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CONTRACT MANAGEMENT OVERVIEW

CONTRACT MANAGEMENT OVERVIEW. Presented by : Mr. Chip Summers (703) 805-5151. Contract Management. Contracting Environment Acquisition Planning Selecting the Source Contract Administration. Go to end of briefing. Contracting Environment. Contracting Activities Sequence

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CONTRACT MANAGEMENT OVERVIEW

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  1. CONTRACT MANAGEMENTOVERVIEW Presented by: Mr. Chip Summers (703) 805-5151

  2. Contract Management • Contracting Environment • Acquisition Planning • Selecting the Source • Contract Administration Go to end of briefing

  3. Contracting Environment • Contracting Activities Sequence • Flow of Authority • Oversight and Guidance • Guiding Principles

  4. Contracting EnvironmentContracting Activities Sequence Requirements Acquisition Plan Acquisition Package Solicitation Source Selection/Negotiation Award Contract Administration Delivery/Acceptance Contract Closeout

  5. Contracting Environment Flow of Authority CONSTITUTION CONGRESS Head of Agency Senior Procurement Executive Head of Contracting Activity Contracting Officer

  6. Executive Branch ASPA (1947) ASPR DAR (1978) Congress GAO Protests Decisions Stay Provisions Laws FPASA (1949) FPR President Executive Orders Audits OMB OFPP A-11 A-76 Policies FAR (1984) DFARS Service Supplements to FAR/DFARS Buying Activity Supplements FASA (1994) FARA (1995) Clinger-Cohen (1996) Courts Army Navy Air Force Claims DoD Protests Directives 5000 Series Source Selection Guidance Defense Acquisition Deskbook Guidebooks ASBCA Claims Contracting EnvironmentOversight and Guidance OMB-Office of Mgt & Budget, OFPP-Office of Federal Procurement Policy, ASBCA- Armed Services Board of Contract Appeals, ASPA- Armed Services Procurement Act, ASPR- Armed Services Procurement Regulation, DAR-Defense Acquisition Regulation FAR- Federal Acquisition Regulation, DFARS- Defense Federal Acquisition Regulation Supplement, FPASA- Federal Property & Administrative Services Act, FPR- Federal Procurement Regulation, FASA- Federal Acquisition Streamlining Act, GAO- General Accounting Office

  7. Contracting EnvironmentGuiding Principles In exercising initiative, Government members of the Acquisition Team may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR nor prohibited by law (statute or case law), Executive order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority. FAR 1.102(d)

  8. Acquisition Planning (FAR Part 7) Market Research Commercial Items Competition Contracting Methods Socio-Economic Programs Contract Types

  9. Market Research Acquisition Planning Market Research (FAR Part 10) What Is It? • Market Surveillance • Ongoing Familiarity With a Market • Trade Shows • Research Reports • Trade Journals • Symposia Proceedings • Market Investigation • Collect, Evaluate & Analyze • Specific Information to meet • Agency Needs • Identify potential sources • Survey Manufacturers • Analyze Responses • Product Available • Proceed with • Commercial Buy • Revise Requirement? • New Development?

  10. Acquisition Planning Commercial Items (FAR Part 12) • Clear Preference for Commercial Items • Certain Laws Not Applicable • Contract Type • FFP or FP(EPA)

  11. Acquisition Planning Competition • “Acquisition managers shall take all necessary actions to promote a competitive environment….” (DODD 5000.1) • “The program manager shall, throughout the acquisition process, promote full and open competition and sustain effective competition between alternative major system concepts and sources, as long as it is economically beneficial and practicable to do so.” (FAR 34.005-1) • “... contracting Officers shall promote & provide for full and open competition in soliciting offers and awarding Government contracts.” (FAR. 6.101)

  12. Acquisition PlanningCompetition - Hierarchy • Full & Open Competition • Full & Open After Exclusion • Set Asides • Alternate Source • Other Than Full & Open Competition • Only One Available Source • Unusual or Compelling Urgency • Maintain Mobilization Capability • International Agreement • Authorized or Required by Statute • National Security • Public Interest

  13. Acquisition PlanningMethods of Contracting • Micro Purchases • <$2,500 • no competition necessary • the Government-wide commercial credit card - preferred method for purchase and payment • Simplified Acquisition Procedures • $2,500 - $100,000 • Electronic Commerce is preferred means • Reserved for small business • Can use for commercial item < $5M

  14. Acquisition PlanningMethods of Contracting Sealed Bidding requirements are easily understood expect competition no discussion required review responsiveness and responsibility Contracting by Negotiation competitive non-competitive opportunity for discussions best value consideration

  15. Acquisition PlanningMethods of Contracting - Alternatives • Federal Supply Schedule (FSS) • Blanket Purchase Agreements (BPA) • Multiple Award Schedule (MAS) • Government Wide Agency Contracts (GWAC) • Other Transaction Authority (OTA)

  16. Acquisition Planning Socio-Economic Programs www.sba.gov • Small Business: • Independently owned • and operated • Not dominant in its • field • Meets size standards • in Part 19.102 Small Businesses All Contractors • Small Disadvantage • Business: • Small business • At least 51% owned & • managed by person or • persons who are • socially & economically • disadvantaged SDB’s 8A’s HUB Zone Firms • 8A Contractor: • SDB • Approved for partici- • pation in 8A program • by SBA • HUB Zone Firm: • SBC in • historically under- • utilized business zone • 35% Employees • reside in zone

  17. Acquisition PlanningContract Types - Characteristics Fixed Price • Cost Promise Best Effort Deliver Risk to Contractor Low High Risk to Government High ? Cash Flow Cost Incurred On Delivery Progress Payments ---- Yes Performance Based Payments ---- Preferred Administration High Low Fee/Profit Periodic On Delivery

  18. Acquisition Planning Contract Types - Major Systems Continuum User Needs & Technology Opportunities TYPICAL CONTRACT TYPE CHANNEL Pre-Systems Systems Acquisition Sustainment Acquisitions B A C CPFF FFP (LOE) FPI FFP FPI FFP CPFF CPAF CPIF FOC IOC Concept Refinement Technology Development System Development & Demonstration Production and Deployment Operations & Support Concept Decision Design Readiness Review FRP Decision Review LRIP/IOT&E ILL DEFINED RQMT ... WELL ... DEFINED RQMT CE PDRR EMD PRODUCTION or DEPLOYMENT WORK STATEMENT TYPE CHANNEL

  19. Acquisition PlanningContract Types CPFF CPAF CPIF Max Fee Max Fee Award Fee Pool 100/0 Share Fixed Fee Share Ratio Target Fee Base Fee Min Fee Base Fee (0-3%) Estimated Cost Estimated Cost Target Cost FFP FPIF Target Profit 0/100 Share Multiple Incentive Share Ratio Profit (PTA) Ceiling Price Cost Target Cost

  20. Acquisition PlanningContract Types - Incentives • Cost • Schedule • Performance • Multiple Incentives

  21. Selecting the Source • Pre-Solicitation Process • Uniform Contract Format • Source Selection Policies • Post-Solicitation Process • New Contract/New Work • Traditional Approach • Alpha/One Pass Approach

  22. Selecting the SourcePre-Solicitation Process Request for Proposal Solicitation Preparation Requirement Market Research Acquisition Strategy & Plan Source Selection Strategy Draft Request for Proposal FedBizOpps: Advisory Multi-Step DRFP Release Reading Room Finalize RFP RFP Release Briefing to SSA Advertise RFP Release RFP Release to Industry

  23. Selecting the SourceUniform Contract Format Part I The Schedule A Solicitation/Contract Form BSupplies or Services & Prices or Costs C Specification/SOW/SOO/ORD D Packaging & Marking E Inspection & Acceptance F Deliveries or Performance G Contract Administration Data H Special Contract Requirements Part II Contract Clauses I Contract Clauses Part III List of Documents, Exhibits, & Other Attachments J List of Attachments Part IV Representations & Instructions K Representations, Certifications, & Other Statements L Instructions, Conditions, & Notices to Offerors or Quoters M Evaluation Factors for Award

  24. Selecting the SourceSource SelectionPolicies • Minimize Complexity of the Solicitation, Evaluation, and Selection Decision • Ensure Impartial Evaluation of Proposals • Select Source/Sources with Best Value to the Gov’t • All contractors and prospective contractors shall be treated fairly and impartially but need not be treated the same. FAR 15.002,15.101-1,1.102-2

  25. Advisory Multi Step Process/RFP Release Receipt of Proposals/ Presentations Competitive Range Determination Initial Eval Clarifications Limited Communications Face-to-Face Discussions/ Negotiations Receive & Analyze Field Surveys (if requested) Prepare for discussions with Remaining Offerors Request Final Proposal Revision Receive & Analyze Final Proposal Brief SSAC Brief SSA Contract Award (Distribution) SSA Decision Selecting the SourcePost-Solicitation Process (No Discussions)

  26. SOURCE SELECTIONOrganization Who Responsibilities DECIDE SOURCE SELECTION AUTHORITY (SSA) COMPARE SOURCE SELECTION ADVISORY COUNCIL (SSAC) EVALUATE PRAG SOURCE SELECTION EVALUATION BOARD (SSEB)

  27. SOURCE SELECTION Protest Interested Parties Agency (PCO) Court of Appeals for Fed Circuit GAO Court of Federal Claims

  28. Legend Contractor and Government Contractor Government Selecting the SourceTraditional Approach (Non-Competitive) Tech Eval Pre-Negotiation Objectives Pricing Negotiations Proposal Field Pricing DCAA Audit Price Negotiation Memorandum Reviews Write Contract PCO Signs Distribution Contractor Signs

  29. Selecting the SourceAlpha /One Pass

  30. Selecting the SourceAlpha/One Pass Relies on a Team Approach • To concurrently develop a scope of work • Price that scope of work • Prepare a contract to execute that scope of work

  31. Legend Contractor and Government Separately Contractor and Government Government Selecting the SourceAlpha/One Pass (Sole Source) Requirement Acquisition Strategy Processes Team Members Acquisition Plan Model Contract Distribution Contractor and Government Sign Reviews Technical & Cost Agreements

  32. Selecting the SourceAlpha/One Pass – Keys to Success • Management Commitment • Trust • Honesty • Empowerment

  33. Contract Administration • DCMA • Locations • Functions • Modifications • Constructive Change • Disputes • Alternative Dispute Resolution • Termination for Convenience • Termination for Default • Contract Closeout

  34. Contract Administration Defense Contract Management Agency Districts East & West 67+ CMOs Boston DCMD East Los Angeles DCMD West International Major CMOs

  35. FAR 42.302 Lists 70 “normal” Functions 10 additional functions are frequently delegated Most Functions Fall into 1 of 7 Categories Contract Administration Pricing/Negotiations Program Integration Property Management Quality Assurance Engineering Surveillance Production Surveillance Contract AdministrationFunctions

  36. Contract AdministrationContract Modification Change Order Administrative Supplemental Agreement

  37. Contract AdministrationContract Modification- Constructive Change • Oral or written act or failure to act by authorized Government official construed by contractor as having same effect as a written change order • Must involve: • Change in performance beyond minimum contract requirements, and • Word or deed by Government representative which requirescontractor effort that is not a necessary part of the contract • Requires Ratification

  38. Contract AdministrationDisputes Appeal Process U.S. SUPREME COURT Court of Appeals for the Federal Circuit Armed Services (Agency) Board of Contract Appeals Court of Federal Claims Alternative Appeal Route Filed Within 90 Days of Receipt of C.O. Decision Alternative Appeal Route Filed Within 12 Months of Receipt of C.O. Decision (Administrative) (Judicial) Contractor Appeal of Contracting Officer’s Final Decision * Use of Alternate Dispute Resolution (ADR) is Preferred

  39. Contract AdministrationAlternative Dispute Resolution Any procedure or combination of procedures voluntarily used to resolve issues in controversy without the need to resort to litigation.

  40. Contract AdministrationAlternative Dispute Resolution - Contract Tool • No Perfect Contracts; Unforeseen Problems Occur • Litigation Takes Too Long; Costs Too Much • Collaborative (21st Century) versus Adversarial (1980s) • Structured Conflict Management Clears Obstacles; Enables Joint Mission Success

  41. Contract AdministrationAlternative Dispute Resolution - Methods Arbitration: Impartial third party issues final binding decision. Mediation: Neutral third party serves as an advisor to determine mutual interests and defines best and worst alternatives to a negotiated agreement. May also be called Conciliation. Minitrials: Each party makes presentations to a panel comprised of senior executives from each side and a neutral party. Panel attempts to work out an equitable agreement. Fact-finding: Impartial third party examines the issues and submits a report with recommended settlement. Partnering: Agreement between the parties that describes how they will work together to keep issues from becoming adversarial.

  42. Contract AdministrationTermination For Convenience • Unilateral Government Right • Notice of Termination Must Be in Writing • No Justification is Required • May Be Partial or Complete

  43. Contract AdministrationTermination For Default • Government May Terminate for Default if Contractor Fails To: • Make Timely Delivery • Perform Any Other Contract Provision • Make Progress & Thereby Endangers Performance • Government Pays Contract Price for Completed Supplies • Government May Obtain Reprocurement Costs

  44. Contract AdministrationContract Close Out • Must assess physical completion to undertake close-out • Physical completion occurs when: • All required deliveries are completed, inspected and accepted • All options have expired • Government has given the contractor a notice of termination

  45. Contract AdministrationContract Close Out • Close out includes • disposition of classified material • disposition of Government property • final patent & royalty reports are cleared • a plant clearance report is received • interim or disallowed costs are settled • price revisions are complete • subcontracts are settled by the Prime

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