Service Contracting an Integrated Approach William Cox CPCM

8/17/2019 Service Contracting an Integrated Approach William Cox CPCM

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Service Contracting:

An Integrated Approach

William Cox, CPCM, MAM

United States Department of Veterans Affairs

ffice of Ac!"isition and Materiel Management

Ac!"isition Assistance Division#$%&A'D(illiam)cox*va)gov

April ++, $$-


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Today’s Topics1. Introduction to Service Contracting

2. Project Management of ServiceContracting

3. Risk Management in ServiceContracts

4. Financial s!ects of Service

Contracts". Current #egislation $out Service

Contracting

%. #a$or #a&s for Service Contracting

'. Contracts for S!eciali(ed Services


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Chapter 1

Introduction to ServiceContracting


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c)uisition of Services

Applicable processes and practicesin:

– Acquisition Planning

– Solicitation Development

– Perormance Assessment


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c)uisition Planning

Determining your customer’srequirement

–!ho is your customer–"eet #ith your customer

–$evie#ing recurring requirements


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Market Researc*+ Sum of ,&o

ProcessesProvides a general sense of theservices available in the market placeand their characteristics andcapabilities.

-

Determine, with a high degree ofcondence, whether any services willsatisfy the need, or can be modied ortailored accordingly.


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Market Researc*

%no#ledge gained should assist in identiying:

& 'est methods or conducting a service acquisition

& 'est available sources or perorming the services

& 'est mar(etplace practices& 'est practices in the perormance o services

& 'enchmar(ing perormance standards)measures

& 'est practices in evaluation and use o incentives

& 'est strategies or socioeconomic considerations


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o& Market Researc*

Can el!/& Commercial practices

& *evel o competition

& 'uyer or Seller "ar(et+

& Price estimate& Delivery terms

& Payment terms

& !arranty terms

& ,nsurance $equirements

& -nit pricing terms& Contract type and length

& Contract rene#al terms

& Commercial Clauses

& Commercial standards

& .uality processes

& Are metrics used+

& Certi/cations)accreditations& $emedies0poor perormance

& Source Selection procedures

& Sample !or( Statements

& Sample Contract Clauses

& "ar(etingliterature)brochures

& "onetary)non0monetaryincentives


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Market Researc* Process

Step 1: stablish a group leader or acilitatoror the acquisition team

Step 2: De/ne basic needs and identiy type o

serviceStep 3: Compile a list o potential sources

Step 4: Develop #ritten survey or oralintervie# questions

Step 5: Conduct surveys or intervie#s

Step 6: Document the mar(et research


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Identif0 ,0!es of Services

& Process services 7o8site9 perormance o aparticular tas(

& ;pert services 7on0 or o80site9 applicationo creativity or intelligence

&


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Market Researc* Re!ort

Com!onents& Description o need

& Desired or required delivery schedule

& ;planation o methodology–

"ethod used or compiling and re/ning list o potentialsuppliers)vendors

& =irms or organi>ations contacted– Summary o ino received rom /rms

& Summary o commercial terms and)or perormance0

based characteristics& ,denti/cation o price ranges


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*at are Statements of ork and

Statements of $jectives/& A Statement o !or( 7S

– "inimum requirements or perormance o tas(s under acontract

– Standards o perormance or determining i the requirementshave been met

& A Statement o


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*at is a Performance ork

Statement PS/A Perormance !or( Statement is adocument describing the #or( in terms othe required results rather than either ho#the #or( is to be accomplished or thenumber o hours to be provided and itstructures all aspects o the acquisitionaround the purpose o the #or(B


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Statement PS/A P!S may be prepared by theEovernment or result rom a Statement

o


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Statement PS/& nable assessment o #or( perormance

against measurable perormance

standards@ and& $ely on the use o measurable

perormance standards and /nancialincentives in a competitive environment

to encourage competitors to develop andinstitute innovative and cost0e8ectivemethods o perorming the #or(B


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Solicitation 5evelo!ment

& S

& -nique Clauses or Services& Proposal Preparation ,nstructions

& valuation Criteria


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6e0 to Procurement ctions

& stablishing contracts rom ne#solicitations

& "odiying e;isting contracts& Providing tas( orders and inde/nite0

quantity contracts

& stablishing the basis or other documents

& valuating perormance


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S or PS Role In t*e

c)uisition of Services& ,denti/es tas(s required o the contractor

& Contractually binds the document stating thosetas(s the contractor must perorm to get paid

& ngages the time and e8ort o a contractor toperorm an identi/able tas( rather than tournish an end item o supply

& ,denti/es either personal or non0personalservice contracts

& De/nes contractor e8orts& De/nes deliverables or services and data


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Statement of ork or Performanceork Statement riting8uidelines

Fere are the steps #hen #riting aStatement o !or( S

– ,dentiy outputsB

– Structure around the purpose o the#or( to be perormedB

– nsure completenessB

– Communicate clearly


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9nsuring Com!leteness

& ,dentiy and de/ne all tas(s

& ,dentiy completion criteria or each tas(

& ,dentiy relationships bet#een tas(s

& ;clude unnecessary tas(s

& ,dentiy logical Go# o tas(s

& ;clude ho#0to requirements

& "a(e sure that requirements trac( toperormance standards and to evaluationcriteria


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6e0 to riting Clearl0

& -se active voice – The passive voice should notbe used.

& Choose descriptive verbs

&Distinguish bet#een shall)#ill andshould)may

& Avoid ambiguity – Eschew Obfuscation.

& Avoid generalities but do not over speciy

& Avoid agreements to agree& De/ne all abbreviations and acronyms

& -se short sentences


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Issues :ni)ue ,o 5i;erent ,0!es ofServices

& Eeneral issues:

– Payment schedule

&31 -BSBCB 3324 speci/es that a payment under acontract to provide a service or deliver an article or the

-nited States Eovernment may not be more than thevalue o the service already provided or the articlealready deliveredB

&See =A$ 32B4H3 and 32B4H4 or applicability ande;clusions

– Time o perormance– Authori>ation and changes


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,ssues related to e;pert services

– Delegation

– ,ntellectual property– Patents

– Copyright

– Disclosure and con/dentiality issues– *icense and royalties


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,ssues regarding process services– cope 0 De/ne the limits o the #or( you #ant doneB

The scope o the #or( is the most requent source odisputes #ith service suppliersB

– ,ssues related to this type o service’s e;amplesinclude:& Photocopying

& quipment "aintenance

& Photographic Services

& Data Processing

– De/nition o Scope& .uality

& Authori>ation

& Completion


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,ssues regarding operational services

– *iability

– ,nsurance– Conduct

– Compliance

– -se o asset)materials


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6e0 :se of S7PS in SourceSelection Process

%ey to successul use o S

– stablishment o a clear relationshipbet#een the S


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Section #< Instruction to ;erors

Iis that place in the solicitation #hereinormation and guidance is posted to

guide o8erors in preparing proposals inresponse to the solicitationB


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Section M+ Source SelectionCriteria

Section " o the solicitation contains theevaluation actors or a#ardB This part o a$equest or Proposals is intended to

represent a:– Clear communication rom the Eovernment topotential o8erors

– Statement o #hat is most important to thecustomer7s9 or end0user7s9

– Delineation o actors dealing #ith ho# proposals #illbe evaluated


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Illustration of t*e Relations*i!=et&een S7PS< Section # > MStatement of WorkPerformanceRequirement

Section L Section M

Provide taxi service so

that pick up time iswithin 5 minutes ofrequest time, 95% ofthe time.

The offeror shall

describe how taxiservice will beprovided inaccordance with thestated requirement.

The agenc will

evaluate the offeror!sapproach for taxiservice. The offerorwill be evaluated forbest value, in termsof technical merit andcost with additionalconsideration for theofferor!s relevant pastperformance trackrecord.


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Performance ssessment

& .uality Assurance Surveillance Plan7.ASP9 Development

& ,mplementing Perormance Assessment

& Contractor Assessment Documentation


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?ualit0 ssurance SurveillancePlan ?SP

& Eovernment’s technical management plan oproposed actions to evaluate perormance@ not acontractual item 7=ormulated #ith S

& Provides inormation to potential o8erors on– !hat and #hen tas(s are inspected

– !hat standards #ill be employed

– Fo# assessment #ill be conducted

& Tailored to requirement 7ris( management tool9

& Provide the means #hereby deductions mayproperly be ta(en or non0perormance


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Contractor ?ualit0 Control Plan

Those assessment methods identi/ed inthe .ASP together #ith the contractor’squality control plan #ill help determine

#hether the contractor delivers the levelo perormance agreed to in the contractB


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Im!lementing Performancessessment

& ,nsight vsB ed


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Contractor ssessment5ocumentation The record should contain as a minimum:

– The contractor number

– A short description o the requirement beingsurveyed

– The contract paragraph number reerencing therequirement

– The method o assessment and observation

– The date time and location o assessment

– The results o the assessment– The signature and title o the individual doing the

assessment


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,*e Federal Su!!l0 Sc*eduleProgram a.k.a Multi!le &ard

Sc*edule AMSB& Provides =ederal agencies #ith a simpli/ed

process o acquiring commonly used suppliesand services

– ,n Jarying quantities– !hile obtaining .uantity discounts

& ,nde/nite0delivery contracts are a#ardedusing competitive procedures

& The /rms provide supplies and services atstated prices or given periods o time


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Industrial Funding Fee

& "AS contracts are unded through a KLee paid to ESA by the agencies thatpurchase supplies and services

& The ee is incorporated into the price osupplies and services sold on theSchedule


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o& does t*e MS Program &orkfor Contractors/

& Contractors may ?oin to sell a single serviceunder a single Schedule or multiple servicesunder multiple Schedules

& ESA determines that the vendor is responsibleand the services are priced reasonably

& $easonable pricing required o contractors byinsisting that the Eovernment be treated as

the vendor’s most avored customer& ,t does not guarantee sales or contractors

–


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Com!etition Re)uirements forMS Program

& Any authori>ed purchaser may purchaseservices rom that vendor #ithout additionalcompetition

& ,ndividual purchasers under the "AS Program donot need to to meet the requirements o C,CAB– "AS contracts are a#arded through ull and open

competition

& Agencies must comply #ith certain basicrequirements set orth at =A$ NB4H4:– sole source a#ards are limited per =A$ NB4H506

– several recent court decisions have emphasi>ed the needor agencies to revie# at least three Schedule price lists


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Risks in*erent in t*e MSProgram

for Contractors& Jolume $equirements

& Product $equirements

& Jendor $equirements


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Risks in*erent in t*e MSProgram

for =u0ers& ConGicts o ,nterest bet#een ESA and

your agency

& Sot#are license agreements aresometimes not included or #henincluded conGict #ith ederal la#

& Oeed to retain complete copy o ESA

schedule contract 7not ?ust the scheduleitsel9 or contract administration


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Current State of ,*e MS Programfor =u0ers

& ,s quic(ly becoming the procurement vehicleo choice or many Eovernment buyers

& ,s open to most Eovernment agencies

& ,t is considered easy to use

& Signi/cantly reduces the administrativeburdens o traditional Eovernment

procurements& ,s becoming restricted #ith the Department

o Deense


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Current State of MS Program forContractors

& Almost every ma?or purveyor ocommercial services holds one or more

Schedule contractsB& Provides e;cellent revenue0generatingopportunities #ithout many o theburdens o traditional Eovernment

contracts


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*en Procuring Services<gencies

"ust loo( to the ollo#ing sources in the order sho#n:

• Services available rom the Committee or Purchaserom People !ho Are 'lind or Severely Disabled

• "andatory =ederal Supply Schedules

•


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rgani(ational ConDicts of Interest

ational conGict o interests 7


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59R E'.3'1G% GG Incom!ati$ilit0 $et&eenregular duties and !rivate interests. 7a9 mployees o a management and operating contractor shall notbe permitted to ma(e or inGuence any decisions on behal o thecontractor #hich directly or indirectly a8ect the interest o theEovernment i the employees personal concern in the matter maybe incompatible #ith the interest o the EovernmentB =or e;ample:An employee o a contractor #ill not negotiate or inGuence thea#ard o a subcontract #ith a company in #hich the individual hasan employment relationship or signi/cant /nancial interest@ and anemployee o a contractor #ill not be assigned the preparation o anevaluation or Dation 7other than the contractor#ho is the individuals regular employer9 in #hich the individual hasan employment relationship or signi/cant /nancial interestB


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59R E'.3'1G% GG Incom!ati$ilit0$et&een regular duties and !rivateinterests< continued+

7b9 The contractor shall be responsible orinorming employees that they are e;pectedto disclose any incompatibilities bet#eenduties perormed or the contractor and theirprivate interests and to reer undecided

questions to the contractorB


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EA


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$easons or ,ncreasing


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Chapter 2

Project Management ofService Contracting


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#earning $jectives

& Describe the nature o pro?ect managementB& Construct a pro?ect net#or(B

& Perorm critical path analysis on a pro?ect net#or(B

& Allocate limited resources to a pro?ectB

& Crash activities to reduce the pro?ect completiontimeB

& Analy>e a pro?ect #ith uncertain activity timesB

& -se the earned value chart to monitor a pro?ectB

& Discuss the reasons #hy pro?ects ail to meetperormance time and cost ob?ectivesB


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,*e @ature of Service ProjectManagement& !haracteristics of Pro"ects: purpose lie cycle

interdependencies uniqueness and conGictB

& Pro"ect #anagement Process: planning 7#or( brea(do#nstructure9 scheduling and controllingB

& electing the Pro"ect #anager : credibility sensitivityability to handle stress and leadershipB

& $uilding the Pro"ect Team: =orming Storming Oormingand PerormingB

& Principles of E%ective ervice Pro"ect #anagement :direct people individually and as a team reinorcee;citement (eep everyone inormed manage healthyconGict empo#er team encourage ris( ta(ing andcreativityB


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,*e @ature of Service ProjectManagement

& The depth and breadth o service pro?ectmanagement depends on the degree ocriticality o the pro?ect and ho# the contractingparties have allocated ris(B

& !hen the government controls the processesand methods o pro?ect e;ecution it #illgenerally retain responsibility or all aspects opro?ect managementB

& !hen a pro?ect is e;ecuted through aperormance0based services contract thecontractor #ill be primarily responsible orpro?ect managementB


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Project Management ?uestions

& !hat activities are required to complete apro?ect and in #hat sequence+

& !hen should each activity be scheduled tobegin and end+

& !hich activities are critical to completing thepro?ect on time+

& !hat is the probability o meeting the pro?ectcompletion due date+

& Fo# should resources be allocated toactivities+


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Work Breakdown Structure (WBS)Work Breakdown Structure (WBS)

WBSA Simple

Tool

to identify

What work/tasks

must be done

Adapted from

Reference Text p!" #$#

.raphic Displa/

#"%

System

#"#

&ardware

#"'

Software

#"#"#

esi!n

#"#"'

f!"

Indented 0ist

#"% System

#"# &ardware

#"#"#" esi!n

#"#"'" f!"

#"' Software

WBS

*e+els

#

'

,

The WBS can be written

functionally oriented or

task oriented


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WBS - Best .racticesWBS - Best .ractices

The WBS should be de+eloped at an appropriate le+el of detail to mana!e the pro0ect"

The WBS should be de+eloped by the entire

(multi1functional) pro0ect team to ensure

completeness"

2nsure the WBS includes all of the work contained

in the contract Statement of Work (S3W)"

4our customer should re+iew the WBS to ensure all pro0ect re5uirements are addressed"


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.ro0ect .lannin!.ro0ect .lannin!

8uidelines *at 0ou

must kno&

,ools

!hat is to be doneB & *ist o pro?ect deliverables

& !or( 'rea(do#n Structure 7!'S9

& Scope o !or(

& Statement o !or(

!hen it should be done and #hat is thecurrent statusB

& Eantt Chart& "ilestone Chart

& Critical Path "ethod 7CP"9

& Program valuation $evie# Technique 7P$T9

!ho is responsible or doing itB & Point o contact lists

& ational 'rea(do#n Structure 7


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,ennis ,ournament ctivities

"# $ctivit #escription etwork "mmediate #uration

ode Predecessor &das'

( egotiate for )ocation $ * +

+ ontact -eeded Plaers * /0 Plan Promotion ( 0

1 )ocate 2fficials # 0 +

5 -end 3-4P "nvitations 0 (6

7 -ign Plaer ontracts 8 +,0 1

Purchase alls and Trophies : 1 1

/ egotiate atering ; 5,7 (

9 Prepare )ocation " 5, 0

(6 Tournament < /,9 +


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Schedulin! Tool - 6antt 7hartSchedulin! Tool - 6antt 7hart

6antt 7hart

Sho(s Start#finish and d"ration of

vario"s activities

1asiest sched"le to ma2e

Uses target dates 3 4Most 0i2el/ 5ime6

Progress displa/ed 7/ indicatingact"als (ith s/m7ol

5ells least amo"nt of information

Months

Determine Requirements ****************************************

Assess Needs *********************

Identify Desires ***********************T"=5

%2>

Design Hardware *******************************************************

Dee!o" Pre!iminary Design *********** #onduct PDR *******

Dee!o" $ina! Design *******

#onduct #DR *****

Dee!o" Hardware **************************************************************************

Design Hardware ****************

%rder Materia!s ************************

Dee!o" Prototy"e ***********************************

&est Hardware ********************

Manufacture *********

&ime Period

&ask Name


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9arl0 Start 8antt C*art for ,ennis,ournament

"# $ctivit #as #a of Pro?ect -chedule

( + 0 1 5 7 / 9 (6 (( (+ (0 (1 (5 (7 ( (/ (9 +6

$ egotiate for +

)ocation

ontact -eeded /

Plaers

Plan Promotion 0

# )ocate 2fficials +

-end 3-4P (6

"nvitations

8 -ign Plaer 1

ontracts

: Purchase alls 1

and Trophies

; egotiate ( atering

" Prepare )ocation 0

< Tournament +

Personnel 3equired + + + + + 0 0 0 0 0 0 + ( ( ( + ( ( ( (

ritical Path $ctivities

$ctivities with -lack


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Resource #eveled Sc*edule for ,ennis ,ournament

"# $ctivit #as #a of Pro?ect -chedule

( + 0 1 5 7 / 9 (6 (( (+ (0 (1 (5 (7 ( (/ (9 +6

$ egotiate for +

)ocation

ontact -eeded /

Plaers

Plan Promotion 0

# )ocate 2fficials +

-end 3-4P (6

"nvitations

8 -ign Plaer 1

ontracts

: Purchase alls 1

and Trophies

; egotiate ( atering

" Prepare )ocation 0

< Tournament +

Personnel 3equired + + + + + + + + + + + + + 0 + + + + ( (

ritical Path $ctivities

$ctivities with -lack


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Schedulin! Tool - ilestone 7hartSchedulin! Tool - ilestone 7hart

ilestone 7hart

Condensed graphic displa/

Sho(s Milestones

- Planned 5arget dates

- 8evised dates

- Act"al dates

Used on contracts of longer d"ration

Does not sho( relationship 7et(een

Milestones

ilestone

etermine

Re5uirements

esi!n

&ardware

e+elop

&ardware

7ustomer Acceptance

Time

onths


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8etwork Schedules - 7. and .2RT 8etwork Schedules - 7. and .2RT

7ritical .ath ethod .ro!ram 2+aluation Re+iew Techni5ue (7.) and (.2RT)

Shows lon!est path throu!h a

pro0ect

Shows the path with 9ero slack

time (7ritical .ath)

7ritical .ath - is the shortest time

to complete a pro0ect

Shows explicit relationships

7oordinates the bi! picture

To reduce the schedule you must reduce the

time it takes to complete acti+ities on the

critical path - 7alled 7rashin! the 7ritical

.ath

*ays out work flow


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Schedulin! Tool - 8etwork SchedulesSchedulin! Tool - 8etwork Schedules

7. or .2RT7. or .2RT

8etwork Schedules

Developed from W9S

Sho(s time to finish

Sho(s activit/ interdependencies More diffic"lt to ma2e

Provides more info than .antt or

Milestone charts

Ma/ "se 5arget time estimate i)e)

CPM;

Ma/ "se m"ltiple d"ration estimates

most li2el/, optimistic, andpessimistic times; to calc"late expected

time i)e) P185;

3

4

5

6

7

8 9

8etwork Schedule

3 : 2+ent (Start/;inish)

: Acti+ity


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,ennis ,ournament ctivit0 on @ode5iagram


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@otation for Critical Pat* nal0sis

"tem -mbol #efinition

$ctivit duration t The expected duration of an activit

arl start ES The earliest time an activit can begin if all previous

activities are begun at their earliest times

arl finish EF The earliest time an activit can be completed if it

is started at its earl start time

)ate start LS The latest time an activit can begin without

delaing the completion of the pro?ect

)ate finish LF The latest time an activit can be completed if itis started at its latest start time

Total slack TS The amount of time an activit can be delaed

without delaing the completion of the pro?ect


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Com!letion ,ime 5istri$ution for ,ennis,ournament

ritical Path

$ctivities # 4

$ + 1@07

0 1@07 (6 (11@07

" 0 07@07

< + 6

A +6 (//@07 A 5.+ A µ σ '


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Costs for 0!ot*etical Project

, o s t

&6,6'

-chedule with =inimum Total ost

#uration of Pro?ect

Total ost

"ndirect ost

2pportunit ost

#irect ost


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ctivit0 CostGtime ,radeo;

B

#B # $ctivit #uration as'

ormal

rash

-lope is cost to expedite per da

ost


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CostG,ime 9stimates for ,ennis ,ournament

Time stimate #irect ost xpedite ost

$ctivit ormal rash ormal rash -lope

$ + ( 5 (5

/ 7 ++ 06

0 + (6 (0

# + ( (( ( (6 7 +6 16

8 1 0 / (5

: 1 0 9 (6

; ( ( (6 (6

" 0 + / (6

< + ( (+ +6

Total ((5


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Progressive Cras*ing

Pro?ect $ctivit #irect "ndirect 2pportunit Total

#uration rashed ost ost ost ost

+6 ormal ((5 15 / (7/

(9 1( 7

(/ 0 1

( 00 +

(7 +9 6

(5 +5 *+ (1 +( *1

(0 ( *7

(+ (0 */

ormal #uration $fter rashing $ctivit

Pro?ect Paths #uration

$**#*:*"*< (7

$***"*< +6

$***;*< (/

$**8*;*< (+

*8*;*< (5


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Sources of :neH!ected Pro$lemsCost 5ime Performance

• (ifficulties re5uiremore resources

• Scope of work increases

•


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9arned alue C*art

Actual7ost

Toda#ollars

?alue

7ompleted

Bud!eted 7ost

(Baseline)

#as

$

P4

4

C o s t V a r i a n c e

S c h e d u l e

V a r i a n c e

TimeVariance

$ T > P

- T > P


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Chapter 3

Risk Management inService Contracting


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More 6e0s to riting Clearl0

& 'e more or less speci/cB

& Dont repeat yoursel or say again #hat youhave said beoreB

& Oever use a big #ord #hen a diminutivealternative #ould suceB

& Oo sentence ragmentsB

& And al#ays be sure to /nish #hat


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De/nition o $is(De/nition o $is(

Risk is a measure o the inability to achieveoverall program ob?ectives #ithin de/nedcost schedule and technical constraints and

has t#o components: 719 the probability oailing to achieve a particular outcome and729 the conse&uences'impacts o ailing toachieve that outcomeB U

U RIS6 M@89M9@, 8:I59FR 55 C?:ISI,I@

Fift* 9dition

ersion 2.


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De/nition o $is(De/nition o $is(

Risk is the possibility o su8ering lossBU,n a development pro?ect the loss

describes the impact to the pro?ect

#hich could be in the orm odiminished quality o the end productincreased costs delayed completion or

ailureB

U Sot#are ngineering’


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$is( "anagement


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Planning

& Develop a $is( "anagement structure

& nsure integration #ithin the currentprogram management rame#or(

& ,dentiy (ey participants and sta(eholders& De/ne roles and responsibilities

& De/ne the processes and methodologies

& stablish ris( management tools

parameters reports and ormatsB& Train Program Team "embers


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Risk Management Planning ,i!s

& $is( management plan must include clearperormance based metrics as inputs to youridenti/cation processB

& Create a committed pro?ect charter or the ,PTdedicated to resolving ris(s #ithout 7/rst9 requiring

restructuring o the contractB& Design and structure ho# team members #ill

collaborate to implement e8ective processes in orderta(e advantage o these technologiesB

& 'e sure to evaluate and complete business processdesign /rst beore building the process #ith electronic#or(Go# tools


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IdentiKcation

& Coordinated e8orts o:

– $is( "anager

– ,ndependent Assessments

– Program Team "embers

& De/ned communicationstreams

& ,dentiy ris( attributes

– $is( De/nition

– $is( lements

– Potential ,mpacts


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Risk IdentiKcation ,i!s

& nsure ris( identi/cationprocesses are #ithineach team member’sresponsibilities and

yearly perormance goalsor the entire programteamB

& valuate the use otechnology tools to

support proactive ris(identi/cation


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nal0sis

& Collect basis o estimates or the impact and

li(elihood o ris( events rom sub?ect matter

e;pertsB

& stablish dispositions o lo# medium andhigh ris(s and appoint a ris( champion to

manage mitigationB

& -nderstand appropriate use o quantitative

methods S" bias and hypnotic statistical

po#er


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Risk ssessment ?uantiKcation

Antennae (ias

Days De!ayed )eyond (ase!ine Schedu!e Im"act

066

(+6

6

(/6

76

6%

+6%

16%

76%

/6%

(66%

6 56 (66 (56 +66

Days De!ayed *#AI+

"mpact Probabilit

=odule $d?ustment

$lgorithm 3edesign

$ntennae


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Risk ?uantiKcation ,i!s

& The ris( quanti/cation process can be delayedor the technical person #ho #ishes toe;haustively study the situation todetermine a statistically signi/cant '


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andling

& Develop "itigations Plans– $is( Champion

– S"’s

& Collect relevant supporting documentation

& Determine metrics to monitor "itigation Actions& Develop $is( Closure Criteria

T,P: $e#ard successul ris( champions and the

team or their time e8orts and ideas and includeincentives in annual perormance revie#sB


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Risk Management

Monitoring & Collect status rom ris( champions& "onitor (ey plan metrics

& "aintain current supporting documentation

& -pdate the $is( "anagement Database& "onitor mitigation e8orts

& Eenerate and distribute summary and detailreports to relevant Program Team members

and "anagement


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Closure

& Collect veriy and analy>e all requisiteinormation pertaining to a potential ris( closure

& Coordinate and agree ris( closure #ith all

relevant parties including $is( Champion

& $ecord the criteria supporting each ris( close

out including all supporting documentation

& Prepare and distribute regular reports detailing

ris( closures to the relevant parties 7iBe Program"anager9


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Chapter 4

Financial Issues of ServiceContracts


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Financial s!ects of ServiceContracts

Chapter


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'udgeting and Appropriation Process 0Statutory requirements

& 31 -BSBCB 13H17a9@ Appropriated unds usedonly or the intended purposes

& 31 -BSBCB 13H17d9@ $eprogramming o undscannot violate the intended use provision& 31 -BSBCB 1341 – The Anti0de/ciency Act@

Spending limited to the amount stipulated inthe appropriation@

& 31 -BSBCB 15H27a9 – The 'ona =ide Oeeds$ule@ Provisions o the 'ona =ide Oeeds$ule are to be ollo#edB

i i l f S i


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Contract Types and Characteristics

& =irm =i;ed0Price

& Cost $eimbursable

& Time0and0"aterials

& *abor Four

& ,nde/nite Delivery ) ,nde/nite .uantity

& ESA Schedule

Fi i l f S i


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Financial s!ects of ServiceContractsCost Allo#ability and Allocability& Pertinent #hen actual cost data is used or estimating and

billing purposesB

& $elevant contract clauses@– =A$ 52B21502 – Audit and $ecords

– =A$ 52B21501H)11 – Price $eduction or Deective Cost or Pricing

Data– =A$ 52B2160R – Allo#able Cost and Payment

– =A$ 52B2320R – Payments under Time0and0"aterials and *abor FourContracts

– =A$ 52B23202H – *imitation o Cost

– =A$ 52B232022 – *imitation o =unds

& Contract type and characteristics govern the inclusion ocontract clauses and resultant business inrastructurerequirements

Fi i l t f S i


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Financial s!ects of ServiceContractsCost Allo#ability and Allocability& =undamental accounting concepts

– Actual costs are determined based on ull absorptionaccounting

– Actual costs are computed based on allo#able costs

& =undamental business system capabilities& Accounting system– Consistent de/nition o cost as direct or indirect– ,denti/cation and segregation o unallo#able costs– Accumulation and reporting o costs at ?ob or pro?ect

level and under general ledger control& Time(eeping and labor charging system – adequate

time(eeping practices and distribution o labor costs

Fi i l t f S i


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Cost Allo#ability and Allocability@ De/nitions& Actual cost& Allocable costs& Allo#able costs

& Direct cost& =inal cost ob?ective& =ull absorption accounting& ,ndirect cost

& $easonable costs& -nallo#able costs

Fi i l t f S i


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Cost Allo#ability and Allocability

Attributes o an adequate accounting system

& Consistency #ith EAAP

& Segregation direct V indirect costs& Direct costs by contract pro?ect tas( order

etcB

& Allocation o indirect costs

& ob costs under general ledger control& Adequate time(eeping system

Fi i l t f S i


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Attributes o an adequate accounting system

& $outine posting o boo(s o account

& Segregation o unallo#able costs& Segregation o pre0production costs

& =inancial inormation or compliance #ithnoti/cation and billing requirements

& Provide reliable data or estimating

Fi i l t f S i


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,ndirect cost collection V distribution e;amples

&


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,ndirect cost collection V distribution e;amples

& 'usiness -nit EVA ;pense– Total cost input

– Direct labor dollars

& Fome


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Cost Allo#ability and Allocability& Accounting practices or direct and indirect costs

must be consistently applied or -S Eovernmentcontracts

& Application o accounting practices is independent o

the ability to bill or recover recorded costs under a -SEovernment contract& BE overtime cost normally accounted or and

treated as a direct costs– Speci/c clause does not allo# reimbursable under a given -S

government contract as a direct cost

– The cost is still accounted or as direct– The cost may not be reclassi/ed and reimbursed as an overallelement o indirect e;pense

Financial s!ects of Service


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Cost Accounting Standards

& Purpose is to ensure consistent and equitableaccounting practices or cost– "easurement

– Assignment

– Allocation

& Administrative remedies provided oraccounting practice changes or non0

compliance



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Cost Accounting Standards

& Application to negotiated contracts in e;cesso M5HHHHH unless other#ise e;empt

& Coverage– "odi/ed CAS coverage requires compliance #ith CAS4H1 4H2 4H5 and 4H6

– =ull CAS coverage includes applicability o all 1Qstandards

& Disclosure statement may be required orlarger contracts or contractors



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Financial s!ects of ServiceContractsCost Accounting Standards& CAS 4H1 0 Consistency in stimating

Accumulating and $eporting Costs& CAS 4H2 0 Consistency in Allocating Costs

,ncurred or the Same Purpose

& CAS 4H3 0 Allocation o Fome ation o Tangible Assets& CAS 4H5 0 Accounting or -nallo#able Costs

& CAS 4H6 0 Cost Accounting Period& CAS 4HR 0 -se o Standard Costs or Direct"aterial and Direct *abor



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Cost Accounting Standards& CAS 4HN 0 Accounting or Costs o Compensated

Personal Absence& CAS 4HQ 0 Depreciation o Tangible Capital Assets& CAS 41H 0 Allocation o 'usiness -nit Eeneral and

Administrative ;penses to =inal Cost


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,aHes L 5e!artment of 9nerg0 ContractsDA$ QRHB2QH301 00 Applicability o state and local

ta;es to the government:

,t is D


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,aHes L 5e!artment of 9nerg0 ContractsQRHB2QH301 00 Applicability o state and local ta;es to

the government continued:

7b9 Acquire directly and urnish to contractors as Eovernment

urnished property equipment material or services #hen inthe opinion o the Fead o the Contracting Activity:719 Such direct acquisition #ill result in substantial savings tothe Eovernment ta(ing into consideration any additionaladministrative costs@729 Such direct acquisition #ill not have a substantial adversee8ect on the relationship bet#een D


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,aHes L 5e!artment of 9nerg0 Contracts

Payment in *ieu o Ta;es -nder the Atomicnergy Action o 1Q54 7D


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Truth0in0Oegotiations Act 7deective pricing9

& Application to all negotiated pricing actions oM65HHHH or more unless:

– Price is based on adequate price competition

– Price is set by la# or regulation

– Contract or subcontract is or a commercialitem

– $equirement #aived by the head o thecontracting activity



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Truth0in0Oegotiations Act 7deectivepricing9

& Contractors to certiy that cost or pricing

data #as complete accurate andcurrent as o the date o agreement oncontract price

& Price reduced i signi/cant overpricing

occurred because the government reliedon deective cost or pricing data



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Truth0in0Oegotiations Act 7deective pricing9& =A$ 52B21501H7a9 de/nes deective pricing

& =A$ 15B4HR 15B4HN 52B21501H and 52B215011provides remedies

& Eovernment is entitled to– Price reduction

– ,nterest on any overpayment

– Penalty equal to the amount o any overpayment ithe contractor (no#ingly submitted cost or pricing

data #hich #ere incomplete inaccurate or noncurrent&


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& Applicable pricing actions include– A#ard o any negotiated contract 7e;cept or

unde/niti>ed actions such as letter contracts9

– A#ard o a subcontract at any tier i the contractorand each higher tier subcontractor have beenrequired to urnish cost or pricing data

– "odi/cation o any sealed bid or negotiated contract7#hether or not cost or pricing data #ere initiallyrequired9 or subcontract



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Truth0in0Oegotiations Act 7deective pricing9Cost or pricing data

& All acts

& As o the date o price agreement

& That prudent buyers and sellers #ould reasonably e;pectto a8ect price negotiations signi/cantly

& Certi/ed as accurate complete and current inaccordance #ith =A$ 15B4H6B2

& =actual not ?udgmental and are thereore veri/able

& ,ncludes the data that orm the basis or the prospectiveo8eror’s ?udgment about uture cost pro?ections



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Truth0in0Oegotiations Act 7deective pricing9Contractor obligations

& Provide the government a parity o position #ithrespect to all the actual data supporting price

proposals& -pdate cost or pricing data but not necessarily

the proposal

& Cooperate during the conduct o a posta#ardaudit

&


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"ethods o protection

& The preparation and consistent use o anstimating System "anual

& The development o a sound pricing strategy& Constant updating o the cost or pricing data

& Clear understanding o disclosure requirements

& Documentation o the inormation that is disclosed

& A #ell e;ecuted negotiation strategy& Careul planning or post0a#ard audits



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Truth0in0Oegotiation Acts 7deective pricing9

Eovernment has burden o proo that:

& The inormation is cost or pricing data

& Data e;isted and #ere reasonably available& Data #ere not properly submitted or

disclosed

& Eovernment relied on the deective data

& Eovernment reliance on the data caused anincrease in price



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Financing and Pa0mentEeneral

& -S Eovernment paying oces usually have3H days to pay

& Speci/c agency may prescribe shorter period7but no shorter than R days9

& Audit or other revie# may delay payment

& Payment request must be proper

& *ate payments may require -S governmentinterest payment



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Financing and Pa0ment

Department o nergy "anagement and


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Financing and Pa0ment Payments under Time0and0"aterials and *abor0Four Contract

& Fourly rates multiplied by the number o direct labor hoursperormed

& Jouchers normally– Submitted monthly

– To the contracting ocer’s representative

& Timecards or other documentation to support incurredhours

& Contracting ocer may #ithhold o 5 L per tas( order #ith

total amount #ithheld not to e;ceed M5HHHH& Allo#able direct materials per =A$ 31B2

& Oormal indirect rates may be applied to materials



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Financing and Pa0ment Payments under Time0and0"aterials and *abor0Four

Contracts

& Ceiling price established or contract or each order

& Ooti/cation required o any e;pected overrun& Contractor not obligated to e;ceed the ceiling price

& Eovernment not obligated to pay in e;cess o ceilingprice

& ,nterim payments sub?ect to Prompt Payment Act orservices contracts but not or other than servicescontractsB



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Cost0reimbursable contracts@ =A$ 52B2160RAllo#able Cost and Payment

& Eovernment shall pay #hen requested as #or(progresses

& Oo more than every t#o #ee(s 7e;cept smallbusiness9

& Allo#able costs in accordance #ith =A$ 31B2

& Small business can bill more oten than t#o#ee(s



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Financing and Pa0ment Cost0reimbursable contracts@ =A$ 52B2160R

Allo#able Cost and Payment

& $eimbursable costs@ Costs include:

– $ecorded costs that have been paid or items andservices purchased directly or the contract

– ,ncurred costs i the contractor is not delinquent inpaying costs in the ordinary course o business

– Supplies and services and subcontractor /nancingpayments i payments #ill be made

& ,n accordance #ith terms and conditions o subcontract orinvoice

&


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& $eimbursable costs@ Costs include:– "aterials issued rom inventory and placed into

production

– Direct travel

–


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& 'illing rates– $eimbursement at provisional billing rates

– Anticipated /nal rates

– $evised by mutual agreement

& Audit

– ,nvoices to be audited any time– Payments reduced or unallo#able costs

– Payments ad?usted or over)under billings



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!Contracts


Cost0reimbursable contracts@ =A$ 52B2160RAllo#able Cost and Payment

& =inal indirect rates established in accordance#ith =A$ 42BR

& =inal payment@ contractor to submit– Completion invoice #ithin 12H days o /nal rate

establishment

– Assignment o reunds rebates credits or otheramounts

– A release discharging government liabilities



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!Contracts

Financing and Pa0ment =i;ed price contracts@ =A$ 32B5 Progress

Payments 'ased on Costs

& Applies to /;ed price contracts

& $epresents /nancing 7loans9 againstundelivered #or(

& Customary@ NHL o total costs 7N5L or smallbusiness9

& Figher rates considered WunusualW andrequire approval by agency head



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!Contracts

Financing and Pa0ment =i;ed price contracts@ =A$ 32B5 Progress

Payments 'ased on Costs& Progress payments approved as matter o

course i contractor– ,s reliable competent and capable– Fas an adequate accounting system– ,s in sound /nancial condition

& All others require advance determination that

– Contractor #ill liquidate– Eovernment is protected against loss– Accounting system is adequate



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!Contracts

Financing and Pa0ment=i;ed price contracts@ =A$ 32B5 Progress Payments

'ased on Costs

& ligible costs

– Total costs incurred under the contract– Subcontractor /nancing payments under similar terms

– Supplies and services and subcontractor /nancingpayments i payments #ill be made

& ,n accordance #ith terms and conditions o subcontract orinvoice

&


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!Contracts


=i;ed0Price Contracts 0 Progress paymentsbased on a percentage o completion

& Payments to be commensurate #ith #or(accomplished

& Percentage or stage o completion must bemeasurable

& Typically used or contracts #ith tangibledeliverables



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!Contracts

Financing and Pa0ment =i;ed0Price Contracts@ =A$ 32B1H Perormance0'ased

Payments 7=A$ 52B23202N 7P9 and =A$ 52B2320327C99

& "ay be made against #hole contract price

& "ay be made against a deliverable 7line item9 price

& Perormance bases– Speci/cally described events

– Some measurable criterion o perormance

– ach event or perormance criterion triggers a payment

& vents that do not qualiy

– Signing o contract– ;ercise o options

– ;ecution o modi/cations



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!Contracts

Financing and Pa0ment =i;ed0Price Contracts@ =A$ 32B1H Perormance0

'ased Payments& Perormance 'ases

– vents or criteria may be severable or cumulative– Oo payment or cumulative items until dependent is

accomplished– Severable items speci/cally identi/ed in contract– Contract shall identiy preconditions or successul

achievement o cumulative items

& , payments is on deliverable item basis theneach event or criteria shall be part operormance necessary or that deliverableand be identi/ed to the line item



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!Contracts

Financing and Pa0ment =i;ed0Price Contracts@ =A$ 32B1H Perormance0

'ased Payments

Payment amounts

– Payments not to e;ceed QH L o contract price i on #holecontract basis

– Payments not to e;ceed QH L o deliverable item price i onC*,O basis

– Amount o each payment to be speci/cally stated as dollaramount or percentage o speci/c price

– Payment amounts may be established on any rational basis– Payment schedule to be ad?usted to reGect actions required

by modi/cations



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!Contracts

Financing and Pa0mentPrompt Payment and lectronic =unds Transer

& , payment is not made by the speci/ed due date– Eovernment #ill automatically pay an interest penalty

– !ithout request rom the contractor& Provision does not apply to contract /nancing

paymentsB

& Due date is usually later o – 3Hth day ater paying oce receives a proper invoice

– 3Hth day ater government acceptance o servicesperormed



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Contracts

Financing and Pa0ment Prompt Payment and lectronic =unds Transer

Proper invoice includes:– Contractor name and address– ,nvoice date and number– Contract number– Description quantity unit o measure unit price and

e;tended price o services perormed– Oame and address o contractor ocial– person to notiy i deective invoice

– Ta;payer ,denti/cation Oumber 7T,O9– Any other inormation or documentation required by the

contract



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Contracts


Prompt Payment and lectronic =unds Transer

& =T to be used to ma(e contract payments

& Eovernment #ill protect contractors =Tinormation rom improper disclosure



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Contracts

Summary

& $evie# the solicitation and contract termsand conditions

& nsure that appropriate inrastructure e;istsor #ill be implemented

& stablish appropriate internal controls


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Chapter 5

Current #egislation andRegulation ;ectingService Contracting

vervie& of Regulator0


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9nvironment

& ,ncreased government procurement osupport services in the past several years

& Surge in service procurements has beengreatly assisted by signi/cant changes in

la#s and regulations 7iBeB =ASA9& ,ncreased sales and easing o rules createsthe potential or actual or perceived abuses– This oten leads Congress to go bac( and add

requirements to the procurement process

& The environment is al#ays changing: Xesterday’s reorm may be catalyst ortomorro#’s perceived abuse

8S Sc*edule Re)uirements for 55rdering gencies


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rdering gencies

& Section NH3 o 2HH2 DoD Authori>ation Act imposedadditional ordering obligations on D


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SR

of 23& Acquisition #or(orce and training

& 'usiness acquisition practices

& Commercial item acquisitions&


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FR Su$!art 3'.%

& De/ne the #or( in measurable terms o results

& De/ne perormance standards such as quality ortimeliness

& stablish a .ASP to measure perormance against

& Contracts are a#arded competitively on best0valueevaluation criteria

& Contracts are /;ed0price completion type contracts #ithlimited e;ceptions

&


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FR Su$!art 3'.% L P

Recommendations&


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FR Su$!art 3'.% L P

Recommendations& Publish a 'est Practice Euide ondevelopment o measurable perormancestandards or contractsB

& "odiy the =A$ to include an identi/cationo the government’s need)requirementsby de/ning a 'aseline PerormanceCase in the P!S or S


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FR Su$!art 3'.% L P

Recommendations&


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FR Su$!art 3'.% L P

Recommendations

&


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ct for Fiscal ear 24

Speci/c ocus on Title Z,J @ ServicesAcquisition $eorm

& Adopted rom the Services Acquisition$eorm Act 7SA$A9

– Stemmed rom e8orts o Congressman Tom Davis 7$0JA9 Chairman o the Fouse Eovernment $eormCommittee

– Signed into la# by the President

@ational 5efense ut*ori(ation t f Fi l 24


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Acquisition !or(orce and Training

& Section 1412 establishes a civilian acquisition#or(orce training und #ithin ESA– =inanced by 5L ee on the ollo#ing non0D


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Adaptation o 'usiness Acquisition Practices

& Section 1421 calls or each e;ecutive agencyto establish a chie acquisition ocer and a

senior procurement ocer& Section 1422 establishes a Chie Acquisition


155/199

@ational 5efense ut*ori(ation t f Fi l 24


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"andate or Perormance0'ased S

& This act clearly states a mandate or use o thistool

& Congress and the 'ush Administration have alsoencouraged its #idespread use

& ,ntent is to move a#ay rom heavily detailedspeci/cations and move to#ard morestreamlined methods associated #ith privateindustry– ,dea is to contract or results not ?ust pay or best e8orts


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Commercial Items Contracts @o&Include ,ime and Materials and


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Include ,imeGand Materials and

#a$orGour ,0!e Contracts

8ective =ebruary 12 2HHR the =ederal Acquisition$egulation 7=A$9 e;pressly authori>ed the use o time0and0materials 7TV"9 and labor0hour 7*F9 contracts orcommercial services under speci/ed conditionsB 'eore

this change commercial services #ere limited to /rm0/;ed0price 7==P9 and /rm0/;ed0price #ith economicprice ad?ustment 7PA9 type contracts #hen using =A$Part 12 procedures and services based on hourly rates#ere generally e;cludedB The =A$ de/nition ocommercial services no# does not prohibit services sold

based on hourly rates #ithout an established catalog ormar(et price or a speci/c service perormed or aspeci/c outcome to be achievedB

Commercial Items Contracts @o&Include ,ime and Materials and


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Include ,imeGand Materials and

#a$orGour ,0!e Contracts

Contracting


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.R. 13%2 L Marc* %< 2'

$equires the revision o the =ederalAcquisition $egulation 7=A$9 to restrict theperiod to a ma;imum o one year ornoncompetitive ederal contracts issued orunusual and compelling urgency unless thehead o the e;ecutive agency concerneddetermines that the Eovernment #ould beseriously in?ured by the limitation on the

contract periodB

ccounta$ilit0 in Contracting ct< R 13%2 Marc* % 2'


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.R. 13%2 L Marc* %< 2'

Amends the =ederal Property andAdministrative Services Act o 1Q4Q to requirespeci/ed e;ecutive agency heads to developand implement plans to minimi>e the use o:

719 noncompetitive contracts@ and 729 cost0reimbursement type contractsB $equiresagencies to ma(e ?usti/cation and approvaldocuments or noncompetitive contracts

including deense agency contracts publiclyavailableB


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Chapter 6

#a$or #a&s ;ectingService Contracting

A O d T th S lli


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Ann Owed Two the Spelling

Checker unkno&n

ye have a spelling chec(er

,t came #ith my Pea Sea,t plane lee mar(s our my revue"iss stea(s aye can (not seaB

,*e !rimar0 federal la$or statutes


164/199

! 0

& =air *abor Standards Act 7=*SA9& Davis0'acon Act 7D'A9

& "cOamara0


165/199

& mployers to compensate their coveredemployees at a rate o one and one0haltimes the employee’s regular rate o pay

& 'ans employers rom hiring child laborers

& $equires that men and #omen be paid equalpay or #or( perormed under similar#or(ing conditions requiring the same s(ills

& =*SA imposes certain record(eeping

requirements on employers covered by theActB

F#S !!lica$ilit0


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& mployers that have employees handlingselling or other#ise #or(ing on goods ormaterials that have been moved in orproduced or commerce #ho have grossannual sales o M5HHHHH are presumptively

covered by the =*SA& All activities o public agencies are coveredby the =*SA

& Oumerous e;ceptions and e;emptions orspeci/c provisions

& Jarious state la#s supplement applicabilityand enorcement

5avisG=acon ct 5=


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& $equires payment o locally prevailing #ages and ringe

bene/ts to laborers and mechanics employed to perormcontracts or construction alteration or repair o publicbuildingsB

& !or(ers must be paid unconditionally and not less oten thanonce per #ee( #ithout subsequent rebates or deductions7e;cept or payroll ta; and other related deductions9B

& Contractor must post #age schedules in a visible location at the

#or( siteB& Contractor must maintain payroll and related records pertaining

to its compliance #ith the D'A provisions during perormanceo the contract and or three years thereaterB

& Proponents argue that it is necessary to prevent governmentcontractors rom underbidding each other by lo#ering #or(ers’salariesB

& The Act imposes a considerable bureaucratic and regulatoryburden on government agencies and contractorsB

5= !!lica$ilit0


168/199

& very contract in e;cess o M2HHH to #hichthe -nited States or the District o Columbia isa party or construction alteration and)orrepair including painting and decorating opublic buildings or public #or(s o the -nited

States or the District o Columbia& Types o contracts covered by the D'A includehigh#ay construction dredging demolitionand cleaning and painting o public buildings

& $equires both the prime contractor and all

subcontractors to comply #ith the terms othe contract

Service Contract ct SC


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& Service employees #ho perorm services under contractscovered by the SCA must be paid at the prevailing local#age rate as determined by the Department o *aborB

& Service employees include s(illed and uns(illed manuallaborers and cratsmen guards and #atchmenB

& stablishes minimum ringe bene/tsB

& $equires employers to maintain certain records and topost required inormation at the #or(placeB& ,mposes minimum saety and health standards or

#or(ersB& Designed to address the concern that by a#arding

contracts to the bidder #ith the lo#est proposed hourly

#age rate the government #ould contribute to anoverall reduction in the #ages o service employeesB

SC !!lica$ilit0


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& very contract entered into by the -nitedStates or the District o Columbia in e;cesso M25HH the principal purpose o #hich is tournish services through the use o serviceemployeesB

& Services must be provided in the -nitedStates including any State o the -nitedStates the District o Columbia Puerto $icoor the Jirgin ,slandsB

& Oumerous e;emptionsB

als*Geale0 Pu$lic Contracts ct


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All contractors #ho urnish materials suppliesarticles and equipment in any amount e;ceedingM1HHHH must– Pay their employees not less than the prevailing minimum

#age or persons employed in similar positions in the locality@

– Compensate employees or overtime hours #or(ed at the#age rate set orth in the =air *abor Standards Act@

– Oot hire any male #or(er under age 16 or any emale #or(erunder age 1N@ and

– nsure that no part o the contract is perormed underconditions that are unsanitary ha>ardous or dangerous to the

health and saety o the employees engaged in theperormance o the contract 7or subcontracts9 B

!!lica$ilit0


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& Any contract entered into by the -nited States or itsagentsB& =or the manuacture or urnishing o materials supplies

articles and equipmentB& ,n any amount e;ceeding M1HHHH&

;ceptions– Contracts or public utility services including electric light andpo#er #ater steam and gas@

– Deliverables completely manuactured or urnished outside thegeographic limits o the -nited States Puerto $ico the Jirgin,slands or the District o Columbia@ and

– Contracts a#arded to sales agents or publisher representatives

or the delivery o ne#spapers maga>ines or periodicals by thepublishers thereo– Contracts or the purchase o materials supplies or equipment

that may usually be bought in the open mar(et perishableslivestoc( and nursery products or to agricultural or armproducts processed or /rst sale by the original producersB

Contract ork ours and Safet0Standards ct CSS


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Standards ct CSS

& Oo contractor or subcontractor contractingor any part o the #or( #hich may involvethe employment o laborers or mechanicsshall require or permit any such laborer or

mechanic to #or( more than 4H hours in any#or(#ee(

& -nless the #or(er is paid a #age o time0and0one0hal or all hours #or(ed in e;cess o

4HB

CSS !!lica$ilit0


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& Any contract #hich may require or involvethe employment o laborers or mechanics

& -pon a public #or( in the -nited States inany territoryB

& Does not apply to:– Contracts o less than M1HHHHHB– Contracts done in accordance #ith the provisions o

the !alsh0Fealey Public Contract ActB– Contracts or transportation by land air or #ater or

or the transmission o intelligence or or thepurchase o supplies or materials or articlesordinarily available in the open mar(etB

Co!eland ntiG6ick$ack ct


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& Prevents employers rom orcing intimidating orthreatening dismissal or by any other manner#hatsoever employees to give up any part o thecompensation to #hich he is entitledB

& The Act is intended to aid in the enorcement o theminimum #age provisions o the Davis0'acon ActB

& $equires contractors and subcontractors to submit#ee(ly statements detailing the hours #or(ed and#ages paid including deductions to #or(ersB

& "aintain #ee(ly payroll records on /le or threeyears rom the date o completion o the contractB

Co!eland ct !!lica$ilit0


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& Any contract #hich is sub?ect to ederal #agestandardsB

& =or an amount greater than M2HHHB

& =or the construction prosecution

completion or repair o public buildings or#or(s /nanced in #hole or in part by loans orgrants rom the -nited StatesB

orker djustment and Retraining@otiKcation ct R@


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@otiKcation ct R@

& ,ntended to protect employees against une;pectedlosses o employment due to plant shutdo#ns ormass layo8sB

& $equires employers provide their employees #ith 6Hdays notice o impending plant closings or mass

layo8sB– A plant closing occurs #hen a single site o employment or a

discrete operating unit #ithin a single site shuts do#n terminatingthe employment o S< or more employees e;clusive o part0timeemployees during any 3H0day period

– A mass layo8’ occurs #hen a reduction other than a plant closinga8ects 7i9 one0third 733 percent9 o the #or(orce e;clusive o part0

time employees but a minimum o 5H employees or 7ii9 5HHemployees at a single site o employment during any 3H0day period

R@ !!lica$ilit0


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& mployers #ith 1HH or more employeesother than part0time employeesB– Test is met i in the aggregate all o the employees

together #or( more than 4HHH hours each #ee(e;cluding overtimeB

– mployees on temporary layo8 #ho have areasonable e;pectation o recall or #ho are on leaveo absence also are included #hen determining#hether the 1HH0employee test is satis/edB

& ;ceptions– Oatural disaster

– =altering company– -noreseen business circumstances


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Chapter R

Contracts for S!eciali(edServices

5e!artment of 9nerg0 Contracts


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Agency has contracts #ith variousorgani>ations to manage and operate 7"V


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!!lications and Restrictions


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Can be used to:

719


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& The primary purpose is to advance scienti/c andtechnical (no#ledge and apply that (no#ledge tothe e;tent necessary to achieve agency andnational goalsB

& $VD contracts are directed to#ard ob?ectives or#hich the #or( or methods cannot be precisely

described in advanceB& ,t is dicult to ?udge the probabilities o success orrequired e8ort or technical approaches some o#hich o8er little or no early assurance o ullsuccessB

& Process must encourage the best sources rom the

scienti/c and industrial community to becomeinvolved in the programB


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c)uisition Process


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& ,n $VD acquisitions the precise speci/cations necessary orsealed bidding are generally not available thus ma(ingnegotiation necessaryB

& =i;ed0price arrangement preerence applies in $VDcontracting only to the e;tent that goals ob?ectivesspeci/cations and cost estimates are sucient to permit sucha preerenceB

& Absence o precise speci/cations and diculties in estimatingcosts #ith accuracy normally precludes using /;ed0pricecontracting or $VD the use o cost0reimbursement contractsis usually appropriateB

& Pro?ects having production requirements as a ollo#0on to $VDe8orts normally should progress rom cost0reimbursementcontracts to /;ed0price contracts as designs become more

/rmly established ris(s are reduced and production toolingequipment and processes are developed and provenB

rc*itecture and 9ngineeringServices


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& -nique source selection procedures are appliedrather than the solicitation or source selectionprocedures prescribed in =A$ Parts 13 14 and 15B

& Services that do not require perormance by aregistered or licensed architect or engineer should

be acquired pursuant to =A$ Parts 13 14 and 15B& !hen the statement o #or( includes both

architect0engineer services 7that requireperormance by a registered or licensed architector engineer9 and other services the contracting

ocer shall ollo# the AV proceduresB

Construction Contracting


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& Sealed bid procedures are used orconstruction contracts unless the contract #illbe perormed outside the -nited States and itsoutlying areasB

& Eenerally /rm0/;ed0price contracts shall be

used to acquire constructionB& Special Aspects o Contracting or Construction– Disclosure o the magnitude o construction pro?ects– "odi/ed sealed bidding procedures– Statutory cost limitations–

*iquidated damages– 2 phase design0build selection procedures

Personal Services Contracts


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& Personal services contractW means a contractthat by its e;press terms or as administeredma(es the contractor personnel appear to bein e8ect Eovernment employeesB

& The Eovernment is normally required toobtain its employees by direct hire undercompetitive appointment or other proceduresrequired by the civil service la#sB


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& An employer0employee relationship under a servicecontract occurs #hen as a result o 7i9 the contractsterms or 7ii9 th

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Service Contracting an Integrated Approach William Cox CPCM

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