some methods of contracting require more time than others

(3) CLC-222 Contracting Flashcards | Quizlet 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. When Dell and FedEx reached their breaking point, they chose to abandon their existing contracting process and create a formal relational contract that specified desired outcomes and defined relationship-management processes at the operational, management, and executive levels. (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. Multi-year contract means a contract for the purchase of supplies or services for more than 1, but not more than 5, program years. (d) The DoD acquisition official, as defined at 17.701, shall provide to the servicing nondefense agency contracting officer any DoD-unique terms, conditions, other related statutes, regulations, directives, and other applicable requirements for incorporation into the order or contract. contracting officers shall avoid, to the maximum extent practicable, using the lowest price technically acceptable source selection process in the case of a procurement that is predominantly for the acquisition of (1)Information technology services, cybersecurity services, systems engineering and technical (f) Nondefense agency certifications, waivers, and additional information are available at http://www.acq.osd.mil/dpap/cpic/cp/interagency_acquisition.html. But many organizations require long-term, complex relationships for which the vested methodology is well suited. Cancellation means the cancellation (within a contractually specified time) of the total requirements of all remaining program years. (iii) Include a statement that at least one of the following circumstances applies: (A) The acquisition will appropriately be made under an existing contract of the servicing agency, entered into before placement of the order, to meet the requirements of the servicing agency for the same or similar supplies or services. An official website of the General Services Administration. To satisfy requirements of part 6 regarding full and open competition, the option must have been evaluated as part of the initial competition and be exercisable at an amount specified in or reasonably determinable from the terms of the basic contract, e.g.-. Public Law 95-507, which amended the Small Business Act of 1978, formalized the Small Business Subcontracting Plan requirement in contracts over $500,000 to large businesses. 'N' represents links. Early research by one of us (Oliver, who won the 2016 Nobel Prize in economics for his work on contracts) predicted that in response to the combined problems of hold-ups and incomplete contracts, companies are very likely to make distorted investments that produce poor outcomes. 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). Cancellation results when the contracting officer-, (1) Notifies the contractor of nonavailability of funds for contract performance for any subsequent program year; or. The objectives of this technique are one or more of the following: (a) Reduce delivery time. In a subsequent workshop the team delved deeper, crafting four high-level desired outcomes, seven goals, and 22 tactical and measurable objectives. Any competitive negotiated acquisition having a basis for award stating that factors in addition to cost/price will be considered in selecting the successful offeror (s) Accordingly, for multi-year contracts, the agency head may authorize modification of the requirements of this subpart and the clause at 52.217-2, Cancellation Under Multi-year Contracts. (b) (ii) Each agencys file shall include the interagency agreement between the requesting and servicing agency, and shall include sufficient documentation to ensure an adequate audit consistent with 4.801(b). (3) Additional numbered line items identified as the option. (f) Annual and multi-year proposals. The estimates of both the cost of the contract and the cost avoidance through the use of a multi-year contract are realistic. (a) Multi-year contracting is a special contracting method to acquire known requirements in quantities and total cost not over planned requirements for up to 5 years unless otherwise authorized by statute, even though the total funds ultimately to be obligated may not be available at the time of contract award. Subpart 17.4 - Leader Company Contracting, Subpart 17.6 - Management and Operating Contracts. Nondefense agency that is an element of the intelligence community means the agencies identified in 50 U.S.C. (c) A provision that, if the Government determines before award that only the first program year requirements are needed, the Governments evaluation of the price or estimated cost and fee shall consider only the firstyear. However, the preparation and evaluation of dual offers may increase administrative costs and workload for both offerors and the Government, especially for large or complex acquisitions. (a) Subject to the limitations of paragraphs (b) and (c) of this section, for both sealed bidding and contracting by negotiation, the contracting officer may include options in contracts when it is in the Governments interest. Working with the University of Tennessee (including Kate), they embarked on the five-step process. These include complicated outsourcing and purchasing arrangements, strategic alliances, joint ventures, franchises, public-private partnerships, major construction projects, and collective bargaining agreements. 1. (d) (f) Recurring costs means costs that vary with the quantity being produced, such as labor and materials. (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. It is a description of a task, subtask, activity, and/or deliverable; and reflects corresponding pricing assumptions proposed and accepted by the client. 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. A unit price contract can be used for all or part of a project. Exam (elaborations) - Clc 222 mod 4 contract monitoring: performance exam 3. (a) Interagency acquisitions are commonly conducted through indefinite-delivery contracts, such as task- and delivery-order contracts. It is crucial that all terms and conditions of the formal relational contract are aligned with the guiding principles. (c) The contracting officer shall not employ options if-. (ii) The fixed or maximum fee amount is determinable by applying a formula contained in the basic contract (but see 16.102(c)); (4) A specific price that is subject to an economic price adjustment provision; or. (2) The D&F shall be approved by a contracting officer of the requesting agency with authority to contract for the supplies or services to be ordered, or by another official designated by the agency head, except that, if the servicing agency is not covered by the FAR, approval of the D&F may not be delegated below the senior procurement executive of the requesting agency. Cash flow is easier to predict in a lump sum contract. The extent to which cancellation terms are used in multi-year contracts will depend on the unique circumstances of each contract. To date, 57 companies have employed the vested methodology. (a) Written agreement on responsibility for management and administration. Obtaining both also provides a basis for the computation of savings and other benefits. (1) The incumbent contractors overall performance, including, specifically, technical, administrative, and cost performance; (2) The potential impact of a change in contractors on program needs, including safety, national defense, and mobilization considerations; and. in the overall strategic planning of an acquisition]. (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). (a) Multi-year contract procedures provide for the amortization of certain costs over the entire contract quantity resulting in identical (level) unit prices (except when the economic price adjustment terms apply) for all items or services under the multi-year contract. Formats for Submission of Line Item Summaries C(8)) are estimated at 10 percent of the total multi-year price, and the percentages for each of the program year requirements for 5 years are (i)30 in the firstyear, (ii)30 in the second, (iii)20 in the third, (iv)10 in the fourth, and (v)10 in the fifth. (1) Percentage of specific line items, (2) Increase in specific line items; or. (a) The senior procurement executive for each executive agency shall submit to the Director of OMB an annual report on interagency acquisitions, as directed by OMB. Each was crafted to establish a new norm for the partnership. (i) State that use of an interagency acquisition is in the best interest of the Government; (ii) State that the supplies or services cannot be obtained as conveniently or economically by contracting directly with a private source; and. Options should not include charges for plant and equipment already amortized, or other nonrecurring charges which were included in the basic contract. But the real power is it threads all the way down to core decisions on how the parties would work. In a business world where strategic, long-term relationships are critical to competitive advantage, leaders have no choice but to overturn the status quo. Under the new pricing model, when the inpatient population is low, the hospitalists can opt to take time off and save Island Health money. When the period of production is likely to warrant a labor and material costs contingency in the contract price, the contracting officer should normally use an economic price adjustment clause (see 16.203). In sealed bidding, the contracting officer shall change the ceiling by amending the solicitation before bid opening. 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. The inclusion of recurring costs in cancellation ceilings is an exception to normal contract financing arrangements and requires approval by the agency head. (1) The use of such a contract will result in significant savings of the total estimated costs of carrying out the program through annual contracts; (2) The minimum need to be purchased is expected to remain substantially unchanged during the contemplated contract period in terms of production rate, procurement rate, and total quantities; (3) There is a stable design for the supplies to be acquired, and the technical risks associated with such supplies are not excessive; (4) There is a reasonable expectation that, throughout the contemplated contract period, the head of the agency will request funding for the contract at a level to avoid contract cancellation; and. The main advantage of using this method is avoiding the need to draft the subcontract from scratch and hopefully saving time negotiating it. For example, Island Health never shared the budget with the hospitalists. To ensure that all interested sources of supply are thoroughly aware of how multi-year contracting is accomplished, use of presolicitation or pre-bid conferences may be advisable. (g) Solicitations that require the offering of an option at prices no higher than those for the initial requirement shall-, (1) Specify that the Government will accept an offer containing an option price higher than the base price only if the acceptance does not prejudice any other offeror; and. The remedy is to adopt a totally different kind of arrangement: a formal relational contract that creates a flexible framework designed to foster collaboration in complex strategic relationships over the long term. For sealed bids, the determination shall be in writing. The approach encourages trust and honesty between the two sides, said Ken Smith, a hospitalist at South Island. If I need to make an urgent decision or have a difficult issue that cant wait for the next formal meeting, I can phone my two-in-a-box partner and ask to meet., Such pairings are also highly encouraged outside the governance teams to strengthen the relationship and build trust between parties at all levels. (b) (b) Achieve geographic dispersion of suppliers. We will be recognized leaders in health care. Government Contracting Rules You Need to Know | Wolters Kluwer 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. The primary goal of Step 1 is to establish a partnership mentality. Here is your test result.The dots represent the choices you have made. Each lacked trust and confidence in the other, yet neither could afford to end the relationship. Companies understand that their suppliers are critical partners in lowering costs, increasing quality, and driving innovation, and leaders routinely talk about the need for strategic relationships with shared goals and risks. The contracting officer shall reduce the cancellation ceiling for each program year in direct proportion to the remaining requirements subject to cancellation. If you "overrun" the costs, your fee is the same, or fixed. Leaders employ a range of tactics to try to ensure that they are not taken advantage of by a powerful partner. You need to ensure, Prior to certifying the Managing Accounting Billing Statement for contract payments by Governmentwide Commercial Purchase Card, the Approving/ Billing Official must do what two things? (2) Part 17 - Special Contracting Methods | Acquisition.GOV Economic price adjustment clauses are adaptable to multi-year contracting needs. For patent rights, see 27.304-2. (c) Replacement of an incumbent contractor is usually based largely upon expectation of meaningful improvement in performance or cost. At the time, there were too many unknowns about how it would be implemented to address the issue formally. (B) The servicing agency has the capability or expertise to enter into a contract for such supplies or services that is not available within the requesting agency. Review and, Which three of the following statements about convenience checks are true? Some relationships, such as those involving the purchase of commodity products and services, are truly transactional and only need traditional contracts. not visited and 'Y' represents visited links. (b) In the event there are no DoD-unique requirements beyond the FAR, the DoD acquisition official shall so inform the servicing nondefense agency contracting officer in writing. (d) (2) For special protection covering the orderly transition of personnel and work in the event of a change in contractors. (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. (a) Solicitations shall include appropriate option provisions and clauses when resulting contracts will provide for the exercise of options (see 17.208). If cancellation occurs, the Governments liability will be determined by the terms of the applicable contract. But the process we have outlined should be part of the contracting tool kit to govern highly complex relationships that demand collaboration and flexibility. 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 . Subcontracting under construction contracts - Pinsent Masons (2) Laws and regulations that apply to procurements of supplies and services made by DoD through other Federal agencies, including DoD financial management regulations, the Defense Federal Acquisition Regulation Supplement (DFARS), DoD class deviations, and the DFARS Procedures, Guidance, and Information (PGI). The multi-year contracting method may be used for the acquisition of supplies or services. (c) 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. Which of the following is not a, When a COR is involved in the Source Selection Evaluation Board, what might his/her main roles, The purpose of market research is to determine capabilities in the marketplace able to satisfy the, Who has the official responsibility for performing market research? We argue that the remedy is to adopt a totally different kind of arrangement: a formal relational contract that specifies mutual goals and establishes governance structures to keep the parties expectations and interests aligned over the long term. (a) Before placing an order for supplies or services with another Government agency, the requesting agency shall follow the procedures in 17.502-1 and, if under the Economy Act, also 17.502-2. (2) Any other DoD official authorized to approve a direct acquisition or an assisted acquisition on behalf of DoD. (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. Exam (elaborations) - Clc 222 mod 5 contract monitoring: documentation & handling issues exam 5. All program years except the first are subject to cancellation. (a) Insert a provision substantially the same as the provision at 52.217-3, Evaluation Exclusive of Options, in solicitations when the solicitation includes an option clause and does not include one of the provisions prescribed in paragraph (b) or (c) of this section. If funds are not appropriated to support the succeeding years requirements, the agency must cancel the contract. It may be negotiated as a percentage of the estimated costs but it is written into the contract as a precise amount, not a percentage. 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. (a) Multi-year contracting is a special contracting method to acquire known requirements in quantities and total cost not over planned requirements for up to 5 years unless otherwise authorized by statute, even though the total funds ultimately to be obligated may not be available at the time of contract award. Information on such committees may not be readily available to contracting officers. Physical asset specificity (location, machinery, processes), Level of integration required with suppliers systems or processes. Dell felt that FedEx was not proactive in driving continuous improvement and innovative solutions; FedEx was frustrated by onerous requirements that wasted resources and forced it to operate within a restrictive statement of work. The review should determine whether meaningful improvement in performance or cost might reasonably be achieved. (1) Leader company, obligating it to subcontract a designated portion of the required end items to a specified follower company and to assist it to produce the required end items; (2) Leader company, for the required assistance to a follower company, and a prime contract to the follower for production of the items; or. all of these are Contract terms commonly allow 30, 60, even 90 days or more to pay invoices. (1) In the interest of national defense or mobilization readiness; (2) To perform the agencys mission adequately; or. But when contract negotiations begin, they default to an adversarial mindset and a transactional contracting approach. Each individual worked with a counterpart from the other organization to establish connections in key areas. (d) Substantial continuity of production or performance, thus avoiding annual startup costs, preproduction testing costs, make-ready expenses, and phaseout costs. (a) Leader company contracting is to be used only when-. When using sealed bidding, the contracting officer shall make a written determination that there is a reasonable likelihood that the options will be exercised before including the provision at 52.217-5, Evaluation of Options, in the solicitation. (a) Except for DoD, NASA, and the Coast Guard, the contracting officer may enter into a multi-year contract if the head of the contracting activity determines that-, (1) The need for the supplies or services is reasonably firm and continuing over the period of the contract; and. May use an economic price adjustment clause authorized by 16.203, when potential fluctuations require coverage and are not included in cost contingencies provided for by the clause at 52.222-43. 10 U.S.C. When contracting for services, the contracting officer-. (c) Requirements for determinations and findings. (2) An indefinite quantity or requirements contract would be more appropriate than a contract with options. Information on such committees may not be readily available to contracting officers. Indeed, the Canadian supreme court recently took up a case in which a franchisee alleged that it was not being treated fairly by the franchise owner. 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. An official website of the United States Government, FAC Number: 2023-02 Effective Date: 03/16/2023. 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. Level unit prices. The head of a contracting activity may authorize the use of a solicitation requesting only multi-year prices, provided it is found that such a solicitation is in the Governments interest, and that dual proposals are not necessary to meet the objectives in 17.105-2. (g) The contract modification or other written document which notifies the contractor of the exercise of the option shall cite the option clause as authority. (a) Effective work performance under management and operating contracts usually involves high levels of expertise and continuity of operations and personnel. Obtaining both annual and multi-year offers provides reduced lead time for making an annual award in the event that the multi-year award is not in the Governments interest. Value-eroding friction and shading occur because one or both parties feel unfairly treated. A multi-year contract may provide that performance under the contract during the second and subsequent years of the contract is contingent upon the appropriation of funds, and (if it does so provide) may provide for a cancellation payment to be made to the contractor if appropriations are not made. (d) Contracts awarded under the multi-year procedure shall be firm-fixed-price, fixed-price with economic price adjustment, or fixed-price incentive. When the population is high, they manage their hours in a way thats within the budget and optimizes patient care. 3003(4) which include the-. (b) The contracting officer for the servicing agency shall ensure that service contractor reporting requirements are met in accordance with subpart 4.17, Service Contracts Inventory.

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some methods of contracting require more time than others

some methods of contracting require more time than others