some methods of contracting require more time than others

These include complicated outsourcing and purchasing arrangements, strategic alliances, joint ventures, franchises, public-private partnerships, major construction projects, and collective bargaining agreements. (Its called vested because the parties have a vested interest in each others success.) Historically, the two parties had operated under a shroud of opaqueness. Remediation Accessed shows whether you accessed those links. (b) Because of the nature of the work, or because it is to be performed in Government facilities, the Government must maintain a special, close relationship with the contractor and the contractors personnel in various important areas (e.g., safety, security, cost control, site conditions). To ensure that all interested sources of supply are thoroughly aware of how multi-year contracting is accomplished, use of presolicitation or pre-bid conferences may be advisable. (f) And if their previous contracting process led to distrust and a vicious cycle of shading, they should reflect on how and why that happened. (2) The potential cost of disrupted support, options may be included in service contracts if there is an anticipated need for a similar service beyond the first contract period. Crafting a formal relational contract involves five steps: laying the foundation, cocreating a shared vision and objectives, adopting guiding principles, aligning expectations and interests, and creating systems for staying aligned. contracting officers shall avoid, to the maximum extent practicable, using the lowest price technically acceptable source selection process in the case of a procurement that is predominantly for the acquisition of (1)Information technology services, cybersecurity services, systems engineering and technical (4) The contracting officer has determined that there is a reasonable likelihood that the option will be exercised. (1) The leader company has the necessary production know-how and is able to furnish required assistance to the follower(s); (2) No other source can meet the Governments requirements without the assistance of a leader company; (3) The assistance required of the leader company is limited to that which is essential to enable the follower(s) to produce the items; and. Nondefense agency contracting officers are responsible for ensuring support provided in response to DoDs request complies with paragraph (b) of this section. If the buyer refuses to adjust the suppliers fee or the statement of work, the supplier may try to recoup losses by, for example, replacing the expensive A team it currently has on the project with its less costly C team. 10) Some methods of contracting require more time than others. Ceilings must exclude amounts for requirements included in prior program years. Multi-year contract means a contract for the purchase of supplies or services for more than 1, but not more than 5, program years. The approach encourages trust and honesty between the two sides, said Ken Smith, a hospitalist at South Island. (b) For DoD, NASA, and the Coast Guard, a multi-year contract which includes a cancellation ceiling in excess of $150 million may not be awarded until the head of the agency gives written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the committees on armed services and appropriations of the House of Representatives and Senate. We will make decisions based on a balanced assessment of needs, risks, and resources.. (2) Multi-year contract including the requirements for each program year. (e) Recurring costs in cancellation ceiling. It is key to the buyer and seller relationship and provides a framework to deal with each other. (c) Solicitations normally should allow option quantities to be offered without limitation as to price, and there shall be no limitation as to price if the option quantity is to be considered in the evaluation for award (see 17.206). (f) Solicitations may, in unusual circumstances, require that options be offered at prices no higher than those for the initial requirement; e.g., when-. Cancellation ceilings. In an era when businesses increasingly have to depend on their suppliers to lower costs, improve quality, and drive innovation, traditional contracts dont work. In a negotiated acquisition, negotiations with offerors may provide information requiring a change in cancellation ceilings and dates before final negotiation and contract award. (3) Additional numbered line items identified as the option. Method of contracting. A version of this article appeared in the, Cecil Touchon/Courtesy of Sears-Peyton Gallery, New York, CECIL TOUCHON/COURTESY OF SEARS-PEYTON GALLERY, NEW YORK, Note: This table is based on material presented in, From the Magazine (SeptemberOctober 2019). (b) Protection of existing authority. (See 35.017; see also 6.302 for procedures to follow where using other than full and open competition.) If demand is lower during the term of the contract than the buyer stated in the RFP or the scope expands in an unanticipated area, the suppliers profit will take a hit. Recurring costs means costs that vary with the quantity being produced, such as labor and materials. (f) Annual and multi-year proposals. (3) The time between the award of the contract containing the option and the exercise of the option is so short that it indicates the option price is the lowest price obtainable or the more advantageous offer. (g) Facilitate the transition from development to production and to subsequent competitive acquisition of end items or major components. 2) What is a KEY role of the COR in Acquisition Planning? (3) Bills rendered or requests for advance payment shall not be subject to audit or certification in advance of payment. (g) Insert a clause substantially the same as the clause at 52.217-9, Option to Extend the Term of the Contract, in solicitations and contracts when the inclusion of an option is appropriate (see 17.200 and 17.202) and it is necessary to include in the contract any or all of the following: (1) A requirement that the Government must give the contractor a preliminary written notice of its intent to extend the contract. Any extension or renewal of an operating and management contract must be authorized at a level within the agency no lower than the level at which the original contract was authorized in accordance with 17.602(a). (3) The servicing agency is responsible for compliance with all other legal or regulatory requirements applicable to the contract, including-, (i) Having adequate statutory authority for the contractual action; and. (a) Except for DoD, NASA, and the Coast Guard, a multi-year contract which includes a cancellation ceiling in excess of $15 million may not be awarded until the head of the agency gives written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the committees on appropriations of the House of Representatives and Senate and the appropriate oversight committees of the House and Senate for the agency in question. 3003(4) which include the-. Multi-year contract including the requirements for each program year. may not be awarded until the head of the agency gives written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the committees on appropriations of the House of Representatives and Senate and the appropriate oversight committees of the House and Senate for the agency in question. We argue that the remedy is to adopt a totally different kind of arrangement: a formal relational contract that specifies mutual goals and establishes governance structures to keep the parties expectations and interests aligned over the long term. (b) The contracting officer shall ensure that any contract awarded under this arrangement contains a firm agreement regarding disclosure, if any, of contractor trade secrets, technical designs or concepts, and specific data, or software, of a proprietary nature. The Truth in Negotiation Act of 1962 required both prime and subcontractors on contracts over $500,000 to certify the cost data submitted under the solicitation. 11302(e) for Governmentwide acquisition contracts (GWACs). (3) Whether it is likely that qualified offerors will compete for the contract. Cancellation means the cancellation (within a contractually specified time) of the total requirements of all remaining program years. There is a stable design for the supplies to be acquired, and the technical risks associated with such supplies are not excessive; (4) (The DFARS, DoD class deviations, and PGI are accessible at: http://www.acq.osd.mil/dpap/dars). In long-term, complex deals, shading can be so pervasive that the tit-for-tat behavior becomes a death spiral. Administrators and hospitalists who had called their relationship broken, dysfunctional, and distrustful now describe it as collaborative, trusting, and supportive., Kerrone points to financial benefits as well. (b) When the contract provides for economic price adjustment and the contractor requests a revision of the price, the contracting officer shall determine the effect of the adjustment on prices under the option before the option is exercised. When the population is high, they manage their hours in a way thats within the budget and optimizes patient care. (1) All program years except the first are subject to cancellation. 1) What is an Independent Government Estimate (IGE)? The entities decided to explore relational contracting in 2016, two years after their conventional contract had expired and countless hours of contentious negotiations had failed to replace it. If cancellation occurs, the Governments liability will be determined by the terms of the applicable contract. (5) Acquisition authority as may be appropriate (see 17.503(d)). (2) The requesting agency shall also be responsible for furnishing other assistance that may be necessary, such as providing information or special contract terms needed to comply with any condition or limitation applicable to the funds of the requesting agency. Subpart 17.7 - Interagency Acquisitions: Acquisitions by Nondefense Agencies on Behalf of the Department of Defense, This part prescribes policies and procedures for the acquisition of supplies and services through special contracting methods, including-. Procurement contracts are also known as purchase contracts. Companies understand that their suppliers are critical partners in lowering costs, increasing quality, and driving innovation, and leaders routinely talk about the need for strategic relationships with shared goals and risks. (e) If it is anticipated that the Government may exercise an option at the time of award and if the condition specified in paragraph (d) of this section applies, solicitations shall specify the price at which the Government will evaluate the option (highest option price offered or option price for specified requirements). (b) Any justifications and approvals and any determination and findings required by part 6 shall specify both the basic requirement and the increase permitted by the option. Exam (elaborations) - Clc 222 mod 3 contract management exam 4. But when contract negotiations begin, they default to an adversarial mindset and a transactional contracting approach. (a) Compliance with this subpart is in addition to the policies and procedures for interagency acquisitions set forth in subpart 17.5. (d) Substantial continuity of production or performance, thus avoiding annual startup costs, preproduction testing costs, make-ready expenses, and phaseout costs. A contract is a binding agreement between a buyer and a seller. (b) Benefits may accrue by including options in a multi-year contract. Glenn Gallins, the attorney representing South Island Hospitalists and a law professor at the University of Victoria, offers the following advice when it comes to embracing formal relational contracts: The focus on negotiating the foundation of the relationship first is brilliant. (5) Functions that can more properly be accomplished in accordance with subpart 45.3, Authorizing the Use and Rental of Government Property. This type of contract is typically used for well-defined, small-scale projects in which changes are rare. (d) Achieve economies in production. division C of subtitle I, Procurement.). When Dell and FedEx reached their breaking point, they chose to abandon their existing contracting process and create a formal relational contract that specified desired outcomes and defined relationship-management processes at the operational, management, and executive levels. They are especially useful for complex purchasing arrangements, outsourcing, strategic alliances, joint ventures, franchises, public-private partnerships, large construction projects, and collective bargaining agreements. (b) Criteria for comparing the lowest evaluated submission on the first program year requirements to the lowest evaluated submission on the multi-year requirements. The main advantage of using this method is avoiding the need to draft the subcontract from scratch and hopefully saving time negotiating it. An example of a circumstance that may support a determination not to evaluate offers for option quantities is when there is a reasonable certainty that funds will be unavailable to permit exercise of the option. The contracting officer shall reduce the cancellation ceiling for each program year in direct proportion to the remaining requirements subject to cancellation. (e) A statement that award will not be made on less than the first program year requirements. The total estimate of the above costs must then be compared with the best estimate of the contract cost to arrive at a reasonable percentage or dollar figure. Review and, Which three of the following statements about convenience checks are true? (d) If funds are not appropriated to support the succeeding years requirements, the agency must cancel the contract. Shall add the clause at 52.222-43, Fair Labor Standards Act and Service Contract Labor Standards- Price Adjustment (Multiple Year and Option Contracts), when the contract includes the clause at 52.222-41, Service Contract Labor Standards; (2) They designed a hybrid pricing model with a combination of fixed and variable rates, coupled with incentives to improve efficiencies. (a) Insert a provision substantially the same as the provision at 52.217-3, Evaluation Exclusive of Options, in solicitations when the solicitation includes an option clause and does not include one of the provisions prescribed in paragraph (b) or (c) of this section. (b) This subpart applies to interagency acquisitions, see 2.101 for definition, when-, (1) An agency needing supplies or services obtains them using another agencys contract; or. (b) Achieve geographic dispersion of suppliers. in the overall strategic planning of an acquisition]. 10) Some methods of contracting require more time than others. Information on such committees may not be readily available to contracting officers. [Identify the various methods of contracting for a supply or service] [Remediation Accessed :N] Competitive Negotiated contract Ordering off a Blanket Purchase Agreement Simplified Acquisition Procedures
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