Presentation on theme: "772 ESS Lesson Learned Briefing"— Presentation transcript:
1 772 ESS Lesson Learned Briefing Air Force Materiel Command772 ESS Lesson Learned BriefingMrs. Sally Kite772 ESS/PKA21 Aug 13Integrity Service Excellence
2 From “The 100 Worst”From “The 100 Worst Mistakes in Government Contracting” (NCMA 2008)SolicitationProposal Preparation and SubmissionDefective Pricing and Truth in Negotiations ActSubcontract ManagementContract AdministrationContract Disputes
3 SolicitationFailure to Read Solicitation – “read it again, and again, and again”Due Date & Time/Delivery Instructions/Comply/Ask ??sFailure to Consider all Subsequent AmendmentsRead, consider, and formally acknowledge all amendments as part of the offerRead solicitation to see if there are updates that you are responsible for (i.e. Davis-Bacon)Material amendments must be formally acknowledgedFailure to Question Patent AmbiguitiesScour the solicitation for ambiguities prior to submission of offerContractor has duty to seek clarificationPatent vs. LatentRelying on Verbal vs. Written InstructionsNot binding w/few exceptions (micropurchases, simplified acquisitions etc.)Failure to Request a DebriefRequest in timely fashion per guidance (i.e. FAR)Learning Experience1. Make sure you understand contract type and what you have to submit. If unsure – ask questions. Note delivery date and instructions – late is late. Ensure your offer conforms w/instructions even if you don’t agree with them2. Read RFP/IFB/RFQ – some might require offeror to regulate new information (i.e. updated wage decision, new laws/regulations)Material Amendments impose legal obligations on a prospective offeror and must be formally acknowledged. If unsure – acknowledge! Failure to acknowledge amendments could be deemed non-responsive.3. Ambiguities exist where a phrase, clause, or section of a solicitation has more than one reasonable interpretation. Patent are glaring and obvious on face – ktr assumes risk for any uanticipated cost as a result of not obtaining clarifications on a patent ambiguity. Latent – are not obvious – courts may adopt a contractor’s reasonable interpretation - when in doubt – ask for clarification!!4. Get amendments in writing – verbal direction may not be binding on government5. Debrief, purpose to reduce # of protests, furnish basis for selection decision and contract award; debriefs provide an opportunity for the contractor to learn how to make their next proposal more successful (signif weaknesses/deficiencies, past performance, overall ranking, rationale for award/ reasonable responses to relevant questions)
4 Proposal Preparation and Submission Failure to Follow InstructionsComply w/everythingBase Offer on Evaluation FactorsAll factors/subfactors along w/relative importance will be stated in RFPSubmit Offer on TimeGet a receipt - if electronic – ask for read receiptAllow for base access time (if applicable)Violating Limitations on Subcontracting (FAR )Services 50%, Supplies 50%; GC 15%, Construction (special trade) 25%Expectation that Government will Hold DiscussionsFailure to Understand the Importance of Past PerformanceMust be considered in every solicitation over SATAll relevant information may be considered even if not provided directly by offerorComply – page limits/size (anything beyond limit will not be read); format – margins/font; submission of separate volumes for cost/technicalTips – prepare internal rating scheme, showing the value of those factors in the actual evaluation, to determine where to focus efforts during the proposal preparation stage (spend more time on high value items and less time on lower value). Address all – failure to address a factor/subfactor is a deficiencySubmit on Offer on time – proposal is late if received at gov’t office designated in the solicitation after the exact time specifiedLimitations on subcontracting – Services/Construction -% of contract cost, Supplies % of manufacturingExpectation of Discussions – offerors are not guaranteed a chance to negotiate or revise their initial proposal; initial proposal should represent best terms for cost or price and technical because you may not get a second chanceAll relevant information regarding a contractor’s actions under previously awarded contracts. Record of conforming to contract requirements, forecasting and cost controls, adherence to contract schedules, history of reasonable and cooperative behavior and commitment to customer satisfaction, ktr’s businesslike concerns for interests of the customer. Tips – maintain a database of previously awarded gov’t contracts, retain contact information of gov’t officials who worked w/you and can provide reference, regularly check and update agency past performance – don’t be afraid to contact gov’t agency if they have not provided you a rating in a timely manner in system (ACASS, CCASS) – with current reporting systems – gov’t may choose not to ask for PP directly – may search system w/ktr name and key terms
5 Defective Pricing and Truth in Negotiations Act Failure to Understand Cost or Pricing DataTruth in Negotiations Act (TINA)Requires contractors to furnish cost or pricing data before an agreement on price for most negotiated procurements >$700,000.Cost or Pricing DataAll facts prudent buyer would reasonably expect to significantly affect price negotiations that were available at the time the contract’s price was agreed to.Must be certified as “accurate, current, and complete” as of date price agreed uponOther than cost or pricing dataAppropriate information on the prices at which same or similar items have previously sold, and are adequate for determining reasonableness of priceLess onerous on the contractorDefective cost or pricingLaw provides for price reductions-Cost or pricing data Factual and verifiable, not judgmental; May be requested for contract modifications (these actions considered sole source)-Examples of cost or pricing data per FAR – vendor quotes, nonrecurring costs, make or buy decisions, information on mgmt decisions that could have a significant bearing on costs. – Lessons – ensure all documentation in same language as requesting agency (may have to translate vendor/subcontractor quotes/invoicesCertified Cost or Pricing Data not required when –adequate price competition, acquisition of commercial item, prices set by law/reg, or head of procuring agency writes a waiver. If exceptions met –CO may request “other than cost or pricing data”If cost or pricing data is defective, the law provides for price reductionsThe price, including profit or fee, shall be adjusted to exclude any significant amount that such price was increased because contractor (or subcontractor) submitted defective cost or pricing data ( Price Reduction for Defective Cost or Pricing Data; “-Modifications”.
6 Subcontract Management Failure to Flow Down FAR Clauses to SubcontractorsLessons LearnedPricing ArrangementsPrompt PaymentNotice of WithholdingRetainageManage your subcontractor/suppliers – gov’t would prefer not tooFailure to Include a Disputes Clause in the SubcontractRecommend that prime include specifically tailored dispute clause in subcontract, including a statement that the subcontractor must continue performance as directed by the prime contractor during the pendency of the dispute.Procedures for resolving disputesForum for AppealCertain clauses must flow down to protect the gov’t (EEO, Davis-Bacon, Prompt Payment, Service Contract). Some clauses are not required, but should flow down for good business practices (changes clause, termination for convenience).Lessons –*If you have a FFP contract w/gov’t – recommend similar pricing arrangement w/suppliers and subcontractors.*Pay subcontractors in timely manner and IAW prompt payment clause*If you are withholding from subcontractor/supplier – notify CO of how much/and why*Do not include any retainage or withholding in invoice to gov’t*Effectively manage your subcontractors/suppliers and resolve disputes as quickly as possible – gov’t does not have privity of contract w/your subktrs and suppliers, however, the gov’t has obligation to ensure they receive payment for services/supplies – payment bonds, retainage from prime – sub disputes often result in work stoppages for which prime contractor is held fully accountable (i.e. LDs, termination).Disputes – procedures for resolving disputes, forum for appeal
7 Contract Administration Accepting Direction from Unauthorized Government OfficialsOnly Contracting Officer has authorityAsk for written delegation of authorityAsk for direction in writingCourts historically find against contractor and deny claim if a contractor takes direction form someone without authorityFollowing Oral Promises vs. the Written ContractOnly the written word is bindingReliance on oral advice from unauthorized gov’t officials is at contractor’s risk and the government is not bound by riskFailure to Comply with Quality Control/Quality Assurance in the ContractContractor is responsible for quality control/quality assuranceGovernment is entitled to insist on strict compliance w/contract specifications and may order the correction of nonconforming work at no additional cost to gov’tOnly CO has the authority to enter into, administer, or terminate contracts and make related D&Fs. On-site customer may be very demanding – ktr should know their contract and what is within scope – if asked to perform outside of scope – immediately contact the CO and ask for direction. CO and customer may not always be on “same page”. Politely inform unauthorized individuals of scope concerns – if in doubt – say “let’s contact the CO”.FAR lays out 4 general requirements-ktr required to maintain acceptable inspection system and give the gov’t right to make inspections and test while work is in progress-for procurement of complex or critical items, there can be increased quality controls-For commercial items – gov’t should rely on the contractor’s existing QA systems as a substitute for gov’t inspection-For construction contracts – Title II contractors may be contracted for by gov’t – these inspectors are there for sole benefit of gov’t and should not be expected to replace prime contractor oversight (i.e. “I don’t have to watch that subktr – the Title II inspector is watching them”)
8 Contract Administration Continued Failure to Deliver on Time = Serious ConsequencesLoss of current contract (i.e. T4D)Liability for excess re-procurement costsLoss of future contracts (i.e. negative past performance)Failure to Submit a Proper InvoiceUnderstand payment procedures and what constitutes a proper invoiceGovernment will only pay proper invoices (Prompt Payment generally requires Gov’t to reject within 7 and pay proper invoice within 30 days)Payment clauses applicable to contract normally very specific on formatSubcontractors must be paid within 7 days of prime receiving paymentIncurring Cost Before the Contract is SignedFailure to Pay the Minimum Wage Benefits RequiredFederal constructino over $2,000 or service contracts over $2,500 are required to include minimum wage and fringe benefitsWages also apply to subcontractorsFailure to Comply with the Limitations of Funds ClauseAUTHORITY Only CO has the authority to enter into, administer, or terminate contracts and make related D&Fs. On-site customer may be very demanding – ktr should know their contract and what is within scope – if asked to perform outside of scope – immediately contact the CO and ask for direction. CO and customer may not always be on “same page”. Politely inform unauthorized individuals of scope concerns – if in doubt – say “let’s contact the CO”.QUALITY CONTROL FAR lays out 4 general requirements-ktr required to maintain acceptable inspection system and give the gov’t right to make inspections and test while work is in progress-for procurement of complex or critical items, there can be increased quality controls-For commercial items – gov’t should rely on the contractor’s existing QA systems as a substitute for gov’t inspection-For construction contracts – Title II contractors may be contracted for by gov’t – these inspectors are there for sole benefit of gov’t and should not be expected to replace prime contractor oversight (i.e. “I don’t have to watch that subktr – the Title II inspector is watching them”)SCHEDULE – Failure to meet the delivery schedule is a common reason for the gov’t to terminate for default immediately, consequences – loss of your current contract, gov’t may acquire supplies or services to those terminated and the contractor may be liable to the government for any excess procurement costs, loss of future contracts.INVOICES – back to subcontractor mgmt – ensure that subcontractors/suppliers are paid in timely fashion – some will walk regardless of what is in subcontract if not paid for work, payment clauses/prompt payment clauses – have mandatory flowdowns. Tips – submit draft invoice for CO/COR review first time around to ensure complete and accurate. Construction invoices require more extensive backup documentationINCURRING COSTS – don’t do it. Starting work w/o signed contract can result in significant risks of nonpaymentMINIMUM WAGE – Failure to pay minimum wages & benefits required by DB or SCA may result in severe sanctions, including financial penalties, debarment and criminal prosecutionLIMITATION OF FUNDS – Notify ktr in writing when anticipate that within the next 60 days it will exceed 75% of the estimated cost and provide a revised estimate – used to control ktr spending – ktr not obligated to continue beyond ceiling & gov’t not obligated to pay
9 Contract Disputes Failure to Submit a Proper Claim Proper claim must be in writing to COMust request final decisionMust be properly certified if over $100,000Must include sum certain (cannot state “no more than, no less than”)Failure to Request an Equitable Adjustment When WarrantedRecommend requesting REA prior to submitting claimIf over $100,000 – must certifyCO has “reasonable period” to respondA proper claim must-be in writing to CO-must request a final decision-if >$100k must be certified by appropriate official-must include sum certainREAEnsure Ktr is clear on REA vs claim in cover letter and certificationCO has reasonable period to respond.Failure of CO to respond may be “deemed denial” of REA.