Procurement Contract Law
Procurement Law Overview, Part Two
Procurement and Contract Law
Procurement Law Overview, Part Two Payments under Fixed-Price Construction Contract clause permits the government to partially compensate contractors for supply and services which have been accepted by the Government, as long as the contractor demand it and the sum is no less than $1,000 or 50% of the full contract amount. These interim payments diminish the contractor needs to finance expenses to fulfill the contract. As permitted by the Contracting Officer, the government will reimburse the contractor, the amount that is specified in the contract as the work continues, or as decided by the Contracting Officer. An itemized list must be required to identify how …show more content…
much total funds are requested, what the funds have been able to accomplish in this contract, which subcontractors have been paid, and the work they have perform so far. It also needs to include any other pertinent information that the Contracting Officer requires. Preparation costs and deliveries prior to the labor begin can be taken into consideration by the Contracting Officer, as long as the contractor provides acceptable proof that the items are at hand and will be used in for this contract. It is mandatory for every request for payments; the contractor will certify that the totals requested are to cover costs acknowledged in the contract. Once is certified and is discovered that there is a failure to conform to the conditions of the contract, the Contracting Officer must be informed of the deficiency; and be the contractor is obligated to reimburse the government until it has been fixed. I encountered this clause when I submitted a contract request to upgrade our unit conference room with videoconferencing capabilities. The small business contractor required a stipulation in the contract, for immediate repayments within 30 days for the total amount of all audio/video equipment and delivery charges. As soon as the last item was received, I had to immediately certify to the Contracting Officer that all items were on hand, for the Defense Financial Accounting Service (DFAS) to release the funds towards the contractor. It was great concern on the timeline, since most of the equipment was arriving during holiday schedule, which was difficult to forecast an accurate timeline to compensate the contractor. At the end I was told by the Contracting Officer that the government had to compensate the contractor with additional funds, since it took 60 days to release the partial payment. The government’s penalty was to cover for the additional financing charges the contractor had to endure.
The Government Delay of Work Clause can be included when a fixed-price contract is considered for services, or for commercial supplies and /or modified-commercial items. This clause reassures the contractor that if the Contracting Officer fails to include or imply any agreement under the contract of any future delays or interruptions, or fails to act within the time specified or within a realistic time if not specified; an amendment shall be made for any rise in the cost of performance caused by the delay or interruption. The contract shall be improved in writing to include any delivery or performance dates, and any other prescribed period or condition affected by the delay or interruption. However, no modification shall be made under this clause for any delay or interruption by any other cause; or to an attempt to increase profit; and in particular a delay due to the fault or negligence of the contractor. This is actually enforced when the government request for the contractor to begin work immediately and fails to ensure that all the contractor’s requirements to begin the work are not met in a timely fashion. Some of the government delays I’ve witness in my career in the Army Logistic Field when working collaborating with contractors are: delayed access for contractors to freely enter the military installation; special permits from the Installation Management Office and/or Army Corps of Engineers to build and/or modify installation property; access to major roads and facilities; secure storage facilities; unavailability for lodging and/or poor living conditions in the installation; access to installation power sources; delay on background checks for contractor’s personnel; delays due to training, meetings, or important events in the installation; and last minute changes to a training site with the intent to adapt to the continuous tactical changes in the battlefield. These delays contributed to the contractor’s increase in costs to cover for additional days, salaries, lodging, and transportation expenses. For that the contractors were reimbursed for those additional costs, due to the delay of the government.
Contract terms and conditions clause for commercial items allows the government the cancel the contract for their convenience. In the outcome of such end, the government informs the contractor so he could instantly end all work and ensures that all suppliers and subcontractors are informed to do the same. In accord with the contract, the contractor will be paid a fraction of the contract amount for the work completed prior to the notice of termination, and any additional rational charges the contractor can prove which was caused from the termination. Any costs that perhaps ought to been eluded by the contractor after the notification, the government is not obligated to refund the contractor. The contractor will not require fulfilling with the cost accounting standards and the government loses the right to review the contractor’s records. An example on this clause was when my unit had the task to initiate a training facility for a new Army Combative Training facility.
The requirement was set to prepare a training facility for soldiers to physically train in combative training, which is very similar to having a training facility to train in mix martial arts. Due to it was a new pilot program in the Army, a contract was initiated to purchase all essential items for a training facility which incorporates training regiments of boxing, wrestling, jiu-jitsu, karate, etc. The Army pilot program was incorporating a training module with a training package which included all necessary equipment for training soldier. The problem we encountered was there was no clear delivery date for this equipment. The issue allowed us to contract the supply and services to ensure we could meet the demand in preparing a training facility. A month into the contract, we only had 50% of the required equipment to consider our training facility operational. That’s when we received the notification that all required equipment will be received from the Total Package Fielding Initiative from the Army, and we were set to receive the equipment within two weeks. A quick notification was sent to the Contracting Officer of the status, in which he informed all parties involved, to cancel all pending request for equipment. My unit saved 40% of what was initially allocated to be spent for this training …show more content…
facility.
The various types of contracts typically fall into two broad categories: Fixed-priced and Cost-reimbursement. The other contracts which do not fall into the two major categories listed above are: Indefinite-delivery contracts, Multiple Award Schedule (MAS) contract, and Miscellaneous contract types. Choosing the contract type is a staple for negotiation, and the elements which are considered are: competition value, price and cost inquiry, the nature and difficulty of the procurement, the insistence of the necessities, the timeline, and the proficiency of the contractor. Fixed-price contracts are not altered. They place the full risk on the contractor, but also offer the utmost potential for revenue. Firm-fixed-price contracts supply a specific contract without change, or a permanent quantity with a choice to added components, or an unlimited amount. Fixed-price with Economic Price Adjustment (EPA) brings a fixed price which may be adjusted based upon possibilities cited in the contract. Fixed-price incentive is used for the parties to assign a goal rate, goal revenue, a value maximum, and a method for creating the actual return to be paid. Fixed-price redeterminable provide for price redeterminations to be prepared several times throughout the contract. Fixed price with award fee offers an incentive to the contractor, where other reasons cannot be used since a contractor’s performance cannot be measured accurately. Cost-reimbursement contracts are used when there is doubt and the rate of performance cannot be projected with enough exactitude. To succeed on these contracts, the contractor’s bookkeeping structure must be suitable for defining expenses, and government personnel should have access to audit these records. Cost-reimbursement contract for Cost may be used minus a charge to the contractor. These are usually used for non-profit groups and for services contracts. Cost-reimbursement contract for Cost-sharing is typically used for research programs, in which generally the expenses are divided evenly between parties, and the contractor waives any profit. Cost-reimbursement contract for Cost-plus-incentive-fee (CPIF) is used to refund the contractor all permissible costs and also provide a return that varies with the expenses. Cost-reimbursement contracts for Cost-plus-award-fee (CPAF) are a variation of the CPIF that contains a fixed sum and an award to stimulate superiority in performance. Cost-reimbursement contracts for Cost-plus-fixed-fee (CPFF) offers the repayment of all suitable costs, plus a certain fixed fee for satisfactory performance. Indefinite-delivery contracts are used for supplies and services in which are fulfilled after a task order or a delivery order from the government has been submitted.
Multiple Award Schedule (MAS) contracts is a easy process for attaining regularly used commercial supplies and services at costs related with bulk buying. Government-Wide Acquisition Contracts (GWACs) were established by the Clinger-Cohen Act of 1996 to enable the government’s to locate state-of-the-art information technology quickly and at a low price. It shortens the method by enlisting skilled retailers on a pre-approved list of contractors to complete information technology contracts. Miscellaneous contract types are other kinds of contracts which are comprised from other contracts already mentioned, letters, and/or agreements which are not actually considered a formal
contract.
Termination for default clause is the right of the government to terminate the contract once the contractor fails to deliver on time, jeopardize the contract with the lack of progress, or fails to obey with the contract terms and conditions. This deed puts an end to the contract and any chance for the contractor to make a profit. Legal responsibility towards the government may be assumed for any extra fee in contracting a replacement. This act will deny any chances of future contract grants, and characterize a negative record on the contractor’s performance. The most severe sanction can include criminal sentence, ineligibility, or suspension. The government remedy is to charge the contractor for any additional expenses. The contractor can fix elude the situation if he can illustrate a justifiable interruption, or that the government ignored the due date, or there was a breach of contract on the part of the government. The contractor can always petition the clause to the board of contract appeals or file suit in the Court of Federal Claims. Termination for Convenience clause is the government’s right to terminate a contract for their convenience without a cause. It can be revoked before it starts or while is being completed. Normally contracts that include this clause contain termination measures, constructive dissolutions, and any payment the contractor can anticipate from the dissolution. There is a limit which the government cannot act on bad faith, or in an effort to hurt the contractor, or abuse its preference in which was not in the convenience of the government. Sometimes the government may pursue to withdraw a convenience termination, with the contractor’s written approval. The remedy for a contractor when a contract is terminated; the contractor may recuperate the expenses of performance until the time of termination, any post-termination costs, settlement expenses, and additional profit for any work completed. The key is for the contractor to submit a final termination settlement proposal to the Contracting Officer as soon as possible, and no later than a year from the actual date of termination.
Reference
Feldman, S.W. (2010-2011). Government Contract Guidebook (4th Edition) Eagen, MN: West
GSA, DOD, NASA. (2005). Federal Acquisition Regulation (Vol II).
Procurement and Contract Law
Procurement Law Overview, Part Two Payments under Fixed-Price Construction Contract clause permits the government to partially compensate contractors for supply and services which have been accepted by the Government, as long as the contractor demand it and the sum is no less than $1,000 or 50% of the full contract amount. These interim payments diminish the contractor needs to finance expenses to fulfill the contract. As permitted by the Contracting Officer, the government will reimburse the contractor, the amount that is specified in the contract as the work continues, or as decided by the Contracting Officer. An itemized list must be required to identify how …show more content…
much total funds are requested, what the funds have been able to accomplish in this contract, which subcontractors have been paid, and the work they have perform so far. It also needs to include any other pertinent information that the Contracting Officer requires. Preparation costs and deliveries prior to the labor begin can be taken into consideration by the Contracting Officer, as long as the contractor provides acceptable proof that the items are at hand and will be used in for this contract. It is mandatory for every request for payments; the contractor will certify that the totals requested are to cover costs acknowledged in the contract. Once is certified and is discovered that there is a failure to conform to the conditions of the contract, the Contracting Officer must be informed of the deficiency; and be the contractor is obligated to reimburse the government until it has been fixed. I encountered this clause when I submitted a contract request to upgrade our unit conference room with videoconferencing capabilities. The small business contractor required a stipulation in the contract, for immediate repayments within 30 days for the total amount of all audio/video equipment and delivery charges. As soon as the last item was received, I had to immediately certify to the Contracting Officer that all items were on hand, for the Defense Financial Accounting Service (DFAS) to release the funds towards the contractor. It was great concern on the timeline, since most of the equipment was arriving during holiday schedule, which was difficult to forecast an accurate timeline to compensate the contractor. At the end I was told by the Contracting Officer that the government had to compensate the contractor with additional funds, since it took 60 days to release the partial payment. The government’s penalty was to cover for the additional financing charges the contractor had to endure.
The Government Delay of Work Clause can be included when a fixed-price contract is considered for services, or for commercial supplies and /or modified-commercial items. This clause reassures the contractor that if the Contracting Officer fails to include or imply any agreement under the contract of any future delays or interruptions, or fails to act within the time specified or within a realistic time if not specified; an amendment shall be made for any rise in the cost of performance caused by the delay or interruption. The contract shall be improved in writing to include any delivery or performance dates, and any other prescribed period or condition affected by the delay or interruption. However, no modification shall be made under this clause for any delay or interruption by any other cause; or to an attempt to increase profit; and in particular a delay due to the fault or negligence of the contractor. This is actually enforced when the government request for the contractor to begin work immediately and fails to ensure that all the contractor’s requirements to begin the work are not met in a timely fashion. Some of the government delays I’ve witness in my career in the Army Logistic Field when working collaborating with contractors are: delayed access for contractors to freely enter the military installation; special permits from the Installation Management Office and/or Army Corps of Engineers to build and/or modify installation property; access to major roads and facilities; secure storage facilities; unavailability for lodging and/or poor living conditions in the installation; access to installation power sources; delay on background checks for contractor’s personnel; delays due to training, meetings, or important events in the installation; and last minute changes to a training site with the intent to adapt to the continuous tactical changes in the battlefield. These delays contributed to the contractor’s increase in costs to cover for additional days, salaries, lodging, and transportation expenses. For that the contractors were reimbursed for those additional costs, due to the delay of the government.
Contract terms and conditions clause for commercial items allows the government the cancel the contract for their convenience. In the outcome of such end, the government informs the contractor so he could instantly end all work and ensures that all suppliers and subcontractors are informed to do the same. In accord with the contract, the contractor will be paid a fraction of the contract amount for the work completed prior to the notice of termination, and any additional rational charges the contractor can prove which was caused from the termination. Any costs that perhaps ought to been eluded by the contractor after the notification, the government is not obligated to refund the contractor. The contractor will not require fulfilling with the cost accounting standards and the government loses the right to review the contractor’s records. An example on this clause was when my unit had the task to initiate a training facility for a new Army Combative Training facility.
The requirement was set to prepare a training facility for soldiers to physically train in combative training, which is very similar to having a training facility to train in mix martial arts. Due to it was a new pilot program in the Army, a contract was initiated to purchase all essential items for a training facility which incorporates training regiments of boxing, wrestling, jiu-jitsu, karate, etc. The Army pilot program was incorporating a training module with a training package which included all necessary equipment for training soldier. The problem we encountered was there was no clear delivery date for this equipment. The issue allowed us to contract the supply and services to ensure we could meet the demand in preparing a training facility. A month into the contract, we only had 50% of the required equipment to consider our training facility operational. That’s when we received the notification that all required equipment will be received from the Total Package Fielding Initiative from the Army, and we were set to receive the equipment within two weeks. A quick notification was sent to the Contracting Officer of the status, in which he informed all parties involved, to cancel all pending request for equipment. My unit saved 40% of what was initially allocated to be spent for this training …show more content…
facility.
The various types of contracts typically fall into two broad categories: Fixed-priced and Cost-reimbursement. The other contracts which do not fall into the two major categories listed above are: Indefinite-delivery contracts, Multiple Award Schedule (MAS) contract, and Miscellaneous contract types. Choosing the contract type is a staple for negotiation, and the elements which are considered are: competition value, price and cost inquiry, the nature and difficulty of the procurement, the insistence of the necessities, the timeline, and the proficiency of the contractor. Fixed-price contracts are not altered. They place the full risk on the contractor, but also offer the utmost potential for revenue. Firm-fixed-price contracts supply a specific contract without change, or a permanent quantity with a choice to added components, or an unlimited amount. Fixed-price with Economic Price Adjustment (EPA) brings a fixed price which may be adjusted based upon possibilities cited in the contract. Fixed-price incentive is used for the parties to assign a goal rate, goal revenue, a value maximum, and a method for creating the actual return to be paid. Fixed-price redeterminable provide for price redeterminations to be prepared several times throughout the contract. Fixed price with award fee offers an incentive to the contractor, where other reasons cannot be used since a contractor’s performance cannot be measured accurately. Cost-reimbursement contracts are used when there is doubt and the rate of performance cannot be projected with enough exactitude. To succeed on these contracts, the contractor’s bookkeeping structure must be suitable for defining expenses, and government personnel should have access to audit these records. Cost-reimbursement contract for Cost may be used minus a charge to the contractor. These are usually used for non-profit groups and for services contracts. Cost-reimbursement contract for Cost-sharing is typically used for research programs, in which generally the expenses are divided evenly between parties, and the contractor waives any profit. Cost-reimbursement contract for Cost-plus-incentive-fee (CPIF) is used to refund the contractor all permissible costs and also provide a return that varies with the expenses. Cost-reimbursement contracts for Cost-plus-award-fee (CPAF) are a variation of the CPIF that contains a fixed sum and an award to stimulate superiority in performance. Cost-reimbursement contracts for Cost-plus-fixed-fee (CPFF) offers the repayment of all suitable costs, plus a certain fixed fee for satisfactory performance. Indefinite-delivery contracts are used for supplies and services in which are fulfilled after a task order or a delivery order from the government has been submitted.
Multiple Award Schedule (MAS) contracts is a easy process for attaining regularly used commercial supplies and services at costs related with bulk buying. Government-Wide Acquisition Contracts (GWACs) were established by the Clinger-Cohen Act of 1996 to enable the government’s to locate state-of-the-art information technology quickly and at a low price. It shortens the method by enlisting skilled retailers on a pre-approved list of contractors to complete information technology contracts. Miscellaneous contract types are other kinds of contracts which are comprised from other contracts already mentioned, letters, and/or agreements which are not actually considered a formal
contract.
Termination for default clause is the right of the government to terminate the contract once the contractor fails to deliver on time, jeopardize the contract with the lack of progress, or fails to obey with the contract terms and conditions. This deed puts an end to the contract and any chance for the contractor to make a profit. Legal responsibility towards the government may be assumed for any extra fee in contracting a replacement. This act will deny any chances of future contract grants, and characterize a negative record on the contractor’s performance. The most severe sanction can include criminal sentence, ineligibility, or suspension. The government remedy is to charge the contractor for any additional expenses. The contractor can fix elude the situation if he can illustrate a justifiable interruption, or that the government ignored the due date, or there was a breach of contract on the part of the government. The contractor can always petition the clause to the board of contract appeals or file suit in the Court of Federal Claims. Termination for Convenience clause is the government’s right to terminate a contract for their convenience without a cause. It can be revoked before it starts or while is being completed. Normally contracts that include this clause contain termination measures, constructive dissolutions, and any payment the contractor can anticipate from the dissolution. There is a limit which the government cannot act on bad faith, or in an effort to hurt the contractor, or abuse its preference in which was not in the convenience of the government. Sometimes the government may pursue to withdraw a convenience termination, with the contractor’s written approval. The remedy for a contractor when a contract is terminated; the contractor may recuperate the expenses of performance until the time of termination, any post-termination costs, settlement expenses, and additional profit for any work completed. The key is for the contractor to submit a final termination settlement proposal to the Contracting Officer as soon as possible, and no later than a year from the actual date of termination.
Reference
Feldman, S.W. (2010-2011). Government Contract Guidebook (4th Edition) Eagen, MN: West
GSA, DOD, NASA. (2005). Federal Acquisition Regulation (Vol II).