Certified Federal Contracts ManagerNCMA

FAR

Federal Acquisition Regulation

CDC PGOFeb-Mar, 2010

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Federal Acquisition Regulation

https://www.acquisition.gov/far/loadmainre.html

• Part 7: Acquisition Planning• Part 8: Required Sources• Part 9: Contractor Qualifications• Part 10: Market Research

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Acquisition Planning: The Concepts

• Contracting official’s role has expanded– Part of the organization’s management team– Business management

• Acquisition planning is a multi-disciplinary team effort by:– Contracting professional– Customer– Budget and finance experts– Legal counsel– Direct and indirect stakeholders

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Acquisition Planning: The Concepts

“The planning process should begin before the traditional first customer contact, and should have an inward, as well as an outward, focus; particularly as it relates to an important acquisition planning tool – market research.”

NCMA

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Internal Market Research - Internal Scanning TechniquesNCMA

• Review historical information on prior acquisitions• Attend management meetings of internal customers• Receive detailed briefings on functions and processes of

internal customers• Divide short-term assignments into customer work units• Read pertinent customer-oriented publications• Serve in groups that have little to do with contracting• Share information on contracting issues and trends with other

managers

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External Market Research - External Scanning TechniquesNCMA

• Review historical information on similar prior acquisitions for related market information

• Review pertinent professional news, trade, association, or industry publications

• Contact knowledgeable third-party sources of unbiased information regarding potential sources

• Attend trade or professional association shows and exhibits• Contact customers of potential sources for past performance

information• Review catalogs and other printed or electronic information

published by potential sources• Contact potential sources for specific capabilities information or

briefings• Join pertinent professional organizations and attend their meetings

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Acquisition Central by Integrated Acquisition Environment (IAE)https://www.acquisition.gov/ Bureau of Labor Statisticshttp://www.bls.gov/data/Central Contractor Registration (CCR)http://www.ccr.gov Davis-Bacon Wage Determinationshttp://www.gpo.gov/davisbacon/ Defense Contract Audit Agency (DCAA)http://www.dcaa.mil/Defense Procurement and Acquisition Policy (DPAP) and Strategic Sourcinghttp://www.acq.osd.mil/dpap DPAP Contract Pricing Reference Guideshttp://www.acq.osd.mil/dpap/cpf/contract_pricing_reference_guides.html Federal Aviation Administration (FAA) Pricing Handbookhttp://fast.faa.gov/pricing/index.htm General Services Administration (GSA)http://www.gsa.gov/

Sources of Cost and Pricing InformationGovernment Contract Pricing

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Sources of Information Government Contract Pricing

Government Contractor Resource Centerhttp://www.govcon.com/National Contract Management Associationhttp://www.ncmahq.orgSmall Business Administration (SBA)http://www.sba.gov Wage Determinations On-linehttp://www.wdol.gov/ Service Contract Act of 1965, as Amendedhttps://www.acquisition.gov/far/html/Subpart%2022_10.html

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Acquisition Plan Contents

• Description of need (concise but complete)

• Conditions and/or constraints– i.e. computer specifications for specific software– i.e. implementation issues such as space, time,

sequence

• Established cost targets

• Required performance characteristics

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Acquisition Plan Contents

• Delivery or performance period requirements

• Trade-offs related to plan costs, technical performance, capability, and schedule requirements

• Discussion of the level of risk

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Acquisition Plan Contents

• Action Plan with:– Proposed sources– Degree of competition anticipated– Proposed contract type(s)– Source selection process including evaluation

factors related to acquisition goals– Post award administration plan– Milestones or target dates– Other pertinent issues (FAR 7.105)a

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7.102 Policy

(a) Agencies shall perform acquisition planning and conduct market research (see Part 10) for all acquisitions in order to promote and provide for—

(1) Acquisition of commercial items (2) Full and open competition (see Part 6)

(b) This planning shall integrate the efforts of all personnel responsible for significant aspects of the acquisition. The purpose of this planning is to ensure that the Government meets its needs in the most effective, economical, and timely manner.

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FAR 7.107 Bundling

Pro

May result in substantial savings to the Government

Con

Potential disadvantage to small business

The Head of Agency Must Conduct Market Research to Determine the Necessity of Bundling and Justify that the Agency or the Government Benefits.

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FAR 7.107(b) Bundling

Except as provided in paragraph (d) of this section, the agency may determine bundling to be necessary and justified if, as compared to the benefits that it would derive from contracting to meet those requirements if not bundled, it would derive measurably substantial benefits equivalent to—

(1) Ten percent of the estimated contract or order value (including options) if the value is $86 million or less; or

(2) Five percent of the estimated contract or order value (including options) or $8.6 million, whichever is greater, if the value exceeds $86 million.

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7.202 Policy.Economic Order Quantity (EOQ)

(a) Agencies are required by 10 U.S.C. 2384(a) and 41 U.S.C. 253f to procure supplies in such quantity as—

(1) Will result in the total cost and unit cost most advantageous to the Government, where practicable; and

(2) Does not exceed the quantity reasonably expected to be required by the agency.

(b) Each solicitation for a contract for supplies is required, if practicable, to include a provision inviting each offeror responding to the solicitation—

(1) To state an opinion on whether the quantity of the supplies proposed to be acquired is economically advantageous to the Government; and

(2) If applicable, to recommend a quantity or quantities which would be more economically advantageous to the Government. Each such recommendation is required to include a quotation of the total price and the unit price for supplies procured in each recommended quantity.

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Subpart 7.2—Planning for the Purchase of

Supplies in Economic Quantities

(b) In recognition of the fact that economic purchase quantity data furnished by offerors are only one of many data inputs required for determining the most economical order quantities, contracting officers should generally take no action to revise quantities to be acquired in connection with the instant procurement. However, if a significant price variation is evident from offeror responses, and the potential for significant savings is apparent, the contracting officer shall consult with the cognizant inventory manager or requirements development activity before proceeding with an award or negotiations. If this consultation discloses that the Government should be ordering an item of supply in different quantities and the inventory manager/requirements development activity concurs, the solicitation for the item should be amended or canceled and a new requisition should be obtained.

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Subpart 7.3-Contractor Versus Government Performance

This subpart prescribes policies and procedures for use in acquisitions of commercial or industrial products and services subject to— (a) OMB Circular No. A-76 (Revised) (the Circular), Performance of Commercial Activities; and (b) The Supplement to OMB Circular No. A-76.

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7.302  Policy. Inherently Governmental Functions

The Circular provides that it is the policy of the Government to

(a) rely generally on private commercial sources for supplies and services, if certain criteria are met, while recognizing that some functions are inherently Governmental and must be performed by Government personnel, and

(b) give appropriate consideration to relative cost in deciding between Government performance and performance under contract. In comparing the costs of Government and contractor performance, the Circular provides that agencies shall base the contractor’s cost of

performance on firm offers.

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Part 8 – Required Sources of Supplies and Services

• 8.1 Excess Personal Property• 8.4 Federal Supply Schedules• 8.5 Acquisition of Helium• 8.6 Acquisition from Federal Prison Industries,

Inc.• 8.7 Acquisition from nonprofit Agencies

Employing People Who Are Blind or Severely Disabled

• 8.8 Acquisition of Printing and Related Supplies

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8.402 Federal Supply Schedules

(a) The Federal Supply Schedule program is also known as the GSA Schedules Program or the Multiple Award Schedule Program. The Federal Supply Schedule program is directed and managed by GSA and provides Federal agencies (see 8.002) with a simplified process for obtaining commercial supplies and services at prices associated with volume buying.

Indefinite delivery contracts are awarded to provide supplies and services at stated prices for given periods of time. GSA may delegate certain responsibilities to other agencies (e.g., GSA has delegated authority to the VA to procure medical supplies under the VA Federal Supply Schedules program).

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8.402 Federal Supply Schedules

(b) GSA schedule contracts require all schedule contractors to publish an “Authorized Federal Supply Schedule Pricelist” (pricelist). The pricelist contains all supplies and services offered by a schedule contractor. In addition, each pricelist contains the pricing and the terms and conditions pertaining to each Special Item Number that is on schedule. The schedule contractor is required to provide one copy of its pricelist to any ordering activity upon request.

http://www.gsa.gov/fss

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8.405-1  Ordering procedures for supplies, and services not requiring a statement of work.

(a) Ordering activities shall use the procedures of this subsection when ordering supplies and services that are listed in the schedules contracts at a fixed price for the performance of a specific task, where a statement of work is not required (e.g., installation, maintenance, and repair).

(b) Orders at or below the micro-purchase threshold. Ordering activities may place orders at, or below, the micro-purchase threshold with any Federal Supply Schedule contractor that can meet the agency’s needs. Although not required to solicit from a specific number of schedule contractors, ordering activities should attempt to distribute orders among contractors.

(c) Orders exceeding the micro-purchase threshold but not exceeding the maximum order threshold.

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8.405-2  Ordering procedures for services requiring a statement of work.

(a) General. Ordering activities shall use the procedures in this subsection when ordering services priced at hourly rates as established by the schedule contracts. The applicable services will be identified in the Federal Supply Schedule publications and the contractor’s pricelists.

(b) Statements of Work (SOWs). All Statements of Work shall include the work to be

performed; location of work; period of performance; deliverable schedule; applicable performance standards; and any special requirements (e.g., security clearances, travel, special knowledge). To the maximum extent practicable, agency requirements shall be performance-based statements (see Subpart 37.6).

(c) Request for Quotation procedures. The ordering activity must provide the Request for Quotation (RFQ), which includes the statement of work and evaluation criteria (e.g., experience and past performance), to schedule contractors that offer services that will meet the agency’s needs. The RFQ may be posted to GSA’s electronic RFQ system, e-Buy (see 8.402(d)).

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Required Suppliers

8.6—Acquisition from Federal Prison Industries, Inc. http://www.unicor.gov

8.7—Acquisition from Nonprofit Agencies Employing People Who Are Blind or Severely Disabled http://www.abilityone.gov/index.html

8.8—Acquisition of Printing and Related Supplies http://www.gpo.gov/

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8.405-6  Limited sources justification and

approval.

(a) Orders placed under Federal Supply Schedules are exempt from the requirements in Part 6. However, an ordering activity must justify its action when restricting consideration—

(h) Justification approvals. (1) For proposed orders exceeding the simplified acquisition threshold, but not

exceeding $550,000, the ordering activity contracting officer’s certification that the justification is accurate and complete to the best of the ordering activity contracting officer’s knowledge and belief will serve as approval, unless a higher approval level is established in accordance with agency procedures.

(2) For a proposed order exceeding $550,000, but not exceeding $11.5 million, the justification must be approved by the competition advocate of the activity placing the order, or by an official named in paragraph (h)(3) or (h)(4) of this subsection. This authority is not delegable.

(3) For a proposed order exceeding $11.5 million, but not exceeding $57 million (or, for DoD, NASA, and the Coast Guard, not exceeding $78.5 million), the justification must be approved by—

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Part 9 – Contractor Qualifications

• 9.1 Responsible Prospective Contractors• 9.2 Qualifications Requirements• 9.3 First Article Testing and Approval• 9.4 Debarment, Suspension, and Ineligibility• 9.5 Organizational and Consultant Conflicts

of Interest• 9.6 Contractor Team Arrangements• 9.7 Defense Production Pools and Research

and Developmental Pools

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9.103 Policy

(a) Purchases shall be made from, and contracts shall be awarded to, responsible prospective contractors only.

(b) No purchase or award shall be made unless the contracting officer makes an affirmative determination of responsibility. In the absence of information clearly indicating that the prospective contractor is responsible, the contracting officer shall make a determination of nonresponsibility. If the prospective contractor is a small business concern, the contracting officer shall comply with Subpart 19.6, Certificates of Competency and Determinations of Responsibility. (If Section 8(a) of the Small Business Act (15 U.S.C. 637) applies, see Subpart 19.8.)

(c) The award of a contract to a supplier based on lowest evaluated price alone can be false economy if there is subsequent default, late deliveries, or other unsatisfactory performance resulting in additional contractual or administrative costs. While it is important that Government purchases be made at the lowest price, this does not require an award to a supplier solely because that supplier submits the lowest offer. A prospective contractor must affirmatively demonstrate its responsibility, including, when necessary, the responsibility of its proposed subcontractors.

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9.401-1 General Standards

To be determined responsible, a prospective contractor must—

(a) Have adequate financial resources to perform the contract, or the ability to obtain them (see 9.104-3(a));

(b) Be able to comply with the required or proposed delivery or performance schedule, taking into consideration all existing commercial and governmental business commitments;

(c) Have a satisfactory performance record (see 9.104-3(b) and Subpart 42.15). A prospective contractor shall not be determined responsible or nonresponsible solely on the basis of a lack of relevant performance history, except as provided in 9.104-2;

(d) Have a satisfactory record of integrity and business ethics (for example, see Subpart 42.15).

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9.401-1 General Standards

(e) Have the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain them (including, as appropriate, such elements as production control procedures, property control systems, quality assurance measures, and safety programs applicable to materials to be produced or services to be performed by the prospective contractor and subcontractors). (See 9.104-3(a).)

(f) Have the necessary production, construction, and technical equipment and facilities, or the ability to obtain them (see 9.104-3(a)); and

(g) Be otherwise qualified and eligible to receive an award under applicable laws and regulations (see also inverted domestic corporation prohibition at FAR 9.108).

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9.104-3  Application of standards.

a) Ability to obtain resources. Except to the extent that a prospective contractor has sufficient resources or proposes to perform the contract by subcontracting, the contracting officer shall require acceptable evidence of the prospective contractor’s ability to obtain required resources (see 9.104-1(a), (e), and (f)).

(b) Satisfactory performance record. A prospective contractor that is or recently has been seriously deficient in contract performance shall be presumed to be nonresponsible, unless the contracting officer determines that the circumstances were properly beyond the contractor’s control, or that the contractor has taken appropriate corrective action.

(c) Affiliated concerns.

(d) Small business concerns.

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Federal Acquisition Regulation

Subchapter C—Contracting Methods and

Contract Types

CDC PGOFeb-Mar, 2010

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Contract Methodologies

1. Sealed Bidding

2. Two-step Sealed Bidding

3. Negotiation

4. Simplified Acquisition

5. Modular Contracting

6. Auctions

7. Request for Quotation

8. Request for Information

9. Unsolicited Proposal

10.Point-of-Sale Transactions

11.Master Agreements

12.Sales Contract

13.Framework Pricing Arrangement

14.Performance-Based Contract

15.Single Source Negotiation

16.Prequalification

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Part 16—Types of Contracts

• 16.1 Selecting Contract Types • 16.2 Fixed-Price Contracts • 16.3 Cost-Reimbursement Contracts • 16.4 Incentive Contracts • 16.5 Indefinite-Delivery Contracts • 16.6 Time-and-Materials, Labor-Hour, and

Letter Contracts • 16.7 Agreements

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Contract types vary according to—

(1) The degree and timing of the responsibility assumed by the contractor for the costs of performance; and

(2) The amount and nature of the profit incentive offered to the contractor for achieving or exceeding specified standards or goals.

(b) The contract types are grouped into two broad categories: fixed-price contracts (see Subpart 16.2) and cost-reimbursement contracts (see Subpart 16.3). The specific contract types range from firm-fixed-price, in which the contractor has full responsibility for the performance costs and resulting profit (or loss), to cost-plus-fixed-fee, in which the contractor has minimal responsibility for the performance costs and the negotiated fee (profit) is fixed. In between are the various incentive contracts

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16.104  Factors in selecting contract types.

• Price Competition• Price Analysis• Cost Analysis• Type and complexity of

the requirement• Urgency• Period of Performance

• Contractor’s technical capability and financial responsibility

• Adequacy of the contractor’s accounting system

• Concurrent contracts • Extent and nature of

proposed subcontracting• Acquisition history

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16.2 Fixed-Price Contracts16.202 Firm-fixed-price contracts.

16.202-1 Description.

A firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the contractor’s cost experience in performing the contract. This contract type places upon the contractor maximum risk and full responsibility for all costs and resulting profit or loss. It provides maximum incentive for the contractor to control costs and perform effectively and imposes a minimum administrative burden upon the contracting parties.

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16.202-2 Application.

A firm-fixed-price contract is suitable for acquiring commercial items (see Parts 2 and 12) or for acquiring other supplies or services on the basis of reasonably definite functional or detailed specifications (see Part 11) when the contracting officer can establish fair and reasonable prices at the outset, such as when—

(a) There is adequate price competition; (b) There are reasonable price comparisons with prior purchases of

the same or similar supplies or services made on a competitive basis or supported by valid cost or pricing data;

(c) Available cost or pricing information permits realistic estimates of the probable costs of performance; or

(d) Performance uncertainties can be identified and reasonable estimates of their cost impact can be made, and the contractor is willing to accept a firm fixed price representing assumption of the risks involved.

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Cost Reimbursement Type -- 16.301-1  Description.

Cost-reimbursement types of contracts provide for payment of allowable incurred costs, to the extent prescribed in the contract. These contracts establish an estimate of total cost for the purpose of obligating funds and establishing a ceiling that the contractor may not exceed (except at its own risk) without the approval of the contracting officer.

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Cost Reimbursement Type --

16.301-2  Application.

Cost-reimbursement contracts are suitable for use only when uncertainties involved in contract performance do not permit costs to be estimated with sufficient accuracy to use any type of fixed-price contract.

16.301-3  Limitations. (a) A cost-reimbursement contract may be used only when— (1) The contractor’s accounting system is adequate for determining costs

applicable to the contract; and (2) Appropriate Government surveillance during performance will provide

reasonable assurance that efficient methods and effective cost controls are used.

(b) The use of cost-reimbursement contracts is prohibited for the acquisition of commercial items (see Parts 2 and 12).

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16.5 Indefinite-Delivery Contracts16.501-2  General.

There are three types of indefinite-delivery contracts: definite-quantity contracts, requirements contracts, and indefinite-quantity contracts. The appropriate type of indefinite-delivery contract may be used to acquire supplies and/or services when the exact times and/or exact quantities of future deliveries are not known at the time of contract award. Pursuant to 10 U.S.C. 2304d and section 303K of the Federal Property and Administrative Services Act of 1949, requirements contracts and indefinite-quantity contracts are also known as delivery order contracts or task order contracts.

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16.601  Time-and-materials contracts.

(a) Description. A time-and-materials contract provides for acquiring supplies or services on the basis of—

(1) Direct labor hours at specified fixed hourly rates that include wages, overhead, general and administrative expenses, and profit; and

(2) Materials at cost, including, if appropriate, material handling costs as part of material costs.

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Subpart 16.7—Agreements

16.702  Basic agreements.

(a) Description. A basic agreement is a written instrument of understanding, negotiated between an agency or contracting activity and a contractor, that (1) contains contract clauses applying to future contracts between the parties during its term and (2) contemplates separate future contracts that will incorporate by reference or attachment the required and applicable clauses agreed upon in the basic agreement. A basic agreement is not a contract.

(b) Application. A basic agreement should be used when a substantial number

of separate contracts may be awarded to a contractor during a particular period and significant recurring negotiating problems have been experienced with the contractor. Basic agreements may be used with negotiated fixed-price or cost-reimbursement contracts.

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16.702  Basic agreements.

(c) Limitations. A basic agreement shall not— (1) Cite appropriations or obligate funds;

(2) State or imply any agreement by the Government to place future contracts or orders with the contractor; or

(3) Be used in any manner to restrict competition.

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16.703 Basic Ordering Agreements

(a) Description. A basic ordering agreement is a written instrument of understanding, negotiated between an agency, contracting activity, or contracting office and a contractor, that contains (1) terms and clauses applying to future contracts (orders) between the parties during its term, (2) a description, as specific as practicable, of supplies or services to be provided, and (3) methods for pricing, issuing, and delivering future orders under the basic ordering agreement. A basic ordering agreement is not a contract.

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Part 17—Special Contracting

Methods

• 17.1 Multi-year Contracting• 17.2 Options• 17.4 Leader Company Contracting• 17.5 Interagency Acquisitions under the

Economy Act• 17.6 Management and Operating Contracts

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17.1 Multi-year Contracting

(a) Multi-year contracting is a special contracting method to acquire known requirements in quantities and total cost not over planned requirements for up to 5 years unless otherwise authorized by statute, even though the total funds ultimately to be obligated may not be available at the time of contract award. This method may be used in sealed bidding or contracting by negotiation.

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17.5 Interagency Acquisitions under the Economy Act

17.501  Definition.

“Interagency acquisition,” as used in this subpart, means a procedure by which an agency needing supplies or services (the requesting agency) obtains them from another agency (the servicing agency).

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SAMPLE TESTNCMA

Federal Knowledge ModuleStudy Guide

Complete questions

1. FAR Part 2, Questions 4-7, p. 69-70

2. FAR Part 5, Questions 11 & 12, p. 71

3. FAR Part 6, Questions 13-17, p. 71-72

4. FAR Part 8, Questions 18-20, p. 72

5. FAR Part 9, Questions 21-22, p. 72-73

6. FAR Part 16, Questions 61-64, p. 79-80

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