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 Formed in 1959 to foster the professional growth and educational advancement of its members  Headquarters in Ashburn, Virginia www.ncmahq.orgwww.ncmahq.org.

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Presentation on theme: " Formed in 1959 to foster the professional growth and educational advancement of its members  Headquarters in Ashburn, Virginia www.ncmahq.orgwww.ncmahq.org."— Presentation transcript:

1  Formed in 1959 to foster the professional growth and educational advancement of its members  Headquarters in Ashburn, Virginia  Chapters  149 Chapters in USA and 12 Foreign Countries  Local Chapter is the Sacramento Gold Rush Chapter  Members  About 18,000 Members  Government Agency Contract Professionals  Government Contract Professionals  Commercial Contract Professionals  Certification Programs  Certified Professional Contracts Manager (CPCM)  Certified Commercial Contracts Manager (CCCM)  Certified Federal Contracts Manager (CFCM)

2  Publications  Contract Management (Monthly Magazine)  Journal of Contract Management (Quarterly Research Oriented)  NCMA Published, Distributed, and Recommended Books  Training Opportunities/Materials  World Congress  Aerospace and Defense Contract Management Conference  Audio Seminars  E-Courses  National Education Seminars  Certification Training Materials  19 Education Partners  Career Opportunities  Post Job Openings  Find a Job

3  Chapter Awards  Walter R. Graalman Award  Member Awards  Fellow Award  Albert Berger Outstanding Chapter Leadership Award  Alvis D. Keen Honorary Life Member Award  Arthur G. Muller Annual Volunteer Award  Blanche Witte Memorial Foundation Annual Award  Charles A. Dana Distinguished Service Award  Charles Delaney Memorial Annual Award  Excellence in Contracts Professionalism  Herbert Roback Memorial Award  James E. Cravens Membership Award  National Achievement Award  National Education Award  NCMA – ESI International Global Contracting Award  Outstanding Fellow Award  W. Gregor Macfarlan Excellence in Contract Management Research and Writing

4  Upcoming Seminar by NCMA Sacramento Gold Rush Chapter  November 12, 2009 – 8:30 AM to 5:00 PM  Deadline for Early Bird Registration October 10, 2009  Title: “Service Contracting for State and Local Government”  Delta King Hotel, 1000 Front Street, Old Sacramento, California  Course Outline  Advance Contract Planning through Contract Administration (See Flyer for Details)  Proposal Evaluation Exercise  Negotiation Exercise  Registration Fee Includes  Full-Day Seminar  Book “Contracting for Services in State and Local Government Agencies”  Compact Disk with Best Practices RFP & Contract + Other Contract Management Tools  Breakfast  Lunch  8 Continuing Education Hours

5 Fundamentals of Contract Management Best Practices William Sims Curry, CPCM, Fellow A State of California Certified SB/MB/DVBE Fundamentals of Contract Management Best Practices William Sims Curry, CPCM, Fellow A State of California Certified SB/MB/DVBE Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9,

6 Overview – Best Practices Research  Research Objectives  Research Findings – Questionnaire  Research Findings – Document Review  Contract Variable Information  Incidence of Contract Provisions in Terms and Conditions Overview – Best Practices Research  Research Objectives  Research Findings – Questionnaire  Research Findings – Document Review  Contract Variable Information  Incidence of Contract Provisions in Terms and Conditions Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9,

7 Research Project Objectives Determine Service Contracting Best Practices in States and Local Government Agencies to:  Prepare RFP & Service Contract Templates for Use by all State & Local Government Agencies  Include Discussion of Best Practices in “Contracting for Services in State and Local Government Agencies” and “Government Contracting: Promises and Perils.”  Prepare CD Accompanying Book to Provide MS Word Version of RFP, Service Contract & Other Contract Management Tools Research Project Objectives Determine Service Contracting Best Practices in States and Local Government Agencies to:  Prepare RFP & Service Contract Templates for Use by all State & Local Government Agencies  Include Discussion of Best Practices in “Contracting for Services in State and Local Government Agencies” and “Government Contracting: Promises and Perils.”  Prepare CD Accompanying Book to Provide MS Word Version of RFP, Service Contract & Other Contract Management Tools Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9,

8 Fifty States, Fifty Cities and Fifty Counties were Invited to Participate in the Research Project Participating Agencies STATES CaliforniaConnecticutHawaiiIowa KentuckyMarylandMassachusettsNew York North CarolinaOhioPennsylvaniaRhode Island South DakotaTexasUtahWashington West Virginia LOCAL AGENCIES City of Des Moines, IACity/Borough of Juneau, AK City of Montgomery, ALMaricopa County, AZ Oklahoma County, OKCity of Richmond, VA Fifty States, Fifty Cities and Fifty Counties were Invited to Participate in the Research Project Participating Agencies STATES CaliforniaConnecticutHawaiiIowa KentuckyMarylandMassachusettsNew York North CarolinaOhioPennsylvaniaRhode Island South DakotaTexasUtahWashington West Virginia LOCAL AGENCIES City of Des Moines, IACity/Borough of Juneau, AK City of Montgomery, ALMaricopa County, AZ Oklahoma County, OKCity of Richmond, VA Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9,

9 Cost-Plus-A-Percentage-of-Cost Contracts not Permitted Footnote: Cost-Plus-a-Percentage-of-Cost (CPPC) contracts are not permitted by numerous states nor in federal government contracting, because it has been determined that this contract type may provide an incentive for contractors to maximize reimbursable expenditures to increase their profit. [ABA 2000 Model Procurement Code Discourages Use of CPPC Contracts] Cost-Plus-A-Percentage-of-Cost Contracts not Permitted Footnote: Cost-Plus-a-Percentage-of-Cost (CPPC) contracts are not permitted by numerous states nor in federal government contracting, because it has been determined that this contract type may provide an incentive for contractors to maximize reimbursable expenditures to increase their profit. [ABA 2000 Model Procurement Code Discourages Use of CPPC Contracts] Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9, Are Cost-Plus-a-Percentage-of-Cost Contracts Permitted? StatesLocal AgenciesResponse 31Yes 10Yes, but not used 10Yes, but rare 64No 10Don’t know 01No Response

10 Word that Most Compels a Contractor to Perform Tasks [Definition of “shall” in ABA 2000 Model Procurement Code is “Shall denotes the imperative.”] Word that Most Compels a Contractor to Perform Tasks [Definition of “shall” in ABA 2000 Model Procurement Code is “Shall denotes the imperative.”] Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9, What word most compels a contractor to perform tasks? StatesLocal AgenciesResponse 61Shall 10Must 53Shall and Must 01Shall, Must and Will

11 Threshold where Sole Source Justifications are Required [ABA 2000 Model Procurement Code indicates that sole source should require written determination by an agency official that there is only one source.] Threshold where Sole Source Justifications are Required [ABA 2000 Model Procurement Code indicates that sole source should require written determination by an agency official that there is only one source.] Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9, At what dollar threshold are sole source justifications required? StatesLocal AgenciesResponse 01No dollar amount, but sole source must be proven 11$1,000 20$2,500 31$3,000 to $3,100 32$5,000 01$10,000 20$50,000 10$62,600

12 Identification of a Website in RFPs Fifty-nine percent (59%) of the RFPs identified a website for either:  General Information About the Agency & Contracting Program  Announcement of Active Solicitations  Information on Registration as a Prospective Contractor  Posing Contractor Questions Regarding Active Solicitations and Agency Responses [The National Purchasing Institute’s (NPI’s) criteria for the 2008 Achievement of Excellence in Procurement (AEP) award includes the availability of an Internet home page with a link to purchasing activities, on-line registration of prospective contractors, distribution of solicitations via the Internet and electronic commerce.] Identification of a Website in RFPs Fifty-nine percent (59%) of the RFPs identified a website for either:  General Information About the Agency & Contracting Program  Announcement of Active Solicitations  Information on Registration as a Prospective Contractor  Posing Contractor Questions Regarding Active Solicitations and Agency Responses [The National Purchasing Institute’s (NPI’s) criteria for the 2008 Achievement of Excellence in Procurement (AEP) award includes the availability of an Internet home page with a link to purchasing activities, on-line registration of prospective contractors, distribution of solicitations via the Internet and electronic commerce.] Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9,

13 Use of a Website to Manage Pre-Proposal Communications Thirty-two Percent (32%) of the RFPs Identified a Website to Manage Pre-Proposal Communications. In the Majority of Cases, Pre-Proposal Communications are Managed by:  Questions from Prospective Contractors may be Posed Solely via  Questions Posed via Telephone or in Face-to-Face Meetings are not Acceptable  Date for Receipt of Questions is No-Later-Than One Week Prior to RFP Due Date  Agency Posts Contractor Questions and Agency Responses on Website [The original 1979 American Bar Association (ABA) Model Procurement Code for State and Local Governments includes eleven basic principles that have been preserved. There is now a 2000 Model Procurement Code for State and Local Governments. The fifth basic principle from the 1979 code is “Equal Treatment of Bidders/Offerors.” Posting questions regarding solicitations and agency responses to a website for all to see while prohibiting alternative methods for posing questions is an excellent practice that promotes equal treatment of prospective contractors.] Use of a Website to Manage Pre-Proposal Communications Thirty-two Percent (32%) of the RFPs Identified a Website to Manage Pre-Proposal Communications. In the Majority of Cases, Pre-Proposal Communications are Managed by:  Questions from Prospective Contractors may be Posed Solely via  Questions Posed via Telephone or in Face-to-Face Meetings are not Acceptable  Date for Receipt of Questions is No-Later-Than One Week Prior to RFP Due Date  Agency Posts Contractor Questions and Agency Responses on Website [The original 1979 American Bar Association (ABA) Model Procurement Code for State and Local Governments includes eleven basic principles that have been preserved. There is now a 2000 Model Procurement Code for State and Local Governments. The fifth basic principle from the 1979 code is “Equal Treatment of Bidders/Offerors.” Posting questions regarding solicitations and agency responses to a website for all to see while prohibiting alternative methods for posing questions is an excellent practice that promotes equal treatment of prospective contractors.] Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9,

14 No Preference Given to Local Contractors  Eighteen Percent (18%) of the RFPs Indicated that a Preference would be given to Local Contractors.  Thirty-six Percent (36%) of the RFPs Indicated Socioeconomic Preferences Other than for Local Contractors. [The Code of Federal Regulations (CFR) states in 28 CFR, PART 35, STATE AND LOCAL ASSISTANCE, Part , Grantee procurement systems; State or local law, subpart (C) Preference, states, State or local laws, ordinances, regulations or procedures which effectively give local or in-State bidders or proposers preference over other bidders or proposers shall not be employed in evaluating bids or proposals for subagreements under a grant. Similar prohibitions are also included in CFR Subpart , Formal advertising. ] No Preference Given to Local Contractors  Eighteen Percent (18%) of the RFPs Indicated that a Preference would be given to Local Contractors.  Thirty-six Percent (36%) of the RFPs Indicated Socioeconomic Preferences Other than for Local Contractors. [The Code of Federal Regulations (CFR) states in 28 CFR, PART 35, STATE AND LOCAL ASSISTANCE, Part , Grantee procurement systems; State or local law, subpart (C) Preference, states, State or local laws, ordinances, regulations or procedures which effectively give local or in-State bidders or proposers preference over other bidders or proposers shall not be employed in evaluating bids or proposals for subagreements under a grant. Similar prohibitions are also included in CFR Subpart , Formal advertising. ] Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9,

15 Reference to Contractors in the RFP and Contract Solely as “Contractor” or “Prospective Contractor” Eighteen Percent (18%) of the RFPs referred to Contractors as “Contractor” or “Prospective Contractor.” The other RFPs and Contracts Referred to Contractors as “Vendors” or some other Term. Fourteen Percent(14%) of the RFPs referred to Contractors as “Offerors.” [Virtually all the contracts submitted in support of the research project identified the contractor by company name and address in the preamble of the contract, and then indicated that the contractor will subsequently be referred to as “Contractor.”. However, oftentimes the contractors are subsequently referred to in the contract as “vendors. A lesser reason for not referring to contractors as vendors is that the term “vendor” is more appropriate for companies that sell food products from vending machines, at sporting events, or from good carts.] Reference to Contractors in the RFP and Contract Solely as “Contractor” or “Prospective Contractor” Eighteen Percent (18%) of the RFPs referred to Contractors as “Contractor” or “Prospective Contractor.” The other RFPs and Contracts Referred to Contractors as “Vendors” or some other Term. Fourteen Percent(14%) of the RFPs referred to Contractors as “Offerors.” [Virtually all the contracts submitted in support of the research project identified the contractor by company name and address in the preamble of the contract, and then indicated that the contractor will subsequently be referred to as “Contractor.”. However, oftentimes the contractors are subsequently referred to in the contract as “vendors. A lesser reason for not referring to contractors as vendors is that the term “vendor” is more appropriate for companies that sell food products from vending machines, at sporting events, or from good carts.] Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9,

16 Use Weighted Proposal Evaluation Criteria Forty-five Percent (45%) of the RFPs Identified Proposal Evaluation Criteria that were Weighted to Cause Greater Importance to Certain Criteria During the Proposal Evaluation Process. [The ABA 2000 Model Procurement Code for State and Local Governments includes §3-203(5), Evaluation Factors, that states that the RFP “shall state the relative importance of price and other factors and subfactors.” The only known way to reflect the “relative importance” of the various evaluation factors would be some scheme to assign weights to each of the criteria.] Use Weighted Proposal Evaluation Criteria Forty-five Percent (45%) of the RFPs Identified Proposal Evaluation Criteria that were Weighted to Cause Greater Importance to Certain Criteria During the Proposal Evaluation Process. [The ABA 2000 Model Procurement Code for State and Local Governments includes §3-203(5), Evaluation Factors, that states that the RFP “shall state the relative importance of price and other factors and subfactors.” The only known way to reflect the “relative importance” of the various evaluation factors would be some scheme to assign weights to each of the criteria.] Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9,

17 Price Stated as One Criterion for Evaluation of Proposals Thirty-six Percent (36%) of the RFPs Identified Price as an Evaluation Criterion in the Proposal Evaluation Process. [The ABA 2000 Model Procurement Code for State and Local Governments includes §3-203(7), Award, that states award shall be made on the basis of “price and the evaluation factors set forth in the Request for Proposals.”] Price Stated as One Criterion for Evaluation of Proposals Thirty-six Percent (36%) of the RFPs Identified Price as an Evaluation Criterion in the Proposal Evaluation Process. [The ABA 2000 Model Procurement Code for State and Local Governments includes §3-203(7), Award, that states award shall be made on the basis of “price and the evaluation factors set forth in the Request for Proposals.”] Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9,

18 Specification of the Format and Page Limits for Contractor Prepared Proposals Seventy-three Percent (73%) of the RFPs Specified the Format and Five Percent (5%) Set Page Limits for Proposals Submitted in Response to the RFP. [There is no known statutory requirement or organizational recommendation for specifying the format for proposals; however, the benefits of homogeneous proposals are:  Greatly Simplifies the Process for Evaluating Proposals  Facilitates Equal Treatment of Contractors] Specification of the Format and Page Limits for Contractor Prepared Proposals Seventy-three Percent (73%) of the RFPs Specified the Format and Five Percent (5%) Set Page Limits for Proposals Submitted in Response to the RFP. [There is no known statutory requirement or organizational recommendation for specifying the format for proposals; however, the benefits of homogeneous proposals are:  Greatly Simplifies the Process for Evaluating Proposals  Facilitates Equal Treatment of Contractors] Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9,

19 Model Contract Included in RFPs Seventy-seven Percent (77%) of the RFPs Included a Model Contract and Fourteen Percent (14%) of the RFPs Included the Agency’s Terms and Conditions. [The nearly universal practice of including a model contract in solicitations supports designation of this practice as a best practice. This practice discourages contractors from proposing their own contract format. The solicitation should also have a statement to the effect that the Agency intends to award a contract substantially in the format of the attached Model Contract.] Model Contract Included in RFPs Seventy-seven Percent (77%) of the RFPs Included a Model Contract and Fourteen Percent (14%) of the RFPs Included the Agency’s Terms and Conditions. [The nearly universal practice of including a model contract in solicitations supports designation of this practice as a best practice. This practice discourages contractors from proposing their own contract format. The solicitation should also have a statement to the effect that the Agency intends to award a contract substantially in the format of the attached Model Contract.] Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9,

20 Statement in RFP that Proposals will be Opened in Confidence Thirty-two Percent (32%) of the RFPs Stated that the Proposals would be Opened in Confidence. Thirty-six Percent (36%) Announced Public Openings, but Nine Percent of those RFPs Said that Pricing would be Treated Confidentially. [The ABA’s 2000 Model Procurement Code for State and Local Governments §3-203(4), Receipt of Proposals, states that proposals are to be opened so as to avoid disclosure of contents & made available for public disclosure following contract award.] Statement in RFP that Proposals will be Opened in Confidence Thirty-two Percent (32%) of the RFPs Stated that the Proposals would be Opened in Confidence. Thirty-six Percent (36%) Announced Public Openings, but Nine Percent of those RFPs Said that Pricing would be Treated Confidentially. [The ABA’s 2000 Model Procurement Code for State and Local Governments §3-203(4), Receipt of Proposals, states that proposals are to be opened so as to avoid disclosure of contents & made available for public disclosure following contract award.] Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9,

21 Late Proposals Accepted if in the Best Interests of the Agency None (0%) of the RFPs Specifically Permitted Acceptance of Late Proposals. However, Nine Percent (9%) of the RFPs Did Not Exclude the Possibility of Accepting Late Proposals. [Bids in Response to an IFB Must be Opened Publicly. Therefore, it is Unreasonable to Consider Acceptance of Late Bids. However, Proposals in Response to an RFP are Opened in Confidence. Therefore, Acceptance of Late Proposals is not Unreasonable. California Public Contract Code §10344 Prohibits State Agencies from Accepting Late Proposals.] Late Proposals Accepted if in the Best Interests of the Agency None (0%) of the RFPs Specifically Permitted Acceptance of Late Proposals. However, Nine Percent (9%) of the RFPs Did Not Exclude the Possibility of Accepting Late Proposals. [Bids in Response to an IFB Must be Opened Publicly. Therefore, it is Unreasonable to Consider Acceptance of Late Bids. However, Proposals in Response to an RFP are Opened in Confidence. Therefore, Acceptance of Late Proposals is not Unreasonable. California Public Contract Code §10344 Prohibits State Agencies from Accepting Late Proposals.] Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9,

22 One-Page Contract Format with Incorporated Attachments Twenty-three Percent (23%) of the Service Contracts were in a One-Page Format with Incorporated Attachments. [There are no known statutes or organizations that require or encourage use of a one-page contract format; however, the advantages of the format make it worthy of consideration. Advantages of the one-page format are:  Reduces contract error rate  Reduces probability of unauthorized contract changes  Simplifies preparation of contract document  Increases confidence for official reviewing or executing the contract] One-Page Contract Format with Incorporated Attachments Twenty-three Percent (23%) of the Service Contracts were in a One-Page Format with Incorporated Attachments. [There are no known statutes or organizations that require or encourage use of a one-page contract format; however, the advantages of the format make it worthy of consideration. Advantages of the one-page format are:  Reduces contract error rate  Reduces probability of unauthorized contract changes  Simplifies preparation of contract document  Increases confidence for official reviewing or executing the contract] Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9,

23 23 VARIABLE INFORMATION TABLE Contract Number Contract Term BeginsContract Term Ends Agency DepartmentFOB Point TermsBasis for Price [√ One Below] PriceFixed PriceMonthly PriceHourly Rate Contractor Contact InformationAgency Contact Information ContractorProject Manager Street Address City/State/ZIP Telephone Fundamentals of Contract Management Best Practices Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9, 2009

24 Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9, Fundamentals of Contract Management Best Practices Incidence of Inclusion of Provisions in Contract Terms & Conditions NoTitle of Provision Incidence NumberPercent 1Term21100% 2Termination for Default1990% 3Force Majeure943% 4Liquidated Damages210% 5Termination for Convenience1781% 6Termination Transition210% 7Contractor Reimbursement21100% 8Payment Terms21100% 9Set-Off524% 10Agency Project Manager733%

25 Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9, Fundamentals of Contract Management Best Practices Incidence of Inclusion of Provisions in Contract Terms & Conditions NoTitle of Provision Incidence NumberPercent 11Key Personnel314% 12Independent Contractor1362% 13aConfidentiality1048% 13bOwnership1048% 14Indemnification1886% 15Insurance1362% 16Amendments1886% 17Waiver of Rights733% 18Compliance with Laws1467% 19Americans with Disabilities Act314%

26 Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9, Fundamentals of Contract Management Best Practices Incidence of Inclusion of Provisions in Contract Terms & Conditions NoTitle of Provision Incidence NumberPercent 20Health Insurance Portability and Accountability Act15% 21Nondiscrimination1781% 22Drug Free Workplace524% 23Workers’ Compensation1362% 24Contactor’s Standard of Care1048% 25Care of Property314% 26Advertising419% 27Performance Evaluation15% 28Inspection of Work and Project Site210% 29Applicable Law and Forum1886%

27 Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9, Fundamentals of Contract Management Best Practices Incidence of Inclusion of Provisions in Contract Terms & Conditions NoTitle of Provision Incidence NumberPercent 30Successors and Assigns1676% 31Subcontracting1781% 32Unallowable Costs15% 33aAudit & Employee Interviews1571% 33bDocument Retention1676% 34Remedies not Exclusive314% 35Conflict of Interest1362% 36Contractor Integrity733% 37Political Contribution Disclosure524% 38Assignment of Antitrust Claims314%

28 Capitol City Chapter of CAPPO Northern California Chapter of NIGP October 9, Fundamentals of Contract Management Best Practices Incidence of Inclusion of Provisions in Contract Terms & Conditions NoTitle of Provision Incidence NumberPercent 39Payment of Taxes943% 40Officials not to Prosper629% 41Copyrights733% 42Budget Contingency1257% 43Counterparts314% 44Severability1152% 45Notices733% 46Titles, Headings or Captions419% 47aEntire Agreement943% 47bSurvival of Provisions beyond the Contract Term733%


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