CORB Questions

How many years does the current status last for construction (3300) funds, procurement (3010) funds, for R&D (3600) funds, and for O&M (3400) funds?

ANSWER:Authority: GAO Redbook O&M Funds - (3400) - active/current for 1 year; expired for 5 years; cancelled after that. RDT&E (3600) Funds - active/current for 2 years; expired for 5 years; cancelled after that. Procurement Funds (3010, 3020, 3080) - active/current for 3 years; expired for 5; cancelled after that Construction Funds/ MILCON (3300) - active/current for 5 years; expired for 5; cancelled after that

If you use FY08 production money to fund an in-scope FY09 modification to an FY08 production contract, have you violated an in-scope modification to an FY08 contract?

ANSWER:No. FY08 funding is appropriate to fund an in-scope modification to an FY08 contract.

The only subcontract who makes a part is closing. Should you stockpile? Or is there another solution? (check stock exception)

ANSWER:You may not stockpile, but you may replenish missing stock for future use. Authority: 31 USC 1502(a) "Bona Fide Needs Rule" & Authority: 31 USC 1341 "Anti-deficiency Act" a.Is there a substitute part? b.Can another subcontractor redesign a suitable replacement? c.What will the cost/schedule effects of redesign be?

What is the difference between contract price and contract obligation? When is the value of the contract price equal to the value of the contract obligation? Under what circumstances would these two not be equal?

ANSWER: Contract price is the same as the face value of the contract. It describes how much was agreed to be paid for the supplies or services being acquired. Contract price is the sum of the CLIN prices established in Section B of the contract. Contract obligation describes how much money has been set aside to pay bills or invoices for the particular contract. Contract obligation is the sum of the ACRN amounts in Section G of the contract. Contract price and contract obligation are equal when the contract is fully funded. Contract price and contract obligation are not equal when the contract is incrementally funded. In no circumstances can the contract obligation be more than the contract price.

Taking into account the Anti-Deficiency Act, please advise what you would do as a PCO in the following scenario. In response to a solicitation you issued, you have received a proposal from the Widget Company to provide the Government 10,000 high-strength plastic widgets. In order to take advantage of a quantity price break on high-strength plastic, the Widget Company needs to place an order immediately with their high-strength plastic vendor. The Widget Company Contract Administrator contacts you as the PCO and explains the situation. The Contract Administrator knows that you won't have the money to award the contract until 1 Oct. The CA explains that if she can get you to give her a letter stating that contract award is imminent; her manager will allow her to order the high-strength plastic at a substantial savings. Would you issue the letter? Why or why not?

ANSWER:Authority: 31 U.S.C. 1341

You are a PCO and a new trainee comes to you seeking advice. She says she just had a conversation with a Financial Manager who referred to funds categorized by status as either active, expired, or cancelled. She doesn't understand the differences. Can you explain the differences between the 3 status categories?

ANSWER:Authority: 31 U.S.C. 1551-1558 Active means the period of time that you are permitted to use funds for obligation on a contract. Usually that period of within the 12 months of a fiscal year, but there are multi-year appropriations, such as R&D (3600) money, that has a two-year life span in active status. All appropriations are cancelled 5 years after they cease to be active, and are no longer available for any purpose, and are returned to the Treasury. Under PL 101-510, any use of cancelled funds is prohibited and results in a violation of the Anti-Deficiency Act. The period of time between when the appropriate is no longer active, and when it cancels, it is expired, and it is only available to pay obligations that are properly chargeable to that account.

You get a call from a Program Manager. His program has been experiencing difficulty getting funding. He nearly had to stop work on his program last quarter due to a lack of funds. He is facing the same situation this quarter. He has been trying to locate funding and thinks he has come up with a solution. He explains to you that he can get enough procurement funding to cover the effort for the rest of the year. Previously, the effort was funded with RDT&E funding. As the PCO, what issues would you consider before taking action to obligate the procurement funds?

ANSWER:Authority: 31 USC 1341 "Anti-deficiency Act"

You are the PCO on the new Ajax Sensor program. The development contract was awarded a year ago using FY08 funds. The Ajax sensor will be used to sense a list of hazardous chemicals that might be emitted from factories. It was reported in the news last week that a certain rouge nation has developed a new deadly chemical weapon. Your Program Manager comes to you to discuss adding work to your Ajax Sensor contract to incorporate a requirement for your sensor to detect this new chemical in addition to the others in the SOW. The Program Manager tells you the new task to detect this new deadly chemical is within scope because it is still detecting chemicals in the air and provides a memo to that effect. However, since the detection of this new chemical was not a requirement in FY08, when you awarded this contract, he wants to know if he should provide FY08 or FY09 funds for this change. How would you advise him?

ANSWER:Authority: 31 USC 1502(a) "Bona Fide Needs Rule"

On 3 Sep 08 the CO awarded a contract for computer purchases using FY08 O&M (3400) funds. The computers were to be delivered upon completion of a new building expected sometime early in CY 09, but the contractor could have delivered the computers almost immediately upon contract award. Are there any fiscal issues here?

ANSWER:Authority: 31 USC 1502(a) "Bona Fide Needs Rule" Yes. O&M (3400) funds are for one year. You cannot cross FYs unless there is an exception. This could be considered a violation of the bona fide need rule. The lead-time exception does not apply since the delivery delay is based on the government's request and not the reality of when the contractor could actually deliver the computers.

Your Program Office has been losing personnel over the past few years without receiving sufficient replacements but the Program Manager heard about some retired employees who were bored and wanted to volunteer their services. The PM wants to use these former employees to make copies and perform other office chores thus freeing up his people to focus on important problems. Do you see any issues?

ANSWER:Authority: Anti Deficiency Act - 31 USC 1342 Yes. The Anti Deficiency Act, 31 USC sec 1342, does not permit you to accept voluntary services like this. This action may be considered an improper augmentation of an appropriation since federal employees normally would perform this work.

What is a Continuing Resolution and what does it mean to the Contracting Officer?

Answer: Continuing Resolution Authority (CRA) is an act passed by Congress to continue operations of the government when the normal appropriation acts have not been passed by the beginning of the fiscal year. The Continuing Appropriations Act, 2014 (Pub. L. 113-46, enacted October 17, 2013) appropriates funds for the period October 1, 2013, through January 15, 2014, and increases the debt limit through February 7, 2014. It returns DoD to FY13 post sequestration funding levels. January 15, 2014, is the maximum period during which funds appropriated by the resolution are available for obligation.

The Contracting Officer awarded a contract on 12 Mar 2012 for Contractor Logistics Support (CLS) to take place in a foreign country. The period of performance (PoP) was 12 Mar 2012 to 11 Mar 2013. The firm fixed priced CLIN was fully funded with FY12 3400 (O&M) funding. The contract contained a special (H) clause to exempt contractor employees from foreign personal income taxes due to a Status of Forces Agreement (SoFA). However, in the event the SoFA status was denied, the contractor would recover any imposed foreign income taxes. On 6 May 2014, the contractor submitted a Request for Equitable Adjustment (REA) in the amount of $166K for denial of SoFA status for the tax year 2011/2012 (the tax year for this foreign country was from 6 April 2011 to 5 April 2012). The CO requested FY12 3400 (O&M) funding to satisfy the tax liability. Based on the above situation, is FY12 O&M funding appropriate for this entire effort?

Answer: No. Discussion: The tax year expenses do not align with the period of performance. One month could be applied to FY12 funding (only 1 month tax liability coincides with the PoP). REFERENCEs: DFARS 232.703-3 Contracts crossing fiscal years.

What provision supports the authority of DoD to direct contractors to work on excepted activities during a lapse in appropriations?

Answer: The Continuing Appropriations Act, 2014, Section 115 (c): Ratification Actions which states: "All obligations incurred in anticipation of the appropriation made and authority granted by this joint resolution for the purposes of maintaining the essential level of activity to protect life and property and bring about orderly termination of government functions, and for purposes as otherwise authorized by law, are hereby ratified and approved if otherwise in accord with the provisions of this joint resolution."

A Firm Fixed Price (FFP) type delivery order will be awarded 01 May 2015 for engineering services and funding obligated immediately upon award. The period of performance (PoP) will commence 2 November 15 and end 31 Oct 2016. The order will be funded with what appears to be no year revolving funds. Is it appropriate to immediately fund this order with no year revolving funding with the performance occurring so far in the future?

Discussion: The PCO identified funding for this effort as no year revolving funds. After further discussion, the Purchase Request (PR) was presented and it revealed the initial alpha numeric characters in the Line of Accounting (LOA) to read, 97X4930.FC04 645. Typically, the characters identified as 97X would indicate no year funding. However, this is working capital funds and the characters identified as FC 645 indicate FY15 funding and would expire for obligation purposes at the end of FY15. It can't be obligated for work that doesn't commence until FY16 and end in FY17. Obligating these funds on this effort would be a violation of the bona fide needs rule (time) and also gives the appearance of "parking" the funds. REFERENCEs: DoD 7000.14-R FMR Volume 3, Chapter 19, Provision 190203, Budgetary Authority for Working Capital Fund. Revenues are generated in DoD revolving funds used by federal agencies, to purchase goods or services provided by the specific fund. For any working capital fund that is apportioned by the OMB, the ability to incur obligations is limited to the amount of authority approved for obligation during budget review and amended by unanticipated events during execution. Comp. Gen. Decision 346, 1901 "An appropriation should not be used for the purchase of an article not necessary for the use of a fiscal year in which ordered merely in order to use up such appropriation. This would be a plain violation of the law." The CO must take the following corrective actions: Obtain FY16 3400 or Working Capital funds or award the delivery with the PoP to coincide with FY15.

It is now 29 Aug 08. You are the PCO on the biggest source selection in the Air Force, the Whiz-Bang Tanker (WBT-X). You know that the three competitors (A, B and C) will fight hard to win this award and any one of them is likely to protest if they do not win. A is a small business and is not happy that this was not determined to be a set-aside for small business. Beginning 1 Jan 08, B was debarred for six months for conviction of fraud by the company; proposal submittal closed 15 May 08, but the award will take place in Oct 08. C has been eliminated at the competitive range cut made on 20 Aug 08, for being technically deficient (red). Because you are a "leaning forward" CO, explain what you see may be the potential issues for protest before the GAO regarding each of these offerors. Can A protest the fact that this is not a small business set aside? If so, by when would it have to protest? During the course of the solicitation process, B would have to submit a proposal before the 15 May 08 deadline. This is at a time that the debarment is still effective. But by award of Oct 08, the debarment will not be in effect. Can A or C protest an award to B based on its debarment? What issues should the CO consider prior to award? Can C protest to the GAO for being cut from the competitive range? If so, when would it have to file the protest?

REFERENCE: 4 CFR Part 21.2; 4 CFR Part 21.5; FAR 9.104-1; ANSWER: Set-aside determinations may be protested to GAO (SBA size determinations may not). Small business set-aside decisions are made at the outset in a source selection and identified in the solicitation. Under the GAO protest rules, Offeror A would have to protest a non-set aside to GAO before the 15 May 08 proposal due date for an alleged impropriety on the face of the solicitation. Since 15 May 08 has passed, the protest would be dismissed as untimely. A and C could protest an award to B before the GAO, however, in general, the CO's determination of responsibility is one of the protest issues that will be automatically dismissed. The protest might succeed if the CO makes award to B and yet had reliable and specific information that strongly indicates non-responsibility. If the CO finds that the contractor is not a responsible contractor under FAR 9.104-1(d) the CO should not award to B, even though the debarment may have ended. One of the elements of responsibility is that the contractor has a record of integrity and business ethics. C can file a protest for being eliminated from the competitive range, but it must do so within 10 days of when it knew or should have known of the adverse agency action. The 10 days is counted from the date C is debriefed (C, chooses to take its debriefing right away or wait until the award is announced.)

What should you do if you believe you have a dispute with a contractor that can be resolved by Alternative Dispute Resolution (ADR)?

REFERENCE: Local policy ANSWER: You should first notify your program counsel and obtain his/her input. This may be a situation that can be resolved at the CO and program counsel level without any formal attempts at ADR. If those efforts are unsuccessful, your program counsel will notify AFMCLO and engage an attorney from that office. The attorney will familiarize him/herself with the case, and will advise as to which type of ADR would best fit this dispute. They will proceed from there to implement the ADR.

What is the "Bona Fide Need" Rule?

REFERENCE: 31 U.S.C. 1502(a); Principles of Federal Appropriations Law (GAO-04-261SP), the "Red Book"ANSWER: The concept of the "legal availability" of Congressional appropriations is defined in terms of three elements - purpose, time, and amount. The Bona Fide Need rule covers the "time" aspect of legal availability and is one of the primary means of congressional control over its appropriations. The Bona Fide Need rule basically means that a federal agency must have a legitimate or "bona fide" need for the requirement during the time period that the appropriation is available. It is codified in 31 U.S.C. 1502(a), which says, "The balance of an appropriation or fund limited for obligation to a definite period is available only for payment of expenses properly incurred during the period of availability or to complete contracts properly made within that period of availability and obligated consistent with Section 1501 of this title." In other words, the rule states that a fiscal year's appropriation may be obligated only to meet a legitimate need arising in the FY for which the appropriation was made. Several GAO decisions have validated that the bona fide needs rule also applies to multiple year appropriations (B-132900, FEBRUARY 19, 1976, 55 COMP.GEN. 768; B-215825, DEC 21, 1984, 64 COMP.GEN. 163).

An Advisory and Assistance Services (A&AS) contract had just expired and performance had been completed 1 February 2010. From 15 February 2010 through 30 April 2011 the Air Force (AF) accepted services from four individuals previously employed on the expired A&AS contract. The length of service of each individual varied from about four months to fourteen months. One individual was assigned to analyze the performance of certain projects, while another individual supported preparations for an annual meeting, and the other two individuals provided daily written briefings on financial market developments. The AF did not appoint any of the individuals to federal employment, nor did any individual qualify as a student, who may under certain circumstances, perform voluntary services. The AF did not pay any of the individuals for these services. Did the AF violate the voluntary services prohibition of the Anti-Deficiency Act when it accepted the services of four individuals on an unpaid basis?

REFERENCE: 31 U.S.C. § 1342 ANSWER: The Anti-Deficiency Act states an agency "may not accept voluntary services...the purpose of the prohibition is to preclude situations that might generate claims for compensation that might exceed an agency's available funds." In this scenario, the AF accepted the unpaid services of four individuals, and it never intended to pay the individuals. This clearly violates the voluntary services prohibition. By accepting the services of these individuals, a risk was created that the individuals will assert a claim for payment. The only time the AF may accept unpaid services is when someone offering such services executes an advance written agreement that (1) states that the services are offered without expectation of payment, and (2) expressly waives any future pay claims against the Government. The AF obtained no such agreements and should report a violation of the Anti-Deficiency Act as required by 31 U.S.C. § 1351.

A contract was awarded 10 March 2014 for the purchase of a Bobcat, Crawler Carrier, Bulldozer and Snowcat. The Contracting Officer (CO) categorized the items as "heavy equipment" and funded the effort with 3400 (O&M) funds. Based on this situation, is 3400 (O&M) funding appropriate for this effort?

REFERENCE: AFI 24-302, Attach3, para 4.72.1 & Attach 9; AFI 65-601v1 para 8.16.3 ANSWER: The CO categorized the items as "heavy equipment" rather than vehicles, which was incorrect. AFI 24-302, Attachment 3 refers to cranes, snow removal equipment, snow plows, loaders, and graders as "vehicles." The AFI also says that WR-ALC is the central procurement agency for all AF vehicle purchases and must initiate all vehicle acquisitions. AF agencies will not purchase vehicles without prior coordination and written approval from the WR-ALC Program Manager. Also, in the past, 3400 and 3080 funds were used for vehicle procurement, but the regulation now says only 3080 funds are used. AFI 65-601v1 additionally states that local purchase of centrally managed items budgeted in the procurement accounts with 3400 funds is prohibited. Based on all of these findings, 3400 funds are not authorized to procure vehicles. The CO must de-obligate the 3400 funds and obtain 3080 funds to obligate on the contract, plus receive written approval from the WR-ALC PM to do so.

A Firm-Fixed Price (FFP) construction contract was awarded 26 Sep 14 with performance to be completed on or before 23 Feb 15. The work consisted of demolition and disposal of all curb, gutter, sidewalk and site components necessary to construct a new road, and the effort was funded with 3400 FY 14 (O&M) funds. On 26 Jan 15, it was determined additional work should be accomplished to widen two (2) ramps to accommodate a semitrailer truck and widen a concrete driveway entrance (not related to accommodate the truck). The Contracting Officer requested additional FY14 O&M funding through the Obligation Adjustment Reporting System (OARS) on the basis that this work resulted from differing site conditions. Based on the above situation, is FY 2014 O&M funding appropriate for this effort?

REFERENCE: AFI 65-601, V1, par. 6.3.8. ANSWER: No, the work would be considered new and out of scope of the original terms of the contract. The contract was awarded to tear down an existing road and reconstruct a new one. Adding work to widen ramps and a concrete driveway clearly is not within scope of the original effort. The regulation says that when contract changes increase the contract's scope, fund the additional work from appropriations available for current obligation. Whether the contract scope has changed depends on the unique facts and circumstances of each situation; analyze each case separately to make this determination. The CO must obtain current year 3400 (FY15) funds to obligate to fund the new work.

A Fixed Price Incentive Firm (FPIF) type contract was awarded 20 August 2013 for the development of a software system. The period of performance (PoP) was through 19 December 2014 and the contract was funded with 3600 (2 year) Fiscal Year (FY) 13 funds. On 7 March 2014, the Contracting Officer (CO) issued a Change Order modification to the contract to incorporate a revised Capability Release Sequence (CRS). Fiscal Year 13 funds in the amount of $2,767,682 were set aside in contingent liability 12 June 2014 to fund this change order. The contractor submitted a Request for Equitable Adjustment (REA) on 3 October 2014 in the amount of $2,621,304. The CO requested to use the FY13 3600 (expired) funds reserved in contingent liability to award the REA through the Upward Obligation Adjustment (UOA) System. Based on the above situation, is FY13 funding appropriate to fund the Change Order?

REFERENCE: AFI 65-601, V1, para 6.3.8; AFI 65-601, V1, para 4.66; Comp Gen Decision B-197274, Sept. 23, 1983 ANSWER: The CO issued a Change Order modification which altered the program direction and resulted in a change to the contract scope (i.e. additional hours). The contractor submitted an REA stating the directed change would result in additional hours and cost. The AFI says that when contract changes increase the contract's scope, you must fund the additional work from appropriations available for current obligation. Both the change order mod and contractor's REA were submitted in FY14. However, the final price determination of the REA occurred in FY15. Additional guidance from the AFI and case law says that when an annual appropriation or a multi-year appropriation in the last year of availability is used to execute one of these types of contractual actions and definitization occurs in the following fiscal year, the amount being definitized becomes a bona fide need of the (annual appropriation) or a (multi-year appropriation) fiscal year current at the time of definitization. Therefore, the contract price increase, which was definitized in FY15, is a bona fide need of FY15. The CO must obtain FY14 or FY15 3600 funds to obligate so that the contract change may be funded.

You have recently awarded a contract for an infrared laser targeting system. It contains the FAR clause, "Export Controlled Data Restrictions." The contractor calls you and says that although not originally proposed, he now needs to have a Dr. McKenzie work on the contract. Dr. McKenzie is from Australia, although he will be working here in the US at the contractor's facility for this effort. What is your response to the contractor and what kinds of initial actions would you take? What would your response be if the work is not subject to ITAR? What would your response be if the work is subject to ITAR?

REFERENCE: AFMC MP 5327.9002 / ITAR [22 CFR 121-128] ANSWER: If Dr. McKenzie is a foreign national, and although he is working here in the U.S., by giving him the data, it is equated to giving the information to Australia. If the information that he will be working on can be segregated from all of the ITAR sensitive data, then he will be able to work on the segregated data only...but if the information that Dr. McKenzie will require access to is ITAR sensitive data, then he will need an export license under 22 CFR Sec. 125.2, Exports of Unclassified Technical Data, from the Dept. of State, or the contractor will need to find a U.S. national or citizen who can perform the work. (1)Determine if the non-U.S. citizen is a permanent resident ("green-card" holder, admitted lawfully into the U.S. for permanent residence). If so, the individual is considered to have the same rights as a U.S. citizen as far as export-controlled data is concerned and no approval is required. (2)If the individual is not a permanent resident, he/she is a foreign national and is not allowed to have access to any export-controlled data. The contractor must submit a description of the work to be performed by the foreign national and a determination must be made as to whether or not this work is export-controlled. The program team will need to work with the Foreign Disclosure Office for this determination. If the proposed work is not export-controlled, you may approve the use of the foreign national on the contract on the condition that the individual work only on those non-sensitive tasks. Another solution is to modify the contract to segregate the work into sensitive and non-sensitive areas, and let the contractor make the determination as to whether the proposed work is sensitive.

As a continuation of the last scenario, the Contracting Officer (CO) awarded a hybrid modification (containing both CPFF and FFP type CLINs) on 30 Sep 2013 to strip and repaint a particular aircraft for an estimated ceiling price of $9.4M. The effort was fully funded with FY13 Operations and Maintenance (O&M) funds and the period of performance was 60 days. On 12 May 14, the contractor advised of schedule delays and performance issues that led to a $4.5M overrun on this non-severable effort. The CO requested FY13 O&M funds from finance to cover the CPFF CLIN to repaint the aircraft in the amount of $4.4M and the FFP CLIN to provide security in the amount of $.5M. Based on the above situation, is FY13 funding appropriate for both the CPFF and FFP CLINs?

REFERENCE: Answer: Current year or FY14 funding remains applicable to the CPFF CLIN which is an increase to the aggregate cost reimbursement. However, FY13 funding is applicable to the FFP (Security) CLIN.

The Contracting Officer (CO) awarded a Cost-Plus-Fixed-Fee (CPFF) contract on 28 Sep 12. The contract was fully funded with FY12 3400 funds. The period of performance was from 28 Sep 12 to 27 Sep 13. On 01 Aug 13, the contractor notified the CO that funds were at 75% expenditure rate in accordance with FAR Clause 52.232-22, and an additional $50K was needed to complete performance. The CO requested additional FY12 3400 funds from finance to cover the cost overrun. Based on the above situation, are FY12 or FY13 3400 funds to be used on this overrun?

REFERENCE: Answer: FY13 3400 funds REFERENCE: AFI 65-601, V1, par. 6.3.7.5. Change orders to cost reimbursement contracts with a limitation of cost or limitation of funds clause that cause the contract ceiling to be exceeded, and which are not based on antecedent liability, enforceable by the contractor, shall be charged to funds legally available when the contracting officer grants the discretionary increase. The CO must take the following corrective actions: If the CO intends to grant the increase, obtain FY13 3400 funds to fund the cost overrun via modification.

Describe the distinction between billing rates and final indirect cost rates? Who is responsible for establishing the billing rates? What types of information are normally used to establish billing rates?

REFERENCE: FAR 42.701; FAR 42.703-1; FAR 42.302(a)(9) ANSWER: Billing rates provide a method for interim reimbursement of indirect costs at estimated rates subject to adjustment during contract performance and at the time the final indirect cost rates are established. Final indirect cost rates are based on costs the contractor has certified. Final indirect cost rates are binding on all agencies and their contracting offices, unless otherwise specifically prohibited by statute. The establishment of billing and final indirect cost rates is an ACO function listed in FAR 42.302. Billing rates are based on information from a recent review, previous rate audits or experience, or similar reliable data.

Contracting Officer (CO) signed and awarded a contract on 01 Dec 11. The contract included a Depot Repair CLIN. The CLIN was negotiated CPFF, fully-funded utilizing FY12 3400 funds with a period of performance from 01 Dec 11 through 30 Nov 12. The Depot Repair CLIN has an Estimated Cost that is tracked, exclusive of other CLINs on the contract, against FAR 52.232-20, "Limitation of Cost". The contractor, on 01 Oct 12, notified the CO that funds were at 75% expenditure, as required by FAR 52.232-20, and needed an additional $100K to run performance through 30 Nov 12. The CO issued proper corresponding notification to the Contractor. The CO has requested, from FM, additional FY12 3400 funds to cover the overrun. Based on the above situation, are FY12 3400 funds the correct fiscal year funds to be utilized on the overrun?

REFERENCE: Answer: No. Per AFI 65-601, para 6.3.7.5. "Change orders to cost reimbursement contracts with a limitation of cost or limitation of funds clause that cause the contract ceiling to be exceeded, and which are not based on antecedent liability, enforceable by the contractor, shall be charged to funds legally available when the contracting officer grants the discretionary increase." AFI 65-601 defines "Contract Change" — "A change to a contract which requires the contractor to perform additional work. Contract changes do not include adjustments to pay claims, increases under escalation costs or corrections for administrative or accounting errors." The CO must take the following corrective actions: Assuming the CO will grant the increase, via modification, in FY13 the CO should request FY13 3400 funds for the cost overrun.

The Contracting Officer (CO) awarded a Firm-Fixed Price (FFP) undefinitized contractual action (UCA) on 31 July 2009 with an obligated value of $27.2 million of FY 2009 Operations and Maintenance (O&M) funds and a ceiling price of $55.5 million for Instructor Services. Of the $27.2 million, the CO obligated $15.9 million against a 6-month base period CLIN with a period of performance from July 2009 to December 2009, and $11.3 million against a 6-month option CLIN with a period of performance from January 2010 to July 2010. The option period was exercised on 31 July 2009, the date the base contract was awarded. Based on the above situation, is the FY 09 funding appropriate for this effort?

REFERENCE: Answer: The FY09 funding was appropriate for the 6-month base period CLIN, but it was not appropriate for the 6-month option CLIN. Discussion: The CO obligated $11.3M in FY 2009 O&M funds for a contract option that had a period of performance from January 2010 through July 2010. The Instructor Services obtained under the option CLIN could not have been a bona fide need for FY 2009. An exception to the Bona Fide Needs Rule exists for contracts ordering severable services that cross fiscal years. It allows a severable service that cross fiscal years to be financed through funding available during the year the contract was awarded, as long as the contract period does not exceed one year. Although the contract procured severable services with a period of performance that began in FY 2009 and ended in FY 2010, the exception would apply only to the base period CLIN and not the option period CLIN that began in FY 2010. REFERENCEs:

A Firm Fixed Price (FFP) Indefinite Delivery Indefinite Quantity (IDIQ) contract was awarded on 21 September 2009 for hardware and software. The contract consisted of one base year and four one-year options. The IDIQ contract initially provided for a $290,000 guaranteed minimum. On 28 September 2009, the PCO executed a contract modification that increased the minimum from $290,000 to $1,315,000 and issued a task order obligating $1,315,000 FY 2009 O&M funding. On 29 September 2010, the PCO modified the IDIQ contract to change the guaranteed minimum to $1,860,000, exercised option year one, and issued a task order obligating $1,860,000 FY 2010 funding. Based on the above situation, is this a potential bona fide need violation?

REFERENCE: Answer: Yes, a bona fide need in the amount of $1,315,000 did not exist at the end of fiscal year 2009, nor did a bona fide need in the amount of $1,860,000 exist at the end of fiscal year 2010. Discussion: A valid obligation must reflect a bona fide need at the time the obligation is incurred. The guaranteed minimum amount in an IDIQ contract must not only constitute sufficient consideration to make the contract binding, but also reflect the bona fide need at the time of execution of the contract. In this case, the PCO violated the bona fide needs rule where it did not have a bona fide need for the guaranteed minimum quantities specified in an IDIQ contract in fiscal years 2009 and 2010. The CO must take the following actions: Obtain FY 2010 funding to obligate on the first task order and FY 2011 funding on the second task order.

The contracting officer awards a FFP contract to build/repair actuators in support of the B-1 Programmed Depot Maintenance (PDM). The contract was awarded 7 Sept 11 for a total contract price of $267,656 with a completion date of 6 June 2012. The contract was fully funded with 3400 (O&M) type funds. During Lot Acceptance Testing (LAT), it was determined the Government had provided the contractor with defective Government Furnished Material (GFM) to be used in the buildup of the actuators. The contractor is requesting additional funding to rebuild/repair the material. The Government estimates the cost to remanufacture the actuators will be $237,135 and, is requesting to use FY11 3400 type funds. Based on the above situation, is the work to rebuild the actuators within the general scope of the contract? If so, is it acceptable to use FY11 expired funds?

REFERENCE: Answer: Yes, since the rebuild/repair of the material is the same effort as the original requirement, it is considered within scope. Use of FY11 funds is acceptable as the bona fide need occurred in FY11. REFERENCEs: Contractor Liability for Loss of or Damage to Property of the Government, FAR Part 46.803 - Policy (a) General. The Government will generally act as a self-insurer by relieving contractors, as specified in this subpart, of liability for loss of or damage to property of the Government that (1) occurs after acceptance of supplies delivered or services performed under a contract and (2) results from defects or deficiencies in the supplies or services. AFI 65-601 Vol 1, - Using Expired Appropriations - After an appropriation expires, you may use the unobligated balance plus any deobligations to finance valid adjustments until the appropriation closes at the end of the fifth expired year. Do not use current year funds to finance adjustments applicable to expired years. The CO must take the following actions: Since the defective GFM is not the contractor's liability, determine a fair and reasonable equitable adjustment and obtain FY11 3400 funds to obligate on the contract.

When can the contracting officer issue the contractor a written notice of intent to disallow specified costs? Can the notice be issued prior to costs being incurred? Explain.

REFERENCE: FAR 42.8 ANSWER: At any time during the performance of a cost-reimbursement contract, a fixed-price incentive contract, or a contract providing for price redetermination, the contracting officer may issue the contractor a written notice of intent to disallow specified costs incurred or planned for incurrence. Logically, unless the ACO maintains good communication with the contractor and knows about a planned cost that will be disallowed, there is no way to issue the notice prior to its occurrence. Assuming the PCO learns of the cost in advance, then it is within his/her right to issue the notice at any time during performance, including beforehand.

A Time and Materials (T&M) Delivery Order (DO) was awarded for engineering and technical services for corrosion prevention and control of rotary wing aircrafts. The period of performance was from 1 September 2012 to 31 August 2013 and the DO was fully funded with 3400 (O&M) FY12 funds. Government Furnished Material (GFM) was provided to the contractor to assist in their efforts in corrosion prevention. On 9 July 2013, the contractor provided notification to the Contracting Officer that they had exceeded the ceiling and requested additional funding since the GFM was faulty and required extensive changes and/or corrections. The Contracting Officer did not believe the contractor should be reimbursed for the overrun since the contractor did not notify the Contracting Officer the costs would exceed 85 percent of the ceiling price. Is this a potential ADA violation?

REFERENCE: Answer: Yes, the Government should reimburse the contractor since the Government received and accepted a benefit from the contractor's efforts. REFERENCEs: FAR Clause 52.232-7 - Payments Under Time-and-Materials and Labor-Hour Contracts (d) If at any time during performing this contract, the Contractor has reason to believe that the total price to the Government for performing this contract will be substantially greater or less than the then stated ceiling price, the Contractor shall so notify the Contracting Officer, giving a revised estimate of the total price for performing this contract, with supporting reasons and documentation. FAR Clause 52.245-1 - Government Property

Contracting Officer (CO) signed and awarded a contract on 24 Sep 10. The contract included a T&M Labor CLIN for development and verification of aerospace component repair process. The CLIN was fully funded with FY10 3600 (R&D) funds and the period of performance (PoP) was 01 Oct 10 through 30 Sep 11. The contractor, based on actual invoices, started performance on 01 Nov 11 and completed performance on 30 Jun 12. Based on the above situation, do you see any potential violations?

REFERENCE: Answer: Yes, the following violations exist:

In regards to the Berry Amendment and specialty metals, what are some pre-award precautions to consider in minimizing the potential for violations?

REFERENCE: DFARS 225.7003(a)(1); DFARS 252.225-7008 ANSWER: The time to deal with the Berry Amendment and specialty metals restrictions is in the pre-award stage. 1. If your contract contains or might contain any restricted item under this section (steel, alloys, etc.), and no exceptions apply, you need to include the appropriate clauses in the solicitation, because contractor must buy U.S. products. 2.It is also imperative that COs ensure the contractor understands these clauses and can comply with them. If you cannot find a contractor that can comply with this section, then you will need to find alternative domestic items that meet the AF needs or process a DNAD (Determination of Domestic Non-Availability)3.Precautions: a. Make compliance with DFARS 252.225 a discussion item for pre-proposal conferences. b.Pre-award survey can confirm contractor's ability to trace origin of materials c.Make sure during negotiation that contractor understands flow-down to subs/suppliers

Describe, in general terms, the relationship between various data rights under a contract for noncommercial items and processes, and the types of funds used to develop the data?

REFERENCE: DFARS 227.7103-5 ANSWER: Generally, the Government obtains Unlimited Rights to data developed exclusively with Government funds; the Government obtains Government Purpose Rights in data when developed with mixed funding; the Government obtains Limited/Restricted Rights to data developed exclusively at private expense.

You get a call from the General who wants to know what technical data rights the Air Force has in a military purpose radar, which Company X is building for the Air Force. He wants to compete future buys of the radar to save money. He tells you he's pretty sure we "own" all the data since we are paying a fortune for the radar. What do you tell him? Do you have any questions for him?

REFERENCE: DFARS 227.7103-5 ANSWER: In basic terms, the Government does not "own" any of the data that contractors produce - it merely receives a license to do certain things with the data. The licenses fall into categories based on several factors, including the type of data, type of funding involved (Government vs. private), and whether commercial or non-commercial. Furthermore, the categories are slightly different for technical data and computer software. All that being said, the categories roughly break down into the following: 1.Unlimited Rights: the Government can use the data for internal and external purposes, including giving that data to other companies to widen the competitive base 2.Government Purpose Rights: the Government can use the data for internal purposes and some external purposes related to source selections with consent. These turn into Unlimited after 5 years 3.Limited/Restricted Rights: the Government can use the data for internal purposes and must gain consent to release externally. Limited applies to tech data, whereas Restricted is for computer software. Certain types of data automatically receive Unlimited Rights. For example, form, fit, and function data, OMIT data, data received as a deliverable as part of a Government contract, etc. My first question for the General would be whether the military radar data falls into this category? If not, then it largely comes down to funding source. If the Government fully funded the radar, we would have Unlimited Rights. If the contractor fully funded it with private funds, we would have Limited/Restricted rights. If mixed funding (Government & private), we would have Government Purpose Rights. So, my next question would be what type of funding source was used for the radar? My final question would be to ask about what data assertions the contractor originally made related to the radar. This would probably point us to the answer he's looking for faster than doing our own analysis of the funding sources or types of data, and it would have likely been verified and challenged if necessary when the contract was awarded.

When negotiating noncommercial license rights, can the Government accept lesser rights when it has unlimited rights? Government purpose rights? Limited rights?

REFERENCE: DFARS 227.7103-5; AFMCLO/JAN Data Rights Briefing ANSWER: The Government may accept lesser rights when it has Unlimited or Government Purpose Rights in data but may not accept less than Limited rights in such data. However, the Government may not accept less than statutory rights without receiving a "compensating benefit."

Does the government receive a copyright license for technical data or computer software it acquires? If so, what is the scope of the license?

REFERENCE: DFARS 227.7103-9; 252.227-7013; 227.7203-9; and 252.227-7014 ANSWER: The Government receives a copyright license in any work of authorship (technical data or computer software) it acquires pursuant to a Government contract. The scope of the license is the same as the scope of the rights acquired in the underlying technical data or computer software.

When acquiring noncommercial computer software and noncommercial computer software documentation, what is the difference between a nonconforming marking and an unjustified marking? What initial actions should the contracting officer take?

REFERENCE: DFARS 227.7203-12; DFARS 227.7203-13 ANSWER: Authorized markings are identified in the clause at 252.227-7014, Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation. All other markings are nonconforming markings. To the extent practicable, the contracting officer should return computer software or computer software documentation bearing nonconforming markings to the person who has placed the nonconforming markings on the software or documentation to provide that person an opportunity to correct or strike the nonconforming markings at that person's expense. If that person fails to correct the nonconformity and return the corrected software or documentation within 60 days following the person's receipt of the software or documentation, the contracting officer may correct or strike the nonconformity at that person's expense. When it is impracticable to return computer software or computer software documentation for correction, contracting officers may unilaterally correct any nonconforming markings at Government expense. Prior to correction, the software or documentation may be used in accordance with the proper restrictive marking. An unjustified marking is an authorized marking that does not depict accurately restrictions applicable to the Government's use, modification, reproduction, release, or disclosure of the marked computer software or computer software documentation. For example, a restricted rights legend placed on computer software developed under a Government contract either exclusively at Government expense or with mixed funding (situations under which the Government obtains unlimited or government purpose rights) is an unjustified marking. Contracting officers have the right to review and challenge the validity of unjustified markings.

The Contracting Officer (CO) awarded a Firm-Fixed Price (FFP) contract on 30 Sep 13 for severable services with a 12 month period of performance (PoP) and obligated FY 2013 Operations and Maintenance (O&M) 3400 type funds. The effective date of the award is 1 Oct 13. Based on the above situation, is FY 2013 funding appropriate for this effort?

REFERENCE: DFARS 232.703-3; 31 U.S.C. 1502 (Bona Fide Needs Rule) ANSWER: The CO awarded the contract and obligated FY13 3400 funds when performance did not commence until 1 Oct 13. This is a violation of 10 U.S.C. 2410(a), which authorizes the use of current fiscal year appropriations to finance severable service contracts into the next fiscal year for a total period not to exceed 1 year. Since the effective date of the contract is 1 Oct 13, the services awarded were not a current year need (FY13), they were a FY14 need. Additionally, the awarded contract violates the Bona Fide Needs Rule, 31 U.S.C. 1502, which says that the appropriation is available only for payment of expenses incurred during the period of availability. Obligating current year money for future year requirements violates this rule. Therefore, it as it currently stands, the contract should be funded with FY14 funds since it is an FY14 requirement. To fix the issue, there are two possible courses of action. First, if the effective date was an error and it can be established that the contractor commenced performance prior to 1 Oct 13, a bilateral mod could be issued to correct the effective date to the date performance commenced. Then, FY13 funds could be used. If work did not commence until after 30 Sept 13, then the 1 Oct 13 effective date could remain and a modification would need to be issued to de-obligate the FY13 funds and replace them with FY14 funds.

The Contracting Officer (CO) awarded a Firm-Fixed Price (FFP) type contract to install new telephones. The contract was awarded 15 Sep 14 for a total price of $200K, with a period performance ending 14 Sep 15, and incrementally funded in the amount of $100K of O&M (3400) FY 14 funding. Based on the above situation, is it acceptable to award this contract with FY 14 funds for performance mostly occurring in FY 15?

REFERENCE: DFARS 232.703-3; AFI 65-601 Vol 1, 4.61 ANSWER: Yes, since this contract is for a severable service initiated in FY14, the same year (3400) funding is appropriate. DFARS guidance says that the CO may enter into a contract, exercise an option, or place an order under a contract for severable services for a period that begins in one fiscal year and ends in the next fiscal year if the period of the contract awarded, option exercised, or order placed does not exceed 1 year. However, the contract should have been fully funded when the contract was awarded. AFI 65-601v1 says that the total cost of the services to be provided over the 12-month period must be reflected in the contract and that amount must be obligated when the contract is signed. Therefore, the CO should fully fund the contract with FY14 3400 funds.

You have received a request for equitable adjustment (REA) from your contractor. What do you do?

REFERENCE: DFARS 252.243-7002 ANSWER: Requests for equitable adjustment many times result from clauses in the contract that specifically authorize them. For instance, any time a change order is issued, the contractor has 30 days to submit a REA for any increased costs as a result of the change order. REAs are typically more informal than claims, so my first task would be to get all the facts and determine whether the contractor's REA has any merit. If it does, I would then determine whether it needs to be certified (>$150K). If I believe it holds merit and is properly certified, then I would begin to take steps to negotiate a settlement with the contractor, involving my program attorney as necessary. If negotiating with the contractor is difficult, and the involvement of program counsel has not helped, the case can always be referred to AFMC LO for formal ADR. Formal ADR can be accomplished either before or after the issuance of a final decision. If I determine that the REA is without merit, I may still attempt to discuss the issues with the contractor prior to issuing a COFD. Once a stalemate has occurred and the REA can't be resolved at the CO level, a final decision is issued and the contractor can proceed IAW the Disputes clause if it desires.

Compliance with the Berry Amendment (pREFERENCE for domestic specialty metals) is an extremely hot topic right now (circa 2006). What should a PCO do, in both a competitive acquisition and sole source acquisition, when dealing with pre-award Berry Amendment non-compliance?

REFERENCE: DPAP Memos in Policy Vault, 8/18/06 and 9/21/06; DFARS 225.7003 ANSWER: Competitive acquisitions, besides including the appropriate clauses in the RFP, include additional language whereby contractor must state they can comply. If offeror cannot comply with BA requirements, he may be given opportunity to revise proposal to result in compliant items. RFP should state that offerors who are currently in compliance may be more highly rated. Offerors who cannot become BA compliant may be considered nonresponsive. In situations where no offeror can become compliant by the time deliveries are to be made, then process Domestic Non-Availability Determination (DNAD) for offeror representing best value to the Government. CO must use best judgment in case-by-case situations, document decision, and/or seek higher level advice. In non-competitive acquisitions, CO shall impress upon the contractor to comply. If contractor encountered previous compliance problems, Contractor shall describe how compliance will be accomplished prior to delivery and CO shall review their plan to assure it is realistic. Of course, when contractor is 1) not compliant, 2) not able to become compliant, or 3) won't comply and alternate source is not available, a DNAD should be processed with contractor having responsibility to supply appropriate justification.

When using performance based payments, can PBPs be utilized as a method of payment on an undefinitized modification to a definitized firm fixed price contract?

REFERENCE: DPAP PBP Guide 2014 ANSWER: Although not prohibited during the UCA phase, it is recommended that the UCA be awarded using progress payments and PBPs be considered during the price definitization process. The same factors that cause both parties to delay the definitization of price affect the ability to establish PBPs during the UCA period. The first few months of a contract/UCA often do not provide meaningful or objectively measurable PBP events. Providing progress payments during the UCA phase will provide the contractor adequate contract financing during this phase and allow the parties time to appropriately define the PBP arrangement prior to definitization. So while not expressly prohibited to use PBPs on an undefinitized modification, it just may not make sense to do so in practice.

When can incremental funding be used, and what is the rationale for allowing its use? What safeguards keep the contract from violating the Anti-deficiency Act? What does the incremental funding amount have to cover?

REFERENCE: DoD 7000.14-R FMR Vol 2A; DFARS 232.703-1; FAR 32.703-1 ANSWER: The FAR permits use of incremental funding on cost-reimbursable contracts and the DFARS extends use to fixed-price contracts as well. The appropriation of funds must be taken into account, however. The DoD FMR enacts a full funding policy for procurement appropriations (30X0) in order to ensure stable production runs, lower costs, etc. Half an airplane or tank would not be particularly useful. For R&D appropriations, many times these can be severable. The rationale for using incremental funding in these cases is that it adds more flexibility and control and if the full funding does not come through, the Government has already gained benefits from the work/research provided to date. The DFARS says for fixed-price contracts, incremental funding can only be used if: (1)The contract (excluding any options) or any exercised option - (a)Is for severable services; (b)Does not exceed one year in length; and (c)Is incrementally funded using funds available (unexpired) as of the date the funds are obligated; or; (2)The contract uses funds available from multiple fiscal years and -(a) The contract is funded with R&D appropriations; or (b) Congress has otherwise authorized incremental funding. The Government is protected from Anti-deficiency Act violations through the inclusion of either the Limitation of Funds clause (FAR 52.232-22, for Cost Reimbursement contracts) or the Limitation of Government's Obligation clause (DFARS 252.232-7007, for Fixed Price contracts). Both clauses state that the contractor is not obligated/authorized to perform any work beyond the current level of funding, nor is the Government required to pay the contractor for work beyond the already approved level. The contractor is also required to notify the Government within specific timeframes prior to getting close to the approved funding level, so that the Government can secure more funds or terminate if required. Incremental funding is obligated to cover the amount allotted in the increment and any corresponding increment of fee.

You are the PCO on a contract for the production of a cargo transport aircraft. You are told by your contractor that a particular piece of equipment on the aircraft is made by a subcontractor who is going to stop production of that particular item and there are no other suppliers for that item. Describe what this problem is called, what questions you need to ask and possible solutions and authorities for solutions.

REFERENCE: DoDM 4140.01 Vol 3 ANSWER: The situation is referred to as Diminishing Manufacturing Sources and Materiel Shortages (DMSMS) AKA Diminishing Suppliers. Some of the questions you need to ask: Is there an available substitute for the equipment? Can it be redesigned? The cost and time for such a redesign compared to the cost of the current item? How many of these items do you need and for how long? DoDM 4140.01 Vol 3 says that when an item is identified as DMSMS, the managing military department must proactively take timely and effective actions to minimize the impact on DoD acquisitions and pursue actions that will help avoid DMSMS issues threatening to degrade weapon system readiness. Some examples of the actions are: encouraging the existing source to continue production via multi-year contract, using current item specs to find another source, converting the item to a performance-based spec, obtaining an existing form, fit, function substitute, making a bridge buy to allow time to develop another solution, making a Life of Type (LOT) buy, and replacing the system which has the DMSMS. There are 16 suggested actions, so this list was not all-inclusive.

Describe a situation where a fixed-price type contract may be appropriate in an R&D effort.

REFERENCE: FAR 35.006(d) and (e); DFARS 235.006 ANSWER: Normally, fixed-price contracts are precluded by a lack of precise specifications and difficulties in cost estimation. The FAR says that when levels of effort can be specified in advance, a short-duration fixed-price contract may be useful for developing system design concepts, resolving potential problems, and reducing Government risks. Additionally, production follow-on contracts to R&D efforts should transition to fixed-price vehicles.

When would you use a bilateral modification and when would you issue a unilateral modification?

REFERENCE: FAR 43.103 ANSWER: Bilateral modifications are signed by both parties and are used to negotiate equitable adjustments as a result of change orders, definitize letter contracts, and reflect other agreements of the parties modifying the terms of contracts. A unilateral modification can be issued for administrative changes, change orders, termination notices, and for changes from the authority of a clause other than the changes clause (such as GFP, Options, Suspension of Work, LOGO, etc.).

Describe "cure notice" and when you would use one as a CO?

REFERENCE: FAR 49.402-3; FAR 49.607 ANSWER: If a contract is to be terminated for default before delivery date, the Default clause requires a written notification specifying the contractual failure and a period of 10 days in which to cure the failure. This written notice is called a "cure notice." Before using this notice, it must be ascertained that the amount of time equal to or greater than the period of "cure" remains in the contract delivery schedule or any extension to it. If the amount of time remaining in the contract delivery schedule is not sufficient to permit a "cure" period of 10 days or more, the cure notice should not be issued. Instead a "show cause notice" may be issued.

Which administration functions are usually NOT handled by the contracting officer unless the cognizant agency has designated the contracting officer to perform these functions?

REFERENCE: FAR 42.302; DFARS 242.302 ANSWER: There is an extensive list of functions in FAR 42.302 that the PCO normally delegates to DCMA, but the PCO cannot retain the following functions unless the cognizant agency SAYS the PCO will do them:(5)Negotiate forward pricing rate agreements (9)Establish indirect final cost rates and billing rates (11)Practically everything related to Cost Accounting Standards (CAS), including disclosure statements, compliance with CAS, and negotiating price adjustments & supplemental agreements under CAS clauses (12)Determine the adequacy of the contractor's accounting system (S-71)Review EVMS plans and verifying compliance with DoD EVMS criteria (DFARS)

A cost plus fixed fee contract contains a basic and options. The contract is incrementally funded. The period to exercise the option has arrived, but funding for the option is delayed. Can the CO exercise the option without receipt of those funds? (Could also go under FAR Part 17)

REFERENCE: FAR 17.207; FAR 32.703-1 ANSWER: One of the main criteria for exercising an option is that funds are available. So in this case, the gut reaction is "no." However, you could potentially use the funds that are already on contract as part of the basic contract for the option, depending on their currency and appropriation. The first step is to determine whether the option could be funded by the funds currently on contract, and if so, contact the contractor and/or DCMA to find out the exact amount remaining below the NTE price. You could then take some of the funds from the basic and use them to incrementally fund the option. When your option funds arrive, then you would just add them to the contract to fully (or incrementally) fund the remainder of the work. Your increment must have enough to cover the allotted amount plus any corresponding increment of fee.

What is the main purpose of the post award orientation? What are some inappropriate purposes?

REFERENCE: FAR 42.501 ANSWER: The main purpose is to help both Government and contractor personnel to achieve a clear and mutual understanding of all contract requirements, and to identify and resolve potential problems. They are encouraged to assist small business concerns (to include SDB, VOSB, SDVOSB, HUBZone, and WOSB). The post award orientation is not intended to alter the final agreement arrived at in any negotiations leading to contract award or to substitute for the contractor's fully understanding the work requirements at the time offers are submitted.

Describe the general statutory requirements of the Service Contract Labor Standards statute (previously named the Service Contract Act).

REFERENCE: FAR 22.1002-1 ANSWER: Service contracts over $2,500 shall contain mandatory provisions regarding minimum wages and fringe benefits, safe and sanitary working conditions, notification to employees of the minimum allowable compensation, and equivalent Federal employee classifications and wage rates. Under 41 U.S.C. 353(d), service contracts may not exceed 5 years.

Generally, when is an Equal Employment Opportunity Pre-award Clearance required? What are the procedures for requesting a clearance?

REFERENCE: FAR 22.805; AFFARS 5322.805; AFFARS MP 5301.601(a)(i) ANSWER: Pre-award clearances are required for proposed contracts and proposed first-tier subcontracts of $10 million or more (excluding construction). The requirement also pertains to modifications of an existing contract for new effort that would constitute a contract award. The CO does not need to request pre-award clearance as long as the proposed contractor has registered in OFCCP's National Pre-award Registry (http://www.dol-esa.gov/preaward/) within the past 24 months and the Registry review is documented in the official contract file. If the contractor is not in the Registry, the procedures for requesting a clearance begin with the CO processing a pre-award clearance request a soon as the apparently successful offeror can be determined, but at least 30 days prior to proposed award of the contract if possible. Within 15 days of your request, if the OFCCP doesn't notify that they intend to conduct a compliance evaluation, clearance is presumed and you are authorized to proceed. If they do notify you that they're conducting an evaluation, the clock resets with another 20 days for them to complete it. If after 20 days, the OFCCP does not provide you with its conclusions, clearance is presumed and you are authorized to proceed with award. If an OFCCP evaluation would delay award of an urgent and critical contract, award may be made without the pre-award clearance if appropriate approval is sought (AFFARS delegates to SCO/SCCO). If an award is made under this authority, the contracting officer shall immediately request a post-award evaluation from the OFCCP regional office.

What is the purpose of a payment bond; a performance bond? When can a contracting officer require performance and payment bonds for other than construction contracts? What situations may warrant a performance bond?

REFERENCE: FAR 28.001; FAR 28.103-2 & 28.103-3 ANSWER: The Bonds statute (formerly known as the Miller Act) requires both payment and performance bonds for construction contracts over the SAT. However, for contracts other than construction, these types of bonds may be required for contracts exceeding SAT when necessary to protect the Government's interests. A performance bond secures performance and fulfillment of the contractor's obligations under the contract (typically due to contractor bankruptcy or insolvency). The FAR says the following situations may warrant performance bonds: (1) GFP is provided; (2) There is a merger or a selling of assets of the contractor; (3) Substantial progress payments are made before delivery of end item; or (4) Demolition contracts. A payment bond is required when a performance bond is required. It assures payments as required by law to all persons supplying labor or material in the prosecution of the work provided for in the contract. The Government may require that both types of bonds be increased as contract modifications increase contract price. In practice, most insurance companies will issue a "performance and payment bond" to cover both.

You are the Contracting Officer negotiating a major upgrade to your aircraft program. During the negotiations the contractor expresses urgency regarding contract award as he wants to "get in line first to use the new test equipment" that will be purchased to support a portion of the system upgrade. When you ask what he means by "get in line" he tells you that the equipment will be used by programs other than the Air Force's and he needs award made soon so that his schedule is not impacted by the other Services' use. When you check the proposal it appears that the full purchase value of the equipment has been included as part of the contractor's plan for executing the work. Do you have any concerns and if so, what should you do?

REFERENCE: FAR 31.201-4; FAR 31.205-40(b); FAR 45.402; FAR 45.301 ANSWER: I have two primary concerns regarding the equipment. The first is a potential allocability issue. According to FAR Part 31, a cost is allocable to a Government contract if it is (a) incurred specifically for the contract, (b) benefits both the contract and other work and can be distributed in reasonable proportion to the benefits received, or (c) is necessary to the overall operation of the business, although a direct relationship to any particular cost objective cannot be shown. Additionally, FAR Part 31states that the cost of special tooling and special test equipment used in performing one or more Government contracts is allowable and shall be allocated to the specific contract(s) for which acquired. Secondly, while I do not know the type of contract here, there could be an issue with the contractor-acquired property. If the contract is FFP, there wouldn't be any issues other than the allocability issue above, since the contractor would likely retain title to the acquired equipment (depending on T's & C's). But if it is a cost-type or T&M contract, title to the contractor-acquired property would rest with the Government. Using Government property on contracts other than the one to which it is accountable would require some type of consideration or fair rental if used on other fixed-price contracts. The CO may authorize rent-free use on other cost-type Government contracts. As the PCO, I would first check with my technical folks for more information about the possibility of other programs using the equipment. If they indicate that the equipment is peculiar to your program, then the contractor may not have its facts straight and its allocation of the full equipment costs in the proposal may be valid. If the equipment is later determined to have applicability to other programs, you may need to obtain fair rental or other adequate consideration. However, you may authorize its use on a rent-free, non-interference basis if in the best interest of the Government. If the technical folks say the item is in fact interoperable with other systems/programs, you should verify in writing with the contractor that they intend to use the equipment on other programs. If the contractor confirms its intention to use the equipment on other programs you should formulate an objective that takes into consideration the appropriate share (usage) your program will require.

Name the methods of government financing available under FAR 32.1 for non-commercial item financing and FAR 32.2 for commercial item financing. Bonus points: give some characteristics of each method.

REFERENCE: FAR 32.102 & 32.204; AFFARS MP 5332.1 ANSWER: The following are the non-commercial item Government financing methods available: 1.Performance-based payments: Payment upon objective, defined events accomplished. This is the preferred method of financing. 2.Progress payments: Payments based on costs incurred or % complete by the contractor as work is done. Customary rates are 80% LB, 90% SB; adequate accounting system required. Progress payments can be no more than 80% on UCAs. 3.Loan guarantees: Made by Federal Reserve banks, on behalf of designated guaranteeing agencies, to enable contractors to obtain financing from private sources. Used in cases of national defense. 4.Advance payments: Paid in advance for the purpose of making advances to subcontractors. Requires agency approval, need adequate security, interest may be required, may be in addition to progress/partial payments. This is the least preferred. 5.Unusual contract financing. Anything besides the above. Requires advance approval - AFFARS has procedures. Commercial item financing methods are: 1.Commercial advance payments: Provided before any performance of work under the contract. This cannot exceed 15% of the contract price and are not subject to interest penalties under the Prompt Payment Act. 2.Commercial interim payments: Given after some work has been done, but before supplies or services are accepted. 3.Unusual contract financing. Anything besides the above. Requires advance approval - AFFARS has procedures.

Compare and contrast progress payments & PBPs.

REFERENCE: FAR 32.102; FAR Subpart 32.5; FAR Subpart 32.10; DFARS 232.501 ANSWER: Both progress payments and PBPs are types of customary contract financing, payable to the contractor prior to acceptance of supplies or services by the Government if deemed appropriate for the acquisition. Neither progress payments nor PBPs are subject to an interest penalty under the Prompt Payment Act if delayed, and both can be fully recovered in the event of default. Basis of payment differs for these types of financing. Progress payments are paid by one of two ways: either based on costs incurred as the work progresses, or based on percentage/stage of completion of the contract (only authorized for construction). PBPs are made on the basis of performance measured by objective, quantifiable methods, accomplishment of defined events, or other quantifiable measures of results. Progress payments rates are customarily 80% for large businesses and 90% for small businesses. For PBPs, the rate is limited to 90% of the contract or line item price to which it applies. An approved accounting system is required for progress payments, but is not for PBPs. In order to use PBPs, you must agree on performance-based terms with the offeror, but this is not applicable to progress payments. PBPs are preferred over progress payments when deemed appropriate.

What order of precedence must the contracting officer consider when a contractor requests non-commercial contract financing?

REFERENCE: FAR 32.106; AFFARS 5332.104(c)(2) ANSWER: The contracting officer must consider the following order of pREFERENCE, unless an exception would be in the Government's best interest in a specific case: 1.Private financing without Government guarantee 2.Customary contract financing other than loan guarantees and certain advance payments (performance-based payments and progress payments) 3.Loan guarantees 4.Unusual contract financing. See AFFARS for approval requirements. 5.Advance payments

What are the advantages/disadvantages of performance-based payments?

REFERENCE: FAR 32.10; DFARS 232.10; DPAP PBP Guide 2014 ANSWER: In theory, PBPs are the preferred method of contract financing because they are tied to objective performance, rather than simply costs incurred. So while the Government may be helping out the contractor, we are still ensuring that we get what we want at the same time. DPAP's PBP Guide says that the advantages of PBP are four-fold: (1)Enhanced technical and schedule focus (reinforces contractor's motivation to meet PBP event criteria in a satisfactory manner in order to get paid) (2)Reduced cost of oversight (no need to verify "progress" or track costs incurred before payment, no need to oversee contractor's accounting system; this benefit may be overstated because contractor likely has other contracts that require an approved accounting system, plus there is a lot of up front work required to establish PBPs) (3) Broadened contractor participation (since no approved accounting system is required, you could broaden the competitive base; this benefit is not applicable if only using established defense contractors, plus if we are trying to draw in commercial contractors, we can just use FAR Part 12) (4)Potentially improved cash flow for the contractor (up to 90% of price vs. 80% with progress payments) Some of the disadvantages are: (1)They require significant up-front work to establish meaningful PBP event criteria. This takes a good knowledge of the technical and scheduling aspects of the project. Also, PBPs have been criticized in recent years because they can essentially become advance payments - if event criteria do not track with incurred costs properly. This needs to be addressed when setting them up. (2)Since not based on cost incurred, the contractor could have no cash flow for extended period until event criteria are satisfied (3)Not appropriate for all types of effort. For instance, they work well on stable production contracts with predictable events, but not so much for services or development work. (4)Since terms need to be agreed upon up-front, these negotiations could unduly delay the acquisition.

During a kick-off meeting for a new R&D effort in which a CPFF contract is contemplated, the Program Manager mentions that he heard about this thing called Performance Based Payments and it sounded really good. He liked the idea of the contractor only getting paid when progress towards completion has been made. If your Program Manager wanted to use Performance Based Payments on a program, how would you advise her/him?

REFERENCE: FAR 32.10; DFARS 232.10; DPAP PBP Guide 2014 ANSWER: The first thing I would say to my PM is that contract financing is only applicable to fixed-price contracts, so PBPs would not work for the CPFF R&D effort in question. Assuming this is for informational purposes though, I would explain that PBPs are the preferred method of contract financing (when deemed practical by the CO), and are based on measurable performance events, rather than costs incurred. However, they take a lot of work to do correctly. While I wouldn't get into too many of the specifics at this point, I would say that some of the advantages include enhanced technical and schedule focus, reduced cost of oversight, broadened contractor participation, and potentially improved cash flow for the contractor. To realize these benefits, however, it requires support from the PM, technical team, and DCMA/DCAA, to initially set up the event criteria for PBPs, as well as the monitoring of event completion during contract performance. These benefits also depend heavily on the type of effort. While ideal for production efforts, there may be challenges with development work because of the uncertainty of the expenditure profile, the follow-up actions required to close out discrepancies identified at PDR/CDR, and may incentivize the contractor to sacrifice quality in order to get paid sooner.

You are the Contracting Officer for a source selection and are in the process of preparing the RFP. A large business submits a query as to whether or not you will consider PBPs. What are the things you should consider before you respond?

REFERENCE: FAR 32.10; DFARS 232.10; DPAP PBP Guide 2014 ANSWER: There are many factors that go into the decision for PBPs. First, for large businesses, in order to use PBPs or progress payments, the contract must be fixed price, over $2.5 million and there must be a substantial time after work begins before the contractor can bill (typically 6+ months, or alternatively, a demonstrated financial need/unavailability of private financing). Do these apply to this effort? Second, if it passes this initial test, is the type of effort appropriate for PBPs? Is this a stable production program with predictable milestones, or is it a service, where there won't be any meaningful event criteria? How complex is the effort and how will you come up with the PBP schedule? The bottom line here is whether PBPs may have advantages for this effort, such as enhanced technical and schedule focus, reduced cost of oversight, and potentially improved cash flow for the contractor. Third, I would consider the implications on the source selection. Will the addition of PBPs increase competition (i.e. to firms who may not have an adequate accounting system)? Are you trying to award without discussions and will negotiation of terms and milestones add time to the acquisition? Will the cost of financing be included in evaluated price? Will varying proposed PBP percentages (90% is the max) make price evaluation difficult? For these situations, it may be better to say the evaluation will be based on progress payments, but that the Government would be willing to modify to PBPs with the successful offeror at a later date, upon receipt of adequate consideration.

You are working a FAR Part 12 buy and the contractor requests commercial item financing. They propose a schedule of time phased payments with dollar amounts due, e.g. 90 days prior to delivery $1,250,000. What kinds of questions would you ask/research when reviewing this proposal?

REFERENCE: FAR 32.202-1; FAR 32.203; FAR 32.205 ANSWER: Contract financing is normally the contractor's responsibility, but in some markets, buyer financing is a commercial practice. The FAR lists 8 criteria that need to be met prior to authorization of commercial financing. As a review, the 8 criteria for authorizing commercial financing are: (1) The item is a commercial supply or service; (2) Price is over SAT; (3) The CO determines it is customary in the marketplace to make financing payments; (4) It is in the best interest of the Government; (5) Adequate security is obtained; (6) Ensuring commercial advance payments are less than 15%; (7) Contract is competitive, and if not, adequate consideration is obtained if the arrangement is more advantageous than the offeror's normal method of customer financing; and (8) The CO obtains concurrence from the payment office concerning liquidation provisions when required. Once determining the criteria are met, the CO may either specify financing terms in the solicitation, or permit each offeror to propose its own customary financing terms, subject to certain conditions. If I assume the contractor is already proposing its own financing terms as in this scenario, it means I've already determined that commercial financing is appropriate. Therefore, the next step is to evaluate the proposal IAW FAR 32.205. During this stage, the big takeaway with evaluating proposals is that I must consider the cost of providing financing as part of the evaluated price of the offeror (especially when terms vary among offerors), normally by using the OMB-published discount rate and time-value of money calculations.

What actions must a contracting officer take prior to providing unusual progress payments?

REFERENCE: FAR 32.501-2; DFARS 232.501-2; AFFARS 5332.501-2 ANSWER: The contracting officer may provide unusual progress payments only if: 1.The contract necessitates pre-delivery expenditures that are large in relation to contract price and in relation to the contractor's working capital and credit; 2.The contractor fully documents an actual need to supplement any private financing available, including guaranteed loans; and 3.The contractor's request is approved in advance by the DPAP Director (OUSD(AT&L)DPAP). DFARS says that the agency contracting office must first approve and then submit to DPAP, but AFFARS lowers the approval from SAF/AQC to the SCO/SCCO. The SCO/SCCO approved arrangement is then submitted to DPAP for final approval.

What actions can a contracting officer take to ensure that any excess of the unliquidated progress payments over the contractual limitation is promptly corrected?

REFERENCE: FAR 32.503-12 ANSWER: The FAR says an excess over the contractual limits could occur due to several reasons: (1) The costs of performance exceed the contract price; (2) The alternate method of liquidation is used and the actual costs of performance exceed the cost estimates used to establish the liquidation rate; (3) The rate of progress or the quality of contract performance is unsatisfactory; or (4) The rate of rejections, waste, or spoilage is excessive. If an excess occurs, shall be promptly corrected through one or more of the following actions: (1) Increasing the liquidation rate; (2) Reducing the progress payment rate; or (3) Suspending progress payments.

What are the Limitation of Cost and Limitation of Funds Clauses and when would you use them?

REFERENCE: FAR 32.705-2(a) and (b) ANSWER: The Limitation of Cost clause (52.232-20) is used on fully-funded cost-reimbursement contracts, whereas the Limitation of Funds clause (52.232-22) is used on incrementally funded cost-reimbursement contracts. Both limit the Government's obligation - either to the total estimated cost (Cost) or total amount currently obligated on contract (Funds), exclusive of fee. They require the contractor to notify the Government when incurred costs will reach 75% of NTE (or total funding up to that point) within the next 60 days. The contractor is not obligated to perform past the NTE or total funded amount and only the CO can direct them to do so in writing once the NTE or funding is increased.

Upon notice that a protest has been filed with the GAO after award, what are some immediate steps the procuring agency must take?

REFERENCE: FAR 33.104; AFFARS MP5333.04; AFMC MP 5333.104 ANSWER: Upon notification of a GAO protest, the CO shall, IAW the AFFARS MP: (1)Forward to legal and awardee (redact if necessary) within 1 day (2)Advise legal and HCA on status of stay of performance or any intended override within 1 day (3)Email AFLOA/JAQ the contact information of the CO and local program attorney within 1 day (4)Consult with legal within 3 days to determine: summary dismissal or corrective action (5)Prepare draft statement of facts for legal within 10 days and to AFLOA/JAQ within 15 (6)Prepare/submit agency report to AFLOA/JAQ within 20 days (coordinate with COCO, AFMC MP) (7)Report is submitted to GAO within 30 days after notice of protest to GAO

Describe what steps the contracting officer should follow in reaching a decision on a properly certified claim? What are the time limits in reaching a decision

REFERENCE: FAR 33.211 ANSWER: When a claim cannot be satisfied or settled by mutual agreement and a decision is necessary, the CO shall: (1)Review the facts pertinent to the claim (2)Secure assistance from legal and other advisors (3)Coordinate with the contract administration office or contracting office, as appropriate (4)Prepare a written decision to include: (a)A description of the claim or dispute (b)REFERENCE to the pertinent contract terms (c)Statement of the factual areas of agreement and disagreement (d)Statement of the contracting officer's decision, with supporting rationale (e)Paragraph substantially the same as in 33.211(v) (f)Demand for payment prepared in accordance with 32.610(b) in all cases where the decision results in a finding that the contractor is indebted to the Government (5)Furnish a copy of the decision to the contractor The contracting officer shall issue the decision within the following statutory time limitations: (1)For claims of $100,000 or less, 60 days after receiving a written request from the contractor that a decision be rendered within that period, or within a reasonable time after receipt of the claim if the contractor does not make such a request. (2)For claims over $100,000, 60 days after receiving a certified claim; provided, however, that if a decision will not be issued within 60 days, the contracting officer shall notify the contractor, within that period, of the time within which a decision will be issued.

What are the general FAR policies for acquiring major systems?

REFERENCE: FAR 34.002 ANSWER: The general policies in FAR Part 34 are designed to ensure we acquire major systems in the most effective, economical, and timely manner. Agencies shall: (1)Promote innovation and full and open competition by: (a)Expressing needs and program objectives in terms of the mission and not in terms of specified systems, and (b)Focusing resources and management attention on activities conducted in the initial stage of major programs; and (2)Sustain effective competition between alternative system concepts and sources for as long as it is beneficial.

In AFRL, Contracting Officers are also Grant Officers. They can award Grants and Assistance Instruments as well as contracts. What is Assistance? How does it differ from Acquisition? What gives the Grants Officers their authority to enter into assistance? What are the types of Assistance?

REFERENCE: FAR 35.003; 10 USC 2358; 10 USC 2371; 31 USC 6303-6305 ANSWER: Assistance is the name given to a set of legal instruments used to transfer things of value (ie. money, property, or services) to accomplish a public purpose of support or stimulation. This differs from acquisition, which has a primary purpose of acquiring supplies or services for the direct benefit of the Government. Some other differences include the regulatory guidance (DoDGARS vs. FAR), relationship created (partnership of mutual trust/commitment vs. buyer-seller arrangement), and fee/profit implications (profit/fee not appropriate vs. profit/fee expected). While Grant Officers are governed by the DoDGARS, their basic authority stems from U.S. Code. 10 U.S.C. 2358 gives authority for grants and cooperative agreements. 10 U.S.C. 2371 gives authority for Technology Investment Agreements (TIA) and Other Transactions (OT). There are also instruments (grants, CAs, or OTs) that may be legislatively directed by specific statutory language. The three main types of assistance are: (1)Grant. Used when there will be no substantial involvement between the Government and recipient. To use this method, you must obtain a paid up license and march-in rights in any patents developed. (2)Cooperative Agreement. Used when there will be substantial involvement between the Government and recipient. Like a grant, you must obtain a paid up license and march-in rights for patents. (3)Other Transactions. Any instrument other than a contract, grant, or cooperative agreement. The distinction is that a paid up license and march-in rights are not required and a 50/50 cost share is required unless waived. They are used only for basic, applied, and advanced research. Other terms you might hear that are technically assistance instruments as well: (1)Cooperative Research and Development Agreement (CRADA). An agreement between a Government laboratory and a private entity to conduct R&D where no funds change hands. (2)Technology Investment Agreements (TIA). A vehicle to provide cooperative agreements or other transactions (depending on patent rights provisions) to for-profit firms.

You have just received the only proposal against a BAA solicitation issued last month. It is from the University of Southern California and you have to choose the most appropriate contract instrument for the work being proposed. What kinds of things would you consider in determining whether to award a contract, grant, cooperative agreement or other transaction for research?

REFERENCE: FAR 35.003; 31 USC 6303-6305 ANSWER: Here are some of the principle thoughts regarding the type of award I would make: (1)Contract: If the principle purpose of the research is for the direct benefit of or use by the government, then a procurement contract would be best. (2)Grant: If the principle purpose is to transfer a thing of value to carry out a public purpose of support or stimulation authorized by US law AND you plan to have no Government involvement during the performance of the effort then a grant is appropriate. You must also secure a paid up license and march in rights for any patents developed under the grant. (3)Cooperative Agreement: If substantial involvement IS expected between the Government and the recipient, AND USC takes no exception to the patent rights provisions, then a Cooperative Agreement would be appropriate. (4)Other Transaction for Research: If USC takes exception to the patent rights provisions, then an OT for research is your last possible choice. However, 50/50 cost sharing is required unless waived and it can only be for basic, applied, and advanced research. (5)Technology Investment Agreement: These are typically used to leverage for-profit businesses that have not dealt with the Government before. If USC plans to work in a consortium with a for-profit on this effort, it could apply though. It requires a 50/50 cost share, and depending on the patent right provisions, it will take the form of a CA or OT.

You are a PCO in one of Air Force Research Laboratory contracting offices attending a kickoff meeting for planning a new effort. The program manager asks you if it would be appropriate to use an assistance instrument for this effort, and if so, which one. What do you consider in your response?

REFERENCE: FAR 35.003; 31 USC 6303-6305 ANSWER: The first cut line is whether we intend to acquire supplies or services for the direct benefit of the Government, or carry out a transaction that will stimulate or support research and development for a public purpose. If the former, it should be a procurement contract; the latter, an assistance instrument. When choosing assistance instruments, it comes down to largely two things: do we plan to have substantial Government involvement, and does the recipient accept the required patent provisions? If the recipient agrees to a paid up license and march-in rights, it will be either a grant or cooperative agreement. If we want to be substantially involved, it has to be a cooperative agreement. If not, it will be a grant. If the recipient does not agree to the patent terms, then the only other option is other transaction. OT can only be used for basic, applied, or advanced research, and a 50/50 cost share is required unless waived.

The BAA process is commonly used in the R&D environment. A new program manager tells you he has heard of a BAA being used instead of RFPs. He asks you "What is a BAA?," "When do you use it?, What are the advantages?"

REFERENCE: FAR 35.016 ANSWER: The BAA is a competitive solicitation method for basic and applied research and that part of development not related to a specific weapon system or hardware procurement. As a result, it is more general in nature than an RFP. BAA's should be considered when the Government desires unique, creative solutions and/or advances in knowledge, understanding, technology, the state-of-the-art, etc., and is able to state its requirements in terms of areas of need or interest rather than specific solutions or outcomes. Meaningful proposals with varying technical/scientific approaches should be anticipated. One advantage to BAAs is flexibility. They aren't bound by FAR Part 15 procedures for source selection and can be prepared in a simple Word document. Next, they allow open communications through most of the process, which allows for clarifications in proposals as necessary. Next, the Government can acquire either all or part of the proposal. Finally, any type of contract or assistance instrument can result from it.

What is the purpose of a performance-based contract? What are the basic elements of a performance-based contract?

REFERENCE: FAR 37.102; FAR 37.601; FAR 2.101 ANSWER: Performance-based acquisition is the preferred method for acquiring services. These types of contracts are structured around the results to be achieved, as opposed to the manner by which the work is to be performed. In other words, rather than telling the contractor exactly HOW to do something, we tell them our exact required RESULTS and let them come up with creative solutions to achieve them. FAR guidance says that performance-based contracts shall include:(1)PWS (2)Measurable performance standards (i.e., in terms of quality, timeliness, quantity, etc.) and the method of assessing contractor performance against performance standards; and(3)Performance incentives where appropriate that correspond to the performance standards above

What characterizes a personal services contract? What elements should be used as a guide in assessing whether or not a proposed contract is personal in nature?

REFERENCE: FAR 37.104; DFARS 237.104; AFFARS 5337.104 ANSWER: A personal services contract is characterized by the employer-employee relationship it creates between the Government and the contractor's personnel. The typical requirement for obtaining Government employees is via direct hire, and obtaining them through a personal service contract would circumvent those laws. Employer-employee relationships can occur as a result of the contract's terms or the manner of its administration during performance, such as when contractor personnel are subject to the relatively continuous supervision and control of a Government employee. However, giving an order for a specific article or service, with the right to reject the finished product or result, is not the type of supervision or control that converts an individual (such as a contractor employee) into a Government employee. The DFARS guidance gives some instances where personal services contracts may be allowed (experts/consultants/health care) and the D&F required for approval. The AFFARS guidance delegates approval authority down to the SCO/SCCO. The FAR lists the following elements that should be used as a guide in assessing whether or not a proposed contract is personal in nature: (1)Performance on site. (2)Principal tools and equipment furnished by the Government. (3)Services are applied directly to the integral effort of agencies or an organizational subpart in furtherance of assigned function or mission. (4)Comparable services, meeting comparable needs, are performed in the same or similar agencies using civil service personnel. (5)The need for the type of service provided can reasonably be expected to last beyond one year. (6)The inherent nature of the service, or the manner in which it is provided, reasonably requires directly or indirectly, Government direction or supervision of contractor employees in order to adequately protect the Government's interest; retain control of the function involved; or retain full personal responsibility for the function supported in a duly authorized Federal officer or employee.

What are some of the techniques that should be used to manage and mitigate risk during the acquisition of information technology?

REFERENCE: FAR 39.10 ANSWER: While there are several specific risks that come along with purchasing IT, such as risk of technical obsolescence, technical feasibility, and system dependencies, reasonable risk taking is appropriate as long as risks are controlled and mitigated. FAR 39.102 says the following techniques include, but are not limited to: prudent project management; use of modular contracting; thorough acquisition planning tied to budget planning by the program, finance, and contracting offices; continuous collection and evaluation of risk-based assessment data; prototyping prior to implementation; post implementation reviews to determine actual project cost, benefits, and returns; and focusing on risks and returns using quantifiable measures.

To avoid obsolescence, what timeframes should be followed when soliciting, awarding, and taking delivery under a modular contract for information technology?

REFERENCE: FAR 39.103 ANSWER: A contract should be awarded within 180 days after the date on which the solicitation is issued. If award cannot be made within 180 days, agencies should consider cancelling the solicitation. Deliveries under the contract should be scheduled to occur within 18 months after solicitation issuance.

Let's say a small business gets awarded a contract. A large business then buys the small business. What are your options as a PCO?

REFERENCE: FAR 42.1204ANSWER: 41 U.S.C. 6305 prohibits transfer of Government contracts from the contractor to a third party. However, when in its interest, the Government may recognize a third party as the successor in interest to a contract when it arises out of a transfer of assets or merger. You really have two options at this point. If you believe it is not in the best interest of the Government to transfer the contract, the original contractor would remain under contractual obligation to the Government, and the contract may be terminated for reasons of default, should the original contractor not perform. If you believe it is in the best interest of the Government, you could execute a novation agreement IAW FAR 42.1204, which is typically an ACO function. This requires a new determination of responsibility to ensure conflicts of interest are identified and evaluated, as well as a novation agreement package from the contractor.

What are some examples of relevant contractor past performance information? How long should past performance information be retained?

REFERENCE: FAR 42.15 ANSWER: Past performance information includes the contractor's record of: (1)Conforming to contract requirements and to standards of good workmanship; (2)Forecasting and controlling costs; (3)Adherence to contract schedules, including the administrative aspects of performance; (4)Reasonable and cooperative behavior and commitment to customer satisfaction; (5)Reporting into databases; (6)Integrity and business ethics; and (7)Business-like concern for the interest of the customer. The only REFERENCE to a time period for past performance is that "agencies shall use the past performance information in PPIRS that is within three years (6 for construction and A-E) of the completion of performance of the evaluated contract or order." Typically "recent" past performance is defined within each source selection, but a three year time window is common.

You are the CO on a firm fixed price contract for the purchase of modular power supply units for AIM-9 missile launchers. The contract has a base quantity of 2,000 units and two fixed price option quantities, each for 1,000 units. It's time to exercise the first option, and your buyer notes that the original contract doesn't contain some required FAR and DFARS clauses - most notably the Drug Free Workplace, Prompt Payment, Discounts for Prompt Payment, and Electronic Funds Transfer Payment Methods clauses. The buyer suggests that you save time and add those clauses to your unilateral option exercise modification. Should you do it? Why or why not?

REFERENCE: FAR 43.103 ANSWER: The crux of the issue here is that the addition of clauses will have to be a bilateral modification, whereas, taken by itself, the option exercise is meant to be a unilateral modification. The acceptance of an option must be unconditional and in exact accord with the terms offered. Any attempt by the Government to alter the conditions of the contractor's obligation as part of an attempted option exercise renders the option invalid. Therefore, it is usually wiser to simply exercise the option unilaterally without any other changes to protect the Government. Alternatively, if you can add release language that would protect the Government from any type of future equitable adjustment due to the bilateral agreement and legal concurs, you may be able to include the additional clauses with the option exercise. It is largely a situation-dependent scenario based on your relationship with the contractor.

You are the Contracting Officer on a program where the contractor has recently submitted a very large claim based on a constructive change to the contract. The claim is based on direction that the Colonel, the Division Chief for the program, allegedly gave the contractor. The contractor maintains it was a constructive change to the contract. You find out from the Colonel's secretary that he is going out to the contractor's facility next week to meet with corporate management about the claim. You make inquiries and find out that nobody from the program's contracting division or JAG will be accompanying the Colonel. What should you do?

REFERENCE: FAR 43.104; FAR 52.243-7; Gov't Contracts REFERENCE Book, 4th Ed, FAR 1.602-3; FAR 43.202 ANSWER: A constructive change is sometimes called a 'change by implication' and occurs when the Government, by its actions, changes the contract without specifically adhering to the requirements of the 'Changes' clause. A constructive change order has been defined as an oral or written act or omission by the Contracting Officer or other authorized Government official, which is of such a nature that it has the same effect as a formal written change order under the Changes clause. The first thing I would do in this situation is notify my PK chain of command immediately, since they will likely be able to interface with the Colonel more easily. In today's acquisition environment, I don't think anyone in my chain would think this is a good idea. Not only did the Colonel lack authority to direct the contractor in the first place (i.e. an unauthorized commitment), he's now trying to discuss the claim as well (where he also has no contractual authority). Whether my chain discusses it, or I discuss it directly with the Colonel, he needs to know that this will have to be a ratification action to fix the unauthorized commitment. I would also advise him that by going out himself, he would compromise the Government's position and it would be inappropriate (in a tactful manner, obviously). If the Colonel insists on going, I need to be equally insistent on going with him (or at least someone in my chain), along with legal if possible. If the Colonel disagrees, continue to elevate the matter. I would also instruct the contractor that only I have the authority to bind the Government and of their responsibility under the Notification of Changes clause to notify me of anything they consider would constitute a contract change.

When the contracting officer properly issues a unilateral change under the Changes clause, what responsibility, if any, does the contractor have to continue performance?

REFERENCE: FAR 43.201(b) ANSWER: The contractor must continue performance of the contract as changed, except that in cost-reimbursement or incrementally funded contracts the contractor is not obligated to continue performance or incur costs beyond the limits established in the Limitation of Cost (fully funded) or Limitation of Funds (incrementally funded) clause.

You are the Contracting Officer in a major weapon system program. The program is under a lot of pressure to get through flight test and into production. There are cost overruns. Numerous IPTs are working with the contractor. The engineers are meeting regularly with the contractor and making decisions on how to accomplish flight test. Senior Program Management is working with the contractor's management group deciding how to get to production. Decisions are not getting documented. No PCO letters have been issued for over six months. What do you do?

REFERENCE: FAR 43.202 ANSWER: There seems to be a major communication breakdown in the organization, with the contractor, and within the IPT. Bottom line, there needs to be an immediate culture shift, which likely requires me to step up and be the leader I'm supposed to be as the program's CO. First, I need to set the tone that there will be no more constructive changes from anyone, to include the organization's leadership and the IPT members. I need to reiterate the seriousness of this and the fact that these are unauthorized commitments for which they could be held responsible. I would also reiterate that I'm here to help the team and make these changes in the proper manner, not to get in the way - I just need to document things properly to protect the Government. The next step would be to reiterate with the contractor that I'm the only one who can approve changes to the contract, either through a Change Order or PCOL. Without these, they shouldn't be doing anything that will add cost to the contract. I would also remind them of their requirement to notify me of any changes they believe would impact the contract that were not given by me (Notification of Changes clause). All these steps would hopefully fix the issues for the future and I would summarize these discussions through a PCOL. For the past constructive changes, I would analyze the facts and either go forward with the ratification process or attempt to implement the already agreed-upon changes to the contract through change orders (likely bilateral). If I go with the latter, I would prepare for an eventual claim from the contractor and would brief the IPT on this. I would document everything I've done and the reasons for the actions.

What is consideration? How would you address consideration on a Fixed Price type contract being modified to include additional Government Furnished Property (GFP) (e.g., not part of the original contract), and what is your reasoning? How would you address consideration on a Cost type contract being modified to include additional GFP (e.g. not part of the original contract), and what is your reasoning?

REFERENCE: FAR 45.301; DFARS PGI 245.103; Government Contracts REFERENCE Book, 4th Ed ANSWER: Consideration is the inducement to a contract: the cause, motive, price, or impelling influence that leads a party to enter a contract. A binding contract requires an offer, acceptance of the offer, and consideration. Consideration generally requires two elements: (1) something must be given that the law regards as of sufficient legal value for the purpose - either a benefit to the seller or a detriment to the buyer, and (2) the something (benefit or detriment of legal value) must be dealt with by the parties as the agreed-upon price or exchange for the promise - there must be a "bargained-for exchange." The requirement for consideration does not require that what is relied upon for consideration be equivalent in value to the promise; the consideration need only have "some value." During acquisition planning, there is a fairly substantial process required prior to furnishing GFP to contractors, as outlined in the DFARS. If that process has already been accomplished at time of basic award, then it does not have to be repeated for additional modifications. However, if it was not accomplished, it will need to be accomplished with the modification. FAR 45.301 states that if the contractor requests additional GFP after award, adequate consideration or fair rental is required. On a fixed-price contract, after determining the estimated value of the GFP, you would add something of value to the contract (i.e., additional within scope capability, an additional study, additional hours, etc.). The rationale here is that the original contractual agreement was based on the fact that the contractor would utilize its own capability, experience, property, equipment, etc. to carry out the contract for a fixed price. Now that we are providing more GFP to supplement their capabilities, something of value should be exchanged to re-establish the "balance" of the contractual consideration. For a cost-type contract, the textbook answer and pREFERENCE is to reduce the base fee. After determining the estimated value of the GFP, you would get a reduction in the base fee (if there is a base fee). This is because the GFP, in effect, reduces the estimated cost of the contract and therefore the fee associated with it should also be reduced. This re-establishes the original "balance" of the contractual consideration. In practice, however, if the value of the GFP is nominal and it is impractical to reduce the fee - you have a few other alternatives: requesting something of nominal value (additional copies of a report), documenting the file that your product will be enhanced given the use of GFP, or documenting the file that consideration was obtained through "cost avoidance" (over-run for example). The bottom line is that consideration is required on both fixed-price and cost-type contracts, however since the government actually funds its own consideration in a cost-type environment, it is far less critical of an issue than supplying GFP in a FFP environment without "adequate" consideration.

You have a contractor who is continually failing to meet delivery requirements. You've met with the contractor several times in an attempt to resolve this issue but the contractor's performance has not improved. As a PCO, what actions are left for you to take?

REFERENCE: FAR 49.402; FAR 49.607 ANSWER: Since it appears you've already attempted some informal methods of correcting the problem, your next step is to issue something in writing - either a cure notice or show cause depending on the time remaining on contract. Provide a copy to SBA if it's a small business firm. If the contractor cannot cure the problem within the 10 day period, begin the termination for default process by drafting a termination notice and submitting it (along with the contract file) to AFLOA/JAQ IAW the AFFARS procedures. Depending on the results of the legal review, you will then issue the termination notice to the contractor.

You are the CO on an airframe IPT. The Program Manager just showed up at your desk in a panic. The contractor has called to say that one of the engines they just installed and tested does not meet spec and as a result, the ACO will not accept delivery of the aircraft. The contractor said it's not their fault since the engines are GFE and they want paid. In addition, they want assurances this will not adversely affect their incentive fee payment. The Program Manager wants you to resolve this problem. Is this your problem to solve? What issues are involved here and how do you address them?

REFERENCE: FAR 46.407; FAR 52.242-17; FAR 52.245-1; FAR 52.249-14 ANSWER: First, this is a problem our team must solve - therefore, as a team member and business advisor, it is my responsibility to help the team solve this problem. Second, there are several issues here, such as whether this is a problem with only the one engine or all of them, whether there is any slack in the contract delivery date, and whether this is really a GFE only problem. To address these issues, we first need to clarify the problem by talking with the ACO and the contractor. We must also discuss this with the other contracting officer for the engine program providing the engines as GFE. We can then confirm the contract delivery date by simply looking in the contract. If it is determined to be a GFE problem, then the contractor wouldn't be held responsible for the delay nor would the delay impact their incentive fee since these issues were beyond their control. To get things moving, one course of action would be to see if there is a spare engine that could be installed for the acceptance flight tests, which would then allow the contractor's delivery to be conditionally accepted and payment made. Once a good engine is located/procured, it could be installed.

Describe what a warranty provides and describe its use in a cost-reimbursement type contract?

REFERENCE: FAR 46.702; FAR 46.705(a); DFARS 246.705; AFMC IG 5346.702 ANSWER: The principal purposes of a warranty in a Government contract are to delineate the rights and obligations of the contractor and the Government for defective items and services and to foster quality performance. Generally, a warranty should provide a contractual right for the correction of defects notwithstanding any other requirement of the contract pertaining to acceptance of the supplies or services by the Government; and a stated period of time or use, or the occurrence of a specified event, after acceptance by the Government to assert a contractual right for the correction of defects. Except for the warranties in the clauses at 52.246-3, Inspection of Supplies - Cost-Reimbursement, and 52.246-8, Inspection of Research and Development - Cost-Reimbursement, the contracting officer shall not include warranties in cost-reimbursement contracts. DFARS guidance provides one more exception; warranties in the clause at 252.246-7001, Warranty of Data may be used in CR contracts. The AFMC IG links to the DoD Warranty Guide, which provides guidance on warranties for systems.

How is a warranty impacted if the Government specifies or doesn't specify the design of the item?

REFERENCE: FAR 46.706(b)(ii) ANSWER: If the Government specifies the design of the end item and its measurements, tolerances, materials, tests, or inspection requirements, the contractor's obligations for correction of defects is usually be limited to defects in material and workmanship or failure to conform to specifications. If the Government does not specify the design, the warranty extends also to the usefulness of the design.

Where is profit allowed and not allowed under a fixed-price contract terminated for convenience?

REFERENCE: FAR 49.202 ANSWER: Profit is allowed on preparations made and work done by the contractor for the terminated portion of the contract but not on the settlement expenses. Anticipatory profits and consequential damages are not allowed. Profit is not allowed for material or services that, as of the effective date of termination, have not been delivered by a subcontractor, regardless of the percentage of completion. The TCO may use any reasonable method to arrive at a fair profit. The FAR lists several factors to consider when negotiating or determining profit.

You are a PCO who has inherited a problem contract. Your contractor is in the 5th year of a 15-year contract and it has now become obvious that the contractor "bought in" with a low price during the source selection. The contractor is currently complaining they are losing millions of dollars and are threatening to walk out of the contract. Your PM comes to you for advice. Given the limited info you have, discuss some of the issues that you would consider in selecting a course of action. What possible courses of action would you consider recommending to your Program Manager?

REFERENCE: FAR 49.402 ANSWER: I would consider a few things, but mainly how to ensure the contractor upholds its contractual duties and whether termination is a valid option. The scenario doesn't mention that there is a quality of service/supply issue, so this might be a 'behind the scenes' issue at the moment. My goal would first be to create a win-win so that the contract doesn't have to be terminated and I don't have to scramble to re-compete the contract on an accelerated schedule. However, it may come down to termination if the contractor fails to make progress due to their losses and that failure endangers performance of the contract. Since I am already 5 years into the contract, making substantial changes to contract type, requirements, or negotiating costs is not appropriate (especially if it is only to help the contractor avoid failure due to its own lack of business sense in 'buying in'). These changes would likely not be in-scope changes, and could open up the Government to a protest if competing firms become aware. Therefore, my courses of action are somewhat limited. They include: (1)Determine if this is a cash flow problem. Perhaps some type of contract financing would help correct the contractor's cash flow issues. (2)Issue a written letter of concern about the problems and ask the contractor to respond to how they will fix them. I would remind the contractor that a lowered CPAR rating is likely if they aren't fixed. (3)If the contractor's performance begins to suffer or they fail to make progress, you can begin the termination for default process. A cure notice would be an appropriate first step.

What additional liabilities does the contractor incur when a fixed-price contract is terminated for default (in lieu of a termination for convenience)?

REFERENCE: FAR 49.402-2; FAR 49.402-7 ANSWER: The Government is not liable for the contractor's costs on undelivered work and is entitled to the repayment of advance and progress payments, if any, applicable to that work. Additionally, the contractor is liable to the Government for any excess costs incurred in acquiring supplies and services similar to those terminated for default (i.e. excess re-procurement costs), and for any other damages, whether or not repurchase is effected. Other damages can be any other ascertainable damages, including administrative costs, as a result of the contractor's default.

You are the PCO on a CPFF program which includes Army and Navy personnel as well as personnel from your program office. The contractor contacts you to advise that additional costs have been incurred which result in a cost overrun. What actions do you take?

REFERENCE: FAR 52.232-22 & -23 (Limitation of Cost/Funds Clauses) ANSWER: Since this is a CPFF contract, either the Limitation of Cost or Limitation of Funds clause was required (depending on whether incrementally funded). These clauses require the contractor to notify the CO in writing when expected costs to be incurred within the next 60 days, when added to all previously incurred costs, will exceed 75 percent of the NTE cost, or when the total cost will be either greater or substantially less than had been previously estimated. My first question in this case is: why I am just hearing about this now if an overrun has already occurred? The contractor did not notify me as required by these clauses. These specific clauses also state that the Government is not obligated to reimburse the contractor for costs incurred in excess of the estimated cost specified in the contract. Additionally, the contractor is not obligated to continue performance or incur excess costs until the CO notifies the contractor in writing that the estimated cost has been increased and provides a revised estimated total cost of the contract. No notice, communication, or representation in any form other than this, or from any person other than the CO, shall affect the contract's estimated cost to the Government. All that being said, I could take a hard line in this case and tell the contractor that they were under no obligation to incur the additional costs and that it is not the Government's responsibility to pay them. But I would likely try to get some facts first. Was this overrun caused by existing requirements on the contract, or was it for work not specifically required? If the former, you could process as a normal cost overrun and determine if you should fund it, reduce the scope of the effort to match available funding, or terminate the effort. If the latter, you might have a strong case to take a hard line and deny the costs, or you may even have an unauthorized commitment on your hands that would require ratification. Moving forward, I would let the contractor know that it is unacceptable not to notify the Government as required by the Limitation of Cost/Funds clauses.

When is product acceptance not conclusive?

REFERENCE: FAR 52.246-2(k) ANSWER: Acceptance shall be conclusive, except for latent defects, fraud, gross mistakes amounting to fraud, or as otherwise provided in the contract.

You receive a letter from a contractor requesting a no cost time extension (NCTE). The contractor states that he is behind schedule due to his subcontractor's slow progress. Your program manager concurs with the request for the NCTE and suggests that it be processed as an "Excusable Delay". He says it is an "Excusable Delay" because the delay is not the fault of the prime contractor. How would you respond?

REFERENCE: FAR 52.249-14 ANSWER: Assuming this is a CR contract that includes the Excusable Delays clause, the subcontractor's slow progress may or may not be an excusable delay. In general, an excusable delay is defined as something beyond the reasonable control of the contractor, and without its fault or negligence, such as, acts of God or the public enemy, acts of the Government, fires, floods, epidemics, quarantine restrictions, strikes, unusually severe weather, and delays of common carriers. If the subcontractor's slow progress is the result of one of these excusable delays, then the prime would not be held in default either (unless the CO directed the purchase from another source and the contractor failed to comply). If the subcontractor's slow progress results from another reason, the prime will be in default and an excusable delay is not appropriate. The CO can either extend the PoP and receive some type of consideration, terminate for default, or work out some other mutually beneficial solution with the contractor.

What is Public Law 85-804?

REFERENCE: FAR Subpart 50.1; Government Contracts REFERENCE Book, 4th Ed ANSWER: Public Law 85-804 empowers agencies to enter into or amend a contract without regard to other provisions of contract law, when the President considers that such action would facilitate the national defense. Denoted "extraordinary contractual action," this power is used to give contractors additional compensation, without regard to their legal entitlement, when an actual or threatened loss under a defense contract, however caused, will impair the productive ability of a contractor whose continued performance on a contract or as a source of supply is found to be essential to national defense. In other words, we pay the contractors additional money to keep them in business because what they're providing is too essential to national defense to lose (but only after exhausting other contractual remedies). There are three types of relief/contract adjustment available: (1)Amendments without consideration: addressing actual/threatened loss by modifying the contract (2)Correcting mistakes: rectifying mistakes/ambiguities that have impacted contractual performance (3)Formalizing informal commitments: rectifying unauthorized commitments

How do you determine whether or not a change is within the scope of the contract?

REFERENCE: GAO Case LawANSWER: The scope of a contract is not defined in regulations but is a fact-specific inquiry based on GAO decisions. The relevant cases are those in which a competitor has filed a bid protest arguing that the modification is so far outside the original scope for the contract that it should be considered a new contracting action for which other companies should be allowed to compete. In general, a modification is considered to be outside the scope of an existing contract when there is a "material difference" between the contract as modified and the contract as it existed before the modification. The rule is to examine any changes in the type of work, performance period and costs between the contract as awarded and as modified. The PCO must look at the Acquisition Plan, the SOW, the PNM, J&A, to determine if the change was contemplated by the parties at the time of contract award. Neither dollar amount nor quantity of changes are sole determinants in deciding whether a change is in or out of scope. The proposed change must also be evaluated with the consideration as to whether it would have significantly affected the original competition (more or different offerors, different technical approaches in the proposals, use of commercial items, etc.).

What is a contingent liability? Give two examples. How is it funded? What are the PCO's responsibilities when one is identified?

REFERENCE: GAO-05-734SP; DoD 7000.14-R, Vol 3, Ch 8; AFI 65-601v1; Government Contracts REFERENCE Book, 4th Ed ANSWER: An existing condition, situation, or set of circumstances that poses the possibility of a loss to an agency that will ultimately be resolved when one or more events occur or fail to occur. A contingent liability has not ripened into a definite obligation and thus is not recordable as such. However, funds must be committed to cover the liability in the event that the contingency ripens, so as to avoid a violation of the Anti-Deficiency Act. Some examples of contingent liabilities are available, but unearned, award fees, target cost to ceiling overruns on FPIF, fixed-price contracts containing escalation, upward adjustments under savings clauses, etc. As the PCO, funds are committed for these liabilities at the time of contract award at levels sufficient enough to cover the additional obligations that will probably materialize (i.e. "most probable cost" - this is based on judgment and experience, and you do not necessarily have to commit to ceiling/maximum prices). It is your job to document these liabilities, including when they will likely take place, ensuring the correct year & appropriation funds are committed/budgeted, and also review such commitments over time to determine if funds should be reduced or released. SAF/FM has suggested maintaining contingent liability matrices for all contracts, with funds to be committed for all contingent liabilities classified as "probable." All ACAT I and II programs must identify and describe "probable" and "possible" contingent liabilities and estimated obligation dates. In August of fiscal year 2013 (FY13), you awarded a contract to XYZ Company for $15,000 to assemble and deliver 10 leather reclining chairs for your newly upgraded VTC room. The Air Force needs these chairs by December to host a VTC with Congressional staffers to discuss better ways to make federal employees work longer hours for less pay. XYZ Company proposed to assemble and deliver the chairs in approximately three months. This contract was properly funded with FY13 Air Force Operations and Maintenance (3400) money. XYZ Company delivered the chairs on Friday, November 15, 2013, and you accepted delivery at the loading dock. On Monday, November 18, three Airmen from your office went to the loading dock to move the chairs into the VTC room. When they arrived at the loading dock, they discovered that the chairs had been stolen over the weekend. Security Forces opened an investigation, but to date do not have any leads. The VTC is now only a few weeks away. However, you learn that you can place an order off an existing ID/IQ contract from a company that can assemble and deliver 10 new chairs in time for the VTC. The program manager wants you to use the $15,000 in FY13 O&M funds that your organization was not able to spend before the end of the fiscal year. He explains that because the need for these chairs arose in FY13, you should be able to use FY13 funds to replace the stolen chairs. Can you use FY13 funds to replace these chairs? Why or why not? REFERENCE: 31 U.S.C. 1502(a); GAO B-197274; GAO B-226198; GAO-04-261SP Appropriations Law—Vol. I ("Red Book"), p. 5-20 ANSWER: You may not use FY13 funds to replace these chairs. The bona fide needs rule is one of the fundamental principles of appropriations law: A fiscal year appropriation may be obligated only to meet a legitimate, or bona fide, need arising in, or in some cases arising prior to but continuing to exist in, the fiscal year for which the appropriation was made. There are situations in which it is not only proper but mandatory to use currently available appropriations to satisfy a need that arose in a prior year. We refer to this as the "continuing need." If a need arises during a particular fiscal year and the agency chooses not to satisfy it during that year, perhaps because of insufficient funds or higher priority needs, and the need continues to exist in the following year, the obligation to satisfy that need is properly chargeable to the later year's funds. An unfulfilled need of one period may well be carried forward to the next as a continuing need with the next period's appropriation being available for funding. Thus, an important corollary to the bona fide needs rule is that a continuing need is chargeable to funds current for the year in which the obligation is made, regardless of the fact that the need may have originated in a prior year. In this scenario, the chairs represent a continuing need, which is therefore chargeable to the current fiscal year (here, FY14). This situation is almost identical to one the GAO discussed in 1987. In late fiscal year 1986, the U.S. Geological Survey ordered certain microcomputer equipment, to be delivered in early fiscal year 1987, charging the purchase to fiscal year 1986 funds. The equipment was delivered and accepted, but was stolen before reaching the ordering office. The decision held that a reorder, placed in fiscal year 1987, had to be charged to fiscal year 1987 funds. The fact that the need for the equipment arose in 1986 was immaterial.

The contracting officer awards a Firm-Fixed-Price contract to remove and replace perimeter fencing. The contract was awarded 29 September 12 for a total price of $2.6M with the period of performance ending 28 September 13. The contract was funded with FY12 3400 (O&M) type funds. At the time the contract was awarded, the actual location of the (fencing) boundary had not been fully established. A clear zone of 50 feet must be maintained on either side of the boundary. The chosen boundary location will minimize impacts to parking and airfield operations. The contractor is requesting additional funding to demolish 4 buildings that impede the perimeter boundary location. The Government estimates the cost to demolish the 4 buildings will be $96,662 and is requesting to use FY12 3400 funds. Based on the above situation, is the work to demolish the 4 buildings within the general scope of the contract? If so, is it acceptable to use FY12 expired funds?

REFERENCE:Answer: It was not anticipated at the time of the award that the buildings would encroach on the "clear zone". The work to demolish the 4 buildings is within-scope of the contract due to differing site conditions. Use of FY12 expired funds is acceptable since the bona fide need occurred in FY12.REFERENCEs: AFI65-601 Vol 1, 6.3.7, Within-Scope Contract Changes Within-scope contract changes include contract changes that you can charge to expired accounts. For within-scope contract changes, use the same fiscal year funds as for the related obligation unless you cannot satisfy the bona fide need rule for the same year. Examples of changes that are normally with-in scope are: Increased costs because of differing site conditions. The CO must take the following actions: Since it was not anticipated at the time of contract award that the 4 buildings would have to be demolished, process a modification for an equitable adjustment and obligate FY12 3400 funds.

As part of a depot level maintenance contract, the Contracting Officer (CO) awarded a Cost-Plus Fixed Fee (CPFF) modification on 30 Sep 2013 to strip and repaint a particular aircraft for an estimated ceiling price of $9.4M. The effort was fully funded with FY13 Operations and Maintenance (O&M) funds and the period of performance was 60 days. On 12 May 14, the contractor advised of schedule delays and performance issues that led to a $4.5M overrun on this non-severable effort. The CO requested FY13 O&M funds from finance to cover the overrun. Based on the above situation, is FY13 funding appropriate for this effort?

REFERENCE:Answer: No, use current year or FY14 funding. The cost overrun is within the scope of the original contract and the cost increase exceeded the estimated ceiling. The discretionary change to increase the contractually set ceiling results in a new obligation chargeable against current year funds. REFERENCEs: FAR Clause 52.232-20, Limitation of Cost (Apr 1984)(d)(2) The Contractor is not obligated to continue performance under this contract (including actions under the Termination clause of this contract) or otherwise incur costs in excess of the estimated cost specified in the Schedule, until the Contracting Officer (i) notifies the Contractor in writing that the estimated cost has been increased and (ii) provides a revised estimated total cost of performing this contract. AFI 65-601, V1, par. 6.3.7.5. Change orders to cost reimbursement contracts with a limitation of cost or limitation of funds clause that cause the contract ceiling to be exceeded, and which are not based on antecedent liability, enforceable by the contractor, shall be charged to funds legally available when the contracting officer grants the discretionary increase. Comp. Gen. Decision 609, 23 September 1982 Discretionary cost increases in cost reimbursement contracts which exceed contractually stipulated ceilings set forth in limitation of cost clauses and which are not enforceable by the contractor are properly chargeable to funds available when the discretionary increase is granted by the contracting officer. The CO must take the following actions: If the CO intends to grant the increase to the ceiling, obtain current year funds to fund the cost overrun via modification.

Contracting Officer (CO) exercised an option on 01 Oct 12, conditioned upon the "Availability of Funds" clause, FAR 32.703-2. Exercised option includes continuing A&AS severable services that will be funded with FY13 3400 funds when they become available. A pre-contract cost agreement is not included as part of the exercised option. Contractor continues performing tasks in accordance with PWS and Program Management continues supporting meetings with the contractor without funds on contract to cover the effort. Based on the above situation, can the Government continue to accept those services and support meetings with the contractor without funds?

REFERENCE:Answer: No. FAR 32.703-2 -- Contracts Conditioned Upon Availability of Funds "(c) Acceptance of supplies or services. The Government shall not accept supplies or services under a contract conditioned upon the availability of funds until the contracting officer has given the contractor notice, to be confirmed in writing, that funds are available."

Contracting Officer (CO) awards a FFP contract for kitchen renovation at a dining hall facility. The contract was awarded on 31 Aug 12 for a price of $300K (3400 type funds) and completion date of 30 June 13. On 01 Nov 12 the contractor notified the CO that after removal of the dry wall, asbestos had been discovered. The contractor is requesting additional funding to remove the asbestos. Based on the above situation, is the work required to remove the asbestos within the general scope of the contract? If so, what fiscal year funds are required?

REFERENCE:Answer: Yes, the additional effort to remove the asbestos could not have been reasonably detected during the pre-solicitation site inspection. Since the original renovation requirement has not changed and the discovery of asbestos is considered a differing site condition, FY12 funds are required. REFERENCEs: "52.236-2 -- Differing Site Conditions (Apr 1984) (a) The Contractor shall promptly, and before the conditions are disturbed, give a written notice to the Contracting Officer of -- (1) Subsurface or latent physical conditions at the site which differ materially from those indicated in this contract; or (2) Unknown physical conditions at the site, of an unusual nature, which differ materially from those ordinarily encountered and generally recognized as inhering in work of the character provided for in the contract. (b) The Contracting Officer shall investigate the site conditions promptly after receiving the notice. If the conditions do materially so differ and cause an increase or decrease in the Contractor's cost of, or the time required for, performing any part of the work under this contract, whether or not changed as a result of the conditions, an equitable adjustment shall be made under this clause and the contract modified in writing accordingly." "AFI 65-601 Vol 1 - Within-Scope Contract Changes Differing Site Conditions - Increased costs due to differing site conditions such as Acts of God, or inclement weather." The CO must take the following actions: Determine a fair and reasonable equitable adjustment and obtain FY12 3400 funds to obligate on the contract.

Contracting Officer (CO) awards a T&M contract and incrementally funds the Labor CLIN. All of the standard T&M type contract and payment clauses are negotiated into the contract. Based on the above situation, is there a potential ADA violation?

REFERENCE:Answer: Yes. Discussion: T&M and Labor Hour Contracts/CLINs cannot be incrementally funded unless a deviation to FAR 52.232-7 is obtained. Clause - FAR 52-232-7, "Payments Under Time and Materials and Labor Hour Contracts" paragraphs: (c) requires the contractor to give best efforts to complete performance up to the point at which the contract's ceiling price is reached (d) limits the Government's liability to the ceiling price (e) Government not obligated to pay the contractor in excess of the ceiling price FAR 52.232-7 is the mandatory T&M payment clause. FAR 1.401(c) prevents a contracting officer from modifying FAR 52.232-7 without a FAR Deviation. This supports the conclusion there is no authority to incrementally fund T&M contracts. Paragraphs (d) and (e) of FAR 52.232-7 require the contractor to give best efforts to complete performance up to the point at which the contract's ceiling price is reached; and paragraph (e) of FAR 52.232-7 limits the Government's liability to the ceiling price. This language is inconsistent with an incrementally funded arrangement where the contractor is only required to perform up to the amount obligated to the contract and the Government's liability is limited to the obligated amount. An ADA violation exists if funds are not obtained to cover the complete ceiling amount on the T&M contract. The CO must take the following actions: Obtain and obligate, on the contract, funds to cover the entire T&M ceiling amount.

Recent focus has been on decreasing the amount of time it takes to negotiate a contract. There are several current examples of contracts that are taking months to negotiate from the date of business clearance to the handshake. What can you do, as the PCO, to shorten this timespan?

ANSWER: As the PCO on the effort, you have the ability to negotiate "rules of engagement" before the negotiation actually begins. You need to, with your counterparts, establish written rules regarding who the major participants will be, where negotiations will be conducted, a schedule for completion of negotiations, how much time will be permitted between offers and counteroffers, whether negotiations will be on the telephone, in person, or by e-mail, whether DCAA will participate, and whether you will accept "updated" proposals for anything other than BIG changes (not just rate changes, etc.). I would establish that anything that could be handled at the negotiation table to "update" the proposal should not require an updated written proposal. I would keep the contractor aware of exceptions all along the way to avoid surprises in negotiations.

You brief an objective at Business clearance. At negotiations, the Contractor is willing to settle at a number higher than your objective. What do you do?

REFERENCE: AFFARS 5301.9000 ANSWER: If the Business Clearance Approval Authority provided no latitude, you can: Reject the offer and continue negotiations. Shake hands contingent upon CAA approval of the number (this seems applicable only if face-to-face negotiations; if email based, seek CAA approval before hand shake). Get a subsequent Business Clearance from the CAA.

Identify and describe the key events that occur in the pre-award process starting from need identification to contract award. Use an example from your career to illustrate your knowledge of the pre-award process.

REFERENCE: AFLCMC Standard Process A02 - Acquisition Strategy RFP ANSWER: The below key events are generally what is followed for a competitive acquisition. These are outlined in AFLCMC's Standard Process for Acquisition Strategy/RFP:Need identification; Begin acquisition planning, Market research, Risk assessment, Develop draft documents: ASP brief, AP, J&A (if req'd), RFP, SSP, Conduct MIRT 1, ASP approval; Continued RFP development, Exchanges with industry for draft RFP, Conduct MIRT 2, Conduct peer review, Finalize draft RFP; Acquisition Plan approval; Obtain SSA approval of SSP; Legal Review; Business Clearance; SSA approval to release RFP; RFP releas; Conduct source selection IAW SSP; Award contract Any example from your career that ties these steps in should demonstrate your knowledge of the process.

You are the PCO on a major competitive aircraft program that is preparing to issue the RFP to start source selection. What types of requirements documents would you expect to see in the RFP?

REFERENCE: AFLCMC Standard Process A02: Acquisition Strategy/RFP; FAR Subpart 11.1 ANSWER: There are a variety of acceptable answers, but normally at AFLCMC we would expect to see these two types of requirements documents in this major program RFP: 1.A Statement of Objectives (SOO) specifies all the objectives for the program in terms of business and technical outcomes and management emphasis. The government normally would ask each offeror, as part of their proposal, to submit a proposed Statement of Work (SOW) in response to the RFP SOO to be evaluated as part of source selection and for eventual inclusion in the offeror's final contract if they were to be the winning offeror. 2.A Systems Requirements Document (SRD) would specify the aircraft technical details that would be required of all offerors in source selection. Normal, LCMC practice is that each offeror would respond to the RFP SRD with a proposed system and/or air vehicle specification that would capture both the required features from the SRD as well as the unique features of the aircraft to be proposed. The system and/or air vehicle specifications would be evaluated as part of the source selection evaluation, then would become the unique contractual specification for the winning offeror's contract. Regardless of format, the requirements documents should specify: the tasks, how they should be done under the contract, what characteristics the product should have, how it should perform, how it will be tested and supported, etc.

You're a PCO and your buyer, Bob, has just concluded negotiations on a $5.2M cost plus fixed fee contract. At the conclusion of negotiations, the contractor asked Bob how long it would be before they would receive the signed contract. The contractor is very anxious to get started on the work because he doesn't have enough work to keep his employees on the payroll. If the contract you and Bob are awarding doesn't start soon, the contractor will be forced to lay off some of his employees. Bob tells the contractor that it shouldn't take more than 5 days to get the fully executed contract awarded. The contractor tells Bob that he may even be willing to begin work prior to contract award but he's concerned that all of his costs won't be recognized once the contract is awarded. Bob tells the contractor that he'll talk to you to see if there are any contracting tools that can be used in this situation. What advice would you give Bob the buyer in this scenario?

REFERENCE: AFMC MP 5304.101-90 ANSWER: If you feel there is enough justification to allow the contractor to begin early, you could seek COCO approval for an early effective date. To use an early effective date, you need to have agreement on terms, conditions, and price, and funds must be available. You will need to advise the contractor in writing that only allowable, allocable, and reasonable costs will be accepted (same as those incurred after award), and that if the contract does not materialize, the costs must be at the contractor's own risk. You can provide contractual coverage with a letter contract or other UCA action. If the envisioned contract award date is more than 30 days from the early effective date, obtain legal review.

You are the PCO in a division at AFLCMC. You have a requirement that you have determined to be sole source after conducting market research. The estimated value of the requirement is $70M. You write a J&A document citing the appropriate authority. What are the thresholds for approval of J&A documents, and who is the approval authority at this threshold?

REFERENCE: AFMC MP 5306.304 ANSWER: Approval authority for J&As under $650K has been delegated to the PCO. Approval authority for greater than $650K, but less than $12.5M is the Competition Advocate (not further delegable). Approval authority for greater than $12.5M but less than $85.5M has been delegated to the Director of Contracting (for AFLCMC) or to the AFMC/CA if the J&A is within the AFPEO/CM portfolio and certain conditions are met. This authority is delegable to a General Officer or SES. Finally, approval authority for greater than $85.5M needs is the Senior Procurement Executive (not further delegable). Since our estimate is for $70M, our approval authority would be the AFLCMC Director of Contracting, Mr. Robinson.

MIRTS and Peer Review are hot topics in today's acquisition arena. Describe the differences between a MIRT and a Peer Review.

REFERENCE: DFARS 201.170; AFFARS 5301.170; AFFARS MP 5301.9001(b) ANSWER: Multi-functional Independent Review Teams (MIRTs) are comprised of cross-functional subject matter experts (SMEs). They act as an advisor to the Clearance Approval Authority (CAA) by validating each critical decision point (CDP), and are based on policy established in 2009. When clearance is required, the CAA must use a MIRT if the acquisition is over $50M and competitive, but the CAA may waive the MIRT or even specific CDPs within the MIRT based on acquisition/source selection history and procurement/source selection experience of the acquisition team (MIRTs 1 & 4 are currently waived up to the level of the SCCO's authority - $1B for competitive). Also, at the discretion of the CAA, MIRTs can be used for competitive acquisitions < $50M or for sole-source at any dollar threshold. The CAA appoints the SMEs to constitute the MIRT, and they will review and assess CDPs as advisors. MIRTs will convene an out-brief with the source selection team at the conclusion of each CDP. There are 2 Pre-Business Clearance CDPs: (1) Review draft ASP brief/draft AP, and (2) Review Sections L & M of the RFP. The final 3 CDPs are Pre-Contract Clearance: (3) Review draft Competitive Range Brief or Award w/o Discussions Brief, (4) Review draft FPR, (5) Review draft Source Selection Decision briefing. Peer Review kicks in when we have an acquisition over $1 billion. There are three Peer Reviews required for competitive acquisitions, and two Peer Reviews required for sole source acquisitions. They are pre-solicitation, pre-FPR, and pre-award for competitive. They are pre-negotiation and pre-contract award for sole source. Peer reviews are also advisory, and are made up of senior leaders across DoD. DPAP chairs the peer review. Peer Reviews are also required POST-AWARD for service contracts over $1 billion.

You are the Contracting Offier negotiating an unclassified substantial research effort with a large business as the Prime Contractor. During negotiations the Contractor notifies you that one of its subcontractors, a Large University whose unique capabilities make it a major player in the effort, refuses to accept the DFARS clause 252.204-7000, Disclosure of Information. You want this clause included to prohibit the prime or its subs from releasing potentially sensitive information without your permission. The University has advised the prime they feel so strongly that this clause would impair their academic freedom that they will not participate in this effort unless the clause is removed. What should you consider in formulating your response?

REFERENCE: DFARS 204.404-70; DFARS 252.204-7000 ANSWER: The clause in question is required in solicitations and contracts when the contractor will have access to or generate unclassified information that may be sensitive and inappropriate for release to the public. If you truly believe that there will be sensitive information generated (confirm with the PM, legal office, and Foreign Technology Office to determine if military critical technologies will in fact be produced), you should not agree to delete this clause. The clause just requires that the contractor (and subcontractors) get permission from the PCO before release of information, not that all information disclosure is unauthorized out of principle. If explaining this distinction does not quell the university's fears, perhaps it might be possible to designate certain portions of the effort as "protected," requiring prior approval to release, with other portions that the university could release on its own. It would also be helpful to know if the university's portion of the effort even deals with anything that is sensitive.

In a Weighted Guidelines, there are 2 factors in the Performance Risk section - Technical and Management/Cost Control. All of which have a range of 3-7% with a norm of 5%. What type of considerations would lead you to above normal in Cost Control?

REFERENCE: DFARS 215.404-71-2 ANSWER: For the management/cost control factor (they are not separate), the CO can assign a higher than normal value when there is a high degree of management effort. Indicators of this are: (1)The contractor's value added is both considerable and reasonably difficult; (2)The effort involves a high degree of integration or coordination; (3)The contractor has a good record of past performance; (4)The contractor has a substantial record of active participation in Federal socioeconomic programs; (5)The contractor provides fully documented and reliable cost estimates;(6)The contractor makes appropriate make-or-buy decisions; or (7)The contractor has a proven record of cost tracking and control.The contracting officer may justify a maximum value when the effort— (1)Requires large scale integration of the most complex nature; (2)Involves major international activities with significant management coordination (e.g., offsets with foreign vendors); or (3) Has critically important milestones.

What is the difference between Long Lead items and Advance Procurement?

REFERENCE: DFARS 217.103; DFARS 217.172(g)(2); Government Contracts REFERENCE Book, 4th Ed ANSWER: Long-lead items are those components of a system or piece of equipment for which the times to design and fabricate are the longest and, therefore, to which an early commitment of funds may be desirable in order to meet the earliest possible date of system completion. For planning purposes, long-lead items might be ordered during engineering development to arrive in time for the start of production. Advance procurement is an exception to the full funding policy that allows acquisition of long-lead items or economic order quantities of items in a fiscal year in advance of that in which the related end item is to be acquired. These items must be funded in advance to maintain a planned production schedule. DoD is authorized to use this technique in multiyear procurement.

You have been working as the PCO for a Colonel program manager who is ambitious, very results-driven, and somewhat forceful, but has only been in acquisition for a few months after a noteworthy career as a fighter pilot. The Colonel sends you an e-mail telling you that, since the organization has not really had the time to properly plan the award of a new contract, he is directing that an Undefinitized Contract Action (UCA) be used to preserve schedule. The Colonel also summons you to his office to discuss the issue. As you gather your thoughts and prepare to meet with the Colonel, how would you proceed?

REFERENCE: DFARS 217.7403; AFMC MP 5317.7404-1(91) ANSWER: According to the regulations, lack of planning is not a bona fide reason to issue a UCA - as a matter of fact, UCA approval documentation should include coverage of acquisition planning accomplished to avoid the use of a UCA. The PCO should point this out to the Colonel, but attempt to work with the Colonel to determine alternative ways to keep on schedule or to justify issuing a UCA. One course of action might be the Option to Extend Services clause, which could buy time for proper acquisition planning for the new requirement. The PCO should inform his/her chain about the situation to get some support at higher levels.

What techniques can be used to incentivize contractors to support definitization of UCAs?

REFERENCE: DFARS 217.7404-3 ANSWER: Submitting a qualifying proposal IAW the definitization schedule is a material element of performance of the contract. If the contractor doesn't submit a timely proposal, the CO can suspend or reduce progress payments, or take other appropriate action. Other actions could include documenting failure in CPARS, reducing profit under Management/Cost Control due to poor management practices, or lowering award fee determinations.

How should your Weighted Guidelines profit calculation for UCAs be different?

REFERENCE: DFARS 217.7404-6 ANSWER: When the final price of a UCA is negotiated after a substantial portion of the required performance has been completed, the HCA shall ensure the profit allowed reflects: (1)Any reduced cost risk to the contractor for costs incurred before negotiation of final price (2)Contractor's reduced risk for costs incurred during performance for rest of contract (3)The requirements of DFARS 215.404-71-3(d)(2) regarding lowering risk value to as low as 0% in WGL under contract type risk for actual costs incurred & document risk assessment in file (PNM)

What is a Savings/Reopener Clause and when might you use it?

REFERENCE: DFARS 242.7502(g); DFARS 244.305-70(f) ANSWER: A Savings/Reopener Clause is a special contract provision (H clause) which creates explicit authority for an equitable adjustment to the contract price. The equitable adjustment can be triggered by the occurrence of an event, the non-occurrence of an event, or some future event or condition which has an unpredictable outcome (a contingency). If parties cannot mutually agree to resolve the contingency during negotiations, they may consider using this type of clause. A savings/reopener clause should only be used in extraordinary situations, where time does not permit resolution of the contingency and the uncertainty of the contingency could cause a significant impact to the contract price. The only place this is addressed in the regulations is twice in the DFARS. In those two instances, it recommends a reopener clause as one option to mitigate purchasing or accounting system deficiencies that are identified during negotiations. If the CO believes the negotiations should continue without giving the contractor time to fix the issue and the proposal, they could add a savings/reopener clause that would adjust the contract amount after award. Other instances where this may be used in practice are for adjustments for negotiations conducted in the absence of FPRA/FPRRs. A downward only adjustment could be used to protect the Government if the contractor agrees to it.

You are the PCO on a new acquisition and have just received the DCAA audit for the $12M proposal that you received last month. The audit had $100,000 in questioned material costs, and $100,000 in unsupported costs for the subcontractor labor hours. As you put together your clearance charts for the effort, you realize that you have only decremented $30,000 from the proposed materials costs in building your objective, and you find that decrement to be fair and reasonable. You have decremented the entire $100,000 that was unsupported in the audit from the costs proposed for the subcontractor labor, and you find that decrement to be fair and reasonable. What must you do?

REFERENCE: DFARS PGI 215.406-1 ANSWER: Back in 2009, the DPAP director released a memo that covers this exact scenario, and guidance is now included in DFARS PGI 215.406-1. When the PCO has a significant disagreement with an auditor's recommendation, there are several required responsibilities. But it first helps to know the definition of a "significant disagreement." This term means that the CO is planning to sustain less than 75% of the total recommended questioned costs in a DCAA audit report for contracts or contract modifications greater than $10 million. Note that it does not include unsupported/unresolved costs. In the scenario, a significant disagreement has occurred because the acquisition is over $10M and I've decided to sustain only 30% of DCAA's recommended questioned costs. The PGI says I must first have a discussion with the auditor and document the disagreement in writing to the auditor. Then, I must document the disagreement in the pre-negotiation objective (or pre-business clearance). If business clearance is approved, then the disagreement is supported and I may proceed with the negotiation. However, if the auditor doesn't agree with my decision, then DCAA has three days to elevate the issue, which could go all the way to USD AT&L and the Comptroller. So I must have some very good rationale for not sustaining an additional $45K, so that I will be able to defend my decision at all levels.

You have a fixed price incentive firm (FPIF) contract, awarded as the result of a source selection. Although the government team, during its source selection assessment, believed that it was likely that the contractor would go to ceiling, the SPO has obligated funds only to cover target price, and have no funds reserved beyond that. The contractor has just notified you that he has completed a detailed Cost To Complete, and now estimates he will have a significant overrun, probably going to ceiling. He advises that he will still complete the work on schedule (12 more months of work), but will exceed the funds obligated on the contract in 4 months. What do you do?

REFERENCE: DoD 7000.14-R, Vol 3, Ch 8; AFI 65-601v1; FAR 52.232-20 ANSWER: First of all, as a result of the Government team's source selection assessment, the funding required to go from target price to ceiling should have been considered as a known contingent liability, and sufficient funds should have been committed to cover it. Since that is not the case, the PM/PCO need to request these funds now be committed to the program. If they are not available, the following alternatives exist: (1) Program office can try to obtain more funds from sources outside of program to fund this overrun (if this search is going to take time, and the program office is confident they will eventually get the funds, may have to issue stop work order (partial or full) while trying to obtain funds; (2) contract can be downsized in requirements to fit funding (not likely at this late date); (3) terminate for convenience. In any event, the contractor should be immediately put on notice that the Government's maximum liability is the funding obligated on the contract, that the contractor is not obligated to work beyond that funding, and the Government is not obligated to pay the contractor for anything beyond that amount of funding.

How does a PCO get their authority?

REFERENCE: FAR 1.602-1; FAR 1.603-1 ANSWER: FAR 1.602-1 states that Contracting Officers must receive clear written instructions as to the limits of their authority from the appointing authority. FAR 1.603-1 states that agency heads or their designees may select and appoint contracting officers and terminate their appointments. For AFMC, the role of appointing official has been delegated to the Senior Center Contracting Official (SCCO), i.e. AFLCMC Director of Contracting. In a broader sense, authority to pay debts and obligate the Government stems from Article 1, Section 8 of the Constitution, which grants that authority to Congress. Congress gives authority to the Department of Defense, who in turn gives authority to the Assistant Secretary of the Air Force (Acquisition) (ASAF(A)), then to the MAJCOM SCO (HQ AFMC/PK), to the SCCO (AFLCMC Director of Contracting), and ultimately to the PCO.

Under what circumstances is ratification of an unauthorized commitment permitted? In general, what are the generic Air Force (AFFARS) procedures for handling ratification actions? Who are the approval authorities for ratifications?

REFERENCE: FAR 1.602-3; AFFARS 5301.602-3; AFFARS MP 5301.602-3 ANSWER: According to the FAR, there are several limitations/circumstances that apply before ratification is permitted: Supplies or services have been provided to and accepted by the Government, or the Government otherwise has obtained or will obtain a benefit resulting from performance of the unauthorized commitment; The ratifying official has the authority to enter into a contractual commitment; The resulting contract would otherwise have been proper if made by an appropriate contracting officer; The contracting officer reviewing the unauthorized commitment determines the price to be fair and reasonable; The contracting officer recommends payment and legal counsel concurs in the recommendation, unless agency procedures expressly do not require such concurrence; Funds are available and were available at the time the unauthorized commitment was made The ratification is in accordance with any other limitations prescribed under agency procedures. In general, the basic AFFARS MP is: The PCO begins investigation (asks for docs and evidence); and the Commander (where commitment occurred) provides w/in 30 days to PCO: Report on facts, corrective actions, disciplinary action, signed statement from person involved, relevant documentation/records regarding the unauthorized commitment. The PCO collects and analyzes and if ratification is appropriate, prepares file, that includes: Summary of facts by PCO that addresses all elements from FAR 1.602-3 Legal opinion Invoice from contractor Report from commander as above Ratification statement (per language of reg If more than $30K, PCO forwards file through wing commander for review by SCO/SCCO (per language in reg). After execution by the appropriate authority, the CO processes. The contract and the ratification statement are included in the contract. AFFARS MP 5301.602-3 says that PCOs may use ratification template when preparing ratifications The approval authority for ratification is HCA, but has been delegated per MP 5301.601(a)(i) to the SCCO (>$30K) or the COCO (<$30K).

You have been assigned as the Contracting Officer for a new acquisition and the requirement has just been briefed by the Colonel as the Wing's number one priority. The Program Manager approaches you with a draft sole-source J&A and asks for your review and comment. Upon review you note that no mention of Market Research is made and the PM later confirms that none was accomplished as the Wing wants to use their "usual" contractor; she also tells you that she isn't really sure why any would be necessary or where to begin the research. What should you do?

REFERENCE: FAR 10.002 ANSWER: You should inform her that market research is usually the foundation for sole-source or limited competition and without it (unless one of the other exceptions in FAR 6.302 applies) you cannot process the J&A. You should also ensure that she understands that the market research will demonstrate if a commercial item is available, or could be modified, to meet the Government's requirement, thereby saving time and money in the development and delivery of the item. Bottom line, we won't be proceeding with the J&A without performing market research and exploring all options first. You should direct her to FAR Part 10 which provides several avenues of conducting market research, some of which are: 1. Contacting knowledgeable individuals in Government and industry regarding market capabilities to meet requirements. 2.Reviewing the results of recent market research undertaken to meet similar or identical requirements. 3.Publishing formal requests for information in appropriate technical or scientific journals or business publications. 4.Querying the Government-wide database of contracts and other procurement instruments intended for use by multiple agencies available at www.contractdirectory.gov and other Government and commercial databases that provide information relevant to agency acquisitions. 5.Participating in interactive, on-line communication among industry, acquisition personnel, and customers. 6.Obtaining source lists of similar items from other contracting activities or agencies, trade associations or other sources. 7.Reviewing catalogs and other generally available product literature published by manufacturers, distributors, and dealers or available on-line. 8.Conducting interchange meetings or holding pre-solicitation conferences to involve potential offerors early in the acquisition process.

What are some factors to consider when establishing contract delivery or performance schedules?

REFERENCE: FAR 11.401 and 11.402 ANSWER: Contracting officers shall ensure that delivery or performance schedules are realistic and meet the requirements of the acquisition. If too short, it might restrict competition, limit small business, and may cost more. Some factors to consider are: 1. Urgency of need; 2. Industry practices; 3. Market conditions; 4. Transportation time; 5. Production time; 6. Capabilities of small business concerns; 7. Administrative time for obtaining and evaluating offers and for awarding contracts; 8. Time for contractors to comply with any conditions precedent to contract performance; 9. Time for the Government to perform its obligations under the contract (e.g. furnishing GFP).

When acquiring commercial items, what contract type(s) are normally used? What type(s) are prohibited?

REFERENCE: FAR 12.207; DFARS 212.207 ANSWER: Firm-fixed-price contracts or fixed-price contracts with economic price adjustment are required for purchasing commercial items. However, if commercial services are being acquired and certain conditions are met, then a T&M or labor-hour contract may also be used. DFARS Part 212 places additional restrictions on those types of commercial service contracts. Indefinite-delivery contracts may be used where the prices are established based on a firm-fixed-price or fixed-price with economic price adjustment. These contract types may be used in conjunction with an award fee and performance or delivery. Use of any other contract type is prohibited.

You are the Contracting Officer on a large aircraft program. The engine is provided to the Prime Contractor as GFE and is purchased via a separate contract as a commercial item; engine spare parts (replenishment spares) are also purchased as commercial items as they also meet the FAR definition of commerciality. This morning you receive a call from the OSI informing you of an investigation they are conducting regarding inconsistencies in billing for engine spare parts between your contract and another commercial contract. OSI tells you that the Government's contract prices are 5% higher than the "other" commercial customer they are using as a comparison. Do you have a problem? What should you do?

REFERENCE: FAR 12.209 ANSWER: Not necessarily. The first thing I would do is caution OSI in jumping to conclusions based on comparison with a commercial contract. For starters, since you've already awarded this one, you likely accomplished extensive market research and made the determination that the price you're paying is both fair and reasonable. Next, I suspect that if there is a significant difference between the commercial contract and the Government contract, the terms and conditions might be different. FAR Part 12 says that when determining price reasonableness of commercial items, we must be aware of customary commercial terms and conditions when pricing. Therefore, I would challenge OSI to consider all aspects of the terms and conditions. For instance, is the period of performance for both contracts the same? Are the deliverables exactly the same? Does one have accelerated delivery? Does one include labor whereas the other is parts only? Were there any extended warranty provisions? These are the types of questions that lead me to believe that OSI might not be comparing apples to oranges. The Government may have unique requirements that lead to a higher price, such as limits on periods of performance (where commercial customers could secure better deals for long-term contracts) and unique warranty requirements. Configuration or numeric/quantity differences could also affect the overall contract values. You have likely accounted for all these things when determining this acquisition fair and reasonable in the first place, so you should be able to send that analysis to OSI. But without further information from the commercial contract, you can't go much farther. Finally, it is worth discussing with OSI what they mean by "billing inconsistencies". Commercial contracts are largely limited to fixed price vehicles, where the contractor will only bill once the items are delivered and accepted (commercial financing is typically rare, but could be authorized in some situations though). There shouldn't really be any room for discrepancies in billing for this reason. You could get OSI in touch with DCMA and/or DFAS to get to the bottom of these types of inconsistencies. Regardless of whether you negotiated the best deal, the contractor should not be able to bill in excess of the awarded price.

You are the Contracting Officer for a commercial item acquisition. The Program Manager comes to your office and asks you to explain how a commercial item is supported for reasonableness. You tell the PM that FAR has an order of pREFERENCE that involves three steps. Please explain what these three steps are and provide examples of each step.

REFERENCE: FAR 12.209; FAR 15.402; DPAP Memo (4 Feb 15) - Commercial Items and the Determination of Reasonableness of Price for Commercial Items ANSWER: Commercial items are exempt from the requirement of certified cost or pricing data. However, we must still determine reasonableness of the offered price. FAR 15.402 says that we shall obtain other than certified cost or pricing data as necessary, in the following order of pREFERENCE: (1) No additional data from the offeror if price is based on adequate price competition, (2) Data other than certified cost or pricing data, such as (A) Data related to prices, or (B) Cost data to the extent necessary to determine a fair and reasonable. Within (2)(A), there is a three step flow of retrieving the data: First - Determine if information is available within the Government. Examples - prices from other Government contracts, AFLCMC/PKF historical information, government independent cost estimates, historical data from other government services or agencies, records within DCAA and DCMA. Second - Determine if information is available from sources other than the offeror. Examples - Market Research, published market prices, published price lists from both the offeror and other vendors, information requested from other vendors. Third - Obtain information from the offeror. Examples - Prices at which the same or similar items have previously been sold in the commercial marketplace (sales data), catalogs, market priced items (market quotes from the vendor), cost or pricing data from the vendor that will not be certified. FAR 12.209 says that we should also be aware of customary commercial terms and conditions when pricing commercial items. Commercial items are affected by factors that include speed of delivery, length and extent of warranty, limitations of seller's liability, quantities ordered, length of performance period, and specific performance requirements. These things could lead to differences between Government requirements and commercial contract comparisons.

What are some conditions a bidder might impose that would cause rejection of its bid? Why would the Government want to reject the bid?

REFERENCE: FAR 14.404-2(d) ANSWER: Bids shall be rejected in cases where the bidder: 1.Protects against future changes in conditions, such as increased costs, if total possible costs to the Government cannot be determined; 2. Fails to state a price and indicates that price shall be "price in effect at time of delivery;" 3. States a price but qualifies it as being subject to "price in effect at time of delivery;" 4.When not authorized by the invitation, conditions or qualifies a bid by stipulating that it is to be considered only if, before date of award, the bidder receives (or does not receive) award under a separate solicitation; 5.Requires that the Government is to determine that the bidder's product meets applicable Government specifications; or 6.Limits rights of the Government under any contract clause. These imposed conditions would modify requirements of the invitation or limit the bidder's liability to the Government, and, as a result, would be prejudicial to other bidders. For this reason, the bid must be rejected.

You have been assigned as the CO for a new source selection. The Program Manager wants to receive brief written abstracts, followed by oral proposals and makes a convincing case that, from an evaluation standpoint, this is the easiest method to assess the offerors' technical abilities. What are some things you should both consider before proceeding?

REFERENCE: FAR 15.102 ANSWER: While oral presentations can be effective in streamlining the source selection process and may be a suitable method for gathering information from offerors, the FAR recommends taking four things into consideration beforehand: (1) The Government's ability to adequately evaluate the information: What components of the oral presentation will be tied to evaluation factors? Does the Government have adequate technical resources to document and review each oral presentation (audio, video, transcription, etc)? Will the presentation style influence or sway the results (i.e. will the best-presented offeror outperform the most capable)? (2)The need to incorporate any information into the resultant contract: Will terms and conditions result from the oral presentation that have to then be transcribed into the PWS/contract? (3) Impact on the efficiency of the acquisition: How many prospective offerors are there? What if way more offerors actually respond? Will this presentation method attract those who are less qualified? Does the Government have the time/schedule/facilities to accommodate everyone? Will this method actually create efficiencies as compared to written proposals? (4)The impact (including cost) on small businesses. Will this method actually restrict competition? Is it possible to accommodate teleconferencing/ videoconferencing instead of on-site?

You are in a source selection and according to the RFP the offerors are to submit a paper copy and an electronic version of their offer. One offeror submits both versions, on time, one hour before closing time for receipt of proposals. However, the next day, when the electronic version is loaded to begin evaluations, it is found to be defective and cannot be read. What do you do and why?

REFERENCE: FAR 15.207(c) ANSWER: Check to make sure the paper version is complete and acceptable for evaluation. Then you may either use it or ask the offeror to submit another electronic version. Once you verify that it is the same as the paper version you already have, use the new electronic version. Why? No one has been harmed or disadvantaged by this, the government could have evaluated the paper version alone so the electronic version is merely for the convenience of the government. FAR part 15 says that if any portion of a proposal received by the contracting officer electronically or by facsimile is unreadable, the contracting officer immediately shall notify the offeror and permit the offeror to resubmit the unreadable portion of the proposal. The method and time for resubmission shall be prescribed by the contracting officer after consultation with the offeror, and documented in the file. The resubmission shall be considered as if it were received at the date and time of the original unreadable submission for the purpose of determining timeliness under 15.208(a), provided the offeror complies with the time and format requirements for resubmission prescribed by the contracting officer.

In source selections for negotiated competitive acquisitions, what factors, as a minimum, must be addressed or evaluated? Describe how you would evaluate each factor?

REFERENCE: FAR 15.304(c); FAR 15.305; DoD Source Selection Procedures ANSWER: The FAR guidance states that there are two factors that must be addressed in all source selections, as well as a third one if certain thresholds are met. The first is price or cost to the Government. Second, the quality of the product or service is evaluated through one or more non-cost factors, such as past performance, compliance with solicitation procedures, technical excellence, management capability, personnel qualifications, and prior experience. The third factor is past performance, and it is included in all source selections for negotiated competitive acquisitions that exceed the SAT. However, DoD Class Deviation 2013-O0018 increases the thresholds for various categories of acquisition: (1)For systems and operations support contracts > $5M (2)For services and information technology contracts > $1M (3)For ship repair and overhaul contracts > $500KWhile each acquisition might be slightly different, section M of your solicitation will state exactly how each factor is evaluated. Section M will be developed with the DoD Source Selection Procedures in mind. Price or cost to the Government is normally evaluated through cost or price analysis; however, in a negotiated competitive acquisition, competition normally establishes price reasonableness. For FFP or fixed-price with EPA, comparison of proposed prices usually satisfies the requirement for price analysis. For cost-reimbursable, a cost realism analysis shall be performed. Next, technical factors are evaluated through one of two methodologies: combined technical/risk rating or separate technical/risk rating. Both methods have associated rating tables in the DoD Source Selection Procedures that are meant to reflect the degree to which the proposed approach meets or does not meet minimum performance/capability requirements. Finally, past performance comes from multiple Government and non-Government sources and must first be recent (as defined in the solicitation), but then is rated on whether it is relevant and how well it was performed. The DoD Source Selection Procedures ultimately yield a performance confidence assessment for past performance.

You were the Contracting Officer for a source selection that bought 500 engine trailers based on adequate price competition from Engine Trailers, Inc. Three months later a decision was made to buy an additional 50 trailers from this company. As a Contracting Officer for this follow-on buy, would you need to request certified cost or pricing data or would it be acceptable to buy from this same source based on the TINA exception for adequate price competition?

REFERENCE: FAR 15.403-1(c)(1)(iii) ANSWER: It would be acceptable to buy the additional 50 trailers based on the TINA exception for adequate price competition per FAR 15.403-1(c)(1)(iii) which states "A price is based on adequate price competition if price analysis clearly demonstrates that the proposed price is reasonable in comparison with current or recent prices for the same or similar items, adjusted to reflect changes in market conditions, economic conditions, quantities, or terms and conditions under contracts that resulted from adequate price competition." Since the trailers are being procured only 3 months later, the "recent prices for the same or similar items" appears to be the reason that these still fall under adequate price competition.

What types of questions would you ask in order to determine if a waiver to certified cost or pricing data (TINA waiver) is proper for an upcoming requirement? Who would you ask?

REFERENCE: FAR 15.403-1(c)(4); DFARS 215.403-1; DFARS PGI 215.403-1 ANSWER: My first thought is that it's called "an exceptional case waiver" for a reason. To get the waiver approved by HCA (not delegable), DFARS says the HCA determination must show that:(1)The property or services being purchased by the government cannot be reasonably obtained without granting the waiver; (2)The price can be determined reasonable without submission of cost or pricing data; (3)There are demonstrated benefits to granting the waiver. Most of my questions would revolve around answering these three DFARS requirements as they apply to my acquisition. For instance, some questions might be: 1. Are there alternate ways of procuring the supplies/services that won't require a waiver? 2. For what reasons would the source not be able to provide certified cost or pricing data? 3.Is there a potential significant deficiency with their estimating system?4.How will I accomplish price analysis to determine price reasonableness since I likely won't have cost or pricing data? 5.For price analysis, what data is already available, what is needed from the contractor, and will they cooperate? 6.What adjustments to similar items are necessary to make apple-to-apple comparison for pricing? 7. Would the subcontractor(s) also need a waiver? 8.What are the demonstrated benefits of the waiver, and does it make good business sense? If I believe that I may meet the requirements for a waiver, I would obviously talk with my contracting chain about their experiences with waivers. Then I would ask the SME in AFLCMC/PK and/or the Pricing team to give me some background on previously approved waivers and a template to use. DCAA & DCMA would also be good resources for collecting data for price analysis. AFFARS & AFMC MP list the routing requirements for the completed waiver.

One of the exceptions to getting certified cost or pricing data is a waiver (commonly called a TINA waiver, despite TINA's name change). If a large contractor who does military business, such as Boeing, comes to you with a request for a waiver, what do you do?

REFERENCE: FAR 15.403-1(c)(4); DFARS 215.403-1; DFARS PGI 215.403-1 ANSWER: There are very few reasons that an exceptional case waiver would be approved in general, but with a company like Boeing that has an adequate estimating system and regularly provides certified cost or pricing data, it would be a hard sell to the HCA. But I would at least do my due diligence by analyzing Boeing's request, following up with questions as necessary, and seeing if the waiver holds merit. To get the exceptional case waiver approved by HCA (not delegable and AFFARS & AFMC MP list the routing requirements), DFARS says the HCA determination must show that: (1)The property or services being purchased by the government cannot be reasonably obtained without granting the waiver; (2)The price can be determined reasonable without submission of cost or pricing data; (3)There are demonstrated benefits to granting the waiver. There are also additional Congressional reporting requirements for waivers over $15M (also includes commercial items over $15M).

The subject of this question is waivers to certified cost or pricing data. According to the FAR, the Head of the Contracting Activity (HCA) may waive the requirement for submission of cost or pricing data in exceptional cases. There are two parts to my question. First, can this waiver power be delegated by the HCA to a lower level? Second, how are subcontractors handled when requesting a waiver for an acquisition?

REFERENCE: FAR 15.403-1(c)(4); FAR 1.108(b) ANSWER: One of the FAR conventions is that each authority is delegable unless specifically stated otherwise. In the case of the waiver, FAR 15.403-1(c)(4) specifically states that the approval is not delegable below the HCA. Next, the same paragraph of the FAR says that award of any subcontract expected to exceed the cost or pricing data threshold requires the submission of cost or pricing data unless: (1) An exception otherwise applies to the subcontract; or (2) The waiver specifically includes the subcontract and the rationale supporting the waiver for that subcontract.

Compare and contrast price analysis and cost analysis. Describe when each is used.

REFERENCE: FAR 15.404-1 ANSWER: Both price analysis and cost analysis are ways of analyzing a proposal to determine whether the final agreed-to price is fair and reasonable. Whereas price analysis only considers the final price, cost analysis breaks down and analyzes the separate cost elements and then combines them back together to arrive at the final price. Price analysis shall be used when cost or pricing data is not required. This makes sense, because you typically won't have insight into the individual cost elements when cost or pricing data is not required, such as with commercial items, when certified cost or pricing data exceptions apply, or anything under the threshold. Sometimes you might request (in an effort to determine fair & reasonable pricing) and receive the same exact data that would be provided for cost analysis, but it just won't be certified. Some specific techniques for performing price analysis are: (1)Comparison of proposed prices received in response to the solicitation. (Preferred) (2)Comparison of proposed prices to historical prices paid, whether by the Government or other than the Government, for the same or similar items (Preferred) (3)Use of parametric estimating methods/rough yardsticks (4)Comparison with competitive published price lists, public market prices of commodities, similar indexes, and discount or rebate arrangements (5)Comparison of proposed prices with Independent Government Cost Estimates (6)Comparison of proposed prices with prices obtained via market research for the same/similar items (7)Analysis of data other than certified cost or pricing data provided by the offeror... Cost analysis shall be used to evaluate the reasonableness of individual cost elements and profit/fee when certified cost or pricing data is required. It requires judgment to determine how well the proposed costs represent what the cost of the contract should be, assuming reasonable economy and efficiency. After completing the cost analysis, you should also use price analysis to verify that the overall price is fair and reasonable (though not required). Some techniques for performing cost analysis are: (1)Verification of cost data or pricing data and evaluation of cost elements, to include: the necessity for and reasonableness of proposed costs; projections of the offeror's cost trends; reasonableness of estimates generated by parametric models or cost-estimating relationships; and the application of audited or negotiated indirect cost rates, labor rates, and cost of money or other factors (2)Evaluating the effect of the offeror's current practices on future costs (3)Comparison of costs proposed by the offeror for individual cost elements with: actual costs previously incurred by the same offeror; previous cost estimates for the same/similar items; other cost estimates received in response to the Government's request; IGCEs by technical personnel; and forecasts of planned expenditures (4)Verification that the offeror's cost submissions are IAW contract cost principles and CAS (5)Review to determine whether any cost or pricing data required for a suitable proposal have not been submitted (6)Analysis of the results of any make-or-buy program reviews, in evaluating subcontract costs

You awarded a FAR Part 15 $50M FFP competitive contract to a small business 6 months ago. You are now in the process of issuing a $750K modification to that contract. The contractor submits a cost proposal, but states they will not provide a certificate of current cost or pricing data. Are you ok with this? Is there an exception that applies under these circumstances?

REFERENCE: FAR 15.404-3 ANSWER: My initial reaction to the contractor's statement is that they likely do not understand the FAR requirements in this situation or are confused about what the certificate constitutes. I say that for several reasons. First, since there was likely adequate price competition at time of award, the small business may be unfamiliar with the process of submitting a certificate. Second, they already provided the data, but just haven't been willing to certify it. Third, it is a common confusion that their judgments of the currency, accuracy, and completeness could later be called into question, when in fact, it is only whether they relied upon data at the time of the modification that was current, accurate, and complete to the best of their knowledge. If I explain all of these things and there is still an unwillingness to provide the certification, there might be deeper issues at play such as estimating system deficiencies or potential shady business practices.

You have a cost proposal subject to the Truthful Cost or Pricing Data statute and there is a subcontract over the certified cost or pricing data threshold. The prime has not been forthcoming about providing a cost evaluation of the sub. What actions can you take?

REFERENCE: FAR 15.404-3 ANSWER: There are a lot of unknown variables in this scenario and a lot depends on what type of acquisition it is - sole source or competitive. If this were a competitive acquisition, depending on the evaluation criteria, this could have been a proposal deficiency and gotten the contractor thrown out of the competitive range if it chose not to cooperate. However, it is more likely this is referring to a sole source situation on something like an Engineering Change Proposal so that is my primary assumption. Depending on the discussions we've already had, I will first submit something in writing to the contractor that shows exactly what is required by the FAR and how the prime's proposal is currently deficient as a result. I would give the prime a suspense to submit the analysis (and potentially even the subcontractor's certified cost or pricing data if the subcontract is over $12.5M or over 10% of the overall price). If the suspense is not met, then we will begin to take more drastic measures. Things that I would try include: withholding award and taking the issue to my supervision for guidance/resolution; considering a joint review of the sub with the prime (perhaps the sub does not want to disclose proprietary information to the prime, so they might even want to work directly with the Government); notifying DCAA/DCMA about the potential procuring/estimating system deficiency; alerting the prime that their inability to work with/manage their subs will be reflected on their CPARS report; and considering lowering the profit objective on the proposal as a disincentive (reduction of management/cost control factor).

You are the CO on a new R&D program. Proposals were recently received in response to a Broad Agency Announcement, and a Cost Plus Fixed-Fee (CPFF) type contract is anticipated. The proposal most favored by the technical team was priced significantly under the Government estimate. The contractor proposed fee is an amount that equates to 20% of the estimated cost. The Program Manager (or user) has more than enough funds to cover the entire proposed price and wants you to accept the price as is. How should you advise the Program Manager (or user) and what factors should you consider in determining a reasonable fee?

REFERENCE: FAR 15.404-4(c)(4)(i) ANSWER: The statutory limitation on CPFF type contracts does not permit fee to exceed 15% of the estimated cost for experimental, developmental, or research performed under a CPFF contract. As the proposed amount of fee is outside the statutory limitations you need to determine what a fair and reasonable rate is that falls inside the limitations. The FAR recommends a structured approach for determining fee such as Weighted Guidelines, which considers four primary factors. These factors are performance risk, contract type risk, facilities capital employed and cost efficiency. I would tell the PM that I cannot accept the proposal as-is, but I plan to come up with a reasonable profit figure using Weighted Guidelines, then negotiate fee with the contractor (assuming costs are already acceptable/reasonable).

You as the Contracting Officer are involved in a very difficult Firm Fixed Price negotiation which is proposed at $120M. At the present time the two sides are $15M apart. The Air Force maximum position would allow movement of $8M. The Program Manager is concerned about the length of time the negotiation is taking and has asked you about the possibility of offering the contractor a 50/50 split of the present positions. What would be your response?

REFERENCE: FAR 15.405; FAR 15.406-1 ANSWER: If a fair and reasonable price for the government to pay is no more than the $8M that they can move...then splitting the difference is paying more than the taxpayer should fairly and reasonably pay. As a contracting officer, you must keep in mind that you are a steward for the taxpayer, and splitting the difference will not even guarantee that you will be successful in negotiating it, and it is not a fair and reasonable price. The Government should never offer a 50/50 split with the contractor for the following reasons: If the contractor says no, which is very likely with this magnitude of difference, the Government team has nowhere to go. The credibility of the AFNT is gone since it is now obvious that only the Government management can settle the acquisition. A move of this sort allows for little additional room for management to adjust (in this case, only $500K). If you reserve the right to go back to your previous position if the split is not accepted you would be in the same situation as telling the jury to ignore the previous statement. In other words, the contractor now knows you can go at least to the split position and they will continue negotiating with this knowledge. The FAR makes clear in 15.405, that if the contractor insists on a price or demands a profit or fee that the PCO considers unreasonable, the PCO needs to refer the contract action to a level above the PCO, and document the file accordingly.

Please describe the concept of a TINA cut-off date and some things you would consider before granting one as a Contracting Officer.

REFERENCE: FAR 15.406-2; AFMC Contracting Bulletin Dec 2014 ANSWER: FAR 15.406-2, which provides the language of the Certificate of Current Cost or Pricing Data, allows data to be certified on "an earlier date agreed upon between the parties that is as close as practicable to the date of agreement on price." That earlier date would be the TINA cut-off date. Generally, the use of cutoff dates is not encouraged, as their use represents a relinquishment of Government rights. Additionally, in this era of digital data, and information available at the click of a mouse, cut-off dates are not nearly as relevant as they were in years past. However, here are a few things a CO should consider before granting one: 1.It is rarely a good idea to agree to a cutoff date for the entire proposal. Rather, it's best to apply them only to items of cost that are stable and predictable during the period between cut-off date and negotiation date (e.g. labor standards based on report issued once/month) 2.Utilize a date as close as possible to the actual conclusion of negotiations (i.e. not 6 months prior!) 3.If using for certain pieces of data, call out specifically in Certificate and any accompanying data log. 4.Review the Certificate to ensure dates match those previously agreed to and language matches FAR 5.Document arrangement fully in PNM 6.Contact legal counsel if there are any concerns

Please define what a Certificate of Current Cost or Pricing Data is and what is its purpose? What does a contractor's signature on the certificate constitute? What are some of the key things you would expect to see or review before accepting the certificate?

REFERENCE: FAR 15.406-2; AFMC MP 5315.406-2 ANSWER: A Certificate of Current Cost or Pricing Data is typically a one-page document, formatted IAW FAR 15.406-2 that states that, to the best of the contractor's knowledge, the cost or pricing data submitted with its proposal is current, accurate, and complete as of the date of agreement on price or, if applicable, an earlier date agreed upon between the parties that is as close as practicable to the date of agreement on price. The purpose is to have the company commit to the accuracy, completeness, and currency of submitted data. If the data is later found to be incorrect or appropriate data was not submitted, the government reserves the right to downward contract price adjustment for any monetary damages incurred. It is important to note that the certificate does not constitute a representation as to the accuracy of the contractor's judgment on the estimate of future costs or projects. Rather, it applies to the data upon which the judgment or estimate was based. This distinction between fact and judgment should be clearly understood. In other words, the contractor uses its judgment with the current, accurate, and complete information it has at the time to make projections about future costs. If those costs later change, we cannot fault the contractor's judgment for not seeing the change coming. They relied on the data they had at the time, and that data was the most current, accurate, and complete available. There are several key things we would expect to see or review before accepting a Certificate of Current Cost or Pricing Data. The first big assumption here is that there are no exceptions to certified cost or pricing data that would make the certificate unnecessary. Assuming that is the case, the certificate must be in the exact format as shown in FAR 15.406-2, with all blanks filled in. These blanks include the proposal number, the date negotiations were concluded and price agreement reached or an earlier agreed upon date, the firm's name, signature, name, and title of an authorized representative of the company, and date of execution as close as practicable to the date negotiations were concluded and price agreement reached. Second, if the contractor completed a data sweep and submitted new cost or pricing data with its certificate, follow the procedures in AFMC MP 5315.406-2, which basically requires a price impact summary from the contractor and state that the price can only be adjusted downward (or net zero change).

Provide a brief description of defective pricing and name at least one thing you can do during the pre-award process as a contracting officer in order to protect the government's interest during the post-award process.

REFERENCE: FAR 15.407-1 ANSWER: Defective pricing is any certified cost or pricing data found to be or have been inaccurate, incomplete, or noncurrent. The implicit assumption here is that the contractor had additional information available at the time of price agreement (i.e. the "as of" date on the Certificate of Current Cost or Pricing Data) that shows their negotiated price was not based on accurate, complete, and current data. To prevent this situation, there are a few things you can do during the pre-award process: (1)Documentation: Your PNM must REFERENCE what data the contractor provided and your reliance on it when making a fair and reasonable determination. If you did not relay on the data, this must also be stated in the PNM. Be sure to include all data provided by the contractor in the official contract file. (2)Clauses: Ensure that the clauses prescribed in FAR 15.408(b) and (c) are included in the contract - FAR 52.215-10, Price Reduction for Defective Cost or Pricing Data and 52.215-11, Price Reduction for Defective Cost or Pricing Data - Modifications. These clauses also list the Government's entitlements if defective pricing is found, such as interest on overpayments and a penalty payment. (3)Certificate: Make sure you fully review it! Ensure it is in the exact format shown in FAR 15.406-2 and that it does not contain any caveats or attempts to limit the Government's rights in any way. If there is a list of data attached to the cert as having been disclosed, confirm it was all disclosed. (4) Waivers: Only pursue waivers that meet criteria in the FAR and are in the best interests of the Gov't. (5)Disclosure: If the contractor refuses to provide data, get the refusal in writing. This is extremely important as it is an excellent tactic to get the data you need. If a contractor is crazy enough to put in writing a refusal to give data, then the Government may have enough evidence to pursue remediation in the future. (6)Data sweeps: Avoid them if at all possible. If your contractor chooses to provide one, ensure you follow the procedures of the AFMC MP regarding these sweeps. The guidance basically says that a price impact summary must be submitted and that the contract price can only be adjusted downward (or net zero). If they refuse to provide this summary, but them on notice in writing. Always document the sweep and your review of the sweep as part of the PNM.

You are near the conclusion of a high-dollar value negotiation with your contractor. The contractor has mentioned a data sweep to your Program Manager who in turn has come to you with a couple of questions: What is a data sweep? Is it required by the government, and what is its purpose? The PM also indicated that the contractor mentioned the sweep could result in an upward or downward adjustment to the negotiated price and he wants to know if this is true.

REFERENCE: FAR 15.407-1; AFMC MP 5315.406-2; CPRG Vol 4 Ch 5 ANSWER: A data sweep is the term given to the extensive reviews many contractors like to do following agreement on price in negotiations but prior to submitting their Certificate of Current Cost or Pricing Data. The objective of a data sweep is to protect the contractor from charges of defective pricing at a later date by identifying any new or revised data that will make the contractor's data current, accurate, and complete. The offeror then submits the new or revised data with its Certificate of Current Cost or Pricing Data. Data sweeps have taken several months to complete for a single contract in some instances. It is NOT required by the Government and it could indicate serious flaws in the contractor's estimating system if it takes more than 30 days. It has long been held by the DoD Inspector General that the contract price should not be increased as a result of data submitted after price agreement, which is consistent with post-award audits where offsets are only allowed up to the amount the contract was increased due to defective pricing. AFMC MP says that when a contractor submits additional cost or pricing data after the date of agreement on price, but before contract award, which is current as of the date of agreement on price, the contracting officer shall: (1)Require the contractor to provide a price impact summary which separately reflects price increase and price decrease impacts on the negotiated price; (2)Allow only a downward price adjustment; a net zero adjustment may be considered when valid price increase offsets are present; and (3)Require that the "as of" date on the Certificate of Current Cost or Pricing Data be the date of agreement on price rather than the date the additional data was submitted.

What are some of the main conditions necessary to have defective pricing?

REFERENCE: FAR 15.407-1; DCAA Contract Audit Manual, Chapter 14-102 ANSWER: The DCAA CAM states that five conditions are necessary to prove defective pricing: (1)The information in question fits the definition of cost or pricing data (2)Accurate, complete, and current data existed and were reasonably available to the contractor before the agreement on price (3)Accurate, complete, and current data were not submitted or disclosed to the Contracting Officer or one of the authorized representatives of the CO (4)The government relied on the defective data in negotiating with the contactor (5)The government's reliance on the defective data caused an increase in the contract price

You are the PCO and have been unable to reach an agreement with the contractor on price. There is a difference between the ACO and contractor on both the direct and indirect rates. The Forward Pricing Rate Agreement was withdrawn last month and the ACO has published a Forward Pricing Rate Recommendation. If you move away from the recommended rates, you believe you might be able to quickly complete negotiations. What are your responsibilities regarding the ACO's rate recommendations?

REFERENCE: FAR 15.407-3; DFARS 215.407-3; FAR 42.1701; DPAP Memo - Forward Pricing, 11/16/11 ANSWER: The FAR/DFARS says that we must use the FPRA rates when available, and must seek HCA waiver (delegated to SCO/SCCO) in order to deviate. The guidance does not mention FPRR rates, however. A DPAP policy memo from 2011 stated that COs should use DCMA FPRAs when they exist, and FPRRs to establish pre-negotiation objectives when FPRAs do not exist. This memo also stated that a CO may, as a result of more current data, determine the FPRR/FPRA does not accurately reflect the particulars of the negotiation and deviate from them. COs are expected to discuss such exceptions with the DCMA CACO or DACO, as well as document their rationale in business clearance/PNM. As the PCO, you should have used the FPRR to develop your pre-negotiation objectives. You cannot now change your rates for the sake of expediency, as your goal is to find the proposal fair and reasonable, not to finish negotiations quickly. If you believe you have a valid reason, however, such as new information received as part of the negotiation, you could likely justify the deviation (after discussing with the ACO as well). If the changes increase your objective and impact your negotiation range, you may also have to seek clearance approval for revised latitude. You would want to document all of this in your PNM.

Tell me everything you know about excessive pass-through costs.

REFERENCE: FAR 15.408(n); FAR 52.215-22 & FAR 52.215-23; FAR 31.203(i) ANSWER: Excessive pass-through charges are defined in FAR 52.215-23 as a charge to the Government by the contractor or subcontractor that is for indirect costs or profit/fee on work performed by a subcontractor (other than charges for the costs of managing subcontracts and any applicable indirect costs and associated profit/fee based on such costs), when the contractor/ subcontractor adds no or negligible value to the contract/subcontract. In other words, these are charges where the contractor tries to sneak in additional costs or profit/fee on work performed solely by one of their subs when they (the prime) add nothing to the value chain. They are unallowable by FAR Part 31. PCOs must include the pass-through charge clause/ provision whenever the estimated contract value is over the certified cost or pricing data threshold and the contract type (for DoD) is anything except FFP, fixed-price with EPA, or fixed-price incentive contracts awarded for commercial items or on the basis of adequate price competition. The clauses can also be added below the threshold when the CO determines them appropriate. The clause states that the Government will not pay excessive pass-through charges and that it is the PCO's responsibility to determine if they exist. The clause also says that the contractor is required to notify the PCO in writing if the prime changes the amount of the subcontracted effort such that it is more than 70% of the total cost of work to be performed and must verify that they will provide value (applicable to all tiers and prime is required to insert substance of this clause in all subcontracts, with limited exceptions). If the PCO determines that excessive pass-through charges exist, the Government is entitled to a price reduction in the amount of the charge.

Is this adequate disclosure on the part of the contractor? Why or why not? If not, what else would you like to have?

REFERENCE: FAR 15.408, Table 15-2 ANSWER: The contractor is required to provide sufficient supporting documentation for its costs, including costs already incurred. Unless there is a key somewhere in the original proposal, this data is meaningless as I have no insight into what these charge codes stand for. I need to be able to discern what these hours are for and when they were applied. Therefore, I would need to know the exact labor categories reflected by the codes, the dates and times hours were incurred, and if possible, the specific tasks accomplished during those hours.

As the Contracting Officer on a source selection you recently sent out the notice to unsuccessful offerors and have received several requests for debriefings. Some of the requests are for pre-award debriefs and some are for post award debriefs. What are the things you may/may not tell the offerors in the debriefings?

REFERENCE: FAR 15.505; FAR 15.506 ANSWER: Based on the scenario, it appears that the notices were sent to offerors excluded from the competitive range or otherwise excluded from the competition before award. Within 3 days of receiving the notice, offerors can either request a pre-award debriefing, or delay the debriefing until after award. For those requesting a pre-award debriefing, the debriefing shall include, at a minimum: (1) The agency's evaluation of significant elements in the offeror's proposal; (2) A summary of the rationale for eliminating the offeror from the competition; and (3) Reasonable responses to relevant questions about whether source selection procedures contained in the solicitation, applicable regulations, and other applicable authorities were followed in the process of eliminating the offeror from the competition. Pre-award debriefings shall not disclose: (1) The number of offerors; (2) The identity of other offerors; (3) The content of other offerors proposals; (4) The ranking of other offerors; (5) The evaluation of other offerors; or (6) Any of the information prohibited in 15.506(e) For those who chose a post-award debrief, they shall include, at a minimum: (1) The Government's evaluation of the significant weaknesses or deficiencies in the offeror's proposal, if applicable; (2)The overall evaluated cost or price (including unit prices), and technical rating, if applicable, of the successful offeror and the debriefed offeror, and past performance information on the debriefed offeror; (3)The overall ranking of all offerors, when any ranking was developed by the agency during the source selection; (4)A summary of the rationale for award; (5)For acquisitions of commercial items, the make and model of the item to be delivered by the successful offeror; and (6)Reasonable responses to relevant questions about whether source selection procedures contained in the solicitation, applicable regulations, and other applicable authorities were followed. The debriefing shall not include point-by-point comparisons of the debriefed offeror's proposal with those of other offerors. Moreover, the debriefing shall not reveal any information prohibited from disclosure by 24.202 or exempt from release under the FOIA, including (15.506(e)): (1)Trade secrets; (2)Privileged or confidential manufacturing processes and techniques; (3)Commercial and financial information that is privileged or confidential, including cost breakdowns, profit, indirect cost rates, and similar information; and (4)The names of individuals providing REFERENCE information about an offeror's past performance

You are a PCO who has just been assigned as a trainer for a new employee. The new employee's name is Condoleezza. You are helping Condoleezza prepare for her first kick-off meeting for a new buy. She has been researching and gathering information pertaining to contract types. She's not very clear on the differences between a cost type contract and a fixed price contract. As a result of her research, she thinks that all Government contracts should be fixed price. She just can't understand why anyone would want to award a cost type contract. What advice or input would you offer to Condoleezza?

REFERENCE: FAR 16.101 - 16.104; FAR 16.301-2 - 16.301-3 The FAR says that an FFP contract, which best utilizes the basic profit motive of business enterprise, shall be used when the risk involved is minimal or can be predicted with an acceptable degree of certainty. However, when a reasonable basis for firm pricing does not exist, other contract types should be considered, and negotiations should be directed toward selecting a contract type that will appropriately tie profit to contractor performance. In other words, while the Government prefers fixed price, there are times when other contract types, including cost type, are appropriate and necessary. Cost type contracts are generally used when requirements are complex or not well-defined or there are uncertainties involved in contract performance that do not permit costs to be estimated with sufficient accuracy to use any type of fixed-price contract. In these cases, the Government assumes more of the risk in an attempt to attract more contractors and increase competition. The use of cost-type contracts does have other requirements, such as an adequate accounting system and appropriate Government surveillance. The CO must document the rationale for selecting contract type in the contract file. R&D is a prime example of a situation where a cost-type contract would be most appropriate.

You are a brand new Contracting Officer and the first question that the Program Manager asks is the following. What are the four most commonly used contract types and what is the order from the most risky to the Government to the least risky?

REFERENCE: FAR 16.101 ANSWER: In order of most to least risk to the Government, the four most common contract types are: Cost Plus Fixed Fee (CPFF), Cost Plus Incentive Fee (CPIF), Fixed Price Incentive Firm (FPIF), and Firm Fixed Price (FFP). The riskiest to the government is CPFF followed by CPIF, FPIF, and FFP.

Per FAR 16.102(c), a Cost-Plus-Percentage-of-Cost contract type is not to be used for Government contracting. Please define what a Cost-Plus-Percentage-of-Cost contract type is and the logic behind why it is prohibited.

REFERENCE: FAR 16.102 ANSWER: A Cost-Plus-Percentage-of-Cost contract type is when an agreement is made to apply a pre-determined fee rate against actuals that will be incurred in the future. This type of contract is prohibited because it would incentivize the contractor to run up costs in order to maximize its earned fee. If you apply a pre-determined fee rate against a negotiated prospective cost line, this is not a Cost-Plus-Percentage-of-Cost contract type.

What are some factors that should be considered when selecting and negotiating contract type?

REFERENCE: FAR 16.104; DFARS 216.104-70 ANSWER: The FAR lists the following as factors to consider: price competition, price analysis, cost analysis, type and complexity of the requirement, combining contract types, urgency, period of performance, contractor's technical capability and financial responsibility, adequacy of the contractor's accounting system, concurrent contracts, proposed subcontracting, and acquisition history. DFARS adds a PGI to assist in selecting the appropriate R&D contract type.

You are the Contracting Officer for a $500M acquisition that has a period of performance spanning six years. Because of the long period of performance, you are in agreement with the contractor that the contract includes an Economic Price Adjustment (EPA) clause. When the contractor sends in their clause you notice that the rate of inflation in the clause is 3% per year. You ask your Price Analyst what rate of inflation is in the proposal and she responds with 6%. Does this difference between the 3% and the 6% concern you and if so, why?

REFERENCE: FAR 16.203-2(a); DFARS PGI 216.203-4; AFMC MP 5316.203-4 ANSWER: This difference is definitely a concern. The FAR says that when establishing a base level, the PCO should make sure that contingency allowances are not duplicated in both the base price and the adjustment requested by the contractor under the EPA clause. The two rates need to be validated against each other so that the clause is not "gamed" in order for the contractor to receive additional money through the EPA clause that is not reasonable. In this particular example, the contractor's EPA clause notes a base of 3% inflation. Let's say the actual rate of inflation was 5%. According to the EPA clause, they would be upward adjusted an extra 2% to meet the 5% actual inflation rate. However, they've built 6% inflation into their proposal, which already fully covered the actual inflation. Therefore, between the extra 2% from the clause and the 6% built in, the contractor is receiving 8% inflation, which over the proposed rate and is essentially windfall profit.

Describe some basic elements of a cost-reimbursement contract? What requirements must be met before a cost-reimbursement type contract can be used?

REFERENCE: FAR 16.301 ANSWER: These 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. Cost-reimbursement contracts are suitable only when circumstances do not allow the agency to define its requirements sufficiently to allow for a fixed-price type contract or uncertainties involved in contract performance do not permit costs to be estimated with sufficient accuracy to use any type of fixed-price contract. They may be used only when the factors for selecting contract type have been considered, a written acquisition plan has been approved and signed at least one level above the CO, the contractor's accounting system is suitable, and there will be appropriate Government surveillance during performance.

You are doing contracting planning for an ACAT III R&D acquisition involving prototype hardware and your program manager has expressed a desire for a CPIF contract. You are aware that the law now favors fixed-price contract types for development but a cost contract can be used with justification to and approval by the program Milestone Decision Authority. What issues would you discuss with your program manager to arrive at a decision on contract type considering FPIF and CPIF as your two alternatives?

REFERENCE: FAR 16.401(c); FAR 16.403-1; FAR 16.405-1ANSWER: Some of the issues to discuss would be comparing & contrasting CPIF with FPIF to see what best fits the acquisition: 1. Since fixed price contracts require delivery or performance for the contractor to be paid, FPIF requires a tighter specification and/or work statement and requires definitive criteria for acceptance of deliverables or acceptable performance. CPIF requires only "best effort" for contractor payment and generally has more flexibility for the program team to resolve issues without large cost penalties for the contractor. 3. FPIF normally has a higher profit rate and earnings potential for the contractor than CPIF due to the risk situation. FPIF is intended for lower-risk efforts with higher confidence in the cost and schedule estimates, CPIF for higher risk and lower confidence in the estimates. Accordingly, FPIF contracts typically have steeper share lines (e.g. 70/30) vs. CPIF (e.g. 90/10). Steeper share lines result in less flexibility for the Government to deal with problems that drive cost and schedule increases. 3.For CPIF, there is a minimum and maximum fee that can be earned while FPIF has no maximum profit that can be earned for an underrun and for an overrun, the contractor could even lose money. 4.FPIF has a price ceiling while CPIF does not have a ceiling associated with the costs. 5.For an overrun for FPIF the share ratio reverts to 0/100 at the Point of Total Assumption (PTA), at which time the contractor will most likely get pretty uncooperative as he hemorrhages financially until the contract is completed. After a CPIF contract reaches minimum or maximum fee, the share ratio reverts to 100/0, and the contractor will work as long as funds are available. 6.FPIF normally involves progress payments while CPIF is based on reimbursing the contractor for total costs incurred, after consideration of the incentive arrangements, that meet the tests of regulatory cost principles. 7.CPIF R&D can be incrementally funded. FPIF can be incrementally funded with the LOGO clause.

You are the PCO on a large experimental aircraft program designed to achieve sustained flight at unprecedented Mach numbers. You are preparing to issue a competitive RFP with a CPFF contract type. The general in charge of the program summons you to her office and says that she is interested in incentivizing the contractor to achieve the unprecedented Mach numbers with a performance incentive based on measured flight test results. She asks your opinion on taking this approach and what in the RFP would need to be changed. What do you tell the General?

REFERENCE: FAR 16.402-2; FAR 16.402-4(b); FAR 16.405 ANSWER: The general is talking about an objective performance incentive, which is technically not part of any award fee construct, but rather a stand-alone incentive provision. It is objective because the payment is based on an objective, measured result rather than a subjective assessment of the contractor's performance. Changes required for the RFP would be: 1.Development of an incentive provision for the contract that stipulates the terms, payment amounts, etc., as well as associated cost, quality, and schedule requirements that must be met. 2.The RFP model contract type needs to either be changed to an incentive (e.g. CPIF) contract or the performance incentive payment needs to be conditioned on the achievement of a certain level of cost performance under the current CPFF contract in the RFP. (FAR 16.402-4(b) states that a cost tradeoff is required when there are other incentives being used.) 3.The incentive will also have to require that a certain schedule be adhered to, to avoid the contractor taking an excessive amount of time to achieve the incentive payment to the detriment of the program's overall schedule. 4.Preparing the incentive will require all or almost all of the functional disciplines in the program office, so there is a resource commitment. 5.The incentive will have to have enough of a payment associated with it to motivate the contractor to expend cost to achieve it. 6.Finally the incentive will have to be "war-gamed" to ascertain if there are any possible unintended consequences of the incentive. An example of this would be the contractor placing so much emphasis on speed that other technical or performance elements of the program may be neglected. 7.Clause FAR 52.216-10 - Incentive Fee will have to be added to resulting contract

You are the PCO on a large SDD program with a CPFF contract. The schedule calls for delivery of a prototype on 30 Sept, but the group commander tells you that we need it sooner than that...not later than the end of June. The colonel tells you that the contractor is willing to sign up for a 30 Jun delivery if the Government pays him an additional incentive bonus fee of $1M. How would you respond to the colonel?

REFERENCE: FAR 16.402; FAR 1.602-1; AFFARS 5243.102-90 ANSWER: There are two major issues with this interaction, before even getting to the contractual implications. First, I would want to know why the colonel was negotiating with the contractor without me being present. The colonel lacks all contractual authority in this situation and may have undermined my authority in trying to negotiate a fair and reasonable price for this type of arrangement in the future. Second, I would want to know why this earlier suspense wasn't made clear when the effort was put on contract. I understand that requirements sometimes change, so at the least I would want something in writing from him as the customer to justify any type of schedule acceleration. The next thing to investigate is whether this type of incentive can even be added to the contract at this point. Is this a material difference from the initial contract? Could the parties have reasonably anticipated this change? With the facts presented, I would tend to believe that this additional $1M delivery incentive would constitute an out-of-scope change. Therefore, including it may require a J&A with approval by the Competition Advocate. Getting a J&A of this type approved at this point in the contract would likely be a hard sell. Assuming I were able to somehow add this incentive bonus, I would first want to determine if it is fair and reasonable and if it would accomplish our intended goal. Pricing and my tech team may be able to assist here. Since the contract is currently a CPFF, there would need to be an offsetting incentive to control costs. Without it, the contractor could spend funds up to the NTE price in order to achieve the incentive payment...not a good idea. Also, since CPFF is based on level of effort, there is no requirement for the contractor to deliver if funds are exhausted and the Government cannot obligate more. In that instance, all the additional funding spent to achieve the delivery incentive up to that point would have been wasted. The preferred options are to either transition to a CPIF with a delivery incentive as well, or continue with the CPFF as long as there is also some type of cost constraint/incentive. The CPIF route would require a D&F signed by the SCCO to justify the use of an incentive contract, among other requirements.

You are the CO for a CPIF acquisition. The contractor made an offer that included an 80/20 share ratio over target and a 40/60 share ratio under target. Your Price/Cost Analyst rejected these share ratios as being favorable to the contractor and not in the best interest of the government. Your trainee buyer comes to you for an explanation of why the Price/Cost Analyst rejected these ratios. You decide to use an example of a $100,000 overrun and underrun to explain how the share ratios work mathematically. What would you say to the trainee buyer?

REFERENCE: FAR 16.405-1 ANSWER: Under target, the share ratio represents the rate at which the Government saves money and the contractor gains it as part of its incentive fee. For the $100,000 underrun with a 40/60 share ratio, the Government would recoup only $40K, whereas the contractor would gain $60K in fee. Over target, the share ratio represents the rate at which the Government pays additional costs and the contractor loses fee. For a$100,000 overrun, with an 80/20 share ratio, the Government would pay an additional $80K, whereas the contractor would only lose $20K in its fee. In both scenarios, the Government carries more risk and the contractor has the advantage.

As the Contracting Officer, you were involved in a source selection for the overhaul and maintenance (which includes painting) of the C-130 fleet. The effort was competed among the incumbent ALC and several commercial repair facilities. A contractor won the competition and you issued a Requirements Contract, with FAR clause 52.216-21, for a performance period of one year. The contract also includes a three-year option. Prior to award, a Pre-Award Survey was performed by DCMA. DCMA verified that the contractor had the capability, quality control, and adequate capacity. However, after the first few units were painted, despite passing quality inspections, your Program Manager was unsatisfied with the quality of the paint jobs. He tells you that the contractor's paint job doesn't compare to the quality work of the ALC. Subsequently, your Program Manager directs the next few C-130s be delivered to the ALC for painting, where they still paint other aircraft. What would you advise the Program Manager?

REFERENCE: FAR 16.503; FAR 52.216-21ANSWER: Since it is very early in the performance period, the contractual limits have not likely been met. No other condition justifies exception, per the Requirements clause (FAR 52.216-21) in the contract. Therefore, the PM will violate the conditions of the Requirements Clause by redirecting any work away from the contractor. The successful bidder's proposal was based on receiving all estimated work; subsequently, the Program Manager risks legal action (a claim) from the successful contractor. One point you might bring up is that the contract term is only for one year. If the PM is unhappy with the "quality" of the contractor's performance, even though the work complies with the contract, he should review the contractual requirements and determine if the quality should be upgraded on a later procurement. Perhaps, a higher quality requirement will result in less frequent paint jobs, thereby saving money. On the other hand, perhaps the higher quality is not necessary and not worth a premium to simply make the aircraft look better. In any event, the PM is obligated to send all work to the successful contractor for one year, up to the estimated amount, unless some authorized exception exists, like an urgency that the contractor in unable to perform. By the way, the Program Manager might be tempted to use the options as award-term incentives and convince the contractor to increase the "quality" of the work above the requirements. This could result in higher costs to the Government. Also, changing the quality terms in the contract ex post facto may tempt the losing competitors to protest. Before the Program Manager made any further moves, I would advise a meeting with legal counsel.

An IDIQ contract is signed, but no money is available, so there is no accompanying order. The first order will be issued at a later time. Do you have a problem with the Anti-Deficiency Act? When should the minimum amount on an IDIQ be guaranteed?

REFERENCE: FAR 16.504; AFFARS MP 5316.504 ANSWER: In general, ADA prohibits contracting in advance of appropriations, but the award of an IDIQ does not commit the Government to anything more than the minimum amount that will be obligated through subsequent DOs/TOs. Over the years however, in order to eliminate any problems with not satisfying minimum order guarantees, regulatory guidance has shifted to require obligation of the minimum quantity on a DO/TO upon execution of the contract (AFFARS MP). So while it may not be an ADA violation, this scenario would be a violation of the AFFARS requirements.

You have recently awarded a multiple award ID/IQ contract to three contractors in accordance with FAR 16.5. The contracts are for specialized support equipment and the ordering period is three years. FAR 16.505(b)(1) states that you must provide each awardee a fair opportunity to be considered for each order exceeding $3,000. Are there any exceptions to this, and are you required to publicize these orders on the GPE?

REFERENCE: FAR 16.505(b)(2); FAR 502(a)(6) ANSWER: There are several exceptions to the fair opportunity process, including: (1)Need is so urgent that providing a fair opportunity would result in unacceptable delays (2)Only 1 awardee is capable of providing at the level of quality required because unique or highly specialized (3)Logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order. (4)Necessary to satisfy a minimum guarantee. (5)If above SAT and statute requires purchase from a specified source (6)Small business set asides IAW FAR Part 19. Orders placed under ID/IQ contracts are exempt from both synopses of proposed contract actions and synopses of contract awards.

When may a T&M contract be used? What must the D&F contain? Who would approve the following D&Fs: A T&M contract for $650K; A T&M contract for $500K in which the base period plus option periods will be a total of 4 years; A T&M contract for $1.5M of services (base plus option will be 2 years)?

REFERENCE: FAR 16.601; DFARS 216.601

You are the Contracting Officer for a new program that is going to acquire repair and overhaul services. After conducting research you decide to use a Time-and-Material (T&M) contract type. The Program Manager is not familiar with this type contract and has asked you to explain what a T&M contract type is and some of the advantages and disadvantages. What would be your answer?

REFERENCE: FAR 16.601; DFARS 216.601 ANSWER: A T&M contract is now the least preferred business arrangement. It is used to buy time at a fixed and specified hourly rate that includes direct labor, indirect costs, and profit. Material is acquired at cost with no addition of profit. Some of its advantages include: (1) it provides a contractual vehicle when costs cannot be realistically/accurately estimated, (2) material expenditures exclude profit, and (3) by excluding profit on materials, it makes it more likely that the contractor will choose to repair rather than replace, which is usually what the Government prefers to the extent it is practical. Some disadvantages include: (1) difficult to provide oversight & accountability, (2) contractor is incentivized to expend additional hours because it increases profit, (3) contractor is incentivized to substitute lower-graded labor than was priced in the hour late, thus profiting more on the rate differential, and (4) use of lower-grade laborers may result in more hours being expended, increasing profit dollars.

Is a Basic Ordering Agreement a contract? Why or why not?

REFERENCE: FAR 16.703 ANSWER: No, the FAR specifically says that a BOA is not a contract, mainly because it is only an agreement and does not contain the element of consideration that is required for contracts. It is simply a written instrument of understanding, negotiated between an agency and contractor that contains things like T&Cs, a description of supplies/services to be provided, and methods for pricing, issuing, and delivering future orders. The intent is to create a way to expedite contracting for uncertain requirements (but when a substantial number of requirements is anticipated). Since it is not a contract, you must seek proper approvals and competition when placing orders.

When including options in a contract, what basic elements must be included in the contract?

REFERENCE: FAR 17.204; FAR 17.205 ANSWER: An option can be included in a contract when in the Government's best interest. The FAR lists the following as required elements in the contract when including options: (1)The contract must specify limits on the purchase of additional supplies or services, or the overall duration of the term of the contract, including any extension. (2)The contract must state the period within which the option may be exercised. The period shall be set so as to provide the contractor adequate lead time to ensure continuous production (i.e. state the time required for preliminary notice of intent in appropriate clause) (3)The total of the basic and option periods shall not exceed 5 years in the case of services, and the total of the basic and option quantities shall not exceed the requirement for 5 years in the case of supplies. These limitations do not apply to information technology contracts. (4)Increases in supplies or services may be expressed in terms of (a) Percentage of specific line items; (b) Increase in specific line items; or (3) Additional numbered line items identified as the option. The CO must justify in writing the quantity or the term under option, the notification period for exercising the option, and any limitation on option price under FAR 17.203(g). This D&F will be included in the file.

You are the Contracting Officer on a large aircraft sustainment contract. The contract has a base year and several one year options for various support requirements. The contract period of performance runs from 1 Oct through 30 Sep of each year. On 5 Oct one of the Program Managers comes to you with a request to exercise an option for continued Tech Order Updates, however the contract states that the particular option the PM has identified was to be exercised by 1 Oct. The PM asserts there is still a requirement for the TO support and is willing to give you a memo addressing the need and accepting responsibility for not notifying you of his requirement in sufficient time to exercise the option. How would you proceed?

REFERENCE: FAR 17.2; FAR 6.302; FAR 6.304 ANSWER: The black and white answer to this is that the Government has lost its right to exercise the option since it was not done IAW the terms and conditions of the contract. Since this is the case, the Government would have to re-compete the requirement in order to have it met. Alternatively, there is a way to proceed that involves other than full and open competition, but this would be a tough sell. One of the main reasons that the FAR says other than full and open competition is not justifiable is due a lack of advance planning. That being said, the process would proceed as follows. You would contact the contractor, express the Government's need to have the work performed, and see if the contractor is amenable to performing the work. If they are, you should contact your legal counsel, review the circumstances and get their buy-in for a contract modification. If your counsel agrees, you should prepare a J&A under FAR 6.302 and FAR 6.304, if there are no other suppliers who could perform the work, and there is rationale for other than full and open competition, and proceed with a bilateral contract agreement. The contractor is entitled to renegotiate the price as the option was not exercised IAW the contract terms and conditions.

What actions should a contracting officer take to encourage Small Business Participation in acquisitions?

REFERENCE: FAR 19.202-1; DFARS 219.202-1; DFARS PGI 205.207(d) ANSWER: The FAR lists 5 ways to encourage SB participation: (1)Divide proposed acquisitions of supplies and services (except construction) into reasonably small lots (not less than economic production runs) to permit offers on quantities less than the total requirement. (2)Plan acquisitions such that, if practicable, more than one SB concern may perform the work, if the work exceeds the amount for which a surety may be guaranteed by SBA against loss. (3)Ensure that delivery schedules are established on a realistic basis that will encourage SB participation to the extent consistent with the actual requirements of the Government. (4)Encourage prime contractors to subcontract with SB concerns. (5)Generally, provide a copy of the proposed acquisition package to the SBA procurement center representative (PCR) at least 30 days prior to the issuance of the solicitation. Additionally, DFARS points the CO to a PGI which shows how to advertise an event for SB on the GPE. This allows the public to easily search the GPE using the small business event calendar on the website.

You are in a kick-off meeting for a $20M R&D new-start effort and the Program Manager points out the list of potential offerors, three of which are small businesses. When asked, he states that all three are capable of doing the work. Are you required to set this acquisition aside for small business? What question would you ask the PM?

REFERENCE: FAR 19.502-2(b)(2) ANSWER: Although the FAR states: "The Contracting Officer shall set aside any acquisition over $150,000 for small business participation when there is a reasonable expectation that (1) offers will be obtained from at least two responsible small business concerns offering the products of different small business concerns; and (2) award will be made at fair market prices." It also states, "In making R&D small business set-asides, there must also be a reasonable expectation of obtaining from small businesses the best scientific and technological sources consistent with the demands of the proposed acquisition for the best mix of cost, performance, and schedules." Your question for the PM would be whether two or more of the small businesses would offer the best technical solution for the best mix of cost, performance, and schedule.

FAR 19.502-5: Describe some insufficient causes for not setting aside an acquisition for small business?

REFERENCE: FAR 19.502-6 ANSWER: The FAR says the following are reasons for not setting aside an acquisition: (1)A large percentage of previous contracts for the required item(s) has been placed with SB concerns (2)The item is on an established planning list under the Industrial Readiness Planning Program, and no large business Planned Emergency Producers have conveyed a desire to supply the item (3)The item is on a Qualified Products List and none of the large businesses with products on the QPL desire to participate in the acquisition (4)A period of less than 30 days is available for receipt of offers (5)The acquisition is classified (6)SB concerns are already receiving a fair proportion of the agency's contracts for supplies/ services (7)A class SB set-aside of the item or service has been made by another contracting activity (8)A "brand name or equal" product description will be used in the solicitation

What is the purpose of a Certificate of Competency (COC)? Describe some examples of when a contracting officer might refer a small business for a possible COC?

REFERENCE: FAR 19.601; FAR 19.602 ANSWER: The purpose of a Certificate of Competency is to show that the holder of the COC is responsible (with respect to all elements of responsibility) for the purpose of receiving and performing a specific Government contract. The COC program empowers the SBA to certify to the elements of responsibility for an apparently successful offeror who would otherwise receive an award if not for the CO's determination of non-responsibility. If the CO determines the apparent successful offeror is not responsible, then the COC process would apply. The non-responsibility determination could occur for a number of reasons, to include the SB's capability, competency, capacity, credit, integrity, perseverance, tenacity, and limitations on subcontracting.

Describe liquidated damages in the context of subcontracting plans under FAR 19. What is the amount of the damages? What standard is used to measure contractor compliance?

REFERENCE: FAR 19.705-7; FAR 19.706 ANSWER: The FAR states that because utilization of small businesses is a national interest item with both social and economic benefits, contractors should be held responsible for not making a good faith effort to comply with their plans. The standard is not whether they met their goals or not, but rather, whether they made a good faith effort to comply. If it can be shown that the contractor is not making that good faith effort, they can be directed to pay liquidated damages in an amount that equals the actual dollar amount by which the contractor failed to achieve each subcontract goal. The FAR includes a process for determining whether a good faith effort has been made. This process is normally performed by the small business folks at DCMA, who will review the contractor's Small Business Subcontracting Program and issue a report.

You are the Contracting Officer for a $5,000,000 acquisition for which the contractor has taken the position that the product is commercial. You must now determine if you agree with this position. What documentation would you need to complete for your contract file and what steps would you take determining if you agree with the contractor's position of commerciality?

REFERENCE: FAR 2.101; DFARS 212.102; AFMC MP 5312.201-90 ANSWER: First, as a PCO, you will review the definition of a "commercial item" in FAR 2.101 to make sure you fully understand what is required for an item to be determined commercial. Although there are 8 aspects to the definition, the main consideration is whether the item has been sold or offered to the general public for purposes other than governmental purposes (or modifications/evolutions to those items). If it is not clear from reading the definition, you may need to interface with the contractor to see why it thinks the item is commercial and have them provide backup documentation. Next, since the acquisition is over $1 million, DFARS states that the PCO shall determine in writing that the commercial definition has been met. This does not apply, however, if the commercial item will be used to support defense or recovery from CBRN attacks (FAR 12.102(f)). In order to comply with the DFARS guidance, the AFMC MP lists exactly what is required for the Commercial Item Determination (CID). The CID may be written as a memorandum, and shall address the minimum components of: (i) Description of supplies or services; (ii) Basis on which the supplies or services meet the definition of a commercial item in FAR 2.101; (iii) Basis on which the commercial item satisfies the government's requirements; (iv) Contracting officer signature and date. The final step would be to gain approval at one level above the CO depending on which aspect of the commercial definition from FAR 2.101 is used ((1)(ii), (3), (4), or (6) require this approval).

Your program has identified a requirement for improved cockpit radios for your transport aircraft. The Program Manager conducted market research and has concluded that there is a commercial radio on the market that, with minor modification, would meet the minimum requirements. However there are sufficient funds available for the development of an entirely new cockpit radio to the exact military specifications. How would you advise the PM to proceed? Does the commercial radio meet the FAR definition of a commercial item? If so, does the PM have the option of developing a new military item?

REFERENCE: FAR 2.101; FAR 12.101(b) ANSWER: According to FAR 2.101, an item that otherwise meets the definition for a commercial or non-developmental item "but for modifications of a type customarily available in the commercial marketplace or minor modifications of a type not customarily available in the commercial marketplace made to meet Federal Government requirements" is a commercial item. As a Contracting Officer, you should advise the PM that you must purchase the commercial item under the circumstances. According to FAR 12.101(b), agencies shall acquire commercial items or non-developmental items when they are available to meet the needs of the agency.

Describe some of the exceptions to the requirement to synopsize a proposed action?

REFERENCE: FAR 5.202; AFFARS 5305.202; AFMC MP 5305.202 ANSWER: The PCO need not submit a synopsis for a proposed contract action if the head of the agency determines in writing (after consultation with Administration of Federal Procurement Policy and Administrator of the Small Business Administration) that advance notice is not appropriate or reasonable. According to AFFARS, the PCO must route this type of request through SCO/SCCO to SAF/AQC, address why it's not appropriate/reasonable to synopsize and identify alternative actions to optimize opportunities for small business. AFMC MP guidance says to also coordinate through local Small Business Director and that non-AFLCMC actions should go through the HQ AFMC/PK workflow rather than the SCO/SCCO as prescribed by AFFARS. Besides the process for special cases above, there are 14 standard exceptions to synopsizing a proposed contract action: The synopsis would disclose classified information if the requirement was published (but you can't use this as an excuse....if you could word it differently so that it could be published you must) The synopsis is a contract action with a J&A for unusual and compelling urgency, and the Gov't would be seriously injured if complies with time period The action stems from an international agreement or treaty or payment from foreign government, and it requires the acquisition come from specified sources Required or authorized specifically by statute to a particular source, including 8(a) and AbilityOne Utility services (other than telecommunications) and only one source is available. An order under IDIQ contract (Subpart 16.5). It's a Small Business Innovation Development Act action (SBIR). It's from an unsolicited research proposal that is a unique and innovative concept and publication would disclose originality. Perishable subsistence supplies and advance notice not reasonable. Action will be awarded under conditions of FAR 6.302-3 (industrial mobilization; engineering, developmental, or research capability; or expert services), 6.302-5 (authorized or required by statute in regards to brand name commercial items for authorized resale), or 6.302-7 (public interest). Proposed contract action is made under terms of synopsized contract that had enough detail to "count". Defense agency action performed outside the U.S. and only local sources solicited. Below the SAT ($150K), through GPE, permits the public to respond electronically. Action for services of expert to support the Government in litigation or dispute

Describe how the synopsis process can be streamlined when acquiring commercial items.

REFERENCE: FAR 5.203(a)(2); FAR 12.603ANSWER: The synopsis required by FAR 5.203 and the solicitation can be combined into a single document. This document is basically the synopsis as required by FAR 5.207 with added information that normally goes into the solicitation (an SF 1449 is not used). As a result, 15 days are cut from the acquisition, since it is no longer necessary to publicize a separate synopsis prior to the solicitation.

You have just awarded 3 contract actions. You remember something in FAR Part 5 about synopsizing contract awards. The first action was a Small Business Innovation Research contract for $99,978. The second action was a $3M new delivery order under an existing IDIQ contract and the third action was a purchase order for $12,995. As a PCO, would you synopsize these contract actions?

REFERENCE: FAR 5.301(b); FAR 5.002 ANSWER: In general, we publicize contract actions in order to (a) increase competition, (b) broaden industry participation in meeting Government requirements, and (c) assist small business concerns and minority small businesses in obtaining contracts and subcontracts, as outlined in FAR 5.002. However, there are various reasons prescribed in FAR 5.301(b) where synopses for contract awards are not required. In particular, synopses are not required for awards under the Small Business Innovation Development Act of 1982, for orders placed under FAR 16.5 (ID/IQ), or for orders below the SAT. However, dollar threshold is not a prohibition against publicizing an award of a smaller amount when publicizing would be advantageous to industry or to the Government.

There are seven statutory exceptions to the Competition in Contracting Act (CICA). Please list them and the exception most likely to apply to Foreign Military Sales (FMS) contracts. What specific documentation would be necessary to support this FMS exception? Which exception is least preferred?

REFERENCE: FAR 6.302; DFARS 206.302-4; AFFARS 5306.302-4 ANSWER: The seven exceptions to full and open competition are IOU PAIN: FAR 6.302-3 - Industrial Mobilization; Engineering, Developmental, or Research Capability; or Expert Services: There are three aspects to this exception, as the title implies. Industrial mobilization is basically the Government intervening to ensure vital facilities or suppliers are kept in business, trained, etc. in times of national emergency or other critical situations. The second portion involves maintaining essential capabilities in the technical fields of engineering, developmental work, or research. Expert services refer to retaining experts for use in litigation or disputes. FAR 6.302-1 - Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements: When there is a reasonable basis to conclude that the agency's minimum needs can only be satisfied by unique supplies or services available from only one source or a limited number of sources, or from only one or a limited number of suppliers with unique capabilities; it shall not be used when any of the other circumstances is applicable. FAR 6.302-2 - Unusual and Compelling Urgency: An unusual and compelling urgency precludes full and open competition, and delay in award of a contract would result in serious injury, financial or other, to the Government. FAR 6.302-7 - Public Interest: When the agency head determines that it is not in the public interest in the particular acquisition; may be used when none of the other authorities in 6.302 apply. (1) FAR 6.302-5 - Authorized or Required by Statute: When statutes expressly authorize or require that acquisition be made from a specific source or through another agency. FAR 6.302-4 - International Agreement: When a contemplated acquisition is to be reimbursed by a foreign country using a LOA directing source; of for services to be performed, or supplies to be used, in the sovereign territory of another country and the terms of a treaty or agreement specify or limit the sources to be solicited. FAR 6.302-6 - National Security: When disclosure of the Government's needs would compromise the national security (e.g. would violate security requirements). The exception most likely to apply to an FMS contract is FAR 6.302-4, International Agreement. While a J&A is normally the documentation required to process a sole source action, international agreements are slightly different for DoD. DFARS guidance says the J&A is not required if the HCA prepares a document that describes the terms of an agreement/treaty or the written directions, such as a Letter of Offer and Acceptance, that have the effect of requiring the use of other than competitive procedures. AFFARS states this document must be titled, "International Agreement Competitive Restrictions (IACR)" and authority to prepare it is delegated down to the PCO per AFFARS MP 5301.601(a)(i). The IACR and a copy of the associated Letter of Offer and Acceptance must be in the contract file. The least preferred option in my opinion is Public Interest because it's the most difficult to justify. It also requires a written determination by the SECDEF and requires Congressional notification prior to award of the contract.

Currently there is a non-Government contractor employee who is working in a unique technical area. A new source selection is planned and the technical director would like to make this contractor employee chief of the technical evaluation team. As such, this employee would be a voting member of the source selection board. Is it permissible to have a non-Government contractor employee as chief of the technical evaluation team and a voting member of the source selection board?

REFERENCE: FAR 7.503(c)(12)(ii) ANSWER: It is not permissible to have a non-Government employee as a voting member of any source selection board, as this is an inherently governmental function. FAR policy states that contracts shall not be used for the performance of inherently governmental functions. Inherently governmental functions include: control of criminal investigations or prosecutions, command of military forces, determination of agency policy and application of regulations, determining budget priorities, and direction and control of federal employees, among other. (The list is not all inclusive!)

Describe some examples of sources of information the contracting officer should use in determining contractor responsibility?

REFERENCE: FAR 9.105; FAR 9.104-6 ANSWER: The most obvious sources that PCOs check on every acquisition and modification are the SAM Exclusion List and the FAPIIS websites. Review of FAPIIS is required if over SAT per FAR 9.104-6. PCOs shall also consider any relevant past performance information when determining responsibility. FAR 9.105-1(c) lists some other sources of information: Records and experience data, including verifiable knowledge of personnel within the contracting office, audit offices, contract administration offices, and other contracting offices. 2. The prospective contractor: including bid or proposal information, questionnaire replies, financial data, information on production equipment, and personnel information. 3.Commercial sources of supplier information of a type offered to buyers in the private sector. 4.Pre-award survey reports. 5. Other sources such as publications; suppliers, subcontractors, and customers of the prospective contractor; financial institutions; Government agencies; and business and trade associations.

You are the Contracting Officer on a large aircraft program. When you arrived at work this morning you are greeted with a notification that your contractor has been placed on the System for Award Management Exclusions list. What are the rules on continuation of your current contracts with the Contractor?

REFERENCE: FAR 9.405-1 Unless the agency head directs otherwise, you may continue a contract or subcontract with a firm that is debarred, suspended or proposed to be debarred. If you decide to terminate, the FAR recommends seeking review by contracting and technical personnel, and by counsel to ensure the propriety of the proposed action. Additionally, unless the agency head makes a determination of the compelling reasons for doing so, you must not: (1) Place orders exceeding the guaranteed minimum under indefinite quantity contracts, (2) place orders under FSS contracts, BPAs, or BOAs, or (3) add new work, exercise options, or otherwise extend the duration of the contract.

Under a current contract, Contractor A is to do testing, evaluation and validation of items to determine their use in a particular area. You are the Contracting Officer on a new source selection that will have the successful offeror submitting items to be tested by Contractor A under the current contract. Contractor A is one of many contractors who have expressed interest in the new source selection. As a CO what should you consider when determining if Contractor A may be allowed to bid as a prime contractor on this new source selection?

REFERENCE: FAR 9.502(c); FAR 9.504; FAR 9.505; DFARS 209.571 ANSWER: FAR 9.502(c) states "an organizational conflict of interest may result when factors create an actual or potential conflict of interest on an instant contract, or when the nature of the work to be performed on the instant contract creates an actual or potential conflict of interest on a future acquisition. In this latter case, some restrictions on future activities of the contractor may be required." First, I would apply common sense here. Since Contractor A is doing all the testing, evaluation, and validation on an active contract, is there a conflict of interest if they submit items on a separate contract that they will then have to test, evaluate, and validate? It appears that they might have an advantage because they would know how to design the product in advance so that it passes test/eval/validation more easily. Knowing there might be a conflict of interest here, I must comply with FAR 9.504, which says I must avoid, neutralize, or mitigate significant potential conflicts before contract award. To do so, I would consult with legal counsel and technical specialists to see if Contractor A's role in test/eval/validation is reason enough to exclude them from the new acquisition. Perhaps the test/eval/validation is only a minor piece of the new acquisition and it would still be in the best interest of the Government to award to Contractor A. I could also include a requirement/provision for conflict of interest mitigation plans to be submitted with the proposal. If, after analyzing all the evidence, I do not believe the risk can be sufficiently mitigated or neutralized, I would avoid going with Contractor A. If I do choose to go with Contractor A, I would document appropriately and alert the HCA of my decision.

When dealing with potential organizational and consultant conflicts of interest, what are the two underlying principles?

REFERENCE: FAR 9.505 ANSWER: The two underlying principles are: (1) Preventing the existence of conflicting roles that might bias a contractor's judgment; and (2) Preventing unfair competitive advantage.

In what ways does market research influence pre-award program management? Why must a pre-award team perform market research? (Could also go under FAR Part 7)

REFERENCE: FAR Part 10 ANSWER: It can help determine if the requirements are realistic; identify program risks; provide information to help decide acquisition strategy; better define the RFP (model contract, Sections L & M, and evaluation criteria); and prepare the evaluators for better proposal evaluation. The pre-award team must perform market research because the Federal Acquisition Streamlining Act (FASA) of 1994 and the Clinger Cohen Act of 1996 require us to go to the commercial market first before developing a new product. The most significant tool we have to get to the commercial market place is through market research. Market research is critical to developing both knowledge and understanding of the products, services, and practices of industries that make up the global commercial market; and, besides, it only makes good business sense to take advantage of products, services and infrastructure that already exist. Basically, it's the law, and it's the smart thing to do.

Your Program Manager receives an Unsolicited Proposal for a new defensive avionics system. The program team evaluates the proposal and finds it has some merits. However, you recommend that the program manager reject the proposal. What are some of the reasons you could have for making that recommendation?

REFERENCE: FAR Subpart 15.6; AFFARS MP 5315.606-90 ANSWER: Assuming this unsolicited proposal met all the initial requirements to justify a comprehensive evaluation, it still may not meet the criteria for award on a sole source basis. FAR 15.607 states that "a favorable comprehensive evaluation of an unsolicited proposal does not, in itself, justify awarding a contract without providing for full and open competition." The proposal should be returned, citing reasons, when its substance: (1)Is available to the Government without restriction from another source (2)Closely resembles a pending competitive acquisition requirement (3)Does not relate to the activity's mission (4)Does not demonstrate an innovative and unique method, approach, or concept, or is otherwise not deemed a meritorious proposal

You recently released an RFP for an anticipated $15M FFP contract and you believe there are several interested offerors. Two weeks after RFP release, you realize that you forgot to include the requirement for a Small Business Subcontracting Plan. You amend your solicitation with the new requirement to submit a plan. You then receive three offers, as follows: Offeror A: Large business - Did not submit a subcontracting plan Offeror B: Small business - Plan shows that they will subcontract 75% to a large business Offeror C: Large business - Claims they are in Comprehensive Subcontracting Program. Do you have any concerns with these offers?

REFERENCE: FAR Subpart 19.7; FAR 52.219-14; FAR 52.215-23 ANSWER: For Offeror A, I would consider them non-responsive at the current time. Perhaps they did not see the amendment to the solicitation, but this would definitely be an issue to address. For Offeror B, my concern is that small businesses are not required to submit subcontracting plans. However, since I have the information now, their plan to subcontract 75% to a large business concerns me. This could potentially be a situation in violation of the Limitations on Subcontracting clause (typically only for SB set asides though), nonmanufacturer rule (typically not applicable for full & open), or if nothing else, the rules on excessive pass-through charges. This would need to be addressed before considering them for award. Finally, Offeror C appears to be a responsive offeror. The Comprehensive Subcontracting Program has been extended until 2017 and it would be very easy to check the validity of the contractor's claim on the program's website and/or with DCMA.

It's 10:00 AM on Sep 30 2009, one of your A&AS contract specialists just walked out on you. You now have to find someone to award 10 of her contract actions by midnight. In addition, the Division Director just dumped another $90K installation service acquisition on your desk and he wants it awarded by midnight. You do some research and find out this is a follow-on acquisition and was previously awarded under the 8(a) Business Development Program. Is there any way that you can get this awarded by midnight? Why/Why Not? What issues/challenges do you face?

REFERENCE: FAR Subpart 19.8; FAR 19.804-4 ANSWER: Since this effort was under the 8(a) program previously, I would consult with my small business specialist to see if I could continue the effort with the same small business. I would also conduct market research to make sure that other small businesses could not perform the effort in accordance with 19.804-4, Repetitive Acquisitions. If the small business specialist indicated that award could be made and market research revealed that this should be a sole-source follow-on, then I would contact the SBA district office servicing my geographical area regarding acceptance of this effort. Technically, they have 2 days to respond since it's below SAT, but most offices have procedures in place for expedited processing of end of year requirements. I would also need to consider whether or not the award of this effort would violate the bona fide need rule. I must consider the severability of these services and exercise care when obligating annual funding for severable CLINs at the end of the fiscal year. In order for me to award, I would need to document the file with evidence that performance or a duty to perform occurred in the fiscal year funds were available and obligated in order to establish a bona fide need. The requirements official or financial management official would be required to provide the evidence. In this particular instance, it may be difficult to show a duty to perform or to show performance occurred in this fiscal year; however, if the PM or FM were able to provide evidence, then I may be able to award the contract before midnight. Since award is not guaranteed, I would make sure to inform the Director of the issues and I would let him know that if award is possible, I will need support and documentation from him in order to award by midnight.

What are the elements of a contract?

REFERENCE: Government Contracts REFERENCE Book, 4th Edition ANSWER: A generic definition of contract would be an agreement, enforceable by law, between two or more competent parties, to do or not to do something not prohibited by law, for a legal consideration. Breaking down that definition, there must be legal capacity to enter the contract, an offer, acceptance, consideration, clear and unambiguous terms, and must not include performance of acts that are illegal.

What is consideration?

REFERENCE: Government Contracts REFERENCE Book, 4th Edition ANSWER: Consideration is the inducement to a contract: the cause, motive, price, or impelling influence that leads a party to enter a contract. A binding contract requires an offer, acceptance of the offer, and consideration. Consideration generally requires two elements: (1) something must be given that the law regards as of sufficient legal value for the purpose - either a benefit to the seller or a detriment to the buyer, and (2) the something (benefit or detriment of legal value) must be dealt with by the parties as the agreed-upon price or exchange for the promise - there must be a "bargained-for exchange." The requirement for consideration does not require that what is relied upon for consideration be equivalent in value to the promise; the consideration need only have "some value."

You are the PCO on a new competitive program that is preparing for the System Development and Demonstration phase (SDD), and you are very close to issuing the RFP. The Captain, who is also the PM, comes up to you and says that the Colonel at the requirements office has asked that a few significant last minute requirements be put into the RFP, and he wants to know what your thoughts are. What do you tell the PM?

REFERENCE: No clear guidance/regulations ANSWER: This is always tricky. The Captain here will most likely not say "no" to the Colonel. The correct response, however, is two-fold: First, the Program Manager should tell the Colonel that there will most likely be a cost, schedule, and/or performance impact from adding the new requirement. The impact may be as simple as a delay in contract award or more complex than that. The Captain has an obligation to tell the Colonel that he/she will obtain that information and provide it to the Colonel so that the Colonel can make an informed decision. The PM should also ask the Colonel if the new requirements can be inserted at a planned future date, perhaps along with other new or changed requirements. These new/changed requirements could be added at a later date as a planned "block" or separate increment of capability in a planned, organized, and less disruptive manner after the current contract is in performance. Most importantly, the Colonel must be made aware of the fact that in most situations, changing requirements this late in the acquisition process will undoubtedly lead to delays in the pre-award acquisition schedule and could have significant impact on the planned contract award date.

What are the differences between apparent, implied and express authority?

REFERENCE: SGS-92-X003 v. United States; Formation of Gov't Contracts; Roy v. United States; Distribution of Postal Consultants, Inc. v. United States ANSWER: Actual authority is either express or implied. Express actual authority to bind the Government exists in a contract only when the Constitution, a statute, or a regulation grants it to that agent in unambiguous terms. Implied actual authority exists when such authority is considered to be an integral part of the duties assigned to a Government employee and cannot exist without prior express actual authority. Apparent authority occurs when a principal makes others believe that she has conferred authority upon an agent by holding them out to the public or a third-party as the principal's agent. Apparent authority never binds the Government.

You are working on a competitive RFP and are nearing completion of Section L, containing information and instructions to offerors, and Section M, containing evaluation factors for award. You have just completed a cross-check of Sections L and M to make sure that there is correlation between the contents of the two sections and you are satisfied that there is 100% correlation. Your PM comes into your office all excited and tells you that he wants to include a request for additional information in Section L. In talking to him, you find that this new information request is not related to any other information requested from the offerors in Sec L. You also know from your work on the RFP that there is no corresponding evaluation criteria in Sec M for this information. You ask him why he wants to include the request in the RFP and he states that this is important information that he absolutely has to obtain for the success of the program. What do you tell the program manager?

REFERENCE: Various GAO decisions; AFFARS MP 5315.3 (Section L/M Templates) ANSWER: Section L and Section M must match...exactly! You have to evaluate the offerors fairly, using the same criteria that exists in Section M, and you should not be asking the offerors for any information that will not be part of the evaluation criteria. Although this information may be helpful in making the decision, it isn't fair to the offerors to have them provide everything but the kitchen sink, when you aren't evaluating the whole package. If the information that the PM is now requesting is necessary to be able to evaluate the offerors, the only option available to the PCO is to include that as another evaluation criteria in Section M. If the information is helpful but not necessary to conduct a thorough evaluation, then we should not be including it in Section L or M. So the question to the PM is whether it is necessary or just helpful. If necessary, add it to both. If only helpful, keep the RFP the way that it is written. AFFARS has section L & M templates available to help and the ACE conducts regular Section L & M training.

You are the Contracting Officer on a very large aircraft sustainment contract with world-wide performance requirements. There are contractor personnel stationed at various bases that provide maintenance and repair capabilities, via the contract's Over and Above clauses, should organic repair not be available. The Program Manager has just notified you of an incident that occurred last week at Frankfurter Air Base in Germany where an aircraft was damaged and required repair, but tells you not to worry as the aircraft has already been repaired and returned to service by the Contractor's on-site mechanics. The contract stipulates that before any repairs can begin, written authorization from the CO or the on-site Contracting Officer's Technical Representative (COTR) must be provided as the authorization allows the contractor to begin work and incur costs that will be paid under the contract. You ask the Program Manager for a copy of the COTR's work authorization and he hands you an email addressed to the Contractor from an individual you do not recognize (not the designated COTR) that directs the work to begin. What are your issues and what steps might you take?

REFERENCES/ AUTHORITY: FAR 1.602-3 One of the first steps is to determine who the "authorizing" official was. If the individual was an A&AS employee, the authorization to repair the aircraft was not valid as any action that approves the expenditure of funds is Inherently Governmental and cannot be performed by a contractor. If the individual was not a contractor but was a legitimate employee of the U.S. Government you may have a Ratification Action provided the conditions for ratification can be met: (1) Supplies or services were received and accepted by the Government or the Government has or will get a benefit from the unauthorized action; (2) The ratifying official has the authority to enter into a contractual agreement; (3) The resulting contract would otherwise have been proper if made by a warranted CO; (4) The CO reviewing the unauthorized commitment determines the price to be fair and reasonable; (5) The CO recommends payment and legal counsel concurs in the recommendation, unless agency procedures expressly do not require such concurrence; (6) Funds are currently and were available at the time the unauthorized commitment was made; and(7) The ratification is in accordance with any other limitations prescribed under agency procedures In either event, the individual did not have the actual authority to commit the Government by authorizing the work. The contractor, as well as the Frankfurter Air Base personnel, should also be reminded that only the CO or his/her designated representative can authorize the expenditure of funds.

You are the PCO in Source Selection and dutifully following the FAR, DFARS, etc., on a particular issue. However, your higher leadership is now giving you "direction" which you believe is contrary to your legal guidance. What do you do? Do you comply with the law or higher leadership direction?

REFERENCES: FAR 1.602-2; AFFARS 5301.602-2; AFMC MP 5301.602-2 ANSWER: This is a classic example of how your responsibilities as a PCO can sometimes conflict with your responsibilities as part of a chain of command in the Air Force. While you typically want to comply with the orders of your higher leadership, it may not be possible due to your responsibilities as a warranted PCO. In this case, I would first determine the legal parameters of the issue. Two citations from the regulations may help. First, AFFARS states that when there is doubt or controversy about the interpretation of statutes, directives, and regulations, you must seek legal advice. The issue at hand seems to have some controversy as to the original legal guidance. Second, the AFMC MP says that it's up to the PCO and the attorney to resolve any issues determined to violate statutes or that lack legal sufficiency. If it can't be resolved, the PCO should highlight the issue in the clearance request and briefing. With these things in mind, I would first check to see if the legal guidance is mandatory or only advisory in nature. If mandatory, I would follow the legal guidance and then work with my supervisor to help resolve the situation with my higher leadership. I wouldn't need to "go it alone," but at the end of the day, it is my warrant on the line and my responsibility to ensure the integrity of the procurement system. I won't sign anything I don't feel comfortable signing. If there is flexibility in the legal guidance, I would consult with the attorney again to bring up the potential alternate course of action, and get his/her input, but I would ultimately determine whether or not to proceed and then document the file accordingly.

As a PCO, what kinds of things could cause you to lose your warrant?

REFERENCES: FAR 1.603-4; AFFARS MP 5301.603A PCO loses his/her warrant upon retirement from employment, reassignment from the position requiring a warrant, termination of employment, or unsatisfactory performance. Terminations must be submitted in writing using the "Contracting Officer Appointment/Warrant Eligibility Transfer/Termination Request" template in AFFARS, and requests must be submitted at least 14 days in advance of the requested termination along with the reason.