some methods of contracting require more time than others

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). (a) The contracting officer shall insert the clause at 52.217-2, Cancellation Under Multi-year Contracts, in solicitations and contracts when a multi-year contract is contemplated. (2) The highlighted questions are the questions you have missed. (a) This subpart prescribes policies and procedures applicable to all interagency acquisitions under any authority, except as provided for in paragraph (c) of this section. The limitation in paragraph (a) of this section shall not apply to the acquisition of supplies and services on behalf of DoD by a nondefense agency during any fiscal year for which the Under Secretary of Defense for Acquisition and Sustainment has determined in writing that it is necessary in the interest of DoD to acquire supplies and services through the nondefense agency during the fiscal year. (e) (1) In the interest of national defense or mobilization readiness; (2) To perform the agencys mission adequately; or. When contracting for services, the contracting officer-. Methods of Contracting Flashcards | Quizlet Recurring costs in cancellation ceiling. 10) Some methods of contracting require more time than others. Cancellation ceilings. (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. (c) The multi-year contracting method may be used for the acquisition of supplies or services. The contracting officer shall limit the Governments payment obligation to an amount available for contract performance. Government Contracting Rules You Need to Know | Wolters Kluwer (g) Some companies go so far as to install a shadow organization to micromanage the supplier. some methods of contracting require more time than others (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. 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. (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. L. 110-181, section 801, as amended ( 10 U.S.C. These limitations do not apply to information technology contracts. 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. (4) In no event shall the servicing agency require, or the requesting agency pay, any fee or charge in excess of the actual cost (or estimated cost if the actual cost is not known) of entering into and administering the contract or other agreement under which the order is filled. A 60-day termination for convenience translates to a 60-day contract, one CFO at a supplier told us. You need to ensure, Prior to certifying the Managing Accounting Billing Statement for contract payments by Governmentwide Commercial Purchase Card, the Approving/ Billing Official must do what two things? Cancellation ceilings and dates may be revised after issuing the solicitation if necessary. We put everything on the table, and we challenged the contracting team to figure out ways to work with the money weve got.. The use of such a contract will result in significant savings of the total estimated costs of carrying out the program through annual contracts; (2) (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). This method may be used in sealed bidding or contracting by negotiation. To satisfy requirements of part 6 regarding full and open competition, the option must have been evaluated as part of the initial competition and be exercisable at an amount specified in or reasonably determinable from the terms of the basic contract, e.g.-. (B) The servicing agency has the capability or expertise to enter into a contract for such supplies or services that is not available within the requesting agency. (2) For special protection covering the orderly transition of personnel and work in the event of a change in contractors. The head of a contracting activity may authorize the use of a solicitation requesting only multi-year prices, provided it is found that such a solicitation is in the Governments interest, and that dual proposals are not necessary to meet the objectives in 17.105-2. and provides policy and procedures for the use of multi-year contracting. Fixed-price contracts, also known as firm-price or lump-sum contracts, are agreements in which the two parties state the goods or services one party will provide and establish the price the other party will pay for them. (a) Multi-year contracting; (c) Leader company contracting. 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) (See 17.207(f) with regard to the exercise of options. (a)Multi-year contracting is a special contracting method to acquire known requirements in quantities and total cost not over planned requirements for up to 5 years unless otherwise authorized by statute, even though the total funds ultimately to be obligated may not be available at the time of contract award. Annual and multi-year proposals. If a third party is proposed, consent of the third party should be obtained in writing. 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. We will be recognized leaders in health care. 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. (3) On January 23, 2019, the FAR is changed to require a new contract clause in solicitations and contracts valued above the simplified acquisition threshold. Buyers are crazy to expect us to invest in innovation if they do the math.. Which of the following is not a streamlined method of acquisition? However, this does not preclude the use of an indefinite quantity contract or requirements contract with options. Obtaining both also provides a basis for the computation of savings and other benefits. After all, the team realized, who better to optimize the scheduling for superior patient care than the doctors on the front lines? Accordingly, for multi-year contracts, the agency head may authorize modification of the requirements of this subpart and the clause at 52.217-2, Cancellation Under Multi-year Contracts. Before, we had no one to speak with [if concerns arose]. Which of the following is not a, When a COR is involved in the Source Selection Evaluation Board, what might his/her main roles, The purpose of market research is to determine capabilities in the marketplace able to satisfy the, Who has the official responsibility for performing market research? (b) Multi-year contracting is a flexible contracting method applicable to a wide range of acquisitions. (c) Insert a provision substantially the same as the provision at 52.217-5, Evaluation of Options, in solicitations when-. (ii) Competition for the option is impracticable once the initial contract is awarded. (c) Maximize the use of scarce tooling or special equipment. 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. x Contracting Officer, The Competition in Contracting Act requires that _________: . (a) Participation by subcontractors, suppliers, and vendors. These contracts, which are legally enforceable, specify mutual goals and establish governance structures to keep the parties expectations and interests aligned. Historically, the two parties had operated under a shroud of opaqueness. The 100-page-plus document was filled with supplier shall statements that detailed FedExs obligations and outlined dozens of metrics for how Dell would measure success. (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. 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. A.) (e) 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. (a) Termination-for-convenience clauses create perverse incentives for suppliers to not invest in buyer relationships. (d) Cancellation ceilings. As provided by that guidance, the funds obligated for multi-year contracts must be sufficient to cover any potential cancellation and/or termination costs; and multi-year contracts for the acquisition of fixed assets should be fully funded or funded in stages that are economically or programmatically viable. (a) The contract shall specify limits on the purchase of additional supplies or services, or the overall duration of the term of the contract, including any extension. 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. 3003(4) which include the-. From the following statements, select the correct statement pertaining to the, Personnel services contracts are authorized by the government When? In that event, contracting officers must follow the requirements of subpart 17.2. (f) The formal relational contract addresses these deficiencies. Now I have someone I know fairly well at a high level in administration. Use of multi-year contracting is encouraged to take advantage of one or more of the following: (b) This subpart prescribes policies and procedures specific to acquisitions of supplies and services by nondefense agencies on behalf of the Department of Defense (DoD). The review should determine whether meaningful improvement in performance or cost might reasonably be achieved. In unusual circumstances, an authorized person at a level above the contracting officer may approve a greater percentage of quantity. When Dell originally selected FedEx, in 2005, to handle all aspects of its hardware return-and-repair process, the companies drew up a traditional supplier contract. They agonize over every conceivable scenario and then try to put everything in black-and-white. Economic price adjustment clauses are adaptable to multi-year contracting needs. (g) Contracts may express extensions of the term of the contract as an amended completion date or as additional time for performance; e.g., days, weeks, or months. (3) A specified limitation on the total duration of the contract. Again, its important to note that these guiding principles have teeth. (b) The contracting officer shall review each management and operating contract, following agency procedures, at appropriate intervals and at least once every 5 years. 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. 17.208 Solicitation provisions and contract clauses. Buyers must consider three key factors when deciding what type of contracting arrangement is right for each supplier relationship. 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. 2) What is a KEY role of the COR in Acquisition Planning? (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. Multi-year contract procedures provide for the amortization of certain costs over the entire contract quantity resulting in identical (level) unit prices (except when the economic price adjustment terms apply) for all items or services under the multi-year contract. Issuing RFI. To date, 57 companies have employed the vested methodology. One objective, for example, called for improving physicians billing to the provincial Medical Services Plan (MSP) for cost recovery for the hospitalist fees. Participation by subcontractors, suppliers, and vendors. For acquisitions on behalf of the Department of Defense, also see subpart 17.7. Standard forms can also be useful if the same parties are involved on repeat projects. 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. The contracting officer shall include these dates in the schedule, as appropriate. The DoD reimburses the allowable incurred costs and pays a fixed amount that is negotiated at the beginning of the contract. (d) A provision specifying a separate cancellation ceiling (on a percentage or dollar basis) and dates applicable to each program year subject to a cancellation (see 17.106-1(c) and (d)). (a) May modify the clause at 52.222-43 in overseas contracts when laws, regulations, or international agreements require contractors to pay higher wage rates; or. The 5 Key Types of Construction Contracts | Procore - Levelset (f) Except for DoD, NASA, and the Coast Guard, the contracting officer may enter into a multi-year contract if the head of the contracting activity determines that-, (1) 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. And in a publicly funded health care environment, that is exactly what we need to be focusing on., The governance structure also helped the parties surmount the tricky problem of scope creep. (3) All others, with the exception of a time-and-materials contract which is a hybrid of the two, are, subsets of cost reimbursement or fixed-price contracts. (ii) The fixed or maximum fee amount is determinable by applying a formula contained in the basic contract (but see 16.102(c)); (4) A specific price that is subject to an economic price adjustment provision; or. Value-eroding friction and shading occur because one or both parties feel unfairly treated. 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). (f) Solicitations may, in unusual circumstances, require that options be offered at prices no higher than those for the initial requirement; e.g., when-. 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. The cancellation ceiling shall not be an evaluation factor. A procurement contract includes: Product or service selection. The aggrieved party often cuts back on performance in subtle ways, sometimes even unconsciously, to compensate. The cancellation percentages, after deducting 3 percent for the first program year, would be 7, 4, 2, and 1 percent of the total price applicable to the second, third, fourth, and fifth program years, respectively. 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. (d) The work is closely related to the agencys mission and is of a long-term or continuing nature, and there is a need-, (1) To ensure its continuity; and. Cancellation means the cancellation (within a contractually specified time) of the total requirements of all remaining program years. The main advantage of using this method is avoiding the need to draft the subcontract from scratch and hopefully saving time negotiating it. (a) Benefits may accrue by including options in a multi-year contract. Kim Kerrone, of Island Health, described how the vested methodology broke the impasse. (h) Providing incentives to contractors to improve productivity through investment in capital facilities, equipment, and advanced technology. Each individual worked with a counterpart from the other organization to establish connections in key areas. (f) Avoidance of the need for establishing quality control techniques and procedures for a new contractor each year. Cancellation ceilings and dates may be revised after issuing the solicitation if necessary. CLC 222 Contracting Officers Representative (COR) (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 requirements, by item of supply or service, for the-, (1) Tradeoff What does Best Value mean? Perhaps unsurprisingly, most companiesand their legal counsels in particularare uncomfortable with informal handshake deals, especially when the stakes are high. (b) Achieve geographic dispersion of suppliers. Together, we are a team that celebrates and advances excellence in care for our patients and ourselves through shared responsibility, collaborative innovation, mutual understanding, and the courage to act, in a safe and supportive environment. In sealed bidding, the contracting officer shall change the ceiling by amending the solicitation before bid opening. (a) Except for DoD, NASA, and the Coast Guard, the contracting officer may enter into a multi-year contract if the head of the contracting activity determines that-, (1) The need for the supplies or services is reasonably firm and continuing over the period of the contract; and. A case in point is Vancouver Island Health Authority and South Island Hospitalists, a partnership of administrators and doctors who work together to provide inpatient care for patients with the most complex medical issues in British Columbia. Each of these contract types is suitable for some projects and not others, and each has both advantages and disadvantages for the various stakeholders . Subpart 17.1 - Multi-year Contracting - Acquisition Multi-year contracting is a special contracting method to acquire known requirements in quantities and total cost not over planned requirements for up to 5 years unless otherwise authorized by statute, even though the total funds ultimately to be obligated may not be available at the time of contract award. (b) For DoD, NASA, and the Coast Guard, the head of the agency may enter into a multi-year contract for supplies if-. (5) The estimates of both the cost of the contract and the cost avoidance through the use of a multi-year contract are realistic. 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. Recurring costs means costs that vary with the quantity being produced, such as labor and materials.

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