So here's what I'm facing; I have a seller whom I suspect is providing RFQs which ultimately shift overhead coats to the buyer. Certain things I've seen so far (been here all of six weeks), between the two companies who've been in the aviation business since the 1920s:

- We've had to provide training for developing a schedule (using Project - however, the deliverable is for the schedule to be in contractor format (yes, an eff'ed up SDRL))

- We've provided training how to streamline a production product

- Provided recommendations for how to streamline a repair line

- Etc

For insight, recently the question was asked if they baselined their schedule. The question went over their head.
Resources are allocated based on half- day need.


In retrospect, I suspect their corporate office seeks to decrease the fixed costs of the particular office and I'm trying to likewise identify what they are doing to mitigate expectations. Such things I've seen/suspect are:

Overrated titles for management (a Sr PM title for the less experienced PM employee, a director title for a semi experienced PM, etc) thereby paying 2/3 for the position(s) observed)

Shifting training of employees to the buyer

Location is a smaller place/ square feet than needed

Located in an area which cannot support skill set required/ needed (akin to hiring carbon fiber techs in Key West)

Ideas for what is missing?

TIA

Not quite sure what you are asking. Are you wanting to know how to shift fixed costs to the buyer or are you asking rhetorically?

The seller has to shift all costs to the buyer plus a gross margin profit otherwise they won't be in business for too long.

Or another way: who owns the assets funded by the fixed costs? For example, if a job requires a specific tooling and the tooling is of no value to the seller, the buyer pays for the tooling even in cases where it's not feasible to remove the tooling after the contract.

you say they provided RFQs which to me means Request for quotes and not a purchase order/contract but you've already provided trainings. What gives? Is there a contract/purchase order signed and accepted by both sides?

You don't really care to know about their business, otherwise, you could have just hired people for the tasks they're doing. What you should care about is what are the deliverables of the contract and is the seller delivering on them.

If you hired a project management company and you're having to train their people how to use Project, someone in your company effed up big time in selecting the wrong vendor.

ETA: it sounds like you need to engage your contracts and legal departments to get yourself out of the deal. But sometimes, companies bite the bullet and pay the cheaper tuition costs than to enter litigation.

One thing we caught suppliers in the 90s doing was subcontracting production and services out to a subsidiary company and then rolling admin cost into price as a acquisition cost. All kinds of inspired accounting can then be applied.

Rey, what's happening is due to failed government audits, the seller cannot be on Time and Material contracts, FF type only.

On our side, and before my time, a SOW and PO vehicle were set into place with one of the deliverables (for example) being the seller provide an IMS - in contractor format. The first deliverable was, no kidding, hand written. By the fourth iteration the schedule was provided in excel. We, the buyer, spent the effort to train them in Project. (Shifting their training costs)

IMO - we should have specified, in writing, the schedule be provided in Project or other compatible file type. The buyer is in their right to specify a line item which shows training, overhead, etc to comply (though if the buyer hired qualified PMs, the training wouldn't be as impactful)

The question is more rhetorical than anything. We cannot get out of the contract, the requirement for the seller's product makes that a zero option - and both sides know this. What I'm trying to ultimately figure out is if it were an economically viable option to purchase the intellectual rights and design data to manufacture the LRUs ourselves.

I don't know what an IMS is but it can't be that esoteric that a handwritten one submitted couldn't have been grounds for non-delivery and subsequent voiding of the contract. Training is for familiarization to aspects peculiar to your organization.

You hire a contractor to paint your house, you may have to train them where the rooms are but you shouldn't have to train them how to paint.

Are you certain the seller's product will even work? You may be paying for the whole thing including development and testing of the product. There may not be any actual "product " at this point.

Are they just a 3rd party value reseller of an off-the-shelf highly customizable complex program? It may be cheaper to cut losses and go with a second vendor.