By formerfed on Monday, April 02, 2001 - 09:36 am:

Bob just posted this to the site. It's B-286979, and concerns an appeal of an agency level decision. It's interesting in that the agency level decision (Army - AMC) displayed some rather poor rational, which cited the CO as wrong. Fortunately, GAO didn't buy into it.

http://www.wifcon.com/cgdedbelowcost.htm

Any thoughts?

By ex-fed on Monday, April 02, 2001 - 10:42 am:

The Army demonstrated inability to think clearly and got into very faulty mixing of "apples and oranges." It did so by equating "NSP" with "$0.00" and tangible deliverable CLINS with work required to deliver them in a FFP.

In the latter case one has to wonder at the logic of including contractor's labor as a CLIN in such a contract. It really makes no sense whatever. An analogy might be to require the retailer to disclose and separately bill the store manager's "cost" when one buys a television or an office software package. On the surface it appears to be a FFP for a "thing" in which the buyer became confused and tried to impost cost contract like insight into component costs.

I expect all involved will get performance awards later this year.

By Linda Koone on Monday, April 02, 2001 - 11:26 am:

Formerfed:

You beat me to the draw on this one. I thought it was an interesting decision too.

I agree with the GAO decision that was primarily based on the concept that "NSP" and a price of $0.00 are two separate concepts.

What I question, and what wasn't raised, was whether the CO's discussions produced the desired outcome of discussions, which is to ensure that the Govt obtains the best value. I believe that letters can be used during discussions as a means of beginning a dialogue. I can't help thinking, however, that if actual verbal exchanges occurred, the CO might have reconsidered having a line item for the Program Manager; or alternately, the company that entered NSP may have learned that there would be an acceptable way to meet the requirements of the solicitation and still not directly charge for Program Manager hours.

By Kennedy How on Monday, April 02, 2001 - 01:20 pm:

It appears to me that it could be somebody wanting to see the costs involved with performing on the contract other than for the hardware being ordered. Maybe somebody directed them to separately price the labor.

I remember Congress directing us in the past to compete technical support contracts, which normally went to the systems developer. And, if a competetor won that contract, look out! We've also broken out Warranty costs as a separate line item. In that case, somebody wanted to see exactly how much something like that costs for a armored combat vehicle.

As a contract specialist, I tend to find it difficult to believe that a separately priced line item requirement was included on a whim. Usually, it's in response to the desires of somebody higher up. Maybe it was the result of an audit or DoDIG ding for NOT breaking it out! 

Kennedy

By ex-fed on Monday, April 02, 2001 - 03:20 pm:

Then it appears the contract was the wrong type. End price, with contractor taking the risk is the point of this type. Data collection is not the point. Being curious about internal cost is not the point.

If I'm shopping for the best fixed price on a car, TV, installing a toilet, or obtaining an office software package I am mixing apples and oranges if my interest extends to the vendor's internal cost of delivering that package. I've no business getting curious about summer AC cost, the manager's office decor, or how much anyone makes. Do I get item X with my required material terms (return policy, warranty, and such) and nothing more. Checklist. Done deal. If I'm wasting my time on quibbling about "your sofa is too fancy for a plumber" I'm stupid.

I'd love to hear an rational explanation of why someone should insist a contract is an "apple" while requiring "orange like" terms. If driven by a legitimate need then put in a CLIN with the right type. Complicating a "simple" contract with complexities of another type is just useless work and a recipe for trouble. Selection of FFP offers should not involve such effort. So now they got it -- and 15 minutes of fame and publicity.

If higher authority is doing this then they need their performance evaluated! Muddled thinking is muddled thinking regardless of grade level.

By Eric Ottinger on Tuesday, April 10, 2001 - 07:20 pm:

Former Fed and All,

I think the court got the issue, regarding NSP and $0.00, right. An NSP item is directly linked to other specific CLIN(s). There is no link with the $0.00.

"On the contrary, while an entry of NSP, by its terms, means that the item in question is "not separately priced" and therefore suggests that it may not be orderable separate from other CLINs, an entry of $0.00 does not raise any such question about the offeror's intent to provide the CLIN without a separate purchase of another CLIN."

Initially, I thought the Court was missing the subtext. The only way that the offeror could be proposing $0.00 for the Program Manager category would be a situation where the Program Manager was normally charged to indirect. But this point is addressed at the end of the opinion.

A similar "level playing field" issue arises when some offerors charge secretaries (administrative assistants, graphics support, etc.) direct and other offerors charge indirect.

I think the key is the availability of this (or these) person(s). If the program manager is a person with a name and a face, that should go a long way toward answering the question. However, I would want written assurances regarding this person's availability.

Even if the Program Manager is charged direct, you will usually find that a person at that level is expected to put in some hours supporting indirect company headquarters cost objectives. Examples would include recruiting, proposal preparation and long range planning. If the Program Manager's direct hours in support of the Army contract are not revenue enhancing, there will be a powerful temptation to use this person as much as possible for indirect "other duties as assigned" and shift his/her responsibilities to other high level direct charge categories. There are good reasons to be concerned about performance risk.

Arguably, the multiple award ID/IQ arrangement would answer this concern. Ongoing competition should keep GTSI honest. The actual Task Orders should be completion, if possible, rather than level of effort.

My initial thought was that we should be careful about casting any aspersions on the PCO. It takes a team effort with help from Management and Legal (and, in this case, Higher Headquarters) to really screw things up.

You or I might not entirely agree with this risk assessment in the finding signed by the SSA. But, unless the risk assessment is utterly unreasonable (which it isn't) this issue should be protest proof.

"Based on this review, the selection authority made findings of possible risk associated with accepting GTSI's decision to price program management at $0.00. In these findings, at 15, the selection authority determined that there was no unacceptable risk to the government in the approach because:

(a) GTSI's letter dated 14 June 2000 has assured the Government that Program Management hours will be included as required in individual delivery orders and that they will utilize individuals with the requisite qualifications as stated in the RFP. …"

Not to quibble, but if this were strictly hardware and not services, it should be a "Delivery Order" contract, not a "Task Order" contract. In any case, there is clearly an element of services included in "servers, workstations, accessories, and support."

Eric

By formerfed on Wednesday, April 11, 2001 - 07:53 am:

Eric,

I think the CO and SSO used proper logic. GAO agreed. The part I thought was awful is AMC's interim decision supporting the protest and, in essence, saying the CO erred. I wonder where AMC's head (along with their lawyers) was when they sustained the protest, causing this to go to GAO.

By Kennedy How on Wednesday, April 11, 2001 - 01:06 pm:

I remember having this kind of discussion with my colleagues a few years back on the issue of direct/indirect contracts support. I was more in favor of direct charging, where I could hook a name to a position, and pay for that position over the life of the program. I had some friends who were seeing more of the opposite. That is, charging those sorts of administrative functions to indirects. Maybe it was due to cost cutting. Or budget constraints. Or, because it was just plain difficult to slot a direct charge person there because he didn't exist, and he wouldn't until they got the contract. On the other hand, if there was already an office tasked to do that stuff, and they were being allocated on an "as required" basis, then maybe being charged as an indirect is proper. Having a Program Manager being charged both direct and indirect causes problems, in my view.

But, I do remember thinking back then that we were heading back to the gigantic indirect pools of old, before we decided to get more specific, and started requesting that people be direct charged.

Kennedy

By ex-fed on Wednesday, April 11, 2001 - 07:23 pm:

All:

How about clarifying the rationale for such detail on who does what at what cost on a FFP contract, the type at issue in this case.

Why are you really interested?

Why are you even justified in looking into this level of detail within a private company that has already said we will deliver this at this price?

Within the price envelope for a clearly stated product or service, presumably the focus of the decision, what business is it of yours what the required PM cost as long as the PM function is met?

To me this clearly is something that needs a strong reason to do, not a reason not to do. It is involving the government inappropriately at a level it has no need to enter at some cost to itself and the contractor. It has both cost and "political" ramifications.

Finally, if the need for such insight into the contractor's internal cost structure is for some legitimate reason, aside from meddlesome curiosity, firmly established why stay with this contract type?

By Anonymous on Thursday, April 12, 2001 - 08:11 am:

All:

I think that the explanation for the pricing scheme is in the first paragraph of the Background section of the decision.

CECOM intended for this contract to be available to all Federal agencies, worldwide, to order IT supplies or services as needed. This was to be a GWACS-type contract. That's why CECOM had such a complicated CLIN/SLIN schedule and required the offerors to provide separate pricing and agree to separate ordering. The contract was designed to allow any agency to buy virtually any kind of IT supplies or services from the contractors. The CLIN/SLIN pricing scheme facilitated that objective. ex-fed, the agency wasn't being nosey about costs, it was establishing a catalog of supplies and services and their associated prices. As mentioned in the decision, the contractor was aware that it might have to provide program manager services at an hourly rate or price of $0.00 in response to a task order.

This was yet another entreprenuerial endeavor by a Government agency seeking to compete with GSA. I'll bet that CECOM is to receive compensation from agencies that use its contracts. The REALLY interesting question that this decision raises for me is whether agencies should be allowed to engage in these kinds of entreprenuerial endeavors. Otherwise, the decision is interesting mainly because of the enjoyment one gets from seeing the smarty-pants AMC Headquarters lawyer(s) getting put down by GAO. As the GAO pointed out, the difference between NSP and $0.00 was established some time ago.

By ex-fed on Thursday, April 12, 2001 - 12:00 pm:

Let me get this straight. There will be a menu of options forming a program of different composition and flavor for various ordering agencies. Some will order the program with and some without a program manager. Interesting.

I would think the management function was a necessity to some degree regardless of whether the full or partial menu was ordered. "I'll have the Caesar salad, surf and turf, baked potato, asparagus without management please." The logic still escapes me.

On a FFP it would seem to me the sensible thing is to include "management" among the non-directs with every order paying a share according to consumption. Even varied CLIN difficulty levels could be covered by varied rates on the deliverable CLINS. That avoids violation of the KISS principle -- one FFP objective I believe.

By formerfed on Thursday, April 12, 2001 - 01:03 pm:

Anon,

You brought up a subject that always puzzles me. So many agencies are establishing government-wide contracts and charge fees for their use. However, most of these agencies can't do much (or shouldn't be doing much) with the fees. Unless they have special authorization, such as franchise authority or a working capital/revolving fund, they can only charge for reimbursement of their actual costs. So what's the point of all the extra work? If you want to do something entertaining, ask an IT marketing rep what contracts are available for you to order their products from. Some companies can come up with five or more.

The next issue of AMC's legal newsletter "AMC Command Counsel Newsletter" will be interesting. Bob has a link to it. Let's watch and read the lawyer's side of this.

By ex-fed on Thursday, April 12, 2001 - 11:03 pm:

Formerfed,

One might wonder about the result if the total potential value and total deliverable payload of all those government wide contracts were calculated and then compare against a realistic estimate of need. Might we expect another fun story on the evening news?

Even more interesting might be a real analysis of exactly what differs in cost and terms for very closely comparable or even exact items in the various contracts.

There may really be entirely too many cooks in this kitchen.

By bob antonio on Friday, April 13, 2001 - 05:24 am:

Ex-fed:

If I remember correctly, before the GWAC program started, the Director of the Ofice of Management and Budget was required to certify that this was a cost-saving program.

However, I remember posting a note to Director Raines and Administrator (forgot his name already) on an old forum that I could show the government paying several different prices for the same item. Additionally, I feel that I can show a better price for the same item on a state or local contract.

Several years ago, on the Dell.com site, they included a separate area for government buys. If only, I had access to the prices paid for items on those contracts.

I have three current projects that will take me into 2002--most notably my eternal effort to do an article on the Adarand cases. However, GWACS, MACS, GSA schedules, etc. are dear to my heart. I would be pleased to post an article on this site dealing with an in-depth analysis of these programs.

Next month, the House Small Business Committee (I think that is the one) will begin its attack on the government competing with industry. I feel confident that the General Services Administration will be a major topic in those hearings. They have already been criticized for competing with private industry with GSA Advantage. If they receive criticism for a progam that is quite old and precedes any industry competition, I would suspect that all the GWAC and MAC programs could be included in the criticism.

By formerfed on Friday, April 13, 2001 - 08:23 am:

Bob,

GSA Schedules are also dear to my heart. It's difficult to come up with a contractual vehicle that has so many good and bad features at the same time. However, the negative points are so easily overcome if government buyers just used the same approaches to purchasing as they do in making personal buying decisions.

Buying a car is a good example. Very few people pay sticker price, but that's close to what GSA prices are. Getting better is so easy. All one usually has to do is ask a few questions and play some games with the salesperson, just like with the car dealer. Most every item is available through several different GSA vendors. It's so easy to prepare an RFQ and fax to several. The buyer needs to let the company know they are seeking competitive quotes as well.

I don't think the program is broke - it certainly saves a lot in administrative time and expense. The problem seems to be in the use. I don't know what the solution is. There are many unskilled, untrained, and unmotivated people doing purchasing. Also, there are good people in the 1102 ranks that are capable and qualified, but it's overkill to use GS-13's (even though many GSA orders run into several hundred thousand dollars). The acquisition workforce has been so depleted at many agencies, that there aren't enough people to do the proper job. Too many orders are just processed by "rubber stamping" what's on the requsition. If you want to do an interesting study, ask some vendors what received orders look like. There are horror stories galore that demonstrate that no thinking or effort went into the order at all.

By Anon Zed on Friday, April 13, 2001 - 08:56 am:

Two observations in response to formerfed's last message:

First, I am convinced that the problems described by formerfed reflect a larger problem with government in general. A headline in today's New York Times says that due to personnel cuts the IRS is no longer enforcing the tax code and that "millions" who have not paid their taxes are being left alone. Cuts in civil service staffing levels, competence problems, recruiting problems, and poorly managed contracting-out are undermining Government competence.

Second, and more to the point of this discussion, the problems discussed in the more recent messages in this thread reflect that fact that agencies do not feel that they can "get on contract" quickly enough under the rules in FAR Part 6 and FAR Part 15. The proliferation of schedule contracts and GWACs and MAC contracts for services, and task order contracts in general, reflect attempts to speed up the contract formation process. They are officially-sanctioned ways around what is perceived by many to be a CICA-Part 15 roadblock to management effectiveness in this era of contracted-out government. What worries me is that no one is systematically studying the effect that these policies and procedures are having on what Steve Kelman called "the quality of Government performance."

Please, do not misconstrue what I've said to mean that I am a CICA advocate, an opponent of acquisition reform, or a Cassandra. But I do wonder if we are in a state of free market anarchy in government acquisition and, if we are, whether it will produce good or bad results in the long run.

By formerfed on Friday, April 13, 2001 - 09:34 am:

Anon Zed,

Good points. Personally I see many good things done over the past several years. The problem is too many of the workforce are ill equipped are use the tools. Consequently abuses, mistakes, and just plain exercise of poor judgement are common.

Let me state it differently. Most agree the old (pre-acquisition reform) process didn't get the job done. Now many tools are available to reduce lead times, select the best vendor, and management the acquisition process better. However, embedded in it is the responsibility to plan and exercise prudent judgment. If a CO can get the right products/services quicker and easier, while still economical, so much the better. However, that CO is expected to use good judgement and the audit trail should show taxpayers benefited from the initiative, insight, and overall actions taken. A few might look at getting around roadblocks, but a good CO leaves a track record showing good things - a procurement that used to take years was done in months, the result was achieved by two people instead of 20, the business deal is a good one, and industry didn't spend a fortune to participate.

The problem is not many CO's can carry this out. For starters, they need to earn the trust and respect of the programs they support. This ensures they are brought in on the acquisition at the earliest stages to help formulate the strategy. Next, they need to be able to communicate with industry in conducting market research. Then they need the savy and knowledge to apply the wide variety of tools. Finally they need to use sound judgment and let the results speak for themselves.

But what we have are too many people lacking these skills and knowledge. That's why orders on GSA are placed at inflated prices, why orders are competed when appropriate, why program offices use GWAS and other means to avoid competition, and on and on.

Well, when I'm elected President, I'll get everything straight.

By ex-fed on Friday, April 13, 2001 - 11:01 am:

Increased freedom requires increased responsibility. We don't give freedom to five year olds. Now we see reform offering increased freedom and personnel policies driving a workforce less able to perform even under the old, more restrictive rules.

Do it faster with less under these circumstances means something. It means do it poorly. I think the real "tax cut" could come from more sensible and responsible management of government spending in acquisition, particularly as more and more of the work expected is done through contracts.

On the other hand, the combination of money in politics and the intensive lobbying interest by contractors combined with disinterest among ordinary citizens almost gurantees nothing will really be fixed.

As a businessman I'd love to have one of my largest, most powerful customers fragmented into little buying groups who can't be bothered to compare the prices I'm charging. I'll let the fools pay while I grin all the way to the bank. I'll also spend a few bucks up in the CEO's office and take the Board out for a few lunches so I can explain how wasteful it would be to pay more attention. Let the market decide. Give them freedom and they will make the right choice in a free market composed of their many branches and my shop. Oh yeah!

By ex-fed on Friday, April 13, 2001 - 11:06 am:

By the way, is anyone taking on those questions I asked up above? Why am I not being blasted for just not understanding the fine points of the original issue?

Did or did not the Army lose sight of KISS in this effort to load up a FFP vehicle with cost like insight?

By Kennedy How on Friday, April 13, 2001 - 12:13 pm:

Formerfed,

If you are referring to the issue of "Dinner without management, please", then I would say that depending on what a particular customer wants, they might want to do it all themselves, without a program manager type, or maybe they want a "one stop shopping" approach to include all of the admin stuff necessary to get what they want up and running.

I'm taking the approach that the program manager isn't somebody managing this contract program, but somebody who's doing some kind of integration work for the customer. A service, in other words. I can't really see a program manager who manages a GWAC in it's entirety to be paid on one order and not on another. He's responsible for this "program", you have to pay him. Thus, he might be a service rep.

On my EDI contract, I have a program manager who does all the coordination on his (contractor) side of the house. Sometimes, a deliverable to us is deemed to be useful to some other agency, who contacts us for more info. We've offered him up to that agency to help them integrate our application into whatever it is they want to have accomplished; but that agency MIPRs us the money to pay for his time, we don't pay for it. Or, we can hand the entire app over to them (it's owned by the Government) to do what they will, they don't get any of my PM's expertise. Plus, we don't do any further work on THEIR version of the application, and we don't warrant/support any changes they make.

Kennedy

By formerfed on Friday, April 13, 2001 - 01:33 pm:

Ex-fed,

Without the benefit of seeing the solicitation, my guess is the KISS principle is violated because the Army tried to be too many things to too many people. From looking at the protest decision, I get the impression the procurement is overly broad for one single action. For starters, the scope is government-wide and world-wide. Then it includes a broad array of products and services: servers, workstations, operating systems, compilers, engineering support, LANs and WANS, maintenance, leasing, consumables, etc. Then, as an indication oh how complicated this all is, there are 15 CLINS for program management support. Again, another assumption, the Army should have talked with industry before this went out, or at least have considerable prior experience when they developed their CLIN structure.

You point makes sense to me, but I wonder how many of the offerors might balk about living with that kind of arrangement for world-wide support over several years. What I think we see is the Army attempting to do the best they can with an overly ambitious IDIQ contract. Maybe this was the simplest they could devise.

By ex-fed on Friday, April 13, 2001 - 10:36 pm:

I'll agree the solicitation is needed for a definitive conclusion. The comments "Federal Data Corporation (FDC) and PRC, Inc., learned for the first time that GTSI entered "$0.00" for certain CLINs that required hourly, daily, weekly, monthly, and yearly rates for a program manager" and "we note for the record that during the course of this protest GTSI reaffirmed its intent to provide program manager services for $0.00, even if the services are ordered separately" don't sound to me as if some sort of "service rep" to me. I guess Occam's Razor is my view. Why would the decision keep referring to "program manager" -- a rather clearly defined position -- when what is really meant is "service rep" -- another well recognized position.

Without further evidence, I believe they are talking about a contractor's PM who will manage all the things such a person would normally do and in the framework of a FFP contract. The purpose of such a contract is a quite direct. In basic form isn't it "I require (this) at this time under these terms. You state you will comply, any reservations and a price. I don't want any further bother or involvement beyond taking delivery."

Now someone wants to "get involved" to see what is going on in the process -- not just the result. In some ways it really is like "I'll have your $9.95 chicken dish and oh, by the way, I do need a receipt and I also want you to allocate the restaurant manager's cost for its preparation separately on my bill."

We all know of cases where such insight may be necessary, but this seems wrong place, wrong type. As for "too many things to too many people," Amen. The disease seems rampant.

By Rob Bristow on Monday, April 23, 2001 - 11:16 am:

I commend the Army's KO for trying to get the best deal for the taxpayers. Without engaging in the usual banter about cost and pricing data or how CLINs are set up, it is obvious that the KO was on the right track.

All too often federal consumers are paying prices using BankCards, GSA, GWACs, and so on without analyzing what they are paying let alone planning and adequately developing requirements all driven by the PM office addiction to acquisition self- gratification.

Poorly developed requirements continues to be the most significant shortfall not cycle times (or development of Section B) by the local contracting officer. Deidre Lee makes an excellent point about GSA when she states we can now buy the wrong things faster.

By ex-fed on Friday, April 27, 2001 - 11:45 pm:

Rob, how can you commend the KO for mistaking the principle of the matter? The decision involves "award of a fixed-price ID/IQ task order contract" and not a cost type contract. The contract involved is not a type in which the government should be interested in the individual components of the total cost. If that is required, another type applies.

In reality it demonstrates a government meddling in places it has no business. I agree with your comment on requirements, but the requirement has been established to be something obtainable by fixed price. If that is an "economy sedan" delivered at fixed price (all risk on contractor) the contractor's broken down cost are neither the government's business or concern assuming the homework has been done and the offered prices are within industry standards to other customers.

Driving a hard bargin is the KO's business. Monitoring components in fixed price contracts isn't. If one can make an argument they are, then another contract type is also arguable and probably should be picked. Misplaced diligence is not commendable.

By Anon Zed on Saturday, April 28, 2001 - 10:18 am:

ex-fed:

You seem to think that the inclusion of a line item for "program manager" reflects a misplaced concern about contractor costs. That's not correct. On April 12 at 08:11 am, "Anonymous" explained that this was to be a GWACs-type task order contract, available to many users.

The key to understanding such task order contracts is to recognize that they allow agencies to buy services while deferring specification of individual tasks until an order is placed. Since specification is deferred, you cannot price the tasks at the time of contract award. However, statute and regulation require that Government contracts include prices of some kind. Thus, it is standard practice to include line items for different labor categories in such contracts -- including program manager. Such labor category pricing lets users of the contract negotiate task order prices without starting entirely from scratch. The labor category prices serve as price ceilings for future task order proposals and satisfy the statutory and regulatory pricing requirement.

The Army's contract does not violate the KISS principle when you consider the Army's objective, which was to establish a contract that included a catalog of task component prices from which agencies could assemble a total task order price. One such task component might be a program manager.

While the wisdom of the wide-spread use of these GWAC-type contracts is a matter for debate, I think that your criticism of KO "meddling" is misplaced in this instance.

By ex-fed on Saturday, April 28, 2001 - 01:47 pm:

Anon Zed:

I fully understand the concept here of the GWAC-type allowing agencies to order off a menu. My problem with this issue deals directly with the menu item of with or without PM. Perhaps I'm not thinking in terms of some sort of "special" PM these people had in mind, but I have a real difficulty in picturing contract activity without management.

Degrees of management are an issue. For example, what is my loading of "management" when I simply browse the aisles of a discount store and take items through checkout? It is probably at about the same low level as that of my ordering from a catalog. In both cases my share of management is really an overhead type thing. It is background, but management is there and part of the fixed price I pay supports that management. The management support level is very likely to increase when I'm not putting an item in the cart and am getting a service. Still, in a fixed price world it is included in the service price.

Now, I have a real problem in the store or with the catalog sales. I call for management to settle the problem. I take the manager's time and perhaps cause management to increase their work level. Whether TV in a cart or problematic haircut I still pay the fixed price.

I can only go by what is in B-286979: "GTSI's contract was awarded pursuant to request for proposals (RFP) No. DAAB07-00-R-H254, issued by the Army's Communications-Electronics Command (CECOM), for commercial-off-the-shelf servers, workstations, operating systems, compilers, software applications, peripherals, local and wide area networking, engineering and support services, managed environment support, maintenance, system upgrades, training, leasing, documentation, and consumables to meet world-wide requirements of the U.S. government." It is described as "fixed-price ID/IQ task order."

Of the described categories "commercial-off-the-shelf servers, workstations, operating systems, compilers, software applications, peripherals" and "leasing, documentation, and consumables" appear to be items from that store shelf or catalog requiring a low, background level of management. The "local and wide area networking, engineering and support services, managed environment support, maintenance, system upgrades, training" are more in the service area and are likely to include more intensive management.

KISS would seem to indicate that for this fixed price contract the line items should be category based with the differing management loading included in the fixed price for the specific category. Thus everyone pays an appropriate share of management, that I hope is required and given in all cases, depending on the management loading of the service. The pricing and selection is straightforward by comparing item cost to item cost and service cost to service cost. Just as the cost of a TV includes store management, the cost of "servers, workstations, operating systems, compilers, software applications, peripherals" would be low and selection would be on the comparative cost of these items. The same with the higher management loading required for categories aligned with "engineering and support services."

One thus compares an hour of engineering and support services with an hour of engineering and support services period instead of the oddity of an hour of managed services or with unmanaged service! The fact that all the contractors came in with either "NSP" or "$0.00" indicates to me the contractors understood this and the Army was confused. Perhaps GAO should look more closely into that interesting idea of unmanaged services!

Category pricing to include management also makes it absolutely clear that management risk is on the contractor and not some separately priced item included for fun and games. More intensive "management" tends to be caused by mismanagement. Really good management is nearly invisible and is hidden behind operational excellence. The message to the contractor is to make your price competitive in each category by managing your management costs. The message is "You are at risk if your poor service demands considerable and unforeseen management attention" and, as in the store above, that extra demand on the manager's time may have just taken the profit out of that fixed price item.

I maintain that the described RFP violated basic principles and KISS.

By Anon Zed on Saturday, April 28, 2001 - 04:18 pm:

ex-fed:

Given the wide variety of projects that are likely to be performed under orders issued against a GWACs-type contract, I think it would be difficult to treat project management as an overhead cost allocated to service categories, because some tasks will require more management than others. Not all "engineering support" projects are the same or require the same ratio of management to labor.

Unless all tasks within a service category are expected to be of the same level of complexity and difficulty and thus require the same ratio of management to labor, labor category pricing is usually simpler and more flexible than service category pricing.

While I am an advocate of simplicity, I don't think the KO violated any "basic principles," including KISS. At least, I don't see anything in the information that we have about the procurement that justifies your opinion in that regard.

You're entitled to your opinion, of course, so I won't debate it with you further.

By ex-fed on Saturday, April 28, 2001 - 05:13 pm:

I understand your point, but I cannot understand how a fixed price management CLIN evaluated at the initial proposal stage quite meets the problem of high "complexity and difficulty" requiring varying ratios of management to labor either. I am assuming the rate would apply to varying hours proposed for each task. While it allows some of the variance, it does not seem to work well as a complex support situation will quite likely take a higher paid manager. Again, my preference would be to class those support elements (Eng. Support I, II, III, etc.) and price them according to complexity.

If this was for mundane IT support I see no need for the complexity of what was done. If for more complex support the type chosen for the support CLINs seems ill advised.

Likewise, I agree to disagree in the absence of more information.

By Anonymous on Sunday, April 29, 2001 - 09:24 pm:

Ex Fed,

Are you aware that the CLINS were for "program managers" priced on an hourly, daily, and weekly basis and not a fixed-price CLIN for "management"?

By ex-fed on Monday, April 30, 2001 - 03:51 pm:

Yes, I read the decision and I am aware of how the contract was structured as far as the decision reveals. I find it odd to bizzare. I would still welcome explanation of what logic underlies "unmanaged," "part managed" or "fully managed" at the selection of the buyer in an overall fixed price situation. I question the logic of the contract as presented, but then there seem to be no few ill conceived efforts running about.

In fair warning, it is going to be difficult to convince me, just as it would be to have me approve of "Hi, we want 24/7 network support with one hour a week of it managed." My response would be "What have you been smoking? Go back and form an acceptable plan."

Good management is essential to an efficient and cost effective contractro program. The very idea of a program without management strikes me as poor business judgement. I readily agree some things take less management than others. Parsing the effort by management intensity therefore makes sense if management intensity is a cost driver in the fixed price categories. For fun, let's start some CLINS for "schedule."

"I'll have six servers, sixty workstations, these COTS software packages and the network support, please."

"Fine, do you want them with or without schedule?"

"I'm cutting costs so I'll have them without management and without schedule."

"Schedule" costs. In fact it is a key to "management." Simple delivery is less costly to schedule than complex IT support service working around government operating schedules. Optional, separately priced schedule CLINS have the same ring of illogic. That is the core of this issue.

By Kennedy How on Tuesday, May 01, 2001 - 12:25 pm:

This may sound like it's directed to Ex-Fed, but it's probably to anybody out there who's familiar with the case, but, do we really know, or have we determined exactly what the SOW says with respect to the "Program Manager"? Have we determined just what part of the contract SOW this falls under? Does anybody know just how wide and "menu driven" this contract really is?

I still believe that the Program Manager may be a term coined to cover somebody who is tasked to assist in the integrating the hardware for a customer. This person is distinct from the Program Manager who is the overall manager of the Contract itself.

Using Ex-Fed's example, if an agency wants all the servers, workstations, and COTS stuff delivered to their receiving dock on a certain date, they should be allowed to do that. They don't need to pay for some "Program Manager" to help them integrate all this stuff into their facility. They may have already bought some of this stuff previously, and have the integration expertise to do it "in house". On the other hand, if the customer was computer illiterate, and is not techincally able to do this, so buying contractor expertise is a valid option for them.

This is not to say that the overheads for the management of the GWAC isn't being covered; I believe it is. Every participant is being charged their share, as I understand it.

Kennedy

By Eric Ottinger on Tuesday, May 01, 2001 - 12:53 pm:

Kennedy,

I think "Program Manager" simply means "supervisor" in this context.

Ex-fed,

I guess "unmanaged" refers to a situation where the contractor sends one or two repairmen and they manage themselves. Nevertheless, I agree that this is all very odd.

Eric

By ex-fed on Tuesday, May 01, 2001 - 01:06 pm:

Kennedy, I understand your point and agree that we don't know exactly what this "Program Manager" really was in terms of exact function.

A part of my point is that program management, in the conventional usage, is required even for delivery of items to the dock. That is associated with what I'll admit is a somewhat purist view of fixed price contracting in which a vendor agrees to sell an item or service at a fixed price on essentially commercial terms. I qualify the "essentially commercial" in that there may be special agreements, but there will not be unusually complex "oversight" or other terms. This places it close to what happens between customer and K-Mart, an auto dealership, an airline, or perhaps even a lawyer: you provide "x" at this unit price and I'll transfer the cash.

In all those situations "management" takes place to some degree. One does not go to the airline counter and ask how much the ticket will be "without management." If management cost and luxury drives one airline's cost too far out of line with the others competition is supposed to act to bring sanity. We deal with these real world "fixed price contracting" matters at the rolled up price level.

Government entirely too often starts mixing and matching without sound logic. My issue here is that if this is an all fixed price contract the airline model should be followed. Compare on the "ticket price" and stay out of the details except for the service provided. If there is sound reason to deviate, go to charter and negotiate (at least on the CLIN level in these contracts). Don't get wrapped around the axle trying to buy a regular ticket with management carved out separately and "with" or "without" options. It complicates the simple model in a weird way.

I cannot know without the SOW, but this has fingerprints of a mixed concept mess. There was probably no reason the contract could not have been structured to include the PM, whatever they were doing, in tailored task descriptions to keep it simple. For example, "network support with on-site manager" vice "network support with off-site manager" - my view of "network support without manager" is already clearly skeptical.

The very fact this came to our attention as it did indicates things were fouled up to some degree. If they didn't mean PM in the usual sense they apparently didn't make that clear to the contractors either. My gut feeling from the facts in the decision is that they ventured into a poorly thought out means of offering choice, began mixing fixed price concepts with others, got unexpected results (NSP/$0.00), picked out one to challenge for some reason and came to our attention. When the concept has logic holes things tend to come apart. It is worth time doing self challenge to close such holes before going on the street. Rarely will every hole be closed, but damage is less.

By Anonymous on Tuesday, May 01, 2001 - 03:01 pm:

You guys seem to be assuming that services procured under the contract were to be provided only in conjunction with a hardware purchase. But that is not necessarily the case. Under a GWACs type contract it's possible that services could be procured separately.

By ex-fed on Tuesday, May 01, 2001 - 08:13 pm:

How did you reach that assumption? I've certainly made no such assumption and have not been struck by anyone else doing so.

By Anonymous on Tuesday, May 01, 2001 - 08:48 pm:

Well, I'm not sure how I reached that assumption.

I'm also not sure what the heck you're talking about.

The program manager line item is there just to establish a resource price. It enables the parties to price the cost of project management for each task, as required. Some tasks may need more project management than others and including a line item for project managers on an hourly, daily and weekly basis lets the parties determine and price the management requirements for each task on an ad hoc basis. On a IDIQ task order contract the hourly rate for a labor category usually reflects the general nature of the work that type of person does and qualifications requirements in the contract, but it does not reflect any specific job, and the person in that labor category may be paid more or less than another person in that same labor category working on a different project.

The pricing arrangement in the contract described in the case is standard practice on such contracts. In fact, that pricing arrangement has been in use for at least forty years. I'm really mystified by your reaction to it, especially the part about it being "odd" and "bizarre." It's nothing of the kind.

And what is the business about "unmanaged"? Where did that idea come from? I have read this entire thread and the case in question and I simply cannot understand where that line of thinking comes from, and I have tried hard to understand, thinking that I've been missing something. Now I think that you misunderstand this kind of contract, which, based on the description in the GAO decision is just about as common as dirt these days.

Forgive me for sounding frustrated. I don't mean to be rude. But I just don't understand why you are so bothered.

By anon4 on Wednesday, May 02, 2001 - 08:13 am:

Anonymous,

I don't know that I would agree that pricing Program Manager support with a $0.00 hourly rate is a standard practice. I have worked in procurement for 17-18 years (Army (Army Materiel Command), Navy (NAVFAC and NAVSEA) Army Corp of Engineers and two civilian agencies)and have not seen it as a common practice. Although I don't know that I am adverse to it not being priced and included in the burdened rate. I do agree with the decision rendered in this case and see some logic in accepting the $0.00 CLIN price.

By Eric Ottinger on Wednesday, May 02, 2001 - 09:15 am:

Anon4,

The court said that it was acceptable propose to lower than a realistic cost. This is true. However, I would not take that logic all the way to zero.

In any case, the offeror didn’t really propose zero. The offeror included the “Program Manager” cost as 13 percentage points of overhead applied to the other rates.

Bidding zero is not a standard practice. However, it is not uncommon to include supervision in overhead. I don’t think this is a particularly complicated issue. The “Program Manager” is the on-site supervisor. The PCO wanted an assurance that this person would show up for work at the site, even though this person was being charged indirect rather than direct. The PCO got these assurances.

In any case, in a multiple award situation, the offeror would be foolish to antagonize the customer by not providing the promised on-site supervision.

Eric

By Anonymous on Wednesday, May 02, 2001 - 09:22 am:

Anon4,

No, $0.00 is not standard, I agree. But that was just a company's unorthodox (though not entirely unheard of) bidding strategy, and I, too, agree with the court decision. Anyway, that's not what Ex Fed has been complaining about.

What bother's Ex Fed, and what I'm talking about, is the inclusion of a CLIN for program manager, which ex fed considers "odd to bizarre." Here's his first reaction to it:

"Let me get this straight. There will be a menu of options forming a program of different composition and flavor for various ordering agencies. Some will order the program with and some without a program manager. Interesting.

I would think the management function was a necessity to some degree regardless of whether the full or partial menu was ordered. "I'll have the Caesar salad, surf and turf, baked potato, asparagus without management please." The logic still escapes me.

On a FFP it would seem to me the sensible thing is to include "management" among the non-directs with every order paying a share according to consumption. Even varied CLIN difficulty levels could be covered by varied rates on the deliverable CLINS. That avoids violation of the KISS principle -- one FFP objective I believe."

It looks to me that his complaint about unmanaged work is based entirely on the fact that the contract includes a separate CLIN and rates for a program manager. That doesn't make sense to him. He wants management to be included as an overhead cost in every other hourly labor rate. But that is not how task order contracts are usually priced because it is not sufficiently flexible to encompass a wide range of tasks, so I don't see it as a valid reason to take the contracting officer to task for violating "principles" and to call the contract "odd to bizarre."

Go to http://www.fss.gsa.gov, look at the Schedules E-Library for FSC Group 70, and check out the SIN for services. Look at the contractors' prices. They include hourly rates for program managers. Look at any number of task order contracts for services and you'll see that they include hourly rates for program managers. It's done that way so the parties can tailor each task order to suit their needs. I don't know why anyone would consider that practice to be odd unless they were not familiar with it. But with thirty years of experience as in contracting, I can tell you that there is nothing odd about it.

Again, I apologize to Ex Fed for sounding so frustrated with him, but I've been reading him trashing the CO for several days now and I still don't understand why he considers what the CO did to be odd or bizarre.

By Anonymous on Wednesday, May 02, 2001 - 09:37 am:

Eric:

My issue with Ex Fed is not about the $0.00 bid and that doesn't seem to be what he is complaining about. His complaint appears to me to be based on the mere fact that the contract included a separate CLIN for a program manager, which IS standard practice.

The Army had a very specific reason for including a separate CLIN for a program manager -- to give ordering agencies flexibility to price task orders encompassing a wide range of complexity and difficulty. As the GAO said in its first paragraph, the contract was designed to meet "worldwide" requirements of government agencies for IT services. Including management as an overhead rate would have been a one-size-fits-all solution that would have been inappropriate in this case.

If there's one thing that government technical people worry about it's program management. It's an obsession with them. They want to see it in the contractor's proposal; they want to know how much of it they're going to get; they want to know who they're going to get; and they want to know how dedicated he or she is going to be. You may not agree with their concern, but there it is. Including management as an overhead item in the hourly rates for other labor categories doesn't provide enough visibility into a contractor's plans for a specific task order and won't cut it.

By ex-fed on Wednesday, May 02, 2001 - 09:59 am:

Anonymous,

The description of this contract being "just about as common as dirt these days" does not impress me. It discourages me if you are speaking of the exact slice and dice used in the PM instance. I don't have too much problem with what you described in your first response and you seem to think it describes the contract at hand. Therefore, you and perhaps others may have missed what is bothering me.

From the decision: "(3) Pricing for any CLIN/SLIN must stand alone, and not be dependent upon the authorization of any other CLIN/SLIN, Id. at 46" and "Among other issues, FDC argued that GTSI's pricing approach for the project manager CLINs" [my emphasis]. Not project manager rates. Not a line item within a CLIN. Not even a linked and dependent CLIN, but project manager CLINs that must not be dependent on any other CLIN. To me this reads "project manager CLINs" that "must stand alone, and not be dependent upon the authorization of any other CLIN/SLIN."

Please explain to me how "project manager CLINs" that "must stand alone, and not be dependent upon the authorization of any other CLIN/SLIN" tie directly to these supposedly well defined tasks they are dependent upon? This is like a shipping CLIN that "must stand alone, and not be dependent upon" what or even if something is shipped. In fact, this wording appears to allow a nonsensical "unmanaged" project or project management without project! It is the logical structuring of CLINs here that bothers me.

I agree with you that the PM's work varys depending on the nature of the work managed. I also generally agree that "tasks may need more project management than others and including a line item for project managers on an hourly, daily and weekly basis lets the parties determine and price the management requirements for each task on an ad hoc basis."

I'd strike the "ad hoc." We would hope each CLIN's tasking is predetermined and well defined for a fixed price contract. I would get even more agitated to find highly varied or undefined tasking is involved here. With task definition well within a commercial analogue, FFP I would think the contractor could define PM with acceptable risks. If they can't it is their risk anyway.

I would have no problem if each tasking CLIN had an integrated PM price/description line defining the intensity and expertise of PM appropriate for the CLIN's tasking. That is a pricing arrangement subject to evaluation for exactly those terms needed: intensity and level appropriate for drop shipping hardware, software or other COTS items and that appropriate for on-site network support. That is not what is being described in the decision and it must have involved some look at the SOW so I doubt it is off on some wild tangent even if we cannot be absolutely certain.

Project management inclusion within the CLIN is something like what I suggested way up in the thread with a step further. This appears to be for essentially commercial services so I questioned whether it is really necessary to get into the level of detail of carving out the PM when there is some real justification to consider it a sort of overhead to the actual tasking. My example of airline tickets involves a much more complex backdrop of labor. Sensible market research and shopping is done continually with their rolled up bottom line.

The question of the contractor's judgment in allocating management to tasking may be interesting, but here may well be complicating simplicity. There is adequate fodder for good market research and a sound sense of the parameters. I have no real problem if the government has a solid reason to complicate its shopping this way. I suspect it does not and is just being nosey and operating on its "audit" instinct.

I really do hope nobody would really try to take advantage of "project manager CLINs" that "must stand alone, and not be dependent upon the authorization of any other CLIN/SLIN" and actually order "unmanaged." It has been hinted at by others in the thread and from the black letter decision is apparently possible. In my experience, to paraphrase and old Army dictum, what can happen will happen. This is particularly applicable when the scope of misunderstanding covers "Ordering from the contract(s) was to be permitted by any federal agency, including foreign military sales customers" -- in other words nearly the world.

You are right, the $0.00 bit doesn't bother me much at all in comparison. At a fine technical level NSP and $0.00 are not the same, yet I'd guess quite a few might consider that another way of saying the price is not broken out separately. In this case I'd consider it merely a poor choice of wording.

By Anonymous on Wednesday, May 02, 2001 - 10:48 am:

Ex Fed,

Two questions:

Do you believe that the contract CLINs are for types of services, like a "job order" contract, with one CLIN for program manager?

Would you think differently if you knew that the CLINs for services were labor category CLINs and not task CLINs?

By ex-fed on Wednesday, May 02, 2001 - 12:59 pm:

Anonymous,

To your Q1:

In part. Of the tasks listed in the decision commercial-off-the-shelf servers, workstations, operating systems, compilers, software applications, peripherals, leasing, documentation, consumables and system upgrades probably fit a "job order" model. They could be drop shipments, but they could include some level of service. Numbers within the packages would of course vary.

Local and wide area networking, engineering and support services, managed environment support, maintenance and training are likely not. This is one of the areas the decision does not make clear, but I would expect not. These services should be a clearly defined package in terms of tasking, but the labor levels (the numbers again) would depend on task volume. That is I presume why the requirement of "(4)" listed within the description section L of the RFP is stated as it is.

Your Q2:

No. The service tasking must be well and clearly defined to meet FFP requirements. The labor types must fit the task to make sense. Some arrangement for variance on mix and certainly numbers could be made for scale. The management of the tasking complexity and labor skill level should then be reasonable clear from the tightly defined portion. The intensity, or volume, of management must then be tailored to the scale of labor required. There is coupling of manager type and task type. Management for "engineering and support services, managed environment support" may quite different than for "training." I rather doubt a poor selection under "stand alone, and not be dependent upon the authorization of any other CLIN/SLIN" of an engineering manager for training or the reverse would benefit anyone.

Now, one of the areas I cannot know is whether there were conditions not mentioned in the decision that mitigated that apparent unlimited free choice on project management. I'd hope so. Without the SOW and particularly ordering instructions to agencies we cannot know precisely. I'm of little faith here though.

I'd also hope those ordering would simply have more sense than to order the equivalent of apple pie with soy sauce. My experience tells me someone out there among all agencies and military assistance countries would try.

I believe the Army here had a logical flaw that led to immediate problems on the responses. The fact everyone came back with "NSP" or that "$0.00" that was probably an attempt at doing so indicates to me the contractors also scratched their heads. The Army should have remembered its dictum: "An order that can be misunderstood will be misunderstood" and avoided both this case and the potential weird customer who wanted that apple pie soaked in soy sauce equivalent in CLIN matches.

By Anonymous on Wednesday, May 02, 2001 - 01:38 pm:

Ex Fed:

It is clear to me that you simply don't understand the kind of contract that the Army awarded. All I can say to you is that what the Army did was quite orthodox, made perfect sense, and didn't violate any principles.

I'm signing off. Take care of yourself and best wishes.

By ex-fed on Wednesday, May 02, 2001 - 02:18 pm:

Anonymous,

I understand only what is in the decision, that it was a FFP-IDIQ and it ran into trouble. I'd be happy to have the secret of the mix and match logic made clear.

No, I don't understand why that degree of "freedom" was allowed and think it nonsense. You haven't taken me up on clarifying why it might make sense despite my provision of the explicit example from the decision. I will also waste no more finger tapping in response to unsubstantiated "this is the way it is done." I've seen entirely too much of "the way it is done" that is wasteful, illogical, counterproductive and any number of other such descriptions.

By anon4 on Thursday, May 03, 2001 - 07:50 am:

Dear Ex-Fed,

Believe it or not I understand the significance of what you are saying with the post of 9:59 am of May 2 concerning the dependence of that CLIN/SLIN in relationship to other CLINs.

Anon4

By ex-fed on Thursday, May 03, 2001 - 12:17 pm:

anon4,

I think most will "get it" if they really think about the impact of severing real dependencies.

Going back to my technology development days one strives to minimize dependencies in technology, schedule and the contract. In IT development a good rule is to minimize and simplify interfaces to the greatest reasonable degree, another form of that rule. So many problems in all these areas, in fact any job, are caused by unrealistic or unnecessary dependencies. A thorough scrub at the planning and paper stage bears real reward during implementation. In many cases that is the difference between success or failure.

Conversely, severing an actual dependency can and quite often will give "weird and bizarre" results. As far as I can see from the information in the decision the Army apparently severed a real dependency between management and what is managed.

Skilled IT people could, with care, cure the situation for an actual delivery. Both my experience and research on the subject tell me that such skill is not really all that common. With the customer scope of this thing I think effort is needed to mitigate risk of the unskilled creating nasty accidents.

As one example, I'd feel a bit better to find that even a half step toward linking was made:

CLIN XXX1: Training (units)
CLIN XXX2: Training Project Management (units). CLIN XXX2 may only be ordered with CLIN XXX1.

That might not solve the "unmanaged" issue, but it would prevent the "apple pie with soy sauce" issue of training managed by a network maintenance manager without a clue of training issues or a sole order of management with nothing to manage. As long as "must stand alone, and not be dependent upon the authorization of any other CLIN/SLIN" governs (we can only hope mitigation is elsewhere in the contract) there is a problem.

Unfortunately we have these contracts churned out somewhat routinely by people who really don't have the experience in IT (or other) systems work or are too rushed to do the needed analysis. Too many remind me of an old Far Side cartoon where a sheriff looks out upon a pile of men, horses, tack and tells his deputy something like "Smith, a posse requires organization." "Let's throw together a wide scope IDIQ" seems to be in vogue. Oversight is overdue.

By the way, Anonymous, avoiding the requested explanation or pointing me to something I've missed by "you simply don't understand the kind of contract" is first a cheap way out and second an interesting assumption. I'd still like to have benefit of your secret knowledge explaining how "project manager CLINs" that "must stand alone, and not be dependent upon the authorization of any other CLIN/SLIN" tie directly to these supposedly well defined tasks they are dependent upon?

By Anonymous on Thursday, May 03, 2001 - 01:56 pm:

Ex-Fed:

There's no secret to it. The CLINs aren't for tasks, they're for labor hours:

CLIN 0001 Labor
0001AA Program Manager
0001AB Systems Engineer
0001AC Senior Programmer
0001AD Journeyman Programmer
0001AE Network Analyst

and so forth. The labor categories reflect the kinds of skills needed to perform the kinds of work described in the SOW.

When an agency has a task it sends the contractor a draft SOW and asks which labor categories are needed to do the job, including program manager. The contractor then proposes the labor mix and the appropriate level of management. The parties then negotiate to agreement on labor mix before the CO issues the task order.

This arrangement is extremely common and has been common since the late 50s when its use began in DOD weapons work. Its great virtue is flexibility. By setting up the CLINs as labor categories you can use the contract for a an almost infinitely wide range of tasks. In order to provide that kind of flexibility with task CLINs you would have to have a CLIN list a mile long.

The CLINs in this arrangement are required to be independent of one another because in order to provide tasking flexibility you need to be able to buy from them on an ad hoc basis. For example, I might want to buy 20 hours of program manager time to help me plan a task without having to buy the labor needed to actually hire the contractor to do the work.

Now go to http://www.fss.gsa.gov and then click on the schedules library. Go to Group 70, Special Item No. (SIN) 132 51 and get the list of contractors. Click on the very first contractor on the list and then click on the link to its prices for on site and off site work. You will find prices for Sr. Program Manager @ $79.19/hr, Sr. Business Analyst @ $88.10/hr, and so on. Check out other contractors as well.

Go to Fed Bus Ops and search for RFPs for IDIQ task order contracts for technical services and look at how they're priced.

Pricing management as an overhead cost included in each hour of labor would apply the same level of management to every such hour of labor, regardless of the nature of the task. That's a one-size-fits-all solution that's inappropriate given the objectives of such a contract.

Everybody in this business must be stupid except you.

By ex-fed on Thursday, May 03, 2001 - 02:49 pm:

Anonymous,

Thanks for the backhanded compliment about me being so smart, but it is another unfounded assumption on your part.

I'm well aware of the structure you use as an attempted answer, have dealt with it and generally approve of the arrangement when reasonably structured. It isn't uncommon and it works.

One little problem. Your example of CLIN 0001 isn't what is described in the decision. It is roughly what I've already said I have no real problem with such structure as it links management appropriately with labor.

The decision is clear on independent project management CLINs, not sub-CLINs, apparently covering a very varied grab bag of deliverables, both things and services. The fact the decision uses the plural in project management options does give some hope there is recognition of varied management requirements. So far it is only a dim hope.

Your CLIN 0001 involves similar labor types. Your CLIN 0001 could possibly fit the engineering support of the contract at hand and I would not have much problem with the arrangement. It could even be reasonably expanded to fit a number of the technical service categories. If you have information that the contract being discussed uses such structure much of my concern vanishes. What you describe is not unreasonable, but it does not address the specifics of the contract being described in the decision.

What is described are "CLINs [plural] that required hourly, daily, weekly, monthly, and yearly rates for a program manager" and not your management sub-CLINs within appropriate labor/task groups. Then it states "Pricing for any CLIN/SLIN must stand alone, and not be dependent upon the authorization of any other CLIN/SLIN" to apparently completely sever the reasonable linking of management with like labor/tasking.

It is possible this is all about semantics, but until new evidence is presented I can only deal with what the decision states. I presume they are competent to state the situation clearly and precisely. No snide comment, but I suggest you read again closely, think a bit on the specific rather than general and then if you come back have something that addresses the explicit issue, not some general example. I'm really not interested in discussing the tangential with you further.

By Anonymous on Thursday, May 03, 2001 - 04:17 pm:

Ex-Fed:

I have read the decision and you are seeing things in it that I don't. I don't think we can sort it out between us, since we've both read the same words and come to different conclusions.

Since you "generally approve" of the pricing arrangement that I've described, I don't have anything more to discuss with you, because I presume that means you do not think that arrangement to be "odd to bizarre."

If the contract is priced the way that you describe, then I would want to know more about the reasoning of the people who designed it before joining you in trashing my colleagues.

By Anonymous on Thursday, May 03, 2001 - 06:10 pm:

Ex Fed:

I have looked at the RFP schedule. You can look at it, too. I found it by searching the CBD archives for RFP No. DAAB07-00-R-H254, which is the number given in the GAO decision. I found the synopsis with a web link to the solicitation. The link takes you to an Army business page. Search in the CECOM solicition archive until you find it. You can find the complete documentary history of the solicitation. I downloaded the entire RFP in a zipped file, then unzipped it and printed out Section B, which is a 24 page long Excel spreadsheet.

There are 52 CLINs and hundreds of SUBCLINs. CLINs 0001 through 0035 are for hardware. There are no CLINs 0036-0039. CLINs 0040 and 00041 are for "SERVICES" and consist of SUBCLINs 0040AA through 0040WQ and 0041AA through 0041GQ. The remaining CLINs are for training, priced on a per student basis, travel and ODC.

Within CLIN 0040, SUBCLINs 0040AA though 0040AD are described as "system configuration and integration," "physical site analysis," "installation and relocation service,' and "high availability configuration." An accompanying note in the RFP says: "CLINs 0040AA thru 0040AD will be used as a rollup of labor categories and hours needed to perform these functions. Individual Kos will negotiate this [sic] items. These CLINs will NOT BE EVALUATED in the Price Model."

All of the remaining SUBCLINs are labor categories, beginning with 0040BA through 0040BQ for "program manager," and continuing with SUBCLINs for "network engineer," security engineer," "database/application programmer," "managed system engineer," "system engineer," "database engineer," "database/application programmer," "system administrator," "network administrator," etc.

Gee. You must have read that GAO decision wrong. Check it out.

By ex-fed on Friday, May 04, 2001 - 10:49 am:

As for your last little closing comment, no, I did not misread the decision. The words are there for all to read at the initial link of this discussion. With the thought of "could I have" I checked again. I won't consume WIFCON space with a long quote, but they are in "Background," numbered items 1-4 and the next paragraph.

I'm sorry you seem to be taking this personally. I'd expect we've both seen some pretty odd and trouble prone contract structure. It happens. It gets to GAO and the courts and it sometimes really goes public. It is not "trashing" people to point out problems in these things. It can be lessons learned. Illogical or poorly considered CLIN structure has caused difficulty in many contracts including one I had to deal with from the consumer end that would be amusing if it hadn't been so pitiful and expensive.

I've said all along that we had knowledge on this limited to the CG decision. I'm still not sure you ever took time to think upon the apparent issue of severance that I raised based on the decision's wording. Now you are countering with data. Good work. My confidence level rises though I have not been able to get to the data yet. Your CLIN examples seemed sound enough and I'm reassured that you seem to think the difficulty is not in the contract.

I've tried to recreate your path to the document and get passwords and other blocks. Using a direct attempt through http://www.monmouth.army.mil/cecom/ac/ac.html and searching on "DAAB07-00-R-H254" I get a meaningless "329 documents found" with a long identical list. I'd be interested in looking at the actual structure, but lack of .mil or .gov access may restrain me. If you have a direct link I'd like to try it.

In any case, I'll presume you have studied the thing. I'm not quite sure what to make of "All of the remaining SUBCLINs are labor categories, beginning with 0040BA through 0040BQ for "program manager," and continuing with SUBCLINs for "network engineer," security engineer," "database/application programmer," "managed system engineer," "system engineer," "database engineer," "database/application programmer," "system administrator," "network administrator," etc."

Assuming these are all options for the contractor to propose against a given SOW and there are adequate protections against some of that galaxy of potential ordering entities playing foolish games with the proposed structure my confidence level goes up notches. If not, are 0040BA through 0040BQ for program manager tied somehow to the labor they manage? What are the safeguards?

By Anonymous on Friday, May 04, 2001 - 11:52 am:

Ex-Fed:

I'm sorry about getting angry with you, but I want to tell you why I did.

You have been extremely critical of a CO on the basis of the limited information in the GAO decision and unfounded conclusions drawn from that information. The procurement is question was very complex and difficult and the CO who did it--Marcia Easton of CECOM, assisted by Michael Doelling--did an excellent job under the circumstances, even showing that they were smarter than the HQ AMC lawyers.

I believed you were drawing unfounded conclusions about the RFP based on the GAO decision before I ever saw the RFP, because based on extensive research I know that most agencies price such contracts on the basis of labor categories, not tasks, and I know why they do it.

You started to get to me with your comment to Rob Bristow on April 27 at 1145, in which you wondered how he could praise the CO for "mistaking the principle" and "meddling." The CO made no such mistake and was not meddling. His praise was well-merited.

You then followed with your "unmanaged" line of discussion, in which you failed to consider the possibility that "program manager" simply described a person with certain knowledge and skill, someone who might be hired to plan a project instead of to manage one and in which you showed that didn't understand the operation of the most common type of task order contract. You ignored a different Anonymous's and Anon Zed's attempts to explain to you what the contract was really about. You described the CO's work as "odd to bizarre." That comment really pissed me off.

I understand what you've said about the separation of management from work. The point is that your analysis does not apply to the facts at hand concerning the RFP. Had you made a more general point without applying your analysis to the RFP in question I would not have considered it controversial.

I would not have joined this discussion, much less become angry with you, had you simply discussed the pros and cons of different pricing strategies without being so damning of the CO. I don't think COs are perfect; in fact, I believe that there are many incompetent COs. However, when you are talking about specific work done by real human beings, I suggest that you either do your homework before criticising them or that you be more circumspect in your criticism.

It was not my responsibility, or anyone else's, to "counter with data." It's your responsibility to get data before you open fire on people.

To find the RFP go to http://www.abop.monmouth.army.mil and then search the CECOM award archive for the RFP number.

By Anonymous on Friday, May 04, 2001 - 01:48 pm:

The correct web address is http://abop.monmouth.army.mil. You have to drop the "www".

By ex-fed on Wednesday, May 09, 2001 - 03:01 pm:

Anonymous,

The address you've given is the one that gave me the "search results for "DAAB07-00-R-H254: 329 documents found" that result in a password requirement and "Error 401- You are not authorized to perform this operation" upon clicking. I've tried other approaches and none worked. As an "ex-fed" I apparently do not have access to this web document.

I can somewhat understand your irritation and I'll accept that I was perhaps too harsh on the contracting officer. Protests happen, sustained protest happen much more rarely. When they do there is often a problem that could have been avoided. On the other hand I do not presume CG decisions contain random, material errors. I do not think the conclusion I drew from information in the decision was "unfounded," but that is opinion.

You have stated your views and I understand how you got to them. I cannot look at the data and am also losing interest in going round this matter. I'll take your word about the general reasonableness and high quality of the contract with a reservation. My issue involves project (program) management in terms of that managing the delivering contract. You seem to be speaking of project management as a i{deliverable labor category}. I am familiar with deliverable labor to assist the government in its project management and this type contract.

The decision did not define which "project management" was involved. I did conclude it was management of the delivering contract for a reason. The contractors quoted "NSP" or the odd "$0.00" for management. That is consistent with internal management for the delivering contract. It is inconsistent for deliverable project management to assist the government in its own project management tasks. That makes no more sense than "NSP" for a programmer, network analyst or any other labor category. Perhaps the only way I'd expect to see this would be within a task price where the solicitation for a FFP on the task listed required labor and for some reason provided a line for labor category price. Then my comments about unnecessary inquiry into the FFP become effective.

If the descriptions of the project management here fall exclusively under deliverable service hours to the government then my severance issue is null. If they are for management of the delivering contract I stand by my criticism of severing essential linkage.

In any case our positions are clear and there is no reason to beat this thing any more.

By Eric Ottinger on Thursday, May 10, 2001 - 06:48 pm:

Ex-fed,

Try this.

http://abop.monmouth.army.mil/busopor27.nsf/Solicitation+By+Number?
OpenView&Startkey=DAAB07-00-R-H254&expandview

I works from my home computer. I don't think "mil" is the issue.

Anon,

From the little that I saw in the case, I would say Ms. Easton did an excellent job.

All,

I think we are getting into "blind man and the elephant" problems because we are reading this though the lens of our personal experience.

Eric