NDIA Annual Educational Seminar Contracting for Services March 31, 2008

1. NDIA AnnualEducational SeminarContracting for Services March 31,2008

2. Contracting for Services Discussion Topics • Procurement Methods • Terms and Conditions • Challenging Areas

3. Procurement Methods and Contract Types • FAR Part 37 - service contract is a “…contract that directly engages the time and effort of a contractor whose primary purpose is to perform an identifiable task rather than to furnish an end item of supply” • May be either non-personal services or personal services • Non-personal services contract – personnel rendering the services are not subject, either by contract terms or manner of administration, to the supervision and control usually prevailing in relationships between the government and its employees • Personal services contract – characterized by employer-employee relationship; under supervision and control of government officer or employee • Areas which service contracts are found include: • Maintenance, overhaul, repair, servicing, rehabilitation, salvage, modernization, modification of supplies, systems, or equipment • Routine recurring maintenance of real property • Housekeeping and base services • Advisory and assistance services • Operation of government-owned equipment, property, and systems • Communications services • Architect and engineering (FAR Subpart 36.6) • Transportation and related services (FAR Part 47) • Research and development (FAR Part 35)

4. Procurement Methods and Contract Types • Performance-based acquisition preferred • Agencies shall generally rely on private sector for commercial services • Non-personal service contracts are proper under general contracting authority • Agency program officials responsible for accurately describing need • Services obtained in most cost effective manner • Sufficiently trained and experienced Agency officials to manage and oversee the contract administration function • CO determines whether service is for personal or non-personal services

5. Procurement Methods and Contract Types • Competition - sealed bidding preferred • Awards are not necessarily limited to price competition • Contract types include fixed price, T&M, and cost reimbursement; subject to specific restrictions, the contracting officer has discretion over type • Contract Term • Funded by annual appropriations; not extend past appropriation year • Multi-Year Contracts are permitted; basic and options should not exceed 5 years (FAR Subpart 17.1 and 17.2) • Extensions permitted to avoid Anti-Deficiency Act; option may be exercised more than once; total extension cannot exceed 6 months • FAR Part 12 commercial services are limited to FFP and FP/EPA

6. Contract Terms and Conditions • Government prepared Performance Work Statement or Statement of Objectives • Measurable performance standards and method of assessing performance • Performance incentives; innovation and cost-effectiveness • Service Contract Act (FAR Subpart 22.10) • Wage determinations; prevailing rates, collective bargaining agreements • Fair Labor Standards Act minimum wage • Inspection of services/Quality assurance surveillance • Uncompensated overtime • Not encouraged • CO must evaluate the use uncompensated overtime so as to not degrade level of technical expertise for competitive negotiations • unrealistically low rates may result in quality or service shortfalls • unbalanced distribution among skill sets and use in key technical positions • Subcontracting plan is not required for personal services contracts

7. Challenging Areas • Service Contract Act • Applicability • Exemptions • Labor categories • Bundling of supplies and services • Labor categories • Contract Types • Personal services vs. Non-personal services • Government-wide contracts

8. Wrap-up and Q&A • Questions/Comments • Mark Dostal 312-298-2330 • mark.s.dostal@us.pwc.com