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Reviewing a Contract for Property Requirements

Reviewing a Contract for Property Requirements. Presented by Andrew C. Anderson CPPM, CF For The Rocky Mountain Chapter April 27, 2011 . Create a deeper understanding of the composition of a contract Increasing our effectiveness in helping reduce property related risks by:

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Reviewing a Contract for Property Requirements

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  1. Reviewing a Contract for Property Requirements Presented by Andrew C. Anderson CPPM, CF For The Rocky Mountain Chapter April 27, 2011

  2. Create a deeper understanding of the composition of a contract • Increasing our effectiveness in helping reduce property related risks by: having a better understanding of how a contract imposes various requirements on the property management profession. Objectives

  3. A contract is “An agreement between two or more parties, creating obligations to do or not to do something, that are enforceable or otherwise recognizable at law…” Black’s Law Dictionary Eighth Edition, 2004 By the way, What is a contract?

  4. Black’s tells us its an “agreement” between two more parties, thus we can believe that the sponsor and your organization agreed to do something…oh yeah, that’s enforceable by law. (Principle applies to a subcontract also) • Property’s obligations are somehow buried in the body of the contract. • Interesting question, how do you read “law”? The meaning of a contract

  5. A contract is used when the USG is going to Procure supplies or services so we are going to produce something…a report, a service, hardware, something normally administered by the FAR. • A Grant is used to provide Financial Assistance to stimulate research and is governed by the OMB Circulars. Why is a contract “let” in the first place?

  6. Federal Property and Administrative Services Act of 1949 • 63 Statute 378: P.L. 152 • aka “The Act” • Started today’s world of Accountability • Created the Federal Property Management Regulations now moving into the Federal Management Regulations • Also created GSA • Empowered the Executive Branch leadership to make certain decisions regarding “accountability” for their respective agencies…thus creating “conflict”!!

  7. Public Law 93-400 • Office of Federal Procurement Policy (OFPP) Act of 1974 • Amended by Public Law 96-83 and OFPP Letter dated August 19, 1985 Federal Acquisition Regulation (FAR) Our roots are found in LAW!!!

  8. Most agencies use the SF 28 for the basic contract and the SF 30 for any modifications, though there are those that deviate. Is There a Common Form?

  9. Where do I find the start and stop dates? • Block 20c, pg 1 for start and Sec F for stop • Where do I find property clauses? • Section 1 • How about funding for acquisitions? • Section B • How do I determine who is administering the contract? • Block 6 of Page 1 Frequent questions

  10. Where do I find the listing of property? • Section H • Where would I locate if prior approvals for acquisitions are needed? • Section H • Contrary information…how do I resolve? • Begin with GPA and work thru ACO if not resolved • What about subcontracts? • Sections H & I Morequestions

  11. The Contract 1. The Schedule 2. Contract Clauses 3. Lists of documents, exhibits and other attachments 4. Representations and instructions What makes up a Contract? There are four parts….

  12. Very serious topic • Contract determines title thru the type of contract and in the clause used in the older world-some examples but many more types of contracts: • Fixed price-normally contractor • Cost reimbursable-normally USG • Time and Material-normally the USG Title issues at a glance or who owns what?

  13. Title addressed in the new property clause 52.245-1 and is the same as previous clauses • Important to understand the circumstances Determining title in the new world

  14. Contractor Responsibility: It all starts with a plan “Contractors shall develop property management plans and systems, at the contract, program, site or entity level that reflect their efforts to obtain best value” Newer Property Clause

  15. Rules have somewhat changed in this arena also • We’re gonna discuss some of the critical challenges facing the property profession today when dealing with subcontract procurements Does this stuff apply to subcontracts?

  16. The Contracts, Procurement, and Property Management departments must work together to ensure that all applicable property control requirements are incorporated into the subcontract, including identification of property to be provided to the subcontractor and liability provisions. Complex process-Subcontracting and the Property effort

  17. Subcontract -- Flowdown • 52.245-1(b)(3) requires prime to flow down 52.245-1 to all subcontractors when Government property is acquired or furnished for subcontract performance • This includes Risk of Loss! • Be sensitive about this issue • 17

  18. FAR 52.245-1(f)(1)(v) Subcontractor Control: (A) “The Contractor shall award subcontracts that clearly identify assets to be provided and shall ensure appropriate flow down of contract terms and conditions (e.g., extent of liability for loss, damage, destruction or theft of Government property).” One more thing about 52.245-1

  19. FAR 52.245-1(f)(1)(v) Subcontractor Control (cont.): (B) “The Contractor shall assure its subcontracts are properly administered and reviews are periodically performed to determine the adequacy of the subcontractor’s property management system.” FAR and subcontract administration

  20. As a part of the property plan, the adequacy and acceptability of subcontractor property management processes are subject to Government review and acceptance. The Property Plan

  21. Limited Risk of Loss…Ifcontractor transfers GP to subcontractor, transfer does not affect liability of contractor for loss, destruction, or damage to property Subcontracts:Risk of Loss-Very Important

  22. Acquisition • Receipt • Records • Physical Inventory • Sub-contractor control • Relief of Stewardship • Reports • Utilization • Maintenance • Contract close-out “Contractors shall develop property management plans and systems, at the contract, program, site or entity level that reflect their efforts to obtain best value” What were once “functional areas”…are now contractor outcomes Contractor Outcomes

  23. To maximize property utilization • Meet customer requirements • Support the Organization’s mission and goals • Policies and procedures to minimize risk • Contribute to the bottom line Property’s Role

  24. For more information andrew.anderson@ascotassociates.com 408-375-3117

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