MINUTES OF THE AGENCY CONTRACT REVIEW BOARD 17 DECEMBER 1969

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP74B00535R000100200016-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 19, 2016
• Document Release Date: November 21, 2005
• Sequence Number: 16
• Publication Date: December 17, 1969
• Content Type: MIN

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Minutes of the Agency Contract Review Board
PRESENT: George E. Meloon, D/L
John F. Blake, DD/L
1.
nature:
b. I now has completed a second paper on the
case. This case has been selected as one to be reviewed for possible use in
an on-going study covering overruns and changes in scope.
opened the meeting with the following comments of a general
a. During recent deliberations on a proposed contract with
at least two members questioned the data placed on the
docket form itself. More specifically it was their contention that too much
operational data had been incorporated. The D/L now has stated that, in his
opinion, sufficient information should be included on dockets to insure that
the case could be understood clearly by individuals who are not contracting
officers.
c. The next meeting of the ACRB is scheduled, tentatively, for
7 January 1970.
Declassification Review by NGA
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d. The first meeting of the Procurement Policy Panel (PPP) has been
held. One of the subjects to be considered by the PPP at an early date will be
Agency use of CPAF contracts, a subject rising out of a recent ACRB meeting.
e. Some consideration has been given to a proposal that funds for cost
type R&D contracts be committed at 10370 of the estimated contract cost. The
extra 3% would not be made known to the contractor but would be held in escrow
for use in paying overrun costs. The members of the ACRB, when polled, were
all against this concept.
f. For some time OL has been preparing a new procedure for more ade-
quate control and utilization of government property in the possession of con-
tractors. This procedure, in the form of a Handbook, is now in publication
channels.
g. At request summarized Agency procure- 25X1
ment status as of the end of November. This summary stressed the fact that
total procurement activity is at about the same level as it was the same time
last FY.
h. I
ladvised the group that he had received a call from
TSD, with respect to the increased costs of Agency con-
tracting.
stated that as looking into this matter at the
25X1
request of OPPB.
At this point Inoted that he too had had a
25X1
brief discussion with OPPB, on this same subject and that some
consideration was being given to discussing the subject with BOB. Further
development of this subject is indicated.
There is some possibility that an existing OC contract with 0
25X1
will be subject to a rather drastic change in scope further complicated
by a potential overrun. At request
presented to the
25X1
group an excellent encapsuled summary of the case which involves work on the
1 -1
2. Next on the agenda was the regularly scheduled Logistics Briefing which in
this instance covered the subject of sub-contracting.
3. As the final presentation on the agenda, the following contract matters were
discussed:
a. During a previous meeting it developed that
the contractor might be in financial difficulty. At that time the audit advisor was
asked to review the financial aspect of the contractor especially the area of indirect
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costs. Today reported on ICAD's findings noting that there is no
evidence of financial weaknesses as evidenced by among other things, the
fact that indirect costs have risen only 267c from 1965 to 1969. Although this
rate of increase is acceptable, 0 stated that ICAD would continue to 25X1
watch the financial status of 25X1
b. A recent case involved an Doverrun of Don a contract 25X1
originally estimated at II During review of this case with board members
the DD/P representative made the observation that this overrun actually might
well be a change in scope. Although no additional comments were forthcoming
the case will be considered together with the Ocontract, when the position 25X1
paper on overruns vis-a-vis changes in scope is finally prepared for submission
to the board.
C. I
scope estimated to cost C
recommended D/L approval.
As there was nothing controversial the board
noted in summary that the optic system 25X1
involved still needs some improvement although the systems electronics now are
adequate.
d. This Contractor has had a history 25X1
of not being able to control his burden rates and as a consequence the Agency has
been forced to impose ceilings. This submission involves an overrun of
which is about 40% of the original target cost. Included in this overrun however
are G&A costs computed at 69% which is well above the ceiling of 40/~% established
by the negotiator and will not be allowed. The board recommended the overrun
for D/L approval but suggested that DD/S&T attempt to develop another source.
e. In this instance the board
reviewed the definitized contract negotiated under D/L approval granted on
30 June 1969. The negotiator had done an excellent job in arriving at a FP contract
which includes a performance bonus. The board recommended the case
for D/L approval. suggested that the CO and COTR be invited to brief
the board on the techniques and philosophy involved in arriving at this very fine
contract. The board agreed and this presentation will be scheduled for an early
meeting.
f. I The D/L previously approved the execution
of this contract on 23 October 1969 with the request that the contracting officer keep
the ACRB advised of this contractors performance. This information was provided
in a memorandum dated 9 December 1969. In his memorandum the 25X1
contracting officer, noted that the contractor is spending allocated funds at too high
a rate and that unless this expenditure rate is reduced there is a strong possibility
This case involves a change in
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that an overrun will be experienced. There is no cost ceiling provision in the
contract. The board was satisfied with the close supervision being provided by
both the CO and the COTR and did not recommend that a cost ceiling be established.
The board did recommend however that a follow up report on this contract be
provided in 30-60 days.
4. Prior to adjournment)
made the following two comments:
a. He suggested that OGC be asked for a ruling with respect to use of
prior year funds for changes in scope. At present such funds can only be used
for overruns and this limitation often leads to a situation in which a contractor
is charged with an overrun which is, in fact, a change in scope.
b. He suggested that some effort be made to survey existing government
laboratories for unused capability which the Agency might utilize. He mentioned
specifically the installation. There was general agreement with
this proposal. ill asume responsibility for the necessary research.
Chairman
Agency Contract Review Board
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