Presented to:

Small Business Round Table

13 August 2015

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Contract TypesContract Types

By Dawn ChartierDeputy Director, Office of Small Business ProgramsNAWCAD Lakehurst

PAO Approved SPR2015-691-Contract Types

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The RegulationsThe Regulations

• Establish general concepts promoting:– Competition– Public access to the process – FebBizOps– Level playing field for all parties (Conflict of Interest)– Insultates procurements from outside influence (Non-

disclosure certification)– Promotes Gov’t. efficiency – fair and reasonable price– Promotes socio-economic goals in Gov’t.

procurement

Hardware Procurements Hardware Procurements

• Hardware requirements require:– SOW with CDRLS – Quantities including options and delivery– Independent Government Cost Estimate– Market research with acquisition history– List for spares – Logistics support requirements– Tech data and intellectual property req’ts.– IT approval if necessary– FMS requirements if necessary– Source Selection Plan for new competitive buy

Service RequirementsService Requirements

• Requirements for Services include:– SOW/SOO with CDRLs– Independent Government Cost Estimate– Market research with acquisition history– Competency Approval– IT approval if necessary– Source Selection Plan for new effort; use of

SEAPORT is no longer mandatory

Types of SolicitationsTypes of Solicitations

• Combined Synopsis/Solicitation (FAR 13.5)

• Good up to $5M

• Combines the notice of solicitation in FedBizOps with simplified solicitation procedures, T&Cs and eval and award criteria

Types of ContractsTypes of Contracts

• Firm Fixed Price – – Used in solicitations and contracts in which the SOW

is well defined(COTS, Drawings, production, follow-on buys) with reasonable risk for the contractor

– Freezes price for Gov’t.; if price to perform increases contractor is responsible

– If contractor can perform more efficiently savings become profit for contractor

– Preferred type of contract for Government

Types of ContractsTypes of Contracts

• Cost Plus Fixed Fee – – Used in Sols. and contracts in which SOW cannot be well

defined (R&D, development, services). Covers all estimated and actual costs associated with performance of contract including labor, mat’ls, burdens plus a fixed fee.

– Actual performance costs may vary from what was originally negotiated. If costs exceed original total (cost overrun) contractor may not continue w/out authorization of PCO. New total must be established and Gov’t pays increased costs.

– If contractor does not properly estimate & bill, at contract close out additional funding in that year money must be provided by PM to close out the contract.

– Less preferred type of contract for Government

Types of ContractsTypes of Contracts

• Time and Materials (T&M) – – Used when actual performance cannot be well

defined (development or RoR)– No incentive for contractor to perform efficiently; the

more hours they work the more they earn– Negotiated fixed labor hour rate for time; includes

burdens and profit– Material cost at actuals with “handling charge” added

to actual cost of material; no fee on mat’l.– Least preferred type of contract for Government

IDIQs and OptionsIDIQs and Options

• Indefinte Delivery/Indefinte Quantity – – When requirements can’t reasonably be predicted over the next

few years but an est max total qty can be predicted– Can be FFP, CPFF or T&M– Should be used when less sure about funding stream– Options – When requirements can be relatively predicted on a

year to year basis with total– Can be FFP, CPFF or T&M– Should be used when more secure with funding stream

availability

Basic AgreementsBasic Agreements

• Written Instrument of Understanding– Contains contract clauses applying to future contracts during its

term– Contemplates separate future contracts that will incorporate by

reference the required and applicable clauses agreed upon in the basic agreement.

– A BASIC AGREEMENT IS NOT A CONTRACT – The basic agreement DOES NOT INCLUDE ANY FUNDING

(funding is provided in the separate orders placed against the basic agreement)

– There is NO GUARANTEE that any orders will be placed against the basic agreement

– These can include Basic Ordering Agreements and Blanket Purchasing Agreements

Types of SolicitationsTypes of Solicitations

• Request for Quotations (RFQs) –– Generally for SAP actions (FAR Part 13), GSA

or BPA;– Uses simplified eval techniques – Typically takes 30 to 60 days– May or may not require synopsis

Types of SolicitationsTypes of Solicitations

• Invitation of Bid (IFB) Formal advertising IAW Far Part 14– Very structured solicitation format which can

only be used with very well defined requirements (e.g., Drawings)

– Primarily used by NAVFAC in construction– Low bidder wins unless and exception to spec

or solicitation is taken

Types of SolicitationTypes of Solicitation

• Request for Proposal (RFP) Negotiated Procurement IAW FAR Part 15– Used in more complex procurements; assumes CO

will need to negotiate or discuss requirements/responses with Contractor prior to award

– Primary type of solicitation used by NAVAIR– SSP for competitive; cost/price proposal for non-

competitive

Sections of ContractSections of Contract

• Section A – Contract cover page; provides contract number, name of contractor, contracting office issuing contract, contract date, PCO name, contract total amount, admin office, payment office, ship to address, payment terms and delv’y terms

• Section B – Contract Pricing Schedule; provides CLINS w/ item descriptions, qtys, Unit Prices, options, total amount obligated

• Section C – Statement of Work (SOW) or Statement of Objectives (SOO) for performance based SOW

Sections of ContractSections of Contract

• Section D – Provides packaging, marking and shipping instructions

• Section E – Provides Inspection and Acceptance instructions

• Section F – Provides delivery or performance schedule for all CLINS

• Section G – Provides contract administration information & data

Sections of ContractSections of Contract

• Section H – Special contract provisions, clauses, Ts & Cs; full text clauses

• Section I – Standard Contract Clauses; general FAR clauses incorporated by reference number – not full text

• Section J – List of Attachments; CDRLS, drawings, DD 254, reference documents

• Section K – Contractor Representations and Certifications; contractor provided information detailing size, type of business, etc. Information used in FPDS data base.

Sections of SolicitationSections of Solicitation

• Section L – Instructions to Offerors, tells contractors how to prepare proposal in response to solicitation; no. vols., no. copies, format, topics and order of presentation

• Section M – Evaluation Factors and Award Provides description of factors considered in award, their relative importance and award criteria – best value or pass/fail, low offeror. For cost type contracts, discusses cost realism evaluation process