Introduction to Federal Government Contracting and FAR 101

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(No Transcript)
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PART 1
Introduction to Federal Government Contracting
and FAR 101
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Federal Government Contracting and FAR 101

• The Federal System and the Process
• Types of Solicitations
• Types of Contracts
• Federal Government Procurement Websites

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Federal Government Contracting FACTOIDS

• USA LARGEST Procurer of Supplies and Services
  in the World
• USA GFY 2006 Budget 2.2 Trillion
• DoD Projected 2006 Spend 419 Billion on
  Supplies and Services
• USA Targets Minimum Annual Spend to SBs 23
• Small and Disadvantaged Business Concerns 5
• Women-Owned Small Business Concerns 5
• Veteran-Owned Small Business Concerns 3
• Service-Disabled Veteran-Owned Small Business
  Concerns 3
• HUBZone Small Business Concerns 3
• To be successful in the game, you must know how
  to play by the rules

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The Federal Procurement BUYING GAME

• The PROCESS
• The PLAYERS
• The RULES

• Federal Acquisition SYSTEM
• 3 Branches of Government
• Taxpayer Funds
• Annual Appropriations
• Buyers v. Sellers
• Federal Acquisition Regulations (FAR) and its
  Supplements

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The Federal System and the Process

• Taxpayer Funds ()
• PLs, EOs, Statutes, Regulations
• Monopsony
• Shared Powers
• Delegated Authority
• Checks and Balances
• Thats why it works so well, but .
• Thats also why the process takes sooooo long

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The Players

• Sellers ()
• Prime Contractor or Offeror
• Program Manager
• Contract Manager
• Project Manager
• Accounting Manager
• Technical Engineer
• Quality Assurance
• Envl. Health Safety
• Property Manager
• Subcontractors
• Suppliers/Vendors

• Buyers
• Contracting Officers (CO)
• Procurement Contracting Officers (PCO)
• Administrative Contracting Officers (ACO)
• Termination Contracting Officers (TCO)
• Contracting Officers Representatives (COR)
• Contract Specialist
• Contracting Officer Technical Representative
  (COTR)
• DCMA SADBUs
• DCAA - Auditors

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The Rules

• Federal Acquisition Regulations (FAR)
• Code of Federal Regulations (CFR) Title 48
  Chapter 1
• Parts 1 through 53 Appendices
• FAR Supplements
• 15 Cabinet Departments
• Department of Defense (DoD) - DFARS
• Army (AFARS)
• Army Corps of Engineers (EFARS)
• Navy (NAPS)
• Air Force (AFFARS)
• Department of Energy (DOE) - DEARS
• Department of Homeland Security (DHS) - HSARS
• Civilian Agencies
• General Services Administration (GSA) - GSARS
• Environmental Protection Agency (EPA) - EPARS

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Organization of the FAR

• FAR Citation 3.502-3 Consistent Arrangement
  and Setup
• Part 03
• Subpart .5
• Section 02
• Subsection -3
• Subdivisions (a)(1)(i)(A)
• FAR Clause Add 52.2 52.203-7
• DFARS Clause Add 252.2 252.203-7
• 7 7th Consecutive Clause in that Specific
  Section.

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FAR Rules of Procurement

• Informal FAR Part 13
• Simplified Acquisition Procedures
• Low Dollar Value Noncomplex SOW or COTS
• Streamlined Ts Cs
• Process - Request for Quotation (RFQ)
• Written or Oral
• Award Document - Unilateral
• Micropurchases
• Credit Cards
• Purchase Orders
• Blanket Releases
• Vouchers/Checks/Imprest Funds/Petty Cash
• And the Formal Procedures

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Types of Solicitations - Formal

• Invitations for Bid (IFB) FAR Part 14
• Requests for Proposals (RFP) FAR Part 15
• Two-Step Procurements FAR Part 36
• Multiple Award Schedules (MAS)
• Broad Agency Announcements (BAA)
• Government-Wide Acquisitions (GWAC)
• Factoid Formal Award is always Written
  and Bilateral.

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What is a Contract?

• Contract Promise to do something or not to do
  something
• Written or Oral
• Unilateral or Bilateral
• Factoid Contracts may be entered into and
  signed on behalf of the Government only by
  Contracting Officers. FAR 1.601

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Essential Elements of The Contract

• Offer
• Acceptance
• Consideration
• Responsible Parties
• Legal Sufficiency
• Factoid Contracting Officers may bind the
  Government only to the extent of the authority
  delegated to them. FAR 1.602

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Rules of Contract Interpretation

• Words in Context
• Contract as a Whole
• Generally Accepted Meanings of Words
• Common Usage of Words in Specific
• Trade, Practice, or Industry
• Conduct of Parties
• During Contract Performance
• During Performance of Past Contracts
• Extrinsic Supporting Documentation
• Parole Evidence Rule
• Other Agreements CANNOT Contradict Current
  Agreement
• Contra-Preferential - Disputed Contract
  Language Will be Interpreted AGAINST the Drafter
• Privity

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Special Rules - Government Contract Interpretation

• Contractor is Bound by Government Interpretation
  of the Contract (if Contractor is Aware of the
  Governments Interpretation)
• Contractor is Required to Seek Clarification
  Where Governments Language Can be Reasonably
  Interpreted in More than One Way
• Christian Doctrine - Incorporation by Reference
  or Operation of Law of Required Clauses
• Legal Authority (Express v. Apparent/Implied)
• Procurement Integrity Act (PIA) Restrictions
• Special Contract Clauses (re PL, EO, Statute,
  Regs)
• Contractor Duty to Inform, Disclose, Share
  Superior Knowledge
• Order of Precedence Clause

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Order of Precedence Clause

• Any inconsistency in this solicitation or
  contract shall be resolved by giving precedence
  in the following order
• 1. The Schedule (excludes Specifications)
• 2. Representations and Other Instructions
• 3. Contract Clauses
• 4. Other Documents, Exhibits, and Attachments
  (includes Drawings) and
• 5. Specifications.
• FAR Clause(s) 52.214-29 (Sealed Bidding) and
  52.215-8 (Negotiated Procurements) iaw the
  Uniform Contract Format (UCF)

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Uniform Contract Format (UCF)

• Standardized Contract Format for Formal
  Acquisition Procedures
• Provides Consistency in Drafting and
  Interpretation
• Provides a Compatible Format for both
  Solicitations
• and Resultant Contracts
• Sealed Bid Format FAR Part 14
• Competitive Negotiations Format FAR Part 15
• Exceptions
• Simplified Acquisition Procedures FAR Part 13
• Construction and AE
• Shipbuilding
• Subsistence
• Basic Agreements

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Types of Contracts FAR Part 16

• Fixed Price
• Cost Type
• And the Hybrids
• What is YOUR tolerance for risk?
• There is no security in life, only
  opportunity. Douglas MacArthur

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Types of Contracts FAR Part 16

• Informal Simplified Acquisition Procedures - FAR
  Part 13
• Micropurchases
• lt 2500 Supplies/Services
• lt 2000 Construction
• Oral Small Purchases
• P-Card, Releases, Vouchers, Checks, Petty Cash
• Purchase Orders (PO)
• Written Oral POs
• Blanket POs/Releases

• Formal Procedures - FAR Parts 14 (Sealed Bid)
  15 (Negotiated)
• Fixed Price (FP)
• Firm Fixed Price (FFP)
• FP w/Econ. Price Adjustment (FPEPA)
• FP w/Incentive (FPI)
• Cost Reimbursable (CR)
• Cost (no fee)
• Cost Sharing (no fee)
• Cost Plus Fixed Fee (CPFF)
• Cost Plus Award Fee (CPAF)
• Cost Plus Incentive Fee (CPIF)
• Others . Hybrids
• Time Materials (TM)
• Level of Effort (LoE)
• Labor Hours (LH)

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Contracting Terms of Art

• Types of Competition - FAR Part 6
• Full and Open - All responsible, responsive
  qualified sources are invited to bid/offer.
• Full and Open with Exclusion of Sources -
  Competition limited to specific class or classes.
• Other than Full and Open - Sole or Single Source
• 7 Statutory Exemptions to Competition
• Fair and Reasonable
• A price that is fair to both parties, considering
  the agreed upon conditions, promised quality, and
  timeliness of contract performance (Prudent Man
  Rule).
• Responsible v. Responsive FAR Part 9

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Contracting Terms of Art

• Current, Accurate, and Complete FAR Part 15
• Data consisting of all facts up to the agreement
  on price (or costs) which prudent buyers and
  sellers would reasonably expect to have a
  significant effect on price (or costs)
  negotiations.
• Allowable, Allocable, Reasonable, and iaw the
  Terms and
• Conditions of the Contract
• A cost is allowable if it meets the test of
  reasonableness and allocability and is in
  consonance with CASB, GAAP, FAR Part 31, or other
  terms agreed to in the contract.
• A cost is allocable if it is chargeable or
  assignable to one or more cost objectives.
• A cost is reasonable if in its nature or amount,
  it does not exceed the cost that would be
  incurred by an ordinary prudent person in the
  conduct of competitive business.
• Price v. Costs
• Price Analysis Process of examining and
  evaluating a prospective price without evaluation
  of the separate cost objectives or profit,
  typically under competitive actions.
• Cost Analysis Review and evaluation of a
  contractors cost or pricing data and of the
  judgmental factors applied leading to an opinion
  of fair and reasonableness.

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Procurement Websites

• Paid Fee Sites
• www.epipeline.com
• www.eagleeyinc.com
• www.input.com
• www.onvia.com
• www.bid-search.com
• www.softshare.com
• www.cch.com

• Free/No-Cost
• www.fedbizopps.gov
• www.defenselink.gov
• www.arnet.gov
• www.ccr.gov
• www.firstgov.gov
• www.grants.gov
• www.orca.bpn.gov
• www.militarywords.com

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Procurement Websites

• Websites
• www.sba.gov
• www.score.org
• www.e-magnify.com
• www.dla.mil/db/procurement.htm
• www.acq.osd.mil/sadbu/mentor_protege/

• Small Business Outreach
• Small Business Administration
• Service Corps of Retired Executives
• National Education Center for
• Women in Business
• Procurement Technical Assistance Centers
• DoD Mentor-Protégé Program