Breakout Session # 201 Lynn Bales, Contract Specialist, The Boeing Company April 23, 2007 10:45-11:45

2. Introduction to the FAR Breakout Session # 201 Lynn Bales, Contract Specialist, The Boeing Company April 23, 2007 10:45-11:45

3. Class Objectives • To Discuss what the FAR is and how it serves the Acquisition Process • To demonstrate the use of the FAR • Discuss the use of the FAR Matrix • Introduce the FAR Sites • Introduce several excellent sites to learn more about Government Contracting

4. What is the FAR? The FAR is the “Playbook” of the Government Contracting Organization. If you know the rules, you will be a better contract administrator/negotiator.

5. Level the Playing Field • A new contract administrator in industry and Government must learn to use the FAR. • It is the Law that regulates Government Contracting • The Government has a curriculum designed to teach Government Contracting and the FAR. • If your company does not have classes for you, you must learn it yourself.

6. Level the Playing Field • This program was designed to offer you a basis to study the FAR and research other sites to learn about Government Contracting and how to meet the needs of the Government Customer. • It is up to each one of us to study and learn about our field. The FAR is the best resource we have.

7. THE FARS • The Federal Acquisition Regulations System is established for the codification and publication of uniform policies and procedures for acquisition by all executive agencies. • The Federal Acquisition Regulations System consists of the Federal Acquisition Regulation (FAR), which is the primary document, and agency acquisition regulations that implement or supplement the FAR.

8. 48 Code of Federal Regulations • The Federal Acquisition Regulation (FAR) was established to codify uniform policies for acquisition of supplies and services by executive agencies. • 1.103 -- Authority. • (a) The development of the FAR System is in accordance with the requirements of the Office of Federal Procurement Policy Act of 1974 (Pub. L. 93-400), as amended by Pub. L. 96-83. • (b) The FAR is prepared, issued, and maintained, and the FAR System is prescribed jointly by the Secretary of Defense, the Administrator of General Services, and the Administrator, National Aeronautics and Space Administration, under their several statutory authorities.

9. Who Publishes the FAR • GSA FAR Secretariat Publishes the FAR on behalf of all three FAR issuing agencies • The GSA Federal Acquisition Policy Division maintains the FAR Secretariat to act as the publication and administrative support arm of the FAR. • . The official FAR appears in the Code of Federal Regulations at 48 CFR Chapter 1.

10. Where is the FAR Published? The FAR is published in-- • (1) The daily issue of the Federal Register, • (2) Cumulated form in the Code of Federal Regulations (CFR); and • (3) A separate loose-leaf edition. And in various sites on the internet: GSA and Air Force have official sites • And by Commerce Clearing House in an annual version.

11. 1.201 -- Maintenance of the FAR. • Maintenance of the FAR • Deviations

12. Evolution A Historical Look • U.S. Constitution, Art. 1, Section 8 • 1792, Dept. of War and Treasury authority to contract • 1798, Dept. of Navy authority to contract • 1808, Officials Not to Benefit clause put in all contracts • 1809, Formal Bidding required • 1861, Civil Sundry Appropriations Act • 1947, Armed Services Procurement Act • 1984, FAR • 1994, FASA • 1996, FARA

13. So what is in the FAR? • The rules and regulations pertaining to Acqusitions • The rules for writing a contract • The rules for administering a contract • Developed from: • Statutes • Executive Orders • OMB Circulars • OFPP Policy Letters

14. What is Acquisition? • Acquisition”means the acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. Acquisition begins at the point when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract. • From 2.101 -- Definitions.

15. Acquisition is the whole Enchilada! • Acquisition begins at the point when: agency needs are established … • includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration… • and those technical and management functions directly related to the process of fulfilling agency needs by contract

16. http://akss.dau.mil/dapc/index.html • Acquisition 5000 Model (the whole enchilada)

17. 1.102-4 -- Role of the Acquisition Team. • The Team must be prepared to perform the functions and duties assigned. The Government is committed to provide training, professional development, and other resources necessary for maintaining and improving the knowledge, skills, and abilities for all Government participants on the Team, both with regard to their particular area of responsibility within the System, and their respective role as a team member. The contractor community is encouraged to do likewise. • (d) The System will foster cooperative relationships between the Government and its contractors consistent with its overriding responsibility to the taxpayers. • (e) The FAR outlines procurement policies and procedures that are used by members of the Acquisition Team. If a policy or procedure, or a particular strategy or practice, is in the best interest of the Government and is not specifically addressed in the FAR, nor prohibited by law (statute or case law), Executive order or other regulation, Government members of the Team should not assume it is prohibited. Rather, absence of direction should be interpreted as permitting the Team to innovate and use sound business judgment that is otherwise consistent with law and within the limits of their authority. Contracting officers should take the lead in encouraging business process innovations and ensuring that business decisions are sound.

18. So, how can find anything in the FAR? • We are going to discuss: • The numbering system • The Supplements • The Prescription • And the Clauses

19. Arrangement of the FAR • 1.105-2 -- Arrangement of Regulations. • (a) General.The FAR is divided into subchapters, parts (each of which covers a separate aspect of acquisition), subparts, sections, and subsections. • (b) Numbering . • (1) The  numbering  system permits the discrete identification of every FAR paragraph. The digits to the left of the decimal point represent the part number. The numbers to the right of the decimal point and to the left of the dash represent, in order, the subpart (one or two digits), and the section (two digits). The number to the right of the dash represents the subsection. Subdivisions may be used at the section and subsection level to identify individual paragraphs. The following example illustrates the make-up of a FAR number citation (note that subchapters are not used with citations): • (2) Subdivisions below the section or subsection level consist of parenthetical alpha numerics using the following sequence: (a)(1)(i)(A)(1)(i).

20. The FAR System • The FAR is supplemented by each service or agency only to add or further define agency requirements and serve its mission. • The services or agencies cannot change the law or its precepts. • The basic principles of the law will be followed.

21. FAR DFARS OTHER NASA AFFARS NAPS AFARS MSFC KSC JSC OTHER AFMC OTHER Supplements Organization Supplements begin with the top level of the service or agency And each level or organization can further supplement due to its mission. FAA is exempt from using the FAR, having written their own regulation after Desert Storm.

22. Supplements to the FAR Are numbered the same way except for two digits added representing the supplement. Chapters 2 through 59 of Title 48 CFR are reserved for the Acquisition Regulations of Executive Agencies. • For Example: Chapter 2 Department Of Defense DFARS Chapter 18 National Aeronautics And Space Administration Chapter 50 General Service Administration Chapter 51 Department Of The Army Acquisition Regulations Chapter 52 Department Of The Navy Acquisition Regulations Chapter 53 Department Of The Air Force Acquisition Regulations Agency supplements to the FAR are preceded by their chapter number: • For example, a DFARS supplement to FAR 6.304(a)(1) would be found in DFARS 206.304 • a NASA supplement reference to the same clause would read NASA 186.304(a)(1)

23. Handout - FAR Table of Contents The Content of the FAR NCMA 25th Annual Government Contract Management Conference 21st Century Federal Contract Management: Challenges and Opportunities

24. 48 CFR Ch. 1 8 Subchapters 53 Parts Appendix How FAR is Organized • Organization system divides FAR into:

25. Subchapters • Subchapter A – Gene Parts 1-4 • Subchapter B – Competition and Acquisition Planning Parts 5-12 • Subchapter C – Contracting Methods and Contract Types Parts 13-18 • Subchapter D – Socioeconomic Programs Parts 19-26 • Subchapter E – General Contracting Requirements Parts 27-33 • Subchapter F – Special Categories of Contracting Parts 34-41 • Subchapter G – Contract Management Parts 42-51 • Subchapter H – Clauses and Forms Parts 52-53

26. How do know what clause to use?

27. The Perscription 11.504 Contract Clauses. (a) The contracting officer may insert the clause at 52.211-11, Liquidated Damages – Supplies, Services, or Research and Development, in solicitations and contracts when a fixed-price contract is contemplated for supplies, services, or research and development (see 11.502). 11.502 Policy. (a) Liquidated damages clauses should be used only when both (1) the time of delivery or performance is such an important factor in the award of the contract that the delivery or performance is delinquent, and (2) the extent or amount of such damage would be difficult or impossible to ascertain or prove. In deciding whether to include a liquidated damage clause in a contract, the contracting officer should consider the probable effect on such matters as pricing, competition, and the costs and difficulties of contract administration.

28. THE Clause 52.211-11 Liquidated Damages – Supplies, Services or Research and Development As prescribed in 11.504(a), the contracting officer may insert the following clause in solicitations and contracts when a fixed-price contract is contemplated for supplies, services or research and development (see 11.502(b)): LIQUIDATED DAMAGES-SUPPLIES, SERVICES OR RESEARCH AND DEVELOPMENT (APR 1984) (a) If the Contractor fails to deliver the supplies or perform the services within the time specified in this contract, or any extension, the Contractor shall, in place of actual damages, pay to the Government as fixed, agreed and liquidated damages, for each calendar day of delay the sum of _______________ [Contracting Officer insert amount]. (b) Alternatives, if delivery or performance is so delayed, the Government may terminate this contract in whole or in part under the Default – Fixed-Price Supply and Service clause in this contract and in that event, the Contractor shall be liable for fixed, agreed, and liquidated damages accruing until the time the Government may reasonably obtain delivery or performance of similar supplies or services. The liquidated damages shall be in addition to excess costs under the Termination clause. (c) The Contractor shall not be charged with liquidated damages when the delay in delivery or performance arises out of causes beyond the control and without the fault or negligence of the contractor as defined in the Default-Fixed-Price Supply and Service clause in this contract. (End of clause)

29. Sections Subparts Part Clause Numbering Correlation

30. http://www.acquisition.gov/far/index.html

31. FAR SITE

32. http://farsite.hill.af.mil/

33. Searching at Hill

34. Hill Far Search

35. Search the FAR

36. Everything you need to know about contracting but didn’t know where to look!

37. Acquisition Central www.acquisition.gov

39. Regulations Portal

40. Defense Acquisition University www.dau.mil

42. Federal Acquisition Institute http://www.fai.gov/

43. Remember • The FAR is a law, but it is not in stone, it is updated regularly. • You must use it to learn how to use it. • Negotiating with the customer/supplier can be easier if you KNOW what the FAR says.