Basic Contract Administration

BASIC CONTRACT ADMINISTRATION

TEXT REFERENCE

Chapters 1 – 13

Current Through FAC 90-46 and DAC 91-12

Prepared by:

Logistics Management Institute Federal Acquisition Institute Center for Public Administration 18th and F Streets, N.W. 2000 Corporate Ridge Washington, DC 20405 McLean, Virginia 22102-7805

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BASIC CONTRACT ADMINISTRATION

Table of Contents

Chapter 1: Contract Administration Planning

Vignette: Eric’s First Day ................................................................................................. 1-1 Course Learning Objectives ............................................................................................... 1-3 Introduction to Contract Administration Planning ............................................................. 1-4 Steps in Contract Administration Planning ........................................................................ 1-6

Contract Administration Planning ...................................................................................... 1-7 1.1 Review the Contract File ..................................................................................... 1-7 Vignette: Pallet Procurement Contract Administration Planning .................................. 1-10 1.2 Determine Criticality ......................................................................................... 1-10 Vignette: Which Designator for the Pallet Procurement? .............................................. 1-11 1.3 Identify Previous Issues and Problems .............................................................. 1-12 Vignette: Joanne’s Concern ............................................................................................ 1-15 1.4 Meet to Discuss Performance Monitoring ......................................................... 1-15 1.5 Determine the Extent of Performance Monitoring ............................................ 1-16 1.6 Delegate Contract Administration Functions .................................................... 1-20 1.7 The Contract Administration Plan ..................................................................... 1-31 1.8 Provide Notices and Instructions ....................................................................... 1-39 1.9 Provide Formal Notice to Contractor ................................................................. 1-43 Vignette: Putting the Pallet Procurement in Perspective ................................................ 1-46

Chapter 2: Postaward Orientations

Vignette: Assessing the Need to Get Started ..................................................................... 2-1 Course Learning Objectives ................................................................................................ 2-3 Introduction to Postaward Orientations .............................................................................. 2-4 Steps in Postaward Orientation Planning ............................................................................ 2-5

Postaward Orientation Planning ......................................................................................... 2-6 2.1 Determine the Need ............................................................................................. 2-6 2.2 Determine the Type of Orientation ...................................................................... 2-8 2.3 Planning Orientations ........................................................................................ 2-12 Vignette: Acquisition Team Planning .............................................................................. 2-14 Vignette: Harry’s Continuing Concern ........................................................................... 2-21 2.4 Conduct the Orientation ..................................................................................... 2-22 Vignette: It Never Hurts to Ask ........................................................................................ 2-25 2.5 Prepare Postaward Orientation Report .............................................................. 2-25 2.6 Actions to Resolve Disagreements on Key Issues ............................................. 2-27 2.7 Identify the Need for Contract Modifications .................................................... 2-27 2.8 Document the Contract File ............................................................................... 2-28

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2.9 Provide Information to Interested Parties .......................................................... 2-28 2-10 Obtain Executed Contractual Documents, Bonds, or Insurance ........................ 2-29

Chapter 3: Basic Procedures for Successful Performance Monitoring

Vignette: Monitoring the Pallet Procurement ................................................................... 3-1 Course Learning Objectives ................................................................................................ 3-3 Introduction to Performance Monitoring ............................................................................ 3-4 Steps in Successful Performance Monitoring ..................................................................... 3-6

Successful Performance Monitoring ................................................................................... 3-8 3.1 Respond to Contractor Requests .......................................................................... 3-8 3.2 Monitor Assigned Technical and Other Support Personnel ................................ 3-9 3.3 Obtain Data on Contractor Performance ........................................................... 3-16 Vignette: And Away We Go! … Or Do We? .................................................................... 3-24 Vignette: Lessons Learned Pay Dividends ...................................................................... 3-30 3.4 Inform Others of Contract Status ....................................................................... 3-35

Chapter 4: Problem Resolution in Contract Administration

Vignette: Yet Another Realm for Eric ................................................................................ 4-1 Course Learning Objectives ................................................................................................ 4-3 Introduction to Problem Resolution in Contract Administration........................................ 4-4 Steps in Problem Resolution During Contract Administration .......................................... 4-5

Problem Resolution in Contract Administration ................................................................ 4-6 4.1 Verify and Document Known or Predictable Performance Problems ................. 4-6 4.2 Determine Impact of Problem on Requirement ................................................... 4-7 Vignette: Cause and Effect: A Two-Sided Coin ................................................................ 4-9 4.3 Suspension or Stoppage of Work ....................................................................... 4-11 Vignette: To Stop or Not to Stop? … That is the Question .............................................. 4-14 Vignette: You Handle the Paperwork … I’ll Handle the Job .......................................... 4-21 4.4 Performance Delays ........................................................................................... 4-22 Vignette: Unwinding a Tangled Skein ............................................................................. 4-30 4.5 Resolve Contractor Performance Problems ....................................................... 4-38 4.6 Document Final Decision .................................................................................. 4-38 4.7 Invoke Formal Remedy ...................................................................................... 4-39 4.8 Inform Requiring Activity and Other Interested Parties .................................... 4-39

Chapter 5: Contract Modifications and Options

Vignette: Another Challenging Frontier ........................................................................... 5-1 Course Learning Objectives ................................................................................................ 5-3 Introduction to Contract Modifications and Options .......................................................... 5-4 Steps in Modifying Contracts ............................................................................................. 5-7

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Modifications ...................................................................................................................... 5-8 5.1 Modifications ....................................................................................................... 5-8 5.1.1 Consider Contractor Requests for Modifications ................................................ 5-8 5.1.2 Consider Government Requests for Modifications ........................................... 5-10 5.1.3 Determine Impact of Change on Scope ............................................................. 5-11 5.1.4 Estimate Impact of Change ................................................................................ 5-14 5.1.5 Determine Appropriate Consideration ............................................................... 5-17 5.1.6 Provide Notice of Rejection ............................................................................... 5-18 5.1.7 Determine Type of Contract Modification ........................................................ 5-18 5.1.8 Implement Contract Modifications for Supplemental Agreements ................... 5-20 5.1.9 Implement Contract Modifications for Unilateral Changes .............................. 5-26 5.1.10 Implement Contract Modifications for Other Administrative Changes ............ 5-30 Vignette: What a Difference a Clause Makes .................................................................. 5-32 5.1.11 Implement Contract Modifications for Novation Agreements .......................... 5-33 5.1.12 Implement Contract Modifications for Name Changes ..................................... 5-36

Steps in Exercising Options .............................................................................................. 5-39 5.2 Options ............................................................................................................... 5-40 5.2.1 Identify Available Options ................................................................................. 5-40 5.2.2 Determine Need for Additional Supplies or Services ........................................ 5-41 5.2.3 Determine Whether Option Requires Synopsizing ............................................ 5-41 5.2.4 Determine Whether to Exercise Options ........................................................... 5-41 5.2.5 Provide Written Notice and Exercise Option .................................................... 5-45 5.2.6 Prepare Written Determination for Contract File .............................................. 5-46 Vignette: Getting in Shape to Exercise an Option ........................................................... 5-47

Chapter 6: Contract Remedies

Vignette: Accountability When Things Go Wrong ............................................................ 6-1 Course Learning Objectives ................................................................................................ 6-3 Introduction to Contract Remedies ..................................................................................... 6-4 Preliminary Steps for Choosing Contract Remedies .......................................................... 6-6

Identifying Types of Remedies ........................................................................................... 6-7 6.1 Identify Types of Remedies ................................................................................. 6-7 Steps in Issuing a Delinquency Notice ............................................................................... 6-8 Delinquency Notices ........................................................................................................... 6-9 6.2 Issue Cure or Show Cause Notice ........................................................................ 6-9 Steps in Implementing Liquidated Damages .................................................................... 6-17 Liquidated Damages ......................................................................................................... 6-18 6.3 Liquidated Damages .......................................................................................... 6-18 Steps in Rejecting Nonconforming Supplies or Services ................................................. 6-24 Nonconforming Supplies or Services ............................................................................... 6-25 6.4 Rejection of Nonconforming Supplies or Services ............................................ 6-25 Steps in Implementing Express Warranties ...................................................................... 6-31 Express Warranties ........................................................................................................... 6-32

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6.5 Express Warranties ............................................................................................ 6-32 Steps in Implementing Implied Warranties ...................................................................... 6-40 Implied Warranties............................................................................................................ 6-41 6.6 Implied Warranties............................................................................................. 6-41 Vignette: Which is It … Warranty, Guarantee, or Guaranty? ........................................ 6-43 Steps in Determining Latent Defects, Fraud, or Gross Mistakes ...................................... 6-45 Latent Defects, Fraud, or Gross Mistakes ......................................................................... 6-46 6.7 Latent Defects, Fraud, or Gross Mistakes .......................................................... 6-46 6.8 Select Most Appropriate Remedy ...................................................................... 6-49 6.9 Withhold, Reduce, or Demand Payment from Contractor ................................. 6-49

Chapter 7: Contract Payment

Vignette: Quid Pro Quo … Payment for Performance ...................................................... 7-1 Course Learning Objectives ................................................................................................ 7-3 Introduction to Contract Payment ....................................................................................... 7-4 Steps in Processing Contract Payment ................................................................................ 7-8

Contract Payment ................................................................................................................ 7-9 7.1 Inspect Invoice or Voucher and Notify Contractor of Any Defects .................... 7-9 7.2 Identify Terms and Conditions Pertinent to Payment ........................................ 7-11 7.3 Obtain Documents and Determinations Pertinent to Payment .......................... 7-11 7.4 Performance-Based Payments ........................................................................... 7-14 7.5 Identify Withholdings, Deductions, or Other Corrections ................................. 7-18 7.6 Determine if Assignee is Protected From Deductions or Withholdings ............ 7-21 7.7 Determine Amount Due Contractor ................................................................... 7-22 7.8 Notify Contractor of Differences Between Invoiced or Vouchered Amounts and Amounts to be Paid ..................................................................................... 7-22 7.9 Notify Contractor of Final Decision on Paying Lesser Amount ....................... 7-22 7.10 Forward Invoice or Voucher .............................................................................. 7-23

Chapter 8: Contract Closeout

Vignette: The Whole is Greater Than the Sum of Its Parts ............................................... 8-1 Course Learning Objectives ................................................................................................ 8-3 Introduction to Contract Closeout ....................................................................................... 8-4 Steps in Contract Closeout .................................................................................................. 8-6

Contract Closeout ............................................................................................................... 8-7 8.1 Verify Contract is Physically Complete .............................................................. 8-7 8.2 Obtain Forms, Reports, and Clearances Required at Closeout ............................ 8-7 8.3 Verify Other Terms and Conditions Have Been Met .......................................... 8-8 8.4 Settle Any Outstanding Issues ............................................................................. 8-8 8.5 Verify No Outstanding Claims or Disputes ......................................................... 8-8 8.6 Make Final Payment or Collect Overpayment From Contractor ....................... 8-10 8.7 Identify and Recommend Deobligation of Excess Funds .................................. 8-10

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8.8 Prepare Contract Completion Statement and Dispose of Files .......................... 8-10 8.9 Determine Whether to Invoke Rights Under Continuity of Services Clause .... 8-12

Chapter 9: Disputes, Claims, and Terminations

Vignette: To Be Forewarned is to be Forearmed .............................................................. 9-1 Course Learning Objectives ................................................................................................ 9-4 Introduction to Disputes, Claims, and Terminations .......................................................... 9-5

Disputes and Claims ........................................................................................................... 9-7 9.1 Disputes and Claims ............................................................................................ 9-7 Terminations ..................................................................................................................... 9-28 9.2 Terminations ...................................................................................................... 9-28 9.2.1 Termination for Default ..................................................................................... 9-30 9.2.2 Termination for Convenience ............................................................................ 9-44 Vignette: Convenience, Cause, or What? ........................................................................ 9-49

Chapter 10: Consent to Subcontracts

Vignette: There’s More to It Than Meets the Eye ........................................................... 10-1 Course Learning Objectives .............................................................................................. 10-4 Introduction to Consent to Subcontracts ........................................................................... 10-5 Steps in Consenting to Subcontracts ................................................................................. 10-7

To Consent or Not to Consent .......................................................................................... 10-8 10.1 Determine Consent Requirements ..................................................................... 10-8 Vignette: Some Folks Just Don’t Get It ........................................................................... 10-9 10.2 Identify Subcontracts Requiring Consent ........................................................ 10-10 10.3 Obtain and Review Advance Notifications ..................................................... 10-12 10.4 Determine If FAR Prohibits Consent ............................................................... 10-16 10.5 Determine to Withhold Consent for Other Reasons or Establish Conditions for Consent ....................................................................................................... 10-19 10.6 Negotiate Subcontracting Changes or Corrections .......................................... 10-23 10.7 Document the Decision .................................................................................... 10-24 10.8 Monitor to Ensure Subcontracts Are Awarded Properly ................................. 10-25

Chapter 11: Limitation of Costs

Vignette: Cost Plus Whatever … A Different World ....................................................... 11-1 Course Learning Objectives .............................................................................................. 11-3 Introduction to Limitation of Costs .................................................................................. 11-4 Steps in Limitation of Costs .............................................................................................. 11-6

Limitation of Costs ........................................................................................................... 11-7 11.1 Determine If Contractor Nearing Estimated Cost or Limit of Funds ................ 11-7 11.2 Meet With Government Contract Administration Team ................................... 11-9 11.3 Resolve the Problem .......................................................................................... 11-9

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Vignette: When Emotions Run High .............................................................................. 11-11 11.4 Deobligate Excess Funds ................................................................................. 11-12

Chapter 12: Assignment of Claims

Vignette: The Assignment of … What? ............................................................................ 12-1 Course Learning Objectives .............................................................................................. 12-3 Introduction to Assignment of Claims .............................................................................. 12-4 Steps in Assigning Payments ............................................................................................ 12-7

Assignment of Claims ....................................................................................................... 12-8 12.1 Determine Contract Permits Assignment........................................................... 12-8 12.2 Determine Proper Request ................................................................................. 12-8 12.3 Determine Assignment Exists .......................................................................... 12-11 12.4 Execute and Return Assignment ...................................................................... 12-12 12.5 Approve Release of Assignment ...................................................................... 12-12

Chapter 13: Property Administration

Vignette: There Comes a Time for Action ....................................................................... 13-1 Course Learning Objectives .............................................................................................. 13-3 Introduction to Property Administration ........................................................................... 13-4 Steps in Property Administration ...................................................................................... 13-6

Property Administration ................................................................................................... 13-7 13.1 Establish Reporting Requirements ..................................................................... 13-7 13.2 Monitor Delivery of Government Property ....................................................... 13-7 13.3 Monitor Contractor Property Control System ................................................... 13-8 13.4 Determine to Decrease or Provide Substitute GFP .......................................... 13-17 13.5 Evaluate and Document Evidence of Loss, Damage, or Destruction .............. 13-18 13.6 Identify Contractor Liability ............................................................................ 13-18 Vignette: Who’s to Blame and What to Do? .................................................................. 13-19 13.7 Prepare Conclusions on Extent and Value of Loss or Damage ....................... 13-20 13.8 Issue Demand for Payment, When Appropriate .............................................. 13-20 13.9 Recover or Dispose of Government Property .................................................. 13-20

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CHAPTER 1

CONTRACT ADMINISTRATION PLANNING

ERIC’S FIRST DAY

It is Eric Schmidt’s first day on the job, and he is understandably nervous. His boss, Joanne Davidson, is the agency’s top contracting officer. While considered extremely able, she has a reputation for being tough. Eric had been introduced to the staff at its morning meeting, and he has settled into his new office. Indeed, he is ready to receive his first assignment from Joanne.

Two years ago, the agency replaced some 30 small supply depots with three totally automated warehouse facilities. Each facility has 20 bays, and each bay is 10 bins high. The material dis-pensed at each facility is stored on pallets in individual bins. The operation of the bins is effi-cient, and the overall warehousing system operates well. There is, however, a nagging problem associated with the material used for pallet fabrication. The material is called out in an agency-specific specification, and the result of its use has been troublesome because the material does not provide sufficient flexibility to withstand the flexing caused by the continual movement of pallets in and out of each facility. This movement is necessary, of course, to accommodate the ongoing flow of material within the warehousing system. Both the manufacturer of the auto-mated system and the agency’s laboratory have been working to find a solution to what has de-veloped into an expensive problem of pallet replacement. Whatever the solution, it has to be cost effective. Until one is found, a continuing supply of pallets will be needed at the three warehouse facilities.

After consulting with both the warehousing system manufacturer and agency laboratory person-nel, Joanne felt that the procurement of pallets requiring fabrication under a specified material will not get the job done. She concluded it is both a waste of time and money. For instance, market research had surfaced a considerable number of pallet manufacturers, and the examina-tion of supplier literature had proved to be a real eyeopener about what might be available in terms of currently manufactured pallets. Customary commercial practices for buyer-seller agreements were evident, and the regular use of implied warranties of merchantability or fitness for a particular purpose were found virtually everywhere. In considering alternatives with her technical and contracting colleagues, all agreed that using a performance specification and ac-quiring the pallets as commercial items would ensure some predictable benefits.

As a result of effective planning with the agency’s acquisition team, Joanne had solicited the marketplace using the procedures of FAR Part 12 (Acquisition of Commercial Items) comple-mented by the use of FAR Part 15 (Contracting by Negotiation) to accommodate what might be needed to clarify the agency’s performance specification for the procurement of pallets. The de-cision was made to solicit widely, and the procurement was labeled as unrestrictive. An appro-priate notice was publicized in the Commerce Business Daily (CBD), competitive offers were received, and a contract was awarded within 45 days of the procurement’s announcement.


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As Joanne explained to Eric, “Your first job is to develop a contract administration plan for the pallet contract we awarded yesterday to Platform Industries. I realize you know nothing about the requirement or the company. However, you may be best qualified to give me a fresh look at a program covered by a performance specification and procured under FAR Parts 12 and 15. It’s kind of a new experience for all of us, Eric. Read the contract file carefully and develop your plan based on the information you find. The first thing you’ll notice is that the contract file is diminished in size from those we generally handle for deals like this. We’ll meet tomorrow morning with someone involved in the program and work to finalize your plan. Any questions at this point?” added the contracting officer. Eric responded cautiously. “No, but I’m sure that will change once I’ve gotten into the contract file, Joanne.”

As she checked her watch and began to leave, Joanne emphasized to her new contract adminis-trator the importance of the procurement’s success in light of the longstanding pallet pliability problem. Half smiling, she rubbed her hands together, backed out of the office, and left by say-ing, “I’m counting on you Eric, and I know you’ll come through for us. See you tomorrow morn-ing.”

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COURSE LEARNING OBJECTIVES

At the end of this course, you will be able to:

Overall: Develop a contract administration plan consistent with the complexity of the ac-quisition and instruct personnel on their respective roles and responsibilities dur-ing the performance period.

Individual:

1.1 Review a contract file to identify critical contract clauses and requirements.

1.2 Assign a criticality designator to the contract.

1.3 From an acquisition’s history, identify previous issues and problems with an ex-isting contractor or contracts for similar requirements.

1.4 Meet with a contract’s acquisition team to discuss performance monitoring and surveillance.

1.5 Determine the extent of any required performance monitoring and surveillance.

1.6 Determine those contract administration functions, if any, that will be delegated and to whom.

1.7 Develop a contract administration plan.

1.8 Provide notices containing information and instructions to technical representa-tives and other support personnel concerning their roles, responsibilities, and li-mitations of authority.

1.9 Provide formal notices to contractors concerning the names, roles, responsibili-ties, and limitations of authority of government contract administration personnel.


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INTRODUCTION TO CONTRACT ADMINISTRATION PLANNING

Contract administration planning involves activity in setting up systems and procedures to ensure compliance with a contract’s terms and condi-tions during performance. The administration of any contract should be considered during an acquisition’s planning phase. Finalizing the plan for this administration is done once a contract has been awarded.

Effective contract administration resides in tailoring its requirements to an acquisition’s complexity, as well as recognizing the need for flexibility.

No one plan or planning device represents a panacea for contract adminis-tration. For the acquisition of commercial items or services, the need for administration should be minimal. For the acquisition of complex sys-tems, the need for administration will require a considerable effort by the Government and a contractor.

Failure to read and understand a contract frequently causes contract ad-ministration problems.

Remember: A contract is a written, mutually binding legal relationship between or among competent parties to do or not to do something not oth-erwise prohibited by law, and its terms and conditions are enforceable un-der law.

When contract administration monitoring or surveillance systems are planned, they must be designed to ensure that the Government and a con-tractor live up to their promises and fulfill agreed-to responsibilities.

The principal objective of contract administration planning is twofold: to set up a system that reinforces the performance of both parties’ responsi-bilities; and to provide means for the early recognition of performance problems either before or when they occur.

The result of contract administration planning is reflected in a contract administration plan. For acquiring commercial items, this plan should be simple and straightforward. Large and complex acquisitions will require more detailed plans and may call for the support of various capabilities (e.g., quality assurance, technical monitoring, and others).

Contract Administra-tion Planning

A Common Failure and Problems

Objective of Contract Administration Plan-ning

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The steps in planning for contract administration are charted on the next page. Following the flowchart, each step is discussed in detail.

Steps in Performance


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STEPS IN CONTRACT ADMINISTRATION PLANNING

1. Review the contract file.

2-5. Determine the extent of performancemonitoring.

6. Determine which contract administrationfunctions will be delegated and to whom.

7. Develop a contract administration plan.

8. Provide notice and instructions torepresentatives of the Contracting Officer(e.g., CORs/COTRs).

9. Notify contractors of names, roles,responsibilities, and limitations of authority forGovernment representatives.

Input: Prospective contract.

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A thorough review of the contract file will turn up any clauses that are critical to performance and any other requirements that may influence or have an impact on contract administration planning decisions. Exhibit 1-1 lists areas of prime importance.

Remember: Effective contract administration planning tailors itself to re-flect the need for performance monitoring and reporting. Overzealous administrative requirements may result in an unnecessary expenditure of

time and money.

Exhibit 1-1

1.1 Review the Con-tract File

Tailor to Meet the Need

Contract File Areas to Study in Detail

FAR Subpart 42.2 The assignment of contract administration functions.

FAR 42.1105 Criticality designator.

FAR Subpart 4.4 Security requirements.

FAR Subpart 42.11 Production surveillance requirements and reporting.

FAR 42.204 Supporting contract administration requirements.

When applicable, special contract requirements, including:

Specifications, Data requirements, First article testing, Government property, Inspection and acceptance, Special Section H clauses, Contractor’s proposal, and Delivery schedule (or performance period).


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Exhibit 1-2 provides an example of a contract file checklist that simplifies the review of any contract file.

Write in the “comment” column references to items that have particular or unusual importance to contract administration planning. For example, you might note a paragraph number in a preaward survey that casts doubt on the contractor’s plant capacity, and this may warrant an increased level of monitoring during contract administration.

Always review preaward file documentation, especially when another per-son awarded the contract. For instance, if you had not attended a prebid or preproposal meeting, you might find some information in the minutes of that meeting that addresses an interpretation of a special contract clause. You might have interpreted this clause differently.

After completing a review of the contract file, you should have identified all critical areas bearing on performance and monitoring. With this knowl-edge you can determine:

How critical the requirement is to the Government, and

How much time and effort are needed to ensure success through contract administration.

Contract File Checklist

Review Preaward Data

Identify Critical Areas

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Exhibit 1-2

Contract File Checklist

FAR 4.803

Item Yes No Comment

1. Purchase request, acquisition planning information, and other presolicitation documents.

2. Justifications and approvals, determinations and findings, and associated documents.

3. Evidence of the availability of funds.

4. A copy of the solicitation and any synopsis published in the Commerce Business Daily.

5. Security requirements and evidence of required clearances.

6. Contractor’s certifications and representations.

7. Preaward survey reports or other references.

8. Contracting officer’s determination of contractor responsibility.

9. Statement of facts justifying the waiver of SBA requests to suspend award action per FAR 19.505(f).

10. Packaging and transportation data.

11. Cost or price analysis.

12. Audit reports or reasons for their waiver.

13. Record of negotiation.

14. Authority for deviations from regulatory, statutory, and other restrictive requirements.

15. Notice of award.

16. The original of the signed contract, all contract modifications, and supporting documents.

17. Bid, performance, payment, or other bond documents, or references to them, and notices to sureties.


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PALLET PROCUREMENT CONTRACT ADMINISTRATION PLANNING

In examining the contract file for pallets, Eric read the entire file and was taken by its overall simplicity. As required, the Standard Form (SF) 1449 (Solicitation/Contract/ Order for Commercial Items) had been used. He noted that the contracting arrangement called for an indefinite-delivery indefinite-quantity contract (ID/IQ) over a two-year period with an option for one additional year. A minimum and maximum quantity of pallets was specified for both the base and option periods. A firm-fixed price per pallet based on the size of any single delivery order had been negotiated. Such pricing represented customary commercial practice, and since the pallets were definably commercial there was no requirement for the submission of cost or pricing data. In-voicing was to occur after each delivery, and payment would be made for conforming pallets.

Eric did take special note of the procurement’s use of the clause at FAR 52.212-4 (Contract Terms and Conditions — Commercial Items). There had been agreement to all these terms and conditions with the exception of one, namely, the standard warranty of merchantability had been altered to substitute for it a warranty of fitness for a particular purpose. He reasoned that this had been done to reflect the need for the contractor’s compliance with the performance specification and to protect the Government’s interest at the time of inspection and acceptance. This had been covered by an appropriate addendum to the SF 1449. The file also provided positive past performance information on Platform Industries.

The Government does not have sufficient resources to evaluate a contrac-tor’s every action for each contract it awards. Prioritizing each contract based on its criticality to the Government is one indicator that helps in the proper allocation of contract administration resources.

The contracting officer is required to assign a designator based on the crit-icality of the requirement for all supplies and services contracts (except facilities, construction, or Federal Supply Schedule contracts). Criticality refers to the degree of overall importance that a contract has to the Gov-ernment. The criticality designator will be shown on the contract when this decision is made prior to the issuance of the solicitation.

In a busy contract administration office, you may be called on to recom-mend a criticality designator. Your recommended choice will be either “A,” “B,” or “C.” The criterion for each of these designators is shown in Exhibit 1-3.

1.2 Determine Criti-cality

FAR 42.1104

FAR 42.1105

Requirement for Use of Designators

Choice of Designators

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The criticality designators indicate where to concentrate surveillance ef-forts. These designators become particularly important when contract administration resources are spread thin.

Exhibit 1-3

DoD assigns criticality designators based on the priority of the require-ment, with Designator C used for unilateral purchase orders.

WHICH DESIGNATOR FOR THE PALLET PROCUREMENT?

Eric noticed that Joanne had not yet assigned a criticality designator to the contract he was reviewing. He made a note to recommend a “B” designator. The pallets are necessary to maintain the Government’s warehouse facilities.

Although the criticality designator a contracting officer may assign has significance within your office, be aware that a certain class of criticality designated “A” contracts, those designated “DX” prior to award, also has a potential impact for work in process within the contractor’s plant.

Persons who have special authorization under the Defense Production Act can apply either a DX or a DO rating to a contract that supports the na-tional defense. The rating is assigned prior to issuance of the solicitation and will appear on the contract.

Selection of Criticality Designator

Criticality Designator Criterion

A Critical contracts, including DX-rated contracts, contracts containing an unusual or compelling urgency, and contracts for major systems.

B Contracts (other than those designated “A”) for items needed to maintain a Government or contractor production or repair line, to preclude out-of-stock conditions, or to meet user needs for nonstock items.

C All contracts other than those designated “A” or “B.”

Assigning Designators DFARS 242.1105

DX and DO Ratings

FAR Subpart 11.6


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The DoD implementation of priorities and allocations are in DoDI 4400.1, Priorities and Allocations—Delegation of DO and DX Priorities and Allo-cations Authorities, Rescheduling of Deliveries and Continuance of Re-lated Manuals.

DX rated contracts have first priority in the “pecking order” within a con-tractor’s plant in the event of material shortages, strikes, or similar prob-lems that impact the normal processing of production orders within the plant. This “pecking order” includes any commercial work in process as well as other Government contract requirements within the plant that are not rated DX.

The other rating is DO. When a contractor is behind in its production scheduling, it is legally bound to give second priority to DO rated Gov-ernment contracts after all DX rated orders.

Realize that a contractor is legally bound to expedite DX and DO rated Government contracts.

Even if you do deal with any contracts that support the national defense, be aware that contractors may not be able to expedite delivery for your order if they have received rated orders from other agencies. DX or DO rated orders have preference over an unrated order.

Consideration must be given to the amount of time and effort that will be necessary to ensure successful performance. This depends on such factors as:

Type of contract. (What type of contract is this? If there was a previous procurement, did the type of contract change?)

Past experiences with this type of requirement. (Has this re-quirement ever been purchased before? What are current problems associated with this product or service?)

Past experience with the contractor. (Did this contractor pre-viously deliver on time? Did the contractor perform as expected?)

Type of specification. (What type of specification was used to describe the requirement: design, function, performance, or a combination of types? Have there been any changes in the speci-fication? Are there any other types of specifications that were used on similar contracts? What monitoring does this type of spe-cification require to ensure compliance?)

Defense Priorities and Allocations DoDI 4400.1 DFARS 211.602 Priority of Ratings

Legal Significance

1.3 Identify Previous Issues and Problems

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Type of requirement. (Does this type of requirement—service or supply—necessitate extensive monitoring to ensure compliance?)

Warranty provisions. (Does the contract include any warranty provisions? Are they the same as offered commercially? Were there problems in the past with reliability beyond the warranty pe-riod?)

Urgency of the requirement. (How soon is this requirement needed and what would happen if delivery was delayed? Were there any previous problems with contractors meeting the delivery terms? Has this contractor established that it can expedite deli-very, if needed?)

If applicable, focus your review on:

Patterns of past performance,

Previously applied remedies and the contractor’s reaction to them, and

Key personnel for the immediate contract that are identified as ei-ther good or poor performers in past performance data.

Identify indicators of a contractor’s past performance by:

Reviewing files in your office covering the contractor’s perfor-mance history, and

Reviewing an existing contract file itself.

Reviewing past performance should involve the following two steps.

Review the contractor’s performance history. An important source of information for identifying potential problem areas is a contractor’s per-formance file. The data included in this file are considered confidential and not available to non-Government personnel. Such files should include the following information:

Contracts awarded and dollar amounts,

Items/services purchased,

Key personnel involved with the contract,

Delivery/performance results, and

Consider Information to Review

Reviewing Past Per-formance

Step 1

FAR 4.801

FAR Subpart 42.15


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Contractor-provided past performance information.

This file represents a history of the contractor’s performance over a period of time on individual contracts, if one exists, plus other information on the contractor’s past performance from other sources.

If your office has had previous experience with the contractor, past prob-lem areas would be documented within this file. These areas will require special attention on a current contract. Generally, when a contractor has demonstrated an inadequacy on a past contract, it will have a tendency toward similar deficiencies in future work.

Deficiencies in a contractor’s performance include:

Missed delivery dates,

Labor problems,

Shortfalls in technical performance capabilities,

Financial difficulties, and

Reporting requirements (progress reports, submission of subcon-tracting reports, etc.).

You should find any remedies that were used and the contractor’s reac-tions to them documented within this file.

Review other available indicators of past performance. Normally, records of past performance within your office will be sufficient for plan-ning efforts. If your office has not had any previous experience with the contractor, you may want to look for other indicators of past performance. The contract file itself is the best place to look for other indicators. Past performance or responsibility determination data in the contract file may contain information from:

Other Government offices, and/or

A contractor’s commercial clients.

This information may indicate some problem areas, even though it may not have been of sufficient magnitude to warrant a negative past perfor-mance rating or a nonresponsibility determination.

Keep information provided by both Government and non-Government per-sonnel strictly confidential. The contractor should never be given

Step 2

CHAPTER 1

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access to these records, told of their contents, or told of those who pro-vided the information.

JOANNE’S CONCERN

Platform Industries was not new to the Government contracting arena. A check on its provided references, four related to government contracts and five to private-sector work, proved a valuable source of information. The record related a history of performance over the past five years that covered different kinds of work ranging from interior design and construction for a large retail establishment to providing large orders of pallets for two government agencies. One of those agencies noted some problems associated with timely deliveries to multiple locations, but they also related the contractor’s willingness to replace an order of several hundred pallets, each of which had been cut several inches short of what the Government’s specification required. A determination of responsibility found the company financially stable with a good backlog of work. Joanne was pleased to have found a viable firm, but she suspected that its capability to deal with a per-formance specification and varying indefinite quantities of pallets to ensure timely deliveries would require some careful monitoring.

Meet with the requiring activity to discuss requirements for contract ad-ministration. This discussion should include:

Sharing of any acquisition history concerning the contractor and the required supplies or services, and

Identifying and ranking the requiring activity’s priorities regarding the contract.

Focus your discussion for contract monitoring on the requisitioner’s priorities. Do not spend too much time on contract requirements that the user is not overly concerned about and, thereby, ignore the user’s vital concerns. The ultimate goal of any contract, Government or commercial, is to satisfy the needs of the user. So fashion your contract administration plan, as much as possible, to meet user priorities.

In sophisticated or complex requirements, the use of meetings with requir-ing activity personnel is beneficial to ensure that:

The Government is working as a team.

Priorities or potential problem areas are understood by all.

Contract progress is measured by foresight, not hindsight.

1.4 Meet to Discuss Performance Monitor-ing

Focus on User Priorities

Meeting Objectives


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A contract is a tool the Government uses to acquire goods and services, and contract administration is an attempt to manage this tool effectively. A vital part of this management is the monitoring of contractor perfor-mance. There are two steps involved in determining the extent of moni-toring that is necessary, given the criticality designator:

Assess factors that indicate the appropriate monitoring level. Many factors are involved in determining how much monitoring is necessary. Some are listed in Exhibit 1-4.

Exhibit 1-4

When acquiring commercial items, the Government is to rely on the con-tractor’s existing quality assurance systems as a substitute for Government inspection and testing before delivery, unless customary market practices for what is being acquired include in-process inspection. If such inspec-tion is customary, the Government’s inspection must be consistent with commercial practices.

The Government must not rely on inspection by the contractor if the con-tracting office determines that the Government has a need to test what is

1.5 Determine the Ex-tent of Performance Monitoring

FAR 42.1104

Step 1

FAR 42.1104(a)

Factors in Determining the Level of Monitoring

♦ Level of the contractor’s own inspection system.

♦ Criticality of the requirement.

♦ Contract requirements for reporting progress and performance.

♦ Contract performance schedule.

♦ Contractor’s production or performance plan.

♦ Contractor’s history of contract performance.

♦ Contractor’s experience with providing the contract’s supplies or services.

♦ Contractor’s financial capability.

♦ Contractor’s risks involved in performance (e.g., type of contract).

Commercial Items and Monitoring

FAR 12.208

FAR 46.202-1

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being acquired before delivery or to pass judgment on the adequacy of the contractor’s internal work processes.

Even though customary commercial practices may permit virtually no contract administration in the acquisition of a commercial item, the Gov-ernment reserves the right to inspect or test the item as tendered for ac-ceptance and to require its repair or replacement (or reperformance if a service) at no increase in contract price.

When required, standard Government clauses specify the type of inspec-tion system that the contractor is to maintain for the performance of the contract. For example:

FAR 52.246-1, Contractor Inspection Requirements, which relies on the contractor’s own internal inspection procedures and indus-try standards.

FAR 52.246-2, Inspection Supplies—Fixed Price, which requires a contractor to establish and maintain an inspection system not oth-erwise defined except that it must be acceptable to the Govern-ment. This standard clause can be the only inspection clause in a contract, or it can be the foundation upon which other Government inspection specifications are based. It contains the Government’s basic rights of inspection.

FAR 52.246-11, Higher-Level Contract Quality Requirement (Government Specification), which requires a contractor to comply with a specific Government inspection system or quality control system or quality program.

Determine what type of inspection system is required by the contract to decide whether you want to rely solely on it for monitoring a contractor’s performance.

Note that the third factor listed in Exhibit 1-4 is reporting data on progress and performance. The Government has no right to require the contractor to submit data for monitoring purposes when the contract does not provide for it. Any required data must be specifically authorized within the sche-dule, specification, or by a contract clause.

The risks of performance, the last factor listed in Exhibit 1-4, determine in part your level of monitoring and administrative effort. Because both the Government and the contractor promise to do something or keep from doing something, both are potentially “at risk” if either, for whatever rea-son, fails to live up to a contract’s terms.

Commercial Items and Protecting the Public Interest

FAR 52.212-4

Contractor Inspection

FAR 46.202-1

FAR 46.202-2

FAR 46.202-3

Contractor Reporting

Contract Risks

FAR 16.103


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The Government stands to lose the benefit of a product or service at the price it agreed to pay, if, for example, required performance is physically impossible or if the contractor does not have the capability to complete the work.

The contractor may lose money if, for example, its performance costs ex-ceed the price it agreed to, or if it is assessed damages for its failure to perform. It may also lose good standing if it fails to live up to a contract’s terms.

A contract is basically an instrument that allocates and defines risks be-tween the parties. Its terms and conditions set forth each party’s obliga-tions, as well as each party’s rights if the other should fail to carry out its obligations. Understand how its terms and conditions—those that are standard and those that are unique—affect the contractor’s risks. When those risks are identified, you will understand what the contractor might do to cover them, and what might have to be done through monitoring to ensure protection of the Government’s interests.

For instance, if stiff liquidated damages for late delivery are to be assessed in a production contract and you know progress is lagging in the last month of the contract, a stepped up level of inspection is probably war-ranted to ensure that the contractor will not cut corners on quality proce-dures to make the delivery.

Select the most appropriate monitoring method(s). The appropriate type of monitoring effort depends on the complexity and scope of the con-tract, as well as the contract’s specific requirements for the submission of progress reports, schedules, and other reports.

Numerous techniques and procedures for determining whether satisfactory delivery or contract completion will take place include:

Reliance on the contractor’s inspection system,

100 percent inspection,

Sample inspection,

Inspection by exception,

Monitoring production or delivery schedules, and

Monitoring schedules devised by Government personnel to meas-ure contract performance.

Government Risk

Contractor Risk

Recognize and Allocate Risks

Step 2

Ways to Monitor Per-formance

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DoD minimum rules on surveillance means that predelivery telephone surveillance is used, with on-site surveillance as required for:

Designator A contracts,

Contracting officer directed on-site surveillance, and

Contracts where your telephone check indicates a problem, unless the contract administrative officer and the contracting officer de-cide that an on-site check is not required.

Make your choice for a monitoring method based on two key considera-tions:

How much you can rely on the contractor’s own system, and

How much you can assume contract problems will receive neces-sary management attention.

Progress on production work is generally easier to measure than progress on a research and development contract. For production work, an inspec-tor can visit the plant to see if the widgets are, in fact, coming off the as-sembly line as scheduled and examine one or more for contract com-pliance.

In the developmental phase of a research and development acquisition, many of the unknowns inherent in the research phase are gone. Although the work is not yet repetitive and detailed specifications are still lacking, the experience gained on earlier contracts, if such existed, provides some standard for comparison. Nevertheless, the work still depends on the con-tractor’s ability to cope with obstacles not encountered before. Monitor-ing is necessary.

Generally, interim monitoring of standard commercial and commercial-like items and services is not administratively cost-effective. You need only monitor timely delivery or performance and inspect the delivered items or work performed. Maximum use of and reliance on the contrac-tor’s inspection system, production control, or data management system for these types of items or services is the standard.

Select a method that is most likely to surface the following:

Actual or potential default situations. Act promptly and careful-ly to initiate immediate improvements while preserving the Gov-ernment’s right to future remedies available under the contract.

Predelivery Telephone Surveillance

DFARS 242.1104(a)

Key Factors for Moni-toring

Monitoring Related to the Requirement

Interim Monitoring of Commercial Items and Services

FAR 42.1104(c)

Goals of Monitoring


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The need for Government action. Although Government action may supplement but not supplant the contractor’s own efforts to solve performance problems, you need to be aware early if Gov-ernment action will be required.

Having determined how the contract will be monitored, the next question is who will be responsible for its administration. This effort may be per-formed by the contracting officer, the contract administrator, or other ap-pointed Government representatives. Some are authorized to perform contractual actions, others are limited to technical direction and clarifica-tion.

The contracting officer (CO) is the official authorized to enter into, admi-nister, and terminate contracts, and make related determinations and find-ings. A single contracting officer may be responsible for delegating duties to specialized contracting officers, that is:

Administrative Contracting Officer (ACO): The official autho-rized to perform any postaward contractual action assigned by the CO. Some agencies have set up separate offices called a Contract Administrative Office (CAO) to handle postaward functions as prescribed by that agency. An ACO would be assigned to the CAO.

Termination Contracting Officer (TCO): The official authorized to perform postaward actions limited to the termination of contracts.

Your office may refer to the contracting officer as the Procuring (or Prin-cipal) Contracting Officer (PCO).

For purposes of clarity, all text references to a “contracting officer” refer to the PCO, that is, the contracting officer responsible for all duties, re-gardless of whether those duties have been delegated to other contracting officers.

The contracting officer determines how contract administration will be handled. The contracting officer must determine whether or not to:

Retain the contract and perform all applicable contract administra-tion functions,

Retain the contract and perform administrative functions with the assistance of other Government personnel,

Assign the contract to a contract administration office (CAO), or

1.6 Delegate Contract Administration Func-tions

Contracting Officers

FAR 2.101

Contract Administration Decision

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Assign the contract to a CAO with specific limitations and/or spe-cific additions.

The contracting officer retains a contract and is responsible for the per-formance of all administrative functions unless such performance:

Must be performed at or near the contractor’s facility, or

Is required of other organizations by agency-specific regulations and may be based on such issues as:

Dollar thresholds. (Some agency’s CAOs may not have to ac-cept contracts below an established amount.)

Type of requirement. (CAOs may not accept contracts cover-ing off-the-shelf commercially available products.)

Organization. (Agencies may require administration by CAOs available to an agency.)

Substantial assistance for the support of contract administration beyond an organization’s normal contract administration functions has to be re-viewed for its validity above the CO’s level.

The overall rule is that DoD activities are prohibited from retaining con-tract administration functions that require the performance of those func-tions at or near contractor facilities. Consequently, CAOs perform the contract administration of many DoD contracts. However, there are cir-cumstances when DoD will not relinquish contract administration to a CAO. Those circumstances involve contracts for:

The National Security Agency,

Research and development performed at universities,

Flight training,

Consultant services,

Base, post, camp, and station purchases,

Operation, maintenance, or installation of radar or communication equipment at network sites,

Architect-engineer services,

Airlift and sealift services,

CO Retention of Con-tract Administration

FAR 42.203

When DoD COs May Retain Administration

DFARS 242.203(a)(i)


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Ballistic missile sites (although CAOs can perform supporting ad-ministration at missile activation sites) and

Operation and maintenance, or installation of equipment, at mili-tary test ranges, facilities, and installations.

When a contracting officer assigns a contract to a contract administration office, the CAO is responsible to:

Perform 69 baseline functions to the extent they apply,

Serve as the focal point for inquiries,

Advise the contracting office of all pertinent matters,

Request supporting contract administration when required, and

Reassign contract administration, if required.

The 69 functions listed in the FAR represent the baseline functions of a contract administration office. Some typical functions are:

Conduct postaward orientation conferences;

Perform production support, surveillance, and status reporting;

Ensure timely submission of required reports;

Consent to the placement of subcontracts;

Issue administrative changes; and

Determine whether disclosure statements are in compliance with Cost Accounting Standards (CAS).

Overseas contract administration should be accomplished under FAR 42.301, unless the overseas need is not specifically addressed in the FAR. In this case, you should coordinate contract administration requirements with the U.S. country team or the commander of the unified or specified command for policy and procedure guidance.

CAO Responsibilities

FAR 42.202(e)

Typical Functions

FAR 42.302(a)

Administration Outside the U.S.

FAR 42.301

DFARS 242.301

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DoD authorizes CAOs to:

Review and evaluate contractor estimating systems,

Monitor contractor costs,

Perform and negotiate schedules on industrial readiness and mobi-lization production planning field surveys, and

Issue, negotiate, and execute orders under BOAs for overhaul, maintenance, and repair.

The contracting officer may withhold any of the FAR-specified functions when:

The CO determines the contracting office can better handle the performance of the function(s), or

Required by agency regulations or interagency cross-servicing agreements.

Any decision to withhold administrative functions should be made after consulting with the CAO.

Beyond the 69 baseline functions, the contracting officer may also assign additional functions, including their administration, such as the following:

Supplemental agreements incorporating contractor proposals sub-mitted under a clause addressing contract changes,

Prices and priced exhibits for unpriced orders under basic ordering agreements (BOAs),

Supplemental agreements changing contract delivery schedules,

Supplemental agreements providing for the deobligation of un-spent dollar balances considered excess to known contract re-quirements,

Changes to interim billing prices,

Adjustments to contract prices resulting from the exercise of an economic price adjustment clause,

Changes under contracts for ship construction, conversion, or re-pair, and

Additional DoD CAO Functions

FAR 42.302(a)

DFARS 242.302(a)

Withholding Functions

Additional Functions

FAR 42.302(b)


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Reduced quantities on firm-fixed-price contracts based on incon-sequential delivery shortages.

Unless specifically assigned, these functions cannot be performed by the CAO.

Keep in mind that these functions comprise a potential menu that can be assigned to a CAO. Rarely would any contracting officer be required to actually perform all of them. In fact, some of the functions may not even be applicable to the contract involved, such as monitoring industrial labor relations matters on a contract for commercial products or maintaining surveillance of flight operations on a contract that does not involve air-craft.

There are also functions that are dependent, to some extent, on events that occur during contract performance. For example, your office may have the responsibility of negotiating supplemental agreements changing con-tract delivery schedules. However, if no change in contract delivery sche-dules is required during contract performance, then this function will not be performed.

The CAO also has the authority to request supporting contract administra-tion from another CAO for any function that has been assigned by the con-tracting officer. The CAO can even reassign the contract when another office is in a better position to perform administrative functions.

The contracting officer may recall a contract or function previously as-signed for administration when:

Warranted by a change in circumstances, and

The recall has been approved by a higher level.

In addition to specialized contracting officers, delegations of contract ad-ministration functions can be made to other Government personnel, result-ing in the formation of a contract administration team.

The contracting officer always heads up the contract administration team. The definition of contracting officer contained at FAR 2.101 “...includes certain authorized representatives of the contracting officer acting within the limits of their authority as delegated by the contracting officer.” FAR is silent on designating these authorized representatives as contracting of-ficer’s representatives (CORs), contracting officer’s technical representa-tives (COTRs), or whatever the case may be.

Tailor the Assignment of Functions

Additional Support

Terminating Support

Other Government Per-sonnel

Team Concept

CHAPTER 1

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It is also silent on how technical and nontechnical representatives are to be addressed, as well as when or how they should be officially designated. The result is that these issues are covered by individual agency supple-ments to the FAR, but they are not considered in light of a uniform stand-ard. They generally reflect organizational practicality.

In practice, the only contracting officer’s representative that is always of-ficially designated is the “contracting officer’s technical representative” (COTR). Some agencies use the term “contracting officer’s representa-tive” (COR) instead of COTR. Most agencies use one term or the other to identify that individual who is specifically given the chief role in monitor-ing aspects of the contract that relate to the statement of work or specifica-tion. However, a few agencies reserve the COTR designator for these representatives, while using the COR label for individuals who have other contract administration duties.

This course uses the designators COR and COTR interchangeably to pa-rallel the practice within the majority of Government agencies. CORs/ COTRs generally perform their contract administration duties as second-ary responsibilities to their primary job which is in a functional area not related to contract administration.

Follow your own agency’s practice. The most common places for listing this practice is in your agency’s supplement to FAR Subpart 1.6 or 42.2.

The contracting officer’s representative (COR), as defined by DoD, is an individual that the contracting officer has designated and authorized in writing to perform specific technical or administrative functions.

Although they may not be specifically designated, other Government offi-cials available to perform various contract administration tasks include:

Contract administrators and contract specialists,

Engineers and scientists,

Project inspectors,

Quality assurance specialists,

Property control administrators,

Legal counsel, and

Auditors.

Contracting Officer’s Technical Representa-tive (COTR)

Contracting Officer’s Representative (COR)

DoD Definition of the Contracting Officer’s Representative

DFARS 202.101 Team Members


1-26

Various key players of a contract administration team are depicted in Ex-hibit 1-5.

Exhibit 1-5

The roles and authorities of these team players depend on the size of the Government organization and the size of the contract. For instance, an engineer may be the representative for the requiring activity for a contract for testing services, one who may not only have written the technical spe-cifications but also may perform COR/COTR functions, project inspector functions, and property control administrator functions.

The delegation of contract administration responsibilities to key team members should be made in writing (e.g., letter of delegation to a COR/ COTR). While signed by the contracting officer, the designee should countersign the letter of delegation and a copy of the completed letter should be placed in the contract file. One should be provided to the de-signee, and one forwarded to the contractor requesting its written ac-knowledgment and placement in its contract file.

Typical responsibilities of key contract administration personnel are gen-erally as follows:

Contracting officer responsibilities. The contracting officer is principal-ly responsible for the existing business relationship between the Govern-ment and a contractor, including the following:

Interpreting and implementing contractual terms and conditions,

Contract Administration Team

Contracting Officer

ACO TCO

Contracting Officer’s Inspector Other Personnel Representative - Project Inspector - Paying Official - Technical Representative - Quality Assurance - Legal Counsel - Project Manager Specialist - Auditors - Task Manager - Engineer - Scientist

Team Roles

Notifications of Team Roles and Responsibili-ties

Team Member Respon-sibilities

CHAPTER 1

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Analyzing costs,

Providing for the auditing of the contractor’s books and records,

Issuing changes and negotiating modifications to the contract, and

Organizing and coordinating the efforts of all the functional spe-cialists who comprise the contract administration team.

Being an effective contracting officer involves more than the application of expertise to specific problems. A successful contracting officer must also demonstrate leadership qualities to ensure that the Government’s rep-resentatives work well together as a team and do not exceed their dele-gated authorities.

Responsibilities of a COR/COTR. A COR/COTR is usually an official with expertise in the area of the contracted effort who possesses the neces-sary background to monitor technical aspects of contract performance. Typical primary responsibilities of a COR/COTR include:

Monitoring performance,

Evaluating work as it progresses,

Exercising appropriate technical direction within the scope of the contract, and

Inspecting and accepting completed work for the Government.

Exhibit 1-6 provides more specific COR/COTR duties related to individu-al contract performance that may be assigned.

Project inspector responsibilities. Project inspectors can report to either a contract administrator, contracting officer, or COR/COTR, depending on the contract administration plan for each project, or on how an agency has set up these reporting procedures among its organizations. In any event, their responsibilities are usually restricted to monitoring and inspection duties such as:

Reviewing the contractor’s progress reports;

Inspecting all work performed by the contractor for contract com-pliance;

Advising the contracting officer or COR/COTR of any unusual problems—such as schedule slippages, requests for changes, or nonconformance with technical specifications or quality control


1-28

requirements that actually or potentially affect contract com-pliance;

Performing on-site checks to ensure that the contractor and any subcontractors are complying with labor standards and practices;

Maintaining a list of subcontractors on the project; and

If required, submitting periodic or daily reports to the contracting officer or COR/COTR.

Roles of other government personnel. Depending on the complexity of the contract, other people may also become involved in contract adminis-tration. They include:

Program or requiring activity personnel,

Administrative support personnel,

Legal counsel,

Cost and price analysts, and

Auditors.

These individuals provide input as requested by the contracting officer.

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Exhibit 1-6 (continued on next page)

COR/COTR Delegations

Administration: — Act as the Government technical representative for contract administration. — Supervise all technical and clerical personnel assigned to assist the COR/COTR. — Assist the contracting officer in conducting a postaward orientation conference. — Represent the Government in conferences with the contractor and prepare memo-

randums of pertinent facts for the record. — Confer with representatives of the requiring office and other user groups on per-

formance matters. — Maintain a file system. — Prepare a project diary. — Keep a current set of drawings and specifications by noting all changes or devia-

tions.

Labor: — Ensure that equal opportunity in employment posters are prominently displayed at

the job site. — Report violations of labor standards provisions to the contracting officer. — Monitor time and record keeping.

Inspection and Acceptance: — Inspect all work for full compliance with contract requirements. — Promptly reject all work that does not comply with contract requirements and

immediately notify the CO. — Advise the contracting officer if the contractor fails to remove, correct, or replace

rejected work promptly. — Provide appropriate technical direction, advising the contractor of its formal ap-

peal rights when there is disagreement. — Prepare and maintain a running list of items that remain at variance with contract

requirements, apprising both the contractor and the contracting officer of correc-tive action or the need for it.

— Maintain a master copy of the official list of defects and omissions. — Ensure that all defects and omissions are corrected or completed.

Changes: — Administer contract modifications previously authorized and issued by the CO. — Ensure that the contractor provides formal proposals for contemplated changes.


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Exhibit 1-6 (continued)

While other Government personnel can be assigned many surveillance and acceptance duties, there are some functions that are prohibited from dele-gation to them. Some of these actions, reserved for a contracting officer, are shown in Exhibit 1-7.

COR/COTR Delegations

Payments: Review and verify the contractor’s invoices or vouchers, determining the Government’s

agreement or nonagreement with the contractor’s percentage of physical completion for progress reports or costs incurred.

Schedule:

— Review and forward to the contracting officer the contractor’s schedule or project management chart with a recommendation for acceptance or rejection.

— Require the contractor to submit, if specified in the contract, a progress chart showing the actual progress at the end of each accounting or payment period.

— Advise the contracting officer of any delay factors (strikes, weather, etc.) and record their impact.

Submissions:

— Determine (from the contract) and list the number and types of submittals re-quired from the contractor.

— Monitor the contractor’s submission of required samples, shop drawings, reports, etc. for timeliness.

— Monitor the Government’s timely and complete response to the contractor’s sub-mission of samples, shop drawings, reports, etc.

— Maintain a record of submittals on a current basis. — Approve or reject submittals as provided in contract documents.

Safety: Enforce all safety and health requirements.

Prohibited Delegations

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Exhibit 1-7

Although the FAR does not require the preparation of a formal contract administration plan, the CO is responsible for ensuring that the parties have complied with all terms and conditions of the contract. At a mini-mum, contracting officers track the receipt of deliverables (or the perfor-mance of services), acceptance, and payment under the contract.

A formal contract administration plan is essential when the contract in-volves large dollar amounts or complex technical requirements. Such con-tracts typically place many duties and responsibilities on both parties. Such a plan should be implemented immediately after award. The plan should provide for:

An appropriate level of surveillance or monitoring of contractor performance, and

Timely and proper performance of the Government’s responsibili-ties.

Actions Not to be Delegated

♦ Award, agree to, or execute a contract or contract modification.

♦ Authorize work outside the scope of the contract.

♦ Obligate, in any way, the payment of money by the Government.

♦ Give direction to the contractor except as provided in the contract.

♦ Make a final decision on any matter that would be subject to appeal under the Disputes clause of the contract.

♦ Resolve any dispute concerning a question of law or fact arising under the contract.

♦ Redelegate any assigned duties unless specifically authorized to do so.

♦ Cause the contractor to incur costs not specifically covered by the contract with the ex-pectation that such costs will be reimbursed by the Government.

♦ Terminate for any cause the contractor’s right to proceed.

1.7 The Contract Administration Plan

Formal Plan


1-32

All members of the Government’s team should keep in mind the problems of contract administration and make key contract administration decisions even before a solicitation is issued. Some implementation of these key decisions may be necessary in the solicitation. Any decision to monitor through a contractor reporting procedure would need an implementing procedure in the contract itself. Key elements of a contract administration plan are identified in Exhibit 1-8.

Although finalized at contract award, the contract administration plan needs to be a flexible, working document to fulfill its purpose in provid-ing:

A baseline for project management and scheduling,

A simple way of tracking the extent of contract completion, and

An aid for any postaward orientation conference.

As the contract progresses, it may be necessary to shift responsibilities or add tasks that could not have been anticipated at the time of award. Over the life of the contract, therefore, a contract administration plan may re-quire periodic updating.

Determine what actions are essential to effective and efficient contract administration. Overreaching to create needless and costly contract ad-ministration requirements serves neither the Government’s nor the con-tractor’s best interests. Tailor your contract administration plan to reflect the acquisition’s requirement. Don’t provide for administering a system acquisition when the need is for far less complex items or services.

Advance Planning and Key Elements

Need for Flexibility and Possible Alteration

Need for Simplicity

CHAPTER 1

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Exhibit 1-8

Devising a workable contract administration plan requires adherence to the following six steps.

Identify contract terms and conditions related to administration. You must identify and outline all major tasks that arise from the terms and conditions of the contract. You can enhance this process by dividing it into four parts.

Part 1—Contract administration preliminaries (e.g., delegations of responsibility, postaward orientation conference).

Part 2—Contract performance (e.g., monitoring payment provi-sions).

Part 3—Inspection and acceptance (e.g., where and conditions for).

Part 4—Post-contract activity (e.g., duties under warranty or patent provisions, transmittal of final technical data, audit, contract close-out activities).

Be sure to list only major tasks. If you decide to hold a postaward orienta-tion conference, for instance, you would want to list it as a major task, but would not list as a major task the subtask of preparing an official record of the orientation. Design checklist formats comprised of key tasks within these four phases, if they fit. Remember to tailor your checklist formats.

Key Elements of a Contract Administration Plan

A listing of contractual terms and conditions related to administration.

Contract milestones.

Contractor reporting procedures.

Quality assurance guidelines (from requiring activity).

Inspection and acceptance process (from requiring activity).

Names, roles, authorities, and limitations of authority for contract administration team members.

Milestones for reports from contract administration team members.

Planning Steps

Step 1


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Your goal is to identify what must be done, when it must take place, who must do it, and, as necessary, how and where it is to be accomplished.

Exhibit 1-9 enumerates some common areas you should consider. Note, however, that you may wish to expand the checklist—particularly in the quality assurance area—tailoring it to unique contract requirements, as de-tailed in Step 3.

Identify contractor reporting procedures. Some agencies use a special form as an attachment in Section J of the contract to identify contract deli-verables including reports. Others insist that all contract deliverables, in-cluding reports and technical data submissions, be given distinct contract line-items in the contract schedule. If your agency does either or both of these, identification of contractor reports will be much simpler. Other-wise, you must compile your own list.

Note procedures and due dates that are pertinent to reports. It will be a part of your contract administration plan to ensure that these are complete, on time, and otherwise comply with contract terms.

Ensure that the plan provides for an inspection and acceptance process and calls for conformance to quality assurance requirements. The requisitioner will have had some input to the inspection and accep-tance process by identifying unique requirements that affect it. These unique requirements will be in the contract’s terms and conditions. For example, a unique inspection requirement might be a performance test. This is not covered by most agency’s standard inspection and acceptance procedures. So your contract administration plan would include a check-list of required performance test parameters as well as when and where the test would be performed and by whom.

Step 2

Step 3

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Exhibit 1-9

Common Elements of a Contract Administration Checklist

After you have reviewed your contract and identified major tasks for your checklist, run through this list of common contract administration functions to see if there are others you wish to include.

Does not Applies Apply

______ ______ Hold a postaward orientation conference.

______ ______ Furnish Equal Employment Opportunity poster.

______ ______ Ensure contractor submits insurance and bond certifications to the CO.

______ ______ Provide Government-furnished property.

______ ______ Monitor contractor material submittals.

______ ______ Verify subcontracting plan submission.

______ ______ Verify first article submission.

______ ______ Obtain OSHA standards certification.

______ ______ Give first article approval.

______ ______ Obtain quarterly reports of prime contractor subcontracts with small, small disadvantaged, and women-owned small business concerns.

______ ______ Monitor contractor-conducted testing procedures.

______ ______ Monitor Government-conducted testing procedures.

______ ______ Review and approve contractor technical deliverables and reports.

______ ______ Review and approve deliverables required for interim payment.

______ ______ Establish acceptance procedures and conduct acceptance.

______ ______ Obtain instruction/maintenance manuals on newly acquired equipment.

______ ______ Arrange for/participate in contract audit.

______ ______ Notify contractor of decision on exercising options.

______ ______ Obtain warranty.


1-36

Examples of some areas that should be addressed are:

The standard in the contract that establishes an acceptable item or service, such as:

The piece of equipment “must run for 100 hours at a specific level of operating efficiency” establishes that operating effi-ciency as the standard.

Food on cafeteria lines “set up no more than 30 minutes before opening” establishes 30 minutes as a performance standard.

The contractor “must respond to on-call repair service within 6 hours from receipt of a telephone call from an authorized Gov-ernment representative” establishes six hours as a performance standard.

Allowable variations from the standard authorized by the specifi-cation or other contract terms, such as:

Establish calibration requirements that contain a range within which calibration is acceptable.

Many service contracts, which recognize human error as a fact of life for some kinds of service, state an “acceptable quality level” of, for example, 5 percent, meaning that if a contractor only meets the performance standard 95 percent of the time, it will still provide “acceptable” service.

A required or otherwise reasonable method to document test re-sults using, for example:

An outside testing laboratory, or

A standard agency form or format.

Deviations that would indicate “conditional” approval rather than rejection, for such things as:

The use of tests on a first article of production that cite easily correctable defects as an unacceptable reason for rejection.

Acceptable Quality Re-quirements

FAR 52.209-3(b)

FAR 52.209-4(b)

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Identify contract administration team members and define their roles. The roles and authorities of these team players depend on the size of the Government organization and the size of the contract.

In the previous steps you identified all the necessary tasks for administer-ing the contract. Now identify who will have responsibility for those tasks. Make sure that each task is clearly defined and any overlapping of functions will not result in confusion among team members. In addition to specific tasks associated with the contract, you need to identify who has been delegated overall responsibility for normal contract administration functions. Each member of the team should receive a copy of the list of participants and their roles and responsibilities. This will help avoid dup-lication of effort or confusion.

Develop key milestones. Assign a time frame for the completion of each task. These tasks include those performed by both Government and con-tractor personnel from contract award to contract closeout. You need to identify which tasks are crucial to the performance of another task. This is especially true when the tasks are assigned to different team members.

Exhibit 1-10 provides a typical format for documenting answers to other questions concerning what, when, and by whom.

Document your decisions. You are now ready to present your decisions in a formal plan. There is no set format you must follow in preparing your contract administration plan. At a minimum, you need to cover all issues necessary to ensure that all parties understand their roles and due dates for assigned tasks. Remember: Keep it as simple and precise as possible. A suggested format is shown in Exhibit 1-11.

Step 4

FAR 2.101

Step 5

Step 6


1-38

Exhibit 1-10

A Format for Phase I Milestones

Task Milestone Date Person Responsible

Write COR delegation letters. Jan. 15, 1997 Ida Juan, Contract Administrator

Notify contractor of delegations. Jan. 15, 1997 Ida Juan, Contract Administrator

Submit quality control plan. Jan. 23, 1997 The ABC Company, Contractor

Review quality control plan. Jan. 31, 1997 Sherlock Holmes, Inspector

Hold postaward orientation Jan. 31, 1997 Jane Justice, conference. Contracting Officer

Provide Government-furnished Feb. 6, 1997 Harry Altogether, property. Program Manager

Note: As necessary, additional columns could be added to specify where and how tasks are to be carried out, as well as a column for when the tasks were actually completed.

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Exhibit 1-11

The following three steps will ensure providing appropriate notices and adequate instructions.

Typical Contract Administration Plan Format

Title of the contract, related identifiers, and criticality designator.

Identity of the contractor and key contractor personnel.

Location of files on the contract and the contractor.

Brief description of the work to be performed.

Place of performance and/or delivery points.

Reporting requirements.

The contractor’s milestones for such critical events as:

— First article testing and reporting. — Performance or delivery. — Submission of progress reports. — Submission of invoices/vouchers and other data related to payment.

Identity of the CO’s Representative (COR/COTR).

Tasks to be performed by Government personnel and milestones for each task for such functions as:

— Monitoring the contractor’s quality assurance program. — Furnishing Government property and monitoring its use. — Reviewing and responding to contractor reports/requests. — Receiving, inspecting, and accepting the work. — Certifying costs incurred or physical progress for payment purposes. — Monitoring compliance with the small business subcontracting plan.

Tasks delegated to each COR/COTR (including any limits on their authority).

Potential problem areas.

1.8 Provide Notices and Instructions


1-40

Review qualifications of COR/COTR prior to issuing notices. Make sure any individual proposed as a COR/COTR has the training, qualifica-tions, and experience commensurate with the authority the contracting of-ficer is delegating. Some agencies require that a copy of the COTR’s training record be kept in the contract file. If not, recommend that the contracting officer request a qualified substitute, unless immediate train-ing is available to qualify the proposed individual for the COR/COTR ap-pointment. For example, avoid having an organization nominate an administrative coordinator to administer a highly technical service con-tract. The technical adviser to the administrative coordinator may be a better choice as the COR/COTR.

Write designation letters. There is only one Governmentwide notice to individual Government employees that contains instructions and outlines specific responsibilities in relation to a single contract: the COR/COTR designation letter. The essential elements of such a letter are outlined in Exhibit 1-12. Only the contracting officer can sign delegation letters to a COR/COTR, project inspector, or other contract administration team

members.

Exhibit 1-12

Step 1

Step 2

Essential Elements of a Letter of Designation

Address the individual by name and position title.

Specify the contract number that applies to the delegation.

Specify the authorities being delegated.

Specify the tasks being delegated.

Emphasize the limitations of the delegation.

Specify any record-keeping requirements and the disposition of those records.

Specify if the designee may redesignate any authority or task.

Include a requirement for certifying that the individual has read and will abide by your agency’s procurement integrity or conflict of interest requirements.

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When the designee is to act for the contracting officer on more than one contract, write a separate designation for each contract. Do this because limitations, authorities, and tasks will vary depending on differing con-tractual terms and conditions.

When instructions and responsibilities addressed to individuals in the con-tract administration process are contained in regulations, office proce-dures, and job descriptions of contract administration team players, you may not need to prepare any designation letters.

COR/COTRs are from a wide variety of organizations whose main func-tion is usually not to act in a contract administration supporting role. Therefore, guidelines and other instructional documentation within their organizations do not normally cover contract administration support activ-ities.

Project inspectors may also be in organizations where contract administra-tion duties are secondary to their normal responsibilities. When such is the case, general instructions for COR/COTR notices apply to project in-spectors as well. More typically, however, contract administration inspec-tion duties are the main job functions of a project inspector.

Exhibit 1-13 provides a sample of a COR appointment letter. A COTR appointment letter would be quite the same.

Set up a system for changing or terminating designations. You will probably need to set up a system to make sure you are aware of when changes or terminations need to be made on lower priority projects. This is particularly true when you have no routine contact with the COR/ COTR. So you might, for example, make it a point to call each COR/ COTR each Friday. If you have too many to call, you may arrange to have the COR’s/COTR’s supervisor provide you with copies of personnel reassignments, long-term travel, or extensive leave approvals that affect your COR/COTR.

Whatever the method, assure that you are aware of any situation having a potential effect on the performance of contract administration duties that have been delegated to others.

Terminate or change designation letters in writing. When possible, issue the termination letter before the termination and specify the date on which it will become effective. Send the contractor either a copy of the termina-tion letter or a separate letter advising of the termination.

Need for Specific In-structions

Step 3


1-42


Sample COR Designation Letter

TO: Tom Jones, Project Engineer

FROM: Jan Justice, Contracting Officer

SUBJECT: Contracting Officer’s Representative (COR) Designation, Contract No. ARN 97-7028

I am hereby designating you as contracting officer’s representative (COR) on Contract No. ARN 97-7028 awarded to the ABC Corporation, Our Town, WI, for the production of a new concept in Super Duper Widgets.

In this capacity you are delegated the specific responsibilities detailed below, but perhaps the most important aspect of this authority is its limitations. Under no circumstances are you to make changes that would affect the cost or duration of the contract. You will have the fol-lowing responsibilities that may not be redelegated to any other individual:

1. To furnish the contractor with technical assistance and guidance in all aspects of the contract. You may formalize your guidance to the contractor by written technical di-rection, provided the direction does not affect price or duration of the contract and that it contains both a signed acknowledgment from the contractor and the following state-ment:

In accepting this technical direction, the contractor agrees that the price and all other terms and conditions of the contract remain unchanged.

2. To provide me with a copy of all technical direction issued under paragraph 1, above, within 48 hours of its issuance.

3. To provide me with written notification of any dispute that cannot be resolved between you and the contractor regarding performance of the contract.

4. To keep accurate records of all interim and final contract testing procedures outlined in the statement of work, and send a report within five working days of any tests to the contractor’s project manager and to me.

5. To keep a daily log of all contract-related activities while you are onsite at the contrac-tor’s plant.

6. To verity invoices and, upon receipt, promptly certify them for prompt payment. After verification, send me a copy of the certified invoice and send the original to Finance.

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1-43


Notify the contractor, in writing, of the names of the individual(s) desig-nated as a COR/COTR. Include in this notification what authority the COR/COTR has in relation to this particular contract. Provide a similar written notice outlining the roles of any other Government employees hav-ing a direct contract administration role. This is especially necessary when the contract itself has not identified these officials.

Such a notice must include some key information. This is found in Exhi-bit 1-14.

7. To turn over all records pertaining to this contract to the successor COR if this COR designation is terminated for any reason before completion of the contract, and to notify me that you have taken such action.

Please note that you may not redelegate any of the contractual authority listed above, except for clerical tasks associated with that authority.

I am providing you with two copies of this letter of designation. Please sign one copy in the space provided below to indicate your acceptance and return that copy to me. In addition, please sign the following certification to indicate that you have read and will abide by the Code of Ethical Conduct (copy attached).

ACCEPTED: __________________________________ Contracting Officer’s Representative

DATE: ________________________________

I have read the Integrity Awareness Act for Government Employees and will abide by its re-quirements in conducting all my responsibilities as a contracting officer’s representative.

CERTIFIED: __________________________________ Contracting Officer’s Representative

DATE: ________________________________

Attachment: Agency’s Code of Ethical Conduct

1.9 Provide Formal Notice to Contractor


1-44

Exhibit 1-14

Exhibit 1-15 provides a sample COR notification letter to the contractor.

Essential Elements of a Contractor’s Notice of a Contracting Officer’s Delegation

♦ Specify the name and position title of the COR/COTR or other person receiving a del-egation.

♦ Cite the contract number for which authority has been delegated.

♦ Specify the extent of the delegation.

♦ Emphasize any limitations of the delegation.

♦ Request a written acknowledgment of the notice from the contractor.

Sample Contractor No-tification

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Exhibit 1-15

Notification Letter to the Contractor

TO: Alvin Johnson, Chief Project Officer The ABC Corporation 123 Main Street Our Town, WI 12345-6789

FROM: Jane Justice, Contracting Officer

SUBJECT: Contracting Officer’s Representative (COR) Designation, Contract No. ARN-97-7028

This officially notifies you that Tom Jones, Project Engineer, Government Agency, will be my onsite representative for this contract.

His authority has limitations. Under no circumstances can he make changes that would af-fect price or the duration of the contract. Please contact me directly at (123-987-6543) when you anticipate changes that would affect price or overall time of performance.

Mr. Jones is authorized to act on my behalf in:

1. Furnishing technical assistance and guidance to you in all aspects of the contract and formalizing this guidance in written technical direction, so long as the direction does not affect price or duration of the contract.

2. Verifying and certifying all invoices. You should submit invoices directly to Mr. Jones.

I am providing you with two copies of this notice and request that you acknowledge one copy in the space provided below and return it. Thank you for your cooperation.

ACKNOWLEDGED: _______________________________ Contractor

DATE: ______________________________


1-46

PUTTING THE PALLET PROCUREMENT IN PERSPECTIVE

Eric had reviewed the pallet procurement contract file and was contemplating his upcoming session with Joanne and whoever else. He had considered alternatives to a contract administration plan and knew that current initiatives throughout the Government sought to minimize—if it was realistic to do so—the expenditure of resources in administering postaward contractor performance. Certainly the pallet procurement did not require the detailed administration that otherwise would be required of a production contract tied to an agency-peculiar specification.

Yet even though the pallets were being procured as commercial items, he felt there were elements that required attention and monitoring during performance. For instance, the use of a performance specification that provided Platform Industries with a description of function had to be monitored to some extent. A failure to do so might leave the Government with an unacceptable risk associated with the warranty of fitness for a particular purpose agreed to by the contractor. He was concerned about the company’s past performance for timely deliveries, nothing major, mind you, but he felt that something should be done to reinforce the criticality of any delivery order’s delivery schedule.

Indeed, Eric had isolated some issues that should be discussed and resolved at tomorrow morning’s meeting with Joanne and someone else involved in the program.

2-1

CHAPTER 2

POSTAWARD ORIENTATIONS

ASSESSING THE NEED TO GET STARTED

Joanne convened a morning meeting of the team for the pallet procurement in her office at eight o’clock. Knowing her penchant for timeliness, Eric arrived a bit early and found his boss on the phone. Waiting outside her office, he looked over his notes and awaited the arrival of Harry Carmichael, the requiring activity’s technical representative for the procurement. Cradling a cup of hot coffee in one hand and a folder of papers in the other, Harry arrived a few minutes after eight. After the two had exchanged amenities, Joanne appeared in the doorway and sig-naled for them to come in.

Seated at a conference table perpendicular to her desk, Joanne was quick to begin the meeting. “Well, Eric,” she started, “I see that you and Harry have met. He represents our customer or-ganization for the pallet procurement, and he’s the one that’s been living with the expensive re-placement problem for some time. We trust that we can do a good job for him with this procure-ment, and I wanted him here to listen to what you came up with concerning the need for plan-ning to administer our contract with Platform Industries. So, what have you got to share with us?”

Shuffling his papers while clearing his throat, Eric responded. “The first thing I did, Joanne, was read the contract file and take note of its terms and conditions relative to the requirement for pallets.”

“That’s a start,” she interrupted, “and what did you find?”

“Actually, not very much,” Eric retorted, “that lends itself to what I’ve always considered to be the basis for a comprehensive contract administration plan. Buying under FAR Part 12 stream-lines the acquisition process and, or so it seems to me, we can minimize the need for any in-volved postaward administration.”

Harry was quick to jump in. “Whoa, Eric, are you saying that we should let Platform Industries run with the ball and then come see us if it scores? We’ve got to do more than that or we’ll end up in the same mess we had with the last contractor, mostly promises and few results that car-ried a big price tag. We’ve got to solve this pallet pliability dilemma or all kinds of criticism will fall on us.”

Peering at Eric, Joanne seemed to reflect Harry’s sentiment. “Are you suggesting a hands-off posture for this one, Eric? And if so, what leads you to believe the contractor can follow-through without some handholding?”

POSTAWARD ORIENTATION

2-2

Sensing he was off to a bad start, Eric tried to recover quickly. “I’m suggesting nothing of the sort. For starters, I’m saying that the contract file, particularly since it represents a FAR Part 12 acquisition, gives us good cause to abide by some of the customary commercial practices that are inherent in the use of FAR 52.212-4. But not all of them.”

At this point, Harry looked puzzled and jumped in. “You’re way ahead of me, Eric. I haven’t the foggiest idea about what you’re saying, and I’m not anxious to mount some huge contract administration effort with Platform Industries. After all, we’re not buying some exotic product here, but we do have a considerable risk if this contractor fails to perform.”

“Let’s get down to specifics, Eric,” said Joanne. “What do we need, why do we need it, and who’s going to do it in administering this contract?”

Eric leaned forward in his chair, looked at both Joanne and Harry, and responded forthrightly. “First, we need to agree among ourselves, especially with Harry’s input, what it will take to monitor Platform’s implementation of the performance spec to see that we’re not running in cir-cles. Second, we have to make certain, as much as we can, that before we issue any delivery or-ders for pallets that the contractor has demonstrated an outcome that we can hold it to in terms of the agreed-to warranty of fitness for a particular purpose. Third, given what we’ve ascer-tained about Platform meeting delivery schedules, we’ve got to drive home the point that on-time delivery is essential.”

Joanne seemed to get the message. “Sounds good to me, Eric, for starters. What do you suggest to get the ball rolling, and what do you see for Harry and his staff in all this?”

“I suggest that Harry and I sit down,” said Eric, “to isolate his concerns representing the user community and mine from a contractual perspective. Then we assess those concerns in terms of what the contract says. Once we’ve done that, we can determine Harry’s role in the contract administration process, shape a reasonable agenda for a postaward meeting with Platform In-dustries, and get the job underway.”

Joanne looked at the technical representative and responded with a sense of finality. “Is that okay with you, Harry?” “You bet!” he shot back. “Better now than trying to figure it all out later.”

“Do it Eric,” concluded his boss, “and get back to me first thing tomorrow morning with an agenda for a postaward meeting with Platform Industries.”

CHAPTER 2

2-3



Overall: Conduct postaward orientations for contractors.

Individual:

2.1 Determine the need for a postaward orientation.

2.2 Determine the appropriate type of orientation.

2.3 Plan an orientation.

2.4 Conduct an orientation.

2.5 Prepare a report on an orientation.

2.6 Select a course of action when agreement on a key issue cannot be reached.

2.7 Identify the need for unilateral or bilateral contract modifications.

2.8 Document the contract file.

2.9 Provide contractual information to interested parties.

2.10 Obtain from a contractor any executed contractual documents or bonds within the time specified.

2-4

INTRODUCTION TO POSTAWARD ORIENTATIONS

Conducted in person, through correspondence, or by teleconferencing, a postaward orientation aids both the Government and the contractor in achieving a clear and mutual understanding of all contract requirements and identifying and resolving potential problems. It is neither a substitute for the contractor’s understanding of requirements at the time offers were submitted, nor is it to be used to alter the final agreement reached in any negotiation leading to contract award.

As a planned, structured discussion between the Government and the con-tractor, a postaward orientation focuses on:

♦ Understanding the technical aspects of the contract,

♦ Identifying and resolving oversights,

♦ Preventing problems,

♦ Averting misunderstandings,

♦ Determining how to solve problems that may occur later, and

♦ Reaching agreement on common issues.

The contracting officer decides whether a postaward orientation (and the form it might take) is necessary. Such orientations are especially encour-aged to assist small, small disadvantaged, and women-owned small busi-ness concerns. When used, a postaward orientation should be conducted promptly after contract award to achieve maximum benefits.

The steps in planning for a postaward orientation are charted on the next page. Following the flowchart, each step is discussed in detail.

Purpose of Postaward Orientations

Focus of Postaward Orientations

Policy on Postaward Orientations

FAR 42.501


CHAPTER 2

2-5

STEPS IN POSTAWARD ORIENTATION PLANNING

1. Determine the need for a postawardorientation.

Needed?

2-5. Plan, conduct, and documentpostaward orientations.

6-8. Take any necessary follow-up action(e.g., a contract modification).

9. Provide information on the contract tointerested parties.

10. Obtain any executed contractualdocuments or bonds from the contractor withintime specified after award.

Yes

No

Input: The contract and contractadministration plan.


2-6

POSTAWARD ORIENTATION PLANNING

For contracts awarded under simplified acquisition procedures or for the acquisition of commercial items or services, contractor performance and its administration by the Government can begin smoothly and proceed without incident.

Other contracts require immediate administrative action to ensure that per-formance starts off on the right track. Such action may signal the need for a postaward orientation.

The success of a postaward orientation rests on the contract administra-tor’s ability to identify issues or concerns that may (or will) impact con-tract performance. These are three steps to follow in identifying issues or concerns.

Identify a need to review specific key contract requirements and mi-lestones. Postaward orientations are most vital when potential risks to the contractor or the Government have not been addressed within the contract itself. In these cases, a postaward orientation identifies these risks and considers ways to reduce the probability of their resulting in serious prob-lems during contract performance.

Risk is diminished, for example, when the contract states that Govern-ment-furnished Equipment (GFE) will be “available 60 days after contract award at the contractor’s plant.” Failure to do this presents an additional risk if the contractor assumed the GFE would be available within the first couple of weeks of contract performance. Were that the case, the Gov-ernment’s failure to provide the GFE would delay and disrupt the contrac-tor’s planned schedule. If the contract had not specified when and where GFE would be delivered, it would be a discussion item for a postaward orientation. You would want to learn when the contractor needed the GFE, determine if the Government could provide it at that time, and inves-tigate what the impact would be if it arrived at a later time.

Analyze any requirement identified from contract administration planning to determine if you really need some form of a postaward orientation. Consider such issues as:

♦ Did the contract fully explain the requirement?

♦ Would an incorrect interpretation of a performance requirement damage the Government?

2.1 Determine the Need

FAR 42.502

Identify Performance Issues or Concerns

Step 1

Reduce or Eliminate Risks

Analyzing Contract Re-quirements

CHAPTER 2

2-7

♦ Would potential problems endanger tight scheduling?

♦ Do contract requirements rely on close interaction between Gov-ernment and contractor personnel?

♦ What is the extent of any subcontracting requirements, and might these be clarified by a postaward subcontractor conference?

♦ Are financing arrangements given to complexities such as progress or interim financing payments?

Identify the need for a general briefing on one or more aspects of con-tract administration. The postaward goals of any contract are to assure that supplies or services are:

♦ Delivered or performed when and where specified in the contract,

♦ Acceptable in terms of conforming to the contract’s specification or statement of work, and

♦ Furnished in compliance with other terms and conditions of the contract.

Compliance with other terms and conditions includes requirements such as:

♦ Security classifications and requirements,

♦ Record-retention requirements,

♦ Service Contract Act requirements,

♦ Federal and state labor requirements, and

♦ Federal policies on nondiscrimination because of age.

Even though ignorance of contract terms does not excuse responsibility for complying with them, many contractors overlook the finer points of a requirement in the preaward stage. Postaward orientations ensure that a contractor fully understands all the details of the Government’s require-ment, including those incorporated by reference, that it agreed to perform when it signed the contract.

Step 2

FAR 4.403

FAR Subpart 4.7

FAR Subpart 22.10

FAR 22.1001

FAR 22.1002

FAR Subpart 22.9


2-8

The extent of information provided or discussed at an orientation depends on:

♦ A contractor’s past experience with Government contracts (small, small disadvantaged, and women-owned small business concerns with little Government experience will generally need more guid-ance); and

♦ The degree of difficulty encountered by experienced contractors on similar requirements.

Exhibit 2-1 provides a menu of items to consider in your analysis.

Document the decisions you make. Include the Exhibit 2-1 checklist as a part of your contract file. It provides an easy way to record the basis for your decision to hold a postaward orientation. This is particularly impor-tant if you decide that you don’t want to hold an orientation. If things go wrong later, it demonstrates that you exercised good judgment in your ear-ly contract administration decisions. If you do hold a conference or con-duct some other form of postaward orientation, you will supply additional documentation to the file on these activities. See Section 2-8 below.

You may accomplish a postaward orientation in three ways:

Hold a face-to-face orientation conference when you believe the contrac-tor does not have a clear understanding of the:

♦ Scope of the contract,

♦ Contract’s technical requirements, or

♦ Rights and obligations of the parties in any area.

Extent of Orientation

Step 3

2.2 Determine the Type of Orientation

Face-to-Face

FAR 42.502

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2-9

Exhibit 2-1

Should I Hold a Postaward Orientation Conference?

Some common considerations in deciding whether to hold a postaward orientation confe-rence are listed below. This checklist will help you crystallize your thoughts. The “Yes” answers favor a conference.

Yes No

____ ____ Is this the contractor’s first Government contract?

___ ____ Has the contractor had little or no previous experience with this type of product or service?

____ ____ If the contractor has had previous Government contracts, were an unusual number of problems associated with them?

_____ ____ Can you foresee specific potential problems for this contract?

____ ____ Is any aspect of this contract urgent or critical to the Government?

____ ____ Does the contract type require a relatively high degree of administration?

____ ____ Is the requirement relatively complex and of a relatively high-dollar val-ue?

____ ____ Have you had little previous conversation with the contractor about this contract? (In contrast, you may have had detailed conversations during an onsite preaward survey or during negotiation sessions.)

____ ____ Is there any indication that misunderstandings exist?

____ ____ Does the procurement history of the required supplies or services reveal recurring problem areas?

____ ____ Is a lengthy production cycle planned?

____ ____ Does the contract involve spare parts and related equipment?

____ ____ Is the contractor a small, small disadvantaged, or women-owned business concern?

____ ____ Is extensive subcontracting involved?

____ ____ Are safety factors involved in the performance of work?

____ ____ Are progress payments or other interim financing arrangements involved?

____ ____ Can you anticipate contract changes that would require the contractor to use specialized accounting procedures?


2-10

Generally, you can use a letter as an alternative to a formal postaward con-ference when:

♦ Only minor details need to be conveyed to the contractor,

♦ The contractor has had previous experience in producing the items or providing the services, and

♦ The procurement is not particularly complex.

For example, a letter may suffice if you need only communicate specifics about onsite availability, instructions for paperwork submissions, or such other fairly straightforward elements. You can include a notice of the COR’s/COTR’s designation within this letter as well.

Exhibit 2-2 provides a sample postaward orientation letter.

A telephone conference is usually sufficient when:

♦ You have had good prior experience with the contractor,

♦ Matters for discussions are relatively straightforward, or

♦ You do not anticipate problems for good reasons.

A postaward orientation may represent a combination of these methods. You may have an uncomplicated procurement with a new contractor for which performance is not required at your installation. In this case, espe-cially if the contractor is not located near your installation, you may find it useful to have a letter convey a few important points. You may also de-cide to use a telephone conference to establish a personal working rela-tionship.

Letter

FAR 42.504

Phone

Combining Orientation Methods

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2-11


An Alternative: The Postaward Orientation Letter

TO: Gary Green, Project Manager, XYZ Power Co.

FROM: Al Jones, Contracting Officer

SUBJECT: Contract No. 104230-97-C-1234

To avoid any potential difficulties, I am writing to point out a requirement of the subject con-tract that has led to problems in other contracts. Also, I would like to clarify the contract completion date and identify the Government personnel who will play a role in the contract’s administration.

To install the four pieces of equipment required in contract line item #4, you will need to have a power outage in the west wing of Building 569, a heavily populated office building. Please note the paragraph 2.a(1) of the statement of work requires that this power outage take place on Sunday, a Federal holiday, between the hours of midnight and 6:00 a.m. In addi-tion, paragraph 2.a(5) of the statement of work requires that you provide me with seven ca-lendar days’ notice of your need for this outage. (Send the original notice to Mr. Smith — see below.)

The reason for the preceding requirement is that we have computers on-line 24 hours a day in that wing of the building, as well as other operations, that cannot be disrupted.

Since performance time is expressed in the contract as 120 calendar days after contract award, I want to affirm the date for contract completion as January 30, 1997.

Mr. Howard Smith is my representative for the technical aspects of this contract. According-ly, he is referred to as the contracting officer’s representative (COR). He is not authorized to make any changes to the contract as written. He does have the authority to inspect and ac-cept the equipment for the Government.

You will receive any change to the contract as an official modification signed by me or another Government official.


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Once the need for an orientation is established, plan it carefully to make certain that its goals are accomplished. Detailed planning is particularly important when you use a formal postaward conference. It is also impor-tant to plan what will be addressed in a letter or telephone orientation.

Addressing the steps listed in Exhibit 2-3 ensures that you are thoroughly prepared for the orientation and have considered all potential problem areas.


The list below summarizes your paperwork submissions and identifies the individuals to whom you should send them:

Final quality control plan. Ms. Jane Doe (You provided a draft plan Quality Assurance at the preaward survey.) Specialist Dept. DEF - Room 829 Your Agency 123 Main Street Our Town, PA 10000-9876

Request notice for the Mr. Howard Smith power outage, request Plant Manager for interim inspection Your Agency required by paragraph Dept. XYZ - Room 117 10.a(7) of the statement 123 Main Street of work, and technical Our Town, PA 10000-9876 reports required by contract line item #7.

All other submissions Mr. Al Jones and correspondence (in- Contracting Officer including nontechnical Dept. ABC - Room 401 questions) should be Your Agency addressed to me. 123 Main Street Our Town, PA 10000-9876

Don’t hesitate to call me if you want to discuss any aspect of this contract. My telephone number is 100-123-1234, and I’m usually in my office between the hours of 7:30 a.m. and 4:00 p.m.

2.3 Planning Orienta-tions

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The following seven steps identify basic activities associated with plan-ning a postaward orientation conference.

Prepare the Government’s position. You may recognize the need to make judgments on issues such as:

♦ Government-furnished property procedures (if the contract does not outline them),

♦ Ambiguous or unclear contractual specifications or clauses, or

♦ Testing or quality control procedures (if they are incomplete in the contract or otherwise need to be supplemented).

Postaward problems in these areas might affect the quality of the product or work, cause delays in delivery, increase the scope of work and cost, and

require a contract modification to remedy the situation.

Exhibit 2-3

Step 1

The Planning Process

Orientation Planning Tasks

♦ Prepare the Government’s position and its understanding on key issues.

♦ Prepare a conference agenda and determine the time and place for meeting.

♦ Designate the Government’s participants and name the chairperson.

Traditionally the CO is the chairperson.

♦ Brief the Government’s chairperson and participants on their roles.

♦ Provide the contractor with a copy of the conference agenda.

♦ Obtain the contractor’s response to the agenda.

♦ Finalize the conference agenda.


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ACQUISITION TEAM PLANNING

Recall that Joanne asked Eric to provide an agenda for a postaward orientation meeting with Platform Industries. In doing so, Eric met with Harry to isolate and iron out key technical and contractual issues and concerns that both felt would affect contract per-formance.

During their meeting, Harry pointed out the need for making sure that Platform’s pursuit of a performance specification effort was monitored effectively. He suggested that an early understanding with Platform about reporting the results of its effort was very important, since any delivery orders for pallets had to await the successful completion of the company’s effort to meet the performance functions set forth in the specification.

Eric expressed his concern about making sure that Platform understood the basis for the issuance of delivery orders under an indefinite-quantity arrangement, and he wanted to drive home the point that delivery order schedules had to be met. Both Eric and Harry agreed that Platform’s warranty of fitness for a particular purpose was a front-burner item that had to be strongly reinforced.

To ensure reasonable monitoring of the contractor’s effort, Eric determined that Harry should have a contract administration role in representing the contracting officer as a designated technical representative. Harry agreed with this. Yet again, Eric reviewed the contract clauses under FAR 52.212-4 to determine those that needed to be stressed with Platform at a postaward orientation meeting.

Prepare the agenda and set the time and place for the conference. In-clude in the agenda all matters needing clarification or otherwise requiring discussion with the contractor to avoid later misunderstandings.

Items for the agenda should consider:

♦ Special contract clauses,

♦ Critical milestones,

♦ Contractor quality control procedures,

♦ Contractor reporting requirements,

♦ Billing and payment procedures,

♦ Roles of the Government’s contract administration team members, and

Step 2

Possible Agenda Items

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♦ Roles of the contractor’s contract administration team members.

Use the checklist at Exhibit 2-4 as the basis for outlining your agenda. The less complex the procurement, the more you will use the “N/A” col-umn. If necessary, add any item(s) that do not appear on the checklist.

Remember: Tailor your agenda to fit the orientation’s needs. Discuss those topics that are most important to reinforcing mutual obligations and contractor performance requirements.

Items that may only affect Government team members and not what the contractor is required to do can be discussed at a separate in-house ses-sion. (See Step 4.)

The complexity of an agenda will influence the length of any orientation. In the case of a conference, you may need to convene more than one ses-sion. Resorting to multiple sessions, however, should occur only for the most complex contracts. When an agenda addresses both high- and low-priority items, it may be more efficient to cover the high-priority items at a formal conference and deal with those of lower priority via a teleconfe-rence, letter, or facsimile transmission.

Time. There are really only two concerns about the timing of the confe-rence:

♦ Hold the conference as soon as possible after contract award.

♦ Make sure the time is mutually agreeable before you firm it up.

Location. Be sensible in your choice of a conference site. Certain loca-tions will typically have advantages, for example:

♦ Contract performance sites offer ready access to physical condi-tions that may have a bearing on issues being discussed.

♦ Conference rooms near or within your office area offer conveni-ence for your contract administration team’s busy schedule.

Sometimes you will have to analyze one site’s advantages relative to those of another to make the best choice. Try to minimize travel time for all participants.

Tailor the Agenda

Length of Orientation

When

FAR 42.501(d)

Where


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Before you finalize your choice of a site, determine the number of contrac-tor attendees and the number of participants among your own contract administration team. Make sure the site can accommodate the group’s size.

Unless you can guarantee no interruptions, always discard the temptation to have smaller conferences in your own or the contracting officer’s of-fice. The convenience will not be worth the ill will and frustration felt by other attendees, both Government and contractor, for wasting their time with your other unrelated business.

Number of Attendees

Productive Versus Convenient Sites

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Checklist/Record for Postaward Orientation Conference

PART I—GENERAL 1. Contract No. 2. Total Amount 3. Type of Contract 4. Date of Conference

5. Preaward Survey? YES NO

6. Contractor Name

7. Contractor Address

PART II—CONFEREES

1. Government 2. Contractor

PART III—CONFERENCE PROGRAM

Subject

Check if applicable

Clause No. if applicable

Significant conclusions, further action to be taken (attach additional sheets if necessary

A. GENERAL 1. Function and authority of assigned

personnel

2. Routing of correspondence

3. Omissions or conflicting provisions

4. Other (specify)

B. REPORTS: PREPARATION AND SUBMITTAL

1. Work progress

2. Financial

3. Other (specify)

C. SUBCONTRACTS 1. Consent to placement

2. Prime’s responsibility for administration

3. Cost or pricing data

4. Source inspection

5. Other (specify)

D. SB, SDB, and WOSB Subcontracting 1. Contractual requirements

2. Program to facilitate

E. CONTRACT MODIFICATIONS

F. GOVERNMENT PROPERTY 1. Use of facilities and tooling



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Subject

Check if Applicable

Clause No. if Applicable


2. Maintenance and preservation

3. Property procedure approval

4. Property disposal procedures

5. Other (specify)

G. SPECIAL CLAUSES 1. Repricing

2. Liquidated damages

3. Government financing

4. Special tooling

5. Overtime

6. Bill of materials

7. Data rights

8. Warranties

9. Work performed at government instal-lations

10. Other (specify)

H. GENERAL CLAUSES 1. Limitation of cost

2. Allowability of cost

3. Other (specify)

I. DELIVERY SCHEDULES

J. TRANSPORTATION

K. INVOICING AND BILLING INSTRUCTIONS

l. PROCESSING OF COST AND PRICE PROPOSALS

M. LABOR 1. Actual and potential labor disputes

2. Davis-Bacon Act

3. Work Hours Act

4. Walsh-Healey Act

5. Copeland Anti-Kickback Act


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Subject

Check if Applicable



N. QUALITY ASSURANCE AND ENGINEERING

1. Quality control system

2. Waivers and deviations

3. Drawing/design approval

4. Manuals

5. Preproduction sample

6. Qualifications and environmental tests

7. Inspection and acceptance

8. Specification interpretation

9. Laboratory facilities

10. Value engineering clause

11. Other (specify)

O. PRODUCTION 1. Production planning

2. Milestones and other monitoring devices

3. Production surveillance

4. Safety

(Additional Notes)



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Designate Government participants to attend a preliminary meeting. Invite Government representatives to attend who will interact with the contractor during performance. Invite only people who will have a signif-icant role such as:

♦ COR/COTR,

♦ Program manager,

♦ Project inspector,

♦ Quality assurance specialist, and

♦ Other appropriate subject matter experts.

One preliminary group meeting is usually sufficient. However, if you, the ACO, anticipate lengthy discussions with one Government representative, hold a separate one-on-one meeting with that person.

You might invite using organizations if the work will take place in their office area and if one of their office employees is not participating in another capacity. If the conference would result in a discussion of price or cost issues, invite your cost/price analyst. For a smooth transition from preaward to postaward when contract administration functions are dele-gated, invite the procuring contracting officer. Questions might be raised that only the procuring contracting officer could answer adequately.

Brief Government participants on their roles. On larger contracts, it may be useful to hold a preliminary meeting with appropriate Government personnel to ensure that the Government’s expectations are clearly ex-pressed and understood. You may have some strong personalities on your contract administration team. Emphasize who is in charge and chairing the meeting. It is either you (the contract administrator) or the contracting officer. The COR/COTR might also chair the meeting if the contract ad-ministrator and the contracting officer could not attend. Also, the COR/ COTR could chair a preliminary meeting covering only technical issues. Final decisions affecting contract terms and conditions must be made by the contracting officer.

Distribute your contract administration plan at the preliminary meeting and conduct a page-by-page review of its contents. The purpose of this preliminary meeting, or individual briefings, is to:

♦ Identify all actions that must be taken by the Government,

Step 3

Step 4

Purpose of Internal Briefings

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♦ Ensure that all Government personnel involved have a clear under-standing of the contract’s terms and conditions and their respective responsibilities,

♦ Establish a “common front” relative to the contractor’s responsibil-ities,

♦ Identify which Government participants will be making a presenta-tion at the postaward orientation conference and restrict the time and subject matter of each, and

♦ Otherwise finalize agenda items with Government participants.

HARRY’S CONTINUING CONCERN

Eric received a call from Harry about an hour after their meeting. “I’m not left with a warm, fuzzy feeling, Eric, about the business of monitoring Platform’s effort to get after the procurement’s performance specification. I mean I can visit them periodically. After all, their factory is only 100 miles or so down the road. My concern runs to what alternative methodologies they’ll utilize to conclude that they have whipped the pallet pliability problem.”

“Well, I share your concern,” Eric said, “and perhaps we should have been more specific about all this in Platform’s contract. Actually, the contractor’s responsibility is to meet the functional conditions of the spec. We didn’t set forth any specific reporting or progress requirements about all that, except that meeting the spec’s functions was to be done not later than 40 calendar days after award.”

“Okay,” Mike joined in, “but can’t we just ask Platform to provide us with a modest written report on its progress, say weekly? I sure want to understand what they’re doing and why they’re doing it.”

Eric winced a bit and was quick to share his understanding. “Hey, I’m with you, Mike, on what you want, but we’ve got a fixed-price arrangement here, and I can’t require the submission of any information that’s not set forth in the contract. Unless, of course, you want to pay for it.”

Mike took a deep breath. “We’re already on the hook for a lot of bucks in this deal, Eric, if it happens the way we trust it will. Can’t we just ask Platform to stretch itself a bit in accommodating our need to let us know what they’re doing?”

“Maybe so,” responded Eric. “I’ll have to raise that one with Joanne and see what we can do.”


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Provide a copy of the agenda to the contractor. When you do this, ask for feedback by a specific calendar date.

Obtain the contractor’s response to the agenda. If you don’t get a re-sponse by the time you asked for feedback, provide the contractor with a written or oral notice that the agenda provided earlier is final. If the con-tractor responds, discuss its input. Make changes to your agenda as neces-sary. Provide the contractor and Government attendees with copies of the final agenda.

Finalize the agenda. If preliminary conference discussions point out the need for a possible change to the contract or to the Government’s normal method of operations, get agreement among appropriate Government per-sonnel prior to the meeting. Also discuss and finalize the handling of po-tential problems you identify. You need to show a united Government front at the orientation meeting.

Goals for conducting a postaward orientation, whether by letter, tele-

phone, or in person are the same. See Exhibit 2-5.

Exhibit 2-5

Any orientation conference agenda should permit a logical step-by-step approach to fulfill its goals. The following six steps allow this to occur.

Step 5

Step 6

Step 7

2.4 Conduct the Orientation

Your Orientation Goals

♦ Clarify any procedures to implement contract requirements smoothly.

♦ Clarify roles of both Government and contractor key personnel.

♦ Detail the more critical or complex requirements to ensure understanding.

♦ Invite questions from the contractor on any requirement needing clarification.

Steps to Attain Goals

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Introduce the participants. At the opening of the conference, the chair-person introduces each attendee by name and title, along with a one-sentence explanation of the role that person will play in contract adminis-tration. You can detail these roles later, but first make sure that that eve-ryone knows who is speaking during the session. If you are the chair-person and don’t know all the contractor’s attendees, ask the contractor to make those introductions.

Explain the purpose of the conference. Go over the points outlined in Exhibit 2-5, but also emphasize that the conference is not intended to change or alter the contract in any way. Emphasize that the only way the contract will be changed or altered is by a written modification signed by the contracting officer.

DoD publishes a post-award conference procedure program, outlined in DD Form 1484, Post-Award Conference Record.

Summarize the roles of Government key personnel. Clarify the limits, authorities, roles, and responsibilities of each Government representative. Ask the contractor to advise the Government of the roles, responsibilities, limits, and authorities of each contractor representative.

Emphasize that the contracting officer is the Government’s agent to change or alter the contract. Any exception to this must be specified clearly. Affirm that conference participants without authority to bind the Government must take no action that in any way changes or alters the con-tract.

Further advise the contractor that the Government is not obligated to make any contract adjustments as a result of an action taken by a Government representative unless the action has been specifically authorized in the rep-resentative’s letter of designation or by the contract itself.

Provide general instructions. General contract administration instruc-tions include information necessary for the contractor to understand its risks as well as the Government’s, and they address contractor responsibil-ities for:

♦ Management and supervision of the work force,

♦ Protection and control of Government property, data, and reports,

♦ Compliance with contract clauses, and

Step 1

Step 2

FAR 42.503-2

DoD Post-award Proce-dure

DFARS 242.503-2

DD Form 1484 Step 3

Step 4


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♦ Other appropriate areas of concern.

Advise contractors of the proper routing of correspondence. Explain that matters pertaining to technical performance may be addressed directly to the COR/COTR or project officer, but that matters pertaining to questions of fact dealing with contractual terms and conditions must be sent to the contracting officer.

Provide the contractor with posters, notices, and other data. Labor law implementation will sometimes require that the contractor post equal em-ployment opportunity posters at the job site, including posters that outline the rights of handicapped persons. If the contract requires posting labor-related notices, the Government is responsible for providing them. The Government may also need to provide seniority lists from incumbent ser-vice contractors ranking its current employees to new follow-on contrac-tors for new service periods. Often Government publications are listed as Government-furnished material. Consider distributing these and other da-ta you need to provide at this orientation conference.

Secure agreement on milestones or interpretation of terms and condi-tions. For milestones that require the contractor’s input, seek the contrac-tor’s agreement now. If you identified ambiguities in key contract terms when drawing up your contract administration plan, get agreement on these now. If not, emphasize significant and critical terms. Key discus-sion items would be any uncertainty about terms that would affect:

♦ Performance,

♦ Interim delivery, and

♦ Payment.

During the conference, request any information or response from the con-tractor to ensure a mutually uniform understanding of key terms and con-ditions.

Step 5

FAR 22.805(b)

FAR 22.1020

FAR 22.1304

FAR 22.1404

Step 6

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IT NEVER HURTS TO ASK

When Eric took Harry’s continuing concern about the performance specification to Joanne, the contracting officer threw the ball back to her contract administrator. “Well,” she asked, “what’s your recommendation about that?”

Eric was quick and decisive in his response. “I say we should ask Platform what its cus-tomary commercial practice is in reporting to its customers on dealing with a performance spec. If the answer is favorable to Harry, then let’s record it in our post-award orientation memo, and leave it at that. If the answer is unfavorable, then let’s press the issue and see if Platform will ‘buy’ a reporting requirement, which I’ll put together for the meeting, at no cost to the government. In any event, let’s not agree to pay for something until we exhaust all that we can do to bargain for a reasonable delivery from the contractor without increasing the price. That’s just good business prac-tice.”

Joanne flashed one of her infrequent smiles. “Okay, Eric, let’s do that. After all, nothing ventured, nothing gained.”

Use any convenient format for an orientation report as long as it contains all the information necessary to document the events of the meeting. Common key elements of a report are contained in Exhibit 2-6.

Make sure that the contracting officer, the COR/COTR, the contractor, and others as appropriate, receive copies of the report. Include a copy in the contract file. If the contracting officer does not write this report, it is a good practice to have that person review it initially to ensure an awareness

2.5 Prepare Post-award Orientation Report

FAR 42.503-3

Key Elements of a Postaward Orientation Report

♦ The names and affiliations of all participants.

♦ The main points discussed and all agreements reached.

♦ Areas requiring resolution.

♦ Names of participants assigned responsibility for further actions.

♦ Completion dates for the actions.


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of any problems or the need for future action.

Exhibit 2-6

You may use DD Form 1484, Post-Award Conference Record, for the re-port.

Exhibit 2-7 is an example of a brief memorandum that can be attached to the checklist in Exhibit 2-4. It may also be used to record specific prob-

DoD Report Form

DFARS 242.503-3

DD Form 1484

Report for the Record


February 1, 1997

I chaired a postaward orientation conference on Contract NO. ISR 97-2498-NR for repairs to a conveyor system in the Federal Building on Main Street in Our Town, PA. A detailed list of the points we covered and the names of those in attendance is attached to this record.

The most pressing problem that surfaced was that none of the Government attendees knew the location of the Government-furnished replacement parts that the Government is to pro-vide, per paragraph 1.2.3a of the statement of work. The building superintendent, Mr. How-ard Ames, one of the attendees, went back to check his records after the conference. He advised me on this date that the parts in question had been ordered through the Federal Supply Schedule and had not yet been received. Our supervisor of simplified acquisition procedures, Ms. Janet Doe, found the order (Order ISN 97-9424-SP) and advised me today that the replacement parts were shipped on January 20, so Mr. Ames should be receiving them any day.

Since the parts will not be needed until the second week in March, their near-term delivery is not holding up performance.

Sam Smart Contract Administrator

Concurred: Jane Justice Contracting Officer

CHAPTER 2

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lems resolved during the orientation.

Exhibit 2-7

Events that occur when the Government and the contractor discover a point of disagreement during an orientation conference reflect the nature of the problem. A key factor is whether the problem can be resolved easi-ly. Remember: Each contractual problem is different, and no one ap-proach can be used to resolve every disagreement that may arise. In general, four steps may be used to resolve points of disagreement.

Document the contractor’s position in detail. During the conference, delve into the reasons for the contractor’s position and include it in the conference report. If disagreement results in an emotionally charged at-mosphere, consider deferring its resolution, but assure the contractor that it will be resolved, if possible. If the problem requires joint contractor/ Government problem solving, set up an early time for a separate meeting with only those who need to be in attendance.

Take appropriate action to resolve the problem. Seek technical or le-gal advice when necessary. Look at all possible solutions.

Select the best solution to the problem and seek agreement on it. It is important that you resolve each issue in a fair and equitable manner and as quickly as possible. Although not always practicable, it is best to resolve all problems before the contractor begins any work under the contract. In seeking mutual agreement, your actions can include:

♦ Further discussions with the contractor’s top management, or

♦ Consideration and negotiation of a contract modification.

When agreement cannot be reached, take appropriate unilateral ac-tion. If a contract clause allows the contracting officer to issue a unilater-al modification, this action is a likely Government solution to the stalemate.

2.6 Actions to Resolve Disagreements on Key Issues

Step 1

Step 2

Step 3

Step 4

FAR 43.103(b)

FAR Subpart 43.2


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If a contract change seems necessary, you must clearly define the extent of the proposed change and implement it promptly. The contracting officer must sign a contract modification in all cases. Chapter 5 addresses con-tract modifications.

Include the conference report detailed in 2.5, above, as well as all other material, correspondence, or actions from the postaward orientation.

In the event of any subsequent disagreements with the contractor, this ma-terial can be used to reconstruct facts and events as they occurred. A well-documented contract file will identify and verify the Government’s initial position on any performance problems that were anticipated during the orientation or in the early steps of implementation.

Provide any documentation to members of your contract administration team as well as the contractor when that information affects their role in contract performance.

You may also get requests for information from other interested parties, such as other companies that have proposed but were evaluated and de-termined to be unsuccessful offerors. Release of any information is sub-ject to the Freedom of Information Act (FOIA). Examples of information you may not release are:

♦ Classified information, and

♦ Contractor’s proprietary data, including trade secrets.

Your agency will have an organization tasked with providing advice on information that is or is not releasable under FOIA. Your own procure-ment organization may have a staff analyst to help you in these decisions. FOIA imposes a response time on answering requests for information. So initiate action on them quickly.

You can find DoD’s FOIA procedures in DoDD 5400.7, DoD Freedom of Information Act Program, and DoD 5400.7-R, DoD Freedom of Informa-tion Act Program.

2.7 Identify the Need for Contract Modifi-cations

FAR 43.103

FAR Subpart 43.2

2.8 Document the Contract File

2.9 Provide Informa-tion to Interested Par-ties

FAR 24.202

DoD FOIA Policy

DoDD 5400.7

DoD 5400.7-R

DFARS 224.203

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Generally, nonconstruction contracts do not require payment or perfor-mance bonds. The contracting officer may include bonds in solicitations for services under certain circumstances.

Another contract requirement may call for the submission of insurance certificates.

Since bonds and certificates of insurance must be executed before perfor-mance begins, the deadline for submission should be stated in the contract. It is usually within 10 days after award. When bonds and certif-icates are required, request them immediately, normally in the letter accompanying contract award. Reference the contract clause that requires the submission and establish a time for receipt, if the contract does not provide a date.

When you receive the forms, review them and, in the case of bonds, check the Treasury Department list to be sure the surety company has the requi-site bonding authority. Bonding companies have limits on the amount they may bond.

2.10 Obtain Executed Contractual Docu-ments, Bonds, or In-surance

FAR 28.103

FAR 28.301

FAR 28.103-3

FAR 28.202

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CHAPTER 2

POSTAWARD ORIENTATIONS

ASSESSING THE NEED TO GET STARTED

Joanne convened a morning meeting of the team for the pallet procurement in her office at eight o’clock. Knowing her penchant for timeliness, Eric arrived a bit early and found his boss on the phone. Waiting outside her office, he looked over his notes and awaited the arrival of Harry Carmichael, the requiring activity’s technical representative for the procurement. Cradling a cup of hot coffee in one hand and a folder of papers in the other, Harry arrived a few minutes after eight. After the two had exchanged amenities, Joanne appeared in the doorway and sig-naled for them to come in.

Seated at a conference table perpendicular to her desk, Joanne was quick to begin the meeting. “Well, Eric,” she started, “I see that you and Harry have met. He represents our customer or-ganization for the pallet procurement, and he’s the one that’s been living with the expensive re-placement problem for some time. We trust that we can do a good job for him with this procure-ment, and I wanted him here to listen to what you came up with concerning the need for plan-ning to administer our contract with Platform Industries. So, what have you got to share with us?”

Shuffling his papers while clearing his throat, Eric responded. “The first thing I did, Joanne, was read the contract file and take note of its terms and conditions relative to the requirement for pallets.”

“That’s a start,” she interrupted, “and what did you find?”

“Actually, not very much,” Eric retorted, “that lends itself to what I’ve always considered to be the basis for a comprehensive contract administration plan. Buying under FAR Part 12 stream-lines the acquisition process and, or so it seems to me, we can minimize the need for any in-volved postaward administration.”

Harry was quick to jump in. “Whoa, Eric, are you saying that we should let Platform Industries run with the ball and then come see us if it scores? We’ve got to do more than that or we’ll end up in the same mess we had with the last contractor, mostly promises and few results that car-ried a big price tag. We’ve got to solve this pallet pliability dilemma or all kinds of criticism will fall on us.”

Peering at Eric, Joanne seemed to reflect Harry’s sentiment. “Are you suggesting a hands-off posture for this one, Eric? And if so, what leads you to believe the contractor can follow-through without some handholding?”


2-2

Sensing he was off to a bad start, Eric tried to recover quickly. “I’m suggesting nothing of the sort. For starters, I’m saying that the contract file, particularly since it represents a FAR Part 12 acquisition, gives us good cause to abide by some of the customary commercial practices that are inherent in the use of FAR 52.212-4. But not all of them.”

At this point, Harry looked puzzled and jumped in. “You’re way ahead of me, Eric. I haven’t the foggiest idea about what you’re saying, and I’m not anxious to mount some huge contract administration effort with Platform Industries. After all, we’re not buying some exotic product here, but we do have a considerable risk if this contractor fails to perform.”

“Let’s get down to specifics, Eric,” said Joanne. “What do we need, why do we need it, and who’s going to do it in administering this contract?”

Eric leaned forward in his chair, looked at both Joanne and Harry, and responded forthrightly. “First, we need to agree among ourselves, especially with Harry’s input, what it will take to monitor Platform’s implementation of the performance spec to see that we’re not running in cir-cles. Second, we have to make certain, as much as we can, that before we issue any delivery or-ders for pallets that the contractor has demonstrated an outcome that we can hold it to in terms of the agreed-to warranty of fitness for a particular purpose. Third, given what we’ve ascer-tained about Platform meeting delivery schedules, we’ve got to drive home the point that on-time delivery is essential.”

Joanne seemed to get the message. “Sounds good to me, Eric, for starters. What do you suggest to get the ball rolling, and what do you see for Harry and his staff in all this?”

“I suggest that Harry and I sit down,” said Eric, “to isolate his concerns representing the user community and mine from a contractual perspective. Then we assess those concerns in terms of what the contract says. Once we’ve done that, we can determine Harry’s role in the contract administration process, shape a reasonable agenda for a postaward meeting with Platform In-dustries, and get the job underway.”

Joanne looked at the technical representative and responded with a sense of finality. “Is that okay with you, Harry?” “You bet!” he shot back. “Better now than trying to figure it all out later.”

“Do it Eric,” concluded his boss, “and get back to me first thing tomorrow morning with an agenda for a postaward meeting with Platform Industries.”