FAR Part 16 Questions Flashcards
FAR 16.505(b) – Fair Opportunity dollar threshold consideration.
Fair opportunity to be considered for each order exceeding the micro-purchase threshold (Currently $3,500) issued under multiple delivery-order contracts or multiple task-order contracts
Exceptions to the fair opportunity 1 of 7
The agency need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays.
Exceptions to the fair opportunity 2 of 7
Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized.
Exceptions to the fair opportunity 3 of 7
The order must be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order
Exceptions to the fair opportunity 4 of 7
It is necessary to place an order to satisfy a minimum guarantee.
Exceptions to the fair opportunity 5 of 7
For orders exceeding the simplified acquisition threshold, a statute expressly authorizes or requires that the purchase be made from a specified source.
Exceptions to the fair opportunity 6 of 7
In accordance with section 1331 of Public Law 111-240 (15 U.S.C. 644(r)), contracting officers may, at their discretion, set aside orders for any of the small business concerns identified in 19.000(a)(3). When setting aside orders for small business concerns, the specific small business program eligibility requirements identified in part 19 apply.
Exceptions to the fair opportunity 7 of 7
For DoD, NASA, and the Coast Guard, the order satisfies one of the exceptions permitting the use of other than full and open competition listed in 6.302 (10 U.S.C. 2304 c(b)(5)). The public interest exception shall not be used unless Congress is notified in accordance with 10 U.S.C. 2304(c)(7).
Each order exceeding the simplified acquisition threshold shall be placed on a competitive basis and the contracting officer shall
Provide a fair notice of the intent to make a purchase, including a clear description of the supplies to be delivered or the services to be performed and the basis upon which the selection will be made to all contractors offering the required supplies or services under the multiple-award contract; and
Afford all contractors responding to the notice a fair opportunity to submit an offer and have that offer fairly considered.
For task or delivery orders in excess of $6 million, the requirement to provide all awardees a fair opportunity to be considered for each order shall include, at a minimum
- A notice of the task or delivery order that includes a clear statement of the agency’s requirements;
- A reasonable response period;
- Disclosure of the significant factors and sub-factors, including cost or price, that the agency expects to consider in evaluating proposals, and their relative importance;
- Where award is made on a best value basis, a written statement documenting the basis for award and the relative importance of quality and price or cost factors; and
- An opportunity for a post-award debriefing in accordance with paragraph (b)(6) of this section.
The contracting officer should consider the following when developing the solicitation procedures for orders
- Past performance on earlier orders under the contract, including quality, timeliness and cost control.
- Potential impact on other orders placed with the contractor.
- Minimum order requirements.
- The amount of time contractors need to make informed business decisions on whether to respond to potential orders.
- Whether contractors could be encouraged to respond to potential orders by outreach efforts to promote exchanges of information
What are the advantages of a T&M contract.
1) Provides a contract option for when costs cannot be estimated realistically
2) Provides fixed hourly rates and a total contract ceiling
3) Profit is saved on the material expenditures
What is a T&M contract type?
A T&M contract arrangement is used to buy time at a fixed and specified hourly rate that
includes direct labor, indirect costs, and profit. Material is acquired at cost with no addition of profit.
What are the disadvantages of a T&M contract.
1) Contractor has a disincentive to control cost – More hours burned is more profit earned
2) Contractor may use less qualified labor than was priced in the hourly rate, thus making more money on the rate differential
3) Performance is not guaranteed – The job may or may not be completed when all hours are expended
You are a SCO on a new requirement from the Army. The topic during acquisition planning is “contract type.” This Army client claims the contract can only be accomplished using a T&M – that’s how they did it the last 9 years. What are some key questions to ask during this meeting?
SCO should listen to the rationale of the Army client – get to why they have used and want to continue using T&M contract type. Remember, it is the SCO final determination on contract type – not the Program Manager or client.
Weave these into your questions/comments from FAR 16.104 – Factors in Selecting Contract Types:
There are many factors that the contracting officer should consider in selecting and negotiating the contract type. They include the following:
(a) Price competition. Normally, effective price competition results in realistic pricing, and a fixed-price contract is ordinarily in the Government’s interest.
(b) Price analysis. Price analysis, with or without competition, may provide a basis for selecting the contract type. The degree to which price analysis can provide a realistic pricing standard should be carefully considered. (See 15.404-1(b))
(c) Cost analysis. In the absence of effective price competition and if price analysis is not sufficient, the cost estimates of the offeror and the Government provide the bases for negotiating contract pricing arrangements. It is essential that the uncertainties involved in performance and their possible impact upon costs be identified and evaluated, so that a contract type that places a reasonable degree of cost responsibility upon the contractor can be negotiated.
(d) Type and complexity of the requirement. Complex requirements, particularly those unique to the Government, usually result in greater risk assumption by the Government. This is especially true for complex research and development contracts, when performance uncertainties or the likelihood of changes makes it difficult to estimate performance costs in advance. As a requirement recurs or as quantity production begins, the cost risk should shift to the contractor, and a fixed-price contract should be considered.
(e) Combining contract types. If the entire contract cannot be firm-fixed-price, the contracting officer shall consider whether or not a portion of the contract can be established on a firm-fixed-price basis.
(f) Urgency of the requirement. If urgency is a primary factor, the Government may choose to assume a greater proportion of risk or it may offer incentives tailored to performance outcomes to ensure timely contract performance.
(g) Period of performance or length of production run. In times of economic uncertainty, contracts extending over a relatively long period may require economic price adjustment or price redetermination clauses.
(h) Contractor’s technical capability and financial responsibility.
(i) Adequacy of the contractor’s accounting system. Before agreeing on a contract type other than firm-fixed-price, the contracting officer shall ensure that the contractor’s accounting system will permit timely development of all necessary cost data in the form required by the proposed contract type. This factor may be critical—
(1) When the contract type requires price revision while performance is in progress; or
(2) When a cost- reimbursement contract is being considered and all current or past experience with the contractor has been on a fixed-price basis. See 42.302(a)(12).
(j) Concurrent contracts. If performance under the proposed contract involves concurrent operations under other contracts, the impact of those contracts, including their pricing arrangements, should be considered.
(k) Extent and nature of proposed subcontracting. If the contractor proposes extensive subcontracting, a contract type reflecting the actual risks to the prime contractor should be selected.
(l) Acquisition history. Contractor risk usually decreases as the requirement is repetitively acquired. Also, product descriptions or descriptions of services to be performed can be defined more clearly.
