I'm doing a commercial janitorial service, and including all of the provision/clauses from FAR Part 12. I see that one of the provisions says "may not be tailored", however, there are italized comments throughout the provision, a lot of items that have nothing to do with my solicitation, can I delete these, or am I banned from doing that in the "no tailoring" statement?

By J. Inman on Monday, July 24, 2000 - 12:59 pm:

in reference to Mr Novak's question --

No, you are not excused from Part 7 acquisition planning or market research or Part 12 commercial item determinations because you contemplate a 8(a) approach -- your acquistion planning and market research will help you to decide if 8(a) is the right way to go -- and your commercial determination will help you decide if your 8(a) contract will be a "commercial" contract (using only commercial clauses) or a "standard" contract (using all the standard clauses).

By Joel Hoffman on Thursday, July 20, 2000 - 09:19 am:

Ron, by "assignment of a contract to a Section 8(a) contractor", do you mean deciding to negotiate a new, sole source contract? Please clarify what you intend to do... Thanks.

By Ron Novak on Wednesday, July 19, 2000 - 06:25 pm:

I'm trying to find out whether assignment of a contract to a Section 8(a) contractor affects (i)the FAR Part 7 requirement to conduct market research and/or (ii) commercial item determinations.

By Bob Ramos on Monday, July 3, 2000 - 06:07 pm:

If this message is improper, I hope I will be excused - first time here. I am an 8(a) firm based in Corpus Christi, TX. My approved SIC Codes are the 87XX series - administrative services) and 73XX series (Computer field except computer maintenance). If you have a potential 8(a) sole source contract and would like to discuss "teaming up", I would appreciate hearing from you.


Bob Ramos
Gabrie Enterprises

I would like to thank everyone who responded to my posting. Your insight and comments have been most helpful. After submitting a proposal and hearing nothing for over a year - the Agency made a Contract award and issued the first task order RFP a day later. Over the course of a week, we had to develop our proposal and work out the details with the 8(a) firm. I represent a Contractor who is trying to do the right thing....but figuring out what that is can sometimes be difficult, especially given the time constraints. Thanks again for the help.

By Wayne Hinton on Thursday, May 4, 2000 - 11:51 am:

For guidance on Limitations on Subcontracting and the methodology for calculating and monitoring compliance, you may want to take a look at the following SBA Regs:

13 CFR 124.510 and 13 CFR 125.6

I've never encountered the 50/50 fee question. Can't help there.

By /joel Hoffman on Tuesday, May 2, 2000 - 07:29 pm:

Cr- there are Small Business Administration CFR's - I am on the road, so don't have ready access to them - which discuss joint venture and teaming arrangements between 8(a) and partners. Basically, the 8(a) must have controlling interest in the management of the contract and the teaming arrangement and must self-perform the minimum percentage of the effort.

Back to the FAR- Profit markups for a subcontractor are negotiable. The weighted guidelines are used by many agencies for evaluating markups for subcontractors when they are required to breakdown their subcontract prices. Sucontractor's profit rate should be commeasurable with the various factors - it could be higher than the prime's, depending upon the circumstances.

Happy Sails! Joel

By Kennedy How on Tuesday, May 2, 2000 - 01:07 pm:

I was kind of hunting around, and the only thing I can find is the FAR Part 30, Cost Accounting Standards, and the FAR Appendix, which address this in more detail. Your subcontract may or may not be applicable.

As far as provisional indirect rates, they don't necessarily have to match what was established for the prime. I say this because under CAS, the subcontractor rates may be higher, but allowable. Forcing the use of a lower rate would mean an unfair and unreasonable price to you. The subcontractor's prices and rates have to be fair and reasonable, and when those are passed up to the Prime, they add their provisionals, which results in the price the Government is paying. Interesting that you use the term "provisional", I normally associate that with cost contracts, and when the contract is done, the final rates are negotiated, and prices adjusted accordingly.

From past experience, I've had DCAA audit subcontractors, in conjunction with the prime asking for an assist audit.

Kennedy

By Eric Ottinger on Tuesday, May 2, 2000 - 01:06 pm:

CR,

We use something called "weighted guidelines" to determine a reasonable profit or fee for prime contracts.

I don't believe this is required for subcontracts. However, the profit/fee should be reasonable.

The ceiling rates would apply to indirects (i.e. overhead and G&A). If you are almost entirely a commercial firm you should be careful about the choice of a contract type. If you have a cost type contract, DCAA will want to verify that your accounting system is adequate for a cost type contract. Further, you would be subject to the cost principles in the Federal Acquisition Regulation. Unless, you intend to do business with the Government regularly, this would not be a good idea for anyone.

A fixed price or Labor Hour arrangement would avoid that problem. Of course, it would be very good if you can establish that your rates are competitive market rates. To make a dumb point, if a fixed price is competitive and fair, the Government doesn't care what profit you make.

I hesitate to keep giving you advice. There are lawyers and retired Government contracting people who can help you out. I don't mean to compete with them and this Forum isn't really geared to provide in depth advice.

You may want to talk to the Prime's contracting person, the Government Contracting Officer and/or the Small Business administration. It never hurts to ask a question.

Good Luck,

Eric

Eric - Thank you for the quick response. Regarding the regulatory guidance regarding profitability....the 8(a) firm has been audited by DCAA and the Contract contains a reference to "Allowable Cost and Payment" which sets forth categories such as fringe benefits, overhead and G&A with percentages for each in a column titled Provisional. The column titled Ceiling Rate is marked N/A and it explains that ceilings do not apply to the contract. What does this mean and as the subcontractor, are we subject to the same type of DCAA audit and the same provisional indirect rates? Again, I appreaciate your help.

By Eric Ottinger on Tuesday, May 2, 2000 - 11:52 am:

No.

However, there is some regulatory guidance on what would be considered a reasonable profit.

Eric

In 1998, the firm I work for agreed to team with an 8(a)contractor in response to a Basic Ordering Agreement request for proposal. The Indefinite Quantity Contract was recently awarded to the 8(a) and we have now submitted our bid in response to the first task order RFP. The 8(a) is the Prime Contractor and my firm, who brings the technical experience and expertise to the table, is acting as a subcontractor.

I am trying to work on a Subcontract Agreement and figure out our deal with the 8(a) prime contractor. The Contract states that "at least 50 percent of the cost of contract performance incurred for personnel shall be expended for employees of the concern (the 8(a)firm)." While I understand this to mean that the 8a must share 50% of the labor cost associated with completing the scope of services, are there any FAR, SBA or other provisions that require that the profit be split in a similar 50/50 manner?

Most of our clients are in the private sector, and we are relatively new to government contracting so your assistance would be greatly appreciated!