Courseware
Starting at the very beginning
What is a contract?
A tool the parties use to allocate transaction risk.
US governance
- Constitution
- Article 1: Legislature
- Article 2: Executive branch
- Article 3: Judiciary
- Federal laws
- From Congress, signed into law by president, then
- U.S. Code
- Federal regulations
- Promulgated by agencies
- In federal, the meat of the matter
- Code of Federal Regulations
- Federal Aviation Regulations at Title 14
- Part 91 for private and business flights
- Part 135 for charters
- Part 121 for commercial service
- FAR is codified at Title 48
- FAA uses unique Acquisition Management System
- State laws
- State regulations
- Federal policies
- U.S. as a common law country
- Courts set common law through precedent
- Contract formation under common law
- Offer: Proposal
- Acceptance: Execution of contract
- Consideration: Purpose of contract
- Authority: Only government KOs may enter into contracts
- Intent: No “gentlemen’s” agreements
- Federal judiciary
- District courts, which have appellate courts, plus
- U.S. Court of Federal Claims: Specialized court for contract disputes arising from government procurement
- Federal Circuit is specific appellate court
- Supreme Cour
Brief history of federal acquisition
- Cost-type contracts
- Defense Contract Audit Agency
- Because contractors are entitled to every allowable, allocable cost, government auditors must assess the classification and computation of transactions
- Government auditors often co-located with federal contractors’ accounting departments
- Dreaded cost or pricing data, including certified cost or pricing data
- Totals are trued up and broad exposure to company records invites whistle-blowers
- Contractor purchasing system review (CPSR)
- Defense Contract Management Agency
- Applies to contractors with anticipated sales exceeding $50 million to validate contractor spends government funds efficiently and effectively
- Review may include:
- Competition for subcontracts
- Pricing practices
- Source selection
- Management of contract changes
- Cost or price analysis
- Recordkeeping
- Competition in Contracting Act of 1984
- Set standard for “full and open competition through the use of competitive procedures”
- Federal Acquisition Streamlining Act (FASA) of 1994
- Established a preference for use of commercial items and FAR Part 12 where possible
- Encouraged use of simplified acquisition procedures
- Preference for multiple-award IDIQ contracting
- Encouraged e-commerce
- Commercial Item Contracting Act (CICA) of 1996
- Further simplified acquisition of COTS products and clarified definitions
- Eased pricing burdens, such as introducing other than certified cost or pricing data
- Emphasized performance-based contracting
- FAR Part 15 rewrite in 1997
- Established Part 15 process model many still cling to
- Trends to IDIQ contracts, including limited task-order protests and expedited award procedures
- Since bogged down by multiple awardees
When contracting with a sovereign
- All rules and regulations are proposed and finalized by the Government
- Terminations for convenience
- Government to evades liability for future work
- It remains obligated to pay for completed work
- All contracts include audit clauses
- Broad investigatory authority to challenge compliance with contracting obligations
- DOJ pursues allegations of wrongdoing or over-charging under the Federal False Claims Act (FCA) to tune of over $1B annually
- Tucker Act
- Article 1 Courts, GAO
- Office of Dispute Resolution for Acquisition (ODRA) for FAA
- Alternative Dispute Resolution
- Adjudication process governed by Administrative Procedures Act
- Sovereign not subject to state law or courts
- Red Book applies to all
- Government does not pay until services are provided
- Contract funds must be obligated
- Contractors perform at-risk without fully executed mods
- Christian doctrine
- “Mandatory” FAR clauses will be read into contracts or subcontracts
- What is a mandatory FAR clause? Each FAR clause has a preamble that states “as prescribed in XX, insert the following clause”
- If XX states that the referenced clause “shall” be included in all contracts or certain contracts, it is a mandatory clause
- If XX state that the referenced clause “may” be included in a contract, then it is not mandatory
Acquisition planning
- Market research
- Determine capability of commercial market to meet needs
- Determine whether contractors in socioeconomic categories exist
- Small businesses
- Economically disadvantaged woman-owned small businesses
- Women-owned small businesses
- Small disadvantaged businesses
- Veteran-owned small businesses
- Service-disabled veteran-owned small businesses
- 8(a)
- Historically Underutilized Business Zone (HUBZone) small businesses
- Market research sources
- Contacting knowledgeable government and industry personnel
- Reviewing recent market research in similar areas
- Querying government and commercial databases
- Participating in online communication
- Sales history of item or similar items
- Supplier Catalogs
- Published requests for information
- Source lists of similar items
- Acquisition plans
(a) Background and objectives –
(1) Statement of need. Introduce the plan by a brief statement of need. Summarize the technical and contractual history of the acquisition. Discuss feasible acquisition alternatives, the impact of prior acquisitions on those alternatives, and any related in-house effort.
(2) Applicable conditions. State all significant conditions affecting the acquisition, such as-
(i) Requirements for compatibility with existing or future systems or programs; and
(ii) Any known cost, schedule, and capability or performance constraints.
(3) Cost. Set forth the established cost goals for the acquisition and the rationale supporting them, and discuss related cost concepts to be employed, including, as appropriate, the following items:
(i) Life-cycle cost. Discuss how life-cycle cost will be considered. If it is not used, explain why. If appropriate, discuss the cost model used to develop life-cycle-cost estimates.
(ii) Design-to-cost. Describe the design-to-cost objective(s) and underlying assumptions, including the rationale for quantity, learning-curve, and economic adjustment factors. Describe how objectives are to be applied, tracked, and enforced. Indicate specific related solicitation and contractual requirements to be imposed.
(iii) Application of should-cost. Describe the application of should-cost analysis to the acquisition (see 15.407-4).
(4) Capability or performance. Specify the required capabilities or performance characteristics of the supplies or the performance standards of the services being acquired and state how they are related to the need.
(5) Delivery or performance-period requirements. Describe the basis for establishing delivery or performance-period requirements (see subpart 11.4). Explain and provide reasons for any urgency if it results in concurrency of development and production or constitutes justification for not providing for full and open competition.
(6) Trade-offs. Discuss the expected consequences of trade-offs among the various cost, capability or performance, and schedule goals.
(7) Risks. Discuss technical, cost, and schedule risks and describe what efforts are planned or underway to reduce risk and the consequences of failure to achieve goals. If concurrency of development and production is planned, discuss its effects on cost and schedule risks.
(8) Acquisition streamlining. If specifically designated by the requiring agency as a program subject to acquisition streamlining, discuss plans and procedures to-
(i) Encourage industry participation by using draft solicitations, presolicitation conferences, and other means of stimulating industry involvement during design and development in recommending the most appropriate application and tailoring of contract requirements;
(ii) Select and tailor only the necessary and cost-effective requirements; and
(iii) State the timeframe for identifying which of those specifications and standards, originally provided for guidance only, shall become mandatory.
(b) Plan of action—
(1) Sources. (i) Indicate the prospective sources of supplies or services that can meet the need. (ii) Consider required sources of supplies or services (see part 8) and sources identifiable through databases including the Governmentwide database of contracts and other procurement instruments intended for use by multiple agencies available at https://www.contractdirectory.gov/contractdirectory/.
(iii) Include consideration of small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns (see part 19).
(iv) Consider the impact of any consolidation or bundling that might affect participation of small businesses in the acquisition (see 7.107) ( 15 U.S.C. 644(e) and 15 U.S.C. 657q). When the proposed acquisition strategy involves bundling, identify the incumbent contractors and contracts affected by the bundling.
(v) Address the extent and results of the market research and indicate their impact on the various elements of the plan (see part 10).
(2) Competition.
(i) Describe how competition will be sought, promoted, and sustained throughout the course of the acquisition. If full and open competition is not contemplated, cite the authority in 6.302, discuss the basis for the application of that authority, identify the source(s), and discuss why full and open competition cannot be obtained. (ii) Identify the major components or subsystems. Discuss component breakout plans relative to these major components or subsystems. Describe how competition will be sought, promoted, and sustained for these components or subsystems.
(iii) Describe how competition will be sought, promoted, and sustained for spares and repair parts. Identify the key logistic milestones, such as technical data delivery schedules and acquisition method coding conferences, that affect competition.
(iv) When effective subcontract competition is both feasible and desirable, describe how such subcontract competition will be sought, promoted, and sustained throughout the course of the acquisition. Identify any known barriers to increasing subcontract competition and address how to overcome them.
(3) Contract type selection. Discuss the rationale for the selection of contract type. For other than firm-fixed-price contracts, see 16.103(d) for additional documentation guidance. Acquisition personnel shall document the acquisition plan with findings that detail the particular facts and circumstances, (e.g., complexity of the requirements, uncertain duration of the work, contractor’s technical capability and financial responsibility, or adequacy of the contractor’s accounting system), and associated reasoning essential to support the contract type selection. The contracting officer shall ensure that requirements and technical personnel provide the necessary documentation to support the contract type selection.
(4) Source-selection procedures. Discuss the source selection procedures for the acquisition, including the timing for submission and evaluation of proposals, and the relationship of evaluation factors to the attainment of the acquisition objectives (see subpart 15.3). When an EVMS is required (see FAR 34.202(a)) and a pre-award IBR is contemplated, the acquisition plan must discuss-
(i) How the pre-award IBR will be considered in the source selection decision;
(ii) How it will be conducted in the source selection process (see FAR 15.306); and
(iii) Whether offerors will be directly compensated for the costs of participating in a pre-award IBR.
(5) Acquisition considerations.
(i) For each contract contemplated, discuss use of multiyear contracting, options, or other special contracting methods (see part 17); any special clauses, special solicitation provisions, or FAR deviations required (see subpart 1.4); whether sealed bidding or negotiation will be used and why; whether equipment will be acquired by lease or purchase (see subpart 7.4) and why; and any other contracting considerations. Provide rationale if a performance-based acquisition will not be used or if a performance-based acquisition for services is contemplated on other than a firm-fixed-price basis (see 37.102(a), 16.103(d), and 16.505(a)(3)). (ii) For each order contemplated, discuss-
(A) For information technology acquisitions, how the capital planning and investment control requirements of 40 U.S.C. 11312 and OMB Circular A-130 will be met (see 7.103(v) and part 39); and
(B) Why this action benefits the Government, such as when-
(1) The agency can accomplish its mission more efficiently and effectively (e.g., take advantage of the servicing agency’s specialized expertise; or gain access to contractors with needed expertise); or
(2) Ordering through an indefinite delivery contract facilitates access to small business concerns, including small disadvantaged business concerns, 8(a) contractors, women-owned small business concerns, HUBZone small business concerns, veteran-owned small business concerns, or service-disabled veteran-owned small business concerns.
(iii) For information technology acquisitions using Internet Protocol, discuss whether the requirements documents include the Internet Protocol compliance requirements specified in 11.002(g) or a waiver of these requirements has been granted by the agency’s Chief Information Officer.
(iv) For information technology acquisitions, identify the applicable ICT accessibility standard(s). When an exception or an exemption to the standard(s) applies, the plan must list the exception and/or exemption, and the item(s) to which it applies. For those items listing 39.204 or 39.205(a)(1) or (2), the corresponding accessibility standard does not need to be identified. See subpart 39.2 and 36 CFR 1194.1.
(v) For each contract (and order) contemplated, discuss the strategy to transition to firm-fixed-price contracts to the maximum extent practicable. During the requirements development stage, consider structuring the contract requirements, i.e., line items, in a manner that will permit some, if not all, of the requirements to be awarded on a firm-fixed-price basis, either in the current contract, future option years, or follow-on contracts. This will facilitate an easier transition to a firm-fixed-price contract, because a cost history will be developed for a recurring definitive requirement.
(6) Budgeting and funding. Include budget estimates, explain how they were derived, and discuss the schedule for obtaining adequate funds at the time they are required (see subpart 32.7).
(7) Product or service descriptions. Explain the choice of product or service description types (including performance-based acquisition descriptions) to be used in the acquisition.
(8) Priorities, allocations, and allotments. When urgency of the requirement dictates a particularly short delivery or performance schedule, certain priorities may apply. If so, specify the method for obtaining and using priorities, allocations, and allotments, and the reasons for them (see subpart 11.6).
(9) Contractor versus Government performance. Address the consideration given to OMB CircularNo.A-76 (see subpart 7.3).
(10) Inherently governmental functions. Address the consideration given to subpart 7.5.
(11) Management information requirements. Discuss, as appropriate, what management system will be used by the Government to monitor the contractor’s effort. If an Earned Value Management System is to be used, discuss the methodology the Government will employ to analyze and use the earned value data to assess and monitor contract performance. In addition, discuss how the offeror’s/contractor’s EVMS will be verified for compliance with the Electronic Industries Alliance Standard 748 (EIA-748), Earned Value Management Systems, and the timing and conduct of integrated baseline reviews (whether prior to or post award). (See 34.202.)
(12) Make or buy. Discuss any consideration given to make-or-buy programs (see 15.407-2).
(13) Test and evaluation. To the extent applicable, describe the test program of the contractor and the Government. Describe the test program for each major phase of a major system acquisition. If concurrency is planned, discuss the extent of testing to be accomplished before production release.
(14) Logistics considerations. Describe-
(i) The assumptions determining contractor or agency support, both initially and over the life of the acquisition, including consideration of contractor or agency maintenance and servicing (see subpart 7.3), support for contracts to be performed in a designated operational area or supporting a diplomatic or consular mission (see 25.301-3); and distribution of commercial products or commercial services;
(ii) The reliability, maintainability, and quality assurance requirements, including any planned use of warranties (see part 46);
(iii) The requirements for contractor data (including repurchase data) and data rights, their estimated cost, and the use to be made of the data (see part 27); and
(iv) Standardization concepts, including the necessity to designate, in accordance with agency procedures, technical equipment as "standard" so that future purchases of the equipment can be made from the same manufacturing source.
(15) Government-furnished property. Indicate any Government property to be furnished to contractors, and discuss any associated considerations, such as its availability or the schedule for its acquisition (see 45.102).
(16) Government-furnished information. Discuss any Government information, such as manuals, drawings, and test data, to be provided to prospective offerors and contractors. Indicate which information that requires additional controls to monitor access and distribution (e.g., technical specifications, maps, building designs, schedules, etc.), as determined by the agency, is to be posted via the enhanced controls of the Governmentwide point of entry (GPE) at https://www.sam.gov (see 5.102(a)).
(17) Environmental and energy conservation objectives.
(18) Security considerations.
(i) For acquisitions dealing with classified matters, discuss how adequate security will be established, maintained, and monitored (see subpart 4.4). (ii) For information technology acquisitions, discuss how agency information security requirements will be met.
(iii) For acquisitions requiring routine contractor physical access to a Federally-controlled facility and/or routine access to a Federally-controlled information system, discuss how agency requirements for personal identity verification of contractors will be met (see subpart 4.13).
(iv) For acquisitions that may require Federal contract information to reside in or transit through contractor information systems, discuss compliance with subpart 4.19.
(19) Contract administration. Describe how the contract will be administered. In contracts for services, include how inspection and acceptance corresponding to the work statement’s performance criteria will be enforced. In contracts for supplies or service contracts that include supplies, address whether higher-level quality standards are necessary ( 46.202) and whether the supplies to be acquired are critical items ( 46.101).
(20) Other considerations
(21) Milestones for the acquisition cycle. Address the following steps and any others appropriate:
Acquisition plan approval.
Statement of work.
Specifications.
Data requirements.
Completion of acquisition-package preparation.
Purchase request.
Justification and approval for other than full and open competition where applicable and/or any required D&F approval.
Issuance of synopsis.
Issuance of solicitation.
Evaluation of proposals, audits, and field reports.
Beginning and completion of negotiations.
Contract preparation, review, and clearance.
Contract award.
(22) Identification of participants in acquisition plan preparation. List the individuals who participated in preparing the acquisition plan, giving contact information for each.
FAA AMS vs. FAR
- FAA’s Acquisition Management System (AMS) is broader and less prescriptive than the Federal Acquisition Regulation (FAR), but both afford managers flexibility
- AMS establishes an acquisition life-cycle management system, including both a contracting and program management system, whereas the FAR is primarily a contracting system
- AMS takes the form of guidance—it is not regulatory, while the FAR is a set of published regulations—a legal foundation that has the force and effect of law
FAR Part 15 process model
Best Value: The Government will rank proposals against the listed evaluation factors and then perform a “trade-off” between the top factors and price to select the awardee. Allows the Govt to award to other than the low-priced offeror
LPTA: The award will go to the offeror that submitted an acceptable technical proposal and the lowest price. No extra points for excellent technical approaches or past performance
- Q&A
- If the Govt fails to resolve an ambiguity or imposes a requirement you believe is inappropriate, you must challenge it before submitting your offer
- Clarificaitons vs discussions