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Breakout Session # 303 James Phillips, Esq. Centre Consulting, Inc. April 10, 2006 2:45 pm

Government Contract Law Basics. Breakout Session # 303 James Phillips, Esq. Centre Consulting, Inc. April 10, 2006 2:45 pm. Differences Between Federal and Commercial Contracting. Unique Features of Federal Contracts. Mandatory Clauses : Very Little Negotiation of Terms & Conditions

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Breakout Session # 303 James Phillips, Esq. Centre Consulting, Inc. April 10, 2006 2:45 pm

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  1. Government Contract Law Basics Breakout Session #303 James Phillips, Esq. Centre Consulting, Inc. April 10, 2006 2:45 pm NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  2. Differences Between Federal and Commercial Contracting NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  3. Unique Featuresof Federal Contracts • Mandatory Clauses: Very Little Negotiation of Terms & Conditions • Audit of Records: Extensive Audit & Surveillance of Contractors • Contractor Bound to Perform: Withholding Performance Not an Option During Disputes NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  4. Federal Acquisition Regulations • Codified at 48 C.F.R. • Comprehensive listing of regulations, policies and contract clauses governing Federal contracts. • Regularly revised and supplemented based on new statutes and federal policies. NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  5. Air Force Army Navy NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  6. Who’s Who? Contracting Officer (CO) Contract Specialist COTR or COR Auditors Inspector Generals NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  7. The Procurement Cycle • Acquisition Plans/ Requirements Development • Synopsize Requirements in FedBizOps (Depending on Dollar Amount and Acquisition Type) • Solicitations Released (i.e., RFP, IFB or RFQ) • Proposals/Bids Submitted • Proposals/Bid Evaluated • Source Selection & Contract Award • Notification & Debriefing of Losing Bidders NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  8. The Acquisition Plan Developing the Plan (How & When Procured) Contents of the Plan (SOWs, Requirements & Evaluation Criteria) Special Considerations (Schedule Buy? Set Aside for Small Biz?) This is When One-on-One Discussions With Buyers are Permitted! NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  9. 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 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  10. Contracting Methods Commercial Item Acquisition (FAR Part 12) RFQ/Simplified Acquisitions (FAR Part 13) IFB/Sealed Bidding (FAR Part 14) RFP/Negotiations (FAR Part 15) GSA Schedule (FAR Part 8.4) NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  11. Commercial Item Acquisitions FAR Part 12 NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  12. 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 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  13. What is a Commercial Service? Service of a type offered and sold in the commercial marketplace, based on established prices. NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  14. Commercial Contracting Market Research Essential Item Streamlined Procedures Past Performance Important Firm Fixed Price Contracts NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  15. Advantages of Commercial Contracting • Limited Audit Rights • Use of Commercial Terms • Limited Subcontractor Flowdowns NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  16. Disadvantages of Commercial Contracting • Applicable Only to Items or Services “Of a Type” Sold Commercially • Full & Open Competition Requirements Applicable NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  17. Simplified Acquisitions FAR Part 13 • Micro-Purchases: Generally under $2,500 = No competition • Simplified Acq. Threshold: < $100K; Issue RFQ to 3 Vendors & Award Based on “Best Value” • Primarily Reserved for Small Biz NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  18. Sealed Bidding FAR Part 14 • Price is the Sole Evaluation Factor • Award Made to Responsible & Responsive Bidder Offering Low Price • No Opportunity to Sell Based On Capabilities NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  19. Negotiated Procurements FAR Part 15 • Award Based on Integrated Assessment of Non Price/Cost Factors and Price or Cost • May Award to Other Than Low Bidder (“Best Value”) • Permits Selling Of Capabilities Via Proposals NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  20. Negotiated Procurements Disadvantages • Procurements Typically Take Much Longer Time to Conduct. • May Require Extensive Bid & Proposal Efforts. • Have a Tendency to Favor Incumbents B/C They Possess Unique Insight into Requirements Plus Relationship with Customer. NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  21. GSA Federal Supply Schedules FAR 8.4 • Long Term Ordering Contracts. • Negotiate Price and Other Terms Upfront & Then Market Capabilities to Receive Orders. • Limited Competition Requirements for Orders: Solicit 3 – 4 vendors. NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  22. GSA Federal Supply Schedules No Dollar Limit on Orders Limited (But Significant) Government Audit Rights Electronic Purchasing Requires Skilled Negotiation & Administration NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  23. Synopsizing Procurements All Procurements must be Synopsized on www.fedbizopps.gov except: • Procurements Valued at < $25,000 • GSA Schedule Procurements • Task Orders Under Previously Competed Indefinite Delivery Indefinite Quantity (IDIQ) Contracts • Classified Contracts NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  24. Summary of Contract Methods NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  25. Contract Types Fixed Price Fixed Price Variants Cost Reimbursement Cost Reimbursement Variants Indefinite Delivery & Requirements NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  26. 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 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  27. Government Unique Obligations NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  28. Government Unique Obligations Standards of Conduct Conduct of Former Employees Procurement Integrity Anti-Kickback Act Covenant Against Contingent Fees Business Espionage NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  29. Terminations NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  30. 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 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  31. 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 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  32. Contract Administration Issues • Changes: Permitted With Equitable Adjustment to Contractor. • Delays: Contractor Entitled to Additional Time for Delays Outside its Control; Damages for Gov’t Caused Delays. • Payment: Gov’t Bound to Pay w/in 30 Days of Receipt of “Proper” Invoice. NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  33. Contractor Remedies • “Equitable Adjustment” Due for Government Changes and Stop Work Orders Increasing Cost of Performance. • “Cost Adjustment” Due for Government Caused Delays. • Contractor Entitled to Equitable Adjustment for Improper Gov’t Contract Interpretations and Actions (“Constructive Changes”) NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  34. Contractor Remedies Procedure for Resolving Claims & Disputes • Submit claim to CO for negotiation or decision. If claim > that $100,000 it must be certified • Appeal adverse decisions or CO inaction to Court of Federal Claims (1 year from decision) or Board of Contract Appeals (90 days from adverse decision) • Alternate Dispute Resolution: Contractor May Elect to Seek Informal Disposition. NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  35. Questions? NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

  36. Thank You jphillips@centreconsult.com (703) 288-2800 NCMA World Congress 2006 : Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

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