1 Contract Administration Briefing for NCMA Lone Star Chapter Presented by Richard Furlong, C.P.M., Fellow Nov. 13, 2008

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Contract AdministrationContract Administration

Briefing for NCMA Lone Star ChapterBriefing for NCMA Lone Star Chapter

Presented by Richard Furlong, C.P.M., FellowPresented by Richard Furlong, C.P.M., Fellow

Nov. 13, 2008Nov. 13, 2008

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Acquisition SituationAcquisition Situation

So… So… You’ve determined what you neededYou’ve determined what you needed Did your Market ResearchDid your Market Research Came up with some moneyCame up with some money Solicited your requirementSolicited your requirement Negotiated with OfferorsNegotiated with Offerors And made an Award!And made an Award!

Now What?Now What?

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Procurement Life CycleProcurement Life Cycle

Define RequirementsDefine Requirements Pre-AwardPre-Award

AwardAward Post-AwardPost-Award


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Post AwardPost Award

Sometimes broken out to mean only Sometimes broken out to mean only issues dealing with:issues dealing with:

Post Award ConferencesPost Award Conferences ModificationsModifications FundingFunding Reporting (FPDS, Metrics)Reporting (FPDS, Metrics)

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Contract Administration

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Generally accepted definition:Generally accepted definition:

• Contract Administration is a system that ensures contractors perform in accordance with the terms, conditions, and specifications of the contract

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PossibilitiesPossibilities

Hand it off:Hand it off: Contract outContract out DCMA (DoD)DCMA (DoD)

Keep it and do Contract Keep it and do Contract Administration yourself (Cradle to Administration yourself (Cradle to Grave)Grave)

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Top Level Considerations:Top Level Considerations: DeliveryDelivery Vendor Invoicing and Vendor Invoicing and

PaymentPayment CloseoutCloseout ArchiveArchive

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Where to StartWhere to Start

Read the ContactRead the Contact Goods or Services or both?Goods or Services or both?

What is to be Delivered?What is to be Delivered? When is it to be Delivered?When is it to be Delivered?

Firm-Fixed Price or Cost Firm-Fixed Price or Cost Reimbursement?Reimbursement?

Determine approach & establish a planDetermine approach & establish a plan

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Guidelines for the FEDsGuidelines for the FEDs For the Federal Workforce Guidance is in the FAR:For the Federal Workforce Guidance is in the FAR:

Title 48: Federal Acquisition Regulations SystemTitle 48: Federal Acquisition Regulations SystemPART 42—CONTRACT ADMINISTRATION AND AUDIT SPART 42—CONTRACT ADMINISTRATION AND AUDIT SERVICESERVICES Subpart 42.3—Contract Administration Office FunctionsSubpart 42.3—Contract Administration Office Functions

42.301 General.42.301 General.When a contract is assigned for administration under When a contract is assigned for administration under Subpart 42.2, the contract administration office (CAO) shall Subpart 42.2, the contract administration office (CAO) shall perform contract administration functions in accordance perform contract administration functions in accordance with 48 CFR Chapter I, the contract terms, and, unless with 48 CFR Chapter I, the contract terms, and, unless otherwise agreed to in an interagency agreement (see otherwise agreed to in an interagency agreement (see 42.002), the applicable regulations of the servicing agency. 42.002), the applicable regulations of the servicing agency. [63 FR 9063, Feb. 23, 1998][63 FR 9063, Feb. 23, 1998]

42.302 Contract administration functions. 42.302 Contract administration functions.

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Kickoff MeetingKickoff Meeting

Regardless of the size of your Acquisition, Regardless of the size of your Acquisition, you should hold a kickoff meeting. Goal you should hold a kickoff meeting. Goal of the meeting is:of the meeting is:

Achieve clear and mutual understanding Achieve clear and mutual understanding of all contact requirementsof all contact requirements

Ensure common understanding of Ensure common understanding of expected process and deliverablesexpected process and deliverables

Identify and resolve potential problemsIdentify and resolve potential problems

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Buyer and Seller:Buyer and Seller: Contract AdministrationContract Administration

Ensure that all contractual obligations are met through communication among all necessary parties; manage contract disputes through negotiation/resolution and review lessons learned throughout performance and at contract completion.

Communicate Contract Authorization Plan Contract Administration Manage Contract performance * Review Contract Completion

NCMA World Congress 2008 – Session #310

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Manage Contract Performance

***Delivery Phase******Delivery Phase***

Dealing with the Problems/Issues Dealing with the Problems/Issues that arise during the Performance of that arise during the Performance of the Contractthe Contract

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Monitoring ProgressMonitoring Progress

Involves regular review and analysis Involves regular review and analysis of:of:

Monthly Status ReportsMonthly Status Reports Planned vs. Actual costsPlanned vs. Actual costs Planned vs. Actual performancePlanned vs. Actual performance Accuracy of Contractor reportsAccuracy of Contractor reports

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Past PerformancePast Performance

One of your responsibilities is to not One of your responsibilities is to not only manage but only manage but documentdocument the the contractor’s performance.contractor’s performance.

This is relevant information for future This is relevant information for future source selection purposes and risk source selection purposes and risk analysis effortsanalysis efforts

If embraced, it could significantly If embraced, it could significantly improve source selection and improve source selection and contract management.contract management.

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Contract DeliveryContract Delivery

Delivery requirements are specified in Delivery requirements are specified in the contract:the contract:

Time and place of deliveryTime and place of delivery Quantity to be deliveredQuantity to be delivered Method of deliveryMethod of delivery Individual or office with the authority Individual or office with the authority

to receive and accept the to receive and accept the deliverablesdeliverables

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Contract ModificationContract Modification

Definition: A contract’s terms and Definition: A contract’s terms and conditions such as it’s Statement of conditions such as it’s Statement of Work, Period of Performance, Work, Period of Performance, quantity, or price, are modified in quantity, or price, are modified in writing.writing.

Contracting Officer is the only person Contracting Officer is the only person authorized to make any contract authorized to make any contract modification.modification.

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Unilateral ModificationUnilateral Modification

Unilateral Modifications are used to:Unilateral Modifications are used to: Make a change authorized by Make a change authorized by

contract clausescontract clauses Make an administrative changeMake an administrative change Issue a change orderIssue a change order Issue a Termination NoticeIssue a Termination Notice

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Bilateral ModificationsBilateral Modifications

Bilateral Modifications include:Bilateral Modifications include: Cost Overrun ModificationCost Overrun Modification Extend the period of performance for Extend the period of performance for

completion of contract requirementscompletion of contract requirements Define letter contractsDefine letter contracts Incorporate any other agreements of Incorporate any other agreements of

the contracting partiesthe contracting parties

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Examples of Examples of Contract Administration Contract Administration

Areas of ConcernAreas of Concern

Notification to Unsuccessful Offerors Notification to Unsuccessful Offerors Debriefing of Unsuccessful OfferorsDebriefing of Unsuccessful Offerors ProtestsProtests COTR Appointments & COTR Appointments &

CorrespondenceCorrespondence BondsBonds Post-Award Orientation ConferencesPost-Award Orientation Conferences Material DeficienciesMaterial Deficiencies

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Areas of ConcernAreas of Concern ClaimsClaims Federal Procurement Data System Federal Procurement Data System

ReportsReports COTR RecommendationsCOTR Recommendations

Performance / Surveillance ReportsPerformance / Surveillance Reports Deliverable / Status ReportsDeliverable / Status Reports

Post Award CorrespondencePost Award Correspondence Revenue and Debt CollectionRevenue and Debt Collection

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Areas of ConcernAreas of Concern Termination ActionsTermination Actions Software Licensing AgreementsSoftware Licensing Agreements Labor DisputesLabor Disputes Property issuesProperty issues Modifications / NegotiationsModifications / Negotiations Invoices & Payments*Invoices & Payments* Freedom of Information RequestsFreedom of Information Requests

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Areas of ConcernAreas of Concern Assignment of ClaimsAssignment of Claims NovationsNovations Change of Name AgreementsChange of Name Agreements Suspensions and DebarmentsSuspensions and Debarments Congressional InquiriesCongressional Inquiries Duty Free Entry of GoodsDuty Free Entry of Goods

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More…More…

SubcontractingSubcontracting Certificate of Confidentiality and Non-

Disclosure Security Clauses & IssuesSecurity Clauses & Issues

EVEN MORE>>>

• Under FAR 42.302(a) 70 Activities listed

• Under FAR 42.302(b) 11 Activities listed

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By Contract TypeBy Contract Type

Firm-Fixed PriceFirm-Fixed Price DeliverablesDeliverables Contractor PaymentsContractor Payments

Cost ReimbursementCost Reimbursement Provisional and Actual Audits of Provisional and Actual Audits of

Contractors Books (determination of Contractors Books (determination of RATES)RATES)

Labor / Time Keeping AuditsLabor / Time Keeping Audits Grants / Other TransactionsGrants / Other Transactions

Special Rules on ExpendituresSpecial Rules on Expenditures

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Vendor Invoicing and PaymentVendor Invoicing and Payment

AuthorizationAuthorization Process?Process? Separate Pay Office?Separate Pay Office? Funding:Funding:

Advance PaymentsAdvance Payments Progress PaymentsProgress Payments Performance Based PaymentsPerformance Based Payments Loan GuaranteesLoan Guarantees Interim PaymentsInterim Payments

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Back to the Life CycleBack to the Life Cycle

O.K. all issues have been dealt with…O.K. all issues have been dealt with…

Everything has been deliveredEverything has been delivered

The contractor has been paidThe contractor has been paid

NOW WHAT?NOW WHAT?

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Contract CloseoutContract Closeout

Definition: Contract is officially ended. Definition: Contract is officially ended. There is no longer a contractual There is no longer a contractual relationship between the relationship between the Government and the contractor.Government and the contractor.

The contractor has completed all The contractor has completed all deliverables.deliverables.

The CO or COTR has signed off on The CO or COTR has signed off on the deliverables. the deliverables.

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Close Out Close Out

Close out if Physically complete*:Close out if Physically complete*: (1)(i) The contractor has completed the required (1)(i) The contractor has completed the required

deliveries and the Government has inspected and deliveries and the Government has inspected and accepted the supplies;accepted the supplies; (ii) The contractor has performed all services and the (ii) The contractor has performed all services and the

Government has accepted these services; andGovernment has accepted these services; and (iii) All option provisions, if any, have expired; or(iii) All option provisions, if any, have expired; or

(2) The Government has given the contractor a (2) The Government has given the contractor a notice of complete contract termination.notice of complete contract termination.

(b) Rental, use, and storage agreements are (b) Rental, use, and storage agreements are considered to be physically completed when—considered to be physically completed when—

(1) The Government has given the contractor a (1) The Government has given the contractor a notice of complete contract termination; ornotice of complete contract termination; or

(2) The contract period has expired.(2) The contract period has expired.

* FAR 4.804-4

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Close OutClose Out

Release of ClaimsRelease of Claims Reporting of RoyaltiesReporting of Royalties Patents & Copyrights InfringementsPatents & Copyrights Infringements Property Issues – final inventoriesProperty Issues – final inventories Audit SettlementsAudit Settlements

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Final PhaseFinal Phase

ArchiveArchive DocumentationDocumentation Hold on to it – a required time period*Hold on to it – a required time period*

* For the Feds: See FAR 4.805

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Questions Questions

Document, document, document…Document, document, document…

Documents

1 Contract Administration Briefing for NCMA Lone Star Chapter Presented by Richard Furlong, C.P.M., Fellow Nov. 13, 2008