Acquisition Test 3 Flashcards
Define procurement.
Purchase/Acquisition of required supplies & services.
What are the objectives of the procurement process?
- Right quality
- Right quantity
- Right time
- Right price
- Right supplier
What are the responsibilities of the Program Manager?
Responsible for meeting program objectives within cost, schedule, & performance.
PM Chain of Authority: PEO, CAE, DAE
What are the responsibilities of the Contracting Offier?
Provide procurement support to the PM & ensure contracts comply with statute.
- Authority from Constitution and FAR.
- Chain of Authority: Head of Contracting, Head of Agency, SECDEF, President
What is a contract and the basic elements?
A mutually binding legal relationship obligating the seller to furnish supplies or services & the buyer to pay.
Elements:
- Offer
- Acceptance
- Consideration
- Competency of parties
- Legality of purpose
- Certainty of terms
What are the 6 phases of the procurement process?
- Procurement Planning
- Solicitation Planning
- Solicitation
- Source Selection
- Contract Admin
- Contract Close-Out
Define Procurement Planning and list at least one activity.
Determine what to procure & when.
Identifying what needs are best met by procuring products or services outside the organization.
Activities:
- Whether to procure (outsource)
- How to procure
- What to procure
- How much to procure
- When to procure
Define Solicitation Planning and list at least one activity.
Document requirements & identify potential sources.
- State requirement in terms of Mission need & minimum Operational performance.
- Use performance objectives rather than design requirements
- ID min threshold & objectives & performance values
- Develop eval factors that communicate program priorities in order of importance.
Define Solicitation and list at least one activity.
Invitation for offerors to submit a bid or proposal.
- Post formal public advertisement
- Obtain quotes, bids, offers, or proposals
Define Source Selection and list at least one activity.
Evaluate proposals and select Best Value.
- Maximize Competition
- Minimize Complexity
- Ensure Impartial Evaluation
- Select proposal with highest degree of Realism
Define Contract Admin and list at least one activity.
Manage relationship with the contractor.
Manage (activities):
- Changes
- Performance
- Disputes
- Termination
- Close Out
Define Contract Close-Out and list at least one activity.
Completion and settlement of the contract and resolution of any open items.
Activities:
- ID & resolve any uncompleted obligations or pending liabilities on part of either party.
- Document contract decisions & actions
How is the procurement process integrated with the acquisition framework?
The procurement process occurs at the beginning of each phase of the acquisition framework, which helps minimize Risk during progression through life cycle.
What are the 3 methods of procurement?
Competitive:
- Sealed Bidding: lowest-priced/tech acceptable (LP/TA). “Silent Bidding.” No communication or negotiations. Used with Well-Defined Requirements(i.e., blueprints/desing/drawings provide detailed specifications) and with Firm-Fixed Price Contracts.
- Competitive Negotiations: Best Value. Contract may be awarded to other than lowest bidder. Quantity is important (blueprint/design/drawings are not provided). Used with any auth contract type.
Noncompetitive:
- Sole-Source: only 1 contractor can provide service or product.
What are 4 objectives in selecting contract type?
- Place as much cost responsibility on the contractor as reasonable.
- Allocate risk between buyer & contractor.
- Maximize contractor incentive.
- Minimize contract administration cost for both parties.
What are 3 factors to consider in selecting contract type?
- Capability of seller’s accounting system
- Uncertainty in cost estimate
- Type & complexity of requirements
- Urgency of requirement
- Marketplace & competition
- Seller’s technical capability
- Admin costs
- Size & amount of the contract
What’s the difference between Fixed Price & Cost Type contracts?
Fixed Price:
- Contractor bears Risk
- Risk of performance is low
-Contractor only receives agreed to amount & profit is dependent on costs incurred.
Cost Type:
-Gov’t bears Risk
- Risk performance is high
- Gov’t obligated to reimburse contractor for all allowable, reasonable, & allocable costs incurred.
- Contractor provides “Best Effort”
- Cost savings is returned to Gov’t
- Cost overrun paid by Gov’t
What are the 3 types of contract fee?
- Fixed Fee: Used with Cost type or Cost Plus Fixed Fee. Lowest risk to Contractor/Hightest risk to Gov’t. Paid regardless of Contractor’s performance.
- Award Fee: Award Fee pool (funding) available at contract initiation, Award Fee Plan states criteria for % of fee awarded, Award Fee Board meets at intervals to determine fee, may include fixed base fee. Subjective tip-like fee given for exceeding requirements. NOT Disputable.
- Incentive Fee: Used to incentivize cost, schedule, or performance, Fee determined by a calculation & is disputable, may specify minimum fee & always specifies max fee, Contractor must perform satisfactory on all contract elements to qualify.
What’s the relationship between requirement, buyer’s risk, seller’s risk, and contract type?
Cost Type Fixed Price
CPFF CPAF CPIF FPI FP/EPA FFP
High Low
Low High
Less Defined More Defined
What’s the purpose of the SOW and its relationship to WBS?
The Statement of Work establishes and defines a standard for contractor performance. Such as:
- What the Contractor must do
- What goods or services are to be performed
Each SOW Task corresponds to a WBS Element from the Systems Engineering Process.
What is SOO and how is it different from SOW?
Statement of Objectives are high level objectives stated in broad terms of desired results, but not how to accomplish the results IOT garner max innovation.
SOO does NOT become part of the contract (like SOW)
Contractor proposes How and the SOO replaces the SOW in the RFP.
Differentiate between IFB and RFP.
Invitation for Bid:“Sealed Bidding” price based selection, discussions not allowed.
Request for Proposal:“Best Value” based selection. LPTA or other than LPTA, discussions are allowed.
List 3 source selection goals.
- Max Competition
- Minimize Complexity of Solicitation, Evaluation, & Selection decisions
- Ensure Impartial Evaluation
- Selet Proposal with highest degree of Realism
Describe the “Best Value” continuum.
LP/TA Highest Tech
Rated Offeror
Tradeoff Process
Identify the 3 source selection organizations & the function of each.
- Source Selection Authority (SSA): Auth Individual Selects the most advantageous source.
- Source Selection Advisory Council (SSAC): Advises the SSA on comparative strengths & weaknesses of proposals based on SSEB findings
- Source Selection Evaluation Board: Performs comprehensive, independent evaluation of proposals against the Solicitation & Source Selection Plan (SSP).
Identify 3 characteristics of source selection factors (be able to ID which is NOT a factor).
- Few in number
- True discriminators with significant differences
- Consistent with Source Selection Plan
- Definable & measureable - Qualitative measures often used
- Predictive of a successful procurement
- Tailored to the Acquisition
- Cost
- Past Performance (required on $1M+ contracts)
Example with weighted importance:
Technical performance (25%), Past Performance (20%), Cost (20%), Supportability (15%), Producibility (15%), Management Approach (5%)
What are the 3 Contract Administration activities?
- Manage contract changes (supplemental Agreements, Constructive Changes)
- Monitor Contractor’s Performance (Quality assurance, Earned Value Management, Contractor Payments, Award Fee process)
- Disputes
- Contract Termination
- Contract Close Out
Differentiate between Change Orders & Supplemental Agreements.
-
Change Orders: written order signed by the Procurement Contracting Officer (PCO) directing the contractor to make a unilateral (w/o prior agreement) change.
- Authorized by the contract “Changes Clause”
- Contractor must contiue performance of the contract as changed by the PCO.
- Creates “undefinitized” Gov’t liability & the contractor may be entitled to subsequent Equitable Adjustment. - Supplemental Agreement: Contract modification based on a bilateral agreement to the change; Equitable Adjustment is part of the agreement.
-
What is a Constructive Change?
- Contractor construes guidance or actions from a Gov’t Official as authorization for a change
- Involves contractor effort that is not necessarily part of the contract.
- Requires PCO ratification (retroactive change order)
- Once ratified, may require Equitable Adjustment.
Ex: CO asks Contractor to install “leftover” carpet in his office, but wasn’t part of the original contract.
What is the role of the DCMA in the procurement process?
- The Defense Contract Management Agency provides Contract Administration Services; PM representation, provides instruction/guidebook;
- Involved in all phases of the contracting process: Pre-Award, Award & Performance, and Completion
What is the role of the DCAA in the procurement process?
- The Defense Contract Audit Agency is the Principle Advisor to the Contracting Officer on financial matters.
- Performs audits on the acceptability of the contractor’s incurred & estimated costs.
- Reviews the financial & accounting aspects of the contractor’s cost control systems
- Performs other analysis & reviews that require access to the contractor’s financial & accounting records supporting proposed & incurred costs.
- Performs audits to confirm allowability of costs claimed on cost-reimbursement contracts.
What is the role of DFAS in the procurement process?
Defense Finance & Accounting Service:
- Entitles & disburses payments on DoD contracts
- Manages invoices & vouchers
- Provides info concerning payment to vendors
- Provides info on invoices submitted against contracts with the DoD & paid by DFAS.
What are 2 types of Contract Terminations?
- Termination for Convenience (T4C): Unilateral Gov’t Right, Notice of Termination must be in writing, No justification required, may be partial or complete, Contractor entitled to termination costs.
-
Termination for Default (T4D): if Contractors fails to: Make Timely Delivery; Perform any Contract Provision; Make Satisfactory Progress thus Endangering Performance.
- Gov’t pays contract price for completed items
- Gov’t may obtain reprourement costs.
Discuss the cure notice, show cause letter, and termination notice.
A 3 step process under the Termination for Default (T4D)
Cure Notice: Issued by the Government when the contractor is failing to make progress on the contract. The contractor is given 10 days to cure (correct) the deficiency.
Show Cause: Issued by the Government when the contractor has failed to correct the deficiency (for example, deliver within the delivery due date), and is being considered for termination.
Termination Notice: Issued when the government takes action to terminate the contract.
What are 2 avenues available to contractors for appealing a CO’s final decision?
- Administrative Filed within 90 days forwarded to Armed Services Board of Contract Appeals, then US Court of Appleas for the Federal Circuit, and US Supreme Court
- Judicial Filded within 12 months forwarded to Court of Federal Claims, then US Court of Appeals for the Federal Circuit, and US Supreme Court
What is the FYDP and what period does it cover?
The Future Years Defense Program.
- “Full” FYDP is 10 years
- “Basic” FYDP is 5 years (aka POM)
1 year: BY
4 years: Out Years
