The requesting agency shall furnish the servicing agency any information needed to make the justification and approval or D&F. (c) Maximize the use of scarce tooling or special equipment. The Government has an, Question 17 of 28 You have an Azure Storage account named storage1 that is configured to use the Hot access tier. Job Order Contracting in Construction: Everything You Need To Know (2) A statement that an extension of the contract includes an extension of the option. In order to broaden the defense industrial base, to the maximum extent practicable-, (1) Multi-year contracting shall be used in such a manner as to seek, retain, and promote the use under such contracts of companies that are subcontractors, suppliers, and vendors; and. Payment limit. (c) Reduction of administrative burden in the placement and administration of contracts. In preparing interagency agreements to support assisted acquisitions, agencies should review the Office of Federal Procurement Policy (OFPP) guidance, Interagency Acquisitions, available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/assets/OMB/procurement/interagency_acq/iac_revised.pdf . This subpart applies to all acquisitions made by nondefense agencies on behalf of DoD. To the extent practicable, multi-year contracting shall not be carried out in a manner to preclude or curtail the existing ability of the Department or agency to provide for termination of a prime contract, the performance of which is deficient with respect to cost, quality, or schedule. In determining cancellation ceilings, the contracting officer must estimate reasonable preproduction or startup, labor learning, and other nonrecurring costs to be incurred by an "average" prime contractor or subcontractor, which would be applicable to, and which normally would be amortized over, the items or services to be furnished under the multi-year requirements. The total estimate of the above costs must then be compared with the best estimate of the contract cost to arrive at a reasonable percentage or dollar figure. Each individual worked with a counterpart from the other organization to establish connections in key areas. refurbishing. (b) Type of contract. x Contracting Officer, The Competition in Contracting Act requires that _________: . (1) (2) An agency uses another agency to provide acquisition assistance, such as awarding and administering a contract, a task order, or delivery order. Course Hero is not sponsored or endorsed by any college or university. Therefore, when reviewing contractor performance, contracting officers should consider-. (c) Cancellation procedures. (5) The estimates of both the cost of the contract and the cost avoidance through the use of a multi-year contract are realistic. Avoidance of the need for establishing quality control techniques and procedures for a new contractor each year. (f) Presolicitation or pre-bid conferences. (See 17.207(f) with regard to the exercise of options. (c) Agency funding of multi-year contracts shall conform to the policies in OMB Circulars A-11 (Preparation and Submission of Budget Estimates) and A-34 (Instructions on Budget Execution) and other applicable guidance regarding the funding of multi-year contracts. As provided by that guidance, the funds obligated for multi-year contracts must be sufficient to cover any potential cancellation and/or termination costs; and multi-year contracts for the acquisition of fixed assets should be fully funded or funded in stages that are economically or programmatically viable. Cash flow is easier to predict in a lump sum contract. Economic price adjustment clauses. (c) The requesting and servicing agencies should agree to procedures for the resolution of disagreements that may arise under interagency acquisitions, including, in appropriate circumstances, the use of a third-party forum. The wording crafted by Island Health and South Island, which they embedded in the preamble of their contract, can be used by other companies as a model for drafting their own guiding principles. Any extension or renewal of an operating and management contract must be authorized at a level within the agency no lower than the level at which the original contract was authorized in accordance with 17.602(a). (a) Compliance with this subpart is in addition to the policies and procedures for interagency acquisitions set forth in subpart 17.5. Multi-year contract means a contract for the purchase of supplies or services for more than 1, but not more than 5, program years. Kim Kerrone, of Island Health, described how the vested methodology broke the impasse. (g) Contracts may express extensions of the term of the contract as an amended completion date or as additional time for performance; e.g., days, weeks, or months. This type of contract is typically used for well-defined, small-scale projects in which changes are rare. Imagine that a supplier of engineering services submits a proposal in a competitive bidding process and wins the contract. (f) These limitations do not apply to information technology contracts. (5) A specific price that is subject to change as the result of changes to prevailing labor rates provided by the Secretary of Labor. Does the buyer benefit from access to the suppliers criticalsystems and processes (and vice versa)? This subpart prescribes policies and procedures for the use of option solicitation provisions and contract clauses. Looking for U.S. government information and services? A unit price contract can be used for all or part of a project. For sealed bids, the determination shall be in writing. (d) A provision specifying a separate cancellation ceiling (on a percentage or dollar basis) and dates applicable to each program year subject to a cancellation (see 17.106-1(c) and (d)). They shall not include any costs of labor or materials, or other expenses (except as indicated above), which might be incurred for performance of subsequent program year requirements. In an era when businesses increasingly have to depend on their suppliers to lower costs, improve quality, and drive innovation, traditional contracts dont work. CLC-222 Contracting Flashcards | Quizlet Termination payment. (1) The solicitation contains an option clause; (2) An option is not to be exercised at the time of contract award; (3) A firm-fixed-price contract, a fixed-price contract with economic price adjustment, or other type of contract approved under agency procedures is contemplated; and. (c) Within 30 days of the beginning of each fiscal year, submit nondefense agency certifications of compliance to Principal Director, Defense Pricing and Contracting at: Office of the Under Secretary of Defense (Acquisition and Sustainment). For DoD, NASA, and the Coast Guard, a multi-year contract which includes a cancellation ceiling in excess of Sole Source - Justification and Approval - AcqNotes Their efforts led to the vested methodology for creating formal relational contractsa process that establishes a whats in it for we partnership mentality. (d) If funds are not appropriated to support the succeeding years requirements, the agency must cancel the contract. Subpart 17.7 - Interagency Acquisitions: Acquisitions by Nondefense Agencies on Behalf of the Department of Defense, This part prescribes policies and procedures for the acquisition of supplies and services through special contracting methods, including-. (d) The contracting officer, after considering price and other factors, shall make the determination on the basis of one of the following: (1) A new solicitation fails to produce a better price or a more advantageous offer than that offered by the option. All others, with the exception of a time-and-materials contract which is a hybrid of the two, are, subsets of cost reimbursement or fixed-price contracts. (3) Together, we are a team that celebrates and advances excellence in care for our patients and ourselves through shared responsibility, collaborative innovation, mutual understanding, and the courage to act, in a safe and supportive environment. in the overall strategic planning of an acquisition]. (b) Business-case analysis requirements for multi-agency contracts and governmentwide acquisition contracts. (f) Nondefense agency certifications, waivers, and additional information are available at http://www.acq.osd.mil/dpap/cpic/cp/interagency_acquisition.html. The key distinguishing difference between multi-year contracts and multiple year contracts is that multi-year contracts, defined in the statutes cited at 17.101, buy more than 1 years requirement (of a product or service) without establishing and having to exercise an option for each program year after the first. The primary goal of Step 1 is to establish a partnership mentality. All program years except the first are subject to cancellation. The nature of the requirement should govern the selection of the method of contracting, since the multi-year procedure is compatible with sealed bidding, including two-step sealed bidding, and negotiation. To perform this calculation, the contracting officer should obtain in-house engineering cost estimates identifying the detailed recurring and nonrecurring costs, and the effect of labor learning. Lowest Price Technically Acceptable (LPTA) 2. Cancellation results when the contracting officer-, (1) Notifies the contractor of nonavailability of funds for contract performance for any subsequent program year; or. (d) An agency shall not use an interagency acquisition to make acquisitions conflicting with any other agencys authority or responsibility (for example, that of the Administrator of General Services under title 40, United States Code, "Public Buildings, Property and Works" and 41 U.S.C. (1) Funds are available; (2) The requirement covered by the option fulfills an existing Government need; (3) The exercise of the option is the most advantageous method of fulfilling the Governments need, price and other factors (see paragraphs (d) and (e) of this section) considered; (4) The option was synopsized in accordance with part 5 unless exempted by 5.202(a)(11) or other appropriate exemptions in 5.202; (5) The contractor does not have an active exclusion record in the System for Award Management (see FAR 9.405-1); (6) The contractors past performance evaluations on other contract actions have been considered; and. The contract may not be awarded until the thirty-firstday after the date of notification. The contract may not be awarded until the thirty-firstday after the date of notification. (b) Since issuance of an authorization under 17.602(a) is deemed sufficient proof of compliance with paragraph (a) immediately above, nothing in paragraph (a) immediately above shall affect the validity or legality of such an authorization. This subpart implements 41 U.S.C. If it is anticipated that the best price available is the option price or that this is the more advantageous offer, the contracting officer should not use this method of testing the market. (f) Solicitations may, in unusual circumstances, require that options be offered at prices no higher than those for the initial requirement; e.g., when-. false. The multi-year contracting method may be used for the acquisition of supplies or services. Now I have someone I know fairly well at a high level in administration. For example, Kim Kerrone and Jean Maskey, informal partners, both say that formal relational contracting was transformational for their respective organizations. May modify the clause at 52.222-43 in overseas contracts when laws, regulations, or international agreements require contractors to pay higher wage rates; or. PDF Text File Part 2 How the Government Buys - Small Business Administration (2) Upon accrual of any payment or other benefit under such a multi-year contract to any subcontractor, supplier, or vendor company participating in such contract, such payment or benefit shall be delivered to such company in the most expeditious manner practicable. For DoD, NASA, and the Coast Guard, the head of the agency may enter into a multi-year contract for supplies if-. 11302(e) for Governmentwide acquisition contracts (GWACs). As contrasted with cancellation, termination can be effected at any time during the life of the contract (cancellation is effected between fiscal years) and can be for the total quantity or partial quantity (where as cancellation must be for all subsequent fiscal years quantities). (3) Bills rendered or requests for advance payment shall not be subject to audit or certification in advance of payment. After all, the team realized, who better to optimize the scheduling for superior patient care than the doctors on the front lines? [Identify the various methods of contracting for a supply or service] [Remediation Accessed :N] Competitive Negotiated contract Ordering off a Blanket Purchase Agreement Simplified Acquisition Procedures The Truth in Negotiation Act of 1962 required both prime and subcontractors on contracts over $500,000 to certify the cost data submitted under the solicitation. (c) For each program year subject to cancellation, the contracting officer shall establish a cancellation ceiling. Work placed with the FFRDC is subject to the acceptance by the sponsor and must fall within the purpose, mission, general scope of effort, or special competency of the FFRDC. (3) Whether it is likely that qualified offerors will compete for the contract. The requirements, by item of supply or service, for the-, (1) If cancellation occurs, the Governments liability will be determined by the terms of the applicable contract. At the time, there were too many unknowns about how it would be implemented to address the issue formally. may not be awarded until the head of the agency gives written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the committees on appropriations of the House of Representatives and Senate and the appropriate oversight committees of the House and Senate for the agency in question. Government Contracting Rules You Need to Know | Wolters Kluwer Options should not include charges for plant and equipment already amortized, or other nonrecurring charges which were included in the basic contract. division C of subtitle I, Procurement.). (3) The contracting officer shall establish cancellation dates for each program years requirements regarding production lead time and the date by which funding for these requirements can reasonably be established. (2) Orders of $600,000 or less issued against Federal Supply Schedules. (a) The contracting officer shall justify in writing the quantities or the term under option, the notification period for exercising the option, and any limitation on option price under 17.203(g); and shall include the justification document in the contract file. So the sustainability team came up with a pilot project to address how to fairly add the additional scope of work and new role for health care providers to the hospitalists schedule and pricing model. A version of this article appeared in the, Cecil Touchon/Courtesy of Sears-Peyton Gallery, New York, CECIL TOUCHON/COURTESY OF SEARS-PEYTON GALLERY, NEW YORK, Note: This table is based on material presented in, From the Magazine (SeptemberOctober 2019). In the event funds are not made available for the continuation of a multi-year contract awarded using the procedures in this section, the contract shall be canceled or terminated. A Fair Way to Lead a Team of Contractors and Full-Time Employees In fact, many companies now believe that even the vaunted keiretsu model, which Toyota and Nissan, among others, used so successfully, ties up capital and limits flexibility. They shall not include any costs of labor or materials, or other expenses (except as indicated above), which might be incurred for performance of subsequent program year requirements. There is a stable design for the supplies to be acquired, and the technical risks associated with such supplies are not excessive; (4) Remediation Accessed shows whether you accessed those links. For each program year subject to cancellation, the contracting officer shall establish a cancellation ceiling. In a negotiated acquisition, negotiations with offerors may provide information requiring a change in cancellation ceilings and dates before final negotiation and contract award. (b) Agencies may authorize management and operating contracts only in a manner consistent with the guidance of this subpart and only if they are consistent with the situations described in 17.604. (d) When contracting for services, the contracting officer-. (4) The contracting officer has determined that there is a reasonable likelihood that the option will be exercised. Economists call this the hold-up problem: the fear that one party will be held up by the other. L. 110-181, section 801, as amended ( 10 U.S.C. Having set the foundation for the relationship in the first three steps, parties hammer out the terms of the dealfor example, responsibilities, pricing, and metrics. Which of the following is NOT, [Recognize how contract types impacts COR responsibilities], Cost reimbursement contracts require less monitoring by the COR than other. (d) When an interagency acquisition requires the servicing agency to award a contract, the following procedures also apply: (1) If a justification and approval or a D&F (other than the requesting agencys D&F required in 17.502-2(c)) is required by law or regulation, the servicing agency shall execute and issue the justification and approval or D&F. Obtaining both also provides a basis for the computation of savings and other benefits. Nor should they. A management and operating contract is characterized both by its purpose (see 17.601) and by the special relationship it creates between Government and contractor. Consider how the Island Health administrators and South Island hospitalists tackled pricing, which had always been their sticking point. (f) In two-step sealed bidding, discussions conducted during the first step may indicate the need for revised ceilings and dates which may be incorporated in step two. (2) If approved by the servicing agency, payment for actual costs may be made by the requesting agency after the supplies or services have been furnished. Cancellation or termination for insufficient funding. This wide selection of contract types is available to the government and contractors to provide flexibility in acquiring the large variety and volume of supplies and services required by agencies. Last Updated Apr 24, 2023. We consciously approached the economics of the relationship with full transparency and a problem-solving mentality instead of a negotiations mentality, she told us. The written determination shall identify the acquisition categories to which the waiver applies. (b) Achieve geographic dispersion of suppliers. Such other elements of any department or agency as have been designated by the President, or designated jointly by the Director of National Intelligence and the head of the department or agency concerned, as an element of the intelligence community. The primary contracting methods used by the government are: micro-purchases; simplified acquisition procedures; sealed bidding; contract by negotiations; and, consolidated purchasing programs, such as the use of GSA schedules, Government Wide Acquisition Contracts and other multiple award vehicles. (3) Because private enterprise is unable or unwilling to use its own facilities for the work. Dells cost of switching to another company would be high, and FedEx would have trouble replacing the revenue and profits the contract generated. However, these tactics not only confer a false sense of security (because both firms switching costs are too high to actually invoke the clauses) but also foster negative behaviors that undermine the relationship and the contract itself. We will be recognized leaders in health care. Requirements to be written in a, manner that promotes full and open competition in order to obtain maximum competition in obtaining, What is an Independent Government Estimate (IGE)? This method may be used in sealed bidding or contracting by negotiation. (2) Modify as necessary or terminate contracts not so identified and authorized, except that any contract with less than 4 years remaining as of the effective date of this regulation need not be terminated, nor need it be identified, modified, or authorized unless it is renewed or its terms are substantially renegotiated. Leaders employ a range of tactics to try to ensure that they are not taken advantage of by a powerful partner. (See 17.200, 17.202, and 37.111.). The limitation in paragraph (a) of this section shall not apply to the acquisition of supplies and services on behalf of DoD by a nondefense agency during any fiscal year for which the Under Secretary of Defense for Acquisition and Sustainment has determined in writing that it is necessary in the interest of DoD to acquire supplies and services through the nondefense agency during the fiscal year. (b) Because of the nature of the work, or because it is to be performed in Government facilities, the Government must maintain a special, close relationship with the contractor and the contractors personnel in various important areas (e.g., safety, security, cost control, site conditions). Formal relational contracts will never completely replace traditional transactional contracts. By the eighth year, the parties were at the breaking point. some methods of contracting require more time than others Companies have traditionally used contracts as protection against the possibility that one party will abuse its power to extract benefits at the expense of the otherfor example, by unilaterally raising or lowering prices, changing delivery dates, or requiring more-onerous employment terms. But the reality is that their external motivations are subtly different because of three ways that their work lives differ: How they are paid: Because FTEs receive salary while contractors are . Providing incentives to contractors to improve productivity through investment in capital facilities, equipment, and advanced technology. 3003(4) which include the-. The job order contracting method can be incorporated for projects that range from private residential jobs to public works projects. The order should include-. Examples of more specific authority are 40 U.S.C. (b) (a) They often undermine the partnerlike relationships and trust needed to cope with external uncertainty. If level unit pricing is not in the Governments interest, the head of a contracting activity may approve the use of variable unit prices, provided that for competitive proposals there is a valid method of evaluation. (g) Broadening the competitive base with opportunity for participation by firms not otherwise willing or able to compete for lesser quantities, particularly in cases involving high startup costs. (3) When the population is high, they manage their hours in a way thats within the budget and optimizes patient care. (5) Document roles and responsibilities in the administration of the contract. Nonrecurring costs include such costs, where applicable, as plant or equipment relocation or rearrangement, special tooling and special test equipment, preproduction engineering, initial rework, initial spoilage, pilot runs, allocable portions of the costs of facilities to be acquired or established for the conduct of the work, costs incurred for the assembly, training, and transportation to and from the job site of a specialized work force, and unrealized labor learning. (2) Any other DoD official authorized to approve a direct acquisition or an assisted acquisition on behalf of DoD. (b) The contracting officer need not evaluate offers for any option quantities when it is determined that evaluation would not be in the best interests of the Government and this determination is approved at a level above the contracting officer. Historically, the two parties had operated under a shroud of opaqueness. The fact that virtually all contracts contain gaps, omissions, and ambiguitiesdespite companies best efforts to anticipate every scenarioonly exacerbates hold-up behavior. (1) A description of the supplies or services required; (2) Delivery requirements; (3) A funds citation; (4) A payment provision (see 17.502-2(d) for Economy Act orders); and. These include complicated outsourcing and purchasing arrangements, strategic alliances, joint ventures, franchises, public-private partnerships, major construction projects, and collective bargaining agreements. (c) An interagency acquisition is not exempt from the requirements of subpart 7.3, Contractor Versus Government Performance. If the buyer refuses to adjust the suppliers fee or the statement of work, the supplier may try to recoup losses by, for example, replacing the expensive A team it currently has on the project with its less costly C team. In the event there are no agency unique requirements beyond the FAR, the requesting agency shall so inform the servicing agency contracting officer in writing. The extent to which cancellation terms are used in multi-year contracts will depend on the unique circumstances of each contract. (2) Fails to notify the contractor that funds are available for performance of the succeeding program year requirement. In order to establish a multi-agency or governmentwide acquisition contract, a business-case analysis must be prepared by the servicing agency and approved in accordance with the OFPP business case guidance, available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/procurement/memo/development-review-and-approval-of-business-cases-for-certain-interagency-and-agency-specific-acquisitions-memo.pdf . (a) When Dell originally selected FedEx, in 2005, to handle all aspects of its hardware return-and-repair process, the companies drew up a traditional supplier contract. (ii) Complying fully with the competition requirements of part 6 (see 6.002). Cancellation charge means the amount of unrecovered costs which would have been recouped through amortization over the full term of the contract, including the term canceled.
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