Proc 5860 Final Exam
PROC 5860 MID-TERM EXAM
1. There are seven statutory exceptions to contract without providing for full and open competition. Select two of those authorities and discuss (in your own words) the rationale for using the exception.
The Competition in Contracting Act (CICA) of 1984 requires that all acquisitions be made using full and open competition. Seven exceptions to using full and open competition are specifically identified in FAR Part 6. Written justification must be provided when utilizing any of these exceptions. Additionally, depending on the dollar value of the purchase, the exception, along with supporting documentation, must be certified and approved at certain levels. Two of the seven statutory exceptions include:
• Only one …show more content…
responsible source and no other supplies or services – If the government has a requirement for which only one source is capable of providing due to the uniqueness or high degree of specialization, or for which there is not a suitable substitute, or for which other sources have been deemed inadequate (in terms of compatibility, quality, service, support, etc) then this exception could apply.
• Authorized or require by statute – Several laws require that certain procurement opportunities be offered to organizations such as the Federal Prison Industries, Agencies for the Blind and Severely Disabled, or Government Printing and Binding.
• National Security – When disclosure of the government’s needs would compromise national security, the government is authorized to limit competition. However, this exception is not to be utilized simply because the acquisition is classified or because access to classified material is necessary to submit an offer.
2. Market Research:
a. What are the two broad categories of market research? Differentiate between the two.
• Strategic (Market Surveillance) – not necessarily aimed at a specific procurement action but rather utilized to gain a general knowledge and sense of the market; gather and analyze data on a continual basis
• Tactical (Market Investigation) – tailored and detailed investigation of the market aimed at specific procurement action; collect, evaluate, and analyze information to meet agency needs
b. Identify three sources for conducting market research.
• Internet • Government websites/government databases • Trade journals/professional organizations
3. What is the role of contracting in the acquisition planning process?
The role of contracting in the acquisition planning process is to ensure the acquisition complies with statutory and regulatory requirements. Additionally, contracting personnel will ensure that the acquisition plan reflects appropriate acquisition streamlining techniques and a sound business approach to buying the needed goods and services. Other contracting roles include (but are not limited to):
• Issuance of the solicitation • Evaluation of proposals, audits, and field reports • Negotiation process • Contract selection type, preparation, review, and clearance • Contract award • Contract management
The contract specialist serves as the principal business advisor and principal agent for the government, and is responsible for developing the solicitation, conducting the source selection process and managing the resultant contract and business arrangement. They also research contracts in the marketplace to identify general business practices, such as commercial terms and conditions, contract type, bid schedule breakout, and the use of incentives.
4. Conflict of Interest comes in two varieties: personal and organizational. Identify two potential situations which may allude to a conflict of interest and the mitigation strategies you would employ.
As stated in the FAR, “Government business shall be conducted in a manner above reproach…with complete impartiality and with preferential treatment for none.” Although a particular situation may not necessarily be in violation of governmental ethics, the general rule of thumb is to avoid even the appearance of a conflict of interest between government employees and potential/existing contractors.
According to the “14 Rules of Government Service” covered in class, government employees should not hold financial interests that conflict with official duties. This situation could create the potential for the government employee to act in a manner that would provide him/her with personal gain while undermining the interests of solicitors and maybe even the government. In order to avoid this situation, any government employee holding financial interests in an organization seeking business with the government (of which that employee could directly affect) should be removed from the acquisition process.
Another rule/ethic governing government employees is to not engage in or seek outside employment or activities that conflict with one’s official duties. Government employees are prohibited from participating personally and substantially in any particular mater that would affect the financial interests of any person with whom the employee is negotiating or has an arrangement regarding prospective employment. When a Government employee begins negotiating employment with a contractor, the employee is disqualified from participating in matters that could affect the contractor’s financial interest and should therefore be removed from the acquisition process.
5. Differentiate between Statement of Work (SOW), Performance of Work Statement (PWS), and Statement of Objectives (SOO) (in your own words).
Statement of Work – a detailed description of the work/tasks to be performed during the life of a project. It should describe the purpose of the project; identify what tasks are to be performed; identify who will be performing the tasks; and specify timelines for progress/completion. A statement of work should answer the fundamental questions of Who, What, When, Where, and How.
Performance Work Statement – specifies the government’s requirement for services in terms of the required results rather than the “how” of performance. A PWS provides the contractor with a description of what the government wants but does not stipulate how the results will be achieved. However, it does provide measurable performance standards and acceptable quality levels for each outcome.
Statement of Objectives – an alternative approach to the PWS, this document specifies the government’s broad objectives and focuses on the outcome or final product rather than the methods used. A SOO provides the contractor the flexibility to develop cost-effective solutions and the opportunity to propose creative and innovative alternatives to meet required objectives.
6. Far 16 describes several contract types and gives an explanation of when it is appropriate to use each type. Let’s concentrate on Cost Plus Incentive Fee Contracts:
a. When is it appropriate to use CPIF?
When determining contract type, the goal is to select one that will assign reasonable risk to the contractor and provide the contractor with the greatest incentive for efficient and economical performance. When it is not possible to use a Firm Fixed Price contract, a contract with objectively measurable incentives should be considered (performance based contract). Performance-based contracting focuses on results, not just best efforts, and involves structuring all aspects of an acquisition around the purpose of the work to be performed. This type of contracting allows the contractor the flexibility of determining the most cost-effective way of meeting the government’s requirement. One type of performance based contract is a cost plus incentive fee (CPIF) contract. A CPIF is a cost reimbursement contract that provides for the initially negotiated fee to be adjusted later by a formula based on the relationship of total allowable costs to total target costs. This contract type is appropriate for development and test products where a profit incentive is likely to provide motivation for more effective contract management (costs).
b. What are the key elements of CPIF; i.e., how does CPIF work?
CPIF contracts include the following key elements:
• Target Cost – best estimate of expected cost • Target Fee – fee the contractor will receive if actual cost equals target cost • Sharing Ratio – the negotiated formula used to adjust fee after actual costs are reviewed and accepted by the government • Minimum Fee – least amount of fee the contractor can earn • Maximum Fee – greatest amount of fee the contractor can earn
The fee and fee adjustment formula provide incentives only cost performance. Upon contract completion, the formula is applied and, subject to the minimum and maximum fee limits, the fee is increased from target fee for underruns and decreased for overruns. Regardless of the final cost outcome, the contractor's risk is limited since the fee paid cannot be less than the minimum fee. However, the minimum fee can be zero or even a negative number. All allocated, allowable and reasonable costs incurred on the contract are paid.
c. Share ratio: 75/25. What is the Government’s share? What does that mean in overrun and underrun scenarios?
A CPIF contract contains minimum and maximum fee amounts. Regardless of the cost overrun, the contractor will always receive at least the minimum fee. Conversely, regardless of the cost underrun, the contractor will only receive up to the maximum fee. Thus, the contractor’s cost risk is minimized because all their incurred costs are paid by the government and they are guaranteed at least the minimum fee.
With a share ratio of 75/25, the government’s share is ____.
7. Differentiate between progress and performance-based payments.
Progress payments are a method of financing a contractor until delivery of the final product of the contract. They are interim payments based on incurred costs commensurate with physical progress on the contract, for uncompleted work in progress. Final payment is made when the contractor has satisfied all of the deliverable items.
Performance-based payments (PBP) are contract financing payments made after the achievement of predetermined goals, such as performance objectives or other defined events. For the government, performance-based payments focus on accomplishing meaningful and measurable technical progress and meeting contract schedule commitments.
8. Differentiate between commercial items, non-developmental items, and non-commercial items.
Commercial items – An item customarily used for nongovernmental purposes that has been or will be sold, leased, or licensed (or offered for sale, lease, or license) to the general public. An item that includes modifications customarily available in the commercial marketplace or minor modifications made to meet federal government requirements is also considered a commercial item. In addition, services such as installation, maintenance, repair, and training that are procured for support of an item described above are considered commercial items if they are offered to the public under similar terms and conditions or sold competitively in substantial quantities based on established catalog or market prices.
Non-developmental items – Any previously developed item of supply used exclusively for governmental purposes by a Federal agency, a State or local government, or a foreign government with which the United States has a mutual defense cooperation agreement.
Non-commercial items – An item or service developed or used for solely for governmental purposes that are not made available to the general public.
9. Uniform Contract Format (UCF):
a. Identify the purpose of Section L and what is contained within the section.
Section L of the UCF contains “Instructions, conditions, and notices to offerors or respondents”. This section is used for solicitation provisions and other information and instructions not required elsewhere to guide offerors or respondents in preparing proposals or responses to requests for information.
b. Identify the purpose of Section M and what is contained within the section.
Section M of the UCF contains “Evaluation factors for award”. This section is used to identify all significant factors and significant subfactors that will be considered in awarding the contract and their relative importance.
c. What is the relationship between Section L and Section
M?
10. Socioeconomic Programs:
a. When does an acquisition have to be set-aside for Small Business?
b. What is the purpose of a Certificate of Competency (COC)?
c. What is the process when an agency disagrees with the SBA issuance of a COC?
1. There are seven statutory exceptions to contract without providing for full and open competition. Select two of those authorities and discuss (in your own words) the rationale for using the exception.
The Competition in Contracting Act (CICA) of 1984 requires that all acquisitions be made using full and open competition. Seven exceptions to using full and open competition are specifically identified in FAR Part 6. Written justification must be provided when utilizing any of these exceptions. Additionally, depending on the dollar value of the purchase, the exception, along with supporting documentation, must be certified and approved at certain levels. Two of the seven statutory exceptions include:
• Only one …show more content…
responsible source and no other supplies or services – If the government has a requirement for which only one source is capable of providing due to the uniqueness or high degree of specialization, or for which there is not a suitable substitute, or for which other sources have been deemed inadequate (in terms of compatibility, quality, service, support, etc) then this exception could apply.
• Authorized or require by statute – Several laws require that certain procurement opportunities be offered to organizations such as the Federal Prison Industries, Agencies for the Blind and Severely Disabled, or Government Printing and Binding.
• National Security – When disclosure of the government’s needs would compromise national security, the government is authorized to limit competition. However, this exception is not to be utilized simply because the acquisition is classified or because access to classified material is necessary to submit an offer.
2. Market Research:
a. What are the two broad categories of market research? Differentiate between the two.
• Strategic (Market Surveillance) – not necessarily aimed at a specific procurement action but rather utilized to gain a general knowledge and sense of the market; gather and analyze data on a continual basis
• Tactical (Market Investigation) – tailored and detailed investigation of the market aimed at specific procurement action; collect, evaluate, and analyze information to meet agency needs
b. Identify three sources for conducting market research.
• Internet • Government websites/government databases • Trade journals/professional organizations
3. What is the role of contracting in the acquisition planning process?
The role of contracting in the acquisition planning process is to ensure the acquisition complies with statutory and regulatory requirements. Additionally, contracting personnel will ensure that the acquisition plan reflects appropriate acquisition streamlining techniques and a sound business approach to buying the needed goods and services. Other contracting roles include (but are not limited to):
• Issuance of the solicitation • Evaluation of proposals, audits, and field reports • Negotiation process • Contract selection type, preparation, review, and clearance • Contract award • Contract management
The contract specialist serves as the principal business advisor and principal agent for the government, and is responsible for developing the solicitation, conducting the source selection process and managing the resultant contract and business arrangement. They also research contracts in the marketplace to identify general business practices, such as commercial terms and conditions, contract type, bid schedule breakout, and the use of incentives.
4. Conflict of Interest comes in two varieties: personal and organizational. Identify two potential situations which may allude to a conflict of interest and the mitigation strategies you would employ.
As stated in the FAR, “Government business shall be conducted in a manner above reproach…with complete impartiality and with preferential treatment for none.” Although a particular situation may not necessarily be in violation of governmental ethics, the general rule of thumb is to avoid even the appearance of a conflict of interest between government employees and potential/existing contractors.
According to the “14 Rules of Government Service” covered in class, government employees should not hold financial interests that conflict with official duties. This situation could create the potential for the government employee to act in a manner that would provide him/her with personal gain while undermining the interests of solicitors and maybe even the government. In order to avoid this situation, any government employee holding financial interests in an organization seeking business with the government (of which that employee could directly affect) should be removed from the acquisition process.
Another rule/ethic governing government employees is to not engage in or seek outside employment or activities that conflict with one’s official duties. Government employees are prohibited from participating personally and substantially in any particular mater that would affect the financial interests of any person with whom the employee is negotiating or has an arrangement regarding prospective employment. When a Government employee begins negotiating employment with a contractor, the employee is disqualified from participating in matters that could affect the contractor’s financial interest and should therefore be removed from the acquisition process.
5. Differentiate between Statement of Work (SOW), Performance of Work Statement (PWS), and Statement of Objectives (SOO) (in your own words).
Statement of Work – a detailed description of the work/tasks to be performed during the life of a project. It should describe the purpose of the project; identify what tasks are to be performed; identify who will be performing the tasks; and specify timelines for progress/completion. A statement of work should answer the fundamental questions of Who, What, When, Where, and How.
Performance Work Statement – specifies the government’s requirement for services in terms of the required results rather than the “how” of performance. A PWS provides the contractor with a description of what the government wants but does not stipulate how the results will be achieved. However, it does provide measurable performance standards and acceptable quality levels for each outcome.
Statement of Objectives – an alternative approach to the PWS, this document specifies the government’s broad objectives and focuses on the outcome or final product rather than the methods used. A SOO provides the contractor the flexibility to develop cost-effective solutions and the opportunity to propose creative and innovative alternatives to meet required objectives.
6. Far 16 describes several contract types and gives an explanation of when it is appropriate to use each type. Let’s concentrate on Cost Plus Incentive Fee Contracts:
a. When is it appropriate to use CPIF?
When determining contract type, the goal is to select one that will assign reasonable risk to the contractor and provide the contractor with the greatest incentive for efficient and economical performance. When it is not possible to use a Firm Fixed Price contract, a contract with objectively measurable incentives should be considered (performance based contract). Performance-based contracting focuses on results, not just best efforts, and involves structuring all aspects of an acquisition around the purpose of the work to be performed. This type of contracting allows the contractor the flexibility of determining the most cost-effective way of meeting the government’s requirement. One type of performance based contract is a cost plus incentive fee (CPIF) contract. A CPIF is a cost reimbursement contract that provides for the initially negotiated fee to be adjusted later by a formula based on the relationship of total allowable costs to total target costs. This contract type is appropriate for development and test products where a profit incentive is likely to provide motivation for more effective contract management (costs).
b. What are the key elements of CPIF; i.e., how does CPIF work?
CPIF contracts include the following key elements:
• Target Cost – best estimate of expected cost • Target Fee – fee the contractor will receive if actual cost equals target cost • Sharing Ratio – the negotiated formula used to adjust fee after actual costs are reviewed and accepted by the government • Minimum Fee – least amount of fee the contractor can earn • Maximum Fee – greatest amount of fee the contractor can earn
The fee and fee adjustment formula provide incentives only cost performance. Upon contract completion, the formula is applied and, subject to the minimum and maximum fee limits, the fee is increased from target fee for underruns and decreased for overruns. Regardless of the final cost outcome, the contractor's risk is limited since the fee paid cannot be less than the minimum fee. However, the minimum fee can be zero or even a negative number. All allocated, allowable and reasonable costs incurred on the contract are paid.
c. Share ratio: 75/25. What is the Government’s share? What does that mean in overrun and underrun scenarios?
A CPIF contract contains minimum and maximum fee amounts. Regardless of the cost overrun, the contractor will always receive at least the minimum fee. Conversely, regardless of the cost underrun, the contractor will only receive up to the maximum fee. Thus, the contractor’s cost risk is minimized because all their incurred costs are paid by the government and they are guaranteed at least the minimum fee.
With a share ratio of 75/25, the government’s share is ____.
7. Differentiate between progress and performance-based payments.
Progress payments are a method of financing a contractor until delivery of the final product of the contract. They are interim payments based on incurred costs commensurate with physical progress on the contract, for uncompleted work in progress. Final payment is made when the contractor has satisfied all of the deliverable items.
Performance-based payments (PBP) are contract financing payments made after the achievement of predetermined goals, such as performance objectives or other defined events. For the government, performance-based payments focus on accomplishing meaningful and measurable technical progress and meeting contract schedule commitments.
8. Differentiate between commercial items, non-developmental items, and non-commercial items.
Commercial items – An item customarily used for nongovernmental purposes that has been or will be sold, leased, or licensed (or offered for sale, lease, or license) to the general public. An item that includes modifications customarily available in the commercial marketplace or minor modifications made to meet federal government requirements is also considered a commercial item. In addition, services such as installation, maintenance, repair, and training that are procured for support of an item described above are considered commercial items if they are offered to the public under similar terms and conditions or sold competitively in substantial quantities based on established catalog or market prices.
Non-developmental items – Any previously developed item of supply used exclusively for governmental purposes by a Federal agency, a State or local government, or a foreign government with which the United States has a mutual defense cooperation agreement.
Non-commercial items – An item or service developed or used for solely for governmental purposes that are not made available to the general public.
9. Uniform Contract Format (UCF):
a. Identify the purpose of Section L and what is contained within the section.
Section L of the UCF contains “Instructions, conditions, and notices to offerors or respondents”. This section is used for solicitation provisions and other information and instructions not required elsewhere to guide offerors or respondents in preparing proposals or responses to requests for information.
b. Identify the purpose of Section M and what is contained within the section.
Section M of the UCF contains “Evaluation factors for award”. This section is used to identify all significant factors and significant subfactors that will be considered in awarding the contract and their relative importance.
c. What is the relationship between Section L and Section
M?
10. Socioeconomic Programs:
a. When does an acquisition have to be set-aside for Small Business?
b. What is the purpose of a Certificate of Competency (COC)?
c. What is the process when an agency disagrees with the SBA issuance of a COC?