhibited in this thread in reaction to the first memo, some folks had better be on watch for the possibility of workplace violence.

This is what happens when people can't read and ask questions about how to implement it.

It still stands though, you are really only truly limited to not exceeding the cost of 2010 spending on the same or similar procurements. The limitation on what your negotiation objective is, well, a waste of time. Nothing binds you to your negotiation objective, so I'm not sure in the point of it other than to start negotiations on the Government end at a lower number in hopes of achieving a lower overall number.

dcarver:

I think you nailed it. At least for now.

Well, "for now" has expired, Vern. Industry has made a motion to AT&L to reconsider --

Contractors complain about Pentagon limits on labor rates

http://cdn.govexec.c...t/092012cc1.pdf

Just a bunch of whiners, 350 of them, I guess . . .

Meh.

Note that they're not complaining about the statute, but about the implementation. The letter is not addressed to Congress; it's addressed to Kendall. With guys like you doing the implementing, I'm not surprised at that complaint. Who can blame them?