NAF Contracting Overview Professional Development

1. NAF Contracting Overview Professional Development March 2005

2. NAF Contracting Directorate Agenda • Vision and Mission • Customers • Policy and Principles • Contracting Processes • Contract Administration • New Initiatives

3. NAF Contracting Directorate Vision One worldwide team partnering with our customers to provide premier contracting services Mission Provide effective, efficient and equitable NAF contracting services

4. NAF Contracting Directorate Installation Management Agency (IMA) NAF Employees Navy AAFES Marine Corps Fisher House Stars & Stripes Army Lodging Success Program CFSC Customers Coast Guard NEXCOM DLA DoD NAF Health Benefits Program Air Force Army Centralized Lodging Procurement Others NSA, Civilian Welfare Fund, Army Executive Mess AFRCs & ARMP MWR Training Academy Pentagon Athletic Center (PAC)

5. Contracting Policy and Principles • Best overall value to the NAFI • Competitive negotiation to maximum practicable • Competition from a reasonable number of sources • Non-competitive when justified • Flexibility while maintaining fairness, integrity and professional ethics • Accomplished by trained procurement personnel • Use of contractors who are responsible • Exercise prudent and sound business judgment that do not violate law, statutes or regulations • Obtain quality supplies, services and construction in an efficient, cost effective and timely manner

6. Contracting Environment In exercising initiative, Government and NAF members of the Acquisition Team may assume if a specific strategy, practice, policy or procedure is in the best interests of the Government/NAFI and is not addressed in the DODI, DODD or AR 215-4 nor prohibited by law (statute or case law), Executive order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority.

7. Contracting Oversight and Guidance • President – Executive Orders • Laws and Statutes • DODD’s (4105.67-NAF Procurement Policy) • DODI’s (4105.71-NAF Procurement Procedures) • Army Regulations (AR 215-1, AR 215-3 & AR 215-4) • “How to Guides” • AAA • IG • GAO • Protest to Contracting Officers and Appeals to Commander • Armed Service Board of Contract Appeals (claims)

8. Contract Process Overview Requirements Acquisition Plan/Business Plan Acquisition Package Solicitation Source Selection/Negotiation Contract Award Contract Administration Delivery/Acceptance Contract Closeout

9. Contract Process Overview Acquisition Planning and Pre-Solicitation Phase is a team effort (requiring activity, contracting, legal) • Market Research – Acquisition Planning Team and Contracting Officer are responsible for conducting • Acquisition Plan – Requiring Activity is responsible for developing the acquisition plan in conjunction with the Contracting Officer • Evaluation Plan – Contracting Officer is responsible for preparing evaluation plan with requiring activity report • Contracting Officer is responsible: • Developing solicitations • Determining solicitation method (simplified, formal negotiation, invitation for bid) • Determine contract type (fixed price, fixed price with economic price adjustment, IDIQ) • Obtaining reviews (legal and others that may be required)

10. Market Research • Market Investigation • Collect, Evaluate & Analyze • Specific Information to meet • Agency Needs • Identify potential sources • Survey Manufacturers • Analyze Responses • Market Surveillance • Ongoing Familiarity With a Market • Trade Shows • Research Reports • Trade Journals • Symposia Proceedings • Draft RFP • Industry forms Market Research Product Available Proceed with Commercial Buy Revise Requirement? New Development?

11. Acquisition Planning Why is it important? A plan setting forth the key elements of the acquisition as it relates to your program or business needs • NAFIs shall perform acquisition planning and conduct market research for all acquisitions in order to promote and provide for- • Acquisition of commercial items • Maximum practicable competition • Integrate the efforts of all personnel responsible for significant aspects of the acquisition • Written acquisition plans required over $100K. Contracting officer may require at any time • Sole source should be the exception • Contracting officer shall promote and provide for competition in soliciting offers and awarding NAFI contracts

12. The Evaluation Process • Solicitation Phase • The Contracting Officer is responsible for controlling the solicitation process • Drafts RFP • Secures Legal and Requiring Activity concurrence • Issues RFP and any Amendments • Receives and safe-keeps proposals • Ensures all communication regarding solicitation comes to and through the contracting office • Takes lead on all aspects of the evaluation process

13. Contracting Method • Micro Purchases • <$5,000 for supplies, $2,500 for services • No competition necessary • Government-wide commercial purchase card – (Government Purchase Card (GPC) preferred method for purchase and payment • Fair and reasonable price determination required • Simplified Acquisition Procedure (SAP) • Less than $100,000 • May be used up to $250,000 for item and services meeting the definition of commercial items • Competition necessary unless a valid sole source accepted by the Contracting Officer

14. Contracting Method IFB & RFP • Contracting by Negotiation – Request for Proposal (RFP) AR 215-4, Chapter 4 • competitive • non-competitive • opportunity for discussions • best value consideration (Price and other factors considered) • Sealed Bidding – Invitation for Bid (IFB) AR 215-4, Chapter 5 –least preferred for NAF • requirements are easily understood (specific) • expect competition • no discussion required • review responsiveness and responsibility • price consideration only • Two Step method available

15. Contract Types • Fixed Price • Firm Fixed Price (FFP) • FP with Economic Price Adjustment (EPA) • FP – Level of Effort • FP with Retroactive Price Re-determination • Indefinite • Indefinite Delivery/Quantity (IDIQ) • Requirement • Multiple Award Schedule (MAS) • Agreement • Basic Ordering Agreement (BOA) • Blanket Purchase Agreement (BPA)

16. Contract Types Alternatives (cont’d) • Other types: • Time & Material, Labor-Hour, Letter Contract • Government Wide Agency Contracts (GWAC) • FSS, GSA, DSCP Prime Vendor by DLA • Cost Reimbursable (CR) • Cost Sharing • Cost-Plus • Incentive Contracts – FP or CR • Award Fee • Incentive Fee • Award Term/Options

17. Contract Types Characteristics Cost Reimbursable Fixed Price • Promise/Performance Best Effort Deliver • Risk to Contractor Low High • Risk to Government High Low • Cash Flow Cost Incurred On Delivery • Progress Payment ---- Yes • Performance Based Payment ---- Preferred • Administration High Low • Fee/Profit Periodic On Delivery

18. What is Best Value • Factors other than price play a significant role in the execution of the contract • Tradeoffs among cost factors and non-cost factors will be made in the source selection • The NAFI is allowed to accept other than the lowest priced proposal • Perceived benefits to NAFI must merit additional costs

19. Source Selection Evaluations Two Types of Best Value • Lowest Price Technically Acceptable • Criteria established as GO/NO GO thresholds • Exchanges may occur • Proposals are evaluated for acceptability, no point scores • No tradeoffs permitted • Award to lowest evaluated price of technically acceptable proposal

20. Source Selection Evaluations Two Types of Best Value Best Value tradeoffs • All evaluation factors and subfactors shall be clearly stated to include their relative importance • RFP shall include a clear indication of the relative weight of non-cost factors/subfactors • Tradeoff and benefits to the NAFI must be documented and consistent with the RFP and evaluation plan • Exchanges may occur

21. Selecting the Source Source Selection Policies • Minimize Complexity of the Solicitation, Evaluation, and Selection Decision • Ensure Impartial Evaluation of Proposals • Supports “Basis of Award” • Select Source/Sources with Best Value to the NAFI • All contractors and prospective contractors shall be treated fairly and impartially, but need not be treated the same • Past Performance Information (PPI) – Use in Source Selection & Admin

22. The Evaluation Process Evaluation Phase • Technical Evaluation Team’s Responsibilities • Chairperson’s Responsibilities • Contracting Officer’s Responsibilities • Legal Office’s Responsibilities

23. The Evaluation Process Responsibilities Technical Evaluation Team’s Responsibilities • Evaluates proposals in accordance with evaluation plan • Evaluates each proposal independently • Identifies areas needing clarifications, discussions • Identifies proposal weaknesses, deficiencies, strengths. • Recommends source

24. The Evaluation Process Responsibilities Contracting Officer’s Responsibilities - Source Selection Process • Controls the source selection process • Requests clarifications, discussions, and revised proposals from offerors • Reviews technical evaluation team’s recommendation and supporting documentation • Reconciles any differences • Develops Contracting Officer Determination for award • Makes fair and reasonable price determination • Conducts pre-award survey • Makes determination of responsibility • Works to obtain legal sufficiency for protection of the NAFI and good business practices • Conducts debriefings, as requested

25. Source Selection Acquisition Process Determine Acquisition Strategy Develop Acquisition Plan Define Requirement Evaluate Offers, Clarification Issues, Past Performance, Brief SSA Develop RFP & Evaluation Plan Issue RFP/draft RFP Conduct Meaningful discussions with all in Competitive Range Establish Competitive Range Award w/o discuss

26. Source Selection Acquisition Process Evaluate FRP in accordance with RFP and Evaluation Plan, Further Clarification & Discussions. Request Final Revised Proposals Brief SSA of Strengths & Weakness of Offers in C. Range Debrief Unsuccessful Offers* Award Best Value Contract* SSA selects Best Value offer* Protest can occur at any stage of the source selection process

27. Contract Administration Functions • Most Functions Fall into 1 of 6 Categories • Contract Administration • Pricing/Negotiations • Program Integration • Property Management • Quality Assurance • Surveillance (Performance, Product, Engineering, etc.) • Some of these functions may be delegated to a COR • COR receives written authority from the contracting officer • COR administers within the terms and conditions of the contract

28. Contract Administration Contract Modification Change Orders Administrative Options T4C Supplemental Agreement Change in terms/Conditions Change in Price T4D

29. Contract Administration Constructive Change • Oral or written act or failure to act by authorized NAFI/Government official construed by contractor as having same effect as a written change order • Must involve: • Change in performance beyond minimum contract requirements, and • Word or deed by Government representative which requires contractor effort that is not a necessary part of the contract • Requires Ratification and contract modification

30. What is Ratification? COR/GPC Cardholders/Program ManagersBE AWARE! "Ratification" means the act of approving an unauthorized commitment by an official who has the authority to do so.“ An “Unauthorized Commitment” is an agreement that is not binding solely because the NAFI/government representative who made it lacked the authority to enter into a contract on behalf of the government. Only Contracting Officers, acting within the scope of their authority, are authorized to enter into contracts or make modifications thereto on behalf of the government Ratification Authority subject to the limitations and without redelegation: Director of NAF Contracting, USACFSC up to $100,000 for USACFSC CG above $100,000 IMA Garrison Commanders up to $100,000 IMA Director above $100,000

31. Contract Administration Termination for Convenience (T4C) • Unilateral NAFI/Government Right • Notice of Termination Must Be in Writing • No Justification is Required However--- Can’t arbitrary T4C ifcontinued need for contract • May Be Partial or Complete • Must pay the Contractor for incurred Cost

32. Contract Administration Termination For Default (T4D) • NAFI May Terminate for Default if Contractor Fails To: • Make Timely Delivery • Perform Any Other Contract Provision • Make Progress & Thereby Endangers Performance • NAFI Pays Contract Price for Completed delivery of performance • NAFI MayObtain Re-procurement Costs

33. Contract Administration Contract Close Out • Physical completion occurs when: • All required deliveries are completed, inspected and accepted • All options have expired • Final payment in full • NAFI has given the contractor a notice of termination • Warranty expires • Close out includes: • Final patent & royalty reports are cleared • Interim or disallowed costs are settled • No pending modification actions • Subcontracts are settled by the Prime Must assess physical completion to undertake close-out

34. NAF Contracting New Initiatives • NAF Electronic shopping mall (eMall) • IMA Headquarters centralized procurement • Fitness equipment • Customer payment solutions • Name brand casual dining In partnership with Business Programs (BP) • Soft drink post mix • Golf carts

35. NAF Contracting SERVING THE ABSOLUTE BEST MILITARY IN THE WORLD Conclusion