Contract Types

1. Contract Types PAO Approved SPR2015-691-Contract Types • Small Business Round Table • 13 August 2015 By Dawn Chartier Deputy Director, Office of Small Business Programs NAWCAD Lakehurst

2. The Regulations • Establish general concepts promoting: • Competition • Public access to the process – FebBizOps • Level playing field for all parties (Conflict of Interest) • Insultates procurements from outside influence (Non-disclosure certification) • Promotes Gov’t. efficiency – fair and reasonable price • Promotes socio-economic goals in Gov’t. procurement

3. Hardware Procurements • Hardware requirements require: • SOW with CDRLS • Quantities including options and delivery • Independent Government Cost Estimate • Market research with acquisition history • List for spares • Logistics support requirements • Tech data and intellectual property req’ts. • IT approval if necessary • FMS requirements if necessary • Source Selection Plan for new competitive buy

4. Service Requirements • Requirements for Services include: • SOW/SOO with CDRLs • Independent Government Cost Estimate • Market research with acquisition history • Competency Approval • IT approval if necessary • Source Selection Plan for new effort; use of SEAPORT is no longer mandatory

5. Types of Solicitations • Combined Synopsis/Solicitation (FAR 13.5) • Good up to $5M • Combines the notice of solicitation in FedBizOps with simplified solicitation procedures, T&Cs and eval and award criteria

6. Types of Contracts • Firm Fixed Price – • Used in solicitations and contracts in which the SOW is well defined(COTS, Drawings, production, follow-on buys) with reasonable risk for the contractor • Freezes price for Gov’t.; if price to perform increases contractor is responsible • If contractor can perform more efficiently savings become profit for contractor • Preferred type of contract for Government

7. Types of Contracts • Cost Plus Fixed Fee – • Used in Sols. and contracts in which SOW cannot be well defined (R&D, development, services). Covers all estimated and actual costs associated with performance of contract including labor, mat’ls, burdens plus a fixed fee. • Actual performance costs may vary from what was originally negotiated. If costs exceed original total (cost overrun) contractor may not continue w/out authorization of PCO. New total must be established and Gov’t pays increased costs. • If contractor does not properly estimate & bill, at contract close out additional funding in that year money must be provided by PM to close out the contract. • Less preferred type of contract for Government

8. Types of Contracts • Time and Materials (T&M) – • Used when actual performance cannot be well defined (development or RoR) • No incentive for contractor to perform efficiently; the more hours they work the more they earn • Negotiated fixed labor hour rate for time; includes burdens and profit • Material cost at actuals with “handling charge” added to actual cost of material; no fee on mat’l. • Least preferred type of contract for Government

9. IDIQs and Options • Indefinte Delivery/Indefinte Quantity – • When requirements can’t reasonably be predicted over the next few years but an est max total qty can be predicted • Can be FFP, CPFF or T&M • Should be used when less sure about funding stream • Options – When requirements can be relatively predicted on a year to year basis with total • Can be FFP, CPFF or T&M • Should be used when more secure with funding stream availability

10. Basic Agreements • Written Instrument of Understanding • Contains contract clauses applying to future contracts during its term • Contemplates separate future contracts that will incorporate by reference the required and applicable clauses agreed upon in the basic agreement. • A BASIC AGREEMENT IS NOT A CONTRACT • The basic agreement DOES NOT INCLUDE ANY FUNDING (funding is provided in the separate orders placed against the basic agreement) • There is NO GUARANTEE that any orders will be placed against the basic agreement • These can include Basic Ordering Agreements and Blanket Purchasing Agreements

11. Types of Solicitations • Request for Quotations (RFQs) – • Generally for SAP actions (FAR Part 13), GSA or BPA; • Uses simplified eval techniques • Typically takes 30 to 60 days • May or may not require synopsis

12. Types of Solicitations • Invitation of Bid (IFB) Formal advertising IAW Far Part 14 • Very structured solicitation format which can only be used with very well defined requirements (e.g., Drawings) • Primarily used by NAVFAC in construction • Low bidder wins unless and exception to spec or solicitation is taken

13. Types of Solicitation • Request for Proposal (RFP) Negotiated Procurement IAW FAR Part 15 • Used in more complex procurements; assumes CO will need to negotiate or discuss requirements/responses with Contractor prior to award • Primary type of solicitation used by NAVAIR • SSP for competitive; cost/price proposal for non-competitive

14. Sections of Contract • Section A – Contract cover page; provides contract number, name of contractor, contracting office issuing contract, contract date, PCO name, contract total amount, admin office, payment office, ship to address, payment terms and delv’y terms • Section B – Contract Pricing Schedule; provides CLINS w/ item descriptions, qtys, Unit Prices, options, total amount obligated • Section C – Statement of Work (SOW) or Statement of Objectives (SOO) for performance based SOW

15. Sections of Contract • Section D – Provides packaging, marking and shipping instructions • Section E – Provides Inspection and Acceptance instructions • Section F – Provides delivery or performance schedule for all CLINS • Section G – Provides contract administration information & data

16. Sections of Contract • Section H – Special contract provisions, clauses, Ts & Cs; full text clauses • Section I – Standard Contract Clauses; general FAR clauses incorporated by reference number – not full text • Section J – List of Attachments; CDRLS, drawings, DD 254, reference documents • Section K – Contractor Representations and Certifications; contractor provided information detailing size, type of business, etc. Information used in FPDS data base.

17. Sections of Solicitation • Section L – Instructions to Offerors, tells contractors how to prepare proposal in response to solicitation; no. vols., no. copies, format, topics and order of presentation • Section M – Evaluation Factors and Award Provides description of factors considered in award, their relative importance and award criteria – best value or pass/fail, low offeror. For cost type contracts, discusses cost realism evaluation process