Federal Contract Law Basics Breakout Session # 103 Barbara Kinosky Centre Consulting, Inc.

1. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

2. Federal Contract Law Basics Breakout Session # 103 Barbara Kinosky Centre Consulting, Inc. April 27, 2004 2:45-3:45pm NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

3. Differences Between Federal and Commercial Contracting NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

4. Air Force Army Navy NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

5. Who’s Who? Contracting Officer (CO) Procurement Contracting Officer (PCO) Contract Specialist COTR or COR NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

6. The Acquisition Plan Developing the Plan Contents of the Plan Special Considerations NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

7. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

8. Competition Requirements Full and Open Competition (CICA) Exceptions Only One Source (sole source) Unusual Urgency Industrial Mobilization, etc. International Agreement Required by Law National Security Public Interest (Agency Head, Congressional Notice) NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

9. Sealed Bidding or Negotiated Procurements NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

10. Contract Types Micro Purchase Simplified Acquisition Fixed Price Fixed Price Variants Cost Reimbursement Cost Reimbursement Variants Indefinite Delivery & Requirements NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

11. Risk v. Return – Common Contract Types CPFF/LOE CPFF/Completion CPAF/LOE CPAF/Completion T&M FFO/LDE (R&D Only) FFP Completion Least Risk & Return Most Risk & Return NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

12. Commercial Item Acquisitions FAR Part 12 NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

13. What is a Commercial Item? An item that is customarily used for non-governmental purposes and has either been sold or leased to the general public or offered for sale or lease. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

14. What is a Commercial Service? Service of a type offered and sold in the commercial marketplace, based on established prices. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

15. Commercial Contracting Market Research Essential Item Streamlined Procedures Past Performance Important Firm Fixed Price Contracts NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

16. Advantages of Commercial Contracting • Limited Audit Rights • Use of Commercial Terms • Limited Subcontractor Flowdowns NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

17. Federal Supply Schedules Long Term No Dollar Limit on Orders Limited Government Audit Rights Electronic Purchasing NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

18. Government Unique Obligations NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

19. Standards of Conduct Conduct of Former Employees Procurement Integrity Anti-Kickback Act Covenant Against Contingent Fees Business Espionage NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

20. Organizational Conflicts of Interest NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

21. Terminations NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

22. Termination for Convenience Basis - In Government’s Best Interest (e.g. war stopped, base was closed, Congress failed to appropriate money) Procedures Termination Settlement Claims - 1 Year - Cost and Profit on that Cost - Limit (original contract price) NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

23. Termination for Default Basis 1. Failure to Timely Deliver or Perform 2. Failure to Make Progress (endanger performance) 3. Breach of Material Term 4. Anticipatory Repudiation Notices – Show Cause/Cure Notice NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

24. Current Issues NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

25. A-76 Reform • Procurement Reform • SARA NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

26. A-76 Reform • The FY 04 Omnibus Bill has passed the House but still awaits action in the Senate. The bill currently faces significant opposition in the Senate on unrelated grounds. • If passed in current form, bill would: • Remove the 10% cost differential on streamlined competitions in favor of a “best value” approach in which cost is one factor to be considered. • Remain silent on protest rights for the Government team. • In the absence of legislation, GAO has indicated that it may implement its own approach to protest rights for the Government team. It has requested government and industry comments on the subject. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

27. Trends Effecting GWACs & Schedules • Initiatives to Obtain Greater Competition In Placing Orders • Initiatives to Promote More Efficient Contract Methods • Initiatives to Promote Performance-Based Contracts for Services NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

28. Recent Legislation Affecting GWACs • Services Acquisition Reform Act (SARA) • 2004 DOD Authorization Act NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

29. SARA Performance-Based Service Contracts: If Used, May Purchase Services as a Commercial Item Up to $25 Million NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

30. SARA Requirements: • Performance-Based SOW; • Award Results in Firm Fixed Prices; & • Contractor Performs Similar Work For the General Public. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

31. SARA Commercial Contract Types: T&M/Labor Hour Contracts Authorized to Procure Commercial Services if: • Procured in Support of a Commercial Item or • Service Falls within Category Commonly Sold to Public Using T&M/Labor Hour Methods & OFPP Determines Gov't Should Be Able to Do Likewise NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

32. DOD Authorization Act Provisions Contract Consolidation/Bundling: Effective May 2004, DOD Agencies Must Do the Following Before Consolidating Requirements in Excess of $5 Million: • Conduct Market Research; • Identify Alternative Approaches Involving Less Consolidation; • Determine that Consolidation is “Necessary & Justified.” NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

33. DOD Authorization Act Provisions “Necessary & Justified” Requires Finding that Benefits of Bundling “Substantially Exceed” the Benefits of Each Alternative Approach. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

34. DOD Authorization Act Provisions • Multi-Year Task & Delivery Order Contracts: DOD Task and Delivery Orders “May Not Provide a Total Period of Performance Greater than Five Years” • DOD Interim Rule Recently Issued Confirming Requirement NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

35. Section 803 Requirements Key Points: • Services Only • Orders Over $100,000 • Three Viable Proposals Must be Obtained NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

36. Questions? NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

37. Thank You bkinosky@centreconsult.com (703) 288-2800 NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”