Obtaining both also provides a basis for the computation of savings and other benefits. 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 objectives of this technique are one or more of the following: (a) Reduce delivery time. Dells cost of switching to another company would be high, and FedEx would have trouble replacing the revenue and profits the contract generated. Few companies will want to risk an expensive court case for breaching the guiding principles; thus the contract becomes a deterrent against counterproductive behavior. 3903 and 10 U.S.C. (d) An agency shall not use an interagency acquisition to make acquisitions conflicting with any other agencys authority or responsibility (for example, that of the Administrator of General Services under title 40, United States Code, "Public Buildings, Property and Works" and 41 U.S.C. It is crucial that all terms and conditions of the formal relational contract are aligned with the guiding principles. The contracting officer shall include these dates in the schedule, as appropriate. 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. This subpart implements 41 U.S.C. These include complicated outsourcing and purchasing arrangements, strategic alliances, joint ventures, franchises, public-private partnerships, major construction projects, and collective bargaining agreements. The approach encourages trust and honesty between the two sides, said Ken Smith, a hospitalist at South Island. For patent rights, see 27.304-2. Nonrecurring costs include such costs, where applicable, as plant or equipment relocation or rearrangement, special tooling and special test equipment, preproduction engineering, initial rework, initial spoilage, pilot runs, allocable portions of the costs of facilities to be acquired or established for the conduct of the work, costs incurred for the assembly, training, and transportation to and from the job site of a specialized work force, and unrealized labor learning. (a) 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. Multi-year contract means a contract for the purchase of supplies or services for more than 1, but not more than 5, program years. (e) Stabilization of contractor work forces. Their efforts led to the vested methodology for creating formal relational contractsa process that establishes a whats in it for we partnership mentality. A management and operating contract is characterized both by its purpose (see 17.601) and by the special relationship it creates between Government and contractor. (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. 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. 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. (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. (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. 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. The Economy Act also provides authority for placement of orders between major organizational units within an agency; procedures for such intra-agency transactions are addressed in agency regulations. The cancellation ceiling shall not be an evaluation factor. (c) Maximize the use of scarce tooling or special equipment. (f) Contracts may express options for increased quantities of supplies or services in terms of-. not visited and 'Y' represents visited links. Information on such committees may not be readily available to contracting officers. In a negotiated acquisition, negotiations with offerors may provide information requiring a change in cancellation ceilings and dates before final negotiation and contract award. (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. Each individual worked with a counterpart from the other organization to establish connections in key areas. 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? In two-step sealed bidding, discussions conducted during the first step may indicate the need for revised ceilings and dates which may be incorporated in step two. (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. 3501 If I need to make an urgent decision or have a difficult issue that cant wait for the next formal meeting, I can phone my two-in-a-box partner and ask to meet., Such pairings are also highly encouraged outside the governance teams to strengthen the relationship and build trust between parties at all levels. Course Hero is not sponsored or endorsed by any college or university. 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. There is a reasonable expectation that, throughout the contemplated contract period, the head of the agency will request funding for the contract at a level to avoid contract cancellation; and. Using multiple suppliers instead of only one, for example, increases costs; so does operating a shadow organization. 10) Some methods of contracting require more time than others. For DoD, NASA, and the Coast Guard, the authorities cited in 17.101 do not apply to contracts for the purchase of supplies to which 40 U.S.C.759 applies (information resource management supply contracts). (2) (ii) Each agencys file shall include the interagency agreement between the requesting and servicing agency, and shall include sufficient documentation to ensure an adequate audit consistent with 4.801(b). There is a stable design for the supplies to be acquired, and the technical risks associated with such supplies are not excessive; (4) (e) Ensure uniformity and reliability in equipment, compatibility or standardization of components, and interchangeability of parts. The primary contracting methods used by the government are: micro-purchases; simplified acquisition procedures; sealed bidding; contract by negotiations; and, consolidated purchasing programs, such as the use of GSA schedules, Government Wide Acquisition Contracts and other multiple award vehicles. The written determination shall identify the acquisition categories to which the waiver applies. (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. (f) Avoidance of the need for establishing quality control techniques and procedures for a new contractor each year. The contracting officer shall include these dates in the schedule, as appropriate. We consciously approached the economics of the relationship with full transparency and a problem-solving mentality instead of a negotiations mentality, she told us. The business-case analysis shall. This is necessary for situations when exercise of the option would result in the obligation of funds that are not available in the fiscal year in which the contract would otherwise be completed. (2) An indefinite quantity or requirements contract would be more appropriate than a contract with options. They shall not include any costs of labor or materials, or other expenses (except as indicated above), which might be incurred for performance of subsequent program year requirements. (c) 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. 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. (3) Additional numbered line items identified as the option. Given the longer performance period associated with multi-year acquisition, consideration in pricing fixed-priced contracts should be given to the use of economic price adjustment terms and profit objectives commensurate with contractor risk and financing arrangements. It is key to the buyer and seller relationship and provides a framework to deal with each other. In that event, contracting officers must follow the requirements of subpart 17.2. (b) This subpart implements Pub. 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. (d) Achieve economies in production. Stabilization of contractor work forces. This authority shall not be delegated. (c) An interagency acquisition is not exempt from the requirements of subpart 7.3, Contractor Versus Government Performance. A New Approach to Contracts - Harvard Business Review (2) Direct acquisitions. Storage1 has a container named container1 and the lifecycle management rule with, You have an Azure Storage account named storage1 that contains a file share named share1. The wording crafted by Island Health and South Island, which they embedded in the preamble of their contract, can be used by other companies as a model for drafting their own guiding principles. (g) The cancellation ceiling shall not be an evaluation factor. (f) Annual and multi-year proposals. The order should include-. (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. (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. Nondefense agency contracting officers are responsible for ensuring support provided in response to DoDs request complies with paragraph (b) of this section. Both parties felt that the new model was a win-win solution that would have been unachievable under previous contracts. x Contracting Officer, The Competition in Contracting Act requires that _________: . They often undermine the partnerlike relationships and trust needed to cope with external uncertainty. Therefore contracting officers should take extraordinary steps before award to assure themselves that the prospective contractors technical and managerial capacity are sufficient, that organizational conflicts of interest are adequately covered, and that the contract will grant the Government broad and continuing rights to involve itself, if necessary, in technical and managerial decisionmaking concerning performance. (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. 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. (a) When exercising an option, the contracting officer shall provide written notice to the contractor within the time period specified in the contract. Economists call this the hold-up problem: the fear that one party will be held up by the other. (d) The DoD acquisition official, as defined at 17.701, shall provide to the servicing nondefense agency contracting officer any DoD-unique terms, conditions, other related statutes, regulations, directives, and other applicable requirements for incorporation into the order or contract. (3) Because private enterprise is unable or unwilling to use its own facilities for the work. 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. Imagine that a supplier of engineering services submits a proposal in a competitive bidding process and wins the contract. This risk is highest when there are many unknowns about what will occur after the contract is signed. (1) The Governments need in certain service contracts for continuity of operations; and. It has been determined that the government and contractor personnel can be used interchangeably. (g) Level unit prices. Perhaps unsurprisingly, most companiesand their legal counsels in particularare uncomfortable with informal handshake deals, especially when the stakes are high. (f) chapter 33, and the agencys regulations governing such contracts. Any competitive negotiated acquisition having a basis for award stating that factors in addition to cost/price will be considered in selecting the successful offeror (s) (f) Presolicitation or pre-bid conferences. (David and Kate have consulted on many of these projects, including several mentioned in this article.) (b) Criteria for comparing the lowest evaluated submission on the first program year requirements to the lowest evaluated submission on the multi-year requirements. (See 17.207(f) with regard to the exercise of options. (4) Its use is authorized in accordance with agency procedures. (e) Waiver. (2) (c) The requesting and servicing agencies should agree to procedures for the resolution of disagreements that may arise under interagency acquisitions, including, in appropriate circumstances, the use of a third-party forum. 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. For example, consider that the total nonrecurring costs (see 15.408, Table 15-2, III. 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. Some methods of contracting require more time than - Course Hero (7) The contractors performance on this contract has been acceptable, e.g., received satisfactory ratings. Cancellation results when the contracting officer-, (1) Notifies the contractor of nonavailability of funds for contract performance for any subsequent program year; or. 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. This type of contract is typically used for well-defined, small-scale projects in which changes are rare. (h) Providing incentives to contractors to improve productivity through investment in capital facilities, equipment, and advanced technology. The final rule revises FAR 19.202-1 to require contracting officers to provide procurement center representatives copies of any proposed acquisition package and other reasonably obtainable information related to the acquisition, if the representatives exercise their discretion to review the acquisition. However, this does not preclude the use of an indefinite quantity contract or requirements contract with options. (h) (b) Business-case analysis requirements for multi-agency contracts and governmentwide acquisition contracts. (a) 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 The job order contracting method can be incorporated for projects that range from private residential jobs to public works projects. Other contract types include incentive contracts, time-and-materials, labor-hour contracts, indefinite-delivery contracts, and letter contracts. But the process we have outlined should be part of the contracting tool kit to govern highly complex relationships that demand collaboration and flexibility. You also have an on-premises Active Directory domain that contains a user named User1. Accordingly, agencies should provide such information through its internal regulations. (The DFARS, DoD class deviations, and PGI are accessible at: http://www.acq.osd.mil/dpap/dars). 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. How to build better long-term strategic partnerships. (a) A procurement contract includes: Product or service selection. (5) Document roles and responsibilities in the administration of the contract. If a third party is proposed, consent of the third party should be obtained in writing. (1) Assisted acquisitions. (1) (Its called vested because the parties have a vested interest in each others success.) Exam (elaborations) - Clc 222 mod 6 special considerations exam 2. (c) The period shall be set so as to provide the contractor adequate lead time to ensure continuous production. (d) (f) Cancellation means the cancellation (within a contractually specified time) of the total requirements of all remaining program years. Which of the following is NOT, [Recognize how contract types impacts COR responsibilities], Cost reimbursement contracts require less monitoring by the COR than other. Before, we had no one to speak with [if concerns arose]. Under the new pricing model, when the inpatient population is low, the hospitalists can opt to take time off and save Island Health money. 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. It may be negotiated as a percentage of the estimated costs but it is written into the contract as a precise amount, not a percentage. CLC 222 Mod 2 Contract Pre-Award & Award Exam - Stuvia (b) An agency shall not use an interagency acquisition to circumvent conditions and limitations imposed on the use of funds. A contracting officer issues a solicitation on January 9, 2019 that requests offers by February 11, 2019. 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. Again, its important to note that these guiding principles have teeth. Such other elements of any department or agency as have been designated by the President, or designated jointly by the Director of National Intelligence and the head of the department or agency concerned, as an element of the intelligence community. Results have not been tracked for all of them, but many have told us that they and their partners are happy with the approach and cite benefits including cost savings, improved profitability, higher levels of service, and a better relationship. (f) The Governments administrative costs of annual contracting may be used as a factor in the evaluation only if they can be reasonably established and are stated in the solicitation. A developer or sole producer of a product or system is designated under this acquisition technique to be the leader company, and to furnish assistance and know-how under an approved contract to one or more designated follower companies, so they can become a source of supply. The contracting officer shall reduce the cancellation ceiling for each program year in direct proportion to the remaining requirements subject to cancellation. For DoD, NASA, and the Coast Guard, a multi-year contract which includes a cancellation ceiling in excess of (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. A unit price contract can be used for all or part of a project. (d) The contracting officer, after considering price and other factors, shall make the determination on the basis of one of the following: (1) A new solicitation fails to produce a better price or a more advantageous offer than that offered by the option. In order to broaden the defense industrial base, to the maximum extent practicable-, (1) (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. There are five common types of construction contracts: lump sum (or fixed price), time and materials (T&M), unit price, guaranteed maximum price (GMP), and cost-plus. 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. The contracting officer shall reduce the cancellation ceiling for each program year in direct proportion to the remaining requirements subject to cancellation. (2) An informal analysis of prices or an examination of the market indicates that the option price is better than prices available in the market or that the option is the more advantageous offer. (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. (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. (d) The termination for convenience procedure may apply to any Government contract, including multiyear contracts. One objective, for example, called for improving physicians billing to the provincial Medical Services Plan (MSP) for cost recovery for the hospitalist fees. They realized that an equally important problem is shading, a retaliatory behavior in which one party stops cooperating, ceases to be proactive, or makes countermoves. (b) (1) The option cannot be evaluated under 17.206; or; (2) Future competition for the option is impracticable. 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. (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. Some relationships, such as those involving the purchase of commodity products and services, are truly transactional and only need traditional contracts. The indefinite-delivery contracts used most frequently to support interagency acquisitions are Federal Supply Schedules (FSS), Governmentwide acquisition contracts (GWACs), and multi-agency contracts (MACs). 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. Therefore, when reviewing contractor performance, contracting officers should consider-. If level unit pricing is not in the Governments interest, the head of a contracting activity may approve the use of variable unit prices, provided that for competitive proposals there is a valid method of evaluation. The highlighted questions are the questions you have missed.

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