ACQ 501 – Government Acquisition- Assignment 2

ACQ 501 – Government Acquisition- Assignment 2

Synopsis

Imagine that you are working on a two-million-dollar procurement for the purchase of vehicles for the fleet of trucks and cars to be used by the U.S. Department of Homeland Security,

Customs and Border Protection. These vehicles will be used for off-road driving on dirt roads in Arizona. Your manager has asked you to select the type of contract to be used for the vehicle purchase.

Types of Contracts

Government contracts fall into four different categories and are governed by the guidelines in the Federal Acquisition Regulation (FAR). First there is the Fixed Price contract which falls under FAR 16.2. Subcontracts of fixed price are Firm fixed price, fixed price with economic price adjustment, fixed price incentive, Fixed price with prospective price redetermination, fixed ceiling price with retroactive price redetermination and Firm Fixed price, level of effort. The next category is cost reimbursement (FAR 16.3) with the subcontracts of cost, cost sharing, cost plus incentive fee, and cost plus fixed fee. Continuing to the following type of contract which is indefinite delivery (FAR 16.4) with subcontract of definite quantity, requirement, and indefinite quantity. The last type of contract is listed as “other contract types” (FAR 16.6) with subcontracts of time and materials, labor-hour and letter. The best type of contract to suit the scenario is a fixed price with prospective price redetermination. This was chosen because the price of vehicles can fluctuate upwards from the time the proposal was submitted. This is especially common in a model redesign year.

Performance Based Acquisition

“Performance Based Acquisition (PBA) is a method of preparing service contracts that emphasizes the service outcomes the Government would like the contractor to provide. The use of PBA has been encouraged by the Office of Management and Budget to drive down the costs of contracts while improving contractor performance”[Nat]. The gist of this type of acquisition is to provided contractors with requirements and allow the contractor the freedom on how to fulfill the requirements. In the current scenario contractor A would select Ford Motor Company vehicles and contractor B would select General Motors vehicles. Both companies’ vehicles would be suitable on paper as long as the requirements that are presented are met.

Sealed Bidding Pros and Cons

“Sealed bidding is a method of contracting that employs competitive bids, public opening of bids, and awards”[Cor]. It is the preferred method of contracting when the governments requirements are clearly defined such as the need for an off road capable vehicle that can operate in harsh and sometimes extreme conditions. An advantage of sealed bidding is that the award is strictly based on price and price related items so the lowest bidder will win which would be a value to the government. A disadvantage to sealed bidding is that FAR 14.104 requires the government to use a fixed price contract or a fixed prices with economic adjustments is prior authority is given.

Contracting Officer Responsibility

(a) The contracting officer is responsible for ensuring that a proposed contract for services is proper. For this purpose the contracting officer shall—

(1) Determine whether the proposed service is for a personal or nonpersonal services contract using the definitions at 2.101 and 37.101 and the guidelines in 37.104;

(2) In doubtful cases, obtain the review of legal counsel; and

(3) Document the file (except as provided in paragraph (b) of this section) with—

(i) The opinion of legal counsel, if any,

(ii) A memorandum of the facts and rationale supporting the conclusion that the contract does not violate the provisions in 37.104(b), and

(iii) Any further documentation that the contracting agency may require.

(b) Nonpersonal services contracts are exempt from the requirements of paragraph (a) (3) of this section.

(c) Ensure that performance-based acquisition methods are used to the maximum extent practicable when acquiring services.

(d) Ensure that contracts for child care services include requirements for criminal history background checks on employees who will perform child care services under the contract in accordance with 42 U.S.C. 13041, as amended, and agency procedures.

(e) Ensure that service contractor reporting requirements are met in accordance with subpart 4.17, Service Contracts Inventory.

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Performance Requirements

The performance requirements shall state what is to happen but not how and they should be measurable in order to grade the contractor’s effectiveness. For example, a requirement may be that a percentage of vehicles be delivered by a certain calendar date after the contract is awarded. “Performance standards establish the performance level required by the Government to meet the contract requirements. The standards shall be measurable and structured to permit an assessment of the contractor’s performance”[Gen].

Vehicle Requirements

Vehicles purchased under this contract must meet the following criteria:

• Towing capacity of at least 7000 pounds

• 30% of vehicles must have seating for at least 5 passengers and the remaining 70% must

have seating for at least 4

• All vehicles must have 4x4 systems

• All vehicles must be Full Size SUV’s or Pickups  Must include delivery fees in quote.

References

Administration, G. S. (n.d.). Service Contracting. FEDERAL ACQUISITION REGULATION, 1.

Cornell University Law School. (n.d.). Elements of sealed bidding. Retrieved from Legal Information Institute: https://www.law.cornell.edu/cfr/text/48/14.101

National Institutes of Health. (n.d.). Performance Based Acquisition. Retrieved from National

Institutes of Health: http://www.ors.od.nih.gov/OD/OQM/Pages/pbsc.aspx www.acquistion.gov. (n.d.). Subpart 37.1- Service Contracts- General. Retrieved from https://www.acquisition.gov/far/html/Subpart%2037_1.html#wp1082913