The cancellation ceiling shall not be an evaluation factor. In Step 3, parties commit to six guiding principles that contractually prohibit opportunistic tit-for-tat moves. 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. Some Days Require More Carpe Than Others October 29, 2013. (c) An interagency acquisition is not exempt from the requirements of subpart 7.3, Contractor Versus Government Performance. What are the two most common types of best Value evaluations? A statement that award will not be made on less than the first program year requirements. Termination payment. Indeed, the Canadian supreme court recently took up a case in which a franchisee alleged that it was not being treated fairly by the franchise owner. (1) Assisted acquisitions. (1) Leader company, obligating it to subcontract a designated portion of the required end items to a specified follower company and to assist it to produce the required end items; (2) Leader company, for the required assistance to a follower company, and a prime contract to the follower for production of the items; or. Cancellation results when the contracting officer-, (1) Notifies the contractor of nonavailability of funds for contract performance for any subsequent program year; or. Island Health and South Island created four joint governance teams chartered to live into the relational contract: Each team meets at regular intervals to review progress against the shared vision, goals, outcomes, and measures. The key distinguishing difference between multi-year contracts and multiple year contracts is that multi-year contracts, defined in the statutes cited at 17.101, buy more than 1 years requirement (of a product or service) without establishing and having to exercise an option for each program year after the first. (a) Method of contracting. It has been determined that the government and contractor personnel can be used interchangeably. However, the preparation and evaluation of dual offers may increase administrative costs and workload for both offerors and the Government, especially for large or complex acquisitions. Stabilization of contractor work forces. (b) Criteria for comparing the lowest evaluated submission on the first program year requirements to the lowest evaluated submission on the multi-year requirements. (3) The requesting agency shall furnish a copy of the D&F to the servicing agency with the request for order. Providing incentives to contractors to improve productivity through investment in capital facilities, equipment, and advanced technology. Therefore, when reviewing contractor performance, contracting officers should consider-. (e) Few companies will want to risk an expensive court case for breaching the guiding principles; thus the contract becomes a deterrent against counterproductive behavior. If funds are not appropriated to support the succeeding years requirements, the agency must cancel the contract. (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. developing an independent Government cost estimate.]. Multi-year contracting is a flexible contracting method applicable to a wide range of acquisitions. If the contract is terminated for the convenience of the Government in whole, including requirements subject to cancellation, the Governments obligation shall not exceed the amount specified in the Schedule as available for contract performance, plus the cancellation ceiling. When the period of production is likely to warrant a labor and material costs contingency in the contract price, the contracting officer should normally use an economic price adjustment clause (see 16.203). 10) Some methods of contracting require more time than others. (a) The senior procurement executive for each executive agency shall submit to the Director of OMB an annual report on interagency acquisitions, as directed by OMB. (e) Unless otherwise approved in accordance with agency procedures, the total of the basic and option periods shall not exceed 5 years in the case of services, and the total of the basic and option quantities shall not exceed the requirement for 5 years in the case of supplies. Obtaining both annual and multi-year offers provides reduced lead time for making an annual award in the event that the multi-year award is not in the Governments interest. The contracting officer shall insert the amount for the first program year in the contract upon award and modify it for successive program years upon availability of funds. Accordingly, agencies should provide such information through its internal regulations. Benefits may accrue by including options in a multi-year contract. Ceilings must exclude amounts for requirements included in prior program years. (2) Orders of $600,000 or less issued against Federal Supply Schedules. The six principlesreciprocity, autonomy, honesty, loyalty, equity, and integrityform the basis for all contracts using the vested methodology and provide a framework for resolving potential. Examples of more specific authority are 40 U.S.C. Annual and multi-year proposals. This subpart prescribes policies and procedures for the use of option solicitation provisions and contract clauses. A 60-day termination for convenience translates to a 60-day contract, one CFO at a supplier told us. (1) The solicitation contains an option clause; (2) An option is not to be exercised at the time of contract award; (3) A firm-fixed-price contract, a fixed-price contract with economic price adjustment, or other type of contract approved under agency procedures is contemplated; and. (f) (b) The Government has an, Question 17 of 28 You have an Azure Storage account named storage1 that is configured to use the Hot access tier. (c) The benefits of informal handshake deals have been studied and promoted over the decades; legal scholars Stewart Macaulay and Ian Macneil were early advocates in the 1960s. The objectives of this technique are one or more of the following: (a) Reduce delivery time. Recurring costs in cancellation ceiling. 3903 and 10 U.S.C. (f) Solicitations may, in unusual circumstances, require that options be offered at prices no higher than those for the initial requirement; e.g., when-. (c) For use of project labor agreements, see subpart 22.5. (b) A nondefense agency is compliant with applicable procurement requirements if the procurement policies, procedures, and internal controls of the nondefense agency applicable to the procurement of supplies and services on behalf of DoD, and the manner in which they are administered, are adequate to ensure the compliance of the nondefense department or agency with-, (1) The Federal Acquisition Regulation and other laws and regulations that apply to procurements of supplies and services by Federal agencies; and. For acquisitions on behalf of the Department of Defense, also see subpart 17.7. Perhaps unsurprisingly, most companiesand their legal counsels in particularare uncomfortable with informal handshake deals, especially when the stakes are high. refurbishing. (1) A description of the supplies or services required; (2) Delivery requirements; (3) A funds citation; (4) A payment provision (see 17.502-2(d) for Economy Act orders); and. (5) Functions that can more properly be accomplished in accordance with subpart 45.3, Authorizing the Use and Rental of Government Property. Companies have traditionally used contracts as protection against the possibility that one party will abuse its power to extract benefits at the expense of the otherfor example, by unilaterally raising or lowering prices, changing delivery dates, or requiring more-onerous employment terms. A multi-year contract may provide that performance under the contract during the second and subsequent years of the contract is contingent upon the appropriation of funds, and (if it does so provide) may provide for a cancellation payment to be made to the contractor if appropriations are not made. (b) This subpart implements Pub. (2) Modify as necessary or terminate contracts not so identified and authorized, except that any contract with less than 4 years remaining as of the effective date of this regulation need not be terminated, nor need it be identified, modified, or authorized unless it is renewed or its terms are substantially renegotiated. Gone were the battles of not in scope; instead, there was a spirit of how can we accommodate this new reality given our statement of intent?. The contracting officer shall limit the Governments payment obligation to an amount available for contract performance. However, these tactics not only confer a false sense of security (because both firms switching costs are too high to actually invoke the clauses) but also foster negative behaviors that undermine the relationship and the contract itself. Six of the most common project delivery methods in construction are Design-Bid-Build (D-B-B), Design-Build (D-B), Construction Manager at Risk (CMAR), Construction Management Multi-Prime (CMMP), Public-Private Partnership (PPP or P3), and Integrated Project Delivery (IPD). Dell felt that FedEx was not proactive in driving continuous improvement and innovative solutions; FedEx was frustrated by onerous requirements that wasted resources and forced it to operate within a restrictive statement of work. (b) Economic price adjustment clauses. 2. While the contract was being developed, in 2016 and 2017, Canada passed a law legalizing medical assistance in dying. So the sustainability team came up with a pilot project to address how to fairly add the additional scope of work and new role for health care providers to the hospitalists schedule and pricing model. (b) Solicitations containing option provisions shall state the basis of evaluation, either exclusive or inclusive of the option and, when appropriate, shall inform offerors that it is anticipated that the Government may exercise the option at time of award. Shading happens when one party isnt getting the outcome it expected. The aggrieved party often cuts back on performance in subtle ways, sometimes even unconsciously, to compensate. (c) Reduction of administrative burden in the placement and administration of contracts. (a) Type of contract. (b) Agencies may authorize management and operating contracts only in a manner consistent with the guidance of this subpart and only if they are consistent with the situations described in 17.604. (1) Consider strategies for the effective participation of small businesses during acquisition planning (see 7.103(u)); (2) Detail the administration of such contract, including an analysis of all direct and indirect costs to the Government of awarding and administering such contract; (3) Describe the impact such contract will have on the ability of the Government to leverage its purchasing power, e.g., will it have a negative effect because it dilutes other existing contracts; (4) Include an analysis concluding that there is a need for establishing the multi-agency contract; and. We will make decisions based on a balanced assessment of needs, risks, and resources.. (2) Upon accrual of any payment or other benefit under such a multi-year contract to any subcontractor, supplier, or vendor company participating in such contract, such payment or benefit shall be delivered to such company in the most expeditious manner practicable. For each program year subject to cancellation, the contracting officer shall establish a cancellation ceiling. (c) Within 30 days of the beginning of each fiscal year, submit nondefense agency certifications of compliance to Principal Director, Defense Pricing and Contracting at: Office of the Under Secretary of Defense (Acquisition and Sustainment). The highlighted questions are the questions you have missed. Cancellation results when the contracting officer-, (1) Notifies the contractor of nonavailability of funds for contract performance for any subsequent program year; or. (4) The contracting officer has determined that there is a reasonable likelihood that the option will be exercised. They agonize over every conceivable scenario and then try to put everything in black-and-white. and provides policy and procedures for the use of multi-year contracting. (1) (c) Replacement of an incumbent contractor is usually based largely upon expectation of meaningful improvement in performance or cost. (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. (f) (d) When an interagency acquisition requires the servicing agency to award a contract, the following procedures also apply: (1) If a justification and approval or a D&F (other than the requesting agencys D&F required in 17.502-2(c)) is required by law or regulation, the servicing agency shall execute and issue the justification and approval or D&F. For example, Island Health never shared the budget with the hospitalists. all of these are correct IDENTIFY THE VARIOUS METHODS OF CONTRACTING FOR A SUPPLY OR SERVICE:Some methods of contracting require more time than others. Having set the foundation for the relationship in the first three steps, parties hammer out the terms of the dealfor example, responsibilities, pricing, and metrics. Cash flow is easier to predict in a lump sum contract. (a) Working with the University of Tennessee (including Kate), they embarked on the five-step process. (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. The key distinguishing difference between multi-year contracts and multiple year contracts is that multi-year contracts, defined in the statutes cited at 17.101, buy more than 1 years requirement (of a product or service) without establishing and having to exercise an option for each program year after the first. 10 U.S.C. (1) Functions involving the direction, supervision, or control of Government personnel, except for supervision incidental to training; (2) Functions involving the exercise of police or regulatory powers in the name of the Government, other than guard or plant protection services; (3) Functions of determining basic Government policies; (4) Day-to-day staff or management functions of the agency or of any of its elements; or. (b) The contracting officer need not evaluate offers for any option quantities when it is determined that evaluation would not be in the best interests of the Government and this determination is approved at a level above the contracting officer. (h) (e) It was a lose-lose scenario. (5) Document roles and responsibilities in the administration of the contract. 10) Some methods of contracting require more time than others. The contracting officer shall include these dates in the schedule, as appropriate. There is a stable design for the supplies to be acquired, and the technical risks associated with such supplies are not excessive; (4) The extent to which cancellation terms are used in multi-year contracts will depend on the unique circumstances of each contract. Exam (elaborations) - Clc 222 mod 6 special considerations exam 2. Nondefense agency contracting officers are responsible for ensuring support provided in response to DoDs request complies with paragraph (b) of this section. A sole source procurement (called an Other than Full & Open Competition) is when the government enters into a contract with a contractor without going through the typical competitive process as required by law because it deems that the contractor is the only source available that can meet the government requirements. The requirements, by item of supply or service, for the-, (1) (a) Participation by subcontractors, suppliers, and vendors. (b) The contract may not be awarded until the thirty-firstday after the date of notification. The model also gave the hospitalists autonomy in scheduling. (d) (g) The cancellation ceiling shall not be an evaluation factor. Protection of existing authority. (2) In determining cancellation ceilings, the contracting officer must estimate reasonable preproduction or startup, labor learning, and other nonrecurring costs to be incurred by an "average" prime contractor or subcontractor, which would be applicable to, and which normally would be amortized over, the items or services to be furnished under the multi-year requirements. In a negotiated acquisition, negotiations with offerors may provide information requiring a change in cancellation ceilings and dates before final negotiation and contract award. The nonsponsoring agency shall provide to the sponsoring agency necessary documentation that the requested work would not place the FFRDC in direct competition with domestic private industry. The order should include-. (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. If cancellation occurs, the Governments liability will be determined by the terms of the applicable contract. In order to broaden the defense industrial base, to the maximum extent practicable-, (1) Multi-year contracting shall be used in such a manner as to seek, retain, and promote the use under such contracts of companies that are subcontractors, suppliers, and vendors; and. (2) Fails to notify the contractor that funds are available for performance of the succeeding program year requirement. (d) Contracts awarded under the multi-year procedure shall be firm-fixed-price, fixed-price with economic price adjustment, or fixed-price incentive. Under the new pricing model, when the inpatient population is low, the hospitalists can opt to take time off and save Island Health money. 3903 and (e) Waiver. For the first time, the administration and our doctors are innovating together to drive efficiencies and optimize for patient care with our limited budget, she said. (b) An agency shall not use an interagency acquisition to circumvent conditions and limitations imposed on the use of funds. 1. An official website of the United States Government, FAC Number: 2023-02 Effective Date: 03/16/2023. Which of the following is, [Identify the various methods of contracting for, Ordering off a Blanket Purchase Agreement, Buys against a GSA Federal Supply Schedule. 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. The six principlesreciprocity, autonomy, honesty, loyalty, equity, and integrityform the basis for all contracts using the vested methodology and provide a framework for resolving potential misalignments when unforeseen circumstances occur. In addition to complying with the interagency acquisition policy and procedures in this subpart, nondefense agencies acquiring supplies and services on behalf of the Department of Defense shall also comply with the policy and procedures at subpart 17.7. (c) The conduct of the work is wholly or at least substantially separate from the contractors other business, if any. A provision that, if the Government determines before award that only the first program year requirements are needed, the Governments evaluation of the price or estimated cost and fee shall consider only the firstyear. They should analyze their dependency on the particular supplier, the strategic value of its product, and the impact of nonperformance on a buyers operations. (1) A specific dollar amount; (2) An amount to be determined by applying provisions (or a formula) provided in the basic contract, but not including renegotiation of the price for work in a fixed-price type contract; (3) In the case of a cost-type contract, if-, (i) The option contains a fixed or maximum fee; or. Enhancement of standardization. Leader company contracting is an extraordinary acquisition technique that is limited to special circumstances and utilized only when its use is in accordance with agency procedures. (h) Include the value of options in determining if the acquisition will exceed the World Trade Organization Government Procurement Agreement or Free Trade Agreement thresholds. (3) The contracting officer shall establish cancellation dates for each program years requirements regarding production lead time and the date by which funding for these requirements can reasonably be established. In the event funds are not made available for the continuation of a multi-year contract awarded using the procedures in this section, the contract shall be canceled or terminated. The requesting agency shall furnish the servicing agency any information needed to make the justification and approval or D&F. (2) Limit option quantities for additional supplies to not more than 50 percent of the initial quantity of the same line item. (f) Nondefense agency certifications, waivers, and additional information are available at http://www.acq.osd.mil/dpap/cpic/cp/interagency_acquisition.html. (b) The contract shall state the period within which the option may be exercised. However, this does not preclude the use of an indefinite quantity contract or requirements contract with options. However, statutes applicable to various classes of contracts, for example, the Service Contract Labor Standards statute (see 22.1002-1), may place additional restrictions on the length of contracts. Before jumping into a formal relational contract process, companies must determine whether it is right for them. If it is anticipated that the best price available is the option price or that this is the more advantageous offer, the contracting officer should not use this method of testing the market. Nonrecurring costs means those costs which are generally incurred on a one-time basis and include such costs as plant or equipment relocation, plant rearrangement, special tooling and special test equipment, preproduction engineering, initial spoilage and rework, and specialized work force training. Nonrecurring costs means those costs which are generally incurred on a one-time basis and include such costs as plant or equipment relocation, plant rearrangement, special tooling and special test equipment, preproduction engineering, initial spoilage and rework, and specialized work force training. (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.
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