Presentation on theme: "1 Contracting under the Federal Acquisition Regulation UNDERSTANDING THE FAR Julie T. Norris, Director Emeritus Office of Sponsored Programs Massachusetts."— Presentation transcript:
1 Contracting under the Federal Acquisition Regulation UNDERSTANDING THE FAR Julie T. Norris, Director Emeritus Office of Sponsored Programs Massachusetts Institute of Technology firstname.lastname@example.org
2 Overview About the FAR Organization Contracting Under the FAR Subcontracting Under the FAR Selected Clauses Conclusion
5 Relationships U.S.C. (law) C.F.R. (implementation of law) Chapters (agencies) Titles (topics) Parts (specific topics)
6 What is the FAR? The FAR is a system of uniform policies and procedures governing the acquisition or contracting actions of all federal executive agencies.
7 Using the FAR When do you use the FAR? on grants? on cooperative agreements? on contracts? on other transactions?
8 Where is the FAR? The FAR is codified at Title 48 of the Code of Federal Regulations (CFR) and consists of 61 chapters. Chapter 1 is commonly known as the FAR, or Basic FAR; Chapters 2-61 are known as FAR Supplements, one for each Executive agency Today were primarily concerned with Chapter 1 and Chapter 1, part 52
9 Basic Structure Chapter (one per agency) Parts (one per topic) Parts 1-51 contain instructions for Part 52 Part 52 contains provisions and clauses Part 53 contains forms Subparts (subtopics) Sections Subsections
12 Agency Supplements Each Agency has the authority to issue a supplement, subject to review Agency Supplemental Clauses either Implement existing, basic FAR clauses, or Supplement existing, basic FAR parts, subparts, sections or subsections
13 Numbering System XX-XX.XXX-XX Chapter (not used with Chapter 1 (basic FAR)) Part Subpart Section Subsection
14 Example 1 27.303 Chapter (agency) Part (topic) Subpart Section Subsection 52.227-11 Chapter (agency) Part (topic) Subpart Section Subsection Instruction Clause/Provision
15 Example 2 227.304 Chapter (agency) Part (topic) Subpart Section Subsection 252-227-7039 Chapter (agency) Part (topic) Subpart Section Subsection Instruction Clause/Provision
16 How is the FAR Issued? Federal Register CFR Federal Acquisition Circulars
18 Where Do I Start? Determine the Nature of the Contract Type Cost-Reimbursement Fixed-Price Time & Material/Labor Hour Indefinite Delivery/Indefinite Quantity Basic Ordering Purpose Construction Research & Development Supply Service
19 Fixed Price Contracts Discussed at 16.2 Procurement of supplies or services on the basis of reasonably definite functional or detailed specifications. When costs can be estimated reasonably accurately. Imposes on contractor maximum incentive to control costs, but with minimum administrative burden. Preferred method of contracting by govt.
20 Fixed Price Contracts (cont.) Why might you want one? Freedom to rebudget Limited financial reporting Keep it if you dont spend it Why might you not want one? Payments tied to deliverables (e.g, full payment upon receipt of final report) Associated FAR clauses ( DEFAULT ) If you run out of funds, too bad.
21 Cost-Reimbursement Contracts Discussed at 16.3. Procurement of non-commercial items which cannot be based on reasonably definite functional or detailed specifications (i.e., R&D). There is no incentive for contractor to control costs, thus government imposes tighter controls.
22 Cost-Reimbursement Contracts Why might you want one? Best efforts basis: when you run out of funds, you stop working FAR clauses may be more favorable Why might you not want one? Tighter rebudgeting controls More frequent financial reports Closer scrutiny
23 R&D Contracting Discussed at Part 35 To advance scientific and technical knowledge and apply that knowledge to the extent necessary to achieve agency and national goals. Centers around the Statement of Work.
24 CR/FP - How Do I Tell? Cost- Reimbursement Total estimated cost or not to exceed amount Invoicing based on expenditures Listed FAR clauses. Fixed Price Total Price Invoicing based on milestones Generally, POs are fixed-price Listed FAR clauses
25 Time & Material/Labor-Hour Discussed at 16.6 Reimbursement of hours worked, not costs incurred. Fixed hourly rate that incorporates salary, fringe benefits, F&A, and fee. Rates invoiced must match proposed rates. Audit?
26 T&M/LH (cont.) What to do about them Propose with disclaimer Dont accept this contract type, unless accounting system can comply Argue on basis of cost accounting standards Negotiate a buffer
27 Basic Ordering Agreements Discussed at 16.703 Not a contract - no fiscal commitment. Contains: Terms and clauses applying to future orders between the parties during the term of the BOA; A description of supplies or services to be provided; Methods for pricing, issuing and delivering future orders under BOA.
28 How is it organized? Part I – The Schedule A. Solicitation/contract form B. Supplies or services and prices/costs C. Description/specifications/ work statement D. Packaging and marking E. Inspection and acceptance F. Deliveries or performance G. Contract administration data H. Special contract requirements Part II – Contract Clauses I. Contract clauses Part III – List of other documents, exhibits and other attachments J. List of attachments Part IV – Representations and Instructions K. Representations, certifications, and other statements of offerors L. Instructions, conditions and notices to offerors M. Evaluation factors for award
29 Looking up FAR Clauses Look-up the clauses listed in your contract in Part 52 of the relevant FAR Chapter (e.g., basic, DoD, NASA, etc), to obtain the full text of each clause. Use the cross-reference stated in the first line of each FAR clause to find the prescription.
30 Which Clauses are Acceptable? Read the clause - can you live with it? Read the prescription - does it apply? Contract type (FP, CR, T&M) Contract purpose (R&D, Supply, Service) Recipient type (for-profit, non-profit, educational) Is there a trigger, or does it apply no matter what? Is it Required or Optional THE KEY: Read the prescription!!
31 Subcontracting Plans Discussed at 19.7 What are they? Established goals for including a minimum percentage of small business concerns, small disadvantaged business concerns, and women-owned small business concerns in any subcontracting activity under a specific contract. The Subcontracting Plan is incorporated into the contract.
32 Subcontracting Plans (cont.) Required at the request of the Contracting Officer if contract, and potential modifications, exceed $500,000. Process to create an individual plan: Obtain detailed budget Work with PI to determine possible vendors for subcontracting Establish estimates by percentages for large, small, small disadvantaged, and woman owned businesses. Master institutional plan is another option Reports must be filed Material breach
33 Certificate of Current Cost & Pricing Data Discussed at 15.406 What is it? A certification that, to the best of your knowledge, all cost & pricing data you have provided to the Contracting Officer are accurate and complete. When is it required? Any contract entered into by negotiation that exceeds $500,000
34 Higher Tier Flow-Downs What is a higher-tier? Direct flow-down When the next higher tier flows down the clauses in their contract exactly as they received them. Indirect flow-down When the next higher tier re-words flow- down clauses
35 Publication Restrictions Most common clauses 52.227-17 Special Works 252.204-7000 Disclosure of Information Arguments against their use… 27.404(f)(2)&(3) NSDD-189 IRS Rev. Rul. 76-296
36 Tips to Successful Negotiating Explain why Link the prescription to your reasoning Argue on the basis of institutional policy Cite previous contracts If commercial, link back to federal contracts Take a breather Switch negotiators Switch techniques
38 Basic Tenet Do Unto Others As Was Done Unto You
39 Subcontractor Involvement Bring subcontractor into the process as soon as possible. Why???
40 Privity Contractual relationship is only between a contractor and subcontractor Protects higher tiers from direct liability. Exception is intellectual property
41 Responsibilities You are the responsible authority, without recourse to the Federal agencies regarding the settlement and satisfaction of all contractual and administrative issues. Includes: Payment Disputes Claims Performance What about audit?
42 Prior Consent/Notification Approval of a subcontract in your budget is not approval of the subcontractor, only of the need to subcontract that effort. ACO prior approval is required for subcontracting of research work, including negotiation memorandum and supporting documentation, if Fixed-Price.
43 Prior Consent/Notification (cont.) Required by 52.244-2 44.201-1: Consent 44.201-2: Notification Determined by: Approved purchasing system (CPSR) Contracting Officer, in (e) of the clause; Type/Amount of subcontract to be issued.
44 CPSR Discussed at 44.3 Evaluates efficiency and effectiveness with which contractor spends govt funds, and complies with govt policy when subcontracting. Provides ACO basis for granting, withholding, or withdrawing approval of contractors procurement system.
45 CPSR (cont.) Review for CPSR is triggered by contractor expecting to exceed $25,000,000 in federal contracts and contract flow-through during upcoming 12 months; Need for CPSR takes into consideration: Past performance; Complexity and dollar value of subcontracts
46 Hints If consent is required, you must notify the govt reasonably in advance, and provide the documentation specified in (f)(1). The CO can specify subcontracts for which consent is required, despite an approved system. Inclusion of either Alternate may require advance notification of the CO, even if consent is not required. In which case, only the info in (f)(1)(i)-(iv) is required.
47 Subcontractor Reliability A subcontractors performance and financial reliability must be acceptable in order to issue a contract. Administrative and performance requirements can be added to ensure completion. Verify with federal debarred/suspended database (online).
48 Request to Issue Must include: Subcontractor name Period of Performance Dollar amount Statement of Work Compliances Reporting Requirements Selection Process Competitive bidding Sole Source Small Business Concerns
49 Subcontractor Qualifications Subcontractor source Subcontractor classification Financial management system Identify source and application of funds Accountability for property Formal personnel policy Salary rates and benefits Time and attendance
50 Subcontractor Qualifications (cont.) Formal travel policy Formal purchasing procedure Comply with CAS Annual financial audit Legitimate business
51 Subcontractor Selection When contracting under a federal prime, contract documentation on selection must indicate the following: Whether small business concerns were solicited and if not, why not; Whether veteran-owned small business concerns were solicited and, if not, why not; Whether HUBZone small business concerns were solicited and, if not, why not;
52 Subcontractor Selection (cont.) Whether small disadvantaged business concerns were solicited and, if not, why not; Whether women-owned small business concerns were solicited and, if not, why not; If applicable, the reason award was not made to a small business concern.
53 Cost/Price Analysis Cost Analysis - the review of separate elements of cost and supporting data. Normal for cost-reimbursement efforts. Price Analysis - the review of the entire contract price without looking at individual items of cost. Appropriate when there is adequate price comparison.
54 Price Analysis Techniques Comparing proposed prices among bids received; Comparison of previously proposed prices and previous Govt and commercial contract prices with current proposed prices for the same or similar item; Parametric estimating; Published price lists; Comparison of proposed prices with independent cost estimates; Market research
55 Cost Analysis Techniques Verification of cost data and evaluation of separate cost elements, including: Evaluation of the necessity and reasonableness of costs, including contingencies; Evaluation of cost trends and reasonableness of estimates; Evaluation of the application of audited/negotiated F&A rates, labor rates, etc. Evaluation of current practices on future cost objectives.
56 Cost Analysis Techniques (cont.) Comparison of proposed costs with: Actual costs previously incurred by subcontractor; Previous cost estimates from the subcontractor or other subcontractors for similar items; Other cost estimates received in response to the solicitation; or Independent estimates by technical personnel
57 Technical Analysis Personnel having specialized knowledge perform an analysis of the proposal costs. Goal is to determine whether the resources proposed are required for the effort. Technical analysis, at a minimum, should address the types and quantities of materials proposed and the quantity and mix of labor hours.
58 Types of Subcontracts Cost-Reimbursement - Normal for universities and non-profits performing R&D. Fixed-Price - Normal for service and supply subcontracting. May be appropriate when greater control over subcontractor performance is desired.
59 Determining Subcontract Type Discussed at 16.104 Price Competition Price Analysis Cost Analysis Type & Complexity Urgency Period of Performance Technical Capability/Financial Responsibility Adequacy of Accounting System Concurrent Contracts Extent and Nature of Proposed Subcontracting Acquisition History
60 Writing a Subcontract Defines relationship: Clarifies expectations of both parties Period of performance Estimated costs Cost sharing Scope of work Reporting requirements Deliverables Incorporated flow-downs Compliances Authorized signatures
61 Purpose of a Subcontract Provides for accountability Evidence of accountability to sponsor Evidence of subs accountability to prime Mechanism for payment Resolves conflicts Preventing disputes by clearly stating terms and conditions both parties must comply with Offers protection for both parties should something unforeseen happen
62 Flow-down Requirements Generally five different types of clauses: Government clauses that must be incorporated in subs exactly as written; Clauses that must have their substance incorporated; Clauses which are silent regarding how they are to be incorporated but are automatically applicable to subs due to the operation of law (see next slide); Clauses that are not mandatory but are necessary because they impose obligations that we cannot fulfill effectively unless similar provisions are incorporated in the sub; Clauses that we choose to flow down based on the circumstances of the sub agreement.
63 Christian Doctrine G.L. Christian & Associates vs. United States, 160 Ct. Cl. – Termination for Convenience Clause read into contract by operation of law, even though clause had been deliberately omitted.
64 Christian Doctrine (cont.) Important Implications Your govt contract may actually contain clauses that are not listed… Flow-down these invisible clauses, or you are at risk under your prime. By far the two most important clauses of this type are Changes and Termination – you must have the ability to change and/or terminate your subcontract if those events occur on your prime.
65 Substitution of Nomenclature Flow-down clauses must accurately reflect the relationship between the parties. Can be effected by using an introductory paragraph to the flow- down clauses.
66 For-Profit Subcontractors Cost Principles = FAR 32.2 Administrative Requirements = FAR Rates to be verified with their DCAA (but you will probably have to go through your ACO - confidentiality) Profit needs to be scrutinized (7% excellent, 15% acceptable)
67 Negotiation Memorandum Must include minimum FAR requirements Principle elements of price negotiations; Most significant considerations controlling establishment of initial or revised prices; Reason cost or pricing data were not required; Extent to which contractor did not rely on subcontractors cost or pricing data; Extent that contractor found subcontractors data were not accurate, complete or current, and action taken;
68 Negotiation Memorandum (cont.) Reasons for any significant difference between price objective, and negotiated price; Explanation of any incentives. Must be complete in order to execute subcontract Must be signed by negotiator
69 Reps and Certs Make sure that subcontractor fills out the same set of Representations and Certifications that were required of you.
70 Subcontracting Plan Required from subcontractor if it was required of you, and if subcontract will exceed $500,000. Review subcontractors plan to make sure they have prepared it correctly. Incorporate their plan into subcontract. Incorporate their reported data into yours.
71 What is Needed to Close Out a Contract The final technical report The final patent report A final, or completion invoice, clearly marked as such (provided by the university) A final inventory of property, if the contract involves property (provided by the university).
74 Classified Information Purpose: Establishes protocols which will apply to the contract if it involves classified information. Issue: Security controls; classified information. Action: Request Alternate I - provides educational institutions opportunity to revise SOW or terminate if level of classification increases. 52.204-02 Security Requirements
75 Defense Priorities Purpose: Identifies contract as rated either "DX" or "DO." See 11.603(c) for requirements. Issue: Requires contractor to prioritize government contracts based upon rating, and allocate resources and procurements accordingly. Action: Determine whether rating is indicated in contract (or you dont have to worry about it). May need to be invoked to meet contract delivery requirements. 52.211-15 Defense Priorities and Allocations System
76 Commercial Acquisition Purpose: Sets forth abbreviated set of fixed-price terms and conditions for the acquisition of commercial supplies and services. Issue: Often used by contracting activities not accustomed to working with educational institutions. Includes warranty and default. Action: Request the contract be changed to C/R R&D (or at least to 52.213-04); negotiate out unacceptable terms. 52.212-04 Contract Terms and Conditions – Commercial Items
77 Simplified Acquisition Purpose: Sets forth abbreviated set of fixed-price terms and conditions for the acquisition of non- commercial supplies and services. Issue: Often used by contracting activities not accustomed to working with educational institutions. Includes warranty and default. Action: Request the contract be changed to C/R R&D, otherwise, negotiate out unacceptable terms. 52.213-04 Contract Terms and Conditions – Simplified Acquisitions
78 Audits and Record Retention Purpose: Establishes governments right to access and to audit contractor records; contractors requirements for retention of records. Issue: Which audit requirements apply; how long to keep the records (3 years after final payment, or settlement…). Action: Request Alternate II, which incorporates OMB A-133. 52.215-02 Audit and Records - Negotiation
79 Order of Precedence Purpose: Establishes the order of precedence for various sections of the contract when the Uniform Contract Format applies. Issue: Will help determine precedence of conflicting clauses. Action: None. 52.215-08 Order of Precedence - Uniform Contract Format
80 Allowable Costs; Payment Purpose: Establishes which cost principles will apply, and terms of payment. Issue: Defaults to commercial cost principles (31.2). Action: Request that reference to 31.2 in first paragraph be changed to 31.3 (which incorporates A-21). 52.216-07 Allowable Costs and Payment
81 Fixed Fee Purpose: To establish that a fee will be an allowable item of expense. Issue: Although this clause only applies in the event you are charging a fee, the Sponsor is treating this contract as if it were issued to a commercial concern, which means there may be other commercially oriented clauses. Action: Remove, if you are not asking for a fee. Look for other inappropriate commercial-oriented clauses. 52.216-08 Fixed-Fee
82 Type of Contract Purpose: To establish the type of contract (CR, FP, etc.), specifically that it is cost-based with no fee; also establishes a reserve to protect governments interests. Issue: Type of contract determines other contract requirements; reserve can be reduced (non-profits) or removed (educational R&D). Action: Try to get the reserve removed (Alternate 1). Otherwise, try to get reserve reduced to $10,000. 52.216-11 Cost Contract - No Fee
83 Subcontracting Plan Purpose: To establish requirement for Contractor to submit a Subcontracting Plan. Issue: Requires preparation and submission prior to award; requires reporting. Plan is incorporated into contract, so violation is a material breach. Action: Coordinate with your purchasing department. If no plan was submitted, get clause removed. 52.219-09 Small, Small Disadvantaged and Women- Owned Small Disadvantaged Subcontracting Plan
84 Service Contract Act Purpose: Establishes minimum salary, benefits, and policies that will apply to project employees covered by the Act (clerical, data processing, etc). Issue: Many smaller federal offices issue Service- type contracts for research effort. May impact application of institutional salaries, benefits, and policies to project personnel. Action: If you cannot live with requirements of Act, try to get contract type changed to R&D. 52.222-41 Service Contract Act of 1965 - as Amended
85 Patents Purpose: Establishes patent terms. Issue: Allows educational and non-profit institutions to elect ownership of patents developed under the contract. This is the preferred clause - implements Bayh-Dole Act. Action: None. 52.227-11 Patent Rights - Retention by the Contractor
86 Patents Purpose: Establishes patent terms. Issue: Allows commercial institutions to elect ownership of patents developed under the contract. This is inappropriate for non-profits and educational institutions. Action: Request clause be changed to 52.227-11. 52.227-12 Patent Rights - Retention by the Contractor
87 Data Purpose: Establishes ownership of data and copyrights. Issue: Allows contractors to establish copyright on publications first produced. For educational institutions, Alternate IV will allow ownership of all data. Action: Request that Alternate IV be included. 52.227-14 Rights in Data - General
88 Data - Special Works Purpose: Establishes that contract deliverables are for sole use of the government (work-for-hire). Issue: All data and deliverables are owned by the government. Contractor may not publish or release without prior approval; must request permission for ownership and/or use. Action: The prescription is very clear about the few situations for which the government may invoke this clause – unless you intend this, get it removed. 52.227-17 Rights in Data - Special Works
89 Cost Accounting Standards Purpose: To establish which Cost Accounting Standards will apply to contracts with educational institutions (same as A-21). Issue: Make sure this is the only CAS clause included, or you may find yourself subject to additional standards. Action: Since these standards are already incorporated into the contract via 31.3 (A-21), dont worry about getting this clause in, unless you see other clauses already there. 52.230-05 Cost Accounting Standards - Educational Institutions
90 Funding? Purpose: To allow government to finalize a contract with funding expected to be obligated from next federal FY; Issue: You may have a contract but you dont have any authority to spend. Action: Wait for government to notify you that funds have been made available. 52.232-18 Availability of Funds
91 Cost Limitation Purpose: Establishes a notification system whereby the government is informed when contractor expenditures reach a specified threshold, and whether expenditures will be substantially more or less than total estimated cost. Issue: Puts government on notice that contractor is coming to end of contract. Government must respond or contractor is no longer responsible to continue work. Action: Provide notification. 52.232-20 Limitation of Costs
92 Obligated Funds Limitation Purpose: Establishes a notification system whereby government is informed when contractor expenditures reach a specified threshold or are expected to exceed total obligated funds. Issue: Puts government on notice that contractor is coming to end of obligated funding. Also establishes 60 day deadline for supplemental or extension requests. Action: Provide notification. 52.232-22 Limitation of Funds
93 Stop-Work Purpose: Establishes responsibilities of each party when government issues a stop-work order. Issue: Contractor must stop work on date stated. Government has up to 90 days to cancel the order, extend it, or terminate the contract. Contractor will be reimbursed for allowable cost incurred prior to effective date and allowable, uncancellable obligations. Action: Request reduction of 90-day suspension to 30 days. 52.242-15 Stop-Work Order
94 Contract Changes Purpose: Establishes conditions under which government may direct changes to SOW. Issue: Only contract officer may direct changes. If changes increase cost and/or time, contract officer may make equitable adjustment to cost based upon contractors request for adjustment. Action: Submit adjustment request within 30 days of change notice. 52.243-2 Changes - Cost Reimbursement
95 Subcontracts Purpose: Establishes prior approval requirements for issuance of subcontracts as well as contractor documentation requirements for same. Issue: Prior ACO approval may be required (even if subcontract was in budget), especially if you dont have an approved purchasing system. Action: Document! Also, previous versions of this clause may apply depending on date of contract, with different requirements. 52.244-2 Subcontracts
96 Property Management Purpose: Defines property; establishes title and management standards. Issue: Title vests in government unless stated elsewhere in contract (Section B). Alternate I allows educational institutions to retain title if under $5,000, provided prior approval was obtained. However, Alt. I also requires quarterly reporting. Default vesting is with government. Action: Request Alternate I if you wish to, but remember reporting requirements. Request title upon termination. 52.245-5 Government Property (Cost-Reimbursement, Time-and-Materials…)
97 Inspection Purpose: Establishes conditions under which government may inspect/evaluate work. Issue: This clause is only available for R&D, and when delivery of designs and reports is the objective. Other inspection clauses require establishment/maintenance of an inspection system and are much more onerous. Action: Argue that contract is for basic R&D and only deliverables are technical reports. 52.246-9 Inspection of Research and Development (Short Form)
98 Foreign Travel Purpose: Imposes requirement to use only U.S-flag air carriers for government-funded travel. Issue: Foreign travel becomes an unallowable cost if U.S. flag air carrier is not used, excepting certain predefined situations. Action: Educate your researchers. 52.247-63 Preference for U.S.-Flag Air Carriers
99 Termination Purpose: Specifies actions contractor must take when it receives a termination notice from government (similar to Stop-Work Order.). Issue: This is the only termination clause prescribed for use with universities performing R&D (either CR or FP). Termination for Default becomes a possibility on non- R&D contracts. Action: Make sure contract is classified R&D. 52.245-9 Termination for Convenience of the Government (Educational and other Non…)
100 Employment Purpose: Establishes prohibition against employing to supervise or consult on a federal contract, allowing to act in management or on board of directors, anyone who within the last 5 years has been convicted of a felony arising out of a DoD contract. Issue: Has far-reaching implications. Action: Central administration must be pro-active. 252.203-7001 Prohibition on Employment
101 Publication Restriction Purpose: To safeguard classified information in industry. Issue: Requires government prior approval to publish or disseminate. Purpose is not apparent from prescription. Action: Refer to 27.404(g)(2)&(3) and NSDD-189 as justification for getting restriction removed. Also, note IRS Ruling 76-296. 252.204-7000 Disclosure of Information
102 Drug Testing Purpose: Requires contractor to maintain certain anti-drug polices and procedures. Issue: Intended for contracts utilizing classified information and to protect national security - unlike basic federal requirement, this clause adds random drug testing. May violate institutional policy; union contracts. Action: Get it removed, or contact university counsel. 252.223-7004 Drug-Free Workforce
103 Invention Reporting Purpose: Establishes reporting requirements for inventions disclosed under the contract, programmatic subcontracts issued and the patent clauses used. Issue: Interim reports every 12 months, and a final report 90 days after completion. Action: Complete DD form 882 Report of Inventions and Subcontracts. Note recent legal issues concerning late invention reports. 252.227-7039 Patents - Reporting of Subject Inventions
104 Warranty of Data Purpose: Requires contractor to warranty technical data for 3 years after end of contract. Govt may require correction of data; provides for remedies by govt. Issue: Penalties include correction of data at contractors expense, or reimbursement to govt. Also, liability for any damages incurred by govt. Action: Negotiate out on basis of inappropriate for basic research, and that university rates do not include the cost of deferred liability associated with warranties. 252.246-7001 Warranty of Data
105 Classified Information Purpose: Establishes protocols that will apply to the contract if it involves classified information (similar to 52.204-02, Alt I). Issue: Security controls; classified information. Action: Nothing 952.204-72 Disclosure of Information
106 Export Controls Purpose: Establishes application of export regulations to contract. Issue: Export controls will apply in accordance with regulations. Presumption for fundamental research is that export controls do not apply. Action: Ensure that there are no publication restrictions or restrictions on access/dissemination of information. 1852.225-72 Export Controls