1. Government Contracts

2. Overview What is a Government Contract?
Authority to Enter into Government Contracts
Four Phases of Government Contracts
The Role of the Government Contract Professional

3. Sources Statutes Federal Acquisition Regulation (FAR)
48 C.F.R. Chapter 1 (FAR Council)
Don’t forget FAR Supplements…
Case Law—administrative cases and Federal cases

4. What is a Government Contract?
Offer, Acceptance, Consideration…
Government is a party (of course)
Specialized statutes, regulations, and case law
Many differences from common law: e.g., socioeconomic policy, contract changes, contract terminations, etc….

5. FAR Definition of a “Contract”
“...a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds…”
FAR 2.101

6. General Categories of Government Contracts
Supplies
Construction
Services
Research and Development (R&D)

7. Every Good Government Procurement System Has…
Competition
Transparency
Integrity

8. Government Authority
Who has the authority to bind the Government with a contract?

9. Government Authority
General Rule: Only someone with actual authority may bind the Government

10. Government Authority Agency Heads (FAR 1.601)
By virtue of their positions (e.g., SecAF)
Delegate down to Senior Center Contracting Official (SCCO)
Folks with warrants (FAR 1.602)
Contracting Officers (COs)

11. Government Authority HCAs appoint COs IN WRITING (WARRANT)
Warrant must be posted (no secrets!)
May include further limitations (e.g. dollar limits)

12. Government Authority What about other folks?
Apparent authority—not recognized
Ratification (of unauthorized act)

13. Contractor Authority
All types of authority apply:
Actual
Apparent

14. Phases of Government Contracts

15. 4 Phases of Government Contracts
Acquisition Planning
Pre-Award (Source Selection)
Post-Award (Performance)
Close-out

16. Acquisition Planning KEY to successful procurement
Basically, looking at:
What do we need? (user)
How are we going to get it? (contracting)
How are we going to pay for it? (finance)
Are we following the rules? (legal)

17. Acquisition Planning: Basic Contract TYPES
Two Basic Types:
Fixed Price
Cost Reimbursement $

18. Acquisition Planning: Basic Contract TYPES
Fixed Price Contract
(FAR Subpart 16.2)
Set, predetermined price
Who bears the risk? $

19. Acquisition Planning: Basic Contract TYPES
Fixed Price Contract
(FAR Subpart 16.2)
Set, predetermined price
Contractor bears risk of increased costs (bound to perform at specified price) $

20. Acquisition Planning: Basic Contract TYPES
Cost Reimbursement Contract (FAR Subpart 16.3)
Government pays contractor’s costs of performance (plus a “fee”)
Who bears the risk? $

21. Acquisition Planning: Basic Contract TYPES
Cost Reimbursement Contract (FAR Subpart 16.3)
Government pays contractor’s costs of performance (plus a “fee”)
Government bears risk of increased costs $

22. Acquisition Planning: Contract TYPES—What else?
Incentive Contracts
Level-of-Effort Contracts
Variable Quantity Contracts
e.g., IDIQ
e.g., Requirements $

23. Acquisition Planning: Contract METHODS
Sealed Bidding (FAR Part 14)
Price is the only basis for award
Invitation for Bids (IFBs)

24. Acquisition Planning: Contract METHODS
Negotiated Procurements
(FAR Part 15)
Various factors (inc. price and past performance)
Best value
Request for Proposals (RFPs)

25. Acquisition Planning: Contract METHODS
Commercial Items (CI) and Services (FAR Part 12)
Definition of CI and Services
Phonebook Test

26. Acquisition Planning: Contract METHODS
Simplified Acquisitions (FAR Part 13)
Under $3,000 (Micro-purchase)
$3,000 to $100k (Simplified acquisition threshold--SAT)
Up to $5.5M (SAT for commercial items)

27. 4 Phases of Government Contracts
Acquisition Planning
Pre-Award (Source Selection)
Post-Award (Performance)
Close-Out

28. Pre-Award (Source Selection): Competition
Every contract requires competition
Micro-purchases (under $3,000) “reasonable price”-FAR
Between $3,000 and Simplified Acquisition Threshold (SAT) “reasonable number of sources” (“Rule of 3”)-FAR
Over SAT-Competition in Contracting Act Full and open competition-FAR 6.101

29. Pre-Award (Source Selection): Competition
Full and open competition AFTER EXCLUSION OF SOURCES FAR Subpart 6.2
e.g., contracts set aside for small business, etc.
OTHER THAN full and open competition FAR Subpart 6.3
requires JUSTIFICATION & APPROVAL (J&A);
e.g., only one source exists
e.g., “unusual and compelling urgency”

30. Pre-Award (Source Selection): Advertising
Publicication FAR 5.101
Over $25,000
Government-wide Point of Entry (GPE) or
$10,000 to $25,000
Posting in a public place
Under $10,000
No requirement

31. Pre-Award (Source Selection): Evaluation of Offers
Responsibility (FAR 9.103)
A Government contract shall be awarded only to a RESPONSIBLE contractor
Responsiveness (FAR )
Offers must meet ALL essential requirements of the solicitation (only for sealed bids)

32. Pre-Award (Source Selection): Bid Protests
What are they?
Basically, offerors or potential offerors challenging a solicitation or a contract award
Various Remedies—inc. possible STAY…
Of Award—Pre-Award
Of Performance—Post-Award

33. Pre-Award (Source Selection): Bid Protests
Where are they filed?
Agency Protests (FAR Subpart 33.1)
Government Accountability Office (GAO)
Court of Federal Claims (COFC)

34. 4 Phases of Government Contracts
Acquisition Planning
Pre-Award (Source Selection)
Post-Award (Performance)
Close-out

35. Post-Award (Performance)
The “Life” of the Contract
Contract Administration
Contract Changes
Claims/Disputes

36. Post-Award (Performance): Contract Administration
Primarily conducted by contracting office personnel (along w/Program Management and functional quality assurance folks)
Government should not wait until there is a problem to involve JA or DCMA
KEY: Foster strong relationships with
all resources available

37. Post-Award (Performance): Changes/Bilateral Modifications
Contract Changes (FAR Subpart 43.1)
Changes Clause allows “minor” changes
EQUITABLE ADJUSTMENT in price
Change must be:
WITHIN SCOPE (of work), and
Made by one with PROPER AUTHORITY (CO)
Unilateral Modifications
Bilateral Modifications

38. Post-Award (Performance): Contract Disputes
Contract Disputes (FAR Subpart 33.2)
Administrative or judicial litigation between the contractor and the agency, relating to contract performance
Starts with a CLAIM to the CO
Adverse final decision by CO perfects appeal to the Armed Services Board of Contract Appeals (ASBCA) or the Court of Federal Claims (COFC)

39. 4 Phases of Government Contracts
Acquisition Planning
Pre-Award (Source Selection)
Post-Award (Performance)
Close-Out

40. Close-Out
“Natural” Causes

41. Close-Out
Early Termination
Convenience
Default

42. Close-Out
Termination for Convenience of the Government (T4C) (FAR Part 49)
May be for any reason, or for no reason at all
Financially O.K. for
the contractor

43. Close-Out Termination for the Default (T4D) (FAR Part 49)
Contractor’s unexcused, present or prospective, failure to perform
Contractor may have
to pay for Gov’t
reprocurement costs
and risks debarment

44. Role of the Government Contract Professional
Legal Reviews
Legal Advice
Business Counsel
Litigation Support

45. Role of the Government Contract Professional: Legal Reviews
Contract File Review
Funding Document
Contract Document
Statement of Work (SOW)
Price Negotiation Memorandum (PNM)
Technical Evaluation
Other Contract Documents
Talk to the Contracting Officer

46. Summary What Is a Government Contract?
Authority to Enter into Government Contracts
Four Phases of Government Contracts
The Role of the Government Contract Professional