£754
&EPA Contract
Administration
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CONTRACT ADMINISTRATION
FOR PROJECT OFFICERS,
WORK ASSIGNMENT MANAGERS
AND DELIVERY ORDER OFFICERS
U.S. Environmental Protection Agency
Procurement and Contracts Management Division
November 1991
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FOREWORD
We're pleased to take this opportunity to extend a warm
welcome to all EPA Project Officers, Work Assignment Managers,
Delivery Order Officers, and Delivery Order Project Officers to
this course in Contract Administration. Your role as a contract
manager is a vital and critical one. To assist you in this
important capacity, the Office of Acguisition Management (OAM)
developed this training course and manual which we hope you will
find useful.
Our Agency has received serious scrutiny on contract
management-related issues from Congressional oversight committees
and the general public. The Office of Acquisition Management
wants to work with you in partnership and give you the assistance
you need to be an effective and responsible contract manager.
The training you are about to receive is designed to provide you
with an understanding of your professional responsibilities in
managing and administering the technical aspects of EPA
contracts. It also provides you with some useful examples and
practical exercises which will enable you to become a more
effective manager of the contracts you oversee.
We hope we have made this manual easy to read and use so
that you will turn to it from time to time as questions arise in
your role as a Project Officer, Work Assignment Manager, Delivery
Order Officer, and/or Delivery Order Project Officer. If you
have comments or recommendations about either the course or the
handbook, please direct them to the Training and Certification
Branch staff (3802F) or to your Contracting Officer.
Thank you for your participation and interest.
enjoy the course.
We hope you
Bailey, Directgpr
Acquisition Management
fette'L. terownT' Deputy Director
of Acquisition Management
fice
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Copy for PCMD-Certificates.
CONTRACT ADMINISTRATION COURSE REGISTRATION
(Name: First, Middle Initial, and Last)
(Date)
(Title)
(Organization)
(Mail Code)
(Street Address of Organization)
(City)
(State)
(Zip Code)
Work Phone:
(Area Code)
(Number)
Have you taken the 3^-day Project Officer Course? Yes No
Date Completed
Do you presently have interim Project Officer Certification?
Yes No
Are you a Superfund employee?
Yes
No
(Name: First, Middle Initial, and Last)
(Date)
(Title)
(Organization)
(Mail Code)
(Street Address of Organization)
(City)
Work Phone:
(State)
(Area Code) (Number)
(Zip Code)
Have you taken the 3^-day Project Officer Bourse? ^ Yes No
Date Completed
Has your organizational address changes since taking the Project
Officer Course? Yes No
Do you presently have interim Project Officer Certification ?
Yes No
Are you a Superfund employee? _
Copy for your Training Officer.
Yes
No
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
. . WASHINGTON. D.C. 20460
APR 17 1990
MEMORANDUM
SUBJECT: Contracting at EPA ' THE ADM.N.STRATOR
TO: All Agency Personnel
Since coming to EPA, I have been continually impressed with
the broad range of work that we perform. It follows that the
expertise required to successfully perform such an assortment of
functions must be equally varied. EPA is fortunate to employ a
multi-talented workforce. However, we are still not able to do
all of this work ourselves. We must get help from the outside,
specifically by way of contractor support.
Contract Management and Accountability
Due to the extent of EPA's contracting, it is critical for
us to effectively manage our contracts. In recent years, we have
improved considerably by focussing on those individuals who
perform the day-to-day contract management activities. However,
in a very real sense, we are all contract managers. Each one of
us, including myself and senior management, bears responsibility.
Agency accountability begins when we make a decision to use
contractor support. And, once we accept a final product from a
contractor, we become responsible for its content and for how it
may be used in reaching Agency decisions. To assure
accountability at senior management levels, I am requiring all
EPA managers to include in their performance standards a
requirement emphasizing contracting controls. The Procurement
and Contracts Management Division (PCMD) has the lead in
developing this language.
Prohibited Contracting
With increasing frequency, I am becoming aware of uses of
contractor support that leave us open to criticism. In many
cases, we have used contractors in areas of a policy and
decision-making nature that should remain under the sole
authority of EPA. Although I am certain that key decisions are
being made internally by EPA managers, there is often the
appearance that contractors make those decisions for us. This
perception is highly damaging to EPA's credibility. And, it must
be stopped.
As a result, I am instituting measures to maintain tighter
control on the Agency's use of contracting support. Attachment A
to this memorandum comprises a list of activities for which EPA
will not contract. The prohibition of these activities will be
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incorporated into all future contracts and current contractors
will be alerted to this new policy. These prohibitions also
extend to Agency subcontractors.
Sensitive Areas
Attachment B is a list of activities that often place the
Agency in positions of vulnerability. They are not activities
from which contractor involvement is precluded but are ones
wherein we must exercise great control if we choose to contract
for them. Over the next months, PCMD will be issuing direction
regarding contracting for these types of activities. As a
minimum, prior to procuring support in any of these areas,
adequate control measures must be established to
ensure a final Agency product that is unbiased and represents
Agency thinking.
Broadening Competition
A high percentage of the tasks falling into the "sensitive"
range are purchased by program offices under broad management
consultant contracts. Having a limited number of contractors
supporting us in so many of these areas creates great potential
for conflict of interest. I ask senior management to help
alleviate this situation by breaking requirements into smaller
portions. Instead of just one contract, a program might be
supported by two or three. This would reduce the conflict of
interest potential and provide for more involvement of small and
minority-owned businesses.
Conclusion
Within the near future, I will be issuing an EPA Executive
Order which will implement in greater detail the policies
discussed in this memorandum. The use of contractor support at
EPA is a very practical way to meet our obligations. However,
each of us is responsible for this Agency's reputation and for
the ideas and opinions we express on behalf of it. Whenever a
contract is used, we must ensure that we provide clear guidance
to contractors on our thoughts, ideas, and positions and that we
scrutinize contractor outputs to ensure they reflect this
guidance. I am confident that each one of us will take ownership
of this large responsibility and work to create an environment
which is conducive to the accomplishment of our^many tasks
through the judicious use of contractual suppoi
(J&£^~*»—-
William K. Rei
Attachments
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Attachment: A
/1
PROHIBITED CONTRACTING ACTIVITIES AT EPA
1. The actual preparation of Congressional testimony
2. The interviewing or hiring of individuals for employment at
EPA
3. Developing and/or writing of Position Descriptions and
Performance Standards
4. The actual determination of Agency policy
5. Participating as a voting member on a Performance Evaluation
Board; participating in and/or attending Award Fee meetings
6. Preparing Award Fee letters, even under typing services
contracts
7. The actual preparation of Award Fee Plans
8. The preparation of documents on EPA letterhead other than
routine administrative correspondence
9. Reviewing vouchers and invoices for the purposes of
determining whether cost, hours, and work performed are
reasonable
10. The development of Statements of Work, Work Assignments,
Technical Direction Documents, Delivery Orders, or any other work
issuance document under a contract that the contractor is
performing or may perform
11. On behalf of EPA, actually preparing responses to audit
reports from the Inspector General, General Accounting Office, or
other auditing entities
12. On behalf of EPA, actually preparing responses to
Congressional correspondence
13. The actual preparation of responses to Freedom of
Information Act requests, other than routine, non-judgmental
correspondence — in all cases, EPA must sign it
14. Any contract which authorizes a contractor to represent
itself as EPA to outside parties
15. Conducting administrative hearings
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16. Reviewing findings concerning the eligibility of EPA
employees for security clearances
17. The actual preparation of an office's official budget
request
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Attachment B
ACTIVITIES OF POTENTIAL VULNERABILITY
The following activities very often require contractor
involvement in programs that are dependent upon contractor
support to accomplish their mission. These activities may result
in the improper use of contractors if internal controls to ensure
proper oversight have not been established. They may also lead
to the perception that inherent Government functions have been
assigned to contractors. Whenever contractors are used to
perform these tasks, Agency employees must play an active role in
overseeing the effort and making all final decisions. This
requires close monitoring to ensure that final outputs reflect
the Agency's positions, thoughts, and ideas.
1. Budget preparation support including workload modeling,
fact-finding, efficiency studies, should-cost analyses, etc.
2. Reorganization and planning support
3. Support services such as analyses, feasibility studies, etc.
to be used by EPA personnel in developing policy
4. Regulation development support
5. Any support in the in-house evaluation of another
contractor's performance
6. Involvement in strategic acquisition planning
7. Support on improving contract management
8. Providing specialized expertise in the contractor selection
process
9. Situations where contractors share office space with EPA
employees
10. Providing specialized expertise in the development of
Statements of Work, Work Assignments, other contract-ordered
tasks
11. Support in preparing responses to Freedom of Information Act
requests
12. Any situation wherein a contractor has access to
Confidential Business Information and/or any other sensitive
information
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13. Any support involving EPA policy or regulatory
interpretation, such as staffing hotlines, attending conferences
on behalf of EPA, community relations efforts, conducting EPA
training courses
14. Any situation where it can be assumed that the contractor is
EPA, without specifically identifying itself as a contractor
15. Independently interpreting EPA policies or regulations on
EPA's behalf to outside parties
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CONTRACT ADMINISTRATION COURSE
AGENDA
DAY 1
9:00-9:30
9:30-10:30
10:30-10:45
10:45-11:30
11:30-12:00
12:00-1:00
1:00-2:00
2:00-2:30
2:30-2:45
2:45-4:00
PURPOSE AND OVERVIEW - Chapter 1
CONTRACT ADMINISTRATION AND THE
AUTHORITY OF GOVERNMENT PERSONNEL - Chapter 2
Break
ELEMENTS AND TYPES OF CONTRACTS - Chapter 3
CONTRACT FUNDING - Chapter 4
Lunch
STANDARDS OF CONDUCT - Chapter 5
PLANNING AND PREPARATION - Chapter 6
Break
ISSUANCE OF WORK - Chapter 7
DAY 2
9:00-9:15
9:15-10:15
10:15-10:30
10:30-12:00
12:00-1:00
1:00-2:15
2:15-2:30
2:30-4:00
ISSUANCE OF WORK
* p
WORK PLANS AND COST PROPOSALS - Chapter 8
Break
REACHING CONSENSUS - Chapter 9
Lunch
TECHNICAL MONITORING - Chapter 10
Break
FINANCIAL MONITORING - Chapter 11
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CONTRACT ADMINISTRATION COURSE
AGENDA (Cont.)
DAY 3
9:00-9:30
9:30-10:30
10:30-10:45
10:30-12:00
12:00-1:00
1:00-2:00
2:00-2:15
2:15-2:30
2:30-4:00
FINANCIAL MONITORING (Cont.)
EVALUATING PERFORMANCE AND DEUVERABLES AND GIVING
FEEDBACK - Chapter 12
Break
CONTRACT MODIFICATIONS - Chapter 13
Lunch
DISPUTES, CLAIMS, TERMINATIONS AND CLOSEOUTS -
Chapter 14
MISCELLANEOUS CONTRACT PROVISIONS AND SPECIAL CONTRACT
TYPES - Chapter 15
Break
EXAM AND COURSE EVALUATION
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TABLE OF CONTENTS - TEXT
Chapter
1
1.1
1.2
1.3
1.4
Title
PURPOSE AND OVERVIEW
Overview of Contract Administration
Purpose of Handbook
Project Officer Certification Program
Summary of Course Content
Page*
5
5
5
8
CONTRACT ADMINISTRATION AND THE
AUTHORITY OF GOVERNMENT PERSONNEL
2.1 Overview of Contract Administration
2.2 Definition of Contract
2.3 Duties of the Parties
2.4 Authority of Government Personnel
2.5 Acquisition Regulations
35
35
36
37
40
ELEMENTS AND TYPES OF CONTRACTS
3.1 Major Contract Elements
3.2 Order of Precedence
3.3 Types of Contracts
3.4 Firm Fixed Price Contracts
3.5 Cost-Reimbursement Contracts
3.6 Time-and-Materials Contracts
3.7 Labor-Hour Contracts
3.8 Indefinite Delivery/Indefinite Quantity Contracts
3.9 Letter Contracts
3.10 Major Procurement Classes
73
74
74
75
77
81
82
83
84
84
CONTRACT FUNDING
4.1 The Appropriations and Contract Funding Process 1 03
4.2 Types of Appropriations 103
4.3 Bona Fide Need Rule 104
4.4 Other Accounting Data 107
4.5 Selecting Appropriations to Fund Contracts and 108
Distribution of Costs Among Source Appropriations
4.6 Voucher Payment 110
4.7 Incremental Funding 110
4.8 Deobligation of Contract Funds 110
Appendix 4A Comptroller General Decision on EPA Level of Effort 113
Contracts - Appropriation Availability
Appendix 4B Recertification of Funds 120
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Chapter Title Page#
5 STANDARDS OF CONDUCT
5.1 Ethics for All Government Employee 139
5.2 Rules for Personnel who Deal with 141
Contractors
5.3 Post-Employment Restrictions 144
Appendix Decisions and Rulings in Brief - Conflicts of Interest 146
PLANNING AND PREPARATION
6.1 The Importance of the Pre-Award Phase
6.2 Reading and Understanding the Contract
6.3 Schedule of Major Tasks and Deliverables
6.4 Post-Award Orientation
6.5 Records, Logs, Reports and Files
Exhibit Sample Contract Administration File Plan
177
177
178
178
179
181
ISSUANCE OF WORK AND RELATED CONSIDERATIONS
7.1 Issuance of Work
7.2 Estimating Hours and Level of Effort
7.3 Estimating Total Costs
7.4 Organizational Conflicts of Interest
7.5 Subcontracts, Consultants and Key Personnel
7.6 Personal Services
7.7 Use of Advisory and Assistance Services
7.8 Government Property
Appendix 7A Use of Contractor Services
Appendix 7B Use of Advisory and Assistance Services
223
225
225
227
229
231
232
234
237
248a
WORK PLANS AND COST PROPOSALS
8.1 Workplan Components
8.2 Workplan Review
8.3 Authorizing Performance Before Signoff
Exhibits Sample Task Directive and Task Plan
267
267
269
270
REACHING CONSENSUS
9.1 Meeting Preparation
9.2 Conducting the Meeting
279
279
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Chapter Title
10 TECHNICAL MONITORING OF CONTRACTS
10.1 Technical Direction
10.2 Technical Direction Under Superfund
10.3 Prohibited Activities
10.3 Technical Monitoring of Progress
10.4 Assuring Timeliness and Quality
10.5 Effective Communication with Contractors
Appendix FAR Inspection clauses
Page*
305
305
305
307
310
312
313
11 FINANCIAL MANAGEMENT OF CONTRACTS
11.1 Cost-Reimbursement Contracts 351
11.2 Time-and-Materials, Labor-Hour, and 353
Fixed-Rate for Services Contracts
11.3 Financial Management Reviews 355
11.4 Cost Management - The Contractor's Job 355
11.5 Voucher Certifications and Payments to Contractors 355
11.6 Project Officer Responsibilities 356
11.7 Guidelines for Suspension or Disallowance 359
of Amounts Invoiced
11.8 The Prompt Payment Act 360
11.9 Processing Payments 361
11.10 Monitoring and Control of Government Property 362
11.11 Disposal, Return or Transfer of Government Property 365
Appendix 11A FAR clauses: Allowable Cost and Payment, Fixed 368
Fee, Incentive Fee
Appendix 11B Sample Property Form 1730-1 371
12 EVALUATING PERFORMANCE AND DEUVERABLES AND GIVING FEEDBACK
12.1 Evaluating Contractor Performance 391
12.2 Giving Contractors Feedback on Performance 391
12.3 Deficiencies Discovered During Performance 392
12.4 Acceptance or Rejection 393
12.5 Revocation of Acceptance 394
12.6 Periodic Formal Performance Evaluations 395
12.6 Cost-Plus-Award-Fee Contracts 396
Exhibits Award Fee Rating Guidelines, Performance Observation 398
Reports, Report Summary for TAT contracts
13 CONTRACT MODIFICATIONS
13.1 Unilateral versus Bilateral Modifications
13.2 The "Changes" Clause
13.3 Supplemental Agreements
13.4 Equitable Adjustments
433
434
435
435
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Chapter Title Page#
13 CONTRACT MODIFICATIONS (Cont.)
13.5 Exercise of Options 436
13.6 Cardinal Changes 437
13.7 Increases in Scope 437
13.8 Exceptions to Full and Open Competition 438
13.9 Co nstructive Changes 439
13.10 Ratifications 440
13.11 Amendments to Work Assignments or Delivery Orders 441
14 DISPUTES AND CLAIMS, TERMINATIONS AND CLOSEOUTS
14.1 Contract Disputes Act of 1978
14.2 Contracting Officer's Final Decision
14.3 Board of Contract Appeals
14.4 Court of Claims
14.5 Contract Termination
14.6 Termination for the Convenience of the
Government
14.7 Termination for Default
14.8 Cure Notice
14.9 Termination
14.10 Excusable Delays
14.11 Waiver of Default
14.12 Contract Closeout
14.13 Closeout Procedures
14.14 Project Officer Responsibilities
455
455
456
456
457
457
458
460
461
461
462
464
464
465
15 MISCELLANEOUS CONTRACT PROVISIONS AND SPECIAL CONTRACTS
15.1 Patents and Data Rights 475
15.2 Peer and Administrative Review 480
15.3 Contractors' Working Files 480
15.4 Treatment of Confidential Business Information 480
15.5 Certification of a Drug-Free Environment 481
15.6 Administration of Special Types of Contracts 482
15.6 Contracts Subject to Specific Labor Laws 482
15.7 Construction Contracts 483
15.8 Contracts with the Small Business 484
Administration under the 8(a) Program
PCMD 7/90
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GLOSSARY OF ACRONYMS USED IN MANUAL
AA Assistant Administrator
AC&C Abatement Control and Compliance Appropriation
ADOO Administrative Delivery Order Officer
Blue Team PCMD Quality Assurance Staff
BOA Basic Ordering Agreement
CBI Confidential Business Information
CERCLA Comprehensive Emergency Response and Cleanup Act
CFR Code of Federal Regulations
CMM Contracts Management Manual
CO Contracting Officer
CPAF Cost Plus Award Fee
CPFF Cost Plus Fixed Fee
DCN Document Control Number
DO Delivery Order
DOL Department of Labor
DOO Delivery Order Officer
DOPO Delivery Order Project Officer
EPAAR Environmental Protection Agency Acquisition Regulations
ERGS Emergency Response Contracts
FAR Federal Acquisition Regulations
FDO Fee Determination Official
FMD-RTP Financial Management Division, Research Triangle Park, NC
FTE Full Time Equivalent
FY Fiscal Year
G&A General and Adminstrative Costs
GFP Government Furnished Property
GSA General Services Administration
IBCA Department of Interior Board of Contract Appeals
ID/IQ Indefinite Delivery/Indefinite Quantity
JOFOC Justification for Other than Full and Open Competition
LOE Level of Effort
OARM Office of Administration and Resource Management
ODC Other Direct Costs
OF Official Form
PCMD Procurement and Contracts Management Division
PEB Performance Evaluation Board
PO Project Officer
POR Performance Observation Report
PR Procurement Request/Order
R&D Research and Development
RCRA Resource Conservation and Recovery Act
RFP Request For Proposals
S&E Salary and Expense
SBA Small Business Adminstration
SF Standard Form
SIRMO Servicing Information Resources Management Officer
SOW Statement of Work
T&M Time and Materials
TAT Technical Assistance Team
TDD Technical Direction Directive
TDM Technical Direction Memorandum
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TID
WA
WAM
Technical Instruction Directive
Work Assignment
Work Assignment Manager
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PURPOSE
AND OVERVIEW
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PURPOSE OF COURSE
Goal: Prepare You As EPA Staff To Function
Effectively As Contract Managers.
1. Increase Knowledge Of Applicable Laws And
Regulations So You Can Function Effectively
Within Them And Avoid Personal Liability
2. Raise Awareness Of Pertinent Issues, But
Also Learn The Nuts And Bolts Of Contract
Administration
3. Improve Ability To Use Contractors To
Accomplish The Agency's Mission, Without
Squandering Its Resources
IGNORANCE OF THE LAW IS NO EXCUSE!
PCMD 9/89
1-1
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oEPA
Designation and Appointment of Project Officer/
Work Assignment Manager/Delivery Order Officer
(For Other Than Small Purchases)
Note: This form is not a Contracting Officer warrant. Delivery Order Officers and Administrative Delivery
Order Officers require a warrant of Contracting Officer authority. Any request for a Delivery Order Officer
warrant must be accompanied by the additional information required in Chapter 8 of the Contracts Manage-
ment Manual.
1a. Name of Nominee
b. Title
c. Organization
d. Mail Code
e. Telephone
2. The nomination is for:
LJ Project Officer
LJ Work Assignment Manager
LJ Delivery Order Officer
I—I Administrative Delivery Order Officer
LJ Delivery Order Project Officer
f. Years of Contract Experience
3. The Nominee Has:
a. Completed the basic Project Officer Course
b. Completed the Contract Administration Course
c. Incorporated appropriate contract management
criteria in position description and performance
standard. (If criteria have not been incorporated.
they must be incorporated within 30 days of
appointment.)
d. If the nominee has not completed the basic Pro-
ject Officer Course or the Contract Adminis-
tration Course, has a waiver or interim
certification been provided
If the answer to items a, b. or c is "No." or the
answer to item d is "No." attach an explanation.)
D
D
a
n
4. Estimated Dollar Amount of Contract, Work Assignment, or Delivery Order
5. Nomination is for (Check one):
LJ a new contract, work assignment, or delivery order entitled
LJ a change in the Project Officer, Work Assignment Manager, or Delivery Order Officer on Contract No.
(if applicable, the work assignment no./delivery order no. is .
Certification
The undersigned nominee and requesting official certify that the designation of this
nominee complies with the workload limitations and other requirements set forth in
Chapter 7 of the Contracts Management Manual.
6a. Signature of Nominee
b. Date
7a. Signature of Requesting Official
(Division Director or Higher)
b. Name and Title
c. Date:
Ba. Signature of Approval Official
(Contracts Organization)
PCMD 9/89
b. Name and Title
1-2
c. Date:
EPA Form 190O-66 (6-85)
Official Contract File Copy
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Chapter 1
PURPOSE AND OVERVIEW
Why does EPA need a course on contract administration? Because EPA spends
well over 25% of its funds through the contracting process, and some EPA programs
spend an even higher percentage. And because errors on the part of government
personnel can be very costly, both to the government and to the individual staff member.
Contract administration is every bit as important a function to government agencies like
EPA as internal staff administration. But it is far more complex.
1.1 Purpose of Course
The purpose of this course is to prepare EPA staff involved in contract
administration to function effectively in their various roles as Project Officers, Work
Assignment Manager, Task Managers, Delivery Order Officers, Administrative Delivery
Order Officers, and Delivery Order Project Officers. The course is designed to enable
EPA staff to: a) become knowledgeable of applicable laws and regulations, so as to
function effectively within them and avoid personal liability; b) become aware of
pertinent issues, as well as learn the nuts and bolts of contract administration, and c)
become better able to use contractors to accomplish EPA's mission, without squandering
its resources.
1.2 Purpose of Handbook
The purpose of this handbook is to provide a ready reference for Project Officers,
Work Assignment Managers, Delivery Order Officers, Administrative Delivery Order
Officers and Delivery Order Project Officers on the basic principles of contract
administration. Any specific questions or problems under your contracts should be
referred to your Contracting Officer. Comments about this handbook or about the
Project Officer training course in Contract Administration should be submitted to the
Procurement Policy staff of the Procurement and Contracts Management Division (PM-
214F), 202/382-5024.
1.3 Project Officer Certification Program
It is EPA policy that all individuals serving as Project Officers, Work
Assignment Managers, Delivery Order Officers and Delivery Order Project Officers on
Agency contracts fully understand their responsibilities and duties. These individuals
are defined as follows:
(1) Project Officer. The Project Officer (PO) is an Agency program official
who initiates a procurement action for other than a small purchase,
evaluates contractor proposals, and/or, in the contract administration-
phase, acts as the technical representative of the Contracting Officer for
monitoring contract performance after award. Some federal agencies use the
term COTR, or Contracting Officer's Technical Representative, to refer to the
project officer.
(2) Work Assignment Manager. The Work Assignment Manager (WAM) is an
Agency program official who prepares written directives (known as work
assignments) to contractors under cost-reimbursement level of effort (term
form) contracts. The Work Assignment Manager monitors the contractor's
performance of such directives and works under the direction and control of
PCMD 9/89
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the Project Officer. For large work assignments which are broken down into
individual tasks, Work Assignment Managers may also be responsible for
supervising one or more Task Managers responsible for oversight of one or
more Work Assignment tasks.
(3) Delivery Order Officer. The Delivery Order Officer (DOO) is an Agency
program official who monitors the performance of the delivery order after
its issuance. The Delivery Order Officer may have Contracting Officer
authority to issue orders to contractors under indefinite delivery/indefinite
quantity contracts, if he/she has a valid warrant.
(4) Administrative Delivery Order Officer. The ADOO is an administrative
officer who has the warrant authority to sign delivery orders but does not
actually monitor them. The ADOO typically executes that signatory authority
on behalf of multiple Delivery Order Project Officers.
(5) Delivery Order Project Officer. This individual prepares delivery
orders for review and issuance by the Administrative Delivery Order Officer
or the Contracting Officer. The Delivery Order Project Officer (DOPO)
monitors contractor performance of the delivery order after its issuance.
The Delivery Order Project Officer does not require a warrant of Contracting
Officer authority.
Chapter 7 of the EPA Contracts Management Manual specifies the required
training, experience, and workload limitations that must be met for an individual to
serve in one of the above capacities. Program offices should become familiar with these
requirements to help them identify individuals who qualify to hold these positions and
any training needs of others. The referenced chapter also sets forth a requirement that
employees' position descriptions and performance standards include criteria on their
pre-award and post-award contracting duties. Performance standards are to be
prepared in accordance with applicable Agency directives on the subject.
To help promote an understanding of the acquisition process and the principles' of
contract management, the Procurement and Contracts Management Division (PCMD) has
developed a Basic Project Officer training course and a Contract Administration Course.
These courses emphasize the responsibilities and duties during the pre-award and post-
award phases of the procurement process. Individuals must meet the attendance
requirements of both courses in order to be certified as Project Officers. Work
Assignment Managers, Delivery Order Officers, or Delivery Order Project Officers are
required to take only the Contract Administration Course.
The basic course is three and one-half days in length; the Contract
Administration course is three days. To satisfy certification requirements, all course
participants must demonstrate their understanding of the course material by taking a
written examination on the final day of each course. At the conclusion of each course, the
Director, PCMD, will forward a certificate of training to each individual who
successfully completes the course.
Delivery Order Officers and Administrative Delivery Order Officers, in addition
to the training and other requirements covered herein, must comply with the
Contracting Officer Warrant Program in Chapter 8 of the Contracts Management Manual
in order to be delegated Contracting Officer authority to obligate funds on behalf of the
Government.
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This authority is not delegated to those individuals designated as Delivery Order
Project Officers, however, and the requirements of Chapter 8 of the Contracts
Management Manual do not apply to them.
The experience requirements and workload limitations for Project Officers,
Work Assignment Managers, Delivery Order Officers, Administrative Delivery Order
Officers and Delivery Order Project Officers are discussed in Chapter 2. For each level
of experience, there is a limitation on the size of an individual contract or delivery
order which may be monitored, as well as a limitation on the total value of all contracts,
work assignments or delivery orders which may be monitored at any one time.
Assistant, Associate and Regional Administrators, General Counsel, the Inspector
General, and Heads of Headquarters Staff Offices or their designees are responsible for
designating individuals who have completed the training program and fulfilled the other
requirements of Contracts Management Manual Chapter 7 to serve as Project Officers,
Work Assignment Managers, Delivery Order Officers and Delivery Order Project
Officers.
Various Officials of PCMD appoint Project Officers and Work Assignment
Managers to administer contracts for EPA. The appointments are made for employees
selected by program offices to serve on individual contracts. Appointments will be made
in consultation with the program office. For Project Officers, the appointment authority
is delegated to the Chief of the Contracting Office for contracts of $5,000,000 or more,
and to the Sections Heads of the appropriate Contracting Office for contracts below
$5,000,000. For Work Assignment Managers and Delivery Order Project Officers, the
appointment authority is delegated to the Contracting Officer. The Chief of the
Contracting Office appoints all Delivery Order Officers and Administrative Delivery
Order Officers for contracts.
EPA Form 1900-65 (see page 4) must be used for the designation of all Project
Officers, Work Assignment Managers, Delivery Order Officers, Delivery Order Project
Officers, and Administrative Delivery Order Officers. A separate form is required for
each individual contract, work assignment and delivery order. Any change in the
designation of individuals on a particular contract will require resubmission of the form
to the appropriate Contracting Office. The form should also be used to designate
alternates in case the Project Officer, etc. becomes unavailable.
Certified Project Officers, Work Assignment Managers, Delivery Order Officers
and Delivery Order Project Officers who do not perform their duties in a responsible,
responsive, or acceptable manner, or who abuse their authority (such as failing to
comply with the EPA Standards of Conduct in 40 CFR Part 3) may have their
certification withdrawn by the Director, Procurement and Contracts Management
Division. The Director, PCMD, will coordinate the withdrawal of any certification with
the affected program office. The Director, PCMD, will provide the program office a copy
of the documentation supporting the withdrawal and the opportunity for comment prior
to withdrawal.
Individuals who have had their Project Officer, Work Assignment Manager,
Delivery Order Officer or Delivery Order Project Officer certifications withdrawn may
be recertified upon the written recommendation of their Assistant, Associate, or
Regional Administrator, General Counsel, Inspector General, and Heads of Headquarters
Staff Offices with approval by the Director, PCMD. The recommendation must contain
PCMD 9/89
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(1) a brief description of the circumstances necessitating the certification withdrawal,
(2) steps being taken to remedy the deficiency, and (3) an action plan to ensure that the
deficiency does not occur again. Recommendations for recertification must be routed to
the Director, PCMD, through the Chief of the Contracting Office.
1.4 Summary of Course Content
The basic Project Officer's Handbook covers in detail the subjects included in the
3 and 1/2-day Project Officer's course. Basically, that course covers all aspects of the
pre-award contracting process, with particular emphasis on developing statements of
work and technical evaluation criteria, and conducting technical evaluations of offerers'
proposals. The 3-day course in Contract Administration covers the post-award phase,
from award of the contract through contract closeout. It also includes specific details of
the responsibilities and duties of Project Officers, Work Assignment Managers, Delivery
Order Officers, and Delivery Order Project Officers. The combination of the two
training courses is designed to give EPA employees who are not contracting professionals
a clearer understanding of the acquisition process and the knowledge to ensure that the
Agency receives the best possible products or services for the money it spends.
PCMD 9/89
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CONTRACT ADMINISTRATION
AND THE AUTHORITY OF
GOVERNMENT PERSONNEL
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PCMD 9/89
10
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CONTRACT ADMINISTRATION PROCESS
ASSIST IN CONTRACT
CLOSEOUT 15
EVALUATE
PERFORMANCE
14
RECOMMEND
EXERCISE OF
OPTIONS! 3
RECOMMEND
CONTRACT
MODIFICATION
12
I
I
REVIEW INVOICES/
APPROVAL OF PAYMENT
11
REVIEW
FINANCIAL
STATUS
CONDUCT POST-
AWARD
CONFERENCE -,
CONTRACT
ADMINISTRATION
MONITOR STATUS
OF HOURS & FUNDS
REVIEW
KEY
PERSONNEL
CHANGES 9
PREPARE WORK
(WA OR DO)
RECOMMEND THE USE
OFSUBCONTRACTORS
AND CONSULTANTS
3
|
I
ISSUE
TECHNICAL
DIRECTION
4
MONITOR USE OF
GOVERNMENT
PROPERTY
REVIEW
CONTRACTORS
TECHNICAL
PROGRESS
6
ACCEPT/
REJECT
WORK OR
DELIVERABLE
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ELEMENTS OF A CONTRACT
A Contract Is:
1. An AGREEMENT
2. Between COMPETENT PARTIES
3. For A VALID CONSIDERATION
4. To Accomplish A LAWFUL PURPOSE
5. With TERMS CLEARLY SET FORTH
6. In The FORM REQUIRED By Law
A Contract Must Contain All Six Elements To
Be Legal.
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PARTIES TO A CONTRACT
1. Government
2. Contractor
a. An Individual
b. A Partnership
c. A Nonprofit Organization
d. A Private Organization
e. A State Or Local Government
f. A Joint Venture (2 Or More Legal Entities
Jointly & Severally Responsible For
Fulfilling The Contract Obligations)
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DUTIES OF THE PARTIES
1. Government - Not To Unreasonably Interfere
With Or Delay Contractor Performance, E.g., By:
a) Failing to provide agreed-upon Government
property
b) Failing to provide necessary access to
Government facilities
c) Issuing faulty specifications or statements
or work that result in Contractor delays
d) Unreasonably delaying Government
approvals or consent that Contractor
requires to continue performance
2. Contractor - To Proceed Diligently With Performance
Unless:
a) Excused by Government gross and material
breach of contract or impossibiity of performance
b) Suspended or stopped by Stop Work Order
or Limitation of Cost or Funds clauses under
cost reimbursement contract
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DELEGATION OF AUTHORITY
CONTRACTING
OFFICER
PROJECT/
DELIVERY ORDER
OFFICER
REGIONAL
PROJECT
OFFICER
SUPERFUND ONLY
SUPERFUND
ON-SCENE
COORDINATOR
WORK
ASSIGNMENT
MANAGER/DOPO
TASK
MANAGER
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October 1990
PROCUREMENT AND CONTRACTS MANAGEMENT DIVISION (PCMD)
AA-OARM
CHARLES L. GRIZZLE
382-4600
I
OFFICE OF ADMINISTRATION
JOHN C. CHAMBERUN, DIRECTOR 475WOO
WILLIAM RNISTER, DEPLOY DIRECTOR 475-8400
POLICY and MANAGEMENT
SUPPORT STAFF
Belle Davis 382-5024
DIRECTOR
DAVID J. O'CONNOR
382-5020
t-0
CONTRACT MGT. DIV.
RTF, NC
Douglas Richmond 629-3045
CONTRACT MGT. DIV.
Cinn., OH
William Bailey 684-7735
ASSOCIATE DIRECTOR
for SUPERFUND/RCRA
PROCUREMENT OPERATIONS
Mark H. Walker, Acting 475-9458
ASSOCIATE DIRECTOR
for ADP PROCUREMENT
and CONTRACT SUPPORT
Don Hambric 382-5020
REVIEW
'OUCY
WCH
Leahy
9404
PURCHASING 8
CONTRACTS MG"
BRANCH
Rosemarie Nance
382-2366
PROCl
OPER
BR/
TomMcE
382-
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AUTHORITY
1. Must Be Delegated
E.g., Authority Of Superfund Delivery
Order Officer To Sign Delivery Orders
Up To Specified Limit (Delegated From
Contracting Officer); Authority Of Work
Assignment Manager (Delegated From
Project Officer)
2. Must Be Actual (Vs. Apparant)
Express Authority Of Contracting Officer
To Sign Contracts To Obligate Government
Up To Limits Expressed In CO's Written
Warrant. (Government Is Not Bound If
Person Acting Appears To Have Authority
But In Fact Does Not, E.g., Where CO
Obligates Funds In Excess Of Limits Of
CO's Warrant.)
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ROLE OF THE
CONTRACTING OFFICER
The Contracting Officer is The Oniy Person Who
Has The Authority To:
1. Sign A Contract
2. Obligate Funds*
**
3. Issue Work Assignments
4. Modify Contract Terms Or Conditions
5. Terminate A Contract
6. Accept Supplies And/Or Services
**
* Except Delivery Order Officers Who Have Been
Issued A Contracting Officer's Warrant, E.g.,
Superfund On-Scene Coordinator With Warrant
Up To $250,000
** Unless Such Authority Has Been Delegated To
The Project Officer As Is Stated In The Contract.
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ROLE OF THE PROJECT OFFICER
1. Monitor Overall Contract Performance
2. Monitor Contract Administration By
Work Assignment Managers Under Level
Of Effort (LOE) Contracts
3. Review Technical & Financial Progress
Reports
4. Provide Technical Direction
5. Monitor Use Of Government Property
6. Certify Vouchers
7. Recommend Contract Modifications To
The Contracting Officer
8. Assist In Contract Closeout
Note: These Duties Concern Only Contract
Administration. The Project Officer
Has Many Preaward Duties As Well.
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ROLE OF THE WORK ASSIGNMENT MANAGER
1. Develop Statement Of Work And Level Of
Effort (LOE) Estimate For Specific Work
Assignments Under Term Form Contracts
2. Monitor Performance On Work Assignments
3. Provide Technical Direction
4. Recommend Work Assignment Amendments
To Project Officer
5. Review Relevant Portions Of Monthly
Technical & Financial Progress Reports
6. Assist The Project Officer In Voucher
Certification
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ROLE OF THE DELIVERY ORDER OFFICER
1. Develop Statement Of Work & Cost
Estimate, & Determine Labor Categories
For Delivery Orders Under Indefinite
Delivery/Indefinite Quantity Contracts
(Time-And-Materia! Contracts)
2. Issue Delivery Orders To Contractor
(Within Limits Of Authority)
3. Provide Technical Direction
4. Monitor Performance On Delivery Orders
5. Review Monthly Technical & Financial
Progress Reports
6. Issue Delivery Order Modifications (Within
Limits Of Authority)
7. Recommend Contract Modifications To
The Contracting Officer
8. Certify Vouchers
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DELIVERY ORDER OFFICER DISTINCTIONS
(Indefinite Delivery/Indefinite Quantity Contracts)
- ADMINISTRATIVE DELIVERY ORDER OFFICERS
Review & Issue Delivery Orders, But Do Not Monitor Performance
Required To Have Limited Warrant Of Contracting Officer Authority
(Because Obligating Funds)
- DELIVERY ORDER PROJECT OFFICERS
Prepare Delivery Orders For Issuance By Administrative Delivery
Order Officer Or Contracting Officer
Monitor Contractor Performance
Not Required To Have Contracting Officer Authority
- DELIVERY ORDER OFFICERS
Issue Delivery Orders & Monitor Contractor Performance
Required To Have Limited Warrant Of Contracting Officer
Authority
(Different Contracts Are Set Up In Different Ways. Some Use All Three
Of The Above Functions, Some Use Two, And Some Use Just One.
The Contract Terms & Conditions Should Be Consulted To
Determine Who The "Players" Are.)
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CONTRACTS MANAGEMENT MANUAJ.
1900 CHG 9
1O/3.9/9O
EXPERIENCE AMD WORKLOAD LIMITATIONS
PROJECT OFFICERS AMD DEPUTY PROJECT OFFICERS
Experience
Workload Limit
Cumulative Dollar Amount*
Less than 2 years *
Superfund and ADP contracts $50 Million
All others contracts $25 Million
2 years and over **
Superfund and ADP contracts $200 Million
All others contracts $100 Million
* Limitation applies to total value of 1 or more contracts.
** Limitations apply to total value of 2 or more contracts (no
limitation for monitoring a single contract)
WORK ASSIGNMENT MANAGERS/REMEDIAL PROJECT MANAGERS/DELIVERY ORDER
OFFICERS/DELIVERY ORDER PROJECT OFFICERS
Experience
Workload Limit
Cumulative Dollar Amount
Less than 2 years *
Superfund and ADP contracts ....... $20 Million
All. others contracts ................. $5 Million
2 years and over **
Superfund and ADP contracts ....... $60 Million
All others contracts $15 Million
* Limitation applies to total value of l or more delivery
orders/work assignments (DO/WA).
**
Limitations apply to total value of 2 or more DO/WA (no
limitation for monitoring a single DO/WA)
OH-SCENE COORDINATORS
Because of the emergency nature of these actions, there are no
limits on the number of individual orders or cumulative dollar
amounts for On-Scene Coordinators.
NOTES:
a. For purposes of this chapter, experience is
considered work in a contract monitoring function (i.e.
project officer, orcering officer, etc.) either at EPA
or another Federal agency.
b. For the purpose of computing workload limitations,
the limitations apply to all contracts/actions whose
period of performance has not yet expired.
F-l
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OTHER INDIVIDUALS INVOLVED IN
CONTRACT ADMINISTRATION
1. The Contract Specialist/Administrator
2. The Property Administrator
3. The Accounting Technician
4. The Cost Analyst/Auditor
5. The Procurement Analyst (On PCMDfs
Review Team)
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PROCUREMENT REGULATIONS*
FEDERAL ACQUISITION REGULATION (FAR) -
Title 48 CFR Chapter 1
Governs All Executive Agencies In Their Acquisition
Of Supplies And Services With Appropriated Funds
ENVIRONMENTAL PROTECTION AGENCY ACQUISITION
REGULATIONS (EPAAR) - Title 48 CFR Chapter 15
Implements And Supplements The FAR For EPA
CONTRACTS MANAGEMENT MANUAL (CMM) -
EPA Directive 1900
Sets Forth Additional EPA Policies And Procedures On
Acquisition Matters Of Particular Interest To Program
Officers And Acquisition Personnel
PCMD ACQUISITION HANDBOOK
Supplements The Above Regulations On Subjects Of
Primary Interest To Acquisition Personnel
Obtainable from your Contracting Officer.
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Project Officer's Checklist
Contract Administration Review
Contract No.
1 - Monitor contractor performance to determine whether or not
the following conditions exist:
a) technical performance is timely and of acceptable
quality.
b) technical progress is commensurate with incurred
costs-
c) costs incurred are in line with the negotiated
elements of cost or total cost.
Yes No N/A
A. Technical Monitoring
1. Is PO receiving CO notification of timely,
acceptable performance?
a. How often?
b. What form?
2. How monitor scheduled deliveries?
3« Any schedule slippages?
4- Is PO furnishing CO timely notification
for remedial action?
5. Are Monthly Progress Reports reviewed for
problems?
6. Are there any unresolved problems?
B. Cost Monitoring
1. What types of reports are received?
Are reports submitted IAW contract?
2.
3.
How monitor progress vs incurred cost
and actual vs projected costs?
- Any independent logs/records maintained?
- What indicators employees?
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-2-
Yes
No N/A
4- How monitor possibility of underruns/
overruns?
5« What proactive methods are taken to
prevent problems?
6. What action (if necessary) will be taken
to ensure proper monitoring?
Assignment of work, placement of delivery orders, and issuance
of directives to contractors are timely and within the scope
of the contract, and are sufficiently detailed to promote
meaningful performance.
Yes
N/A
A. Approved 1900-65's in file?
B. Contractor knowledge of authorized
personnel?
C. Sufficient time allowed by PO for CO to
process work properly?
.D. Any verbal WAs/DOs issued by PO/CO before
work begins?
E. Within scope of contract?
P. Sufficiently detailed SOW?
G. Are task limits (if any) exceeded?
H. Are tasks governmental in nature or
personal services?
I. Are work"plans received for each task
and monitored?
J. Proper use of funding?
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Yes
No
-3-
K. Independent costs estimates prepared?
L. Is PO/WA authority delineated?
M. Is PO/WA authority exceeded?
3« Administrative actions are performed expeditiously with
no programmatic impact and are adequately documented to
establish clear "audit trails."
N/A
Yes No N/A
A. Is Project Officer certified?
B. Within workload limitations, according to
Chapter 7, Contract Managment Manual?
C. Small Business
- Is this an 8(a) contract?
- Any claims?
D. Key Personnel
1. Did contract require prior approval/
notification of Key Personnel changes?
2. Does contract file reflect appropriate
documentation?
E. Property Administration
1 . Any G-FP/E/I/ or Data?
2. Any post award changes?
P. Advance Agreements
1. Any negotiated
2. Contractor compliance?
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-4-
Yes
No N/A
G. Property Administration
1. Any GFP/E/I/ or Data?
2. Any post award changes?
H. Modifications
(To be repeated, as necessary, for
several mods)
1. Change Order #
a. SF 30 block 11 (or 13)
completed properly?
b. Authorized by Changes Clause?
c. Definitization by Supplemental
Agreement in File?
Modification No.
a. SF 30 block 11 (or 13)
completed properly?
b. Authorization?
c. Appropriate documentation
Administrative Change f
a. SF 30, Block 11 (or 13)
completed properly?
b. Appropriate documentation?
Options
a. SF 30, Block 11 (or 13)
completed properly
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-5-
4- Timely follow-up/resolution is performed for audits and
internal/external reviews.
B.
D,
Yes No N/A
A. Any cost audit reports requiring follow-up?
B. Internal controls review?
C. Status of any prior recommendations?
Contract actions concerning administrative remedies
are pursued in a timely and appropriate manner with
proper documentation.
Yes
No
Post Award Orientation
1. Was it conducted?
2. Did CO feel it was necessary?
5- If one had teen conducted, would it
have precluded subsequent problems?
Insurance
1. Have any problems arisen?
'Termination/Claims
1. Any unresolved terminations/claims
2. Appropriate, timely documents issued?
Warranties/Guarantees
1 . Any~warranties/guarantees?
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-6-
6. Organization conflicts of interest
Yes No N/A
A. Have any Was/DOs created any conflicts of
interest?
B. Has PO notified CO of any possible conflicts?
C. Has contractor notified CO of any possible
conflicts?
D. What remedies were effected?
7- Miscellaneous Observations
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EXHIBIT A
CONTRACT ADMINISTRATION AREAS OF REVIEW
I. COST MONITORING
A. Financial reports/vouchers
B. Independent logs
C. Overruns/underruns
II. TECHNICAL PERFORMANCE MONITORING
A. Technical reports
B. Acceptability
C. Timeliness
D. Deliverables
E. Unit 14 checklists
III. PROPERTY ADMINISTRATION
A. Approvals
B. Documentation
IV. SUBCONTRACTS/CONSULTANTS
A. Copy of agreement
B. Summary of prime/sub negotations
C. Competition/sole source
D. ODC and travel ceilings
E. Labor mix/average hourly rate
F. Unit 14 checklists
D. Cost/price reasonableness
E. Approvals
F. Reports
V. ISSUANCE OF WORK ASSIGNMENTS, DELIVERY ORDERS, OTHER DIRECTIVES
D. Limits exceeded
E. Amendments
F. Issued by authorized person
D. New scope
E. Key personnel
F Documentation
A. Timelines
B. Within scope
C. Work Plan approvals
VI. MODIFICATIONS
A. Change orders
B. Options
C. Administrative modifications
VII. DISPUTES, CLAIMS, TERMINATIONS
A. Disputes
B. Claims
C. Terminations
VIII. OTHER
A. Organizational conflicts of interest
B. Improper business practices
C. Security of confidential business information
D. Follow-up/resolution of audits, other post-award reviews
E. Project Officer workload limitations
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Chapter 2
CONTRACT ADMINISTRATION AND THE AUTHORITY OF
GOVERNMENT PERSONNEL
What is contract administration? Ask a variety of people and you will get a
variety of answers. Some might say it is the monitoring of contractor performance until
the products or services which have been contracted for have been provided. Others
might say it is the review of contractor reports, the certification of vouchers, and the
inspection and acceptance of all deliverables. Still others might advise that it means
whatever duties are required to get the best possible product within the time required.
All of these people would be right.
2.1 Overview of Contract Administration
Contract administration encompasses all functions relating to a contract from the
moment it is awarded until final payment has been made and the contract is closed out.
Here at EPA, some contract administration duties are delegated by Contracting Officers
to program office technical contract managers designated as Project Officers, Work
Assignment Managers, Delivery Order Officers, Administrative Delivery Order Officers,
and Delivery Order Project Officers. Because program contract managers are entrusted
with much of the contractor oversight required, an understanding of the principles and
duties involved in contract administration is essential.
Effective contract administration requires direct liaison between the Contracting
Officer and the Project Officer or Delivery Order Officer during the entire life of a
contract. This team concept is critical to a successful contract. It is important to
remember that the Contracting Officer has overall responsibility for obtaining
satisfactory contract performance. But with close cooperation and an understanding of
his or her duties, the Project Officer or Delivery Order Officer can help assure better
results and a more successful accomplishment of the program mission.
2.2 Definition of a Contract
What is a contract? What is an agent? What is the authority of the Contracting
Officer? What types of legal entities can contract with the Government? Who has what
authority? What are the regulations governing the contracting process? It is important
to understand these terms in order to properly administer a contract.
The Federal Acquisition Regulations define a contract as "a mutually binding legal
relationship obligating the seller to furnish supplies or services (including
construction) and the buyer to pay for them." This basic definition is applicable to ail
types of contracts. For a contract to be legally enforceable, it must contain the following
essential elements. It must be: (1) An agreement (2) between competent parties (3)
for a valid consideration (4) to accomplish a lawful purpose (5) with terms clearly set
forth (6) in the form required by law. If a contract does not meet these six tests, the
relationship is not a legal one.
An agent is a person authorized to act for another. The difference between an
agent and an employee is that the employee performs some type of service for the
employer while an agent is appointed to represent the employer in dealings with third
parties. Contracting Officers are agents for the United States Government and the
Environmental Protection Agency, while Project Officers are technical representatives
of the Contracting Officers - not agents - who assist them in administering contracts.
PCMD 9/89
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Contracting Officers have authority to enter into, administer, or terminate
contracts, and may bind the Government only to the extent of the authority delegated to
them. Contracting Officers are the only persons with the authority to enter into and sign
contracts on behalf of the Government. As agents of the Government, their acts bind the
Government to third parties (contractors) and also give the Government rights against
the third parties. Contractors also use agents to carry out the contract and deal with the
Government regarding its administration and modification.
The other party with which a Government contract is made may be any legal
entity with the capacity to contract. The various types are:
- An individual
- A partnership
- A nonprofit organization
- A private corporation
- A State or local Government
- A joint venture (two or more legal entities jointly and severally
responsible for fulfilling the contract obligations)
Any one of these entities could be an EPA contractor. The majority of EPA
contracts are held with private corporations.
2.3 Duties of the Parties
One party to any EPA contract will be the United States of America, the other will
be the contractor. The parties to a contract bind themselves to the provisions of that
contract. Besides the specific written provisions, however, each party has one
fundamental underlying duty common to government contracts.
The Government has the basic duty not to unreasonably interfere with or delay
the contractor in his or her performance of the contract. The Project Officer is
responsible for ensuring that his or her actions do not violate this basic duty. Any
violation thereof constitutes a "breach of contract" for which the contractor is legally
entitled to recover the amount of any damage caused him by the breach. Generally, this
is done through contract modification adjusting the cost or price.
The following actions are examples of those which might unreasonably interfere
with or delay contract performance:
(1) Failure to provide, within the time required or in a condition suitable for
use, any Government property which the Government agreed to furnish;
(2) Failure to provide access to Government premises on which work must be
performed;
(3) Issuing faulty specifications or Statements of Work that result in delaying
the contractor; and
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(4) Unreasonably delaying Government approvals or consent that the contractor
must obtain in order to commence or continue performance under the
contract.
Project Officers, Work Assignment Managers, and Delivery Order Officers must
be certain that they are not delaying contract performance by such action or inaction.
The contractor has the basic duty to proceed diligently with performance of the
contract. This basic duty comes to an end only when the contract is completed or
terminated. (If termination is only partial, the contractor must diligently proceed with
the portion not terminated.) Disagreements or disputes do not relieve the contractor of
the duty to proceed during the appeal process.
The contractor's basic duty to proceed may only be excused by sufficiently gross
and material breach of contract by the Government, or by impossibility of performance.
Their duty to proceed may also be stopped or suspended by the Contracting Officer's
issuance of a Stop Work Order or, under a cost reimbursement contract, by the
Limitation of Cost or Limitation of Funds clauses when contract funds are depleted.
2.4 Authority of Government Personnel
The Government is not bound by the actions of any unauthorized persons. Persons
who commit the Government, without the proper authority to do so, may be personally
liable to the other party to the contract.
(1) Actual vs. Apparent Authority
A Contracting Officer is delegated authority in writing, with a document
known as a warrant. A warrant may contain limitations on the authority of
the individual, or it may be unlimited. The warrant reflects the Contracting
Officer's express, or actual, authority to obligate the United States by
contract.
The law will not bind the United States in cases in which the person acting
appears to have had the authority to act but in fact did not.
An example of such apparent authority would be a Contracting Officer
obligating funds in excess of the limits of his or her warrant. Another would
be a Project Officer directing the Contractor to make changes in the
performance of the technical requirements of the Statement of Work of a
contract.
Apparent authority is not to be taken lightly. Unless the Government ratifies
the action (see Chapter 13), the person who acted without authorization may
be liable to the other party for any monies due. Contractors have a
responsibility to ensure that the person with whom they are dealing has the
proper authority, but the Government employee has a responsibility to act
within the limits of the employee's own authority.
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(2) Role of the Contracting Officer.
The Contracting Officer is the only person who has the authority to:
1. sign a contract
2. obligate funds*
3. issue work assignments**
4. modify any contract terms or conditions
5. terminate a contract
6. accept supplies and/or services**
* except Delivery Order Officers who have been issued a Contracting
Officer's Warrant, such as Superfund On-Scene Coordinators with
warrants up to $250,000.
** unless such authority has been delegated to the Project Officer, as is
stated in the contract.
In the contract administration phase, the role of the Contracting Officer is to
monitor the contractor's progress (with the assistance of the Project
Officer), ensure that the contract terms and conditions are being adhered to,
and make any necessary contract modifications. The Contracting Officer must
also resolve all disputes that arise, request any necessary audits, negotiate
equitable adjustments, and, if necessary, terminate the contract. Project
Officers should use the Contracting Officer's knowledge and expertise
whenever questions arise, and involve the Contracting Officer to the fullest
extent necessary.
(3) Role of the Project Officer, Work Assignment Manager,
Delivery Order Officer, Administrative Delivery Order Officer
and Delivery Order Project Officer.
(a) Project Officer. The Project Officer's role in contract administra-
tion is one of monitoring contract performance from both a technical
and financial standpoint. This monitoring is done in close
coordination with the Contracting Officer. The Project Officer also
provides technical direction to the contractor, reviews and evaluates
contractor deliverables and performance, monitors use of
government property, certifies monthly vouchers for payment, and,
if necessary, recommends contract modifications to the Contracting
Officer during the course of contract performance. The contract
closeout process also requires the involvement of the Project Officer.
For cost-reimbursement LOE contracts or indefinite delivery/
indefinite quantity contracts, the Project Officer also is responsible
for supervising the contract administration activities delegated to
Work Assignment Managers, Delivery Order Officers and Delivery
Order Project Officers. See page 19 for a complete listing of Project
Officer responsibilities.
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(b) Work Assignment Manager. The Work Assignment Manager (WAM)
acts as the technical representative of the Contracting Officer on
specific work assignment(s) under cost reimbursement, term form
contracts, under the supervision of the contract Project Officer. The
WAM typically develops work assignments, monitors performance
under these work assignments, provides technical direction, and
recommends any necessary modifications to the Project Officer.
Since the WAM most closely oversees the contractor's performance
for the particular work assignment, the WAM is also responsible for
reviewing those portions of the monthly technical and financial
progress reports relevant to his or her work assignment, and for
assisting the Project Officer in voucher certification.
(c) Delivery Order Officer. The Delivery Order Officer (DOO) performs
similar duties to the Project Officer under indefinite delivery/
indefinite quantity contracts. The DOO also may have a Contracting
Officer's warrant to issue delivery orders and obligate funds on
behalf of the Government.
(d) Administrative Delivery Order Officer. The Administrative
Delivery Order Officer (ADOO) reviews and issues delivery orders,
but does not monitor their performance, and is required to have a
limited warrant of contracting authority. Performance monitoring is
the responsibility of the Delivery Order Project Officer.
(e) Delivery Order Project Officer. The Delivery Order Project Officer
(DOPO) performs similar duties to the Work Assignment Manager,
but under indefinite delivery/indefinite quantity contracts. The
DOPO monitors performance of delivery orders and recommends
modifications to the DOO.
The individuals listed above must take care that they act only within the
limits of their authority.
(4) Experience and Workload Limitations. As noted in Chapter 1, for
each level of experience and each position, there is a limitation on the size of
an individual contract or delivery order which may be monitored, as well as
a limitation on the total value of all contracts, work assignments or delivery
orders which may be monitored at any one time. The current limitations are
set forth on pages 23-25 . All such limitations are subject to waiver by the
Director, PCMD. Application for waiver must be made directly to PCMD.
(5) Other Government Personnel.
Many other EPA employees are involved to varying extents in the
administration of a contract. Some of these are summarized below:
(a) Contract Specialist. This individual works under a Contracting
Officer, processes all contract documents, and generally performs the
same functions without signatory authority. Contract Specialists
often work more closely on day to day, routine issues with Project
Officers than does the Contracting Officer, who has the ultimate
PCMD 9/89
39
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responsibility for the contracting process and performance on many
contracts.
(b) Property Administrator. This is an EPA employee designated by the
Contracting Officer to administer property for contracts under which
Government property is involved. The Property Administrator is
responsible for evaluating the adequacy of the contractor's property
procedures, and for keeping track of all Government property in the
possession of the contractor. (See Chapters 7 and 11 for details).
(c) Accounting Technician. An accounting technician is the person in
the disbursing office who processes contractor's vouchers for
payment. The accounting technician ensures that the Project Officer
has determined that the payment request is commensurate with the
goods received or services performed before notifying the Treasury
Department to pay the contractor.
(d) Cost Analyst/Auditor. From time to time during contract perfor-
mance, major modifications require the submission of a contractor's
cost proposal. A cost analyst and/or auditor is needed to analyze the
proposal, element by element, and provide recommendations to the
Contracting Officer. This individual often provides advice concerning
salary rates, indirect expenses, and consultant or subcontract costs,
and may, if the contract is large enough, perform a purchasing
system review and a financial management review.
(e) Procurement Analyst. A member of the Quality Assurance staff of
PCMD ("the Blue Team") will review the contract administration
activities on all active contracts over $5 million, to determine if
appropriate and effective management techniques are being employed.
Files of both Contracting Officers and Project Officers and Delivery
Order Officers will be reviewed for this purpose, and a report will be
issued on the findings of this review. See pages 28-34 for a sample
of the Project Officer's checklist used in such reviews, together with
a listing of contract administration areas of review.
2.5 Acquisition Regulations
Contracting personnel have a wide variety of regulations and policies to follow.
EPA contracting personnel and others who deal with contracts are governed by all of the
following:
(1) The Federal Acquisition Regulation (FAR) is a single common regulation
for use by all executive agencies in their acquisition of supplies and services
with appropriated funds.
The FAR System was developed in accordance with the requirements of the
Office of Federal Procurement Policy Act of 1974, as amended by Public Law
96-83. The FAR was issued within applicable laws under the joint
authorities of the Administrator of General Services, the Secretary of
Defense, and the Administrator for the National Aeronautics and Space
Administration, under the broad policy guidance of the Administrator for
Federal Procurement Policy. The FAR is codified as Chapter 1 of Title 48 of
the Code of Federal Regulations with an effective date of April 1, 1984.
PCMD 9/89
40
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(2) The Environmental Protection Agency Acquisition Regulation (EPAAR)
implements the FAR where further implementation is needed for EPA and
supplements the FAR when coverage is needed for subject matter not covered
in the FAR. The EPAAR is codified as Chapter 15 within Title 48 of the Code
of Federal Regulations. In addition, EPA has established acquisition policies
and procedures that are disseminated through the EPA Contracts Management
Manual and the Acquisition Handbook. The EPAAR generally is reserved for
those items implementing and supplementing the FAR and for policies and
procedures that affect the public.
(3) The Contracts Management Manual (CMM) in EPA Directive 1900 is
. reserved for subjects of particular interest to Project Officers and other
program personnel involved in the acquisition process as well as acquisition
personnel. It generally does not address contractual relationships.
(4) The Acquisition Handbook is used for subjects of primary interest to
acquisition personnel in addition to those items already contained in the FAR
and EPAAR.
Copies of the FAR and EPAAR can be purchased from the Government Printing
Office. The CMM and Acquisition Handbook can be obtained from G-100 at Headquarters.
Your contracting officer will also usually have a reference copy of these reguations or
manuals, as does PCMD at 382-5024,
PCMD 9/89
41
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ELEMENTS AND TYPES
OF CONTRACTS
PCMD 9/89
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43
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MAJOR ELEMENTS
OF GOVERNMENT CONTRACTS
1. ADMINISTRATIVE DETAILS
Name/Address of Contractor, Names Of
Contracting Officer, Project Officer, Contract
Specialist, Address Of EPA Paying Office, Etc.
2. CONTRACT PARAMETERS
Contract Amount, Period Of Performance,
Level Of Effort Or Minimums/Maximums,
Options.
3. WORK REQUIREMENTS
Statement Of Work, Reporting Requirements,
Personnel Qualifications, Other Technical
Details.
4. STANDARD TERMS AND CONDITIONS
Changes, Disputes, Terminations, Etc.
5. SPECIALIZED TERMS AND CONDITIONS
Award Fee Plan, Key Personnel Lists,
Subcontract Approvals, Etc.
PCMD 9/89
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45
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ORDER OF PRECEDENCE
If There Is Inconsistency In The Solicitation Or
Contract, The Order Of Precedence For Resolving
That Inconsistency Is As Follows:
a. The Schedule (Excluding Specifications)
b. Representations And Instructions
c. Contract Clauses
d. Other Documents, Exhibits & Attachments
e. The Specif ications
NOTE: Specifications Contained In The Statement Of
Work Receive Lowest Preference And Are Overriden
By All Other Contract Terms And Conditions.
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SIGNIFICANT "BOILERPLATE" CLAUSES
1. Limitation of Cost
2. Limitation of Funds
3. Level of Effort/Cost
Reimbursement Term
4. Work Assignments
5. Fixed Fee
6. Order of Precedence
7. Award Fee
8. Ordering By Designated
Ordering Officers
9. Fixed Rates For Services -
Indefinite Delivery/Indefinite Quantity
Contract
10. Technical Direction
11. Key Personnel
12. Organizational Conflicts of Interest
PCMD 9/89
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SIGNIFICANT "BOILERPLATE" CLAUSES
13. Subcontracts
14. Monthly Progress Report - Cost-Type
15. Monthly Progress Report - Time & Materials
Or Labor-Hour Or Indefinite Delivery/Indefinite
Quantity Fixed Rate Services Contract
16. Option To Extend the Term of the Contract -
Cost-Type Contract
17. Option For Increased Quantity - Cost-Type
Contract
13. Inspection of Services - Cost-Reimbursement
19. Inspection of Research & Development -
Cost-Reimbursement
20. Inspection - Time And Material & Labor-Hour
21. Changes - Cost-Reimbursement
22. Changes - Time-And-Materials or Labor-Hour
23. Notification of Changes
PCMD 9/89
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TYPES OF CONTRACTS
1. Fixed Price
2. Cost Reimbursement (Cost, Cost-Plus-
Fixed-Fee, Cost-Plus-Award-Fee)
3. Time-And-Materials
4. Labor Hour
5. Indefinite Delivery/Indefinite Quantity
NOTE: Letter Contracts are preliminary
contractual instruments which may be
definitized as any of the above types.
PCMD 9/89
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CONTRACT
FIRM
FIXED
PRICE
(FFP)
COST-PLUS-
FIXED-FEE
(CPFF)
COST-PLUS-
AWARD-FEE
LABOR-HOUR
AND TIME-
AND-
MATERIALS
(L-H, T&M)
INDEFINITE
DELIVERY/
INDEFINITE
QUANITY
CID/IQ)
MD 9/89
FEATURES
Goverment pays fixed
price (established before
award) which is not
subject to any adjustment
regardless of contractor's
cost experience.
Government pays allowable
cost plus a negotiated,
fixed fee (profit).
Fixed fee does not vary
with actual costs, but
may be adjusted for
changes in work to be
performed. May be
completion or term form.
Government pays allowable
cost plus base fee (does
not vary with perform-
ance) and all or part of
an award fee (based on
subjective government
evaluation of contractor's
performance). Evaluation
and payments of award fee
made periodically
(usually every 3-4 months)
during performance.
Government pays a fixed
rate for each hour of
direct labor worked by
contractor, up to a
negotiated ceiling on the
total price. (Time-and-
materlals contracts also
provide for payments for
materials at cost).
Indirect costs and profit
are all incorporated in
the fixed hourly rates.
Contract is somewhat
open-ended, i.e., does
not specify delivery or
performance terms.
Payments may be on a fixed
price, cost reimbursable,
fixed rate per item or
service, or a labor-hour
basis. Orders are placed
against the contract
after award. Indefinite
quantity contracts
provide for a "minimum"
and a "maximum" quantity.
APPLICABILITY
Used when:
1). There are reasonably
definite design or
performance
specifications
and
2). A fair and reasonable
price can be
established at the
outset.
Used where performance
is uncertain and accurate
cost estimates are
impossible.
Used where a cost
reimbursement contract is
appropriate and it is
important that contractor
be provided motivation
for excellence in
contract performance
in areas such as
management, quality,
timeliness, ingenuity,
and cost effectiveness.
Usually used for contracts
with a total value of
greater than $5 million.
Used typically for
engineering and design
services, repair,
maintenance or overhaul
work, or in emergency
situations. Least
preferred contract type.
Must have appropriate
government surveillance
during performance.
Used when the exact time
and/or place of delivery
is not known at the time
of contracting. May be
used for either supplies
or services.
q_g
O W
ADVANTAGES' 16
CONTRACTOR
1). Potential for
higher profit
2). Minimum government
control
3). Fewer administra-
tive cost
1). Low risk
2). Risk of loss of
government proper-
ty transferred
1). Possibility of
increased fee
2). Reward for good
management and
good performance
3). Limited risk
1). Potential to
maximize profits
2). Minimal risk
1 ) . Guaranteed
minimum quantity
(unless govern-
ment terminates
contract).
2). Potential to
maximize profits
depending upon
payment provi-
sions.
DISADVANTAGES' TO
CONTRACTOR
1). Greater assumption
of financial and
technical risks
2). Vigilance required
to Initiate and
substantiate change
claims
1). Maximum control by
government
2). Lower fees because
of lower risks.
1). Limit on fee
(usually 10Z)
2). Complexity of
negotiations
3). increased burden
to "prove" itself
A). Performance may
be affected by
government moni-
toring/ technical
direction
1). Constant government
surveillance.
1). No control over
scheduling of
orders
2). No guarantee of
orders beyond
contract minimum.
3). Possible substan-
tial amount of
government
surveillance,
depending upon
payment provisions
4). Requires high
degree of manage-
ment invol v«50nt .
-------
FIRM FIXED PRICE CONTRACTS
1. Government Pays Fixed Price (Established Before
Award) Which Is Not Subject To Adjustment
Regardless Of Contractor's Cost Experience
2. Used When:
- Reasonably Definite Design Or Performance
Specifications
- A Fair & Reasonable Price Can Be Established At
The Outset
3. Advantages to Contractor:
- Potential For Higher Contractor Profits
- Minimum Government Control
- Fewer Administrative Costs
4. Disadvantages to Contractor:
- Greater Assumption Of Financial/Technical Risks
- Vigilance Is Required To Initiate And Substantiate
Change Claims
5. Advantages To Government:
- Contractor Bears Risk Of Performance; Government's
Risk Is Fixed And Limited
6. Disadvantages To Government:
- No Right To Issue Technical Direction
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FAMILY OF COST-TYPE CONTRACTS
1. COST ONLY
2. COST PLUS FIXED FEE*
3. COST PLUS AWARD FEE*
4. COST PLUS INCENTIVE FEE
5. COST SHARING
Commonly Used At EPA
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COST-PLUS-FIXED-FEE CONTRACTS
1. Government Pays Reasonable, Allowable & Allocable
Costs Plus A Negotiated Fixed Fee (Profit). Fixed Fee
Does Not Vary With Actual Costs, But May Be Adjusted
For Changes In Work To Be Performed.
2. Used When:
- Performance Desired Can't Be Clearly Specified,
And
- Accurate Cost Estimates Are Impossible
3. Advantages to Contractor:
- Lower Cost Risk (Best Efforts Only)
- Reduced Liability For Government Property
4. Disadvantages to Contractor:
- Maximum Involvement By Government
- Lower Fee (Profit) Because Of Lower Risks
5. Advantages to Government:
- Greater Flexibility, Greater Control
6. Disadvantages to Government:
- Government Assumes Greater Risk
- Greater Resources Required To Monitor Costs
And Performance
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COST-PLUS-AWARD-FEE CONTRACTS
1. Government Pays Reasonable, Allowable & Allocable Cost
Plus A Base Fee (0% to 3%) That Does Not Vary With
Performance And An Award Fee Based On Subjective
Government Evaluation Of Contractor's Performance.
2. Used When:
- Cost-Reimbursement Contract Is Appropriate,
- Important To Motivate Contractor To Excellence
- Contract Value Usually Greater Than $5 Million
3. Advantages To Contractor:
- Possibility Of Increased Fee
- Reward For Good Management And Good Performance
4. Disadvantages To Contractor:
- Complexity Of Negotiation
- Increased Burden To "Prove" Itself
- Award Fee May Be Affected By Government
Monitoring/Technical Direction
5. Advantages To Government:
- Ability To Reward Good Performance
6. Disadvantages To Government:
- Evaluation Process Is Time-Consuming
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FORMS OF
COST-REIMBURSEMENT
CONTRACTS
1. COMPLETION FORM: Describes The Scope Of
Work To Be Done As A Clearly Defined Task Or Job,
With A Specific End Product Required.
2. TERM FORM (LEVEL OF EFFORT): Describes The
Scope Of Work To Be Done In General Terms And
Obligates The Contractor To Devote A Specified
Level Of Effort For A Stated Period Of Time. Specific
Tasks Are Assigned ToThe Contractor Through
Issuance Of Work Assignments.
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TIME-AND-MATERIALS AND
LABOR-HOUR CONTRACTS
1. Government Pays A Fixed Rate For Each Hour Of Direct
Labor Worked By Contractor, Up To Negotiated Ceiling
On The Total Price. (Time-And-Materials Contracts Also
Provide For Payments For Materials At Cost.) Indirect
Costs And Profit Are Included In The Fixed Hourly Rates.
2. Used For Engineering And Design Services, Repair,
Maintenance Or Overhaul Work, Or In Emergency
Situations.
3. Advantages To Contractor:
- Potential To Maximize Profits
- Minimal Risk
4. Disadvantages To Contractor:
- Constant Government Surveillance During
Performance
5. Advantages To Government:
- Greater Flexibility And Control
6. Disadvantages To Government:
- Potentially High Cost To Government In Terms Of
Cost And Government Surveillance Required
- LEAST PREFERRED CONTRACT TYPE
PCMD 9/89
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LABOR RATE CALCULATION
FOR LABOR-HOUR CONTRACTS
Basic Hourly Rate: Ranges from $14 - $16
Category Average: $15
Fixed Loaded Rate = $32.40
LABOR
INDIRECT COSTS
Ǥ> 100%)
PROFIT
TOTAL
CATEGORY
AVERAGE
$15.00
$15.00
$ 2.40
$32.40
JOHN S.
$14.00
$14.00
$ 4.40
$32.40
SUE T.
$16.00
$16.00
$ .40
$32.40
With The Category Average, The Contractor Earns
8% Profit.
With John S.s The Contractor Earns 15.7% Profit.
With Sue T., The Contractor Earns Only 1.25%
Profit.
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INDEFINITE DELIVERY/INDEFINITE
QUANTITY CONTRACTS
1. Orders Are Placed Against The Contract After
Award. Orders Specify Time And Place Of
Delivery And Quantity To Be Delivered.
2. Three Types:
Definite Quantity - Definite Quantity Of Specified
Supplies Or Services For A Fixed Period.
Requirements - Filling All Requirements For
Specific Supplies Or Services During
Contract Period; Sets Maximum Limit; May
Set Minimum.
Indefinite Quantity - Indefinite Quantity Of
Specified Supplies Or Services, Providing
For A "Minimum" And A "Maximum" Quantity.
3. Used When The Exact Time Or Place Of
Delivery, Or Quantity Required, Is Not Known At
Time Of Contract Award. May Be Used For
Either Supplies Or Services.
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INDEFINITE DELIVERY/INDEFINITE
QUANTITY CONTRACTS (Cont.)
4. Advantages to Contractor:
- Guaranteed Minimum Quantity
- Potential To Maximize Profits
5. Disadvantages to Contractor:
- No Control Over Scheduling Of Orders
- No Guarantee of Orders Beyond Contract
Minimum
- Possible Substantial Amount of Government
Surveillance
- Requires High Degree of Management
Involvement
6. Advantages To Government
- Guarantees Government Ability to Purchase
Within Contract Range (Minimum and Maximum
Quantity)
- Great Flexibility And Control Over Scheduling
Of Orders
7. Disadvantages To Government
- Requires Government Purchase Of Minimum
Quantity At Specified Price
- Requires Substantial Amount of Government
Surveillance
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59
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MAJOR EPA PROCUREMENT CLASSES
1. Mission Contracts
Large, Multi-Year Contracts (Base Plus One
Or More Option Years) With Broad Statements
Of Work, Exercised By Issuing Work
Assignments/Task Orders. Typically Are
Term Level Of Effort (LOE) Contracts, But
May Be Designed to Enable Issuing Of
Fixed Price, Completion or Term Form
Cost Plus Task Orders. Advantages Of
Flexibility And Continuity.
2. Non-Mission Contracts
Contract Statement Of Work Specifies Desired
Performance Without Further Clarification.
May Be Any Type Of Contract.
3. Small Purchase Orders (<$25.000)
Method To Procure Products Or Services
Valued At Less Than $25,000. Expedited
Procurement Procedures.
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METHODS OF DEFINITIZING
CONTRACTS
1. Work Assignment
Defines Work To Be Performed (Services/Products
To Be Provided) By Contractor Under Broadly Defined
Task In Mission Contract. Must Be Signed By Project
Officer, Contracting Officer And Contractor.
2. Delivery Order
Specifies Products To Be Delivered By Contractor
Under Time & Materials-Type Contracts (Basic
Ordering Agreements). Must Be Signed By Delivery
Order Officer (With Warrant) And Contractor.
3.
Task/Technical Directive
Used To Definitize A Broad Work Assignment Or Delivery
Order And/Or Give Technical Direction To Contractor.
(Also Called TDM's, Or Technical Direction Memoran-
dum; TID's, Or Technical Instruction Directive). May
Take The Form Of A Formal Agreement Where Provisions
Have Been Made For Contractor Signature.
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SAMPLE
WORK ASSIGNMENT ACTION REQUEST
CONTRACT NUMBER
CONTRACTOR
WORK ASSIGNMENT NO:
AMENDMENT NUMBER _
WORK ASSIGNMENT TITLE:
PURPOSE:
COMMENTS:
[ ] Initiate Work Assignment
[ ] Approve Work Plan:
[ ] Extend Completion Date to:
[ ] Other:
[ ] Amend Work Assignment () SOW () LOE
[ ] Amend Work Plan {) SOW () LOE
[ ] Disapprove Plan
[ ] Closeout
ESTIMATED LEVEL OF EFFORT (WA)
APPROVED LEVEL OF EFFORT (WP)
CUMULATIVE LEVEL OF EFFORT
PERIOD OF PERFORMANCE:
GOVT COST ESTIMATE.
APPROVED AMOUNT _
CUMULATIVE AMOUNT.
_* through _
(*Date of Contracting Officer Signature unless otherwise specified)
APPROVALS
I have thoroughly reviewed the attached and find that (initial where appropriate):
1. The work assignment (a) gives the contractor clear direction and describes needed, useful
deliverables
2. The work plan
(b) is essential to achieve our technical g0gls
(c) is within the scope of the contract
(a) has sufficient steps to achieve the work goals
(b) proposes costs/labor hours that are reasonable and commensurate with the
work assignment
(c) is within the statement of work
(Signature)
(Date)
(Matt Code)
(Phone #)
Work Assignment Manager
Project Officer
Branch Chief/Section Chief
Contracting Officer
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INSTRUCTIONS - WORK ASSIGNMENT ACTION REQUEST
Be brief and follow the format provided. Always abide by the "Restrictions on the
Work Assignment Manager/Project Officer" to "never give direction to the Contractor
that will increase the level of effort or change the authorized Statement of Work."
WORK ASSIGNMENT REQUEST FORM
The Work Assignment Action is completed for all actions requiring Contracting
Officer approval. Contact the Project Officer for additional assistance.
Work Assignment Manager (or Task Manager on his/her behalf) should complete the
form.
- Indicate the appropriate contract, work assigneraent and/or amendment numbers.
- Assign a short, descriptive title.
- Check the purpose(s) of the action; if it involves an amendment, indicate
whether it amends the scope of work (SOW), level of effort (LOE) or both.
- Use the comments section to elaborate on "other" or clarify the purpose,
or to indicate need for rapid processing, etc., if applicable.
- If a Work Assignment: indicate the estimated level of effort, government
cost and period of performance (leave the first blank blank, and write
the completion date in the second blank).
- If a Work Plan; fill in all. estimates, both the estimated, approval and
cumulative levels of effort and amounts. The period of performance for
an amendment is the original work assignment date through the desired
completion date, which may or may not be the same as the original work
assignment date.
- Approvals; The work assignment manager, project and contract officers
are required to initial l(a)-l(c) for work assignments, and 2(a)- 2(c) for.
work plans, and to sign, date, etc. the form. The branch chief or section
chief, whoever is appropriate, initials only l(a) and (b) or 2(a), as
appropriate, and signs, dates, etc., the form, to indicate their knowledge
and approval.
- Attach Work Assignment Statement of Work
STATEMENT OF WORK
A Statement of Work in the following format should accompany each request for a
Work Assignment or Amendment. (See following page.)
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64
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STATEMENT OF WORK
CONTRACT/WA/AMENDMENT NUMBERS:_
CONTRACTOR NAME
1. Title; Make it short, descriptive and the same as on the Request Form.
2. Estimated Period of Performance; State it as the "Effective date of work
assignment until (insert required completion date)." Performance normally
cannot extend beyond the effective contract option period which usually
ends September 30.
3. EPA Work Assignment Manager; Include the full name, address, room number,
mail code and commercial and FTS telephone number of the person who will
responsibly manage the work assignment (WA). This is not to be confused
with the EPA Project Officer for the entire contract.
4. Background; Briefly summarize any history leading to the need for this
work, indicate the purposes of the work, identify benefits, and include
any other information linking the work to the Office of Emergency and
Remedial Response.
5. Scope of Work; Identify and number the tasks sequentially to be performed
•by the Contractor. Specify the required completion date for each task and/or
deliverable to be produced, and provide deliverable specifications, if any.
Work requirements shall clearly establish the contractor's responsibility
by using the explicit working: "The Contractor shall...." Work assignments
will not be issued based on poorly written work statements.
6. Schedule of Deliverables; Normally in a table, summarize the tasks required,
deliverables to be produced, and expected delivery dates. Tasks listed
should match or be abbreviated forms of tasks titles in scope of work.
7. Special Reporting; Contract Articles routinely require a work plan (including
QA), monthly progress, deliverable and financial reports, and a final report
for each work assignment. Specify only special reports, quantities and
addresses. If there are no special reporting requirements, indicate "None".
8. Genera1; List if: (a) Confidential Business Information is disclosed to
the Contractor; (b) The Contractor uses Government furnished equipment, date
or facilities; (c) expert testimony is expected; (d) release of information
and results of the Contractor is restricted; (e) credentials for right-of-
entry as required; and (f) other conditions necessary for project performance.
9. Suggested Skills Mix and Level of Effort; Identify EPA's best estimate of
the professional (nonclerical) direct labor hours necessary to perform the
requested work. Break it down by labor category and then totaled. Note
any special qualifications needed, if any.
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65
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ORDER FOR SUPPLIES OR SERVICES
IMPORTANT: Mark all
package* and paper* with contract and/or order numbtn.
1« DATE Of ORDER
5. ISSUING OFFICE (Addn
2. CONTRACT NO. (Iftnt)
at eorrftpondmo* to)
3. ORDER NO.
PAGE
1
|
4. REQUISITION/REFERENCE NO.
«. SHIP TOi (Contttn** fnd oddnu, ZJT Cod*)
SHIP VIA:
7. TO: CONTRACTOR (N*m*. addntt end Ztf Cod*)
•. TYPE OF ORDER
D
A. PURCHASE — Reference your .
PIMM furnHlt the following on ttw terms and condi-
tions specified on both sides of this order and on the
attached sheets. If any. Including delivery as Indi-
cated. TN* purchase Is MgotlaMd undar autnority oft
D
B. DELIVERY — Except for billing Innructlont
on UM rav*r«*, tnrt dtllvary order K uiblcet to In-
structions contained on tnis tide only of this form
and Is Issued subject to tne terms and conditions of
the above-numbered contract.
•. ACCOUNTINO AND APPROPRIATION DATA
12. F.OM. POINT
13. PLACE OF INSPECTION AND ACCEPTANCE
10. REQUISITIONING OFFICE
11. BUSINESS CLASSIFICATION (Chick appropriate box(**)) -
OTHER DIS-
I — 1 I — 1 THAN I — 1 ADVAN- f— 1 WOMEN-
1 1 SMALL 1 1 SMALL 1 1 TAGED 1 1 OWNED
14. GOVERNMENT B/L NO.
19. DELIVER TO F.O.B. POINT
ON OR BEFORE (Dot*)
16. DISCOUNT TERMS
17. SCHEDULE IS* mrat for Rtjtetiomt
ITEM NO.
(A)
SM* BILLING
INSTRUCTIONS
ON
JtaTVSJUff
SUPPLIES OR SERVICES
(B)
18. SHIPPING POINT 119. GROSS SHIPPING WEIGHT
QUANTITY
ORDERED
(C)
UNIT
(D)
UNIT
PRICE
2O. INVOICE NO.
21. MAIL INVOICE TO: (Inelud* ZtP Cod*)
22. UNITED STATES OF AMERICA »w
BY WfiMftuv) ^
AMOUNT
(F)
QUANTITY
ACCEPTED
(G)
17(H).TOT.
^ (Cont.
•^ pot**)
170).
.4 GRAND
TOTAL
23. NAME tTyOfd)
TITLE: CONTRACTING/ORDERING OFFICER
NSN 7540-01.1S2-OK3
90347-101
OPTIONAL FORM 347 (lO-«3)
Prescribed by GSA
FAR (44 CFR) S3.213(e)
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PURCHASE ORDER TERMS AND CONDITIONS
522522. ..CLAUSES., INCOHEORAJSD. -BY.._aEEERENCE
(Apr 84h-^Tfiis contract incorporates the following clauses by' ref-
erence with the same force and effect as if they were given in full
textrtJpon request Ihe'Co'ritracting Officer will'make their fulHext
available:
FEDERAL ACQUISITION REGULATION (48 CFR CHAP-
TER!) CLAUSES
' S2.203-1
~52.203-3
'52.212-9
*Sa?222-3>
52.T22-4"
Offtciars-ttot to Benefif(Apr84)
oratuities(Apr84);
C6venant'Agair)'st Contingent Fees (Apr 84)
Variation in Quantity (Apr 84)
{In lha preceding- clause _lfaa permissible varia-
tions are=stated- in the-.schedule)
Convict Labor lApr. 84)
CoTttraCTWffflTTIoTJrs^nil^feTESlafiaarxJrAct-
Overtime Compensation-General (Apr 84)
52.222-.7ff
52.222-36
52.222-40
52.222-41
52.225-3
5Z232-1
52.232-8
52.233-1
52.243-1
52.249- !
Affirmative Action for Handicapped Workers
tApr84)
Service Contract Act of 1965-Contracts of
$2500 or Less (Apr 84)
Service Contract Act of 1 965 (Apr 84)
Buy American Act-Supplies (Apr 84)
Payments (Apr 84)
Discounts for Prompt Payment (Apr 84)
(With Alternate 1)
Disputes (Apr 84)
Changes - Fixed Price (Apr 84)
(Fixed Price) (Short Form) (Apr 84)
NOTE.—If desired, this order (or a copy, thereof) may be used by the Contractor as the Contractor's invoice, instead of a separate invoice,
provddeoi.thefollowing.stafetrient; (signedvahdtlated) is on (or attached to) the order: "Payment is requested in the amount of $
No otne'r'lhvoice will peistib'mitted." Howevef. if;.the_Cojitractor._vyishes.jo_ subm.itan invoice^.tha.fpll.o.wing.infQrmationmust.be provided:.
contract number (If'any)-, order number,. Item. numbers), description "of supplies"'or'services, sizes, quantities, unit prices, and extended-
totals. Prepaid shipping costs will be indicated as a separate item on the invoice. Where shipping costs exceed $10 (except for parcel post),
the billing must be supported by a bill of lading or receipt. When several orders are invoiced-tO:aivoTdEringactivityTtluring,thesarnebiJling
period, consolidated periodic billings are encouraged.
•flEeEJVING-FfEPORT
Quantity tn-the "Quantity-Accepted1'' column-on-the facs-of-thts-ofder-has-beefvf-t^J-ifwpectedr • -L_J-accepted-,- -I
conforms to contract. Items listed below-have been rejected for the reasons indicated.
t received-by-me-and
SHIPMENT
NUMBER
PARTIAL
FINAL
TOTAU CONTAINERS
GROSS WEIGHT
DATE RECEIVED
RECEIVED AT
SIGNATURE OF AUTHORIZED U.S. GOVT. REP.
DATE
TITLE
REPORT OF REJECTIONS
ITEM NO.
..
e
£«
, f
SUPPLES OR snavic=s
•
e _ , ,, _ _M .„ . „ _ ,_,
,
,
•*
•JNI7
.
_
Q'JANTITV
REJECTED
,
REASON FOR REJECTION
.
- .
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OPTIONAL FORM 347 BACK (1O-M)
68
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Sample
TASK DIRECTIVE
CONTRACTOR:
CONTRACT NO:
WORK ASSIGNMENT NO:
TASK NO:
DATE OF DIRECTIVE:
TD NO:
MAXIMUM HOURS
AUTHORIZED:
ESTIMATED COST:
DUE DATE:
TASK TITLE:
DESCRIPTION OF TASK:
SPECIFIC TASK ACTIVITIES/DELIVERABLES
[ ] ADDITIONAL SCOPE ATTACHED
DEADLINES
COMMENTS:
AUTHORIZING:
TASK MANAGER:
SIGNATURE
DATE
PHONE NO
WORK ASSIGNMT MGR:
PROJECT OFFICER:
RECEIVED BY:
[ ] Accepted [ ] Rejected [ ] Accepted With Exceptions (Attached)
CONTRACTOR:
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INSTRUCTIONS FOR COMPLETING TASK DIRECTIVE
Purpose
The Task Directive is used to give technical direction to the contractor in
the conduct of a task which has not been explicitly defined in the work
assignment in terras of either the specific activity(ies) or approach
desired, the deliverable(s), the due date(s) and/or the level of effort. It
can also be used to further clarify the task articulated in the work assignment.
Form Completion
Be brief and follow the format provided. Always abide by the "Restrictions on the
Work Assignment Manager/Project Officer" to "never give direction to the
Contractor that will increase the level of effort or change the authorized
Statement of Work."
I. Complete all standard information in the top blocks.
- Task Directive Number; For any given task, the numbering should begin
with the number 1, and be assigned chronologically by task. (For purposes
of computerized recordkeeping, the TD number should be a combination of
the work assignment number, the task number, and the next available TD
number associated with the task, beginning with the number 1, (e.g.,
TD8-3-2 represents Work Assignment 8, Task 3, Task Directive #2.) The
TD number should be verified by the Work Assignment Manager.
- Date of Directive; Should be filled in by and be the date signed by the
work assignment manager, unless project officer authorization is required,
in which case it is completed by the project officer.
2. Task Title: Should either match the title of the task in the work assignment,
or if the work assignment task title is overly broad, be written as a
short description of the specific task or activity desired.
3. Description of Task; Give a general description of the overall task.
4. Specific Task Activities/Deliverables: State concisely the activities to
be performed and resulting deliverables to be produced, numbered sequentially
in the order of desired performance. If there is insufficient space,
put an "X" in the "Additional Scope Attached" and continue on an attachment.
5. Deadlines; Should be numbered to match the activities/deliverables and
located parallel to the particular activity/deliverable.
6. Comments; State any additional requirements, e.g., reporting, methodology.
7. Authorizing; Must be signed by the task manager and work assignment
manager for all tasks. Project officer signature is required only when
the task directive is used to exercise a broad "Other support" task in
a work assignment.,
8. Task directives must be signed and dated by the contractor.
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(Shaded arats art for ust of procurement sffssa enfyl
Washington. DC 20480
Procurement
Request/Order
&EPA
ot Originator
3. Mail Code
4. Telephone Number
Pan*
L Oftf of ncqutfttiofl
5. Date Item Required
6. Signature) of Originator
7. Recommended Procurement Method
D Competitive LJOther than lull and open compMitun LJ Sole Mure* small purchua
8. Deliver To
9. Address
10. Mail Code 11. Telephone Number
12.
Financial
Dan
a. Appropriation
b. Servicing Finance Office Number
NOTE: Item 12(d) Document Type — Contract = "C."
Purchase) Order = "P"
... FMOUse ..
(3113 dig**!
Document
Control Number
Account Number
W (10 digits!
Object
Class
Amount (h)
Dollars
Cent
13. Suggested Source (Htm*. Addm*. OP Cod*. fhoam/Comma)
14. Amount of money
committed it:
Q Original
DIncrease
D Decrease
18. For Small Purchaaea Only: Contracting Office is autho-
rized to exceed the amount shown in Block 12(h)by 10% or
S100. whichever is less.
Dves DNO
16. Approvals
*. Branch/Office
Oat*
d. Property Management Officer/Designee
Date
). Division/Office
Data
«. Other /Specify]
Data
c. Fund* listed in Block 12 and Block ISJiftnrJ are
available and reserved. (Signtturt o/Ctrt/fying Offieit.
Data
f. Other (Specify)
Date
17. Data of Order
18. Order Number
19. Contract Number litany)
20. Discount Terms
21. FOB Point
22. Delivery to FOB Point by On or before (Date)
23. Person Taking Order/Quote and Phone No.
24. Contractor (Name, addnss. ZIP Coda)
25. Type of Order
O a. Purchase
Reference your quote (Se» block 23)
Please furnish the above on the terms specified on both sices of this order and on
the attached sheets, if any, including delivery as indicated.
O b. Delivery provisions on the reverse are deleted. The delivery order is
subject to the terms and conditions of the contract. tS*e Block 191
C. O Oral O Written O Confirming
26. Schedule
Hem
umto
(a)
(W
Quantity
Ordered
(c)
Unit
(d)
Estimated
Unit Price
(a)
Unit
Price
(f)
Amount
(g)
Quantity
Accepted
(h)
Total*
7. United Statea of America
By tSigmturtf
28. Typed Name and Title of Contracting Officer
EPA Form 19OO-8 (Rev. 9-86) Previous editions are obsolete.
COPY 4-COMMITMENT CLERK (OBLIGATION COPY)
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Instructions for Completing EPA Form 1900-8
Procurement Request/Order
General:
This form is a 9-part interleaved set and is designed to be completed with an elite typewriter (12 pitch). The originating
office should complete all areas that apply. Shaded areas are reserved for Procurement use only. After completing the
form, in accordance with the instructions below, retain the copy marked for "Originator" and send the others through
required channels.
Item:
1 thru 6
7
8 thru 11
12
13
14
15
16
17 thru 25
26{a)
26(b)
26{c) and
26(d)
26(e)
26{f) and
26{g)
26(h)
27 and 28
Note:
Enter the originator's name, mail code, telephone number, date of requisition, signature of originator,'
and the latest date that the items can be delivered.
Self explanatory. Attach a justification for other than full and open competition or for sole source small
purchases.
Enter the name, address, mail code, and telephone number. If the person is the same as the originator,
leave blank.
Self explanatory. Failure to include the appropriation number, the number of the Servicing Finance
Office designated by the Financial Management Division for the accounting office which will record the
commitment and obligation, document type, document control number, account number, object class, or
dollar amount may result in the return of the request to the originator for completion of these items.
Special care should betaken to insure that all data placed in these blocks are accurate and appear legibly
on all copies as these data will serve to record the commitment of funds as well as to eventually obligate
the funds on the contract document. Note: Item 12(d) should be used to denote document type (DT) code,
i.e., C = EPA prime contract, P = EPA purchase or delivery order.
If more than 1 source is suggested, attach a list of the contractor's/vendor's name, address, and point of
contact (if known) for each source.
Self explanatory.
For Small Purchases Only: Check one box. If "Yes" is checked,the funds certifying official must commit
sufficient funds in the Document Control Register to cover the total potential amount of the obligation.
Self explanatory.
For procurement office use only.
Self explanatory.
The degree of detail required will vary with the complexity of the proposed procurement. Each request
shall contain sufficient information on its face to process the request. If the proposed procurement is for
nonpersonal work or services, provide a title which specifically describes the work or services to be
procured and limit the title to sixty (60) positions, including the spaces between each word of the title for
computer input, and attach the documentation required in Chapter 2 of the Contracts Management
Manual. In other instances, describe the articlefs) requested in detail using manufacturer's mode*.
numbers and descriptions, if possible, and provide specification, quantity increment, delivery require-
ment, and special packaging or transportation requirements. (Use EPA Form 1900-8A, Continuation
Sheet, if additional space is required.)
Self explanatory.
Enter the estimated price of the item
For Procurement use only — Leave Blank.
Used for inspection and acceptance only.
To be completed by the contracting officer.
The contracting officer will complete the blocks marked "Invoice Address" and "Ship To" on copy 2 when
this form is used as a purchase order.
Remove this page before completing the Procurement Request.
EPA Forni 19OO-8 (R«v. 9-86) Previous editions are obsolete.
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Chapter 3
ELEMENTS AND TYPES OF CONTRACTS
This chapter discusses the basic elements of government contracts, and then
introduces the different types of contracts. It is important to understand the difference
between these types in order to perform effective contract administration. The various
terms and conditions applicable to each contract type point to different Government
responsibilities and different rights and obligations of both the contractor and the
Government.
3.1 Major Contract Elements
Contracts are comprised of several elements. The Statement of Work is only one
of these, although it is the one typically most familiar to program staff since it is
written by them. Project Officers, Work Assignment Managers and Delivery Order
Officers need to be familiar with all the elements, however, in order to effectively
manage their contracts. Terms and conditions contained in other parts of the contract
can have a major impact on contract management. EPA staff unfamiliar with these terms
may be in for a rude surprise, since these terms will override terms in the statement of
work.
The five major elements of a government contract include:
1. Administrative Details. These include such items as the name and address
of the contractor, the names of the contracting officer, project officer,
contract specialist, the address of the EPA Paying Office, etc.
2. Contract Parameters. These include information such as the amount of
the contract, the period of performance, the level of effort or the minimum
and maximum amount of work that can be ordered, option periods and
amounts, etc.
3. Work Requirements. This is the technical part of the contract most
familiar to program staff, and includes the statement of work, personnel
qualifications, and other technical details.
4. Standard Terms and Conditions. These are frequently termed the
contract "Boilerplate" -- clauses that are routinely included in government
contracts. These clauses are typically drawn from the FAR or EPAAR
discussed in Chapter 2, and deal with such critical matters as reporting
requirements, fees, technical direction, progress reports, contract changes,
etc. Many of these clauses are not written out in full in each contract, but are
rather "incorporated by reference." That is, they are listed by title and
clause number in the contract. They are nonetheless a valid part of the
contract.
The standard clauses used will depend on the type of contract involved. A list
of some of the more significant of these clauses is included on page 47, and a
number of the clauses are quoted and discussed throughout the course.
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5. Specialized Terms and Conditions. These terms are included above and
beyond standard terms and conditions to deal with matters peculiar to the
particular contract, e.g., the award fee plan, the list of key personnel,
subcontract approvals, etc.
Project Officers should not assume that the contract boilerplate is identical from
contract to contract. Changes in the FAR and EPAAR do occur periodically, and the
specialized terms and conditions included are unique to that particular contract.
Although Project Officers, Work Assignment Managers, Delivery Order Officers and
Delivery Order Project Officers generally take the time to familiarize themselves with
the contract parameters and work requirements, it is critical that they also be aware of
the standard and specialized terms and conditions. These latter terms may govern in
cases of inconsistency with the specifications included in the statement of work, as
described below.
3.2 Order of Precedence
The written terms of a contract govern, no matter what each party personally
understands the agreement to be. The Contracting Officer is the only person, outside the
courts or the Boards of Contract Appeals, who can or should interpret a contract on
behalf of the Government. Project Officers, Delivery Order Officers and other program
staff should always defer to the Contracting Officer when called upon to interpret the
meaning of any contract provision.
All EPA contracts include a clause entitled "Order of Precedence." This means
that, in the event of any inconsistency within the contract provisions, the following
portions, in order of precedence, will govern:
(1) the contract schedule (excluding the specifications);
(2) representations and other instructions;
(3) contract clauses (standard and specialized terms and conditions);
(4) other documents, exhibits and attachments; and
(5) the specifications (in the statement of work).
In other words, specifications contained in the statement of work receive lowest
preference and will be overridden by all other contract terms and conditions.
If a contract provision can be interpreted in more than one way, even after
applying the order of precedence shown above, it is termed an "ambiguity." Ambiguities
are almost always resolved in favor of the contractor, since the Government drafted the
document.
3.3 Types of Contracts
EPA uses a variety of different types of contracts. Each type has its advantages
and disadvantages, both for the government and the contractor. Some types are definitely
preferable over others, but may need to be used because of some characteristic of the
work to be performed. Hopefully for the technical contract manager, the contract type
selected is well-matched to the work to be performed.
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EPA uses five basic contract types: the fixed price contract; the cost-
reimbursement contract; time and materials contract; labor hour contract; and
indefinite delivery/indefinite quantity contract.
A summary of the various contract types and their characteristics is found on
page 50.
3.4 Firm Fixed Price Contracts
The firm fixed price contract provides for a price which is not subject to any
adjustment, regardless of the contractor's cost experience during performance. In a
firm fixed price contract, the specified price is paid to the contractor when the items
called for by the contract have been delivered and accepted. The statement of work or
contract specifications define the products to be provided or services to be performed.
3.4.1. When Used
This type of contract is used only when a definitive design or performance
specification or statement of work exists, and a fair and reasonable price can be
established prior to award. If major cost uncertainties are present, or definite
specifications are not available, a fixed price contract may not be awarded. Because the
contractor assumes full cost responsibility in a fixed-price arrangement, and because
this type of contract imposes a minimum administrative burden on both parties, it is
always the preferable type to use if conditions permit.
Fixed price arrangements are generally used fpr an entire contract. However, it
is possible to mix types of delivery orders under an indefinite delivery/indefinite
quantity contract. Small purchases (discussed later on page 86) are generally fixed
price contracts.
3.4.2. Issuance of Work
The statement of work in the contract or the contract specifications govern the
work. The statement of,work in the contract as originally written should be sufficiently
specific that there is no need for technical direction from the Government. Changes in
the statement of work can only be made through formal amendment, giving the contractor
the opportunity to renegotiate the price.
3.4.3. Government Responsibilities
The Project Officer is responsible for periodically evaluating the contractor's
progress to assure that time deadlines are met, and for inspecting the items to verify
that the quality requirements have been adhered to. The Government is entitled to
receive exactly what the contract requires, and the standard "Inspection" clause (see
page 297 ff) gives the Government the right to inspect all deliverables at any time,
whether at source or at destination. However, the clause also states that the Government
cannot unnecessarily delay the work by conducting inspections and tests. The
Government has no authority to provide technical direction under fixed price contracts;
technical direction that can be interpreted as Government interference can give the
Contractor a contract claim.
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The responsibility for acceptance belongs to the Contracting Officer, unless the
contract delegates that authority, in writing, to the Project Officer. (Most of EPA's
contracts do delegate the authority for acceptance to the Project Officer, but it must be
specifically stated in the contract before the Project Officer can assume responsibility
for that function.) Whoever performs this function must be thoroughly familiar with
the specifications or Statement of Work. Acceptance or rejection of all items must take
place as soon as possible after delivery. If a Project Officer has reason to reject any
item, he or she should contact the Contracting Officer immediately so official notification
to the contractor can be made and corrective action can be taken. The contractor must
correct the deficiency, or the Government has the right either to replace or correct the
defective good or services and charge the contractor the cost, or to require delivery of
the defective goods at a reduced price. The Government also has the right to terminate
the contract for default (see Chapter 14).
Project Officers must ensure that they expedite the handling and certification of
contractor vouchers, since delays can strain the contractor's financial ability to
perform, and can violate the provisions of the Prompt Payment Act (see Chapter 11).
The Government's obligation to make payment under fixed price contracts is
expressed in the standard "Payments" clause. Basically, this clause provides for
payment of the price(s) stated in the contract for supplies delivered and accepted, or for
services rendered and accepted, upon the submission of proper invoices or vouchers.
The clause also provides for payment for accepted partial deliveries when the amount is
at least $1,000, or 50 percent of the total contract price, whichever occurs first.
It is also possible to make progress payments if the contract so provides.
Progress payments are payments made as work progresses under a contract in order to
help the contractor finance performance of the work. These payments are based upon
costs incurred or percentage of completion, and are made before actual completion or
acceptance of the work.
3.4.4. Contractor Responsibilities
The contractor submits a bid to perform the work defined by the Government.
Once that bid is accepted, the contractor's responsibility is to deliver the product or
service at the bid price. If the contractor underbids the work to be performed, the
contractor must bear the loss. Fixed price contracts give the contractor a major
incentive for efficient performance.
3.4.5. Advantages/Disadvantages for Government
The advantages of fixed price contracts to the Government are high. The
contractor bears the risk of performance; the Government's risk is fixed and limited. If
the contractor fails to deliver, the Government simply doesn't pay. On the other hand,
the Government has no right to issue technical direction, and if the contractor is having
problems, the Government can't simply intervene. The Government can nonetheless use
its inspection authority to inspect the product being produced and point out deficiencies
or variance from the contract specifications.
Although the Government has no right to issue technical direction, it is
nonetheless essential to maintain some level of Government monitoring, particularly if
delivery of the product or service by a particular deadline is critical to the Government.
Although the Government can reject the product or service that fails to meet
specifications, and not pay the contractor until the product or service is correctly
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delivered, it is preferable to get the product on time. The Government can not simply
ignore oversight of its fixed price contracts.
3.4.6. Advantages/Disadvantages for Contractor
Fixed price contracts have numerous advantages for the contractor. If bid
properly and managed efficiently, there is potential for higher contractor profits than
the typical 7-10% range for cost reimbursement contracts. If the Government accepts
the contractor's bid of $20,000 and it actually only costs the contractor $15,000 to
perform, the contractor nets a 25% profit. On the other hand, the contractor assumes
the risk of getting the work done for the price bid, and if it costs the contractor
$22,000 to produce the product or service, the contractor loses money. There is a high
cost of error for the contractor, particularly if the contractor underestimates the
technical difficulty of the work.
Fixed price contracts also have the advantage of minimum government control and
oversight, and involve fewer administrative costs for the contractor. On the other hand,
the contractor has to be vigilant in initiating and substantiating change claims. If, for
example, the site conditions vary from those specified or presumed in the contract, the
contractor must ensure that a cost adjustment is made to account for those differing
conditions.
3.4.7 Other Aspects
As stated above, the fixed price of the contract or of a particular item in the
contract is not subject to adjustment by reason of actual contractor costs. The following
situations are examples of ones which might cause the price(s) to be adjusted:
(1) defective workmanship or material;
(2) latent defects;
(3) defective pricing data;
(4) assessment of liquidated damages;
(5) variations in quantity in excess of those permitted by the contract;
(6) partial or complete termination of the contract.
If any of these situations occurs, the Contracting Officer may have to modify the
contract to reflect a change in the firm fixed price.
3.5 Cost-Reimbursement Contracts
Cost-reimbursement contracts are exactly what they state: the Government
agrees to reimburse the contractor's cost of performance.
3.5.1 Cost Reimbursement Contract Types
There are five (5) different types of fee (profit) structures which are used with
cost-reimbursement contracts. This include cost-only, cost plus fixed fee, cost plus
award fee, cost plus incentive fee, and cost sharing contracts. The three (3) described
below are generally used at EPA:
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(1) Cost Contract - With this type, the contractor receives no fee at all.
Generally, such contracts are awarded primarily to educational institutions
and other nonprofit organizations. They may also be appropriate for
research and development work or for facilities contracts.
(2) Cost-Plus-Fixed-Fee (CPFF) - This is the most prevalent type of
cost-reimbursement contract awarded in this Agency. Under this
arrangement, the contractor is paid a negotiated fee that is fixed at the
inception of the contract. The amount of fee does not vary with actual cost,
but stays fixed unless adjusted as a result of changes in the work to be
performed.
(3) Cost-Plus-Award-Fee (CPAF) - A CPAF contract provides for a fee
consisting of 1) a fixed base amount, and 2) an award pool, the amount of
which awarded is based upon a subjective, judgmental evaluation by the
Government of the contractor's performance. Areas such as quality,
timeliness, ingenuity, and cost effectiveness are evaluated by EPA in
accordance with established criteria. The amount of award fee to be paid is
decided at stated intervals (usually every quarter or trimester) during
contract performance. The overall objective is to motivate the contractor in
a positive way to improve poor performance or to continue good
performance. This type of contract is considered for use when the expected
effort is anticipated to exceed $5 million and a cost-reimbursement contract
has been selected. However, it may be used for contracts of any dollar value.
Most Superfund cleanup contracts are CPAF contracts.
3.5.2 Forms of Cost-Reimbursement Contracts
Cost-reimbursement contracts of any of the types listed above can be structured
in one of two basic forms:
(1) The completion form is one which describes the scope of work to be done as
a clearly defined task or job with a definite goal or target expressed and with
a specific end-product required. This contract form normally requires the
contractor to complete and deliver the specified end-product (such as, a
final report of an analysis) as a condition for payment of the entire fixed fee
established for completing the work. The contractor is expected to complete
the work within the negotiated estimated cost. However, in the event the
work cannot be completed within the estimated cost, the Government may
elect to continue the work provided it increases the estimated cost. The
contractor then must complete the work at no additional fee.
(2) The term form (level of effort contract is one which describes the scope of
work to be done in general terms and which obligates the contractor to devote
a specified level of effort for a stated period of time. Under this form, the
fixed fee is payable at the end of the agreed-upon period of time provided the
contractor has exerted the level of effort specified in the contract in
performing the work called for, and such performance is considered
satisfactory by the Government. Extensions in periods of performance or
requirements for additional levels of effort are new acquisitions and involve
new fee and cost arrangements as well as adequate justification for other
than full and open competition or sole source awards.
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The completion form of contract, because of differences in obligation assumed by
the contractor, is generally preferred over the term form. Under a completion form
contract, prospective contractors are reasonably expected to complete all of the work
called for by the Statement of Work within the estimated cost.
3.5.3. When Used
The Contracting Officer will award a cost-reimbursement type contract when the
estimate of total costs negotiated is believed to be reasonable under the circumstances,
but because of the degree of uncertainties involved, a fixed-price arrangement is not
feasible. In this situation, the Government assumes the risk, and pays the contractor the
actual allowable costs incurred in the performance of the contract, up to the estimate of
total costs established at the time of negotiation. Beyond this amount, the contractor will
not be reimbursed and is required to stop work unless additional funds are provided and
continued work is authorized by the Contracting Officer. The contractor must have, or
establish, an accounting system that is acceptable to the Agency before being awarded a
cost-reimbursement contract.
Cost-reimbursement contracts are appropriate for research and development
activities (such as development of computer systems) where it is difficult if not
impossible to know in advance exactly what will need to be done, or how much it will cost
to do it..
3.5.4. Issuance of Work
Many EPA cost-reimbursement term form contracts are what are called "mission
contracts" discussed later in this chapter on page 13, and are very large, multi-year
contracts involving numerous rather broadly defined tasks. The contract is "definitized"
by means of issuing specific work assignments, which are, in turn, managed by Work
Assignment Managers.
3.5.5 Government Responsibilities
The Government has major responsibility for definitizing the cost-
reimbursement contract, as well as for providing technical direction and oversight. The
Government role in cost-reimbursement contracts requires a high degree of
involvement, and continuous evaluation of the status of work in progress.
The basic obligation of the Government under a cost-reimbursement contract is
to make payment to the contractor for the costs incurred during performance, plus
whatever amount of fee has been negotiated or awarded. The Contracting Officer must
determine the allowable costs in accordance with the principles set forth in FAR Part
31. Specific types of costs are unallowable in these regulations, such as interest on
borrowing, bad debts, entertainment, advertising costs unless need arises under the
contract, fines and penalties from violations of Federal, state or local laws, etc..
Under these principles, the Government also will pay the contractor only if the
costs claimed are reasonable and allocable. Reasonable costs are those of an amount and
type that would be incurred by an ordinarily prudent business person in a competitive
business, and must be consistent with the contractor's normal operating practices.
Allocable costs include 1) direct costs or expenses incurred specifically for
performance on that contract, and 2) a portion of indirect costs, which are expenses
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which cannot be assigned directly to a specific contract but which benefit the contract
indirectly.
Under a CPFF Contract, the contractor is paid a portion of the fixed fee with each
voucher until 85 percent of the fee has been paid. The remaining 15 percent of fee, or
$100,000, whichever is less, is withheld by the Agency until the final voucher is paid.
This amount is also withheld from the base fee amount of a CPAF contract.
3.5.5 Contractor Responsibilities
The contractor under cost-reimbursement contracts is not required to provide a
finished product meeting clearly defined specifications in order to get paid. The
contractor is only required^ to use the contractor's "best efforts" to provide the desired
performance. With term-form contracts, if the contractor's best efforts do not deliver
the desired performance, the contractor is not penalized. If fact, the contractor gets paid
even if the work has to be redone. In term-form contracts, the contractor's basic
obligation is simply to deliver the hours of work bid up to the contract ceiling. The only
time the contractor doesn't get paid under cost reimbursement contracts is if the
government can prove a clear case of fraud or deliberate ignoring of government
technical direction. That is why continuous government monitoring is so important, so
that appropriate technical direction can be given to guide the contractor's efforts toward
project completion.
In completion-form contracts, however, the contractor is expected to delivery
the specified end-product within the estimated cost, and failure to do so can result in
reduction of fee and completion of work at no additional fee.
3.5.6. Advantages/Disadvantages for Government
Cost-reimbursement contracts provide the Government the major advantages of
flexibility and maximum control. The Government is not bound to a rigid set of
specifications or tightly defined statement of work necessary in a fixed price contract.
Rather, since the statement of work generally has such broad task areas, the Government
can assign work as it needs it in the form of specific work assignments under the broad
tasks. This permits the Government to adjust the contract work to meet its needs as
these needs become defined. In addition, the Government can modify the work assignment
to redirect the work.
If the contract is an award-fee contract, the Government has the additional
advantage of being able to reward good contractor performance, increasing the
contractor's incentive to perform at a higher level.
There are, however, disadvantages. The Government not only assumes all of the
cost risks in cost-reimbursement contracts, but there are other disadvantages as well.
A far greater administrative burden is placed upon the Government in a cost-
reimbursement arrangement. Costs must be audited, at a minimum, once before final
payment, and a determination must be made that all costs claimed are allowable,
allocable, and reasonable. (See Chapter 11 for further details.)
Many times, individual vouchers may be audited. Frequent financial monitoring
is also required. Administration is even further complicated if Government property is
involved (see Chapter 11). If the contract is an award-fee contract, periodic contractor
evaluations are required to administer the award fee process, which can be time-
consuming.
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Further, there is less incentive afforded the contractor to control costs or to
improve performance, unless the award fee form is used. Because of these
disadvantages, cost-reimbursement contracts should be used only when necessary and
when conditions warrant.
3.5.6. Advantages/Disadvantages for Contractor
The cost-reimbursement contract has the advantage of sheltering the contractor
from risk. The contractor gets paid even if the contractor fails to complete the work
within the desired time frame or cost estimate. In term-form contracts, the contractor
is paid for time spent (best efforts), not for work completed or products delivered. On
the other hand, the contractor may have to settle for a lower fee or profit as a result of
the lower risks involved. In addition, the administrative costs (recordkeeping,
reporting, etc.) associated with cost-reimbursement contracts are much higher, and
there is a great deal more government control and involvement. The contractor must be
able and willing to be responsive to changing government needs and technical direction.
If the contract is an award-fee contract, the contractor has the possibility of
earning a higher fee as a reward for good management and performance. However, the
award fee process subjects the contractor to periodic formal evaluation, imposing an
increased burden on the contractor to "prove itself". In addition, the award fee may be
adversely affected by the quality of Government monitoring and technical direction. If
Government staff only documents deficiences and failss to adequately document good
performance in the performance appraisal process, the contractor may not obtain the _
award it deserves.
3.6 Time-and-Materials Contracts
The time-and-materials (T&M) type of contract provides for the procurement of
supplies or services on the basis of (1) direct labor hours at specified fixed hourly
rates (rates include wages, overhead, general and administrative expense, and profit),
and (2) material at cost, and, where appropriate, material handling costs as a part of
material costs. Material handling costs may include indirect costs not included in the
labor rates, including general and administrative expense. A variation on the time-and-
materials contract is one where fixed rates for equipment are used as well as fixed rates
for labor.
3.6.1 When Used
This type of contract is usually used in the procurement of (1) engineering and
design services, (2) repair, maintenance, or overhaul work; and (3) work to be
performed in emergency situations (e.g., Superfund cleanups).
Time and materials contracts should be used only where it is not possible at the
time of placing the contract to estimate the extent or duration of the work or to
anticipate costs with any reasonable degree of accuracy. Particular care should be
exercised in the use of this type of contract since its nature does not encourage effective
cost control. Thus, it is essential that a T&M contract be used only where provision is
made for adequate controls, including appropriate surveillance by EPA personnel during
performance to give reasonable assurance that inefficient or wasteful methods are not
being used.
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3.6.2. Issuance of Work
Work is generally ordered by an ordering officer in the form of a delivery order.
(See Optional Form 347 on page 67.)
3.6.3. Government Responsibilities
The basic responsibility of the Government is to pay the contractor for services
rendered, up to the negotiated ceiling amount. Because there is absolutely no incentive
for the contractor to control costs under this contract type, continuous Government
surveillance is required to ensure that the services provided are being effectively and
efficiently managed, and that materials provided are being provided at a reasonable cost.
3.6.4. Contractor Responsibilities
The contractor's prime responsibility is to deliver the labor hours and materials
ordered, up to the specified ceiling amount. The contractor does not guarantee its
performance to produce any particular end product.
3.6.5. Advantages/Disadvantages for Government
Time and materials contracts are useful because of the flexibility and control
they offer. Work can be ordered when and as needed; changes within the scope are easily
made to adjust to changing situations. Only labor rates and the contract ceiling are fixed.
On the other hand, time and materials contracts do not afford the contractor any
positive profit incentive to control the cost of materials or to manage its labor force
effectively. Since it does not encourage effective cost control, it requires almost
constant Government surveillance. It should be used only after the Contracting Officer
determines that no other type of contract will suitably serve. It sometimes requires the
daily acceptance of charges by Government personnel, who must monitor performance to
ensure that charges are appropriate for the work performed.
3.6.6. Advantages/Disadvantages for Contractor
The T&M contract is advantageous from the contractor's point of view because of
the minimal cost risk involved and the potential to maximize profits. However, the
contractor is subject to continuous government surveillance during performance, and
there are high administrative costs associated with the government technical and
financial monitoring.
3.7 Labor-Hour Contracts
The labor-hour type of contract is very similar to the time-and-materials type
of contract, except that materials will not be supplied. The contractor is reimbursed
strictly on the basis of hours worked at the fixed labor rates specified in the contract.
Handout 3-9 on page 57 illustrates the problems potentially associated with labor-hour
(or time and materials) contracts. Since the contractor is reimbursed at a fixed rate for
labor falling within a particular category, the contractor has a high incentive to use
lower-paid and thus less experienced employees on a particular job, since the
contractor's profit margin on the lower-paid employee may be substantially higher.
This can work to the government's disadvantage.
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3.8 Indefinite Delivery/Indefinite Quantity Contracts
One of the following indefinite delivery type contracts may be used for
procurement where the exact time or place of delivery, or quantity to be delivered, is
not known at time of contracting.
(1) Definite Quantity Contracts. This type of contract provides for a
definite quantity of specified supplies or for the performance of specified
services for a fixed period. Deliveries or performance occur at designated
locations upon order by EPA. This type of contract is particularly suitable
for use where it is known in advance that a definite quantity of supplies or
services will be required during a specified period and is regularly
available or will be available after a short lead time.
(2) Requirements Contracts. This type of contract provides for filling all
actual purchase requirements of specific supplies or services during a
contract period with deliveries to be scheduled by the placement of orders to
the contractor. All Agency requirements for the supplies or services
covered by this type of contract must be ordered from that contractor, and
cannot be procured through any other contracts. (This restriction does not
apply to the other two types of indefinite delivery contracts.)
A realistic estimate of total quantity to be ordered throughout the contract
period is stated for the information of prospective contractors. However,
the Government is not bound by the estimate set forth. The estimate may be
obtained from the records of previous requirements and consumption, or by
other means. The contract states the maximum limit of the contractor's
obligation to deliver and appropriate provisions limiting the Government's
obligation to order. It may also specify the maximum quantities which may
be ordered under each individual order during a specified period of time.
Similarly, when small orders are anticipated, the contract may specify the
minimum quantities to be ordered. Funds are obligated by each order and not
by the contract itself.
A requirements contract may be used for procurement when it is impossible
to determine in advance the precise quantities of the supplies or services
that will be needed by EPA during a definite period of time. Advantages to the
government of this type of contract are:
(1) flexibility with respect to both quantities and delivery scheduling;
(2) supplies or services need be ordered only after actual need has
materialized.
Generally, the requirements contract is appropriate for use when the item
or service is commercially available and when a recurring need is
anticipated.
(3) Indefinite Quantity Contracts. The indefinite quantity type of contract
provides for the furnishing of an indefinite quantity of specified supplies or
services, with deliveries to be scheduled by the placement of orders to the
contractor. The contract provides that the Government will order a stated
minimum quantity of the supplies or services and that the contractor will
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furnish the minimum and any additional quantities not exceeding a stated
maximum. .
The maximum quantity (or amount expressed in dollars) should represent
the Government's best estimate of potential usage. In appropriate cases the
maximum may be raised during the contract period, if justification for
using other, than full and open competition exists. The minimum must be
more than a nominal quantity; yet it should not exceed the amount which is
fairly certain to be ordered. The common practice is for the first order to
be for the minimum quantity, and placed simultaneously with contract
award. EPA Form 1900-8 (see form on page 71), Optional Form 347 or
another form approved by EPA may be used in placing orders. Some
contracts of this type also stipulate minimum and maximum quantities
applicable to each order.
3.8.1. When Used
An indefinite quantity contract may be used where it is impossible to determine
in advance the precise quantities of the supplies or services that will be needed by EPA
during a definite period of time and it is not advisable for the Agency to commit itself for
more than a minimum quantity.
Traditionally, fixed-price or fixed-rate arrangements have been used in
indefinite quantity contracts. In such cases the solicitation provides for fixed amounts
per item specified, and evaluation of proposals for award is based on respective offerers'
bid prices per item times the maximum quantity. Other forms of pricing arrangements
may be used. These methods include: (i) fixed loaded labor rates in the time-and-
material or labor-hour mode and (ii) cost-reimbursement.
3.8.2. Issuance of Work
Work is ordered through the issuance of delivery orders.
3.8.3. Advantages/Disadvantages for Government
If time-and-materials or labor-hour pricing arrangements are used, the
indefinite quantity contract has the same disadvantages as those types of contracts.
Therefore, it is essential that adequate Government surveillance be performed at all
times.
There are, however, certain advantages to the indefinite quantity type which
make it attractive to the government in some situations. These are:
(1) discrete funding with each order;
(2) flexibility with respect to both quantities and delivery scheduling;
(3) placing orders only as the need arises;
(4) flexibility in the types of pricing arrangements selected for use; and
(5) the Government's legal obligation is limited to contract minimums and
delivery orders as issued.
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3.8.4. Advantages/Disadvantages for Contractor
These contracts have the advantage of guaranteeing that the Government will
order a specified minimum quantity of product or services. They also provide the
contractor with the potential of maximizing profits, particularly if time and material or
labor-hour arrangements are used.
The disadvantages from the contractor's standpoint are also major, however. The
contractor has no control over the scheduling of orders, and must respond promptly
when orders are placed. The contractor must always "be prepared." In addition, there is
no guarantee that the Government will order more than the required minimum quantity.
So the contractor has to stay prepared but may not be requested to deliver. This can be
costly, and it is hard for the contractor to plan effective resource allocation. There is
also likely to be a high degree of Government surveillance, and the contracts require a
high degree of management involvement on the part of the contractor.
3.9 Letter Contracts
A letter contract is a written preliminary contract that authorizes the contractor
to begin work immediately, before negotiations have been completed and a definitive
contract awarded. It is used only when the supplies or services are so urgently needed
that the Government's interests demand that the contractor be given a binding
commitment to commence performance, e.g., in Superfund cleanups to procure
emergency response services from local contractors.
A letter contract must contain a maximum liability of the Government to cover
the estimated amount necessary to cover the contractor's efforts before the contract is
definitized (negotiated and converted to another type of contract). This liability must
not exceed 50 percent of the estimated cost of the definitive contract. Definitization of
the contract must occur within 180 days after the date of the letter contract or before
completion of 40 percent of the work to be performed, whichever occurs first.
3.10 Major Procurement Classes
From the standpoint of contract administration and its complexities, an
alternative method of categorizing contracts and technical monitoring requirements is to
classify them as mission contracts, non-mission contracts, and small purchase orders.
This classification is useful because it distinguishes the relative size and complexity of
the contract, the number of individuals involved in contract administration, and the
scope of technical review required.
(1) Mission Contracts are typically large, multi-year contracts
characterized by broad statements of work. Performance is obtained by the
issuance of individual work assignments (or in the case of indefinite
delivery/indefinite quantity contracts, through the issuance of delivery
orders.) That is, the contract is "definitized" through the issuance of work
assignments or delivery orders. Page 63 is an example of a work
assignment action request used for issuing work assignments. Page 67
illustrates a sample delivery order form.
Mission-type contracts usually involve at least two administrative levels.
For example, LOE contracts are administered by a Project Officer, who
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typically delegates the preparation and monitoring of work assignments to
one or more Work Assignment Managers. For indefinite delivery/indefinite
quantity contracts, the Delivery Order Officer or Administrative Delivery
Order Officer may delegate the preparation and monitoring of delivery
orders to one or more Delivery Order Project Officers.
Some Superfund contracts have yet a third method of definitizing work,
through the issuance of Technical Direction Memoranda (TDMs) or Technical
Instruction Directives (TIDs). These are used to formalize the issuance of
technical direction where the work assignment or delivery order is broad
and requires further definition. A sample of a task directive is found on page
69.
(2) Small Purchase Orders are contracts used to procure products or
services valued at $25,000 or less. Because of their scope and relative
simplicity (most are fixed priced contracts), contract administration for
small purchase orders is similarly simple. The Project Officer usually is
the only program individual involved, the work is usually relatively well-
defined and requires minimal oversight, and the period of performance is
generally short.
(3) Non-Mission or All Other Contracts. The balance of EPA contracts
for the performance of work valued in excess of $25,000 are typically
administratively simple, since they involve only one administrative layer,
the Project or Ordering Officer. The Project/Ordering Officer handles all
contract administration functions delegated by the Contracting Officer,
regardless of contract type.
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CONTRACT FUNDING
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THE CONTRACT FUNDING PROCESS
(Or, How We Get And Spend Money!)
CONGRESS
APPROPRIATION
APPORTIONMENT
ALLOTMENT
EPA USER
COMMITMENT
OBLIGATION
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APPROPRIATED FUNDS
LIMITS ESTABLISHED BY CONGRESS
Time Restrictions
Limit The Time During Which Funds May
Be Obligated Or Expended
Subject-Matter Restrictions
Limit the Use To Which Funds Can Be
Put For Accomplishing Specific Purposes
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THE LIFE OF AN APPROPRIATION
ANNUAL APPROPRIATIONS (6890200)
May Be Obligated Only During The Fiscal Year
Covered By the Appropriation Act. Unobligated/
Funds Are Lost To The Agency. E.g., EPA's S&E
Appropriation)
MULTI-YEAR APPROPRIATIONS (689/00108)
May Be Obligated During A Specified Period In
Excess Of One Year, But May Not Be Obligated
After The Life Of The Funding. (These Are Usually
Two-Year Appropriations, E.g., EPA's R&D And
AC&C Appropriations. R&D's Number Is 689/00107.)
However, These Funds Must Be Recertified When
Using A Prior Year Account Number.
NO-YEAR APPROPRIATIONS (68/20X8145)
Are "On-Going" Funds And May Be Obligated
Until The Appropriation Is Exhausted. Funds Not
Obligated Remain With The Agency And Do Not
Lapse Back To The Treasury. (E.g., EPA's Superfund
Appropriation). However, These Funds Must Be
Recertified When Using A Prior Year Account Number.
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BONA FIDE NEED RULE
GAP DEFINITION
A Fiscal Year Appropriation May Be
Obligated Only To Meet A Legitimate
Or Bona Fide Need Arising In The Fiscal
Year For Which The Appropriation Is
Available.
Issue: This Rule Comes Into Play When
You Have End Of Year Funds That You
Either Must Obligate Or Lose.
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TYPES OF SERVICES
1. SEVERABLE SERVICES:
Performance Must Be A Bona Fide Need For The
Time Period In Which It Occurs. Hours Of Service
Can Only Be Charged To, And Consumed In, The
Fiscal Year In Which The Need Arises.
Deliverable Is Always A Service (Not A Product,
Even When It Appears To Be A Product) For A
Specified Time Period. Service Must Stop At The
End Of The Fiscal Year, Regardless Of The Stage
Of Project Completion. Option Years Exercised
Must Spend Option Year Hours And Funds.
Typical Examples Are All Term Form (Level Of Effort)
Contracts, Some Labor-Hour And Time & Materials
Contracts.
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RULES FOR SEVERABLE
SERVICE CONTRACTS
(Ail Term Form [LOE's], Some Labor/Hour, Time & Materials Contracts)
1. All Hours Within Contract Period (Base
And Each Option) Must Be Ordered And
Completed Within The Contract Period
Charged.
2. Work Assignments Must End Concurrently
With Expiration Of The Charged Contract
Period. Uncompleted Or Further Efforts
Must Be Issued Under New Work Assignments
Charged To The Subsequent Contract
Period (Fiscal Year Appropriation).
3. Contract Performance Periods Must Be
Established Consistent With The Period
Of The Appropriation Encumbered (Base
And Each Option Year).
4. The Contract Base And Each Option Period
Are Separate And Distinct. Hours Not
Ordered At The End Of Each Period Are Not
Available For Use In Subsequent Contract
Periods. Can Transfer Unexpended Funds To
Subsequent Period If Appropriation Extends.
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TYPES OF SERVICES
2. NONSEVERABLE SERVICES:
Performance Can Not Be Segmented. The Service
Is Integral To Providing An End-Product. To
Discontinue The Effort Based On Passage Of Time
Alone Would Deny EPA The End Product Deliverable
Which EPA Contracted For. The Bona Fide Need
Arises At The Time The Product Is Ordered (I.e.,
When Funds Are Obligated). Effort May Continue
Regardless Of Fiscal Year Boundaries To Enable
Completion Of The Product Deliverable.
E.g., Completion-Type Contracts, Most Time &
Material Contracts, Most Labor-Hour Contracts,
Most ID/IQ Contracts.
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1.
RULES FOR NONSEVERABLE
SERVICE CONTRACTS
(Fixed Price Or Cost-Reimbursement Completion
Form Contracts)
Effort May Cross Fiscal Years. Prior Fiscal Year Funds
May Be Used To Pay For Tasks Completed In
Subsequent Fiscal Year, So Long As All Funds Were
Obligated During Fiscal Year When Task Was Initiated.
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ANNUAL APPROPRIATION
EXAMPLE (6810200)
(E.G., FY 91 SALARIES & EXPENSES)
1. TERM FORM (LEVEL OF EFFORT): Must Obligate
FY 91 Funds And Complete Performance In FY1991
May Sometimes Deobligate Excess Funds &
Reobligate To Other Contract That Can Complete
Performance/Spend Funds During FY 1991.
2. COMPLETION FORM: Must Obligate FY 91 Funds
In FY 1991, But Performance May Extend Beyond
FY 1991. Excess Funds May Be Deobligated
And Reobligated In FY 1991 Only.
3. INDEFINITE QUANTITY: Nature Of Delivery Order
Governs. If Work Statement Is Severable, Then #1
Above Applies. If Nonseverable, Then #2 Above
Applies. Delivery Orders Must Be Issued Within
Specified Contract Period, But Normally Contract
Terms Allow Performance To Go Beyond The
Contract Period Of Performance.
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MULTI-YEAR APPROPRIATIONS
EXAMPLE (681/20108)
(E.G., A.C.&C., R&D Appropriations)
1. TERM FORM (LEVEL OF EFFORT): Must Obligate FY
91/92 Funds In FY 1991, Unless The Comptroller Grants
A Carryover Allowance (Re-Certification). Funds Must
Be Expended And Performance Completed By End
Of FY92.
2. COMPLETION FORM: Must Obligate FY 91/92 Funds
In FY 1991 Unless The Comptoller Grants A Carryover
Allowance, But Performance May Extend Into Later Years.
Or Until End Product (Deliverable) Is Completed And
Accepted.
3. INDEFINITE QUANTITY: Nature Of Delivery Order
Governs. If Work Statement Is Severable, Then #1 Above
Applies. If Nonseverable, Then #2 Above Applies. All
Delivery Orders Must Be Issued Within Specified Contract
Period. Normally Contract Terms Allow Performance To
Go Beyond The Contract Period Of Issuance.
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NO-YEAR APPROPRIATION
EXAMPLE (68/20X8145)
(E.G., Superfund Appropriation)
1. TERM FORM (LEVEL OF EFFORT): Must Obligate FY
91 Account Funds In FY 1991, Unless Comptroller Grants
Carryover Allowance (Recertification). Must Complete
Performance Within Existing Contract Period, But
Otherwise Is No Limitation On Year Of Expenditure. May
Deobligate Excess Funds. Need To Recertify Funds From
One Year To Next Due To EPA Policy.
2. COMPLETION FORM: Must Obligate FY 91 Funds In
FY 1991 Unless Obtain Carryover Allowance, But
Performance May Extend Into Later Years. May
Deobligate And Reobligate Excess Funds Subject To
Need To Recertify.
3. INDEFINITE QUANTITY: Nature Of Delivery Order
Governs. If Work Statement Is Severable, Then #1 Above
Applies. If Nonseverable, Then #2 Above Applies. All
Delivery Orders Must Be Issued Within Specified Contract
Period. Normally Contract Terms Allow Performance To
Go Beyond The Contract Period Of Issuance.
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CONTRACTS FUNDED FROM MULTIPLE
APPROPRIATIONS
The Director, Financial Management Division, Must
Approve The Project Officer's Rationale For Allocating
Costs Among Appropriations When:
1. Any Proposed Contract Will Be Funded From More
Than One Appropriation And Will Have Neither
Delivery Orders Nor Work Assignments,
OR
2. Any Specific Work Assignment Or Delivery Order
Will Be Funded From More Than One Appropriation.
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RATIONALE FOR MULTIPLE APPROPRIATIONS
Rationale Must State:
- The Contract Number
- The Work Assignment Or Delivery Order
Number (If Applicable)
- Each Appropriation Number
- The Allocation Method Proposed
- The Basis For Use Of Such Methodology
The Director, FMD, Must Approve The Rationale
Before The Contract Can Be Awarded Or The Work
Assignment Or Delivery Order Can Be Issued.
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Chapter 4
CONTRACT FUNDING
Contract funding is a complex issue which is fully understood by surprisingly
few people. Rules apply as to which contracts can be incrementally funded. This chapter
will attempt to explore these issues with the intent of making them less complex for
Project Officers and other personnel outside the contracting and budgetary fields. The
rules on contract funding are as applicable during contract administration as they are
during the pre-award phase of a contract.
4.1 The Appropriations and Contract Funding Process
Funding for EPA contracts results from a Congressional appropriation. Public
funds may not be used for the acquisition of supplies and services without authorization
from Congress. The Agency's proposed budget is presented to Congress well in advance of
the fiscal year for which it is proposed. It is reviewed by both the House and the Senate,
defended by Agency officials, and must be approved by both Appropriations Committees
before it is passed into law.
EPA may spend its appropriated funds in line with its budget, and commit its
funds to carry out the budgeted projects, including contracts. The particular program
(e.g., Superfund) "commits" its funds to specific contracts; PCMD contracting officers
in turn have the authority to "obligate" those committed funds through the signing of
contracts on behalf of EPA.
4.2 Types of Appropriations
Congress establishes limits on the use of appropriated funds, which are either
time restrictions, subject-matter restrictions, or both. Time restrictions limit the
time during which funds may be obligated or expended. Subject matter restrictions
limit the use to which money can be put for accomplishing specific purposes, such as a
program or project.
Annual appropriations (one-year funds) may be obligated only during the fiscal
year covered by the Appropriation Act. Thus, any unobligated funds are lost to the
Agency. Multiple-year appropriations, such as two-year appropriations, may be
obligated within a specified period in excess of one year, but may not be obligated after
the life of the funding. "No year" funds are "continuing" funds, under which obligations
may be made without time restrictions until the appropriation is exhausted.
charged:
EPA cu
irrently has several appropriations against which contracts may be
(1) Annual Appropriations. Funds appropriated under the Salaries and
Expenses (S&E) Appropriation currently last for only one year. Funds not
obligated during the fiscal year revert back to the Treasury. Contracts
typically charged to this appropriation are generally administrative in
nature, i.e., janitorial services, landscaping services, or economic
consultants. The S&E appropriation number for FY 91 is 6810200 (FY92
would be 6820200, etc.) and must appear on all procurements requests.
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(2) Multi-Year Appropriations. Funds appropriated under the Abatement,
Control and Compliance (A.C&C) Appropriation are available for two years;
funds not obligated the first year are "carried over" into the second year.
The Office of the Comptroller issues "carryover" allowances the second year.
Carryover funds may also be reprogrammed (moved from one account to
another), subject to the same restrictions as new authority. Contracts funded
under this appropriation are generally program-related, i.e., contracts to
perform laboratory analyses of water or hazardous waste materials, or
contracts to perform environmental impact studies. The AC&C appropriation
number for FY 91/92 is 681/20108; for FY 92/93 would be 682/30108,
etc. The number "68" is EPA's designated number.
(3) Research and Development (R&D) Appropriation. These funds are also
available for two years. The Office of Research and Development manages
most of this appropriation and issues a variety of research grants and
contracts under its aegis. The R&D appropriation number for FY 91/92 is
681/20107. Other organizations may also have two-year appropriations.
(4) No-Year Appropriations. The Superfund Appropriation is a "no-year"
appropriation; the funds are available until obligated and do not lapse back to
Treasury. The majority of the Superfund appropriation is managed by the
Office of Solid Waste and Emergency Response. Contracts are issued for a
variety of purposes, including laboratory analyses, cleanup of hazardous
waste, and construction of containment facilities. The Superfund
appropriation number is 68-20X8145. This number remains constant
throughout the life of the appropriation.
(5) Other. There are a number of other appropriations which are smaller than
those mentioned above, are specified for much narrower purposes, and are
usually managed by a single office, e.g., Building and Facilities funds for
construction work.
4.3 Bona Fide Need Rule
The general rule for lawfully obligating a fiscal year appropriation is that the
supplies or services are intended to serve a bona fide need of the fiscal year for which
the appropriation was made. This rule has particular application in the contract
administration phase, as it may limit the carryover of funding and hours into option
periods in certain types of contracts.
The main question to be answered, if the contract is for services, is whether the
services can be classified as severable or non-severable. These terms, as they apply to
the bona fide need question, are defined as follows:
(1) Non-Severable - a contract is non-severable if the required perfor-
mance is such that it cannot be segmented on the basis of time. The
performance required focuses on completion of the required work rather
than providing effort over a period of time. Generally, non-severable
contracts tend to involve non-repetitive services or products where there is
a definitive workscope which cannot be fragmented by time periods. A
completion form of cost-reimbursement contract is non-severable, e.g.,
providing registration services for a specific event. Fixed price contracts
are also generally non-severable. (However, fixed price orders placed
under indefinite quantity/indefinite delivery form contracts may be
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severable, as in the case of janitorial services.)- An example of non-
severable service contract would be a requirement for an economic analysis
of a specific industry affected by a proposed EPA regulation.
Under a non-severable contract, appropriations available for the year in
which the contract is executed may be used to fund the entire performance,
even though delivery or performance may continue into a later fiscal year in
which the appropriated funds are not available. This is true because a bona
fide need exists during the fiscal year in which the contract is awarded and
funds are available for obligation.
(2) Severable - a contract is severable when the required performance
reflects a direct relationship to specific time period(s) and performance can
be identified only as a bona fide need for the time period in which it occurs.
Severable contracts tend to involve repetitive or routine continuing
services, and are defined in terms of hours and not end product. They tend to
have a general workscope. A general rule of thumb is: If the contract
requires performance of services throughout a period of time rather than by
a certain date, there is a good likelihood that it is severable. Severable
contracts continue over a time period as opposed to a single job arrangement.
Services provided under cost reimbursement, term form (LOE) contracts
are defined as severable. An example of severable services is a contract
calling for general policy support in the area of CERCLA Enforcement where
work assignments are to be issued during contract performance which
describe specific tasks to be performed, such as gathering all EPA costs on a
particular hazardous waste site for recovery against the responsible party.
Under a severable contract, the period of the contract must be consistent
with the period for which the funds are available, and hours or services
must be expended during the period of availability. In other words, a
contract for severable services funded with a 2-year appropriation can have
a base period only as long as the availability of the appropriation. (See
paragraph (e), below for an example of this rule.) Other restrictions
applicable to severable service contracts, including term form, level-of-
effort contracts are listed below:
(a) Completion of Existing Work. All hours available within a given
contract period of performance must be used within that period or
they are lost. Work assignments which task specific directions
and/or order hours of effort must be issued and completed within the
same contract period to be construed as valid charges to the
appropriation of that period.
(b) Issuance of New Work. New work assignments to conclude efforts
initiated under work assignments from a previous contract period
(base period or an option period) must be issued so that funds and
hours available in the new period are charged for the work
accomplished during that subsequent period.
(c) Options. Performance beyond the contract base period may be
accomplished by the use of options. The exercise of options originally
evaluated at the solicitation stage and priced in contracts is not
considered to be new procurement. As such, follow-on work
assignments for work begun in the previous contract period may
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begin with the issuance of a new work assignment concurrent with
the effective date of the option period. Cost-reimbursement term
contracts may include a provision stating that, when an option to
extend the contract term is exercised, work assignments initiated in a
previous period but not completed are extended into the option period.
The provision must clearly state that hours performed and costs
incurred during the option period are charged to that option period.
Work assignments must have a specific completion date and if this
date extends into the option period, the work assignment must refer
to the provision discussed above. A modification may be issued by the
Contracting Officer to existing contracts to incorporate the provision.
(d) Extensions of Performance Period. Any extensions to the period of
performance of a term form contract, i.e., to the base or any of the
option periods of performance, is by regulation defined as new
procurement. As such, extensions can only be accomplished through
full and open competition procedures or through one of the seven (7)
statutory exceptions to obtaining full and open competition. Each
period of performance (base and each option) is separate and distinct
and these procedures apply separately for extensions to each period.
Work assignments for follow-on or new work may only be issued
upon approval and execution of the extension. These work
assignments may be issued concurrent with the effective date of any
such contract modification.
(e) Period of Performance. To ensure that obligations in each contract
period of performance (base and each option) are proper, such
periods of performance must be established consistent with the
period of the appropriation(s). For example, the base period of the
contract could extend from the date of award to the expiration date of a
two-year appropriation. For a contract awarded October 1, 1985, or
thereafter against a two-year appropriation, (e.g. FY 86/87), the
base period could extend until September 30, 1987.
A contract funded with the same appropriation and awarded on
December 15, 1986 could also have a base period through September
30, 1987. Option periods beyond this base period may also be
established consistent with anticipated periods of future
appropriations. However, considering pricing uncertainties beyond
three years in the future, good contract management would strongly
suggest that option periods beyond the base period be written for one
year at a time.
(f) Unexpended Funds: Audits. The contract base and each option period
of performance are separate and distinct. Hours not ordered and
unexpended funds from expiring appropriations remaining at the end
of each period are not available for use in the subsequent contract
period. Funds from expiring appropriations should be deobligated to
the extent they exceed the Government's liability. To definitively
ascertain all actual allowable, allocable, and reasonable costs
requires a final audit. Contracting Officers could order audits and
close each year separately. It is generally more efficient to only
order a single final audit after the conclusion of the last option
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period. Normally, funds are deobligated only after settlement of the
final contract audit, but may be deobligated earlier, provided that
sufficient funds are left to provide for unforeseeable increases in cost
that may result, e.g., from the application of final indirect cost rates.
(See Section 4.8, below, for a discussion of deobligation of contract
funds.)
(g) No-Year Appropriations. Contract performance periods involving
appropriations with indefinite obligation terms, commonly referred
to as no-year funds or x-year appropriations, should be consistent
with sound program and contract management needs. Contract periods
(base and options) may be established for terms as long as these
needs dictate. Generally, contract periods of up to three years
approach the limit of sound contract management. Periods for more
than three years must be approved by the Chief of the Contracting
Office prior to issuance of the solicitation.
Because of these restrictions on severable service contracts, Project Officers are
encouraged to develop definitive Statements of Work that can be priced as either cost-
reimbursement completion type or fixed-price completion contracts, which, as they
constitute non-severable services, may cross fiscal years and be charged to the year in
which the contract is executed. See Appendix 4A on page 113ff for a comptroller general
decision and further discussion.
4.4 Accounting Data
Contract obligations carry with them certain accounting data which specifically
identify them. These are:
(1) Appropriation number - As described above, this number varies depending
whether the appropriation is annual, multi-year or no-year. For example,
the annual S&E appropriation number for FY88 was 6880200.
(2) Account number - An account number is a 10-digit alpha/numeric identi-
fication which classifies accounting data by organizational structure and
program budget.
(3) Document control number (DCN) - The DCN is a 6-digit serial number
uniquely assigned to each commitment, and is recorded with each obligation
made against that commitment.
(4) Object Class - An object class is a code used to identify the kind of material
or service to be obtained. It consists of four digits and is divided into two
parts, i.e., a major object class (first two digits) and a sub-object class
(last two digits).
(5) Amount - The amount of the obligation is to be shown in dollars and cents.
Each EPA program office has an administrative staff member designated to assign
and manage that office's funds. This individual records all commitments made and
monitors the availability of program funds. This individual should be contacted to obtain
the appropriate DCN number and verify all accounting data.
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4.5 Selecting Appropriations to Fund Contracts and Distribution of Costs
Among Source Appropriations
Each time a work assignment, delivery order or contract without work
assignments or delivery orders is funded, the office originating the action must decide
which appropriation or appropriations will be the source of funds for that contract
action. Certain rules apply to the selection process and to the distribution of costs among
appropriations if more than one appropriation is used.
a. Selecting Appropriations. Not all EPA appropriations are available to
fund every type of contract action. To find out which appropriations are available to
fund a given contract action, an office must first decide which object class should be
assigned to the action. The Financial Management Division (Fiscal Policies and
Procedures Branch) annually distributes an updated listing of object classes and
definitions. (The object class is entered as part of the accounting data on procurement
requests.) The office must then review the Budget Division's (Budget Formulation and
Control Branch) listing of allowable object classes by appropriation to determine which
appropriations are available to fund the particular contract action. Before the
procurement request is sent forward to PCMD, an office originating a contract action
must ensure, through their senior budget officer, that only allowable appropriations are
used.
b. Consistent Use of Appropriations. Generally, a single appropriation is
chosen to fund each work assignment, delivery order, or contract without work
assignments or delivery orders. The General Accounting Office has issued an opinion to
EPA on the continued use of that appropriation, once selected, to the exclusion of any
other source of funds. The basic rule, as stated in Resources Management Direction
2510 (Planning and Budgeting), page 4-4 is:
Where either of two appropriations may reasonably be construed as
available for expenditures not specifically mentioned under either
appropriation, the determination of the agency as to which of the two
appropriations to use will not be questioned. However, once the election
has been made, the continued use of the appropriation selected to the
exclusion of any other for the same purpose is required, in the absence of
changes in the appropriation acts
Under this "pick and stick" rule, for example, EPA could not decide to fund a work
assignment from the Research and Development appropriation and then subsequently
propose to place additional funds on the same effort from the Abatement, Compliance and
Control apppropriation.
c. Distributing Costs Among Appropriations. Where a work assignment,
delivery order or contract provides services or other benefits to more than one
program, the costs (both obligations and disbursements) of that contract action may be
charged to more than one appropriation. For example, a contract work assignment for
entry of Agency financial data into the EPA finacial system provides services benefiting
both the Superfund program, which is funded from the Superfund appropriation, and
other Agency programs funded from the Salaries and Expenses appropriation. Data entry
for Superfund could possibly have been separated out, and individual work assignments
issue for each. However, EPA may combine the work under one work assignment, and
fund it from both the "benefitting" appropriations if it is in the interest of government
efficiency and cost-effectiveness to do so.
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This situation is distinguishable from the circumstances described above, where
a single appropriation had to be selected to fund the action. In the above case, the work
was not divisible as to benefiting appropriation.
If a work assignment, delivery order or contract benefits more than one
appropriation, there are two options for charging costs to the respective appropriations.
The option chosen for distributing the costs must be clearly stated as part of the
procurement request. The two approaches are:
i. Direct Charging. If there is a practical, cost-effective way of determining
which portion of services are being performed for each Program, the costs should be
directly identified as such. In the keypunching example, it may be feasible to separate
Superfund processing from other work and to record the hours of contractor staff doing
work benefiting each. Or for a work assignment to perform literature searches, the
staff hours and computer user charges may be distinguishable as to the Program being
serviced.
ii. Allocation Methodologies. If direct charging is not feasible or not an accurate
method of determining the costs to be charged to each source appropriation, the contract
costs may be allocated to the appropriations. However, before PCMD will approve a
procurement using an allocation methodology, the Director of EPA's Financial
Management Division must approve the methodology. To request approval, the
originating office must submit a copy of the procurement request and the statement of
work to the Director, FMD, along with at least the following information:
o Explanation of why direct charging of costs is not practical or would be less
accurate than allocation methods;
o Identification of the "statistic" proposed to be used to distribute the costs
(e.g., the ratio of Superfund transactions to total transactions processed by the
keypunching service, or ratio of Superfund FTEs to total FTEs in the office to
which a contractor is providing services.);
o Explanation of why the proposed ratio for distributing costs is the best
indicator of benefit to the respective programs served; and
o A statement indicating that the numerical ratios will be reviewed and
updated, and the contract charging adjusted accordingly, by the end of each
fiscal year. (See Contracts Management Manual Chapter 9 for additional
information.)
A signature block for the Director, FMD, must be included at the. bottom of this
information.
Once the allocation methodology is approved, the Project Officer is responsible
for ensuring that the calculations are properly done, that the numerical averages are
updated as needed (e.g., as transaction ratios change), and that the costs are properly
allocated on the Project Officer Invoice Approval form or on the contract voucher.
Allocation methodologies have typically been used for support type contracts that
benefit both the Superfund Program and the other programs of the Agency, whose
intramural expenses have traditionally been funded from the Salaries and Expenses
appropriation.
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NOTE: The requirement for FMD review of allocation methodologies applies only
to use of more than one appropriation in the circumstances described above -- it does
NOT apply when more than one account under a SINGLE appropriation funds a contract
action.
4.6 Voucher Payment.
The Project Officer must provide on every invoice approval the accounts (and
amounts) against which invoiced costs are to be charged. (See Chapter 11 for details.)
The financial management office cannot pay contractor billings unless the account
numbers and amounts to be charged to each account are clearly stated on the Project
Officer approval. A Project Officer's failure to comply with these procedures will delay
processing of payments and may result in an Agency violation of Prompt Payment Act
requirements.
4.7 Incremental Funding
Incremental funding is defined as partial funding of a cost-reimbursement
contract. It is used in situations where program offices do not have the full .amount of
funds available at the time of contract execution, but expect to have it later in the
contract period.
This type of funding can only be used under cost-reimbursement contracts.
Under a fixed-price contract, the entire amount of the contract must be obligated at the
time of contract award. Indefinite delivery/indefinite quantity contracts must obligate
the entire contract minimum at award; thereafter, each delivery order must be fully
funded at the time of issuance.
Under an incrementally-funded contract, a contractor is required to perform
only until the amount funded has been expended, not up to the entire negotiated estimated
cost. For this reason, Project Officers must ensure that the amount of incremental
funding made available is sufficient to keep the contractor working until the balance can
be obligated. If the Government fails to provide the full amount of funds needed to
complete the work, the contractor will cease to perform and is no longer liable for
further work unless and until additional funding is made available. Contracts will not be
awarded on an incrementally-funded basis unless there is a reasonable assurance that
the entire estimated cost will be provided before the incremental funding is exhausted.
4.8 Deobligation of Contract Funds
Contract funds may only be deobligated by a Contracting Officer and only in
certain situations. These are:
(1) Substitution of funding from one appropriation or account to another. In
this case, the deobligation takes place concurrently with the obligation of an
equal amount of funding with different accounting or appropriation data.
(2) Deobligation of unearned award fee after the Fee Determination Official
awards the fee for a specific period.
(3) Unexpended funds from expiring appropriations remaining at the end of each
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contract period. (This is usually only done after an interim or final audit
has been performed, unless a mutual agreement has been executed between
the contractor and the Government to reduce the estimated cost for that
period. When excess funds are deobligated before a final audit, the
Contracting Officer must retain a certain amount to cover possible
adjustments for indirect rate increases and other potential adjustments.)
(4) Settlement of an interim final audit on a particular contract period. This
must be executed by bilateral contract modification or, if agreement cannot
be reached, by a final decision of the Contracting Officer.
(5) Termination for convenience of the Government (total or partial) where the
remaining hours or costs are not needed. Settlement procedures require a
final audit to determine the Government's actual liability.
(6) Termination for default where the work has not been completed. All excess
funds for uncompleted work will be deobligated. This may or may not
require a final audit, depending upon the nature of the contract. Funds
deolbigated as a result of a default termination may also be used on a
successor contract which covers the same items or services.
(7) Equitable adjustment on certain change orders or supplemental agreements
which result in a decrease to the contract cost or price.
(8) Settlement of a final contract audit after the last option period has been
completed and all actual costs are known, and determined to be allowable,
allocable, and reasonable. If agreement cannot be reached on the total final
cost, the Contracting Office will issue a final decision, subject to the
"Disputes" clause of the contract (See Chapter 14).
Deobligation of funds occurs through preparation of a purchase order similar to
the one originally processed to obligate the funds (including the appropriate accounting
data described above) and indicating the amount of funds to be deobligated, as well as the
reason for the deobligation. See Appendix 4B on page 120 for a more detailed discussion
of deobligation and recertification of funds.
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* UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
1986
OFFICE OF
ADMINISTRATION
AND RESOURCES
MANAGEMENT
MEMORANDUM
SUBJECT:
FROM:
TO:
Comptroller General Decision on EPA Level of
Effort
Procurement ai^d Ccm^racts Management Division (PM-214
See Addressees
Attached for your information is the subject decision.
This decision confirms existing Procurement and Contracts
Management Division policy on the issuance of work assignments
under level of effort contracts.
Attachment
List of Addressees
Rosemarie Nance (PM-214-F)
William Wilfong (PM-214-F)
Pam John (PM-214-F)
Jack Zabretsky (PM-214-F)
Don Hambric (PM-214)
Douglas Richmond - RTP
Richard Pohlkamp -. CINN
6 Regional Contract Specialists
Policy & Quality Assurance Branch Staff
113
PCMD 9/89
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DECISION
THE COMPTWOULEPI OEMEHAU.
OP THE UNITED STATES
WASHINGTON. O.C. SOS48
FILE:
MATTER
DIGEST:
B-214597
DATE: December 24, 1985
EPA Level of Effort Contracts -
Appropriation Availability
The Environmental Protection Agency may not
issue a nonseverable work assignment under a
cost-reimbursement, level of effort, term con-
tract where the effort furnished will extend
beyond the contract's initial period of perfor-
mance into an option period. The Federal
Acquisition Regulation requires that term con-
tracts be "for a specified level of effort for
a stated period of time." Further, issuance of
a work assignment which could not be performed
until the next fiscal year would violate the
bona fide need rule.
The Environmental Protection Agency may not
modify a level of effort contract to
accommodate a non-severable task extending
beyond the original contract period of
performance. Since the period of performance
is an essential part of a level of effort
contract> any change in that term would
substantially change the contract such that the
contract for which competition was held and the
contract to be performed are essentially
different. Accordingly, such a contract could
not be extended by contract modification.
This is in response to a request from C. Morgan Kinghorn,
Comptroller of the Environmental Protection Agency (EPA), for
a decision regarding the propriety of issuing a hypothetical
nonseverable work assignment under a cost-reimbursement,
level of effort, term contract, in which the effort furnished
will extend beyond the contract's initial period of perfor-
mance. EPA has also asked informally whether it may modify
an existing level of effort contract to accommodate a work
assignment extending beyond the term of the original contract
to be funded with appropriations available during the
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B-214597
initial contract period. Although the contract described in
EPA's hypothetical also contains options to extend the con-
tract for additional periods of performance, EPA recognizes
that performance under any options would be funded with
appropriations available during the fiscal year covered by the
option period. .EPA's second question, however, is whether a
modification, prior to option exercise, extending performance
beyond the end of the fiscal year during which the original
period of performance takes place, may encumber the funds of
the expiring fiscal year.
For the reasons set forth below, we conclude that EPA may
not issue a work assignment extending beyond the term of a
level of effort contract, nor may it modify the term of an
existing level of effort contract to accommodate such a work
assignment.
Background; EPA uses level of effort, term contracts to
perform service-intensive type work, including, for example,
economic cost and benefit analyses and technical analyses of
hazardous waste regulations. Typically, EPA, through its
level of effort term contracts, purchases, on a cost-
reimbursement basis, a specified quantity of person-hours (the
level of effort) for the contract's base period and each
option period. The contract's estimated cost is established,
based upon a maximum number of hours set forth in the con-
tract. EPA is obligated to order and the contractor is obli-
gated to furnish the specified level of effort within the time
period set forth in the contract. The contract provides for a
downward adjustment in the contractor's fees if the contractor
provides less than 90 percent of the specified level of
effort. The contract's scope of work merely sets forth the
broad outlines of the type of work to be performea. During
the term of the contract, EPA issues work assignments which
draw on the contract's specified quantity of person-hours and
require the contractor to work on a specific task.
EPA raises the following hypothetical situation:
"Assume a level of effort, work assignment
contract is awarded October 1, 1982, with a
period of performance through September 30,
1983. The contract has an option for one addi-
tional year running from October 1, 1983,
through September 30, 1984. Both the basic
period of performance and the option year are
for 10,000 professional hours for each period.
Assume that the contractor has provided 9,000
hours as of September 25, 1983 and EPA issues a
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B-2I4597
work assignment on September 26, 1983, for
1,000 hours. The contractor will provide the
bulk of hours in FY 1984. The work assignment,
when viewed alone, is for nonseverable ser-
vices."
For purposes of our analysis of this hypothetical situation,
we have assumed what EPA has implied but not stated, that the
contract is being funded under an appropriation that is
available for obligation only through the end of the contract
term.I/
EPA asks two questions regarding this hypothetical situ-
ation. The first question is whether it properly may issue
the 1,000 hour work assignment on September 26, 1983, recog-
nizing that the contractor will provide the bulk of hours in
fiscal year 1984. The second question is whether it could
modify the terms of a level of effort contract to accommodate
a work assignment extending beyond the term of the contract.
Analysis; We conclude that in the hypothetical situation
posed by EPA, the issuance of a work assignment which could
not be completed within the contract's initial term of perfor-
mance, i.e., by September 30, 1983, would have violated both
the Federal Procurement Regulations (FPR)2/ and the "bona
fide need" rule, 31 U.S.C. § 1502(a). As EPA concedes, EPA's
level of effort contracts fall squarely within the FPR defini-
tion of "term contracts." Section 1-3.405{e)(2) of the FPR
provide:
"The Term form is one which describes the scope
of work to be done in general terms and which
obligates the contractor to devote a specified
level of effort for a stated period of time for
the conduct of research and development."
Our assumption is based on statements in EPA's inquiry
letter such as "so long as a nonseverable work assignment
was issued during the period of availability of a
particular appropriation * * *." P.4. We are aware that
EPA generally receives appropriations which are available
for 2 fiscal years, but the principles remain the same.
The FPR, rather than the Federal Acquisition Regulation
(FAR), governed procurements by civilian agencies during
the time period specified in EPA's hypothetical ques-
tions. However, the FAR has nearly identical provi-
sions. See FAR 16.306(d)(2) and (4).
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B-214597
The FPR further providesin section 1-3.405(e) ( 5 ):
"In no event should the term form of contract
be used unless the contractor is obligated by
the contract to provide a specific level-of-
effort within a definite period of time."
(Emphasis added.)
Accordingly, to permit a contractor to provide a portion of
the required 10,000 professional hours beyond the basic period
of performance, i.e., after September 30, 1983, would be con-
trary to the FPR requirement that such term contracts "provide
a specific level of effort within a definite period of time."
Further, the issuance of a work assignment which could
not be completed within the contract's initial term of perfor-
mance would also violate the bona fide need rule. The bona
fide need rule requires that appropriations made available for
obligation during a given fiscal year or years may be obli-
gated only to meet a legitimate need arising in that fiscal
year (or years). 31 U.S.C. S 1502(a) (1982). See, e.g.,
38 Comp. Gen. 628 (1959).
As a general rule, service contracts can extend beyond
the duration of an appropriation period only when the portion
of the contract,to be performed after the expiration of the
appropriation period is not severable from the portion
performed during the prior period. See 60 Comp. Gen. 219
(1981). In the EPA case, the level of effort contract is, by
definition, a severable services contract. It requires the
performance of a certain number of hours of work within a
specified time period rather than requiring the completion
of a series of work objectives. Because the original con-
tract in EPA's hypothetical is for 10,000 hours of work to
be performed in fiscal year 1983, funds obligated under the
contract may not be expended for work performed within fiscal
year 1984. See B-183184, May~30, 1975. The fact that a work
assignment issued under the contract late in the fiscal year
might, by its nature, be considered nonseverable if this were
what the FPR (as well as the FAR) call a "completion" form of
term contract, does not change the result in this case. A
completion contract would require the ^ccu^ractor to complete
and deliver a specified end product—e.g., a final report. As
long as the end product is a bona fide need of the year in
which it was ordered, the funds could remain obligated until
the end product was delivered. See FPR l-3.405(e)(1) and
FAR 16.302(d)(1). In contrast, the EPA hypothetical con-
tract calls for 10,000 work hours before the end of the fiscal
year. Performance of those hours in the next fiscal year
would not be consistent with the requirements of the con-
tract.
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The second- question raised informally by EPA is whether
it may modify the original contract to accommodate the
^completion of a work assignment, performance of which ;will
extend beyond the end of the contract period of performance.
In raising this question, EPA says it recognizes that a
modification cannot be issued which extends the term of the
contract beyond the period of availability of the fiscal year
appropriation to be charged. Essentially, EPA is asking
whether it may amend a level of effort contract near the end
of the fiscal year to provide for the performance of a
nonseverable task, performance of which will extend beyond the
end of the fiscal year. As noted, EPA's modification would be
for the purpose of funding the modification with expiring
appropriations. Any options exercised, of course, would be
funded with currently available appropriations.
The determination of whether a particular modification
should be treated as a new procurement is generally decided on
a case-by-case basis. For example, we have held that if the
contract as changed is materially different from the contract
for which the original competition was held, the new
requirement should be procured competitively, unless a non-
competitive procurement is justifiable. 57 Comp. Gen. 285,
286 (1976).
The essential characteristics of a level of effort
contract are the stated level of work and the term in which
that work is to be performed. Therefore, any change in that
structure — particularly a change from a specified level of
effort for a fixed term to the performance of specified,
non-severable tasks — would "substantially" change the
contract such that "the contract for which competition was
held and the. contract to be performed ere essentially
different." Accordingly, we conclude that a modification of
the sort suggested by EPA to a level of effort contract could
not be done by contract modification, but rather would require
the execution of a new contract. This is because EPA's
suggested modification would turn a level of effort contract
into a contract for one or more nonseverable tasks.
In a memorandum prepared by the EPA Office of General
Counsel on this issue before it was submitted to us, the sug-
gestion was made- that use of indefinite quantity or require-
ments contracts would eliminate the end of year problems
encountered with level of effort term contracts. We would
agree that the kind of services explained in EPA's hypothet-
ical question could be acquired under such an arrangement,
provided that the nature of the services themselves is non-
severable. It appears that the most satisfactory form of con-
tract, for EPA's purposes, may be the completion contract,
described earlier as requiring a specific end product as a
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B-214597
condition for payment of the full fee and costs. As a non-
severable contract, performance could extend into a subsequent
year but be payable from funds obligated at the time the con-
tract was executed. See FAR 16.306(d)(1),(2), and (3).
/ '
"Y^VComptroller* General
n of the United States
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Attachment I
rage i
f •<•
— .-. A_- ->•
MEMORANDUM
it? ! 2 &-'•
9 4,, ;**w*
rgan Ki
Compcr oiler ( '
TO:
See Attached Listing
The purpose of this meaorandua is to stats the Office of the- Coortrollsr
pa lie- and procedures for the deobligatioa and cecertiiication of. excess
funds currently obligated on Agency contracts. I an offering the following
guidance to help clarify the recertification process as it applies., in.
particular, to cost reimbursement tern, form contracts. The recertificarion
process has been the subject of much discussion since the Office of General
Counsel decision applying the bona fide need principle to cost reimbursement'
term contracts. Definitive policy on the application of the bona. fide
need principle was issued by Seymour Greenstone on February L0» L984-..
BACKGROUND
The bona fide need principle is defined as an obligation against as
appropriation, which is valid only if it relates to an actual need existing
within the life of an appropriation. In order to obligate a fiscal year
appropriation for payments to be made in a succeeding year, Che concract
imposing ehe obligation must not only have been made within the fiscal year
to be charged, but ehe contract must have been made to meet a bona. fide.
seed of csat fiscsl year.
DEOBLIGATION AND RSCEtCTIFICATION POLICT
You should use ehe following guidance to determine when recertificacion
is required.
1. Cose reimbursement term form contracts with option periods. Excess
funds (i.e. Chose funds obligaced on Che contract in excess of the work.
performed .or expected to be performed') exist on the contract.
a. If the life of the appropriation obligated on the base contract will
expire before the end of ehe option period, the excess funds are not availabl«
Co fund Che option period. Recertification is not possible.
TN8
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Attachment I
rage z
Examoler
A cose reimbursement cera fora concracc is co expire OQ September 30,
1984. The concracc.contains a one year option. The funds obligated
for the base year effort are from the fiscal year 1983/1984 Abatement,
Concrol and Compliance appropriation. Excess fiscal year 1983/1984
funds are noc available co fund the fiscal year 1985 option period.
b. If Che life of Che appropriacion obligated on the base contract will
cover Che option period, che excess funds nay be deobligaced from the base
period and may be used to fund the option period effort. If che reobligation
occurs during che current year allowance, no recertification is required. If
che reobligacion is planned for a cime after che year of che current allowance,
and remains wichin Che life of che appropriation, recertificaeion is required.
Example
The cose reiaburseaenc Cera form coacracc expires on September 30, 1984.
The concracc contains a one year option period. The funds obligated
for the base year effort are from the fiscal year 1984/1985 Abatement,
Control and Compliance appropriation. Excess fiscal year 1984/1953
funds have been identified on the base concracc. The excess funds
may be removed (deobligaced) from che base concracc and used co
fund che opcion period (fiscal year 1985) if che option is exercised
and che obligacion is aade on or before September 30, 1984 (i.e. before
che end of che current year allowance). No recertification is necessary.
The excess funds may be removed from che base concracc and used co
fund Che opcion period after September 30, 1984, only if Che funds
have been recertified.
2. Indefinite quaneiey - delivery order fora concraees wieh opcion periods.
Excess funds (i.e. funds obligaced on a delivery order in excess of che
anticipated actual expenditures) exisc on a delivery order.
a. If Che life of Che appropriacion obligaced on che delivery order
will expire before che issuance of a new delivery order, che excess funds
are noc available Co fund che new delivery order. Recertification is noc
oossibie.
Examole:
An indefinite quantity contract has a base ordering period of January 1,
1984 to January 1, 1985. A delivery order issued on January 1, 1984
and funded wich fiscal year 1984 Salaries and Expenses funds is found co
have excess funds available. The funds may noc be removed from the
initial delivery order and placed on a new delivery order -to be issued
after .September 30, 1984. However, funds may be removed from the initial
delivery order during the current year allowance and used elsewhere if
action is taksn prior to October 1, 1984.
b. If the life of the appropriacion obligaced on che delivery order will
cover the time the new delivery order is placed, the excess funds on the initial
delivery order may be reobligated on a new delivery order (this assumes the
new delivery order is nonseverable'or if severable, that the period of
performance of the delivery order is within the period of availability of
the appropriation). If the new delivery order is issued (under the base
13-4 121
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Attachment I
contract or a new option period) within the period of the current year's
allowance, no recertif ication is necessary. If the new delivery order is to
be issued ia a period beyond the current year's allowance, recertification
is required.
Examole:
An indefinite quantity contract has a base ordering period of January 1,
1984 to January 1, 1985. A delivery order issued on April 1', 1984 and
funded vita no year Superfund monies is found to have excess funds avail-
able. The excess funds may be removed from the delivery order and placed
on a delivery order issued on September I, 1984. NO recertif ication is
necessary. If excess funds are removed from the delivery order and
placed on a delivery order issued on November 1 , 1984 the funds first
must be recertified. The new obligation is beyond the initial year's
allowance. . .
Excess funds are identified on an Agency contract. The excess zEsnds
may be deobligated from this contract and reobligated on a new contract if
the appropriation used to fund the original contract is still available.
If the new obligation occurs within, the current year's allowance period,
no recertif ication is required. If the new obligation occurs after the
current year's allowance has ended, recertif ication is required.
Exanole:
A cost plus fixed fee contract is identified as having excess fiscal
year 1984/1985 Abatement, Control and Compliance funds. These funds
were part of the fiscal year 1984 allowance. These excess funds may
be deobligated and reobligated on a new contract without recertification
if the new contract obligation occurs in fiscal year 1984. Recertifi-
cation is required for a new obligation in fiscal year 1985.
RECERTIFICAIION PROCEDURES
Allowance Holder Responsibility - Where recertification of funds is
necessary, it is the responsibility of the allowance holder to initiate
deobligating documents and forward to Procurement & Contracts Management
Division for processing. A written request for recertitication should
also be seat to the Budget Division attaching a copy of the deobligating
document. The request should include a justification for the use of
recertified funds. In cases where recertification. is necessary, the
allowance holder should not presume that the funds will be recertified.
Procurement & Contracts Management Division (PCMD) Responsibility -
PCHD will expedite processing of the deobligating document and forward
ic to the .applicable servicing Finance Office.
Financial Management Division - The Financial Management Division
will record the deobligations from PCMD immediately and include the
amount of the deobligation as part of net recoveries in their monthly
and end-of-year report.
TN8
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Attachment I
f age 4
Budget Division - The Budgec Divisioa will expedite requests for
recertificacion and respond as quickly as possible to reissue funds in
a& Allowance. In some cases, the Budget Division muse first request
that net recovered funds be apportioned to E?A by the Office of Management
and Budget (OMB). Funds then can be recertified to the Allowance Holder
In an Advice of Allowance.
'Please be aware that there is no change to the existing procedure to
have deobLigated prior year funds recertified. Current guidance can be
found in Policy & Procedure Memorandum (PPM) 013, Recovery and Overrun of
Prior Year Obligaeions. According to Agency Policy as stated in this PPM,
there is no guarantee that deobligated funds will be recertified. The
issuance of recovered funds is subject to Agency priority needs at the
discretion of the Administrator and Deputy Administrator. If you have any
questions concerning this memo, please contact Rick, Peterson (382-4212).
Attachment
PCMD
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STANDARDS OF CONDUCT
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ETHICS PRETEST
Which of the following circumstances would EPA view as ethical employee behavior.
(Indicate yes/no/comments)
1. EPA employee accepts Christmas gift from EPA contractor who has been personal
friend for 10 years and has been giving Christmas gifts during that entire period.
2. EPA employee speaking on behalf of EPA at professional meeting two hours from
Washington accepts ride to meeting with other speaker from private company.
3. EPA employee attends federal office automation trade show and accepts the following
items from vendors there:
a) desk calendar;
b) discount coupon for software worth $99.00;
c) disk holder with vendor's name and address (worth $12.00 retail);
d) pen with vendor's name and address (worth $4.99 retail);
e) free buffet lunch.
4. EPA employee in OSWER has received proposals from several companies in response
to solicitation. The lowest bidder presently has contract with OARM. OSWER
employee calls project officer in OARM to inqurie if lowest bidder has been
performing satisfactory work and within original contract budget. Is project officer
permitted to respond?
5. EPA employee receives unsoliciated proposal, but has no funds to fund proposal.
One year later, EPA employee writes RFP for competitive procurement based on
proposal submitted, and divulging the methods proposed in the unsolicited proposal.
Is this permissible? Does the original submitter have a right to protest?
6. EPA employee receives invitations from EPA contractors to attend Christmas parties.
To avoid any showing of partiality, EPA employee decides to attend all parties.
7. EPA employee attends all-day briefing by EPA contractor at contractor's office.
Contractor provides buffet lunch for all attendees, both public and private.
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8. EPA employee's husband has substantial private stock in EPA contractor company,
representing 25% of husband's net worth; employee is husband's beneficiary. EPA
employee serves on technical review panel for major procurement, where EPA
contractor has submitted proposal.
EPA employee receives and accepts invitation to speak on behalf of EPA at private
conference at the Greenbriar funded by state government funds. Invitation includes
transportation, meal and lodging expenses and $200 honorarium. Employee also
attends separate reception and dinner for speakers sponsored by private company
arranging the conference.
10. EPA employee is friend of local official running for reelection, and assists official
in telephone poll on specific election issues totally unrelated to federal activities or
issues.
11. EPA employee prepares competitive procurement RFP. During the alloted response
period, employee leaves EPA and joins firm that is bidding on the RFP, assists firm
in preparing bid proposal, and appears as staff in the proposal.
12. EPA contract is due to expire and be recompeted. Existing contractor requests EPA
project officer for information regarding anticipated requirements and continuation
work., EPA project officer gives information to contractor.
13. If a bribe if offered, the employee should not accept anything, but indicate a
willingness to consider the offer, and then contact EPA's Office of Inspector General.
14. An EPA employee served on a technical evaluation panel for a contract award. After
he left EPA, he went to work for the contractor and was assigned to work as project
manager for the contract he helped to award. A dispute arises over the meaning of a
contract provision and the company's management asks the former employee to
prepare a written submission to EPA for signature of the company's president.
15. An employee is the treasurer of an environmental group which has applied to EPA
for a grant. The employee receives no pay for this activity.
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16. Which of the following qualify as indicators of potential fraud: (Circle ones that are
indicators)
a. Purchasing items and services from single source.
b. Selective release of information concerning requirements and pending purchases.
c. Providing mailing list of potential contractors to contracting officer for mailing
out RFPs.
d. Defining statement of work and specifications to fit products/capabilities of
limited set of contractors.
e. Using statements of work, specifications or sole source justifications developed
by or in consultation with a specific contractor.
f. Splitting up requirements to fit within the small purchase requirements
($25,000).
g. Vague specifications.
h. When requested by a contractor to recommend possible subcontractors or experts
with the desired expertise, providing references to several known individuals or
groups.
i. Acceptance of a late bid (e.g., five minutes after deadline).
j. Wide variance between the technical rating given the best proposal and all other
proposals.
k. Bidders who are qualified and capable of performing fail to bid with no apparent
reason, and relatively fewer than normal bids are submitted.
I. Identical bid amounts on a contract line item by two or more contractors.
m. Contractor includes interest costs as part of contract costs to be reimbursed by
the government.
n. Contractors submits progress payment request for work completed but not yet
accepted by the government.
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STANDARDS OF CONDUCT
RULE: EMPLOYEE SHOULD AVOID ANY ACTIVITY
OR SITUATION WHICH CREATES EVEN THE
APPEARANCE OF IMPROPRIETY OR CONFLICT OF
INTEREST.
SUBRULES:
1. No Participation In Any Decision Where Employee
Or Close Relative Has Financial Interest. File Financial
Statements Depending On Grade (If GS-13 Or Above,
Although Some Divisions Require Lower Levels).
2. No Representation Or Other Party In Court/Agency
In Matter In Which U.S. Or D.C. Government Is Party
Or Has Interest.
3. No Outside Employment That Violates Law, Creates
Conflict Of Interest, Or Involves EPA Project, Time,
Property, Or Confidential Information.
4. No Gifts From Foreign Government Over $180; No
Gifts From Private Parties Over $10 Retail.
5. No Payment Accepted For Official Appearance.
(Can Accept Gifts For EPA Scholarship Fund Or
Daycare Center.) No Payment In Excess Of $2000
For Private Outside Appearance.
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STANDARDS OF CONDUCT (CONT.)
SUBRULES:
6. No Outside Activities That Relate To Specific EPA
Matters, Involve Government-Financed Trips, Approving
Advertising, Imply Official EPA Support, Involve
Personal Compensation For Work Performed As
Government Employee.
7. No Reimbursement For Official Travel Expenses
Except From State/Local Governments Or 501(c)(3),
And Not In Excess Of Government Travel Regulations.
8. No Nonofficial Use Of Government Property Or Time.
9. No Hatch Act-Restricted Activities.
10. General Standards Related To Not Using Public Office
For Private Gain; Giving Preferential Treatment;
Impeding Government Efficiency/Economy; Losing
Independence/Impartiality of Action; Making Decision
Outside Official Channels; Adversely Affecting
Confidence Of Public In Government Integrity.
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STANDARDS OF CONDUCT
1. GRATUITIES: Solicitation Or Acceptance Of Gifts,
Entertainment, Or Favors From A Contractor Is Expressly
Prohibited. The Following Are Exceptions To This
Rule:
Food Or Refreshments Of NOMINAL VALUE Only
When Official Business Is Being Transacted During
The Meal And Only When There Is No Arrangement
For Separate Billings.
Food Or Refreshments At WIDELY ATTENDED Gatherings
Sponsored By Industrial, Technical Or Professional
Organizations;
INCIDENTAL Transportation From A Private
Organization In Connection With Official Duties;
UNSOLICITED Advertising Or Promotional Material
Of NOMINAL Value (Under $10 Retail), Such As Pens,
Pads, Or Calendars; And
Gifts From Family Or Friends Only If It Is Obvious
That The Personal Relationship, And Not The Business
Relationship, Is The Reason For Such Gifts. Although
The Gift May Be Acceptable, The Relationship In
Itself May Be a Conflict.
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STANDARDS OF CONDUCT (CONT.)
2. PROTECTING CONFIDENTIAL BUSINESS
INFORMATION:
EPA Personnel Are Not Permitted To Divulge Any
Information Considered By A Contractor To Be
Confidential To Anyone Outside The Government Or
Not Having A Need To Know (Including Other EPA
Employees).
3. MAINTAINING IMPARTIALITY:
EPA Employees Must Treat All Firms With
Objectivity And Equal Conduct. There Should Be
No "Outside Socializing" With Contractor
Personnel.
4. DISCLOSURE OF PROCUREMENT INFORMATION:
Project Officer And Other Technical Evaluation or Source
Evaluation Board Members Must Maintain The Integrity
Of The Competitive Process And The Independence Of
Contractors' Proposals By Not Divulging Any
Confidential Procurement Information Before, During Or
After An Acquisition.
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STANDARDS OF CONDUCT (CONT.)
5. POST EMPLOYMENT RESTRICTIONS:
No EPA Procurement Official May Solicit Or Accept
Promise Of Future Employment Or Business
Opportunity With Competing Contractor During
Conduct Of Procurement (Eff. July 1989)
After July 16,1989, No Procurement Official Or
Reviewer Of The Award, Modification Or Extension Of
Contract May Participate In Negotiations Or Advising
On Negotiations On Behalf Of Contractor For 2
Years From Date Of Agency Participation; Nor
Work Personally And Substantially On Contract
For Contractor For 2 Years From Date Of Agency
Participation.
Former Govt. Employees Permanently Barred From
Representing Parties Other Than U.S. Govt. Before
Federal Court Or Agency On Matters In Which They
Were Personally And Substantially Involved At EPA;
Barred For 2 Years Only If Official Responsibility
For Matters But Not Actual Participation In Them.
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STANDARDS OF CONDUCT (CONT.)
5. POST EMPLOYMENT RESTRICTIONS (Cont.):
One-Year Prohibition Against Award Of Sole-Source
Contract To Former Employee Or Employee's
Firm If Employee Was Involved In Developing Or
Negotiating Contract Proposal At EPA, or Would Be
Involved In Management, Administration Or
Performance Of Project At EPA.
Former Senior Employees Restricted From Assisting
Outside Party By Personal Presence Before Agency
Regarding Matters Where Participated Personally And
Substantially For 2 Years; Also Prohibited From
Communicating With Intent To Influence EPA On
Any Matter For 1 Year
*Note: One-year suspension of implementation of
these Procurement Integrity Act restrictions in effect
beginning 12/1/89.
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PROCUREMENT OFFICIAL CERTIFICATE OF INTEGRITY
The undersigned certifies that:
1. He/she is familiar with and will comply with
the requirements of section 27(b) and (e) of the
Office of Federal Procurement Policy Act (41 U.S.C.
423) as implemented in section 3.104-3 of the
Federal Acquisition Regulation (copy attached).
2. He/she will not engage in any conduct prohibited
by sections 27(a), (b), (c), and (e) of the Act.
3. He/she will report immediately to the Contracting
Officer any information concerning a violation or
possible violation of sections 27(a), (b), (c), or
(e) of the Act.
This certification concerns a matter within the
jurisdiction of an Agency of the United States and
the making of a false, fictitious, or fraudulent
certification may render the maker subject to
prosecution under Title 18, United States Code,
Section 1001.
Name
Date
Title
Organization
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PROCUREMENT OFFICIAL EXIT CERTIFICATE
The undersigned certifies that:
He/she understands the continuing obligation, during
the conduct of the procurement, not to disclose
proprietary or source selection information related
to the procurement(s) on which he/she served as
a procurement official.
This certification concerns a matter within the
jurisdiction of an Agecy of the United States and
the making of a falso, fictitious, or fraudulent
certification may render the maker subject to
prosecution under Title 18, United States Code,
Section 1001.
Name
Date
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Chapter 5
STANDARDS OF CONDUCT
Federal employees are responsible for the day-to-day management of the
Government and its funds. As such, the taxpayers expect and are entitled to impeccable
conduct on the part of Government personnel. All official decisions must be free from
any consideration of personal self-interest or any type of favoritism.
EPA employees should read and understand the requirements of 40 CFR Part 3,
which sets forth the standards of conduct for personal behavior. In addition, a pamphlet
entitled "U.S. Environmental Protection Agency Guidance on Ethics and Conflicts of
Interest" is available and has been distributed to all employees. A more recent
publication entitled "Ethics in a Nutshell" can be obtained by calling 475-8960. These
pamphlets summarize and explain the basic conflict of interest laws and EPA regulations.
It is absolutely vital that the restrictions are understood, since criminal penalties may
be imposed for any serious violations.
In 1988, Congress passed the Federal Procurement Policy Act Amendments of
1988, Public Law 100-679. Section 6, entitled "Procurement Integrity," prohibits
competing contractors and government procurement officials from offering or accepting
gratuities, soliciting or discussing postgovernment employment during a procurement,
or soliciting or disclosing proprietary or source selection information. Interim
implementing regulations went into effect on July 16, 1989. A one-year suspension of
the implementation of these regulations went into effect December 1, 1989.
Nonetheless, they were in effect for several months and may take effect again in one
year. These regulations and EPA guidance associated with them should therefore be
reviewed and understood by EPA employees.
The Designated Agency Ethics Official responsible for managing the EPA ethics
program is EPA's Deputy General Counsel. He is assisted by an Alternate Agency Ethics
Official and by Deputy Ethics Officials in each program area or region. These officials
are responsible for advising their employees on the rules of ethics, coordinating their
advice with the Designated Agency Ethics Official, reviewing requests for approval of
outside employment, and reviewing and maintaining confidential statements of
employment and financial interest. Deputy Ethics Officials are Assistant
Administrators, Associate Administrators, Staff Office Directors, Regional
Administrators, Office Directors, Laboratory Directors, and the Inspector General. If
questions arise, employees should consult either their Deputy Ethics Official or the
Designated Agency Ethics Official.
5.1 Ethics for all Government Employees
The following general standards are applicable to all EPA employees:
(1) An employee shall not participate in any decision, as a Government officer
or employee, on a matter in which he or she (or a close relative) has a
financial interest. This restriction applies to rulemaking, policy matters,
adjudications, grants and contracts. An employee must recuse him or herself
from all such matters even if it would create only the appearance of a
conflict of interest. Certain types of financial interest are exempted from
the statute, and others may be waived by the Designated Agency Ethics
Official if it is deemed that the financial interest is not so substantial as to
affect the integrity of the employee's services.
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(2) Designated EPA employees must file confidential financial disclosure
statements in order to assist the Agency in preventing conflicts of interest on
the part of certain key employees in decision-making roles. Generally, GS-
13's and above who exercise judgment in decisions relating to contracts,
grants, or regulations which might have economic impacts on those outside
the Government, are required to file such statements. However, below the
level of GS-13, employees who serve as Project Officers, Contracting
Officers, On-Scene Coordinators, Inspectors, or Auditors will also be
requested to file confidential financial disclosure statements.
(3) No employee may represent any outside party before a court or Government
agency in a matter in which the United States or the District of Columbia is a
party or has a direct interest.
(4) An employee's salary may not be supplemented by any source other than the
United States Government (except if contributed by a state, county, or
municipality) as compensation for the employee's services as a Government
official.
(5) An employee shall not engage in any outside employment which would violate
Federal or State law, give rise to a real or apparent conflict of interest,
involve work for an EPA project, or involve the use of EPA time or property,
or any information confidential to EPA.
(6) Employees may not solicit, accept, or retain gifts of over "minimal value"
(in excess of $180) tendered by any foreign government. All gifts from
foreign governments must be reported to the Office of International
Activities. Gifts of more than minimal value may only be accepted if refusal
to accept would cause offense or embarrassment, and any such gifts must be
turned over to the Agency for disposal.
(7) No employee may accept payment for any official appearance, i.e., as an EPA
representative, unless that payment is accepted on behalf of and donated to
the EPA Scholarship Fund or Day Care Center. If the appearance is clearly in
the nature of private outside activity, honoraria are limited to $2,000 for
any one appearance.
(8) An employee who does any teaching, speaking, writing, or editing outside of
his EPA official duties is restricted from all of the following activities:
(a) Instructing people on dealing with specific matters pending in EPA;
(b) Pursuing any such activities in connection with trips at Government
expense;
(c) Approving or disapproving of advertising;
(d) Expressing or implying official EPA support or approval of any work
or the opinions expressed; or
(e) Accepting outside compensation for any work performed as a part of
Government duties.
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In addition, if an employee writes on a subject related to his or her official
duties, the written material must either omit any mention whatsoever of the
employee's connection with EPA or include the following disclaimer:
"This (article, book, etc.) was (written/ edited) by (name) in
(his/her) private capacity. No official support or endorsement
by the Environmental Protection Agency is intended or should be
inferred."
(9) Employees may not accept any reimbursement for official travel expenses
from outside sources except state or local governments or organizations
listed under Section 501 (c)(3) of the Internal Revenue Code. Even from
these sources, the amounts may not be greater than EPA would have provided
under the Travel Regulations.
(10) Employees may not use or allow the use of Government property or time
(including Government offices, equipment, or the services of subordinates)
for other than official purposes.
(11) All employees are subject to the restrictions on political activity covered
in the Hatch Act. In addition, employees may not use their official authority
to affect a federal election, promise any Government favors or rewards in
return for political activity, deprive anyone of Government employment or
benefits for refusal to make a political contribution, solicit any such
contributions from federal employees, make a political contribution to
another federal employee, or solicit or receive political contributions on
Government premises.
(12) General standards which affect all EPA employees prohibit any action
which might result in, or create the appearance of:
(a) Using public office for private gain;
(b) Giving preferential treatment to any organization or person;
(c) Impeding Government efficiency or economy;
(d) Losing independence or impartiality of action;
(e) Making a Government decision outside official channels; or
(f) Adversely affecting the confidence of the general public in the
integrity of the Government.
5.2 Rules for Personnel who Deal with Contractors
Government employees who work with contractors have even further
restrictions placed upon them due to the sensitivity of this work. There must be no
question of favoritism or any action which might compromise or appear to compromise
the integrity of EPA's acquisition program. All Project Officers, Work Assignment
Managers, and Delivery Order Officers, as well as any other individuals who work with
contractors, must observe the following restrictions in the conduct of their
relationships with EPA contractors:
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(1) Gratuities
Solicitation or acceptance of gifts, entertainment, or favors from a
contractor is expressly prohibited. Exceptions include:
(a) Food or refreshments of nominal value only when official business is
being transacted during the meal and only when there is no
arrangement for separate billing;
(b) Food or refreshments at widely attended gatherings sponsored by
industrial, technical or professional organizations if the employee is
representing EPA;
(c) Incidental transportation from a private organization in connection
with official duties;
(d) Unsolicited advertising or promotional material of nominal value
(under $10), such as pens, pads, or calendars; and
(e) Gifts from family or friends only if it is obvious that the personal
relationship, and not the business relationship, is the reason for such
gifts. Although the gift may be acceptable, the relationship in itself
may be a conflict.
Employees must use judgment and discretion even when using any of the
exceptions listed above. If the acceptance of such a nominal gift or gratuity
would create even the appearance of an impropriety or if the contractor
would expect to be rewarded through an employee's official EPA capacity, it
must be declined.
(2) Protection of Confidential Business Information
EPA technical personnel often are privy to information which contractors
consider to be highly confidential. Examples of such confidential business
information include: profit margins, indirect cost rates, number and kind of
employees, individual salary rates, or amount of award fee earned.
Unauthorized disclosure of such information is a violation of a contractor's
rights under the Freedom of Information Act, and could possibly place its
competitors in a more advantageous position on future requirements.
Therefore, care must be taken not to discuss anything known about a
particular contractor to anyone (including other EPA employees) not having
a "need to know." Even such an innocent remarks as offering your personal
opinion of a contractor's performance on a particular task could be
detrimental and is unauthorized.
(3) Maintaining Impartiality
It is very easy to become partial towards a firm who is performing
exceptionally well and meeting your every need. When you work very
closely on a day-to-day basis with contractor personnel, it is difficult to
maintain an objective opinion. However, care must be taken to keep the
relationship at arm's length.
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The Government and the contractor are separate parties to an agreement with
different responsibilities and different goals. Our goal is to receive products
or services within a reasonable time period and at a reasonable cost, while
our responsibility is to provide technical direction, enforce the terms and
conditions of the contract, and to make payment in return for products or
services.
The contractor, on the other hand, is trying to make a profit and enhance his
reputation so he can continue to make profits in the future. He is
responsible for.adhering to the terms of the contract and delivering the
products or services.
Since the interests of the two parties are so different, Government employees
must remain objective about a contractor's performance. Government funds
must be spent wisely and efficiently, and it must not appear that Project
Officers, Work Assignment Managers or Delivery Order Officers are losing
sight of their responsibilities and goals. Therefore, a distance must be
maintained, and socializing with contractor personnel outside of official
duties is firmly discouraged. Government employees' actions should be such
that a full public disclosure would not give rise to a question of impropriety.
Project Officers are particularly susceptible to this possibility, and should
take great care that their conduct is proper.
(4) Disclosure of Procurement Information
All information before award of any contract or contract modification is
considered to be highly confidential. Any unauthorized disclosure of such
information could lead to one or more offerers' having a competitive
advantage over others, which could result in a bid protest and a ruling
against the Agency. The integrity of the competitive process is entirely
dependent on the premise that all firms are on an equal footing. In the case of
a contract modification, the validity of a cost proposal is only assured if the
contractor prepares it independently without benefit of Government
estimates, knowledge of the amount of funding available, or any
prenegotiation positions being considered by EPA.
Project Officers and any other program personnel privy to such information
must ensure that they do not inadvertently let slip any advance or otherwise
confidential procurement information to current contractors or other firms
who contact them, either before, during or after contract award. Penalties
associated with disclosure can be severe. Individual employees can be fined
up to $100,000, whether EPA or Contractor. In addition, an Agency
employee who knowingly and willfully discloses or promises to disclose any
proprietary or source selection information can be subject to criminal
penalites up to five years of imprisonment.
If any questions arise, or there are areas of which program personnel are
not sure, direct all inquiries to your Contracting Officer. It is important to
have such information come directly from the Contracting Officer rather
than the Project Officer anyway, as this ensures that there is a control on
who receives what information.
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5.3 Post-Employment Restrictions
All employees are subject to some type of conflict-of-interest restrictions after
their EPA employment has ceased. These restrictions were made more stringent by the
July 1989 Procurement Integrity prohibitions. The following is a brief summary of
these restrictions:
(1) All former Government employees are permanently barred from
representing anyone other than the United States before a Federal court or
agency with respect to contracts, grants or adjudications, or any other
matter involving "specific parties", in which they ever participated
"personally and substantially" as Government employees. Rulemaking is not
included. Former employees are not barred from seeking competitive
contracts or working on contracts with the agency for which they worked,
excepted as limited by (7) below.
(2) Former employees who, in their final year of EPA employment, had official
responsibility for particular matters involving "specific parties" but did not
actually participate in them are prohibited from representing outside
parties on such matters for a period of two years.
(3) Former employees designated as "senior employees" are restricted from
assisting an outside party "by personal presence" in connection with
particular matters in which they ever participated personally or
substantially for a period of two years. ("Senior employees" include
Assistant Administrators, Office Directors, Regional Administrators, some
Directors of Staff Offices reporting to the Administrator, and some Division
Directors.)
(4) Former employees who served in "senior employee" positions are
prohibited from any communication with EPA with intent to influence on any
matter, including rulemaking, regardless of whether the former employees
participated in the matter, for a period of one year. Communications with
courts and Justice Department attorneys in connection with cases involving
EPA are included in the restrictions.
(5) There is a one-year prohibition against award of a sole source contract to a
former EPA employee orjo a firm in which the former employee is an
officer or director if he or she was involved in developing or negotiating the
contract proposal or will be involved in the management, administration, or
performance of the project. However, there Is no prohibition against the
award of a competitive contract involving a former EPA employee, excepted
as limited by (7) below.
(6) Effectively July 16, 1989, during the conduct of an Agency procurement
of property or services, no Agency procurement official may knowingly
solicit or accept, directly or indirectly, any promise of future employment
or business opportunity from, or engage, directly or indirectly, in any
discussion of future employment or business opportunity with, any officer,
employee, representative, agent, or consultant of any competing contractor.
The term "procurement official" includes any individual, whether an
employee or a contract consultant or advisor to EPA, who has participated
personally and substantially in the conduct of a procurement. Once the
conduct of the procurement has ceased, however, the former procurement
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official is free to engage in such employment discussions although he or she
remains subject to the post employment prohibitions on participating in
procurement negotiations and working on the contract for two years, and on
disclosure of proprietary and source selection information.
(7) No EPA official or employee who has participated personally and
substantially in the conduct of any EPA procurement or who has personally
reviewed the award, modification or extension of any contract for such
procurement shall a) participate in any manner, as an officer, employee,
agent, or representative of a competing contractor, in any negotiations
leading to the award, modification or extension of a contract for such
procurement or in any advising on negotiating strategies, or (b) participate
personally and substantially on behalf of the competing contractor in the
performance of such contract for a two-year period after such participation
or review. Thus, if you personally and substantially participated in a
procurement as a procurement official or personally functioned as reviewer
of that procurement after the effective date of July 16, 1989, you are
barred from working personally and substantially on the contract for two
years from the date of your participation. The two-year ban on providing
advice or information to a competing contractor does not apply to providing
scientific, technical, or other advice that is unrelated to negotiating
strategies. Pages 136/7 present examples of procurement integrity
certificates to be signed by procurement officials, developed in response to
the procurement integrity act amendments.
To participate "personally" means directly, and includes the participation of
a subordinate when actually directed by the supervisor in the matter.
"Substantial" participation means "significant" participation, i.e., the
individual's involvement must be of signficance to the matter. Individuals
may seek an Agency decision on whether their participation has been so
personal and substantial as to trigger these prohibitions.
As noted earlier, implementation of the Procurement Integrity Act Amendments
of July 1989 has been suspended for a one-year period effective December 1, 1989.
Therefore several of these restrictions will not be in effect until the conclusion of that
period.
Appendix 5A contains an example of a conflict of interest situation where an
offerer's consultant gained in-depth knowledge of proposals while a government
employee. A bid protest resulted in ultimate exclusion of the offerer's proposal.
Apparent disclosure of that information was deemed to have given the offerer undue
advantage over its competitors.
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(Vol. 44) 1099
Decisions and Rulings in Brief
Bid Protests — AOP Procurements — Specifica-
tions — An agency cannot reject a quotation for AOP
equipment that could be reasonably interpreted as
meeting its needs, the General Services Administra-
tion Board of Contract Appeals rules. The Army issued
an RFQ asking schedule contractors to quote prices
for rental and maintenance of a "computer output on
microfiche" system. The solicitation stated that the
system must have an "in line duplicator and collator
with a method of preparing the number of copies
required from coding in the master fiche." The pro-
tester, which submitted the lowest quote, offered to
supply a system that could determine the number of
copies required from machine readable bar coding on
the master fiche. By comparison, only one source
produces a system that meets the government's needs
precisely as described in the solicitation.
The rejection of the low quote—for a system that
met the agency's needs by a different method—was
tantamount to making one company's design criterion
a minimum mandatory requirement. Administrative
Judge Vincent LaBella points out. "Even if we could
interpret the RFQ as requiring a system that reads
coding in the master fiche. [the government] failed to
provide the necessary justification for the require-
ment and failed to obtain the approval required when
goods are available from only one source listed on a
GSA nonmandatory ADP schedule contract" Further-
more, the requirement for coding in the master fiche
appears only in the RFQ's general description of the
desired system, the board observes, adding that man-
datory requirements were listed elsewhere in the so-
licitation. Moreover, the relevant mandatory, provi-
sion appears as a functional rather than as a design
requirement, the board notes. "It was reasonable for
protester to assume that a functionally equivalent
system would be acceptable... ;why else would [the
agency] have issued an RFQ permitting quotations on
equivalent equipment?"
Finally, rejection of the low offer here is a clear
violation of the Competition in Contracting Act and
implementing regulations, the board declares. "We
conclude that [the] acquisition in this case violated the
requirement in FIRMR §201-32.206(aX2Xii) for meet-
ing its stated needs at the lowest overall costs." The
agency's stated requirements, as reasonably inter-
preted, are met by the protester's equipment, the
board emphasizes. "We find that [the government] has
[sought] to impose a specific make and model specifi-
cation, and that it has attempted to use a schedule
contract for requirements available from only one
source." The protest is sustained (NCR Corp., GSBCA
No. 8155-P, 11/18/85).
Conflicts of Interest — Evidence — Evidence that
an offerer's consultant gained in-depth knowledge of
proposals while a government employee justifies ex-
cluding the proposal from consideration, the General
Accounting Office rules. The deputy director of the
procuring activity, after evaluation of proposals on a
contract to provide engineering services, retired from
government service and joined the protester as a
consultant. The agency, concerned that the consultant
had extensive knowledge of the proposals, amended
the RFP to add additonal tasks and evaluation factors.
Nevertheless, the protester offered a 33 percent price
reduction in its best and final offer. Consequently, the
agency concluded that the protester knew the relative
technical and cost rankings of its competitors, and
that any resulting award would be based on an unfair
competitive advantage. Accordingly, the agency dis-
qualified protester's offer.
The protester noted that the consultant's employ-
ment agreement bars him from disclosing any confi-
dential information, including that of the government.
However, the agency produced affidavits from two
procurement officials stating that the consultant had
been briefed on the strengths and weaknesses of each
offerer's engineering services, and that he worked on
a source selection plan while employed by the govern-
ment. The agency, before disqualifying an offer,.need
not demonstrate an actual conflict of interest, GAO
observes. "We find that the potential for a decisive
unfair advantage was reasonably established to the
Navy by the [two officials'] statements." The mere
possibility that both officials were mistaken, or that
the protester actually obtained no competitive advan-
tage, does not render unreasonable the agency's con-
cern about a serious impropriety, GAO adds. The
protester took no action—other than signing a stand-
ard employment contract—to prevent an improper
use of the consultant's knowledge or to address the
agency's concerns. The agency had reasonable
grounds to conclude that an impropriety or conflict of
interest was likely, and to exclude the protester from
the competition.
The facts do not establish that there was an organi-
zational conflict of interest, GAO acknowledges. How-
ever, agencies may impose restrictions based on their
needs or the nature of the procurement. "We see'little
difference between excluding an offeror because of an
unfair advantage gained helping prepare, the state-
ment of work... and excluding [one] that has entered
into a consulting agreement with a retired official
who not only was involved in planning the procure-
ment, but is reasonably believed to know the standing
of other offerers and the details of their proposals."
(GAO; NKF Engineering, Inc., B-220007, 12/9/85).
Counterclaims — Sureties — A contractor's crimi-
nal conviction for fraud does not operate as an estop-
pel on the issue of a surety's liability under a Miller
Act performance bond, the U.S. District Court for the
Eastern District of New York determines. The court
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PLANNING AND PREPARATION
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RESPONSIBILITIES RELATED TO
TERM FORM (LEVEL OF EFFORT)
CONTRACTS
1. PROJECT OFFICER ROLE:
Oversee Issuance Of Work Assignments; Ensure That
Work Assignments Fit Under Contract Statement Of Work
Supervise Work Assignment Manager On The
Administration Of Work Assignments But Otherwise
Delegate Daily Work Assignment Management To
Work Assignment Manager
All Other Responsibilities As Usual, Including Financial
Supervision
2. WORK ASSIGNMENT MANAGER/DOPO ROLE:
Draft And Manage Work Assignments; Prepare Technical
Directives; Supervise Task Managers (If Applicable)
Review Monthly Progress Reports, Including Technical
And Financial Reports
Recommend Modifications, Extensions, Etc. To Project
Officer
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PREPARING FOR CONTRACT
ADMINISTRATION
1. Read Your Contract.
2. Evaluate The Statement Of Work.
- Make A List Or Chart Of Tasks And Deliverables
- Make A List Of The Government's Duties And
Obligations.
3. Set Up Contract Files And Record-Keeping Systems.
4. Meet With The Contractor To Go Over Tasks And
Ensure Understanding Of Contract, Work Assignment
And/Or Delivery Order. Note, However, That Only The
Contracting Officer Can "Interpret" Contract Terms.
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STEP 1: READ THE CONTRACT
1. Obtain An Official Copy Of The Contract That Is The
Result Of Final Signing And Includes Any Changes
Made During Contract Negotiations.
2. Thoroughly Read The Contract Statement Of Work.
3. Familiarize Yourself With The Key Personnel.
4. Read Pertinent Contract Terms And Conditions
(These Override The Contract Statement Of
Work.)
5. Ensure That You Have Completed Form 1900-65
Designating You Project Officer Or Work
Assignment Manager/Delivery Order Officer
For The Contract.
6. Familiarize Yourself With All Reporting And Deliverable
Provisions.
7. Familiarize Yourself With Contract Funding Provisions
And Payment Terms.
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STEP 2: EVALUATE STATEMENT OF WORK
1. Make A List Or Chart Of Tasks And Deliverables.
2. Make A List Of Government's Duties And Obligations.
3. Review Schedule And Adequacy Of Reporting
Requirements.
4. Identify Areas Needing Clarification Or Modification
(And If Contract Modification May Be Required).
5. Develop Proposed Modifications/Clarifications.
6. If WAM Or Delivery Order Officer, Discuss With
Project Officer.
7. Discuss, As Pertinent, With Contracting Officer.
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SCHEDULE OF TASKS AND DELIVERABLES
CONTRACT NO. 68-01 -0001
CONTRACT: John Doe Environmental, Inc.
DATE OF AWARD: 9/30/85
EXPIRATION DATE: 8/31/86
TASK/DELIVERABLE
GOVT. TASK
DUE ACTUAL
CONTRACTOR TASK
DUE ACTUAL
1. DELIVER GOVT-FURNISHED DATA
2. PROVIDE DRAFT REPORT
3. REVIEW DRAFT REPORT AND
PROVIDE COMMENTS TO
CONTRACTOR
4. PROVIDE FINAL REPORT ON
CHEMICAL INDUSTRY
10/15/85
12/15/85
10/13/85
12/16/85
11/30/85
11/30/85
1/31/86
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SCHEDULE OF TASKS AND DELIVERABLES
TASK/DELIVERABLE
1 . DEVELOP PROJECT WORKPLAN
2. REVIEW GOVT-FURNISHED DATA
3. PREPARE DRAFT REPORT
4. PROVIDE FINAL REPORT ON
CHEMICAL INDUSTRY
Status Reports
WEEKS AFTER AWARD
12345678 9 10 11| 12 13 14 15 16 17
y^
X2\
j/s\ /*\
•••••••
Final Project Workplan (2 weeks)
Review Government Data (6 weeks)
Prepare preliminary draft (8 weeks)
Complete draft (12 weeks)
Complete final report (16 weeks)
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CONTENT OF THE CONTRACT
STATEMENT OF WORK
1. Background Information
2. Technical Considerations
3. Detailed Description Of Work
4. Specialized Reporting Requirements
5. Deliverables
6. Special Considerations
NOTE: Categories Included May Vary With
Contract Type, E.g., Depending On If It Is A
Mission Or Non-Mission Contract.
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STATEMENT OF WORK TYPES
1. LEVEL OF EFFORT TYPE
Some Quantity Of Technical/Professional Effort
No Specific End Result Can Be Forecast (E.g.,
Basic Research)
Statement Of Work Must Give An Indication Of The
Projected Level Of Effort (E.g., 8000 Person Hours
Of Effort To Determine The Effect Of XX On YY.
2. COMPLETION TYPE (JOB OR TASK TYPE)
Specific End Result Can Be Prescribed (E.g.,
Product, New Method)
Amount Of Effort Not Stated In Contract Statement
Of Work
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STATEMENT OF WORK
CHARACTERISTICS
1. BROAD STATEMENT OF WORK (Mission-Type)
Provides Flexibility
More Difficult To Price Accurately
Often Leads To Cost Reimbursement Type Contract
2. NARROW STATEMENT OF WORK
Closely Restricts Activity
May Require Later Changes
May Limit Innovation
Provides Tighter Control
May Lead To Firm Fixed Price Type Contract
GOAL: TO STRIKE REASONABLE BALANCE
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STATEMENT OP WORK
The contractor shall furnish the personnel, services, materials,
and equipment required to assist the Policy Preparation Branch
(PPB) and the Office of Environmental Programs (OEP), as well as
other related elements of the Environmental Protection Agency
(EPA) in developing and implementing policies and regulations as
mandated "by-statute. Related activities in support of such rule
making will also be involved. Individual requirements- under this
contract will generally fall within, but not be limited to the
following categories:
A. Technical Assistance for PEP Divisions and EPA Regions
The contractor may be asked to summarize technical
data from ongoing and past research efforts to allow PPB
to determine requirements for new guidance and consistency
with existing guidance. The technical assistance will be
directed at the Planning and Implementation Division as
well as other offices within OEP and the 10 EPA regions.
Technical assignments may be of a statistical, economic,
health and/or engineering nature, and may involve
consultation with Federal or State technical personnel.
Such assignments will result from, or lead to, the develop-
ment of specific technical guidance documents.
Technical transfer may also be an integral portion
of this effort to ensure that all the EPA regions remain
abreast of technological development. The technology
transfer may take the form of conferences to bring
together appropriate experts in the substantive areas
including economics, human health, environmental impacts,
and exposure risks. The contractor may be asked to assist
OEP by preparing agendas, audio visual aids, scheduling
for those conferences, compiling digests of technical
papers, presentation, and conference proceedings. No more
than five such meetings, normally to be held in Regional
offices, are likely to be arranged each year.
B. System Development
The contractor may be required to provide or develop
a variety of systems (inanual or automated) to assist OEP
in tracking, coordinating, and monitoring the activities,
policies, correspondence, etc. in its area of responsi-
bility. Such assignments may involve new software
development, modification of existing programs to meet
current needs, or other tasks as assigned by OEP.
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-2-
C. General Policy Support
This effort provides for assistance to OEP staff in
the development of technical policies, strategies and plans
for EPA environmental responsibilities. The policies,
strategies and plans will be consistent with existing
statutes and regulations. The contractor's duties will
range from assisting OEP in coordinating with EPA offices
as well as outside agencies to preparing policy option
papers for presentations to Agency management.
D. Other Tasks as Assigned
The contractor shall be prepared to provide support
as specified in individual work assignments in any other
areas as directed by EPA.
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STATEMENT OF WORK PROBLEMS
COMMON FAULTS
Sentences Too Long And Unwieldy (Sentence Length
Tends To Increase With Complexity Of Project, But The
More Complex The Project, The More Important The
Clarity Of The Statement Of Work)
Use Of Bureaucratic Terms ("Trade" Terminology Is Ok)
Sentences Capable Of Several Interpretations
(If two interpretations are possible, will be
interpreted against the writer, e.g. the Govt)
Failure To Use Terms Consistently When Discussing
Same Thing
Too Much Inclusion Of "How To Do It"; Discuss The
"What," Not The "How"
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STATEMENT OF WORK PROBLEMS
(Cont.)
USE OF COMPLEX AND UNCOMMON WORDS
Tends To Increase If Writer Does Not Understand
The Purpose Of The Effort
EXCESSIVE VERBIAGE
Increases Likelihood Of Ambiguity And Conflicting
Terms
Adds To Problems Of Various Persons Who Will Need
To Understand Statement Of Work
Technical persons (Govt and contractor), contracting
Officers, contractor administrative persons, attorneys,
boards of review and courts
EXCESSIVE USE OF PASSIVE VOICE
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STEP 3: SET UP FILES AND RECORD SYSTEMS
1. Basic Contract File
2. File on PO and Contract Monitor Designation
3. Internal Correspondence File
4. Contractor Correspondence File
5. Technical Direction/Evaluation File
6. Payment File
7. Computerized Or Manual Tracking Systems
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BASIC CONTRACT FILE
1. Copy Of Contract And All Modifications
2. Copy Of Contractor's Technical And Cost Proposal
(Including Resumes & Labor Rates)*
3. Copy Of Specifications, Drawings Or Manuals
Incorporated Into The Contract By Reference
4. Listing Of Contractor Submittal Requirements
5. Listing Of Government-Furnished Property Or
Services
6. Listing Of All Information, Data Or Documents
Furnished To Contractor
7. Copy Of The Pre-Award Survey, If Conducted
8. Schedule Of Compliance Reviews
'Highly Confidential
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FILE ON PROJECT OFFICER AND CONTRACT
DESIGNATIONS
1. Copy Of PO Designation, Including Alternates
(EPA Form 1900-65)
2. Copies Of Approved Work Assignment Manager
And Delivery Order Officer Designations,
Including Alternates (EPA Form 1900-65)
3. Listing of Contract Administration Functions
Delegated to the PO, DO or WAM/DOPO
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INTERNAL CORRESPONDENCE FILE
1. Record Of Communications Between PO And
Other Support Activities
2. Copies Of All Correspondence Between The PO
And The Contracting Officer
3. Copies Of Correspondence Between The PO And
WAM/DOPO And Program Offices
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CONTRACTOR CORRESPONDENCE FILE
1. Copy Of All General Correspondence Related To
The Contract
2. Original Of AH Contractor Submittals Of Data And
Reports
3. Copy Of Notices To Proceed, Stop Work Orders
Or Cure Notices
4. Copy Of All Letters Of Approval Pertaining To:
Materials; The Contractor's Quality Control
Program; Changes In Contractor Key Personnel;
Prospective Employees; Work Schedules
5. Copy Of Letters Between the Contracting Officer
And The Contractor
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TECHNICAL DIRECTION/EVALUATION FILE
1. Copy Of All Drafts Submitted By Contractor
2. Copy Of All Comments Provided To Contractor
On Contractor Submittals, Or Other Records
Of Technical Direction Given
3. Copy Of Government's Contract Monitoring Logs
And Communication Records, Meeting Records
And Notes
4. Copy Of Contractor Evaluation Form And
Deliverable Review Form (See 12-3), Including
CPAF Performance Event Forms
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CONTRACTOR COMMUNICATIONS RECORD
CONTRACT NO. 68-01 -0001
CONTRACT: John Doe Environmental, Inc.
DATE/
TIME
CONTACT
SUMMARY OF DISCUSSION/DECISIONS MADE
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MEETING RECORD
CONTRACT NO. 68-01 -0001
CONTRACT: John Doe Environmental, Inc.
PATE/TIME:
ATTENDEES:
PURPOSE/DESCRIPTION:
DECISIONS MADE:
NEXT STEPS (EPA . CONTRACTOR) (Actions to Take. Issues to Resolve):
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PAYMENT FILE
1. Information Relative to Discount Provisions for
Prompt Payment
2. Copy of Contractor Invoices And Record Of Date
Received (Date Stamped)
3. Copies of Inspection Reports
4. Letters Pertaining to Invoice Clarifications,
Deductions Or Fee Adjustments
5. Back-Up Documentation for Recommendation of
Contractor Payment or Progress Payment
6. Copy of Recommended Suspensions Or
Disallowances
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TRACKING SYSTEMS
MANUAL OR AUTOMATED SYSTEMS TO TRACK:
1. WAM Assigned
2. Work Assignments Issued And Workplans
Received
3. Deliverables And Due Dates
4. Actual Task Or Subtask Completion
5. Funds Obligated And Expended By
Account Number
6. Funds Allocated And Expended By
Work Assignment
7. Hours Assigned And Expended
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SUGGESTED FILE PLAN FOR WORK
ASSIGNMENT MANAGERS AND DELIVERY
ORDER PROJECT OFFICERS
1. Copy Of Work Assignment /Delivery Order, With
All Modifications
2. Copy Of Approved Designation Of Work Assignment
Manager/Delivery Order Project Officer And
Alternates
3. Copy Of Contract And All Modifications
4. Contractor's Work Plan (Drafts & Final, With
Evidence Of Government Approval Of Final)
5. Schedule Of All Tasks And Deliverables
6. Copies Of All Deliverables With Related
Correspondence (Approvals, Rejections, Comments
On Draft)
7. Correspondence Relating To Subcontract Or
Consultant Approvals
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SUGGESTED FILE PLAN (Cont.)
8. Technical Progress Reports
9. Financial Progress Reports
10. Copy of Invoices (With Supporting Documentation)
& Related Correspondence
11. Documentation and Forms Related to Government-
Furnished Property
12. Records of Meetings and Phone Calls with
Contractor
13. Miscellaneous Correspondence
14. Evaluation of Contractor's Performance
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STEP 4: CONDUCT POST-AWARD ORIENTATION
This Should Include Review/Discussion Of:
1. The Statement Of Work (Including Schedule Of
Major Tasks And All Deliverables)
2. Reporting Requirements
3. Special Contract Provisions (Key Personnel Clause,
Subcontract Consent Clause, Etc.)
4. Procedures For Monitoring And Measuring Progress
5. Invoicing And Payment Procedures, Incl. Whom To
Contact
6. The Key Players, Their Responsibilities And The
Chain Of Command (Both Government & Contractor);
Whom To Contact For What (E.g., Property Manager)
7. Logistics Of Operation And Communications
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Chapter 6
PLANNING AND PREPARATION
Before one can properly administer a contract, there are certain steps which are
important to assuring satisfactory contract performance and effective administration.
Some of these begin before award of the contract, when the requirement is first being
defined. Others are to be performed immediately after award. All of these tasks are
extremely essential if EPA is to receive the best possible products or services within the
time required.
6.1 The Importance of the Pre-Award Phase
Effective contract administration is based upon the premise that the contract
expresses the exact agreement of the parties. EPA's primary intention is to get what it
is paying for at the level of quality desired by the program office. But a contract is a
legally enforceable agreement which is only as good as the language it contains. In other
words, a contract is interpreted to mean what it actually says, not what one or the other
of the parties meant to say.
It is also of the utmost importance that the contractor have the necessary
experience and qualifications to perform the work called for by the contract. If the
contractor proves to be incapable of providing the desired quality, there is not much
remedy afforded to EPA unless specific contract provisions have been breached. This is
often not the case, as excellence and quality are difficult to define.
All of this only serves to underline how important pre-awar.d planning is to the
Government. Whoever originates the requirement, whether the Project Officer, Work
Assignment Manager, Delivery Order Officer or Delivery Order Project Officer, has a
basic responsibility to ensure that the language in the RFP and the resultant contract
will meet his or her needs. Statements of Work must be clear and concise, and state
exactly what the Government requires. Evaluation criteria should be structured so as to
allow the selection of a highly qualified source. Reports of Work and other deliverables
should be well-defined, with reasonable deadlines which will meet EPA's needs.
In performing any of these pre-award planning tasks, Project Officers as well as
Contracting Officers need to be aware of the particular requirements and any problems
which are involved in administering and monitoring the different types of contracts.
This awareness can help these personnel to be effective contract administrators and
reduce the time they need to spend in monitoring the contract.
6.2 Reading and Understanding the Contract
After a contract has been awarded in EPA, what is the first thing the Project
Officer should do? The answer is: READ THE CONTRACT.
Even if the Project Officer was responsible for drafting the requirement in the
first place, the most important part of contract administration is to become thoroughly
familiar with the specific obligations of both the contractor and the Government. By
reading the entire contract, the Project Officer will be able to monitor the contractor's
progress more successfully as different stages of performance are reached. If questions
arise, the Contracting Officer will make time available to assist the Project Officer in
understanding the contract's terms and conditions.
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One of the first things which should be examined is: what are the obligations of
the Government? The contract may require EPA to provide property or data to the
contractor. If the property or data is not provided on time, the contractor may have an
excuse for delaying performance, and may even have a basis for a monetary claim against
the Government. Project Officers must be very careful to guard against such potential
delays caused by the Government, and should develop some type of schedule, coordinating
with other EPA offices, if appropriate, for the timely fulfillment of these obligations.
6.3 Schedule of Major Tasks and Deliverables
After reviewing the Government's obligations, the Project Officer should next
make a list of each of the major tasks under the contract. (If the contract is a term
form, or a fixed-rate, indefinite quantity type, this function, as well as the
determination of the Government's obligations, will be performed for each task by the
Work Assignment Manager or Delivery Order Officer, with oversight by the Project
Officer.) See pages 153-4 for sample schedules.
The list of tasks should include all associated deliverables, reporting
requirements, and deadlines, as well as any specific inspection requirements and duties
of the Government. This list should be kept up-to-date by the Project Officer, and used
as a tool for monitoring progress and determining the extent of contract completion.
In identifying the work the contractor is legally obligated to perform, keep in
mind that some documents describing the requirements may have been made a part of the
contract by a device called "incorporation by reference". Requirements incorporated by
reference are not written out in full in the contract, but are simply listed by title and
FAR or other reference. Examples of this are many clauses required by the Federal
Acquisition Regulations. Clauses which are incorporated by reference are just as
binding on the contractor as any other provision specifically written in full text in the
contract. EPA personnel and contractors should review these clauses (by reviewing the
referenced clauses in, for example, the FAR), to ensure their knowledge of the
applicable requirements. Pages 47-8 list a number of the more important clauses;
these are discussed in more detail in later chapters, e.g., in Chapter 7, pages 187 ff.
6.4 Post-Award Orientation
Once a review of the Government's and the contractor's obligations has been made,
it is often useful to hold a post-award orientation conference with the contractor. This
will help to ensure that all aspects of the contract requirements are clear and that each
party is certain of its obligations. Post-award orientation is a useful tool for
contributing to good contractor performance by:
- increasing the assurance that the contractor understands everything the
contract requires.
- clarifying the roles of the Government personnel with whom the contractor
will deal during the life of the contract.
- explaining the contract administration procedures that will be used.
Depending upon the complexity of the contract, the format for post-award
orientation may be relatively simple, such as a letter signed by the Contracting Officer,
or a conference call with both the Project Officer and Contracting Officer participating.
Or, it might be more formal, with a meeting attended by contractor representatives and
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various EPA personnel involved in the administration of the contract. Regardless of
format, the following significant items should be covered:
(1) The Statement of Work (including major tasks and all deliverables);
(2) Reporting Requirements;
(3) Special Contract Provisions (Key Personnel clause, Subcontract Consent
clause, etc.);
(4) Procedures for monitoring and measuring progress;
(5) Invoicing and Payment Procedures;
(6) The Key Players, Their Responsibilities and the Chain of Command
(7) The Logistics of Operation and Communications
The conference should always be chaired by the Contracting Officer. The
objective is to promote an understanding of the contract, and usually it is necessary for
the EPA personnel involved to meet beforehand to develop the agenda and establish a
coordinated position on all points. Preparing for the conference also presents an
excellent opportunity to ensure that all EPA personnel involved in the contract (Work
Assignment Managers, Delivery Order Officers and Delivery Order Project Officers) are
similarly oriented.
After the conference, it is a good idea to prepare a report covering the items
discussed, the understandings reached, and any further actions required, and distribute
it to all attendees.
6.5 Records, Logs, Reports and Files
The need to maintain proper records, logs, and reports cannot be emphasized
enough. The Project Officer's records are considered part of the official contract
documentation. In event of a contract dispute, these records may be subjected to
examination by the Board of Contract Appeals or by the Federal Courts. The Project
Officer should immediately, upon his or her designation, set up a contract administration
and suspense file for the contract.
Documents concerning the contract must be contained in the Project Officer's
official files. This includes copies of the contract arid any modifications, all related
internal and external correspondance, copies of all contractor deliverables, and all
financial and payment information. Exhibit 6-A is a sample file plan which may be used
for this purpose. Sample contractor communications records and meeting record forms
are presented on pages 169-70.
The sample plan may be changed to meet the specific requirements of the
contract. For example, it may be wise to set up a special file section if Government-
furnished property or special equipment is involved in the contract. If the contract
provides for award fee payments, a section that specifically relates to this area should be
set up in the files.
Work Assignment Managers, Delivery Order Officers and Delivery Order Project
Officers have similar recordkeeping requirements, depending on the extent of their
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delegated responsibilities. (See pages181-2 for a suggested file plan.) Failure to
maintain such records reduces the government's ability to hold the contractor
accountable for the contracted-for performance.
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Sample Contract Administration
File Plan
Basic Contract File
Copy of contract and all modifications thereto
Copy of specifications, drawings, or manuals incorporated into the
contract by reference
Listing of contractor submittal requirements
Listing of Government-furnished property or services
Listing of all information or documents furnished to the contractor
Copy of the pre-award survey, if conducted
Schedule of compliance reviews
File on PO and Contract Monitor Designation
Cogy of PO designation
Letters of contract monitor assignments with copy of transmittal letter
furnished to the contractor
Listing of specialized contract administration functions delegated to the
PO or contract monitor
Internal Correspondence File
Record of communications between PO and other support activities
In-house p re-performance checklist
Copies of all correspondence between the PO and the Contracting Officer
Copies of correspondence between the PO and contract monitors and
sponsoring activities
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Figure i-A. (page I of 2)
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Contractor Correspondence File
Copy of all general correspondence related to the contract
Original of all contractor submittals of data and reports
Copy of notice to proceed, stop work, or correct deficiencies
Copy of all letters of approval pertaining to, for example: materials; the
contractor's quality control program; prospective employees; work
schedules, etc.
Payment File
Information relative to discount provisions for prompt payment
Copy of contractor invoices
Copies of inspection reports
Letters pertaining to contract deductions or fee adjustments
Back-up documentation for recommendation- of contractor payment or
progress payment.
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Figure 4-A (page 2 of 2)
182
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ISSUANCE
OF WORK
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•o
o
o
to
8
1
fsTARTJ
WAM PREPARES
PROCUREMENT
PACKAGE, GETS
FUNDS COMMITTED
O
O
O
.O
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WORK ASSIGNMENT CLAUSE
Specifies Required Work Assignment Elements, I.e.,
Number, Estimate Of Required Labor Hours, Period
Of Performance & Schedule Of Deliverables, And
Description Of The Work.
Requires Contractor To Sign Work Assignment
To Acknowledge Receipt And Submit Work Plan
To PO And CO.
Requires Contractor To Stop Work If They Do Not
Receive Work Plan Approval.
Contractor Must Notify CO If Work Assignment
Suggests Change To Contract Terms Or Conditions.
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EPAAR Clause
WORK ASSIGNMENTS (API 1984)
(«) The Contractor shall perform work uodcr this contract as speci-
fied in written work assignments Issued by the Contracting Officer.
(b) Each work assignment will include (1) a numerical designation,
(2) the estimate of required labor hours, (3) the period of performance
and schedule of deliverable*, and (4) the description of the work.
(e) The Contractor shall acknowledge receipt of each work assignment
by returning to the Contracting Officer a signed copy of the work
assignment within calendar days after its receipt. The
Contractor shall begin work immediately upon receipt of a work assign-
ment. Within calendar days after receipt of a work assignment,
the Contractor shall submit copies of a work plan to the Project
Officer and copies to the Contracting Officer. The work plan
shall include a detailed technical and staffing plan and a detailed
cost estimate. Within ..... calendar days after receipt of the work
plan, the Contracting Officer will provide written approval or disap-
proval of it to the Contractor. Zf the Contractor has not received
approval on a work plan within calendar days after its submis-
sion, the Contractor shall stop work on that work assignment. Also, if
the Contracting Officer disapproves a work plan, the Contractor shall
stop work until the problem causing the disapproval is resolved. In
either case, the Contractor shall resume work only when the Contracting
Officer finally approves the work plan.
(d) This clause does not change the requirements of the*"Level of
Effort" clause, nor the notification requirements of either the
"Limitation of Cost" or "Limitation of Funds' clauses.
(e) Work assignments shall not allow for any change to the terms or
conditions of the contract. Where any language in the work assignment
may suggest a change to the terms or conditions, the Contractor shall
immediately notify the) Contracting Officer.
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DELIVERY ORDER CLAUSE
Specifies individuals (Aside From Contracting
Officer) Who Are Authorized Ordering Officials.
Requires Use Of Optional Form 347 Or Other
Agency Prescribed Form To Order Supplies
Or Services.
Requires Use Of Standard Form 30 If Amending
Requires Contractor To Acknowledge Receipt And
Submit Staffing Plan To Ordering Officer Within 10
Days.
If Contractor Considers Estimated Hours Or Completion
Date Unreasonable, Must Notify Ordering Officer
And Contracting Officer In Writing Within 10 Days
Contractor Must Not Exceed Order Ceiling Price,
And Contractor Must Notify CO If Contractor Believes
Costs Will Exceed 85% Of Total Cost Within Next
30 Days
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EPAAR Clause
ORDERING—BY DESIGNATED ORDERING OFFICERS (APR 1984)
(a) The Government will order any supplies and cervices to be
furnished under this contract by issuing delivery orders on Optional
Form 347, or any agency prescribed fora, from through In
addition to the Contracting Officer, the following individuals are
authorized ordering officers.
(b) A Standard Fora 30 will be the method of amending delivery orders.
(c) The Contractor shall acknowledge receipt of each order and shall
prepare and forward to the Ordering Officer within tea (10) calendar
days the proposed staffing plan for accomplishing the assigned task
within the period specified.
(d) If the Contractor considers the estiaated labor hours or
specified work completion date to be unreasonable, he/she shall
promptly notify the Ordering Officer and Contracting Officer in writing
within 10 calendar days, stating why the estimated labor hours or
specified completion date is considered unreasonable.
(e) Each delivery order will have a ceiling price, which the
Contractor may not exceed. When the Contractor has reason to believe
that the labor payment and support costs for the order, which will
accrue in the next thirty (30) days, will bring total cost to over 85
percent of the celling price specified in the order, the Contractor
shall notify the Ordering Officer.
(f) Paragraphs (c), (d), and (e) of this clause apply only when
services are- being ordered.
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PREPARING THE STATEMENT OF WORK
FOR WORK ASSIGNMENTS/DELIVERY ORDERS
1. Determine Objectives Of The Work
2. Consider What The Govt Should Provide, E.g.,
Furnish Or Make Available Background Reports
3. Prepare Outline, Insuring That All Needed Points
Are Included; Arrange In Logical Sequence
4. One Person (If Feasible) Writes Draft Statement
Of Work To Attain Good Flow Of Thoughts
5. Edit Statement Of Work
Eliminate excessive verbiage
Check sentence lengths (mix of short/longer
sentences; make it readable)
Eliminate bureacratese
Define any uncommon acronyms or technical
terms at first point of use (or provide glossary)
Stress use of active voice (E.g., dog bites On-
Scene Coordinator vs. On-Scene Coordinator
is bitten by dog)
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PREPARING THE STATEMENT OF WORK
(Cont.)
6. Pass Draft Version To Another Person For Review
7. Make Changes Based On The Review
8. Prepare in Final Form
THROUGHOUT -- REMEMBER TO CONSIDER:
- You Can't Reasonably Guard Against Every
Conceivable Contingency
- You Can Guard Against Some Performance
Problems By:
- Clearly specifying delivery dates
- Including the means to evaluate whether contractor
is delivering the quality of work required
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ELEMENTS OF WORK ASSIGNMENT
1. PERIOD OF PERFORMANCE
(Should last until final deliverable is due)
2. LEVEL OF EFFORT
(Estimated number of person-hours required to
perform the assignment)
3. STATEMENT OF WORK
Title*
Purpose Of Task/Background*
Detailed Task Description (Specific Tasks/Deliverables)*
Required Additional Reports (W/ Desired Format)
Schedule Of Tasks And Deliverables*
Suggested Skill Mix
Required Personnel Qualifications
Provision Of Government-Furnished Data
Special Requirements or Restrictions
'Mandatory Components (Others Should Be Included If Applicable)
PROJECT MUST FALL WITHIN CONTRACT STATEMENT
OF WORK!
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LEVEL OF EFFORT (LOE)/COST
REIMBURSEMENT TERM CONTRACT
HOURS, Not Dollars, Are What Are Counted And
Allocated.
Most LOE Contracts DO NOT Count Support
Personnel Such As Company Management,
Typists, And Clerical In Direct Labor. However,
Some Contracts May Deviate From This Method.
Level Of Effort Does Include Subcontractor And
Consultant Hours, As Well As Contractor Hours.
Hours Not Used In Given Contract Period Are Lost
And Cannot Be Used In Later Period.
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EPAAR Clause
LEVEL OF EFFORT—COST-REIMBURSEMENT TEBM CONTRACT (APR 1984)
(a) The Contractor shall perfora all work and provide all required
reports within the level of effort specified below. The Governaent
hereby orders direct labor hours for the base period, which
represents the Governaent's best estiaate of the level of effort to
fulfill these requirements.
(b) Direct labor includes personnel such as engineers, scientists,
draftsmen, technicians, statisticians, and prograaaers and not support
personnel such as coapany aanageaent, typists, and key punch operators
even though such support personnel are noraally treated as direct labor
by the Contractor. The level of effort specified in paragraph (a)
includes Contractor, subcontractor, and consultant labor hours.
(c) If the Contractor provides less than 90 percent of the level of
effort specified for the base period or any optional period ordered, an
equitable downward adjustaent of the fixed fee, if any, for that period
will be aade. The Governaent aay require the Contractor to provide
additional effort up to 110 percent of the level of effort for any
period until the estiaated cost for that period has been reached.
However, this additional effort shall* not result in any increase in the
fixed fee, if any. If this is a cost-plus-incentive-fee (CPIF)
contract, the tern "fee" in this paragraph aeans "base fee and
incentive fee." If this is a cost-plus-award-fee (CPAF) contract, the
tern "fee" in this paragraph aeans "base fee and award fee."
(d) If the level of effort specified to be ordered during a given
base or option period is not ordered during that period, that level of
effort aay not be accuaulated and ordered during a subsequent period.
(e) These tens and conditions do not supersede the requireaents of
either the "Limitation of Cost" or "Lialtatlon of Funds" clauses.
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DEFINITION OF LABOR CLASSIFICATIONS
Listed below are qualifications for each category of
professional services the contractor must provide:
(a) Level IV; Senior Professional (Management):
At least eight years of professional experience planning,
conducting and participationg in short-term studies; the design,
review and evaluation of management and administrative systems;
and the provision of management support. At least some of
the experience must include scheduling work to meet completion
dates, estimating manpower needs and reviewing project progress
and making changes in methodology where necessary. This
individual plans, conducts, and supervises projects of major
significance, necessitating advanced knowledge and the
ability to originate and apply new and unique methods and
procedures. This person supplies technical advice and counsel
to other professionals and generally operates with wide
latitude for unreviewed action. In addition, must have at
least a masters degree in business administration, management,
public administration, or related discipline unless the
Experience/Qualification Substitutions clause is satisfied.
(b) Level III; Mid Professional (Senior Analyst);
At least three years professional experience participating
in short-term studies; the design, review and evaluation of
management and adminsitrative systems; and the provision of
information management policy support. Individual receives
assignments associated with projects from the senior professional
translating technical guidance received into usable data applicable
to the particular assignment. Work assignments are varied and
require some originality and ingenuity. In addition, must
have at least a masters degree in the social sciences, management,
business administration, public administration, or related
discipline unless the Experience/Qualification Substitutions
clause is satisfied.
(c) Level II; Junior Professional (Analyst);
Less than three years of experience in the areas listed
above under "Mid Professional (Senior Analyst)." Individual
gathers and correlates basic data and performs routine analyses.
Person works on less complicated assignments where little
evaluation is required. In addition, must have at least a
bachelors degree in the social sciences, management or business,
unless the Experience/Qualifications Substitutions clause is
satisfied.
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Experience/Qualification Substitutions;
(a) Any combination of additional years of
experience in the proposed field of expertise plus full time
college level study in the particular field totaling four (4)
years will be an acceptable substitute for a bachelors degree.
(b) A bachelors degree plus any combination of
additional years of experience and graduate level study in the
proposed field of expertise totaling two (2) years will be an
acceptable substitute for masters degree.
(c) Additional years of graduate level study in
an appropriate field will be considered equal to years of
experience on a two-for-one basis.
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WAS6-K235
DEFINITION OF LABOR CLASSIFICATIONS
Offerers shall use the following labor classifications in
preparing their technical and cost proposals:
PROFESSIONAL
(1) Level 4 - Plansi conducts and supervises projects
of major significance/ necessitating advanced knowledge and the
ability to originate and apply new and unique methods and
procedures. Supplies technical advice and counsel to other
professionals. Generally operates with wide latitude for unreviewed
action.
Typical Title: Project Leader/ Chief Engineer
Normal Qualifications: Ph.D. Degree or equivalent; and
Experience: 1O years or more
(2) Level 3 - Under general supervision of project
leader/ plans/ conducts and supervises assignments normally
involving smaller or less important projects. Estimates and
schedules work to meet completion dates. Directs assistance*
reviews progress and evaluates results; makes changes in methods/
design or equipment
where necessary. Operates with same latitude for unreviewed
action or decision.
Typical Title: Project Engineer/ Group Leader
Normal Qualifications: Masters Degree or equivalent; and
Experience: 6—12 years
(3) Level 2 — Under supervision of a senior or project
leader/ carries out assignments associated with projects.
Translates technical guidance received from supervisor into usable
data applicable to the particular assignment coordinates the
activities of juniors or technicians. Work assignments are varied
and require some originality and ingenuity.
Typical Title: Engineer/ Analyst
Normal Qualifications: B. S. Degree or equivalent; and
Experience: 3-8 years
(4) Level 1 - Lowest or entering classification. Works
under close supervision of senior or project leader. Gathers and
correlates basic data and performs *outine analyses. Works on less
complicated assignments where little evaluation is required.
Typical Title: Junior/ Associate
Normal Qualifications: B. S. Degree or equivalent; and
Experience: 0—3 years
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WA86-K235
Experience/Qualifications Substitutions
(1) Any combination of additional years of experience
in the proposed field of expertise plus full time college level
study in the particular field totaling four (4) years will be an
acceptable substitute for a B. S. Degree.
(2) A B. S. Degree plus any combination of additional
years of experience and graduate level study in the proposed field
of expertise totaling tuio (2) years will be an acceptable substitute
for a Masters Degree.
(3) A B. S. Degree plus any combination of additional
years of experience and graduate level study in the proposed field
of expertise totaling four (4) years or a Masters Degree plus two
<2> years of either additional experience or graduate level study in
the proposed field of expertise will be an acceptable substitute for
a Ph. D. Degree.
(4) Additional years of graduate level
appropriate field will be considered equal to years
a one—for—one basis.
study in an
of experience
on
TECHNICIAN
<1) Level 3 — Performs nonroutine and complex
assignments. Works under general supervision of a scientist or
engineer. Performs experiments or tests which may require
nonstandard procedures and complex instrumentation. Records.
computes and analyzes test data prepares test reports. May
supervise lower level technicians.
Typical Title: Senior Technician Experience: 6 years or
more
(2> Level 2 - Performs assignments that are normally
standardized. Operates testing or processing equipment of moderate
complexity. May construct components or subassemb1ies of prototype
models. May troubleshoot malfunctioning equipment and make simple
repairs. Extracts and processes test data.
Typical Title: Technician Experience: 2—6 years
(3> Level 1 — Performs simple and routine tasks or tests
under close supervision. Records test data and may prepare
simple charts or graphs. Performs routine maintenance and may
install or set up test equipment.
Typical Title: Junior Technicians. Technician Trainee
Experience: O—2 years
Experience/Qualifications Substitutions
(1) Any combination of additional years of experience
in the proposed field of expertise plus full time college level
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WA86-K235
study in the particular field totaling four (4)
acceptable substitute for a B. S. Degree.
years mill be an
(2) A B.S. Degree plus any combination of additional
•gears of experience and graduate level study in tf^
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FIXED RATES FOR SERVICES
This Clause Sets Labor Rates For Personnel Classes
For Duration Of Contract.
Rates Stated Are To Cover All Expenses, Including
Report Preparation, Salaries, Overhead, General
And Administrative Expenses, And Profit.
Contractor Must Maintain Time And Labor Distribution
Records For all Employees Working Under The
Contract.
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EPAAR Clause
FIXED RATES FOR SERVICES—INDEFINITE DELIVERY/INDEFINITE
QUANTITY CONTRACT (APR 1984)
The following fixed rates shall apply for payment purposes for the
duration of the contract.
Personnel
Classification
Estimated
Direct Labor
Hours
Total
The rate, or rates, set forth above cover all expenses, including
report preparation, salaries, overhead, general and administrative
expenses, and profit.
The Contractor shall voucher for only the time of the personnel whose
services are applied directly to the work called for in individual
Delivery Orders and accepted by the EPA Project Officer. The
Government shall pay the Contractor for the life of a delivery order at
rates in effect when the delivery order was issued, even if performance
under the delivery order crosses into another period. The Contractor
shall maintain time and labor distribution records for all employees
who work under the contract. These records must document time worked
and work performed by each individual on all Delivery Orders.
(End of clause)
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ESTIMATING WORK ASSIGNMENT
COSTS
TO ESTIMATE TOTAL LABOR HOURS:
1. Break Down Work Assignments Into Tasks
2. Estimate Hours Required To Perform Each
Task, By Labor Category
3. Sum Total Hours, Across All Tasks, For
Each Labor Category
4. Sum Total Hours
TO ESTIMATE TOTAL WORK ASSIGNMENT COSTS:
5. Multiply Total Hours Times Average Loaded
Hourly Rate For Contract (E.g., $50/hour)
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PROJECTED LABOR BUDGET
DIRECT LABOR
Prof. Level 3
Prof. Level!
Est. Mrs Rate
10 X 20
10 X 10
TOTAL DIRECT 20
LABOR OVERHEAD RATE (%
Fringe Benefits
Overhead
33%*
50%*
BASE
X 300
X 400
TOTAL LABOR OVERHEAD
TOTAL BURDENED LABOR
Est. Cost
$200
$100
$300
= $100
= $200
$300
$600
*Typical range = 33-45% for fringes; 40-100% for
overhead
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PROJECTED LABOR BUDGET + ODC'S
WITH RATES LOADED W/ FRINGES & OVERHEAD
DIRECT LABOR
Prof. Level 3
Prof. Level 1
TOTAL DIRECT
Est. Mrs Rate Est. Cost
10 X 40 = $400
10 X 20 = 200
20
$600
OTHER DIRECT COSTS
Travel
Subcontractors (200 prof, hrs.)
Computer Time*
TOTAL ODC'S
$180
6000
820
$7000
TOTAL DIRECT COST AND LABOR $7600
"Must Be Approved by OIRM Or SIRMO As Appropriate
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PROPOSED WORK ASSIGNMENT
BUDGET
WITH RATES LOADED W7 FRINGES & OVERHEAD
DIRECT LABOR
Prof. Level 3
Prof. Level 1
TOTAL DIRECT
Est. Mrs Rate Est. Cost
10 X 40 = $400
10 X 20 = 200
20
OTHER DIRECT COSTS
Travel
Subcontractors (200 prof, hrs.)*
Computer Time
TOTAL ODC'S
$600
$180
6000
820
$7000
TOTAL DIRECT COST AND LABOR $7600
GENERAL & ADMINISTRATION (10%) $760
TOTAL ESTIMATED COST
TOTAL ESTIMATED COST + FEE
$8360
$585
$8945
Average Hourly Rate (Incl. ODC's) = $40.66
(Total costs of $8945 divided by 220 hours of labor,
i.e., 20 hrs.of direct labor + 200 subcontractor hours)
* Separate Breakdown Should Be Provided
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ESTIMATING TOTAL COSTS
1. Calculate Total Hours Per Labor Category
2. Multiply Hours Per Labor Category Times
Hourly Rate Per Category
3. Sum The Costs For All Categories = Total Labor
Costs (Unloaded, I.e., No Fringes)
4. Multiply Labor Costs Times Fringe Benefit Rate
(E g., 33%) = Total Labor Costs
5. Multiply Total Labor Costs Times Overhead Rate
.g., 50%)
6. Add Other Direct Costs (E.g., Consultants,
Subcontractors, Travel, Other Direct Such
As Photocopy, Computer Time)
7. Multiply Sum Of Labor Costs + Other Direct
Costs Times G&A (E.g., 10% For General &
Administrative Costs) = Estimated Cost
8. Multiply Estimated Cost Times Fixed Fee (E.g.,
7%) = Estimated Cost Plus Fixed Fee
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RESTRICTIONS ON
STATEMENTS OF WORK
1. Do NOT Include Any Internally Developed Cost
Estimates
2. Do NOT Direct The Contractor To Use Any Specific
Employee, Consultant Or Subcontractor
3. Do NOT Include Any Tasks Outside The Scope Of
The Basic Contract
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OTHER CONSIDERATIONS IN
PREPARING A WORK ASSIGNMENT/
DELIVERY ORDER SOW
1. Existence Of Any Organizational Or Individual
Conflicts Of Interest
2. Qualifications of Contractor Staff To Perform Task
Or Need To Obtain Subcontractors/Consultants
Consent
3. Key Personnel
4. Avoidance of Creating Personal Services Contract
5. Need For/Use Of Government Furnished Property
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ORGANIZATIONAL CONFLICTS
OF INTEREST
An Organizational Conflict Of Interest Exists When The
Nature Of The Work To Be Performed Under A
Government Contract May, Without Some Restriction On
Future Activities,
1. Result In An Unfair Competitive Advantage To
The Contractor
2. Impair The Contractor's Objectivity In Performing
The Contract Work
.•'; f
NOTE: It Is Similarly Important To Check The Existence
Of Any Conflicts Of Interest, E.g., Ownership Of Stock
In A Company To Be Regulated.
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EPAAR Clause
ORGANIZATIONAL CONFLICTS OF INTEREST
(APR 1984)
(a) The Contractor warrants that, to the best of the Contractor's
knowledge and belief, there are no relevant facts or circumstances
which could give rise to an organizational conflict of interest, as
defined in FAR Subpart 9.5, or that the Contractor has disclosed all
such relevant Information.
(b) The Contractor agrees that if an actual or potential organiza-
tional conflict of Interest is discovered after award, the Contractor
will aake a full disclosure in writing to the Contracting Officer.
This disclosure shall include a description of actions which the
Contractor has taken or proposes to take, after consultation with the
Contracting Officer, to avoid, mitigate, or neutralize the actual or
potential conflict.
(c) Reaedies - The EPA aay terminate this contract for convenience,
in whole or in part, if it deems such termination necessary to avoid an
organizational conflict of interest. If the Contractor was aware of a
potential organizational conflict of interest prior to award or dis-
covered an actual or potential conflict after award and did not
disclose or misrepresented relevant information to the Contracting
Officer, the Government may terminate the contract for default, debar
the Contractor from Government contracting, or pursue such other
remedies as may be permitted by law or this contract.
(d) The Contractor further agrees to insert in any subcontract or
consultant agreement hereunder, provisions which shall conform substan-
tially to the language of this clause, including this paragraph (d).
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SUBCONTRACTS REQUIRING
GOVERNMENT CONSENT
1. For The Fabrication, Purchase, Rental, Installation Or
Other Acquisition Of Special Test Equipment Valued
At More Than $10,000 Or Of Any Items Of Industrial
Facilities
2. That Have Experimental, Development Or Research
Work As One Of Their Purposes
3. For Architect-Engineering Services
4. Cost-Reimbursement, Time-and-Materials Or Labor-
Hour Type
5. Fixed Price Subcontracts That Exceed Either $25,000
Or 5% Of The Total Estimated Cost Of The Prime Contract
(These Consent Requirements Apply To All Prime
Contracts Except Firm Fixed Price Contracts.)
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FAR Clause
SUBCONTRACTS (COST-REIMBURSEMENT AND
LETTER CONTRACTS) (JUL 1985)
(•) "Subcontract," as used in this clause, includes but
is not limited to purchase orders, and changes and
modifications to purchase orders. The Contractor shall
notify the Contracting Officer reasonably in advance of
entering into any subcontract if—
(1) The proposed subcontract is of the cost-reim-
bursement, time-and-materiah, or labor-hour type;
(2) The proposed subcontract is fixed-price and
exceeds either $25,000 or 5 percent of the total esti-
mated cost of this contract;
(3) The proposed subcontract has experimental, d*
velopmental. or research work as one of its purposes;
or
(4) This contract is not a facilities contract and the
proposed subcontract provides for the fabrication,
purchase, rental, installation, or other acquisition of
special test equipment valued in excess of S 10,000 or
of any items of facilities.
(b) (1) In the case of a proposed subcontract that (i)
is of the cost-reimbursement, time-and-materials. or
labor-hour type and is estimated to exceed $10.000,
including any fee, (ii) is proposed to exceed $100,000,
or (iii) is one of a number of subcontracts with a single
subcontractor, under this contract, for the same or re-
lated supplies or services that, in the aggregate, are
expected to exceed $100.000, the advance notification
required by paragraph (a) above shall include the infor-
mation specified in subparagraph (2) below.
(2) (i) A description of the supplies or services to
be subcontracted.
(ii) Identification of the type of subcontract to
be used.
(iii) Identification of the proposed subcontractor
and an explanation of why and how the proposed
subcontractor was selected, including the competi-
tion obtained.
(iv) The proposed subcontract price and the
Contractor's cost or price analysis.
(v) The subcontractor's current, complete, and
accurate cost or pricing data and Certificate of
Current Cost or Pricing Data, if required by other
contract provisions.
(vi) The subcontractor's Disclosure Statement or
Certificate relating to Cost Accounting Standards
when such data are required by other provisions of
this contract.
(Continued on the next page)
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SUBCONTRACTS - "Continued
(vii) A nefotiatioat memorandum reflecting—
(A) The priedpil dements of the subcontract
price nefotiatkMHi "..,"
(B) The moat significant considerations con-
trolling establishment of initial or revised prices;
(C) The reason coat or pricing data were or
were not required;
(D) The extent, if any, to which the Contrac-
tor did not rely on the subcontractor's cost or
pricing data in determining the price objective
and in negotiating the final price;
(E) The extent to which it was recognized in
the negotiation that the subcontractor's cost or
pricing data were not accurate, complete, or
current; the action taken by the Contractor and
the subcontractor; and the effect of any such
defective data on the total price negotiated;
(F) The reasons for any significant difference
between the Contractor's price objective and the
price negotiated; and
(G) A complete explanation of the incentive
fee or profit plan when incentives are used. The
explanation shall identify each critical perform-
ance element, management decisions used to
quantify each incentive element, -reasons for the
incentives, and a summary of all trade-off possi-
bilities considered.
(c) The Contractor shall obtain the Contracting Offi-
cer's written consent before placing any subcontract
for which advance notification is requred under para-
graph (a) above. However, the Contracting Officer
may ratify in writing any such subcontract. Ratification
shall constitute the consent of the Contracting Officer.
(d) If the Contractor has an approved purchasing
system and the subcontract is within the scope of such
approval, the Contractor may enter into the subcon-
tracts described^ in subparagraphs (aXl) and (aX2)
above without the consent of the Contracting Officer,
unless this contract is for the acquisition of major sys-
tems, subsystems, or their components.
(e) Even if the Contractor's purchasing system has
been approved, the Contractor shall obtain the Con-
tracting Officer's written consent before placing sub-
contracts that have bten selected for special suveil-
lance and identified in the Schedule 'of this contract.
(0 Unless the consent or approval specifically pro-
vides otherwise, neither consent by the Contracting
Officer to any subcontract nor approval of the Con-
tractor's purchasing system shall constitute a deterimin-
ation (I) of the acceptability of any subcontract terms
or conditions, (2) of the allowability of any cost under
this contract, or (3) to relieve the Contractor of any
responsibility for performing this contract.
(g) No subcontract placed under this contract shall
provide for payment on a cost-plus-a-percentage-of-cost
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SAMPLE
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
MEMORANDUM
SUBJECT: Subcontractor/Consultant Approval EPA Contract No.
PROM: Work Assignment Manager
THRU:
TO:
Gary R. Polvi, P.E., Project officer
Officer of Water Enforcement and Permits (EN-338)
William Bailey, Contracting Officer
Contracts Management Division, Cine., OH
Your approval is recommended for the following subcontractor(s)/.
consultant(s), proposed by (Prime Contractor), as
identified below in the subject work assignment work plan:
Work Assignment/Amendment No.:
Work Plan Title/Dated:
List of Subcontractors/Consultants Recommended for Approval:
I make the following certifications for each subcontractor/
consultant identified in this approval requests:
That I have reviewed the subject subcontractor/consultant effort,
from both technical and cost perspecties and (except as noted
in the attached work plan approval) find the subcontractor/
consultant^effort necessary and reasonable to achieve the
technical objective of the subject work assignment/work assignment
amendment;
That the proposed subcontractor(s)/consultant(s) were selected
independently by the prime contractor; and
That the efforts of the approved subcontractor(s)/consultant(s)
are to be managed and directed by the prime contractor.
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Date
EPA Work Assignment Manager
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KEY PERSONNEL
UNDER THE PROVISIONS OF THE "KEY PERSONNEL"
CLAUSE, THE CONTRACTOR AGREES TO:
1. Assign To The Contract Work Certain Key Personnel;
2. Not Remove These Key Personnel From The Contract
Work For A Certain Period Of Time (Generally 90 Days)
Without The Consent Of The Contracting Officer; And
3. Obtain The Government's Approval On Any Proposed
Substitutions.
7-31
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EPAAR Clause
KEY PESONNEL (APR 1984)
(a) The Contractor shall assign to this contract the following key
personnel:
(b) During the first ninety (90) days of performance, the Contractor
shall sake no substitutions of key personnel unless the substitution is
necessitated by illness, death, or termination of employment. The
Contractor shall notify the Contracting Officer within 15 calendar days
after the occurrence of any of these events and provide the information
required by paragraph (c) below. After the Initial 90-day period, the
Contractor shall submit the information required by paragraph (c) to
the Contracting Officer at least 15 days prior to making any permanent
substitutions.
(c) The Contractor shall provide a detailed explanation of the
circuastances necessitating the proposed substitutions, complete
resumes for the proposed substitutes, and any additional information
requested by the Contracting Office.r. Proposed substitutes should have
comparable qualifications to those of the persons being replaced. The
Contracting Officer will notify the Contractor within 15 calendar days
after receipt of all required information of the decision on substitu-
tions. This clause will be modified to reflect any approved changes of
key personnel.
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PERSONAL SERVICES
1. A Personal Services Contract Results When The
Government Assumes The Right To Instruct,
Supervise Or Control A Contractor's Employee
In How He/She Performs The Work.
2. It Is The Contractor's Right To Hire And Fire, To
Assign And Organize The Work.
3. Project Officers, Work Assignment Managers And
Delivery Order Officers Must Take Care Not To
Create A Work Assignment That Creates A
Personal Services Contract (Employee/Employee
Relationship).
PERSONAL SERVICE CONTRACTS ARE ILLEGAL!
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ADVISORY & ASSISTANCE SERVICES
1 . Services To Support Or Improve Agency Policy
Development, Decision-making, Management,
And Administration, Or To Support Or Improve
Operation Of Management Systems, To Include:
— Individual Experts and Consultants
— Studies, Analyses and Evaluations
— Management and Professional Support Services
— Engineering and Technical Service
2. Procurement Requests For A&A Services Require:
- Written Justification Of Need And Certification
That Services Do Not Unnecessarily Duplicate
Any Previously Performed Work Or Services
— Written Approval By Official At Level Above
Requesting Office, Or Higher Level If During
4th Quarter Of Fiscal Year Or Agency Requires
3. Management Controls:
- Work Statements Are Specific, Complete And
Specify Fixed Period Of Performance
-- Acquisition Follows Competition In Contracting
Act Requirements
— Disclosure To Avoid Conflict Of Interest
-- Proper Monitoring And Contract Administration
-- Written Evaluation At Conclusion To Assess
Utility Of Deliverables And Contractor
Performance
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CONTRACTS MANAGEMENT MANUAL
1900 Change?
5/21/90
PROCUREMENT REQUEST RATIONALE CHECKLIST
(to be submitted with EPA Forms 1900-8 and 1900-8A)
Item 1 The title of this procurement is
Item 2 This procurement request package contains the following
documents. (Check all applicable boxes and attached
documents as appropriate.)
See Attachment #
Check
Description
EPA Form 1900-8
Procurement Abstract*
Statement or Scope of Work*
Concise Technical Proposal
Instructions*
Competitive Technical Evaluation
Criteria*
Justification for Other Than Full
and Open Competition (JOFOC)
D&F to provide full and open
competition after exclusion of
source (see FAR 6.2)
Justification for Advisory and
Assistance Services
Justification of Need (Government-
Furnished Property (GFP)/
Equipment)*
Quality Assurance (QA) Review Form
Recommended Sources List
r Reports Description
Government-Furnished Property
Description
* The PROJECT OFFICER'S HANDBOOK provides guidance for .preparing
these documents. Also, see Item 11.
Item 3: This procurement [ ] involves [ ]does not involve
advisory and assistance services. (If advisory and assistance
services are involved/ attach a justification that provides a
statement of the need for the services and a certification that
such services do not unnecessarily duplicate any previously
performed work or services) . (See page 4 of Figure 2-2 for
required approvals)
Item 4: This procurement [ ] involves [ Jdoes not involve legal
analysis. I have [ ] have not [ ]discussed this procurement
with the Office of General Counsel which [ ]concurs [ ]does not
concur with proceeding with this procurement
Figure 2-1
Page 1 of 5
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7-POINT JUSTIFICATION OF NEED FOR GFP
1 . Identify The Specific Program And Project For
Which The Property Is Required.
2. Identify The Type, Quantity And Estimated Cost
(Including Any Transportation Or Installation Costs)
Of Each Item Of Property Required.
3. Explain Why The Property Is Necessary For
Contract Performance.
4. Explain Why It Is In The Interest Of The Government
To Provide The Property Rather Than To Require The
Contractor To Provide The Property At No Direct
Cost To The Contract.
5. Identify The Location Of The Contractor's Facility
At Which The Property Will Be Used, And The
Contractor's Personnel Responsible For Acquisition
And Management Of The Property.
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7-POINT JUSTIFICATION OF NEED FOR GFP
(Cont.)
For Property To Be Acquired By The Contractor
At Government Expense, Include A Certification
That No In-house Excess Property Is Available
And Include The Concurrence Of The Local
Property Office.
For Equipment To Be Acquired By The Contractor
At Government Expense (E.g., Purchase Of Special
Test Equipment), Include A Lease Vs. Purchase
Analysis.
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CASE STUDY
THE CASE OF ODD
On September 30, 1994, a cost-reimbursement, term form
contract was awarded to the Technically Acceptable Corporation
(TAG) for the purpose of collecting and analyzing data on the
pesticide industry. The level of effort provided in the contract is
20,000 hours. The period of performance extends until September
30, 1996, and there is an option to extend the period of performance
for an additional year, through September 30, 1997. The option
contains an additional 10,000 LOE hours.
You are a Work Assignment Manager, and you have a
requirement for TAG to study the long and short-term effects of the
new pesticide, "DDDH, on the environment, when used on soybean
plants. There is some data in-house on the chemical composition of
the pesticide, which you will furnish to the contractor. You expect
TAG to conduct research on studies which have already been done in
this area, as well as an appropriate amount of testing. At the end of
the effort, you want a final report. It is anticipated that the work
will take about 2500 person-hours and take about a year to
complete.
It is now January 30, 1996. The Project Officer advises you
that, to date, twelve work assignments have been issued under the
contract, totalling approximately 17,000 hours.
Prepare a Work Assignment package for submission to the
Contracting Officer. This must include a Level of Effort, a Period of
Performance, and a Statement of Work. Also (although this will not
be issued to the contractor), prepare a cost estimate for the project.
On the next page, some pertinent information about the contract is
provided.
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CONTRACT NO. 68-OX-1234
CONTRACTOR: TECHNICALLY ACCEPTABLE CORPORATION
#1A Main Street
Podunk, USA 00000
BASE PERIOD:
OPTION YEAR I:
OPTION YEAR II
Oc tober
Oc tober
Oc tober
1994 -
1996 -
1997 -
Sep tember
Sep tember
Sep tember
30
30
30
1996
1997
1998
BASE PERIOD
OPTION YEAR I
OPTION YEAR II
LEVEL OF EFFORT
20,000 hours
10,000 hours
10,000 hours
ESTIMATED COST
(plus fixed fee)
$1,304,084
$ 678,124
$ 705,249
CEILING
CEILING
ON TRAVEL COSTS (Per Year) $5,000
ON ODC's (Per Year) $7,500
ESTIMATED AVERAGE RATE PER HOUR
(unloaded)
(loaded ) :
$22.45
$60.66
$65.20
(excludes fee)
(wi th fixed fee)
BASE PERIOD LABOR CATEGORIES, RATES, & PROPOSED HOURS
PROJECT MANAGER $27.00
SR. ENGINEER/V.P. 30.00
SR. RESEARCHER 20.00
RESEARCH ASSISTANT 14.50
STAFF WRITER 18.00
SOIL SPECIALIST 9.00
SECRETARY 11.50
CLERK-TYPIST 9.00
3600 hours
416 hours
8100 hours
1800 hours
5400 hours
684 hours
1600 hours
720 hours
INDIRECT COST RATES:
OVERHEAD & FRINGE BENEFITS:
GENERAL & ADMINISTRATIVE EXPENSE:
111% of DIRECT LABOR
18.5% OF TOTAL COSTS
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Chapter 7
ISSUANCE OF WORK AND RELATED CONSIDERATIONS
Probably the most time-consuming role of a Project Officer in relation to
contract management is that of technical monitoring. This is the area where the
involvement of the Project Officer, Work Assignment Manager, Delivery Order Officer
or Delivery Order Project Officer exerts the most influence over the actual work
product the Agency will receive. From the time the assignment is given to the contractor
until the work is accepted by EPA, these individuals are responsible for assuring that
the contractor understands the work requirements and performs in a manner to produce
quality results within the time required.
7.1 Issuance of Work
Under a fixed price contract or a cost-reimbursement completion form contract,
the work requirements are clearly specified in the Statement of Work or specifications.
Under these types of contracts, the Project Officer's role is primarily one of monitoring
progress. Many of EPA's contracts, however, contain broad statements of work, and are
of a level of effort or fixed-rate indefinite delivery/indefinite quantity type, where the
actual assignments are specified in individual work assignments or delivery orders.
These individual efforts are usually assigned and monitored by EPA employees other than
the Project Officer (e.g., Work Assignment Managers under term form contracts and
Delivery Order Officers and Delivery Order Project Officers under indefinite
delivery/indefinite quantity contracts.) The actual assignment of work varies
considerably between the two types of contracts.
Preparing Work Assignments Under Level of Effort Contracts
Implementation of a work assignment begins with the Work Assignment
Manager's preparation of the Work Assignment Request (see sample on page 63.) This
request, along with Form 1900-65 (see page 4) designating the Work Assignment
Manager as manager of the proposed work assignment, and any other required
justifications, is forwarded to the Project Officer who reviews the package for, accuracy
and acceptability. If no changes or clarifications are needed, the package is forwarded to
the Contracting Officer for issuance to the contractor.
The Work Assignment requirements are specified in the standard contract work
assignment clause (see page 187), and consist of the following items:
(1) statement of work;
(2) period of performance and schedule of deliverables;
(3) an estimate of the level of effort.
The statement of work has four mandatory components: a title, background and
purpose of the task, detailed task description, and schedule of tasks and deliverables.
This table summarizing the major tasks involved and expected delivery dates is an
extremely useful tool for summarizing work requirements and facilitating subsequent
monitoring. (See samples on pages 153-54.)
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In preparing the statement of work, the Work Assignment Manager must take
care to keep the assignment within the general scope of work of the contract.
Assignments must be specific in terms of end product(s) required, and the number and
types of reports to be submitted. Any other specific requirements involved may also be
specified in the Work Assignment, e.g., the recommended skill mix, required personnel
qualifications, or the provision of government-furnished data. NO SPECIFIC COST
ESTIMATES ARE TO BE FORWARDED TO THE CONTRACTOR. This gives away the
Government's estimated cost, and guarantees that the contractor will propose at least
that amount. Only estimated level of effort in terms of projected hours may be
communicated. NOR MAY EPA DIRECT THE CONTRACTOR TO USE ANY SPECIFIC
EMPLOYEE, CONSULTANT OR SUBCONTRACTOR. The government is limited to specifying
its requirements in terms of required skills and qualifications.
The Work Assignment should be complete. That is, it should contain all the
information the contractor needs to begin working immediately and to prepare a work
plan, if required. Some suggestions for preparing statements of work are presented on
pages 190-1.
The period of performance will generally be from the effective date of the Work
Assignment until the completion date specified. Performance cannot extend beyond the
current contract base or option period. The level of effort specified will be based upon
the estimated number of direct labor hours required to perform the task(s).
Preparing Delivery Orders Under Indefinite Delivery/Indefinite Quantity Contracts
Issuance of a delivery order depends upon how the contract is set up. Under some
contracts, only the Contracting Officer may issue orders. Under others, individual
program personnel are authorized to issue orders up to a specified dollar limitation.
Because delivery orders obligate funds, an employee must have a Contracting Officer's
warrant to issue orders.
If a Delivery Order Officer with a warrant is located in a program office, all
Delivery Orders within his or her authority do not have to pass through the Contracting
Officer before issuance to the contractor. They must, however, first be reviewed by the
EPA Project Officer responsible for managing the overall effort under the entire
contract. Delivery Orders in excess of a Delivery Order Officer's delegated authority
must be forwarded to the Contracting Officer for issuance.
The content of delivery orders is governed by the standard contract clause on
Ordering by Designated Ordering Officers (see page 189). Delivery orders under most
contracts are written on Optional Form 347, Order for Supplies or Services (see page
67). Most blocks on this form requiring completion are self-explanatory. The
estimated number of hours in each labor category must be listed in block 17, with the
associated fixed rate for each labor category.
A ceiling price on total Other Direct Costs must also be provided, and the total of
each of these entries (loaded direct labor plus ODS) will be computed and set forth as the
ceiling price'on the entire order. The delivery order Statement of Work must be
attached to the order. (See above section on Work Assignments for guidance on how to
prepare a Statement of Work. See also pages 190-1.)
A Procurement Request (EPA Form 1900-8, page 71) must be completed for the
entire amount of the delivery order and forwarded to the Contracting Officer or Delivery
Order Officer, unless the order is within the contract minimum which was obligated at
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the time of contract award. The accounting and appropriation data from this commitment
notice must also appear in block 9 of the delivery order, and must match the information
exactly.
If a Delivery Order Officer has a limit on his or her obligation authority which is
less than the total of the delivery order, the entire order must be placed by the
Contracting Officer, who is authorized to obligate the total amount of funds. The delivery
order and PR should be forwarded immediately to the Contracting Officer for issuance.
The period of performance of a given delivery order may extend beyond the
ordering period of the contract, within the limits specified. (This is unlike hours under
term form contracts, which may not be carried over into subsequent periods). Orders
for severable services (i.e., work assignments) are subject to the bona fide need
principles discussed in Chapter 4, where the period of performance may not extend
beyond the life of an appropriation. Orders for nonseverable services (e.g., fixed price
contracts and delivery orders) are not restricted in this manner. The final completion
date for all the tasks under the order should be entered in block 15 of the OF347.
7.2 Estimating Hours and Level of Effort
Estimating the hours for work assignments and delivery orders is a significant
part of preparing the work assignment or delivery order, and requires thoughtful effort
on the part of the the EPA staff preparing the estimate. The first step is to define the
levels of personnel required to perform the work. Care must be taken to avoid the use of
overly-qualified personnel, which could result in prematurely reaching the contract
cost ceiling amount. Two different ways of defining labor classifications, depending on
the type of work being performed, are presented on pages 195ff. Labor classifications
must, however, be matched to the work to be performed. Work assignment managers and
delivery order officers will be required to use those categories already listed in their
particular contract.
Once the appropriate categories have been identified, EPA staff must estimate the
total number of hours required from each labor class. This requires thinking through
the proposed work assignment tasks, and estimating the time required of each staff level
for each task. These hours are then summed and indicated on the work assignment. The
procedures to be followed are summarized on pages 202ff.
Direct labor hours generally do not include support personnel such as company
management, typists and clerical personnel. Level of effort does, however, include
subcontractor and consultant hours along with contractor hours, which are included as
other direct costs (ODCs) along with travel, computer time, etc.
7.3 Estimating Total Contract Costs
Work assignment managers and delivery order officers are not generally
required to prepare work assignment or delivery order cost estimates. They merely
make an estimate of the total hours required. Project officers, however, must be able
both to estimate and monitor contract costs, and compare invoiced costs against the
original contract budget.
For work assignments and delivery orders, an estimate of the total costs can be
obtained by multiplying total projected hours times the average hourly rate for the
contract, e.g., 200 hours times $60/hour results in a cost estimate of $12,000 for the
work. The average hourly rate used in this case incorporates an estimate of the average
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ODCs (other direct costs), G&A (general and administrative costs, such as the
contractor's finance and personnel staff), and fee or profit (see pages 202ff).
It is important for ail EPA personnel, however, to understand how to estimate and
evaluate contract budgets. This process is detailed below and in the contract itself, with
examples on pages 203-205.
Direct Labor. A contract budget may have five basic elements: a) direct labor,
b) labor overhead, c) other direct costs, d) general and administrative costs, and e) fee
or profit. (Since different contractors use somewhat different cost esimation systems,
there may be some variance in the factors and how they are applied.) Direct labor is
very simply your salary divided by 2080 hours (assuming 40-hour work weeks), the
number of hours in the standard government work year. If your salary is $20,800,
your hourly rate is thus $10.00 per hour, or $20,800 divided by 2080 hours.
Labor Overhead. Labor overhead is the second element. Labor overhead consists
of two factors: fringe benefits, and overhead. Your salary is only one part of your total
compensation. You also get sick leave, annual leave, pension, and other such benefits
generally called fringe benefits, or "fringes." Fringe benefits generally range from 25-
40% of direct labor, depending on the company involved and its fringe benefit package.
Assuming the company's fringe benefit rate to be 35%, you therefore multiple the
hourly labor rate times the company's fringe benefit rate, e.g., $10/hour X 35%
fringes = $3.50. Your hourly rate "loaded" with fringes is thus $13.50.
Overhead includes the organization's costs of keeping you working. It includes
such costs as space rental, furniture and furnishings, supplies, business equipment,
secretarial and clerical support staff, and other such costs. Overhead can vary widely,
depending on how expensively the organization is set up and staffed. It can range from
15% to 200% or more. The overhead rate of a company will significantly affect how
competitive it will be in bidding on government contracts. Some companies therefore
have separate overhead rates for government work versus private work. (A contractor
cannot charge the government more than it charges the private sector, although it can
charge less.) Assuming the company's overhead rate to be 50%, you multiple your
hourly rate loaded with fringes times the overhead rate to obtain total labor overhead
(e.g., $13.50 x 50% = $20.25). Thus, if the salary you are receiving is $10.00 per
hour, the actual cost of keeping you employed, including fringes and overhead, is actually
$20.25, or more than double what you receive. Your direct hourly cost, "loaded" with
fringes and overhead, is known as your "loaded hourly rate." (See page 203 for a
sample).
Other Direct Costs. ODCs include the cost of travel, special equipment required
for the particular work to be performed (e.g., computer time on the special network not
ordinarily available or covered in overhead), subcontract costs or the cost of special
consultants, etc. These direct costs are added to the project labor costs and summed to
obtain the total direct cost plus labor.
General and Administration. G&A is the cost of the organization's management,
e.g., EPA's administrator and assistant administrators, or a company's president and
officers, along with their support staffs (legal, financial, personnel, etc.). This can
range from 2-20% or so, and is multipled times the sum of the labor costs and ODCs.
Assuming that you are projected to require 100 hours of work at $20.25/hour, and
ODCs are $200, then you would multiple the G&A rate of, say, 10% times $2225 (the
sum of $2025 + $200), to get $222.50 G&A, for a total amount of $2447.50.
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Fee. Government contracts usually provide for a fee or profit. The amount of fee
charged is generally negotiated along with other contract terms when the contract is
awarded. Fees may range from 5 to 15% {up to 6% for architectural/engineering
services; 15% for R&D; and 10% for all other, unless an exception is granted). This
fee is charged on top of all other costs. For example, if the fee were 7%, the above
contract amount of $2557.50 would be multiplied by 7% to get the total contract costs,
plus fee. The result would be a fee of $171.33, for a total estimated price of $2728.83.
Page 205 is a sample budget including calculation of all costs, including fee.
7.4 Consideration #1: Organizational Conflicts of Interest
In preparing Statements of Work, EPA staff must take into account a number of
additional factors so they can be appropriately managed or avoided. One of the most
important factors to be considered is the existence of any organizational or individual
conflicts of interest.
Organizational conflicts of interest are situations that occur from time to time
with respect to EPA contracts. It is always preferable to prevent such conflicts from
arising during contract performance by identifying the possibilities during the pre-
award phase and taking steps at that time to avoid them. However, sometimes conflicts of
interest cannot be foreseen nor completely avoided prior to award and Project Officers
need to be aware of what they are and what to do about them if such situations do arise
during the performance of a contract.
Definition
The FAR defines an organizational conflict of interest as a situation that exists
"when the nature of the work to be performed under a proposed Government contract
may, without some restriction on future activities, (a) result in an unfair competitive
advantage to the contractor or (b) impair the contractor's objectivity in performing the
contract work." It is the latter situation which is of the most concern during contract
performance. (See text of EPAAR clause on page 210.)
Any of a contractor's outside interests, be they organizational, financial,
contractual, or of some other type, could affect its objectivity in performing work for
EPA. This is more likely to occur in contracts involving consultant or management
support services, but the possibility exists in all contracts. Regulations require that
the Contracting Officer take immediate steps to avoid, neutralize, or mitigate any actual,
potential, or apparent conflict of interest once notified of its existence. Project Officers
are required to notify their Contracting Officer immediately if they see or suspect a
situation where a contractor's outside interests are affecting its independent judgment in
performing work on an EPA contract, or if the appearance of such a conflict exists, even
if the work performed by a contractor is not in fact biased or lacking in impartial
judgment.
What to Look For
All EPA contracts over $10,000 contain a clause requiring the contractor to
disclose in writing to the Contracting Officer any actual or potential conflict of interest
discovered after award of a contract. Ideally, this would take care of all such situations
and the Project Officer need not be further concerned. However, many times what may
not be a conflict in the mind of the contractor could be a very significant problem in the
opinion of the Agency, but if the contractor does not notify EPA, the Contracting Officer
is not aware of its existence. If the contractor is aware of such a situation and fails to
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notify the Contracting Officer, the contract may be terminated for default (see Chapter
14). For these reasons, Project Officers must be "on the lookout" at all times during
contract performance for situations which might be classified as organizational conflicts
of interest, and must notify the Contracting Officer if a potential one is discovered. If
any doubt exists, the Contracting Officer should be notified anyway, and he or she will
obtain the opinion of legal counsel before making a determination as to whether or not an
organizational conflict of interest exists.
Project Officers should subject all such situations to the following tests:
(1) Is the contractor being asked to perform work which will affect an industry
of which it is a part, or from which it derives a substantial portion of its
income?
(2) Is the contractor performing an analysis for EPA that it is also performing
for a firm which will be affected by the results of that analysis?
(3) Is the contractor performing consulting services for an industry regulated
by EPA at the same time as it under contract to EPA for any work on the same
subject?
(4) Do the work results provided by a contractor appear to be lacking in
complete objectivity from any aspect?
(5) On any Superfund contracts, can the contractor potentially be found liable
as a responsible party on any site for which it is being asked to perform
work for EPA?
(6) Is there any possibility that even the appearance of one of these situations
might undermine the credibility of the work results in the eyes of the
general public?
If the answers to any of these questions is in the affirmative, an actual or
potential conflict of interest probably does exist, and the Contracting Officer must be
notified immediately.
Procedures in the Event of the Existence of an Organizational Conflict of Interest
As stated above, if a determination is made that an actual, potential, or apparent
conflict of interest does exist, the Contracting Officer must take immediate steps to
avoid, neutralize, or mitigate the situation. This may take the form of a bilateral
contract modification, under which the contractor agrees to refrain from performing
any specific outside work for a certain period of time, or is barred from specific future
EPA work for a specified period. Or, the Contracting Officer may direct the Project
Officer not to assign a specific Work Assignment or Delivery Order to the contractor.
If the conflict is significant and the Contracting Officer is unable to resolve or
avoid it, the contract may have to be terminated for the convenience of the Government,
either in whole or in part, depending on the nature of the conflict. Since all of these
possibilities are less than desirable, it is far preferable to identify potential conflicts
before award of the contract, and take steps at that time to prevent all conflicts of
interest from occurring during performance of the work.
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7.5 Consideration #2: Subcontracts, Consultants and Key Personnel
The quality of a contract, especially one for services, is only as good as the best
personnel assigned to perform it. Often, the contractor will supplement his own staff
with the services of consultants and sub-contractors, and will identify them, as well as
key personnel from his own staff, in his technical proposal in order to win the award.
Certain policies govern the use of subcontractors, consultants, and key personnel and
Government representatives who participate in the contracting process need to be aware
of them. This section attempts to explain these key provisions.
Consent to Subcontract
A sizeable portion of many EPA contracts is performed by subcontractors. This
is often necessary for the successful accomplishment of the program mission. The
existence of subcontracts allows the federal dollar to be spread out over many more
firms than would be the case if prime contractors performed the total effort. Other
benefits arise from the fact that the combined expertise of two or more firms may offer
a better quality product or service to the Government than that of a single firm. But,
because the Government has no direct legal relationship with subcontractors, and
because it is often risky to rely wholly on the prime contractor's assurance that
subcontracted work will satisfy all Government requirements, there are contractual
controls in plaiSe.
The prime contractor is selected in part for its management abilities, which
includes the right to "manage the contract in every aspect. The Government cannot direct
the contractor to subcontract any part of the work. The Government may also not, under
any circumstances, direct the prime contractor to subcontract with a specific firm.
Even a suggestion of a particular firm or firms would be improper. These decisions are
entirely at the discretion of the prime contractor, who has overall responsibility for
contract performance. Nonetheless, in certain situations, the Contracting Officer must
consent to the use of certain types of subcontracts. (See pertinent FAR clause on page
212.)
Consent to subcontract is not required under firm-fixed price contracts, as the
Government's interest is presumably adequately protected in this instance by the type of
contract because of the fixed price. However, under all other types of prime contracts
used at EPA, the following types of subcontracts require the consent of the Contracting
Officer before the prime contractor may enter into a subcontract agreement:
(1) subcontracts of any type for the fabrication, purchase, rental, installation,
or other acquisition of special test equipment valued at more than $10,000
or of any items of industrial facilities;
(2) subcontracts that have experimental, developmental, or research work as
one of their purposes;
(3) subcontracts for architect-engineer services;
(4) all subcontracts which are cost-reimbursement, time-and-materials or
labor-hour types; and
(5) fixed-price subcontracts that exceed either $25,000 or 5 percent of the
total estimated cost of the prime contract.
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If the contractor's purchasing system has been reviewed and officially approved
by the Government, the types of subcontracts listed in (4) and (5) above do not require
the Contracting Officer's consent. Nonetheless, the contractor must still provide advance
notification before entering into such subcontracts. Page 214 presents a sample
subcontractor/consultant approval memorandum which can be used for transmitting the
Work Assignment Manager or Project Officer's request for approval to the EPA
Contracting Officer.
The Contracting Officer considers such factors as technical need for services,
compliance with the prime contract's requirements for subcontracting with labor
surplus area or small business concerns, adequacy of competition obtained,
responsibility of the proposed subcontractor, proposed type of subcontract, technical
requirements proposed, and adequacy of cost or price analysis performed. The Project
Officer will usually be requested to comment on the technical need for the supplies or
services, the reasonableness of the subcontract estimate, the capabilities of the proposed
subcontractor, and, in the case of a request to acquire property, the availability of the
item within EPA. Consent must be in the form of a written modification to the contract
or a letter to the prime contractor, and must be signed by the Contracting Officer.
Privity cj Contract Principle
The Government's only direct contractual relationship is with the prime
contractor; there is no such relationship between EPA and any subcontractor at any tier
(or as it is usually phrased, there is no "privity of contract" between the Government
and its subcontractors). What this means is that EPA has no right to deal directly with a
subcontractor on any issue, and the subcontractor has no right to obtain a direct decision
of the Contracting Officer and no right of appeal to the Board of Contract Appeals. It is
the responsibility of the prime contractor to arbitrate any disputes between himself and
his subcontractors. The fact that the prime contract requires advance Government
consent to a subcontract does not remove the subcontractor from the no-privity rule.
By ignoring rules against communicating directly with subcontractors,
Government personnel could actually create privity between EPA and its subcontractors.
This means that a contractual relationship might be developed between these two parties,
of which the prime contractor would not be a part. In such an instance, the prime could
not be held liable for any default on the part of the subcontractor, and the Agency might
lose a substantial portion of its contractual rights. For this reason, Project Officers,
Work Assignment Managers, and Delivery Order Officers must be particularly careful to
guard against such activity.
Because there is no privity of contract between EPA and any subcontractor, how
does a Project Officer provide technical direction and monitor performance when much
of the work has been subcontracted? This is where the prime contractor's management
services come in. All technical direction must be communicated to the subcontractor VIA
THE PRIME CONTRACTOR. It is critical that Project Officers understand this and not
attempt to contact subcontractors directly for the purpose of giving direction.
Similarly, the monitoring of technical performance and financial expenditures on the
part of subcontractors is done through the prime contractor's progress reports, and any
problems noted should be discussed with the prime contractor, who is responsible for
total performance under the contract. Particular attention should be paid to the
performance of subcontractors, as there may be a tendency on the part of the prime to
devote less management attention to this portion of the work and thus allow slippages to
occur. But if this does happen, the Project Officer should let the prime contractor know
that he is not adequately managing the entire contract.
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Consultant Approval
Often in the performance of EPA contracts there is a need to bring in a consultant
with a particular expertise to assist in some aspect of the work. Usually, the technical
performance benefits greatly from such expertise. However, hourly or daily rates
charged by consultants are often prohibitive and may not be commensurate with the
technical benefits we might derive. Therefore, when the use of consultants is anticipated
as a possiblity in cost-reimbursement and some indefinite quantity contracts, the
Contracting Officer will insert a clause in the contract requiring the contractor to obtain
EPA approval before a consultant is used.
The technical qualifications of the proposed consultant, the benefits to be derived
from his or her use, the amount of usage, and the rate proposed, are all reviewed by EPA
before approval is granted. A contract modification is executed to approve the use of the
consultant, and it will usually specify the fixed rate to be charged and set a limit on the
number of hours or days the consultant can be used. This way, the Government is
protected against excessive use of, and excessive charging by, expert consultants under
cost-reimbursement and indefinite quantity type contracts.
The same rules about directing consultant work as those set forth above for
subcontractors are applicable. In other words, EPA cannot direct the contractor to hire
any consultants or influence the selection of such consultants in any way. And, as with
subcontractors, EPA has no privity of contract with any consultants used in the
performance of its contracts. The prime contractor is responsible for all aspects of
performance.
Key Personnel
The qualifications of contractor personnel have a direct effect on the quality of
performance. In many cases, the best way to assure good quality of work performed is to
assure that personnel with the necessary capabilities, qualifications, and experience are
assigned to the work effort. This is particularly important for contracts calling for
creative or conceptual development or analysis. An offerer who proposes the best-
qualified personnel to perform the work, and is selected on that basis, should use those
personnel on the resultant contract to make his proposal meaningful. To ensure that this
occurs, the Government usually includes a "Key Personnel" clause (see page 216).
Under the provisions of this clause, the contractor agrees: 1) to assign to the contract
work certain key personnel, 2) not to remove these key personnel from the contract
work for a certain period of time (generally 90 days unless specifically lengthened in
the contract terms) without the consent of the Contracting Officer, and 3) to obtain the
Government's approval on any proposed substitutions.
Through monitoring, the Project Officer can assure that key personnel have not
been removed or diverted from the contract work and that their level of effort is as
required for satisfactory contract performance. Key personnel should be working in
those capacities and for the level of effort that were indicated by the contractor.
7.6 Consideration #3: Personal Services
A personal services contract results when the government assumes the right to
instruct, supervise or control a contractor's employee in how that employee performs
his or her work. It is the contractor's right to hire and fire the contractor's employees,
and to assign and organize the contracted-for work.
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In drafting statements of work for work assignments or delivery orders, Work
Assignment Managers and Delivery Order Officers must take care to avoid creating a
work assignment or delivery order that creates an employer/employee relationship
between the government and the contractor's employee. This is particularly a problem
where the contractor's employees are working on-site with EPA personnel, e.g., at
Superfund sites. Personal services contracts are illegal, and must be avoided in all
situations.
The following elements should be reviewed to assess whether a contract is
personal in nature:
a. Requires contractor performance on-site;
b. Government provides principal tools and equipment;
c. Services are applied directly to the integral effort of EPA or an organizational
subpart to further its assigned function or mission;
d. Comparable services are performed in the same or similar agencies using
civil service personnel;
e. The need for the type of service can reasonably be expected to last beyond one
year
f. The inherent nature of the service, or the manner in which it is provided,
reasonably requires, directly or indirectly, Government direction or
supervision of contract employees in order to
(1) adequately protect the Government's interest;
(2) retain control of the function involved; or
(3) retain full personal responsibilities for the function supported in a
duly authorized Federal officer or employee.
All of these elements do not have to be present to have the contract deemed a personal
services contract and thus illegal. The most important element to be avoided is the
supervision of contractor employees by government personnel. EPA has provided
guidance on the Use of Contractor Services in the form of an EPA Order that should be
read by all EPA personnel (see Appendix 7A).
7.7 Consideration #4: Use of Advisory and Assistance Services
In January, 1988, OMB issued Circular A-120 entitled "Guidelines for the Use
of Advisory and Assistance Services," superceding a more narrowly focused 1980
circular entitled "Guidelines for the Use of Consulting Services." (See Appendix 7B for
the Guidelines and related Contracts Management Manual guidance.) Advisory and
assistance services are services acquired from non-governmental sources by contract or
by personnel appointment to support or improve agency policy development, decision-
making, management, and administration, or to support or improve the operation of
management systems. Such services may take the form of information, advice, opinions,
alternatives, conclusions, recommendations, training, and direct assistance. The scope
of the current circular includes: a) individual experts and consultants (including
advisory committee members); b) studies, analyses and evaluations; c) management and
professional support services and d) engineering and technical services. There are also
numerous exclusions (see page 248g).
Individuals preparing statements of work for contracts which may employ
advisory and assistance services are now required to do the following:
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(a) Include with their procurement request the procurement request rationale
checklist (see page 217b) indicating whether the procurement request
involves advisory and assistance services, and if so, attaching a justification
that provides a statement of the need for the services and a certification that
such services do not unnecessarily duplicate any previously performed work
or services. (The contracting officer is responsible for determining
whether any requested contractual action, regardless of dollar value,
constitutes advisory and assistance services, and that determination shall be
final. Procurement requests for work assignments under already approved
contracts do not require separate determination.)
(b) Obtain the necessary approvals. Obtain the approval, for a small purchase,
of a program official at least one organizational level above the initiating
office. (For requirements received in the fourth quarter of the year for
approval during that fiscal year, however, approval at the second level above
the initiating office must also be obtained.)
For other than small purchases not in excess of $1,000,000, the approval
of a program official at the level of Associate, Assistant or Regional
Administrator, Inspector General or General Counsel, must be obtained. If
the procurement request exceeds $1,000,000, approval is also required by
the Assistant Administrator or equivalent at Headquarters, or the Regional
Administrator. AH such requests must also be routed through the Director,
PCMD.
(c) Ensure that their statements of work do not procure advisory and assistance
services that would be:
(1) used in performing work of a policy, decison-making, or managerial
nature which is the direct responsibility of agency officials;
(2) used to bypass or undermine personnel ceilings, pay limitations, or
competitive employment procedures;
(3) awarded on a preferential basis to former government employees;
(4) used under any circumstance specifically to aid in influencing or
enacting legislation;
(5) procured through grants and cooperative agreements; and
(6) obtained for professional or technical advice which is readily available
within the agency or another Federal agency, except when the contract is
entered into pursuant to the procedures and provisions of Circular A-
76 ("Performance of Commercial Activities")
(d) Ensure the institution of the following management controls:
(1) Work statements are specific, complete and specify a fixed period of
performance for the service to be provided;
(2) Advisory and assistance service arrangements are properly
administered and monitored to ensure that performance is satisfactory;
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(3) To the extent practicable, contracts for these services require a written
report.
7.8 Consideration #5: Government Property
It is EPA's general policy that contractors should provide all resources necessary
to perform Agency contracts. Nevertheless, situations do arise where it is in the best
interest of the Government to furnish certain property to the contractor. When
Government property is, or is proposed to be, in the hands of contractors, certain
policies and procedures are applicable, and Project Officers need to be aware of them and
make proper provision in their work assignments.
Justification of Need
Whenever a Project Officer recommends property be provided to a contractor, a
written justification of need must be submitted to the Contracting Officer. The
justification must address the following points, and must be signed and approved at the
Division Director or equivalent level in the program office:
(1) Identify the specific program and project for which the property is
required, as well as the contract and the Work Assignment or Delivery Order
number. Also identify the EPA account number(s) that the item is to be
charged against.
(2) Identify the type, quantity, and estimated cost (including any trans-
portation or installation costs) of each item of property required.
(3) Explain why the property is necessary for contract performance.
(4) Explain why it is in the interest of the Government to provide the property
rather than to require the contractor to provide the property at no direct
cost to the contract.
(5) Identify the location of the contractor's facility at which the property will
be used, and the contractor's personnel responsible for acquisition and
management of the property.
(6) For property to be acquired by the contractor at Government expense,
include a certification that no in-house or GSA excess property is available
and include the concurrence of the local property office.
(7) For equipment to be acquired by the contractor at Government expense,
include a lease vs. purchase analysis.
This justification is required whether the property will be furnished at time of
contract award or later, during performance. (If the need arises after award, normally
the Government must receive some consideration for the furnishing of property, which
the Contracting Officer will negotiate with the contractor.) When the need to furnish
Government property is known before award, all property to be furnished should be
identified in the solicitation.
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The Contracting Officer will review the justification and may or may not concur
in the recommendation. Of particular concern is whether or not the equipment is special
purpose or general purpose. It is against Government policy to furnish items of a
general purpose nature (such as furniture, typewriters, etc.) rather than the
contractor.
If the Contracting Officer concurs in the decision to furnish Government
property, it must be approved at an administrative level above the Contracting Officer.
Government property furnished to a contractor must be listed in the contract.
Otherwise, there is no authorization or record of the transaction. It would be difficult to
monitor its use and handling, and ensure its proper disposition after the contract has
ended. Government property may not be provided to a contractor without being formally
authorized through a contract. Property may not be authorized in a work assignment or
delivery order.
Project Officers who want to recommend furnishing Government property or the
acquisition of contractor-acquired property to subcontractors must follow the same
procedures used for dealing with a prime contractor. The prime contractor is
responsible for acquiring any information about Government property from the
subcontractor and for reporting to the Property Administrator (see below). The same
procedures regarding property acquisition, utilization, disposal, etc. apply to the
subcontractor as well.
if property is furnished and/or acquired by a subcontractor, it is the
responsibility of the prime contractor to assure that the subcontractor operates
according to all EPA regulations, that the property is used only as authorized by the
contract, and that it is adequately cared for and maintained. Procedures necessary to
assure the accomplishment of this responsibility should be included in any contractor's
property control system.
Property Provided by the Government Versus Property Acquired by a Contractor
Government property comes into the possession of a contractor in one of two
ways. Either the property is already owned by the Government and furnished to the
contractor, or the contractor is authorized to acquire the property at Government
expense. For several reasons, the first way is preferred. First, it is usually less costly
to purchase it ourselves. Second, the Agency's competitive procurement procedures
should result in a better price than the contractor could obtain. Finally, it could be
perceived that program offices are attempting to bypass budget ceilings on equipment and
other items by using contract funds to obtain the property. However, the Government
could be liable for delaying the contractor if we fail to meet scheduled delivery dates or
the property is received by the contractor in a condition unsuitable for use.
Loans of Government property on a short-term basis should not be made to a
contractor without the Contracting Officer's authorization. If the need exists for
property to be loaned to a contractor, the Project Officer should immediately advise the
Contracting Officer in writing with a copy to the Property Administrator (see below).
Included in this memorandum should be a comprehensive Justification of Need to be
considered in making the decision.
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The Contract Property Administrator
A Property Administrator is an EPA employee designated by the Contracting
Officer in the contract to act as his or her representative in certain matters concerning
the management and control of Government property.
Project Officers should assure that both the Contracting Officer and Property*
Administrator are always fully informed on all matters affecting contract property
administration. Providing such information is vital due to the great variety of rules and
regulations that affect the administration of Government property in the possession of
contractors.
Copies of all contracts are provided to the Property Administrator, who
immediately forwards a "Contractor's Guide for Control of Government Property" to each
contractor. When a review of a contract reveals authorization for the acquisition of
property, decals to be affixed to the property and a reporting form (EPA 1730-1,
"Report of Nonexpendable Property Acquired by Contractor") are provided to the
contractor to identify EPA property. (See copy of form on page 350).
A copy of EPA Form 1730-1 must also be attached to the contractor's invoice to
support any claim for reimbursement. Government-furnished property is transferred
from a program's accountability after verification of receipt by the contractor. A final
inventory must account for all residual property, expendable and nonexpendable.
Actions Involving Other Properly Accountable Area Offices
Property accountable areas are established throughout EPA to control
Government-owned property. Each program office is an area within an accountable area
of the Agency and all of the program's equipment is charged to that particular area.
Therefore, when a determination is made by the Contracting Officer to provide
Government property to a contractor, the Project Officer must notify both the Property
Administrator and the responsible program person, so that a transfer of reponsibility
from EPA to the contractor may be processed. No movement of equipment either to or
from a contract may be made without involvement of both of these individuals.
Written Property Control Procedures by Contractors
Normal contract property administration practice provides for the control of
property by means of written procedures that communicate the organization's standards,
techniques, and instructions to operational personnel. Immediately after the award of an
initial contract, the Property Administrator will request the name, title, address, and
telephone number of the contractor's representative for contract property
administration. Contractors with large inventories of high dollar value equipment that
is Government-furnished or contractor-acquired will be requested to provide their
property control system policies and procedures to the Property Administrator for
approval.
In cases where a contractor has only a few employees, the need for written
procedures will be evaluated by the Property Administrator. If the control system is
found to be inadequate, necessary corrective actions will be referred to the Contracting
Officer.
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is Government-furnished or contractor-acquired will be requested to provide their
property control system policies and procedures to the Property Administrator for
approval.
In cases where a contractor has only a few employees, the need for written
procedures will be evaluated by the Property Administrator. If the control system is
found to be inadequate, necessary corrective actions will be referred to the Contracting
Officer.
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IFICAT1OM
THANtyVHTTAL
NO^ 1900.1
10/31/85
USE OF CONTRACTOR SERVICES
1. PURPOSE. This Transmittal issues a new Order on the Use of
Contractor Services.
2. EXPLANATION. The Order will help employees in avoiding
personal services arrangements in their contract activities.
It provides further guidance and clarification of material
already covered in the Contracts Management Manual, Environ-
mental Protection Agency Acquisition Regulation, and the
Federal Acquisition Regulation.
3. FILING INSTRUCTIONS. File the document in numerical order;
in a three-ring binder established for Agency directives.
ector
Management and Organization Division
ORIGINATOR:
Procurement and Contracts Management Division/Office o
Administration
EPA Pwm 1310-12 (R«r. 743) REPLACES EPA FORM* 131S-1A AMO THE PREVIOUS EDITION Of 131S-12.
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EPA ORDER
1900.J
10/31/85
USE OF CCNT3ACTCR SERVICES
1. PURPOSE. As more and more activities require contractor support to be furnished
on-site at Government facilities, the question of whether these contracted actions
are personal or nonpersonal in nature continues to arise. The Goverrment is
normally required to obtain its employees by hiring through personnel channels.
Therefore, the procurement of personal services by contract is prohibited unless
specifically authorized by statute. This Order is designed to assist you in
avoiding personal .services arrangements in your contract activities.
2. RESPONSIBILITIES. Contracting Officers, Project Officers, Delivery Order
Officers, and all other EPA personnel are responsible for ensuring that personal
services relationships between Government and contractor employees are avoided.
3. DEFINITION. Personal services contracts exist when the nature of the .-
relationship between the contractor and the Government can be characterized as
an employer-employee relationship. An employer-employee relationship exists
when either by the terms of the contract itself, or because of the manner in
which the contract is managed, contractor personnel are subject to the day-to-day
supervision and control of Government personnel.
4. ASSESSING THE PERSONAL NATURE OF A CONTRACT. Wiile one of the most important
elements to be avoided in a contractual relationship is the supervision of
contractor employees by Government personnel (see f. below), the Federal
Acquisition Regulation (TAR 37.104(d)) provides other descriptive elements which
should be used as a guide in assessing whether or not a contract is personal in
nature. All o£ these elements need not be present to have an improper personal
services arrangement:
a. Performance on—site.
b. Principal tools and equipment furnished by the Government.
c. Services are applied directly to the integral effort of the Agency or an
organizational subpart in furtherance of assigned function or mission.
d. Comparable services, meeting comparable needs, are performed in the same
or similar agencies using civil service personnel.
e. The need for .the type of service provided can reasonably be expected to
last beyond one year.
f. The inherent nature of the service, or the manner in which it is provided
reasonably requires, directly or indirectly, Government direction or supervision
of contract employees in order to:
(1) Adequately protect the Government's interest;
(2) Retain control of the function involved; or
(3) Retain full personal responsibilities for the function supported
in a duly authorized Federal officer or employee.
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EPA ORDER
1900.1
10/31/85
USE OF CONTRACTOR SERVICES
5. PRINCIPLES P3R MAtPCING A OCNTRACT.
a. The contracting officer is responsible for determining prior to award,
that the contract does not involve the procurement of personal services. But,
even though supervision ty Goverrment errplcyees is not directly required ty the
terras of the contract, a personal services situation can develop through improper
contract management.
b. Technical management generally relates to the manner in which work
direction is given. • Interchange of information of a technical nature is not
prohibited. In managing the contract, however, the following principles should
be observed:
(1) Insofar as possible, let the contract define the job. This can best
be accomplished when the contract contains a definitive statement of work.
(2) When the job scope nust be changed, notify the contracting officer
innediately so that the appropriate contract changes nay be issued.
(3) Wien the job definition requires interpretation of the work description|
or other direction which is clearly within the project officer's authority, nake
sure that such direction is issued Iran the Project Officer to the appropriate
contractor contact person in the form of a written technical directive. ED not
give any instructions to individual contractor employees.
(4) Prepare memorandums for the record of all meetings, trips and
telephone conversations relating to the contract.
(5) Ensure that all contractor and all EPA occupied space is readily
identifiable. Generally, on site contractor employees are physically located
in separate areas from Government employees. In isolated cases where a general
area must, be occupied or used by both EPA and contractor employees, seme sort of
physical separation, identification of space, and scheduling of equipment usage
should be arranged.
(6) All requests for contractor follow-up or touch-up services should be
directed from the Project Officer to the contractor's project manager. Likewise,
contractor employees must operate through the contractor's supervisor to obtain
any informatioh needed to complete the work product.
(7) Strictly avoid situations in which one .EPA on-site contractor _ provides |
support to another EPA on-site contractor, except where the contract requires
such suoport to be furnished (e.g., janitorial services, security services,
etc.). "
(8) Strictly avoid Government intervention with respect to luring or
firing of employees or assigning particular employees to specific tasks.
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EPA CFDES
1900.1
10/31/85
USE CF
SERVICES
6. ADDITIONAL GUIDANCE.
a. I have attached a comprehensive paper on the use of contractor services
which was prepared by the U.S. Department of the Navy (Attached). This
paper further illustrates proper use of contractor services.
b. As in any contract situation, you are encouraged to contact your
contracting officer for advice and guidance as required on a case-by-case basis.
'John C. Qiaraberlin
Director
Office of Administration
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EPA ORDER
U.S. Departsenc of the Maw
1900.1
Appendix
•Guide for 'Jsing Contractor Services"
BasJ.ally, we do our vork in the Department of the Navy two ways: "in-house"
with military and civilian personnel, or "out-of-house" by contract. Which way
it is done is a decision based on policy, practicality, and law. Generally
rspeaking, it has been Government policy for a number of years to perform
conrercial or industrial "activities by contract unless some compelling reason —
such as military readiness, security, or economy — warrants bringing the job
"in-house." Which route to follow is the subject of other Office of Management
and Budget, Department of Defense, and Department of the Navy instructions, and
is not at issue here. Our concern here is only that, if a decision is made to
let a contract involving services, we make it properly, and use the services
properly. ,
Hie fundamentals are these. It is perfectly proper for the Government to purchase
by contract what may be described as a finished product — a piece of hardware,
a defined piece of research, or a report. Unless Congress has passed a specific
statute to authorize something different, the Government may not contract"out for
.the services of people who receive their assignments from Government personnel,
work under the direct supervision of Government personnel, and whose relation-
ship to the Government is thus no different from that of a Government employee.
Where the Government wishes to procure services in this fashion, it must hire
1u.r. p-ople directly, in accordance with the Civil Service Laws.
A finished prochict versus personal services — these form the two ends of the
.spectrum. The one may be procured by contract; the other may not. In between
ar« situations where the Government does not want to hire people, yet the work
it. needs to have performed is essentially just labor — cleaning, painting, or
operating a radar station. In these situations, the Government may still obtain
tu.e work by contract, providing two conditions are met: (1) the Contract must
ask for the finished product only, and (2) the contract must be administered in
such a way that control and supervision over the work and discretion of the
techniques which will be used remain solely with the contractor. In other words,
if the Government wants a building painted, it defines the job, lets the
contractor paint the building as he sees fit, and then accepts it or rejects it
solely on the basis of whether the completed job meets the specifications.
This would be a perfectly legal contract for a finished product. On the other
hand, if the contractual arrangement with the painting contractor is such that
he is really only providing us with painters whom we direct and and supervise
as we would our own military or civilian employees, then the contract would be
for personal services and would be illegal. In that case, the Government
would, in effect, be "hiring" employees without regard to the Civil Service
System. That it may not do, and that is the reason all service contracts
must provide for a clearly defined task or 3ob.
The Problem:
A contract may thus cross over into the forbidden area either because of the
way it is written or because of the way it is administered. The former should
not occur very often. AS?R, Armed Services Proejrement Regulations, provides
adequate guidance and procedures which, if faithfully pursued, will insure
that every contract for services is in fact legal on its face. But even the
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U.S. Department of the Naw
best-written contracts can later be ruled illegal if they are not administered
properly. Good, intelligent contract administration is really the key to
avoiding personal.services problems.
In essence, a forbidden personal service contract results vhen the Government
assumes the right to instruct, "supervise, or control a contractor's employee
in how ne performs his work. "It is one thing, -for example, to sit down in a
restaurant, order a steak medium rare, and accept it or reject it when it
arrives. It is quite another to insure that it is cooked to satisfaction by
going out to the kitchen, looking over the chef's shoulder, and telling him how
to adjust the flame, when to turn the steak over, and how to season it. When
the Government exercises this sort of direct supervision and control over
contract personnel, it is using them as if they were its own civil service
or military personnel. Control such as this — however well-intentioned —
renders the services personal and the contract illegal.
Bow,.then, can personal services problems be avoided? The answer must begin
early with contract planning, because these problems are far easier to prevent
than to cure.
Pre—Contract Planning:
In planning the contract, the contracting officer must receive a great deal
of willing cooperation from all hands — technical personnel, legal personnel,
and especially the users — those with the requirement for the proposed services.
Under ASPR, before the contracting officer may enter into a service contract,
he must make a.written determination that the services are nonpersonal. To do
so, he must rely almost completely upon the users for the facts he needs, because
only they can provide them. As the first step, therefore, the contracting
officer roust learn the whole story — all the circumstance of what the services
are to be and how they will be used. In view of his responsibility for making
the procurement, he deserves — and has every right to receive — the users'
fullest assistance and candor.
Second, "the users must provide the contracting officer with a detailed
description of the job they want core. Since the contract must be couched in.
terms.of providing the Government with some sort of finished product, this is
the infornation that will be needed to draft proper specifications, task orders,
or work assignments. Although it is-.the job of the contracting personnel to
reduce this information to contract format, it is the job of the users to
explain precisely what work they want performed.
Third, there must be a review of all the collateral circumstancps which might
have a bearing upon whether an illegal personal services contract has been
created. Although the key factor is the degree to which the Govr-rnment exercises
control and supervision over the performance of the contract, th<- Civil Service
Ccnmission's opinion, as well as rulings of the Comptroller Gen«*r.»l, also look
to related circumstances which, by their very nature, go hand in hand with the
exercise of Government control over contract performance.
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U.S. Deoar^ent cf the Naw
An example might be a contract under which the contractor was provided with
articles ot Government property. While it is not unusual for the Government to
furnish equipment or material for use in performing its contracts, what is
furnished is usually specialized or otherwise difficult for the contractor to
provide tor himself. If, instead, the Government furnishes something ordinary
like office equipment, drafting tables, or typing paper — the sorts of things
any employer ordinarily provides his own employees — then, if unexplained, an
inference may be drawn that the Government is treating the contractor's eaploye-ss
as its own.
Similarly, our civilian employees or military personnel generally work on-site,
whereas a contractor's employees usually do not. Thus, providing the contractor
with office space at a Government location might lend weight to an inference
that his employees are, in effect, Government employees. By the &&** token, the
work should be planned to avoid a mix of Government and contractor personnel
so that they are not working side-by-side under similar conditions and
supervision. It should be cautioned, however, that a determination of personal
services would still be found in cases where these personnel - although
physically separated — were all performing the same work and were otherwise
interchangeable. The sane would be true where succeeding contracts with
different firms included provisions for orderly changeover of key personnel,
and the same contract employees were found doing the same work at the same
desk year after year. And personal services have even been found, in incentive
or award fee contracts, where the evaluation of contract performance was made,
not upon the whole job, but rather upon the separate performance of
individual contractor ernployees.
Factors like these are important because each such piece of circumstantial
evidence may contribute to a later conclusion that the services concerned are
personal. All of them pertain to supervision and control, and they are weighed
according to the extent of their contributions to actual Government control over
the contractor's personnel. Taken together and viewed objectively, they may
give every practical appearance that contract employees are being treated as
if they were actually Government employees.
In the planning stage, then, requirements, technical, and contracting people
should pursue every effort toward eliminating as many such factors as they can.
None, of them alone would necessarily be fatal to the contract's legality, and
some of them might indeed be absolutely necessary and, therefore, inevitable.
It is important to realize, however, that these ancillary factors can be
critical to the result and that they can be effectively provided for only in
advance. If they are carefully considered during the planning staqe, and if
there are good reasons for-providing the contractor with tools, or working
space, or doing anything else which might imply Government supervision
or control, then the contract can provide for them, and later be administered,
in a manner which will be proper and will not be susceptible to drawing
an inference of personal services later on.
The Contract:
The sort of planning described above should provide the contracting officer
and his staff with all they need to know about the actual requirements,
in order to reduce them to clearly defined work statements. They musr,
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U.S. Department of the Mavy
then, in clear, understandable language, sec forth exactly what the Govern-
ment wants to have done, They must provide in the contract all the soeci-
fications or-instruction the contractor needs, both to undertake and to
ccrolete the job. This will insure that the Government has the right to
expect an acceptable end product without the need for control over the way
the contractor qoes about his work.
It is not enough, however, to write something like "furnish such assistance
as is or may be necessary to support the overall mission of the activity,"
or "update and revise 40 drawings in accordance with the oral instructions
of the division supervisor or his duly authorized representative." The
contract, or the task orders or worfc assignments written under it, should
adequately describe the job to be done so that further informal direction
is unnecessary. This, of course, does not mean that they cannot be formally
jnodified or amended, if needed.
Furthermore, the contract must avoid creating in the Government a specific
or even an implicit power to hire or fire the contractor's escloyees. It
is- always permissible to retain the authority to require security clearances
or other legitimate and relevant acaiinis trative controls, but it must not
op beyond that. The contractor, for example, may be required to accommodate
himself and his working hours to our daily business routine if he is working
on-base, whereas it would be insroper to incase such a schedule upon work
he performed on his own premises. And it goes without saying that the
contract must not provide for Government supervision or control over the
contractor's staff.
Nor will tiie inclusion of artifical procedures for contract administration
remove the Government from a situation of supervision and control' if one
actually exists. It is no use, for example, to provide an elaborate
organization in the contract for the transmission of work assignments on a
supervisory level if, in practice, it is to be phoned from a Government
draftsman to his contractor counterpart. And even where such conduits have
actually been used in contract administration, they have been viewed as
mere camouflage where the alleged supervisors or technical directors were
so untrained or unskilled as to be incapable of direction and were, at best,
only figureheads. It may be helpful for the contract to make it clear that
the contractor is providing management or judgment as well as personnel,
but only if that is truly the case.* To repeat what was said earlier, writing
a legal contract is not the end of the road. The heart of most personal
services cases has been contract administration — what actually happened —
not withstanding the nineties of the written contract terms.
Contract Administration:
What, then, are the pitfalls of contract administration? Essentially, the
Government must keep "hands off the contractor's employees during the course
of contract operations, in order to avoid sliding into the area of sucervision
and control. Does that mean that,'after the contract is signed, there can be
no further contact with the contractor or his staft? The answer to that is
obviously "No." In the course of almost any contract performance, there must
be some dialogue between both sides. Complete insulation from on- another is
as unnecessary as it is undesirable.
A-4
246
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U.S. Deoartnent of the Saw
The "-^rmissible range of dialogue between the Government's representatives
ar*3. the contractor's representatives is whatever liaison and discussion or
explanation is necessary to carry out the traditional processes of contract
administration. We have inspectors and quality control personnel, for
'example, and their worx cannot be done in a vacuum. It usually requires
contract and communication to be useful, and this is entirely proper.
And we usually assign personnel in a liaison capacity, not only for
surveillance and bo keep us apprised of progress, but also for'a contact
through whom the contractor can relay his questions or problems. It is a
rare contract that does not involve answering questions about the
Government's specifications, and this, too, is a legitimate liaison function.
' IT. addition, the Government is generally concerned about the contractor's
delivery schedule — %iiether he will have the work performed on tire.
Accordingly, the contract milestones are important, and insuring that they
are met may demand prodding and reminding of many shapes and forms. • Like
the liaison and inspection mentioned above, this can be done properly as
well, because it does not involve the exercise of supervision or control
over the individual employees. In all proper administration functions,
Government representatives do not dictate what or how the contractor is
to perform. The "what" is set out in the contractor's responsibility.
In their contract administration roles, our personnel should primarily
be policing the written terms of the contract and assisting the contractor
when necessary to insure that the Government receives the job it bargained
for on time.
Contract administration begins to run afoul when our representatives go
beyond the terms of the contract. .By telling the contractor what to do,
they may be subjecting the Government to claims for changes. That is
another matter. But by directing how to do it, they are .crossing the line
into a personal services situation. Then they are beginning to exercise
supervision or control. When the inspector, liaison officer, or any other
Government representative turns from surveillance to supervision, he begins
to use the contractor's employees as if they were Government employees,
and is well on the way to transforming the contract into one for personal
services. Often, this arises from no more than a well-intentioned but
overzealous desire upon the part of responsible Government officials to
achieve near perfection in the services obtained. Such overzealousness
must be restrained.
After all, it is the contractor's privilege to do the job however he sees
fit, so long as he'stays within the terms and conditions of the contract.
Unless the contract legitimately provides otherwise, it is not our business
whether he does the work with one computer or 200 men, which employees
.work on which assignments, or whether they work nights or mornings, or
whether they do task A before task B,- or vice versa. It is the contractor's
right to hire and fire, to assign and organize the work — in short, to run
PCMD 9/89
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U.S. Department of the Navy
his own company. The moment the Government usurps that right and begins
to tell his personnel what, to do next or how to do it, then it has started
down the slippery slope toward a personal services situation. This illustrates
the rule for illegality, but it also must be understood that the greater the
.technical direction to the contractor, the greater the responsibility for
successful performance is assume by the Government. This situation is not
desirable because it not only, compromises the Government's rights to enforce-
ment of the contract'3 provisions, but it also transforms an otherwise proper
contract into an illegal one.
Sometimes it is the actions of the contractor^hinself which will cause the
contract to cross over into the forbidden area. By being overzealous in
attempting to be responsive to the Navy organization with which he is working,
the contractor may initiate contacts which result in Government control or
supervision over the work being performed. In other words, where the con-
tractor himself continually asks the Government for direction on how to carry
out the various .tasks required by the contract, the Government may end up, in
effect, supervising the performance of the work. This type of situation roust
be guarded against.
The contractor's eroloyees should always be looking only to their own
superiors for instructions, and they, in turn, must look back to the written
terms of the contract. This chain of responsibility must exist throughout
the performance of every contract, and it reemphasizes the need discussed
earlier for giving meticulous attention to the contract work statements,
task orders, or-work assignments at the outset. And it further underlines
the need for assuring that the contract preparation is a genuinely coordinated
effort by everyone involved — the users, technical staffs, contracting
staffs, and lawyers — so that, with the input from them, all the wor^k to be
performed is so clearly and accurately spelled out there will be neither need
nor te-Tptation to slide into, the easy trap of supervising any stage of the job.
Statutory Exception:
As was mentioned at the beginning, these rules of contracting must be
followed, in every service contract unless there is specific authority from
Congress to proceed otherwise. There may be situations — and they do arise
from time to time — when it is desirable for the Government to have precisely
that sort of supervision and control which is generally improper, and where
the short duration of the work dictates against hiring etraioyees under Civil
Service.
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APPENDIX 7B
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
NOV 3 1989
MEMORANDUM
SUBJECT:
OFFICE OF
ADMINISTRATION
AND RESOURCES
MANAGEMENT
Approval Requirements for Contracts with Possible
Use of Advisory and Assistance Services
FROM: . /David J. O'Connor, Director / c/
•V/T Procurement and Contracts Man4gejrfent
yT (PM-214F)
TO: v Associate Directors
PCMD Branch and Staff Chiefs
Douglas Richmond, RTP
William Bailey, CINN
Richard Feldman, OGC
Regional Coordinator
Chapter 2 of the Contracts Management Manual (CMM)
requires special justification and approval for contracts
involving consulting services (now referred to as advisory
and assistance services). This memorandum reminds you of the
need to obtain such approvals prior to contract award.
The Procurement Request Rationale Checklist, submitted
with EPA Form 1900-8, "Procurement Request/Order," contains a
block indicating whether the proposed procurement involves
advisory and assistance services. Using OMB Circular A-120,
"Guidelines for the Use of Advisory and Assistance Services,"
dated January 4, 1988, and the proposed contract's scope of
work, Contracting Officers must review this block to determine
if the project officer's determination on the Checklist is
correct.
If the procurement involves possible use of advisory and
assistance services, a justification must be prepared and
special approvals obtained as prescribed in Chapter 2 of the
-CMM. These approvals and justification are required at the
time the Procurement Request/Order is submitted. If after
contract award, the Contracting Officer determines that
advisory and assistance services are involved and required
approvals were not obtained, justification and approval must
be received before advisory and assistance services can be
PCMD 7/90
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-2-
ordered. Justification and approval of individual work
assignments for use of advisory and assistance services are
not required after approval at the contract level has been
obtained.
In coding information on the contract into the Federal
Procurement Data System (FPDS) through the Contract Informa-
tion System, the Contracting Officer should determine if the
predominant use of the action being coded constitutes advisory
and assistance services. If so, a "Y" should be entered in
the block marked Advisory/Assistance Services Award. Otherwise
an "N" should be entered. This determination should be made
independently for each action requiring data entry, both at
the time the initial contract data is entered as well as for
each funding action.
Please contact Joe Nemargut on FTS 382-5019 if you need
further information.
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CONTRACTS MANAGEMENT MANUAL
1900 CHG 7
5/21/90
2.5 EQUIPMENT LEASE OR PURCHASE
a. The Contracting Officer will perform the necessary
analysis leading to a decision to lease or purchase equipment
considering comparative costs and other factors. The Contracting
Officer will be assisted by the Project Officer and the
cost/price analyst, as necessary, and shall document the analysis
in the contract file. (See Chapter 5 for additional guidance on
furnishing Government property to contractors.)
b. Guidance relative to equipment lease vs. purchase
determinations is contained in the Federal Acquisition Regulation
(FAR), Subpart 7.4.
2.6 ADVISORY AND ASSISTANCE SERVICES
The management and control of contracts for advisory and
assistance services are addressed in OMB Circular A-120 dated
January 4, 1988.
The Circular defines advisory and assistance services as
those services acquired from non-governmental sources by contract
or by personnel appointment to support or improve agency policy
development, decision-making, management, and administration, or
to support or improve the operation of management systems'.
Attachment A contains the complete definition from the Circular.
The Circular excludes ADP/Telecommunications related services
that are subject to control under the Federal Information
Resources Management Regulation.
After consultation with the Project Officer, the Contracting
Officer will determine if the services requested are advisory and
assistance services and are nohpersonal.
2.7 PLANNING PURPOSE PROCUREMENT REQUESTS
Planning Purpose Procurement Requests are defined in
Chapter 1 of this Manual. Such actions shall be clearly marked
on the face of the EPA Form 1900-8. as "PLANNING PURPOSE
PROCUREMENT REQUEST" and shall contain all program and other
approvals that would be needed if the action were fully funded.
2-3
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MANAUIiMtKL' MANUAL
768
ATTACHMENT 1
5/21/90
Federal Register/ Vol. 53. No. 7 / Tuesday. January 12. 1988 / Notices
to Januury 27.1088. Tor (he deadline by
which the licensee may file a request Tor
hearing with respect to issuance of (he
amendment to the subject facility
operating license. This is also the dale
by which any person whose interest
may be affected by this proceeding and
who wishes to participate as a party in
the proceeding must file a written
petition for leave to intervene.
Duled kt Bctheida. MMryland. lh'» 7th tiny
of January 1988.
For ihe Nuclear Regulatory Commission.
David t_ Meyer.
Chief. Rales and Procedures Branch. On ision
of flutes and Records. Office of
Administration and Resources A/e/iofiwrnt
JFR Doe. M-S:0 Filed 1-11-88: 8MS ami
•ttLixa coot
(Docket No. 50-312}
Sacramento Municipal Utility District;
Consideration of Issuance of
Amendment to Facility Operating
License and Proposed No Significant
Hazards Consideration, Determination,
and Opportunity for Prior Hearing;
Correction
The United States Nuclear Regulatory
Commission issued a notice in the
Federal Register on December 28.1987
(52 PR 48889) that it is considering
issuance of an amendment to Facility
Operating License No. DPR-54. issued to
Sacramento Municipal Utility District
for operation of the Rancho Seco
Nuclear Generating Station located in
Sacramento County. California. The
date on page 48889 of the earlier notice
is changed from January 25.1988 to
January 27.1988, for the deadline by
which the licensee may file a request for
hearing with respect to issuance of the
amendment to the subject facility
operating license. This is also the dale
by which any person whose interest
may be affected by this proceeding and
who wishes to parlicpalc as a party in
the proceeding must file a written
petition for leave to intervene.
Dated at Otlhcsda. Maryland, this 7th day
of January 1908.
For the Nuclear Regulator}' Commission.
David t_ Meyer.
Chief. Rules and Procedures Branch. Division
ofRu/es and Re-cords. Office of
Administration and Resources Management.
IFR Doc. 08-521 Filed 1-II-&8: 8:45 am|
•MJJNO coot
OFFICE OF MANAGEMENT AND
BUDGET
Guidelines for the Use of Consulting
Services
AGENCY: Office of Management and
Budget.
ACTION: Revision to Circular A-120.
"Guidelines for the Use of Consulting
Services".
SUMMARY: This notice revises OMB
Circular A-120. "Guidelines for the Use
of Consulting Services." dated April 14.
1980.
The revision is based on
recommendations of the Cabinet
Council on Management and
Administration which in 1984 conducted
a study in response to reports of abuses
of consulting services by Federal
departments and agencies.
The revision: [1] Expands the
coverage of the circular. (2) requires the
designation of a single official by each
agency to be responsible and
accountable for assuring that the
provisions of the circular are met: (3)
mandates minimum controls for the
management and reporting of advisory
and assistance services: and (4) exempts
from the provisions of the circular all
activities carried out in accordance with
Circular A-76 (Revised) "Performance of
Commercial Activities."
EFFECTIVE DATE: These revisions to
Circular A-120 are effective
immediately.
FOR FURTHER INFORMATION CONTACT.'
Contact the Office of Management and
Budget Financial Management Division.
New Executive Office Building. 726
Jackson Place NW.. Room 10201.
Washington. DC 20503. (202) 395-6903.
SUPPLEMENTARY INFORMATION: Notice of
the proposed revision was published for
comment in the Federal Register on June
25.1987. (52 FR 23918). In response.
OMB received comments from more
than 20 Federal agencies and private
organizations.
Following is a summary of the major
comments grouped by subject and a
response to each.
Comment: Since the Cabinet Council
study, a number of new safeguards have
come into being. These include various
provisions of the Competition in
Contracting Act (Pub. L 98-369). the
establishment of competition advocates
in all Federal agencies, the issuance of
Circular A-123. and the annual reports
by agency inspectors general. Because
of these developments, the coverage of
the circular should not be expanded.
Response: The additional
management controls enacted since the
Cabinet Council study may be presumed
to have diminished abuses in the
procurement of advisory and assistance
services, fiowever. there is not evidence
that abuses have been eliminated and
the types of activities covered by the
expanded coverage continue to be
inherently vulnerable. Further, the
expanded coverage of the circular is
consistent with the coverage adopted by
the Department of Defense in 1986.
Comment: A substantial paperwork
and management burden will be created
by applying the controls previously
required only for consulting services to
the much larger number of procurements
of advisory and assistance services.
Response: First, in response to
comments (as noted below) the circular
has been revised to eliminate day to day
operational activities from its
requirements. Secondly, agencies may
find it useful to review their existing
controls and consider whether it is
desirable to apply them in their entirety
to the newly covered activities. Some
agencies now utilize greater control than
is required by the Federal Acquisition
Regulations (Subpart 37.2—Consultant
Services). These additional controls.
need riot be applied to all advisory and
assistance services if. in the judgment of
the agency, it is not desirable.
Comment: The requirement that the
renewal of contracts entered into in
accordance with Circular A-76 be
subject to the provisions of the circular
would constitute a disincentive to the
initial use of the A-76 process.
Response: Section 3 has been revised
to exempt all activities reviewed in
accordance with Circular A-76.
Comment: The proposed definition
includes a large number of routine, day
to day activities which had never been
identified as subject to significant
abuses.
Response: Section 1.6 of the
Exclusions has been revised to exclude
day-to-day operations of functions such
as building maintenance or ADP
operations. In the same vein, section
5.A.(3)c has been revised to exclude-
training which maintains skills
necessary for normal operations.
Comment: The requirement that
procurements of advisory and
assistance sen-ices be reported to the
Federal Procurement Data System solely
by use of the Individual Contract Action
Report (SF 279) ignores the existence of
accurate alternative reporting systems.
Response: Section 9 of the circular.
Data Requirements, has been revised so
that the Office of Federal Procurement
Policy (OFPP) can allow agencies to use
alternative reporting systems whnn
appropriate.
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769
A small number of additional
revisions were also made in order to
clarify the text and correct technical
inaccuracies.
lames C. Milter III,
Director.
(CircuUr No. A-i:o|
To the Heads of Executive Departments and
Establishments
Subject: Guidelines fur the use of Advisory
•nd Assistance Services
1. Purpose. This circular establishes
policy, assigns responsibilities, and sets
guidelines to be followed by executive
branch agencies in determining and
controlling the appropriate use of
advisory arid assistance services
obtained from individuals and
organizations. This circular supersedes
OMB Circular No. A-120 "Guidelines for
the Use of Consulting Services." dated
April 14.1980.
2. Background OMB Bulletin ,\'o. 78-
11. Issued May 5.1978. first required
agencies lo apply extra controls to the
procurement of consultant services.
Circular A-120. dated April 14.1980.
provided permanent guidance in lieu of
the interim guidance provided by the
Bulletin. A Model Control System for
consulting services was issued on
January 15.1982. to provide further
guidance, xvhich was non-mandatory.
In 1984. the Cabinet Council on
Management and Administration
(CCMA) completed a study of consulting
services to estimate expenditures.
review definitions and existing controls.
and propose reforms. The study resulted
from continuing reports, by CAO and
other agencies, of problems in the way
the Government manages and uses
consulting services.
This revision of Circular A-120 is
being issued (1) to expand the coverage
of the circular (2) to mandate controls
for the management and reporting of
advisory and assistance services; and
(3) to clarify the relationship between
Circular A-120 and OMB Circular No.
A-76 (Revised) "Performance of
Commercial Activities." issued August
4.1983.
3. Relationship to OMB Circular A-76.
Activities that are reviewed in
accordance with the A-76 process arc
exempt from the provisions of this
circular except that when the functions
performed by the contractor meet the
definition of advisory and assistance
services set forth in this circular, the
contracting action must be reported in
accordance with Sections 8.A. and 9.A.
below. When A-7G contracts are
renewed, they arc also exempt from the
provisions of this circular.
4. Coverage. The provisions of this
circular apply to advisory and
assistance services obtained by the
following arrangements:
A. Personnel appointment:
B. Procurement contract: and
C. Advisory committee membership.
5. Definition. Advisory and
Assistance Services are those services
acquired fron non-governmental sources
by contract or by personnel appointment
to support or improve agency policy
development, decision-making.
management, and administration, or to
support or improve the operation of
management systems. Such services
may take the form of information,
advice, opinions, alternatives.
conclusions, recommendations, training,
and direct assistance. Advisory and
assistance services include consultant
services provided by indivduals, as
defined in the Federal Personal Manual,
Chapter 304.
A. Advisory and assistance services
include activities having any of the
following characteristics:
(1) Individual Experts and
Consultants. Individual experts and
consultants are persons possessing
special, current knowledge or skill
which may be combined with extensive
operational experience. This enables
them to provide information, opinions,
advice, or recommendations to enhance
understanding of complex issues or to
improve the quality and timeliness of
policy development or decision-making.
These named individuals may either
work independently or be assembled
into panels, commissions, or
committees.
(2) Studies, Analyses, and
Evaluations. Studies, analyses, and
evaluations are organized, analytic
assessments needed to provide the
insights necessary for understanding
complex issues or improving policy
development or decision-making. These
analytic efforts result in formal.
structured documents containing data or
leading to conclusions and/or
recommendations. This summary
description is operationally defined by
the following criteria:
a. Objective: To enhance
understanding of complex issues or to
improve the quality and timeliness of
agency policy development or decision-
making by providing new insights into.
understanding of. alternative solutions
lo. or recommendations on agency
policy and program issues, through the
application of fact finding, analysis, and
evaluation.
b. Areas of application: All subjects.
issues, or problems involving policy
development or decision-making in the
agency. These may involve concepts.
organizations, programs and other
systems, and the application of such
systems.
c. Outputs: Outputs are formul.
structured documents containing or
leading lo conclusions and/or
recommendations. Data bases, models.
methodologies, and related software
created in support of a study, analysis.
or evaluation are to be considered part
of the overall study effort.
d. Exclusions and exemptions: A
complete list of exclusions and
exemptions from the provisions of this
circular is attached.
(3) Management and Profession:!!
Support Services. Management and
professional support services take the
form of advice, training, or direct
assistance for organizations to ensure
more efficient or effective operations of
managerial, adminstrative. or related •
systems. This summary description is
operationally defined in terms of the
following criteria:
a. Objective: To ensure more efficient
or effective operation of management
support or related systems by providing
advice, training, or direct assistance
associated with the design or opcru'.ion
of such systems.
b. Areas of application: Management
support or related systems such as
program management, project.
monitoring and reporting, data
collection, logistics management.
budgeting, accounting, auditing.
personnel management, paperwork
management, records management.
space management, and public relations.
c. Outputs: Services in the form of
information, opinions, advice, training,
or direct assistance that lead to the
improved design or operation of
managerial, administrative, or related
systems. This docs not include training
which maintains skills necessary for
normal operations. Written reports are
normally incidental lo the performance
of the service.
d. Exclusions and exemptions: A
complete list of exclusions and .-'
exemptions from the provisions of this
circular is attached.
(4) Engineering and Technical
Services. Engineering and technical
services [technical representatives) t:ike
the form of advice, training, or under
unusual circumstances, direct assistance
to ensure more efficient or effective
operation or maintenance of existing
platforms, weapon systems, related
systems, and associated software. All
engineering and technical services
provided prior to final Government
acceptance of a complete "hardware
system" are part of the normal
development, production, and
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procurement processes and do not fait
.within the meaning of this category.
Engineering and technical services
provided after final Government
acceptance of a complete hardware
system are within the meaning of this
category except where they are
procured to increase the original design
performance capabilities of existing or
new systems or where they are integral
to the operational support of a deployed
•ystcm and have been formally
reviewed and approved in the
acquisition planning process.
6. E\clusions. The attachment lists the
Government programs and activities
that are excluded from the provisions of
this circular unless agencies decide to
Include them (see Section 8A below).
7. Policy.
A. When essential to the mission of
the agency, the proper use of advisory
and nssistance services is a legitimate
w«y to:
(1) Obtain outside points of view to
avoid too limited judgment on
significant issues:
(2) Obtain advice regarding
developments in industry, university or
foundation research;
(3) Obtain the opinions, special
knowledge, or skills of noted experts
whose national or international preside
ccn contribute to the sources of
fmporlant projects:
(4) Enhance the understanding of. and
develop alternative solutions to.
complex issues:
(5J Support and improve the operation
of organizations:
(6) Ensure the more efficient or
effective operation of managerial or
hardware systems: and
{") Secure citizen advisory •
participation in developing or
Implementing Government programs
that, by their nature or by statutory
provision, call for such participation.
B. Advisor}- and assistance services
shall not be:
(1) Used in performing work of a
policy, decision-making, or managerial
nature which is the direct responsibility
of «scncy officials:
. (2) Used to bypass or undermine
personnel ceilings, pay limitations, or
competitive employment procedures:
(3) Awarded on a preferential basis to
former Government employees:
(4) Used under any circumstances
specifically to aid in influencing or
enacting legislation:
(SI Procured through grants and
cooperative agreements: and
(0] Obtained for professional or
technical advice which is readily
available within the agency or another
Ffc!i>nil agency, except when the
contract is entered into pursuant lo the
procedures and provisions of Circular
A-76.
C No contracts for advisory and
assistance services may be continued
longer than five years without being
reviewed for continued compliance with
this circular.
8. Management Controls.
A. Each agency will assure that it
maintains an accounting or information
system which effectively monitors and
reports advisory and assistance service
activitcs.
B. Each agency's management control
system for advisory and assistance
services shall at a minimum comply
with the Federal Acquisition Regulation.
Agencies are encouraged to apply the
same control system to other
procurements which in their judgment
require similar management attention.
notwithstanding the exclusion of those
functions or programs from the
provisions of this circular.
C. Each agency will assure that for all
advisory and assistance service
arrangements:
(1) The elements of the management
control system required by this circular
have been observed, and all
procurements under this circular are
administered in accordance with the
requirements of the Federal Acquisition
Regulation:
(2) As prescribed by the Federal
Acquisition Regulation, written approval
of all advisory and assistance services
arrangements will be required at a level
above the organization sponsoring the
activity. Additionally, written approval
for all advisory and assistance service
arrangements during the fourth fiscal
quarter will be required at the second
level or higher above the organization
sponsoring the activity:
(3) Every requirement is appropriate
and fully justified in writing. Such
justification will provide a statement of
need and will certify that such services
do not unnecessarily duplicate any
previously performed work or services:
(4) Work statements are specific.
complete, and specify a fixed period of
performance for the service to be
provided:
(5) Acquisition of advisory and
assistance services conform to the
Competition in Contracting Act of 1984:
(6J Appropriate disclosure is required
of. and warning provisions are given to.
the performer(s) lo avoid conflict of
interest:
(7) Advisory and assistance service
arrangements arc properly admini.slered
and monitored to ensure that
performance is satisfactory:
(8) The service is properly evaluated
at the conclusion of the arrangement to
assess its utility to the agency and the
performance of the contractor and
(9) To the extent practicable.
contracts for these services require a
written report. Such reports typically
would document the services delivered
and may. in part, take the form of
software packages.
D. Delegations of Authority.
(1) Each agency head shall designate
a single official reporting directly lo him
or her who shall be responsible and
accountable for assuring that the
acquisition of advisory and assistance
services meets the provisions contained
in this circular. The single official shall
have minimum responsibility for the
procurement of such services.
(2) Each agency will establish specific
levels of delegation of authority to
approve the need for advisory and
assistance services based on the policy
and guidelines contained in this circular.
The senior official shall review each
advisory and assistance services
request which exceeds an amount to be
determined by the agency.
E. Policy and procedures governing
advisory committees and their
membership as well as the procurement
of advisory and assistance services arc
contained in General Services
Administration regulations. 41 CFR Part
101-6.
F. The Federal Personnel Manual.
Chapter 304. governs policy and
procedures regarding personnel
appointments.
G. The Federal Acquisition Regulation
governs policy and procedures regarding
contracts.
9. Data Requirements.
A. Contracted advisory and
assistance services shall be reported to
the Federal Procurement Data System
(FPOS) in accordance with the
instructions in the FPDS Reporting
Manual.
B. Contract actions of S25.000 or less
reported on the Summary Contract
Action Report (S2S.OOO or less) (SF 281)
are not covered by this reporting
requirement. •
C. The following data systems will
continue lo provide information on
advisory and assistance service
arrangements within the executive
branch:
(1) Central Personnel Data File
(CPDF). operated by the Office of
Personnel Management, provides data
on personnel appointments, segregating
advisors, experts, and advisory
committee members.
(2) The Federal Procurement Data
System (FPDS) provides data on
contract arrangements thai are
monitored l>y the management control
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system required by Section 8 of this
circular.
(3) Advisory committee data is
provided in accordance with Section Z
of Executive Order No. 12024 to fulfill
the requirements of section 6(c) of the
Federal Advisory Committee Act. as
•mended (Pub. L. 92-463. 5 U.S.C.. App.).
10. Effective Date. This circular is
effective immediately.
11. Inquiries. All questions or
inquiries should be submitted to the
Office of Management Budget.
Telephone number (202) 395-6903.
lames C. Miller III.
Director.
Exclusions
L The following activities are excluded
from the purview of Circular A-120.
1. Activities thai are reviewed in
accordance with the A-76 process. (Such
activities m-jit be reported in accordance
with sections 8.A and 9.A.)
2. Architectural and engineering services of
construction and construction management
services.
3. ADP/Te!ecommunica!ions may be
excluded if such functions and related
services .ire conlrolicd in accordance with 41
CFR Part 201. the Federal Information
Resource Management Regulations.
4. Research on theoretical mathc.-na.tii'.s and
basic medical, biological, physical, social.
psychological or other phenomena.
5. Engineering studies related to specific
physical or performance characteristics of
existing or proposed systems.
8. The day-to-day operation of facilities
(«.f. the Johnson Space Center and related
facilities) and functions (e.g.. AOP operations.
building maintenance, etc.).
7. Government-owned, contractor operated
facilities (COCOs) (e.g.. Oak Ridge National
Laboratory, the Holsun Army Ammunition
Plant in Kingsporl. Tennessee). However, any
contract for advisory and assistance services
other than the basic contract for operation
and management of a COCO shall come
under the provisions of this circular.
8. Clinical medicine.
9. Those support services of a managerial
or administrative nature performed as a
simultaneous part of. and non-separable
from, specific development, production, or
operational support activities. In this context.
non-separable means that the managerial or
administrative systems in question (e.g..
Subcontractor monitoring or configuration
control) cannot reasonably be operated by
anyone other than Ihe designer or producer of
the end-item hardware.
10. Contracts entered into in furtherance of
tlatulorily mandated advisory committees.
11. Initial training, training aids, and
technical documcnl.-ilion acquired as an
Integral part of Ihe lease or purchase of
equipment.
12. Routine maintenance of equipment.
routine adminislraiix e srrx ices (c g.. tr.j:l.
reproduction, telephone), printing services.
and direct advertising (media) costs.
13. Auctioneers, really-brolcrs. appraisers.
and surveyors.
II. The following progrxms arc excluded
from the purview of Circular A-120.
1. The National Foreign Intelligence
Program (NF1P).
2. The General Defense Intelligence
Program (CDIP).
3. Tactical Intelligence and Related
Activities (TIARA).
4. Foreign Military Sales.
IKK Doc. 88-461 Filed 1-11-88: 8:-15 am|
•ItUNQ COOC 1110-41-M
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety
Administration
(Docket No. IP 87-12; Notice 2)
Grant of Petition for Determination of
Inconsequential Noncompliance;
General Motors Corp.
This notice grants the petition by
General Motors Corporation of Warren.
Michigan, to be exempted from the
notification and remedy requirements of
the National Traffic and Motor Vehicle
Safety Act (15 (J.S.G 1381 et sag.} for an
apparent noncompltance with 49 CFR
571.101. Federal Motor Vehicle Safety
Standard No. 101, "Controls and
Displays." The basis of the grant is '.hat
the noncompliance is inconsequential as
it relates to motor vehicle safety.
Notice of the petition was published
on October 6.1987. and an opportunity
afforded for comment (52 FR 37394).
Standard No. 101 specifics individual
identifying symbols for the windshield
washer control and the windshield
washer and wiper combined control.
General Motors has determined that a
total of forty-eight 1987 Brigadier trucks
were manufactured with an incorrect
illuminated identification for the
windshield washer control. The symbol
for combined windshield washer and
wiper was used instead of the
identifying symbol for windshield
washer alone. General Motors supports
its petition with the following:
1. "The washer control in question is
properly identified on the control itself
with the symbol specified in FMVSS 101.
The incorrect symbol usage is limited to
an adjacent identification which is
present for purposes of meeting the
illumination requirement of KMVSS 101.
2. The Owner's Manual clearly
illustrates and describes the washer
control and its function.
3. A driver will easily and readily
recognize this control, especially the
skilled professional driver of heavy duty
commercial vehicles such as Ihe
Brigadier."
No comments were received on the
petition.
Because the control itself bears the
proper symbol. NHTSA believes that
any confusion on the part of the driver is
most likely to occur when the •
headlamps are in use. and the incorrect
identification illuminated-The
instrument panels of the trucks in
question are designed such that the
windshield washer control is adjacent to
the windshield wiper control. The
illuminated identification of the wiper
control is correct, as is the symbol on
the washer control itself, minimizing the
possibility that the operator will
activate the washer control in the belief
that it is the wiper control. Accordingly.
petitioner has met its burden of
persuasion that the noncompliance
herein described is inconsequential as it
relates to motor vehicle safety, and its
petition is granted.
(Sec. 10i Pub. L. 83-492. 88 Stal. 1-JrO (IS
U.S.C. 1417): delegations of authority at 49
CKR 1.50 and -Id CFR 501.8)
Issued on January 6.1083.
Barry Felricc.
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CONTRACTS MANAGEMENT MANUAL
1900 Change?
5/21/90
PROCUREMENT REQUEST RATIONALE CHECKLIST
(to be submitted with EPA Forms 1900-8 and 1900-8A)
Item 1 The title of this procurement is
Item 2 This procurement request package contains the following
documents. (Check all applicable boxes and attached
documents as appropriate.)
See Attachment f
Check
Description
EPA Form 1900-8
Procurement Abstract*
Statement or Scope of Work*
Concise Technical Proposal
Instructions*
Competitive Technical Evaluation
Criteria*
Justification for Other Than Full
and Open Competition (JOFOC)
D&F to provide full and open
competition after exclusion of
source (see FAR 6.2)
Justification for Advisory and
Assistance Services
Justification of Need (Government-
Furnished Property (GFP)/
Equipment)*
Quality Assurance (QA) Review Form
Recommended Sources List
Reports Description
Government-Furnished Property
Description
* The PROJECT OFFICER'S HANDBOOK provides guidance for preparing
these documents. Also, see Item 11.
Item 3: This procurement [ ] involves [ ]does not involve
advisory and assistance services. (If advisory and assistance
services are involved, attach a justification that provides a
statement of the need for the services and a certification that
such services do not unnecessarily duplicate any previously
performed work or services). (See page 4 of Figure 2-2 for
required approvals)
Item 4: This procurement [ ] involves [ ]does not involve legal
analysis. I have [ ] have not [ ]discussed this procurement
with the Office of General Counsel which [ ]concurs [ ]does not
concur with proceeding with this procurement
Figure 2-1
Page 1 of 5
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PROCUREMENT REQUEST APPROVALS
B. Management Approvals
The following approvals apply to all procurement requests
(P.R.'s), except PR's to add funds to incrementally funded
contracts. These approvals are in addition to those listed in A
above.
Item
1. Procurement Requests for
Advisory and Assistance
Services.
(a) Small Purchases
(b) Other Than Small
Purchases not in Excess
of $1M
(c) Advisory and Assistance
Services Exceeding $1M
Approval
Program official at least
one organizational level
above the initiating office.
When award is made during
the fourth quarter/ a
program official at least
two organizational levels
above the initiating office.
Program official not below
the level of Associate,
Assistant or Regional
Administrator, Inspector
General, or General Counsel.
If the procurement request
exceeds $1M, in addition to
the approvals in (b) above,
approval is required by the
Assistant Administrator for
Administration and Resources
Management. (Assistant
Administrator or Equivalent
at HQ or the Regional
Administrator in the Regions
should make the request for
approval). Requests in this
category must be routed .
through the Director,
Procurement and Contracts
Management Division.
4 of 5
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YOU'VE ISSUED YOUR WORK
ASSIGNMENT, SO
NOW WHAT?!
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WORKPLAN REQUIREMENTS
Workplans Or Staffing Plans Must Be Submitted:
- In Response To Initial Work Assignments/
Deliver Orders
- If There Is A Change In The Scope, Level
Of Effort Or Period Of Performance Of An
On-Going Assignment
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COMPONENTS OF A WORKPLAN
1. Statement Of The Project Goals (Purpose)
2. Detailed Technical Approach With Action
Steps
3. Description Of Each Task/Deliverable With
Schedule For Completion
4. Proposed Personnel
5. Areas Requiring Clarification/Suggested
Modifications/Anticipated Problems
6. Proposed Format(s) For Special Progress
Reports, If Required
7. Proposed Use Of Subcontractors, With
Discussion Of How The Effort Will Be Managed
By The Prime Contractor
8. Detailed Cost Proposal, Broken Down By
Task And Subtask, Including Subcontractor
Cost Breakdown
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WHAT TO LOOK FOR IN A WORKPLAN
1. Does Contractor Demonstrate Complete Understanding
Of The Project (All Elements, Or Just One?)
2. Are The Proposed Milestones Appropriate/Too
Generous/Too Ambitious?
3. Can The Effort Be Accomplished Reasonably Within
TheLOE? Is It Too High?
4. Is The Overall Staffing Plan Appropriate & Reasonable?
Are The Personnel Qualified? Over-Oualified
For The Task?
5. Has The Contractor Identified Any Questions Or
Problems Which Need To Be Resolved?
6. Is There Too Much Subcontracting? Can The
Contractor Maintain Adequate Control Over The
Project?
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WHAT TO LOOK FOR IN A WORKPLAN (Cont.)
7. Cost Proposal:
- Are The Hours And Rates Appropriate & Reasonable?
- Is The Labor Mix Appropriate For The Work?
- Are The Indirect Cost Rates Those Which Have Already
Been Negotiated And Are Stated In The Contract?
- Is The Subcontracted Portion Of The Effort
Reasonable?
- Is The Proposed Amount Of Travel Acceptable?
- Did The Contractor Provide A Breakdown On ODC's?
Is Each Component Reasonable?
- Are Proposed Subs/Consultants Already Approved?
- Will Approval Of The Workplan Require A Ceiling
Increase Of Any Proposed Sub/Consultant?
- Is Any GFP Involved, And Has It Been Authorized In
The Contract?
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STATEMENT OF WORK
WORK ASSIGNMENT #13
BACKGROUND AND PURPOSE
The Environmental Protection Agency (EPA) has a
Congressional mandate to approve the use of all pesticides
for commercial application. It is critical to both the
welfare of the U.S. population, as well as a healthy environment
where natural plant life can flourish without harmful effects,
that no pesticides be used which could harm either human life
or environmental resources.
EPA is thus charged with studying the effects of all
pesticides proposed for use before granting approval. Last
year, the pesticide "DDD" was used widely in both Japan and
France and is gaining in popularity in other agricultural
areas of the world. In those countries, it appears to be
effective as a deterrant against many plant-destroying insects.
However, Canada has rejected the widespread use of this
chemical based upon its research and testing efforts which
have shown a possible harmful effect from "DDD" on the soybean
plant and its consumers.
"DDD" has recently been formally proposed to the U.S.
Government for approval in this country. The purpose of this
work assignment is to compile all research and data which
currently exist on "DDD" into a comprehensive summary document.
The contractor shall also prepare a testing plan for EPA so
the Agency or another party can conduct its own study on the
long and short-term effects of this pesticide. A further
phase of the effort may follow in a future work assignment
(if the option to extend the term of this contract is exercised),
which will consist of the actual testing of "DDD" in accordance
with the approved testing plan. A detailed description of
the tasks the contractor is to perform follows, including
a schedule of reports and deliverables and their due dates.
TASK I - CONDUCT LITERATURE SEARCH
The contractor shall review all existing data and research
on the pesticide "DDD". This shall include any documents
produced in the United States as well as other countries
where such research has been conducted. The three foreign
nations where the majority of known literature has been
compiled are Japan, France and Canada; however, there may be
other countries where data on "DDD" have been produced as
well. EPA has access to much of the Japanese research within
its own library; copies of all such documents will be furnished
to the contractor within fifteen (15) days after issuance of
this work assignment.
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The contractor shall be responsible for obtaining all
other documents which have been produced on the pesticide.
TASK II - PREPARE COMPLETE SUMMARY OF ALL RESEARCH CONDUCTED
ON "ODD"
The contracto'r shall produce a comprehensive final report
which will summariz'e all research and findings to date on the
pesticide "DDD". This document shall include all decisions
made by foreign governments on whether to allow use of "DDD"
on the crops of that nation, and the basis for such decisions.
The contractor shall also include recommendations to EPA,
based solely on existing research, as to whether "DDD" should
be approved for widespread, unrestricted use, restricted use
on certain crops, or not at all at this time.
TASK III - PREPARE TESTING PLAN
The contractor shall propose a plan for testing the long
and short-term effects of "DDD" on soybean plants. (The
actual testing is not to be conducted under this work assignment.)
The testing plan shall include the proposed extent of testing,
a schedule for when it should be conducted, a detailed
description of both the application and the way the effects
of "DDD" will be determined, and an estimated cost for conducting
the entire testing project.
GENERAL
The contractor shall furnish a copy of each section of
the monthly technical and financial progress reports which
relate to this work assignment directly to the Work Assignment
Manager at the same time the reports are submitted to the
Project Officer and the Contracting Officer. In addition,
the following additional financial information shall be
submitted to the Work Assignment Manager on the same date:
(1) A graph using a vertical axis for dollars and a
horizontal axis for time increments that shows the actual a.nd
projected rate of expenditures against the total budget
approved in the work plan, and
(2) A cumulative incurred cost per direct labor hour average
computation compared with the budgeted average cost per
labor hour derived from the approved work plan.
The contractor shall communicate
Work Assignment Manager at least once
afternoons, unless otherwise directed
Manager) to discuss the progress made
by telephone with the
per week (Friday
by the Work Assignment
that week, any problems
PCMD 9/89
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any obstacles encountered, and the complete status of all on-
going tasks. In addition, the contractor shall meet in person
wih the Work Assignment Manager on a bi-monthly basis for the
same purpose.
The contractor shall be prepared to submit for inspection
copies of all work in progress at any time as directed by
the Work Assignment Manager.
The following is a suggested skills mix representing
EPA's best estimate for the performance of this Work Assignment.
The contractor shall specify its proposed skills mix with the
staffing plan submitted as part of the required work plan.
Program Director (P-4)
Senior Researcher (P-3)
Research Assistant (P-2)
Staff Writer (P-2)
300 hours
800 hours
250 hours
150 hours
1500 - Estimated Level of Effort
P.CMD 9/89
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WORK ASSIGNMENT #13
SCHEDULE OF TASKS AND DELIVERABLES
TASKS/DELIVERABLES
I. PREPARE/SUBMIT WORK PLAN
II. RECEIVE GOVERNMENT-FURNISHED
DATA
III. BEGIN LITERATURE SEARCH
IV. COMPLETE LITERATURE SEARCH
V. SUBMIT 1st DRAFT REPORT
ON DATA COMPILATION
VI. RECEIVE EPA COMMENTS
VII. SUBMIT 2nd DRAFT REPORT ON
DATA COMPILATION
VIII. RECEIVE EPA COMMENTS
IX. DELIVER FINAL SUMMARY DOCUMENT
OF DATA COMPILATION TO EPA
X. SUBMIT DRAFT TESTING PLAN
XI. RECEIVE EPA COMMENTS
XII. SUBMIT FINAL TESTING PLAN
DUE DATE
15 days after Work
Assignment issuance
February 28
May 15
June 30
July 15
August 1
August 15
August 30
September 10
September 17
September 30
PCMD 9/89
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PROPOSED WORK PLAN FOR
WORK ASSIGNMENT #13
PURPOSE
This Project Workplan represents Technically Acceptable
Corporation's (TAG) approach to performing the work described
in EPA's Work Assignment #13 issued on February 1, 1996 under
Contract 68-OX-1234. The objective of this work assignment is
to compile all research and data which currently exist on the
pesticide "DDD" into, a comprehensive summary document, to
include recommendations based on the research as to whether
EPA should approve, disapprove, or approve for restricted use
only, the pesticide. In addition, the contractor shall prepare
a testing plan for the conduct of a study of the long and
short-term effects of this pesticide.
TECHNICAL APPROACH
Because EPA will be relying on the results of this research
to make its preliminary decision on whether to approve "DDD" on
a short-term basis for use in the United States, pending imple-
mentation of a longer-term and thorough testing program before
issuing final approval, TCC proposes that the methodological
approach followed be extremely thorough. The tasks TAG proposes
are thus more detailed, and the hours allocated more extensive,
to accomodate this more cautious approach.
Since the health and environmental damage from preliminary
approval of "DDD" could be so
use on-crops such as soybeans
nationally, TAG believes this
of accomplishing
mandate.
EPA's health
extensive, as a result of its
which have such broad exposure
approach to be in,the best interest
and environmental protection
PROJECT TASKS/SCHEDULE,AND DELIVERABLES
This project will consist of three major tasks with n-umerous
subtasks to be completed over a nine-month time period. Exhibit
1 summarizes these tasks, the timeframes for completion and
deliverables to be submitted. The activities which will be
performed as part of each task are described below.
Task 1 —. Conduct Literature Search
Subtask 1.1 - Development of Project Workplan
The purpose of this subtask is to prepare and discuss the
proposed project workplan with the EPA Task Manager and
PCMD9/89
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officials, as needed
other EPA
used to clarify and refine
pertinent study issues and
relevant documentation and
These meetings will be
the scope of work, identify
the availability of existing
finalize study schedule and
deliverable dates. A revised finalized project workplan
will be submitted within 15 calendar days from issuance
of the Work Assignment (February 15).
Subtask 1.2 - Receive and Review Government-Furnished Data
EPA will provide TAG copies of all documents in EPA's
possession related to ODD by February 15. TAG will review
those documents to determine the extent and quality of
data currently available and to determine data gaps. TAG
will then prepare preliminary summary of that data identifying
the data gaps for preliminary discussion with EPA. This
preliminary review will assist EPA and TAG in determining
the extent of additional research required.
Subtask 1.3 —Conduct Literature Search
TAG proposes to undertake an extensive literature search
to identify all sources obtainable within the United States
and other pertinent countries. The following actions are
anticipated:
a. Literature search conducted of the literature
available at the U.S. Library of Congress, U.S.
Department of Agriculture, and National Institute
for Occupational Safety and Health.
b. Thorough review of all commercially available
chemical data bases.
c. Written inquiries to the departments of agriculture
and environmental agencies of the states, with
telephone follow-up to ensure response, and review
of all data obtained.
d. Written inquiries to all major U.S. Schools of
Agriculture, with telephone follow-up and review
of all data obtained.
e. Written inquiries to the departments of agriculture
and environmental agencies of all nations known to
have used and/or studied ODD, with telephone follow-
up and review of all data obtained.
Where document's, studies or data are available only at the
particular sites, TAG proposes to obtain copies where
possible. If a particularly rich source of data is located,
however, and documents cannot be sent either because of
pure volume or time restrictions, TAG proposes to conduct
on—site research. All sites to be visited will be approved
in advance by the EPA Prcj <8ot1 Of f icer, and it is proposed „_„
PCMD9/89 J 260
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that the EPA Work Assignment Manager be a member of the
site visit team.
Subtask 1.4 - Conduct Telephone or Site Visit Follow-Up
It is often difficult to determine the quality of studies
undertaken from the written literature, because of inadequate
description of the study's methodology in,the written
literature. This makes it very difficult to assess the
quality of the resulting data and the true extent of the
data gaps. Where particularly important findings are
claimed, TAG therefore proposes to conduct follow-up
inquiries, by phone or in person, to determine the quality
of the data.
Several deliverables will be submitted during this task which
are described as follows:
a) Revised workplan, based on interaction with EPA staff.
b) Summary in the form of a briefing to be presented to
EPA, summarizing data gaps identified after review of
data provided by EPA.
c) Summaries of telephone interview and site visit data
collected.
Task 2 - Prepare Complete Summary of Research Conducted on "DDD"
Subtask 2.1 - Prepare Draft Summary Report
TAG will summarize the data collected as described above
into a preliminary draft for submission to EPA for
technical review and comment. TAG will similarly prepare
a summary briefing for EPA management summarizing TAG's
conclusions and recommendations.
Subtask 2.2 - Prepare Final Report
Based on .feedback obtained, TAG will finalize the report
and briefing.
Subtask 2.3 - Present Report and Briefing to EPA Management
At a,mutually agreed-upon date as proposed by EPA, TAG will
present a briefing on its conclusions and recommendations
to EPA management.
Several deliverables will be submitted during this task which
are described as follows: •
a) Draft summary report summarizing research and findings
to date, indicating all decisions made by foreign
ft 1 1
PCMD9/89 o- i i ,261
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governments regarding use of DDD and the basis for those
decisions, and including TAG's recommendations, based
on the research, as to whether DDD should be approved
for any use in the United States.
b) Final summary report.
c) Summary briefing summarizing findings and recommendations.
Task 3 - Prepare Testing Plan
Subtask 3.1 - Prepare Draft Testing Plan
During the research phase, TAG will collect information
regarding the testing methodologies used by states,
universities, foreign governments and independent researchers
to study DDD's effects on health and the environment.
TAG will review and evaluate the methodologies used and
quality of the results obtained as part of preparing a
plan for EPA to use in conducting its own research.
Subtask 3.2 - Prepare Final Testing Plan
TAG will meet with EPA officials to review and discuss
any comments received, and incorporate the results of
those meetings into the final testing plan.
Two deliverables will be submitted during this task which
are described as follows:
a) Draft testing plan, including the proposed extent of
testing, a schedule for its conduct, a detailed
description of the application and the way the effects
of DDD will be determined, and an estimated cost for
conducting the testing program. Also included as an
appendix will be a summary of testing methodologies
used by other researchers, and an assessment of their
results, strengths and weaknesses.
b) Final testing plan.
PROPOSED STAFFING AND BUDGET
Exhibit II identifies the proposed staffing and budget.
Mr. Arnie Haig, Vice President of TAG, along with Mr. Jay Theisman,.
the Project Manager, will be responsible for the overall progress
of the project. Day-to-day task management will be the
responsibility of Mr. Louis Thomas, Senior Researcher. Ms. Susan
Ewing, research assistant, and Bernie Goodman, researcher,
will conduct a major part of the research effort. Dickie Nixon,
TAC's pesticides expert, will provide technical advice and assistance
PCMD 9/89
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In reviewing technical findings and recommendations.
of all staff are attached.
Resumes
We estimate that the project will require approximately
2350 hours at a total labor cost of $46,600 to complete.
The total project cost is estimated at $142,858.95.
ISSUES AND ANTICIPATED PROBLEMS
by
To complete this project within
EPA, EPA's provision of technical
the timeframe
documentation
proposed
and
comments according to its proposed timeframe will be crucial.
It is also difficult at this time, prior to initiating research,
to know the precise scope of this task or the responsiveness
of foreign governments to our inquiries. EPA assistance in
supporting research efforts will likely be significant in
obtaining cooperation of foreign government officials.
PCMD 9/89
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EXHIBIT 1
WORK ASSIGNMENT #13
SCHEDULE OF TASKS AND DELIVERABLES
TASKS/DELIVERABLES
I. PREPARE/SUBMIT FINAL WORK PLAN
II. RECEIVE GOVERNMENT-FURNISHED
DATA
III. PRESENT BRIEFING TO EPA ON DATA GAPS
IV. BEGIN LITERATURE SEARCH
V. COMPLETE LITERATURE SEARCH,
DELIVER INTERVIEW SUMMARIES
VI. SUBMIT 1st DRAFT REPORT
ON DATA COMPILATION
VII. RECEIVE EPA COMMENTS
VIII. SUBMIT 2nd DRAFT REPORT ON
DATA COMPILATION
IX. RECEIVE EPA COMMENTS
X. DELIVER FINAL SUMMARY DOCUMENT
OF DATA COMPILATION TO EPA,
DELIVER BRIEFING
XI. SUBMIT DRAFT TESTING PLAN
XII RECEIVE EPA COMMENTS
XIII. SUBMIT FINAL TESTING PLAN,
DELIVER BRIEFING
DUE DATE
February 15
February 15
March 12
March 20
May 15
June 30
July 15
August 1
August 15
August 30
September 10
September 17
September 30
PCMD 9/89
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EXHIBIT II
PROPOSED STAFFING AND BUDGET
LABOR;
Title
Project Manager
Senior Engineer/VP
Senior Researcher
Research Assistant
Staff Writer
Secretary
Clerk-Typist
SUBTOTAL
OVERHEAD AND FRINGES (111% of Labor)
OTHER DIRECT COSTS
Travel
Copying and Printing
Computer Time
SUBTOTAL
TOTAL DIRECT
G&A (18.5% of Total Direct)
TOTAL COST (without fee)
FEE (8% of Total Cost)
TOTAL COST INCLUDING FEE
Level
P-4
P-4
P-3
P-2
P-2
P-l
P-l
Rate
$27.00
30.00
20.00
14.50
18.00
11.50
9.00
Hours
400
100
1000
400
300
100
50
2350
Total Cost
10,800.00
3,000.00
20,000.00
5,800.00
5,400.00
1,150.00
450.00
$46,600.00
51,726.00
11,000.00
1,800.00
500.00
13,300.00
$111 ,626.00
20,650.81
$132 ,276.81
10,582. 14
$142,858.95
PCMD 9/89
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-------
Chapter 8
WORK PLANS AND COST PROPOSALS
Most EPA contracts require the contractor to submit a work plan and/or cost
proposal before commencing work. The purpose of the work plan is to give the
contractor the opportunity to lay out how the contractor proposes to perform the work
assigned, as well as the proposed cost. This in turn permits EPA to ensure that the
contractor appropriately understands the work to be performed, and to approve (or
disapprove and amend) the proposed approach and costs for doing the work. The process
of obtaining consensus on the workplan can be a simple process, or entail numerous
meetings and negotiation.
Work plans typically are submitted in response to initial work assignments and
delivery orders. They should also be amended whenever there is a change in scope, level
of effort or period of performance of an on-going assignment.
8.1 Workplan Components
A workplan should contain the following components:
a) a statement of project goals (the purpose of the assignment);
b) a detailed technical approach, with action steps;
c) a description of each task and deliverable, with a schedule for completion;
d) proposed personnel;
e) indication of any areas requiring clarification, suggested modifications,
and any anticipated problems;
f) proposed formats for any special progress reports, if required;
g) any proposed use of subcontractors, as well as how they will be managed;
h) a detailed cost proposed, broken down by task, including a subcontractor
breakdown.
Not all workplans will contain every element. However, effort put in at this
stage to clarify the details of the work to be performed will pay off in avoided disputes
and allegations of miscommunication at a later stage. Workplans should no! be simple
restatements of the work assignment.
When assignments are being given at the task level, e.g., with technical direction
directives, submission of a task plan may be similarly appropriate. See pages 271-73
for a sample task directive and task plan.
8.2 Workplan Review
Once the workplan is submitted, the Government has a certain period of time to
review and approve it. The review process should be thorough. The plan should be
compared, item for item, with the work assignment or statement of work. Any
discrepancies should be noted, as well as changes that should be made.
PCMD 9/89
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Since the work plan is being reviewed for the purpose of ensuring that the
contractor's understanding of, and approach for, accomplishing the effort is within the
scope of the assignment, and that the proposed level of staffing and resources are
appropriate, sufficient, and reasonable for performing the work, the reviewer must
determine the acceptability of the contractor's understanding and approach.
1. Does the contractor demonstrate complete understanding of all the project
elements?
2. Is the proposed approach for accomplishing the work reasonable and likely
to achieve the government's objectives? Are there ways to do it more
efficiently or effectively?
3. Did the contractor make any substantive changes in the work to be performed,
or the sequence of performance, and are these changes acceptable?
4. Are the proposed milestones appropriate, too generous or too ambitious?
Will they meet the government's needs and deadlines?
5. Can the effort be accomplished reasonably within the LOE available. Is it too
high?
6. Is the overall staffing plan appropriate and reasonable? Are the personnel
qualified, underqualified or overqualified for the task? Is the contractor
using people already familiar with the task or introducing new staff to the
project who might need extra time to get up to speed?
7. Has the contractor identified any questions or problems which need to be
resolved?
8. Is there too much subcontracting relative to the amount of prime contractor
time proposed? Can the contractor maintain adequate control over the
project?
Cost proposals should be reviewed with the same questions in mind, and looked at
from both a qualitative and quantitative point of view.
1. Are the hours and rates appropriate and reasonable? (Rates which have
already been approved by the Government such as fringe, overhead, G&A, and
fee should not be questioned.)
2. Is the labor mix appropriate for the work?
3. Are the indirect cost rates those which have already been negotiated and are
stated in the contract?
4. Is the subcontracted portion of the effort reasonable?
5. Is the proposed amount of travel acceptable?
6. Did the contractor provide a breakdown of ODCs? Is each component
reasonable?
PCMD 9/89
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7. Are the proposed subcontractors and consultants already approved?
8. Will approval of the workplan require a ceiling increase of any proposed
subcontractor or consultant?
9. Is any government furnished property involved, and has it been authorized
in the contract?
8.3 Authorizing Performance Before Signoff
Sometimes the contractor is authorized to begin performance while the work plan
is under development or review. However, usually the contract will specify a point at
which work is to stop if work plan approval has not been received, or if the work plan is
rejected. Therefore, timely review of these documents is critical to ensure that the
work is completed on time. Delays on the part of the Government can excuse a
contractor, under the terms of the contract, from continuing performance.
PCMD 9/89
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Sample
TASK DIRECTIVE
CONTRACTOR:
CONTRACT NO: 68-03-58-33
WORK ASSIGNMENT NO:
TASK NO: ,
8
DATE OF DIRECTIVE; 2/2/87
TD NO:
MAXIMUM HOURS
AUTHORIZED:
30
ESTIMATED COST:$300Q.oo
DUE DATE: 2/16/87
TASK TITLE:
DESCRIPTION OF TASK; Review and comment on revisions in second draft of
NCP and preamble.
SPECIFIC TASK ACTIVITIES/DELIVERABLES
1. Review second draft/ determine consistency /of revisions
with pertinent statutes (CEECIA as amended) and with
existing NCP and [preamble. Prepare comments sheet.
vn' t-h KPA staff to discuss issues raised by revisions
and possible solutions in terms of further revision. _
3. Prepare comments sheet with proposed language changes.
(final draft)
[ ] ADDITIONAL SCOPE ATTACHED
DEADLINES
2/10/87
2/14/87
2/16/87
COMMENTS:
AUTHORIZING:
TASK MANAGER:
SIGNATURE
DATE
PHONE NO
WORK ASSIGNMT MGR:
PROJECT OFFICER:
RECEIVED BY:
[ ] Accepted [ ] Rejected [ ] Accepted With Exceptions (Attached)
CONTRACTOR:
PCMD 9/89
-16
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Sample
TASK PLAN FOR TASK DIRECTIVE #8-1-2
(Review of NCP Draft #2)
CONTRACT NO. 68-03-5833
Technics Incorporated
PURPOSE
This Task Plan represents Technics Incorporated's approach to performing
the work described in EPA's Task Directive #1 issued on February 2, 1987.
The objective of the task is to review and comment on revisions Incorporated
into the second draft of the National Contingency Plan and preamble, based
on comments received from work group members and other internal and external
reviewers, and propose further revisions as pertinent in light of the statutory
requirements of CERCLA, its Amendments and the existing NCP.
TASK APPROACH
This task involves comparing the revisions made and Incorporated into the
second draft of the National Contingency Plan with the language and requirements
of CERCLA and its amendments, and the existing NCP. If any inconsistency Is
identified, Technics will note those discrepancies on its comments sheet for
discussion with EPA staff, including the apparent seriousness of the discrepancies
no ted.
After discussion with EPA staff, Technics will propose additional language
changes to resolve any discrepancies, or prepare, in its comments, a justification
for the discrepancy as represented by EPA's decision to maintain the proposed
language.
Exhibit 1 below summarizes these activities, deliverables and due dates.
EXHIBIT 1
SCHEDULE OF ACTIVITIES/DELIVERABLES/DUE DATES
Activity
1. Review second draft, conduct
research as needed to determine
consistency of revisions with
CERCLA and its amendments
and with existing NCP and preamble.
Prepare comments.
2. Meet with EPA staff to discuss
questions raised/inconsistencies
found as result of revisions,
and possible solutions
3. Draft proposed language changes,
incorporate into comments sheet
Deliverable
Comraen ts shee t
Due Date
2/10/87
Comments sheet w/
language changes
2/14/87
2/16/87
PCMD 9/89
8-17
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PROPOSED STAFFING AND BUDGET
Proposed staff for the task include:
Program Manager (P-4)
Management Analyst (P-3)
Program Analyst (P-2)
TOTAL
Rob Lockett
June Lilly
Roger Li te
5 hours
15 hours
10 hours
30 hours
Technics estimates that the project will require approximately 30 hours at a
total labor cost of $3,000. There are no anticipated direct costs.
SPECIAL REPORTING AND COORDINATION
None
ISSUES AND ANTICIPATED PROBLEMS
None
PCMD9/89
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REACHING CONSENSUS
This Chapter Is Reserved Until Further Notice
PCMD 9/89
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TECHNICAL DIRECTION
PCMD 9/89
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TECHNICAL DIRECTION
This Clause Permits The Project Officer To Provide
Technical Direction In The Form Of:
Direction That Assists Contractor To Accomplish
Statement Of Work,
Comments On And Approval Of Reports And
Other Deliverables.
Technical Direction Must Not:
Institute Additional Work Outside Contract Scope
Constitute A Contract Change
Increase Or Decrease Estimated Cost Of Contract
Alter Period Of Performance
Change Other Express Terms And Conditions
Project Officer Must Issue Direction IN WRITING, Or
Must CONFIRM Verbal Direction IN WRITING
WITHIN FIVE CALENDAR DAYS
PCMD 9/89
10-1
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U.S. ENVIRONMENTAL PROTECTION AGENCY
EPAAR Clause
1552.237-71 Technical Direction.
Aa prescribed in 1537.110, insert the following contract clause in
cost-reimbursement contracts.
H.## TECHNICAL DIRECTION (EPAAR 1552.237-71) (APR 1984)
(a) The Project Officer will provide technical direction on contract
performance. Technical direction includes:
(1) Direction to the Contractor which assists him in accomplishing
the Statement of Work.
(2) Comments on and approval of reports or other deliverables.
(b) Technical direction must be within the contract Statement of
Work. The Project Officer does not have the authority to issue
technical direction which (1) institutes additional work outside the
scope of the contract; (2) constitutes a change as defined in the
•Changes" clause; (3) causes an increase or decrease in the estimated
cost of the contract; (4) alters the period of performance; or (5)
changes any of the other express terms or conditions of the contract.
(c) Technical direction will be issued in writing by the Project
Officer or confirmed by him in writing within five (5) calendar days
after verbal issuance.
(End of clause)
PCMD
ACQUISITION HANDBOOK Volume II Page 130
10-2
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TECHNICAL DIRECTION GUIDELINES
1. Refrain From Discussing Or Divulging To The
Contractor Any Information Relevant To A Work
Assignment Or Delivery Order Prior To Issuance.
2. Never Authorize Work To Begin Before Issuance
Of A Work Assignment Or Delivery Order.
3. Do Not Give Direction Which Will Affect The Terms
And Conditions, Cost/Price, Delivery Or Performance
Schedule Or Level Of Effort Of The Contract.
4. Do Not Direct The Contractor To Perform Services
Which Are "Inherently Governmental" In Nature
(E. g., Making Policy).
5. BEWARE OF CREATING AN EMPLOYER/EMPLOYEE
RELATIONSHIP (Personal Services).
.PCMD9/89
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EXHIBIT V-2(2)
1 A. Cost Center:
IB. Account No.:
3A. Priority 4A. Estimate
DHigh Total Ho,
1 1 Medium - Total Cot
38. Key EPA Contact: 48. Overtime /
Name:
QYes
Phone:
9. Type of Activity: ^^
§SPCC
On- Scene Monitor rng
Spat Clean-up Funded
TAT ZONE II CONTRACT 2>N°"
CONTRACT NO. 68-01-7368 T
ECHNICAL DIRECTION DOCUMENT (TDD)
ECOLOGY AND ENVIRONMENT. INC.
gf SA. EPA Site Name:
ITS:
SB. SSID No.: 5C. City/County/State:
ft. Saurea of Funds: Q O«tur
nw* R CERCLA
7. Completion Data:
8. Reference Info:
DYes Q Attached
Q Me 0 Pick-up
8A. Subnsk Code:
CERCLA AS SPECIFIED ABOVE
Site Assessment H Special Project _ Ou
Removal Funded Aiufvtiol Proiact Tn
Removal PRP (AO/CO) TITLE III Prc
J On- Site Monitoring UST _ Tec
LJ FEMA U '"*
12. Specific Elements:
14. Authorizing DPO:
(Signature)
16. Received by: Q Accepted
G Accepted with Exceptions (Attached) . D Rejected
(TATL Signature)
elrty Assurance
lining
gram Management
ormation Management
11. Desired Report
POfffl*
n Formal Report
_ Latter Report
_ Formal Briefing
Other (Specify)
IX Interim Deadlines:
-
IS. Deta:
17. Data:
Mtrlbutioit: T007037
StM«t t
ShMt 2 aiu*
Sh«m 3 <2r«*«
Shwt4 Cvury
SIMM S (MM
SIMM a
OPOCoov
TATL Coov
ZPMCODV
rocoov
CO Copy
OPO Original (UimflM* b» TATL)
PCMD 9/89
10-4
286
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OSWER Directive 9242.4-01A
EXHIBIT V-2(l)
September 198?
i. COST CENTER:
TAT - CONTRACT 68-01 -7387
TECHNICAL DIRECTION DOCUMENT (TDD)
OHM EMERGENCY RESPONSE AND
SPILL PREVENTION PROGRAM
ROY F. WESTON INC.
2. NO:
3A. TYPE:
3. PRIORITY:
4. SOURCE OF FUNDS:
MEDIUM (3)
I LOW 131
CERCLA C1I
311 (2)
USTI3I
FCMAI4)
& EPA SJTE O:
SA. EPA OTE NAME
0. COMPLETION DATE:
7. OVERTIME APPROVED:
8. REFERENCE INFO:
YES NO
ATTACHED
I PICK UP
*. OINERAL TASK DESCRIPTION:
•A. EITIMATID COST: S
ESTIMATED HOURS:
0. SPECIFIC ELEMENTS:
11. INTERIM DEADLINES:
30. DESIRED REPORT FORM:
OTHER (SPECIFY):
FORMAL REPORT
D
LETTER REPORT
n
FORMAL BRIEF
n
3. COMMENTS:
4. AUTHORIZING DPO:
(SIGNATURE)
IS. DATE:
•. RECSIVED §Y:
ACCEPTED
ACCEPTED WITH EXCEPTIONS
n
17. DATE:
REJECTED
(TATU Sia
•. DESCRIPTOR:
V-22
PCMD9/89
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PERSONAL SERVICES
1. A Personal Services Contract Results When
The Government Assumes The Right To instruct,
Supervise Or Control A Contractor's Employee
In How He/She Performs The Work.
2. It Is The Contractor's Right To Hire And Fire,
To Assign And Organize The Work.
3. Project Officers, Work Assignment Managers
And Delivery Order Officers Must Take Care
Not To Cross The Line From Surveillance To
Supervision. Tell The Contractor "What" And
Not "How".
PERSONAL SERVICE CONTRACTS ARE ILLEGAL!
(Employer/Employee Relationships)
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PRECAUTIONS
GOVT PERSONNEL MUST TAKE
WITH SUBCONTRACTORS
1. NEVER Direct That Any Portion Of Work
Should Be Performed By Subcontractor
Rather Than Prime Contractor.
2. NEVER Direct Prime To Subcontract With
A Specific Firm.
3. NEVER Consent To A Subcontract. Only
The Contracting Officer Can Give Consent.
4. NEVER Provide Technical Direction To A
Subcontractor - There Is No Privity Of
Contract.
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PRIVITY OF CONTRACT
There Is NO DIRECT CONTRACTUAL
RELATIONSHIP, I.e., No "Privity Of Contract"
Between EPA And Any Subcontractor.
Because There Is No "Privity Of Contract,"
EPA May Not Deal Directly With Its
Subcontractors On Contractual Issues.
Subcontractors Also Have No Right To Obtain
A Direct Decision Of The Contracting Officer
And No Right Of Appeal To The Board Of
Contract Appeals.
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EFFECTIVE WAYS TO MONITOR
THE CONTRACTOR'S PROGRESS
1. Inspection Of Work (At Work Site, If
Possible)
2. Telephone Communications
3. Meetings With Contractor Personnel
4. Comparison Of Progress With Work Plan
Schedule Of Tasks And Deliverables
5. Review Of Progress Reports
6. Review Of Financial Management Reports
7. Review of Deliverables
8. Evaluation Of Contractor Performance
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INSPECTION OF SERVICES
Contractor Must Provide And Maintain Inspection
System Acceptable To Government Covering
Contracted For Services.
Government Has Right To Inspect And Test All
Services To Extent Practicable At All Times And
All Places During Contract Term. Inspection
Should Not Unduly Delay Work.
If Services Do Not Conform With Contract
Requirements, Government May Require
Reperformance For No Additional Fee. If Defects
Cannot Be Corrected Through Reperformance,
Government May 1) Reduce Fee, 2) Require
Contractor To Ensure Correct Future Performance,
If Contractor Fails To Take Necessary Action,
Government May 1) Reduce Fee By Amount
Necessary To Get Services Performed Elsewhere
Or 2) Terminate The Contract.
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FAR Clause
INSPECTION OF SERVICES—COST-
REIMBURSEMENT (APR 1984)
(a) Definition. "Services," as used in this clause, in-
eludes services performed, workmanship, and material
furnished or used in performing services.
(b) The Contractor shall provide and maintain an
inspection system acceptable to the Government cover-
ing the services under this contract. Complete records
of all inspection work performed by the Contractor
shall be maintained and made available to the Govern-
ment during contract performance and for as long
afterwards as the contract requires.
(c) The Government has the right to inspect and test
all services called for by the contract, to the extent
practicable -at all places and times during the term of
the contract'The Government shall perform inspec-
tions and tests in a manner that will not unduly delay
the work.
(d) If any of the services performed do not conform
with contract requirements, the Government may re-
quire the Contractor to perform the services again in
conformity with contract requirements, for no addition-
al fee. When the defects in services cannot be correct-
ed by reperformance, the Government may (1) require
the Contractor to take necessary action to ensure that
future performance conforms to contract requirements
and (2) reduce any fee payable under the contract to
reflect the reduced value of the services performed.
(e) If the Contractor fails to promptly perform the
services again or take the action necessary to ensure
future performance in conformity with contract re-
quirements, the Government may (1) by contract or
otherwise, perform the services and reduce any fee
payable by an amount that is equitable under the cir-
cumstances or (2) terminate the contract for default
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INSPECTION-TIME & MATERIALS
Contractor Must Provide And Maintain Inspection
System Acceptable To Government.
Government Has Right To Inspect And Test All
Materials Furnished & Services Performed To
Extent Practicable. Government May Inspect
Plant Of Contractor Or Subcontractor.
Government Shall Accept Or Reject Services
And Materials At Place Of Delivery Promptly, And
They Are Presumed Accepted 60 Days After
Delivery Unless Accepted Earlier.
If Services Or Materials Do Not Conform With
Contract Requirements, Government May Require
Replacement Or Correction During Contract Term
Or Within Six Months Thereafter, With Fee For
Profit Deducted From Costs.
Contractor's Failure To Perform Resulting From
Contractor Fraud, Lack Of Good Faith, Or Willful
Misconduct Of Management, Or By Contractor's
Employee Where Contractor's Management Has
Reasonable Grounds To Believe The Employee Is
Habitually Careless Or Unqualified, Shall Be Cor-
rected By Contractor At No Cost To The Govt.
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INSPECTION—TIME-AND-MATERIAL AND
LABOR-HOUR (JAN 1986)
(a) Definitions. "Contractor's managerial personnel,"
as used in this clause, Mans any of the Contractor's
directors, officers, managers, superintendents, or equiv-
alent representatives who have supervision or direction
of—
(1) All or substantially all of the Contractor's busi-
ness;
(2) All or substantially all of the Contractor's oper-
ation at any one plant or separate location at which
the contract is being performed; or
(3) A separate and complete major industrial oper-
ation connected with the performance of this con-
tract
"Materials," as used in this clause, includes data
when the contract does not include the Warranty of
Data clause.
(b) The Contractor shall provide and maintain an
inspection system acceptable to the Government cover-
ing the material, fabricating methods, work, and serv-
ices under this contract Complete records of all in-
spection work performed by the Contractor shall be
maintained and made available to the Government
during contract performance and for as long afterwards
as the contract requires.
(c) The Government has the right to inspect and test
all materials furnished and services performed under
this contract, to the extent practicable at all places and
times, including the period of performance, and in any
event before acceptance. The Government may also
inspect the plant or plants of the Contractor or any
subcontractor engaged in contract performance. The
Government shall perform inspections and tests in a
manner that will not unduly delay the work.
(d) If the Government performs inspection or test on
the premises of the Contractor or a subcontractor, the
Contractor shall furnish and shall require subcontrac-
tors to furnish all reasonable facilities and assistance for
the safe and convenient performance of these duties.
(e) Unless otherwise specified in the contract, the
Government shall accept or reject services and materi-
als at the place of delivery a* promptly as practicable
after delivery, and they shall be presumed accepted 60
days after the date of delivery, unless accepted earlier.
(0 At any time doriag contract performance, but not
later than 6 months (or such other -time as may be
specified in the contract) after acceptance of the serv-
ices or materials last delivered under this contract, the
Government may require the Contractor to replace or
correct services or materials that at time of delivery
failed to meet contract requirements. Except as other-
wise specified in paragraph (h) below, the cost of re-
placement or correction shall be determined under the
Payments Under Time-and-Materials and Labor-Hour
Contracts clause, but the "hourly rate" for labor hours
incurred in the replacement or correction shall be reduced
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FAR Clause
to exclude that portion of the rate attributable to profit.
The Contractor shall not tender for acceptance materials
and services required to be replaced or corrected without
disclosing the former requirement for replacement or cor-
rection, and, when required, shall disclose the corrective
action taken.
(g) (1) If the Contractor fails to proceed with reason-
able promptness to perform required replacement or
correction, and if the replacement or correction can be
performed within the ceiling price (or the ceiling price
as increased by the Government), the Government
may—
(i) By contract or otherwise, perform the re-
placement or correction, charge to the Contractor
any increased cost, or deduct such increased cost
from any amounts paid or due under this contract;
or
(ii) Terminate this contract for default
(2) Failure to agree to the amount of increased
cost to be charged to the Contractor shall be a dis-
pute.
(h) Notwithstanding paragraphs (0 and (g) above,
the Government may at any time require the Contrac-
tor to remedy by correction or replacement, without
cost to the Government any failure by the Contractor
to comply with the requirements of this contract if the
failure is due to (1) fraud, lack of good faith, or willful
misconduct on the part of the Contractor's managerial
personnel or (2) the conduct of one or more of the
Contractor's employees selected or retained by the
•Contractor after any of the Contractor's managerial
personnel has reasonable grounds to believe that the
employee is habitually careless or unqualified.
(i) This clause applies in the same manner and to the
same extent to corrected or replacement materials or
services as to materials and services originally deliv-
ered under this contract
(I) The Contractor has no obligation or liability
under this contract to correct or replace materials and
services that at time of delivery do not meet contract
requirements, except as provided in. this clause or as
may be otherwise specified in the contract.
(k) Unless otherwise specified in the contract, the
Contractor's obligation to correct or replace Govern-
ment-furnished property shall be governed by the
clause pertaining to Government property.
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CONTRACTOR COMMUNICATIONS RECORD
CONTRACT NO. 68-01-0001
CONTRACT: John Doe Environmental, Inc.
DATE/
TIME
CONTACT
SUMMARY OF DISCUSSION/
DECISIONS MADE
1/2/87
1/4/87
Rider Deliverable #2 will be two days late, due to bad
weather. Agreed to accept delay.
Sarnual Requested decision on number of users and
categories. Informed that 3 user groups
(programmer w/ total access; desk officers w/ data
entry & all reports access; program offices w/
program-only access to reading/printing program
reports.
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MEETING RECORD
CONTRACT NO. 68-01-0001
CONTRACT: John Doe Environmental, Inc.
DATE/TIME: 7/10/89 1:00 - 3:00
ATTENDEES: Lewis, Andrews, Macintosh
PURPOSE/DESCRIPTION: Met to discuss scope of Subtask #3 study to
be conducted.
DECISIONS MADE:
1. Begin study in July. Complete design by February 1.
2. Set up meeting to discuss design possibilities.
NEXT STEPS (EPA CONTRACTOR) (Actions to Take, Issues to Resolve):
EPA: Obtain list of people to attend meeting on study design, and
possible agency experts.
Contractor: Prepare outline of study design, by December 15.
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EPAAR Clause
MOHTHLY PROGRESS REPORT—COST-TYPE CONTRACT (APR 1984)
The Contractor shall furnish copies of a combined monthly
technical and financial progress report briefly stating the progress
made, including the percentage of the project completed during the
reporting period. If work is ordered using work assignments include
the percentage of work ordered and completed during the reporting
period. Specific discussions shall include difficulties encountered
and remedial action taken during the reporting period and anticipated
activity during the subsequent reporting period. In addition, the
report shall specify contract financial status as follows:
(a) For tern form contracts, provide:
(1) Cumulative costs and direct labor hours expended from the
effective date of the contract through the last day of the current
reporting month. Include a cumulative incurred cost per direct labor
hour average computation and compare the result to the cumulative
average cost per direct labor, hour derived from the estimated cost of
the contract.
(2) Actual costs and direct labor hours expended during the current
reporting month.
(3) Estimated costs and direct labor hours to be expended during the
next reporting period.
(4) Actual costs and direct labor-hours incurred for each work
assignment issued and estimates of costs and man hours required to
complete each work assignment.
(b) For completion form contracts, provide a graph using a vertical
axis for dollars and a horizontal axis for time increments that shows
the actual and projected rate of expenditures against the total
estimated cost of the contract.
(c) Tkic submission does not change the notification requirements of
the "Limitation of Cost" or "Limitation of Funds" clauses requiring
separate written notice to the Contracting Officer.
(d) The reports shall be submitted to the following addressees on or
before the of each month following the first complete calendar
month of the contract. Distribute reports as follows:
No. of Copies
Addressee
Project Officer
Contracting Officer
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EPAAR Clause
MONTHLY PROGRESS REPORT- ..ME AND MATERIALS OR LABOR HOUR, OR
INDEFINITE DELIVERY-INDEFINITE QUANTITY FIXED RATE SERVICES CONTRACT
(APR 1984)
The Contractor shall furnish copies of a combined monthly
technical and financial progress report briefly stating the progress
made, including the 'percentage of the project completed during the
reporting period. If the contract is an indefinite delivery/indefinite
quantity type, include the percentage of the work ordered and completed
during the reporting period. Specific discussions shall include
difficulties encountered and remedial action taken during the reporting
period and anticipated activity during the subsequent reporting
period. In addition, the report shall specify contract financial
status by:
(a) Cumulative costs and labor hours expended from the effective date
of the contract through the last day of the current reporting month.
(b) Actual costs and labor hours expended during the current
reporting month.
(c) Estimated costs and labor hours to be expended during the next
reporting period.
(d) For indefinite quantity contracts, actual costs and direct labor
hours incurred for each delivery order issued and estimates of costs
and man hours required to complete each delivery order.
(e) The reports shall be submitted to the following addressees on or
before the of each month following the first complete calendar
month of the contract. Distribute reports as follows:
No. of Copies
Addressee
Project Officer
Contracting Officer
(End of clause)
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A GOOD PROGRESS REPORT WILL:
1. Give The Complete Status Of All Project
Elements, Avoiding Boilerplate Repetition Of
Work Plan.
2. Highlight The Contractor's Major Accom-
plishments During The Month.
3. Point Out Any Problems Or Obstacles
Encountered.
4. Discuss The Key Personnel On The Assignment
And What They Did On The Project During The
Month.
5. Discuss Any Changes (If Applicable) To The
Key Personnel.
6. Discuss Work To Be Performed/Completed
During The Next Month, Including Any Deli-
verables With Their Anticipated Delivery Dates.
7. Compare The Level Of Effort Expended To
Date With That Proposed And Agreed To In
The Work Plan.
8. Estimate The Level Of Effort Required To
Complete The Project.
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PROGRESS REPORT OUTLINE
EPA CONTRACT # 00-00-0000
Work Assignment #00
TECHNICAL
I. Percent of Work Ordered and Completed
II. Progress Made During The Period
III. Specific Problems Encountered/Remedial
Action Taken
IV. Anticipated Activities and Deliverables For
Next Reporting Period
V. Changes Made/Anticipated (Personnel,
Schedule, etc.)
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PROGRESS REPORT OUTLINE (Cont.)
EPA CONTRACT # 00-00-0000
Work Assignment #00 '
FINANCIAL
I. Workhours Proposed Vs. Actual Vs.
Estimated to Completion
II. Funds Budgeted Vs. Actual (Period Vs.
Cumulative) Vs. Estimated To Completion
(By Task) And Variance
III. Average Cost Per Hour
• . : * f.
IV. Summary of Travel (Budgeted Vs. Actual),
,K. Description of Trips
V. Summary of ODC's (Budgeted Vs. Actual),
Description & Breakdown
VI. Subcontract Costs (By Subcontractor--
Budgeted Vs. Actual)
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SUGGESTED ELEMENTS FOR SUCCESSFUL
COMMUNICATION WITH CONTRACTORS
1. Have Frequent Communications.
2. Get Proposed Changes To Due Dates In
Writing.
3. Get Copy Of Table Of Contents Before A
Deliverable Is Completed.
4. Bring Proper Levels Of Personnel Into
Discussions.
5. Formally Amend Work Assignment Whenever
Changes Occur.
6. Call One Day Ahead Of Time To Confirm
Meeting Agenda, Times, Places, Number
Of Attendees, Etc., Or To Confirm Delivery
Requirements.
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Chapter 10
TECHNICAL MONITORING
The technical monitoring role of a Project Officer, Work Assignment Manager, or
Delivery Order Officer is crucial in assuring that the contractor understands the work
requirements and performs in a manner to produce quality results within the time
required. Once the work assignment has been issued, and the work plan submitted and
approved, it is up to these individuals to monitor the contractor's performance to ensure
that EPA obtains the agreed-upon performance.
10.1 Technical Direction
Throughout the period of performance, a Project Officer, Work Assignment
Manager, and/or Delivery Order Officer will often need to communicate with the
contractor for the purpose of directing the effort to ensure that the desired results are
achieved. This is not usually the situation in fixed-price contracts, because the
requirements should have been clearly laid out in the contract itself. In fact, technical
personnel must be careful not to provide technical direction unless the contract contains
a clause permitting them to do so. Providing inappropriate technical direction which
diverts or delays the contractor can give the contractor a cause of action against the
government. However, in cost-reimbursement and many indefinite delivery contracts,
the Technical Direction clause 1552.237-71 (see page 284) will be present, and
allows (and in fact mandates) technical personnel to communicate with the contractor
regarding the work effort.
Technical direction is made a responsibility of the Project Officer (or her/her
designees) by the Technical Direction clause. It specifies that the Project Officer "will
give technical direction on contract performance," including (1) direction to the
.Contractor which assists the Contractor in accomplishing the Statement of Work, and
(2) comments on and approval of reports or other deliverables.
Technical direction should always be reduced to writing, with a copy to the
Contracting Officer (plus one to the Project Officer, if the direction is given by a WAM
or DOPO). If the technical direction was issued orally, the Technical Direction clause
mandates that it be reduced to writing within 5 calendar days.
10.2 Technical Direction Under Superfund
Superfund contracts have formalized the provision of technical direction by
setting up special forms called, depending on the contract involved, Technical Direction
Memoranda (TDMs), Technical Instruction Directives (TIDs), or Technical Direction
Directives (TDDs). There are filled out on-site and permit immediate and formalized
documentation of the direction given. The contractor is frequently requested to sign the
form to indicate the contractor's acknowledgment of the direction given. Sample forms
are included on pages 286-7.
10.3 Prohibited Activities
While there are many types of direction which are authorized for technical
personnel, the following activities are prohibited:
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- Formally or informally discussing or divulging any information relevant to a
Work Assignment or Delivery Order prior to its issuance with the contractor
or any potential subcontractors or consultants.
- Making changes or issuing orders which will affect the terms and conditions of
the contract.
Only the Contracting Officer can direct a change to any terms or conditions of a
contract, work assignment, or delivery order. (See Chapter 13 on Contract
Modifications.) A contractor who is advised of a change without the signature of
the Contracting Officer is required to notify the Contracting Officer
immediately and identify any adjustments to the cost or delivery schedule
which are affected by the change. The contractor is prohibited from proceeding
with the change unless formal approval is given by the Contracting Officer.
Project Officers, Work Assignment Managers or Delivery Order Officers who
direct unauthorized changes to a contract may be relieved of their authority by
the Director, PCMD, and may be held personally liable for any increase in
costs.
- Giving technical direction that will increase costs and/or the level of effort
and/or change the technical approach of the contract, work assignment, or
delivery order. (This can constitute a constructive change, which is discussed
in Chapter 13 on Contract Modifications. Such changes should be formalized as
amendments to the Work Assignment or Delivery Order, also discussed in
Chapter 13.)
- Authorizing services or work to begin before issuance of the work assignment
or delivery order.
- Directing the contractor to perform services which are "inherently Govern-
mental" in nature, e.g., drafting policy.
- Creating a personal conflict-of-interest situation such as working as a part-
time consultant in the technical field relating to the contract or approving
situations which may create an organizational conflict-of-interest.
- Directing or requesting the contractor to perform services which create an
employer/employee or personal services relationship. (See EPA Directive
1900.1 "USE OF CONTRACTOR SERVICES" at end of Ch. 7, on page 237, and page
231 on personal services contracts).
- Providing technical direction to a subcontractor, since there is no privity of
contract or direct contractual relationship with the subcontract. All technical
direction should be given directly to the prime contractor, unless the contract
otherwise authorizes (e.g., some Superfund contracts).
Technical personnel do not have the authority to bind the Government to an
express (i.e., written) contract for additional services or supplies beyond what the
contract provides. However, they could so mislead a contractor that the Government
could be bound to pay the contractor's costs for services rendered on the theory that the
Government should pay for benefits it receives. Case law indicates that the Government
could hold the individual who gave the technical direction liable for any additional costs
incurred by the contractor in such a situation. The utmost in caution is therefore
required.
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10.4 Technical Monitoring of Progress
Under every contract, there is a need to keep abreast of the progress of the
contractor's performance to assure satisfactory completion of the effort. EPA relies on
Project Officers, Work Assignment Managers, and/or Delivery Order Officers to carry
out this very critical function of contract monitoring.
Project Officers cannot assume that all contractor personnel are familiar with
the terms of the contract. While some personnel may become familiar with the
Statement of Work through involvement in preparation of the proposal, they may not
always be the people who are assigned to work under the contract. When they are
actually working on the contract, they may have subordinates who are not as familiar
with the contract terms. On long jobs, personnel turnover may make this problem
worse.
In cases where all contractor personnel are familiar with the Statement of Work,
there is sometimes a temptation to cut a corner or to provide what appears to be just as
good as what was called for in the contract, but isn't. Under the stress of time, items
may "fall through the cracks." Specific characteristics or elements may be overlooked
in both the work effort and progress reports.
Accordingly, it cannot be assumed that the contract effort will be performed
exactly as required. Government personnel must actively oversee the work effort and
monitor the contractor's performance with the objective of assuring that such
performance meets the requirements of the contract.
History has shown that when the Project Officer, Work Assignment Manager or
Delivery Order Officer does not or cannot devote adequate time to determining what is
actually being done under the contract, the results can be disastrous. The Project
Officer is the "eyes and ears" of the Contracting Officer, and, as such, must be aware of
the responsibility of assuring that the work performed is exactly in accordance with the
minimum terms of the contract.
There are several methods by which technical personnel can monitor progress
under a contract:
(1) Monitoring by Inspection
Inspection clauses in the contract (see pages 293ff and 313ff for examples)
give the Government the right to inspect and test the work performed under
the contract. This right is standard under Government contracts; it is
derived from the concept that the Government has the right to determine if
the goods or services offered are what was ordered. This right can be
exercised at any stage and place of work performance. Inspection of the
contractor's work may involve the use of spot checks, scheduled inspections,
random sampling, user reports, and periodic review of the contractor's
quality assurance and control programs.
The need for inspection will vary from case to case and is dependent upon the
type of contract, the nature of the work being performed, the contractor's
past performance history, and the criticality of the work performance. If,
for example, a contractor has an outstanding quality assurance program and
performance levels, the amount of monitoring may be reduced.
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The decision of whether or not to use inspection as the main tool for
monitoring performance is dependent upon many factors, including: type of
work, type of contract, place of performance, and feasibility of performing
inspections. As previously discussed, production of standard, "off-the-
shelf" items under fixed-price contracts may require lower levels of
monitoring, whereas cost-reimbursement type contracts frequently require
a high level of monitoring. Careful attention to the monitoring and
inspection levels required is a key responsibility of the Project Officer.
Review of a draft report is one type of inspection. Revisions can be directed
before the final report is submitted. Project Officers must ensure,
however, that draft reports are reviewed within the time period specified in
the contract. Delays could result in loss of our rights to obtain the final
product on time.
(2) Periodic Meetings
Another helpful tool in monitoring progress is the practice of periodic
meetings to discuss performance. Depending upon the contract, these may be
conducted on a regular schedule, or on an "as-needed" basis, and may be
specific to one or more aspects of performance or may cover the overall
contract. It might be sufficient to hold these by telephone if the need is
minor and the contractor is not locally available. Where there are major
problems, however, or many complex areas are under discussion, face-to-
face meetings may be the only feasible method of reviewing contract
performance. Restraint should be exercised, however, in order to avoid
using an unreasonable amount of contract funds not commensurate with the
complexity of the problems.
The Contracting Officer should always be notified of all meetings to be held
with the contractor and provided an opportunity to attend. In addition, the
EPA Project Officer, Work Assignment Manager or Delivery Order Officer
must document the general content of all meetings, including all telephone
conversations. Failure to document such decisions can leave EPA staff very
vulnerable to allegations of changes made by EPA in such conversations or
meetings. Sample forms for routine documentation are included on pages
296-7, and should note the date, the parties involved, and a summary of the
discussion and any decisions made. Next steps required by EPA or the
contractor should also be noted.
(3) Monitoring through Progress Reports
Most contracts incorporate clauses requiring the submission of periodic
progress reports incorporating both technical and financial information (see
pages 298-9). A sample progress report outline is included on pages 301-
2.
A good progress report will a) indicate the complete status of all project
elements, b) highlight the contractor's accomplishments for the period; c)
point out any problems or obstacles encountered; d) discuss what key
personnel did on the project; e) discuss any changes in key personnel; f)
discussed work planned for the next month, including deliverables due and
their delivery dates; g) compare the level of effort expended to date with that
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agreed to in the work plan; and h) estimate the level of effort required to
complete the project.
The use of a contractor's written progress reports can be of significant help
in providing a picture of work progress under the contract. The Project
Officer is responsible for ensuring that the contractor complies with
reporting provisions. When reports are part of a contract, they have been
included in the contract price or cost. Accordingly, the Project Officer
should ensure that the Government gets exactly those reports required, in
the time frames provided for, and in the detail required. Care should be
taken not to require extra reports above contract requirements, as they
could lead to a claim against the Government for increased costs.
Information required by the Project Officer is important in evaluating
progress and for making management decisions relating to technical
performance of the contract. Although the information flow provided must be
adequate to the requirements of the Government, it should not be so detailed
and involved as to create unnecessary administrative and financial burdens
on the contractor. Additionally, the Government personnel assigned to
review the contractor's reports must be capable of assessing the included
information.
Often the contractor is reluctant to make certain information available. This
is caused by a tendancy to withhold "bad news" or information that may
indicate that the contractor is having problems. Contractors generally
believe that things can be worked out, given a little time. Both the
contractor and the Project Officer must remember that the reason for -
progress reports is to enable the Government to determine whether the
contract is being performed properly. Accordingly, it is vital that the
Project Officer ensure the timely submission of progress reports from the
contractor and review the reports with great care.
If the Project Officer determines after contract award that the reporting
requirements are insufficient to meet program needs, the Contracting Officer
should be requested to negotiate a modification. If reports are not submitted
on time, or are deficient, the Project Officer should request that the
Contracting Officer direct the contractor to promptly remedy the situation.
It is essential that Project Officers read progress reports promptly, so that
any problems which have arisen can be dealt with right away. Failure to
read and understand progress reports renders them virtually useless.
Similarly, progress reports that are vague or too general are of no value and
may be an effort on the part of the contractor to obscure problem areas. The
Project Officer should get whatever clarification is required to render
progress reports meaningful and seek whatever assistance is required to
fully understand them. Verification of the information contained in progress
reports should be accomplished, at the minimum, on a spot-check basis.
(4) Reviewing Financial Management Reports
The financial management reviews conducted by PCMD's Quality Assurance
staff and discussed in Chapter 11 are a good tool for monitoring progress
from a technical standpoint, as well. A major emphasis of these reviews is
the cost-to-complete estimate, which may often represent the most accurate
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measurement of contractor progress. Project Officers should therefore pay
close attention to the report generated from a financial management review,
as it may tell more than just how costs are being managed. Project Officers
on large contracts will need to ensure that they get feedback from their Work
Assignment Managers and Delivery Order Officers on how technical progress
is matching financial expenditures before approval of such reports.
(5) Reviewing Work Plans
If a work plan or task plan similar to those on pages 259 and 271 was
submitted, it can be a useful tool in monitoring progress. Actual progress
can be compared against the overall scheme presented in the work plan.
Technical personnel can use it to assist in identifying delays in completion
and noting areas where the contractor may have fallen behind.
The work plan should contain a schedule that identifies each step required for
contract completion and the period of time needed to accomplish that step.
The schedule is usually expressed in calendar days or weeks. The plan should
be updated as required to reflect changes in estimates for completion of work
elements and the total work effort.
10.5 Assuring Timeliness and Quality
Contractor deficiencies can affect either the timely completion of contract
requirements or the quality of the products or services provided to the Government.
While monitoring contractor progress, attention should be paid equally to both aspects
of performance. The following discussion is designed to help guide Project Officers and
their representatives in monitoring both.
Assuring Timeliness of Performance
The Project Officer must understand from the onset that the contract type has an
impact both on the amount of monitoring needed and the probability of timely
performance by the contractor. In fixed-price contracts, the Government's right to
terminate for default under the "Default" clause (see Chapter 14) may motivate the
contractor to complete on time. In the case of cost-reimbursement contracts, which are
"best effort" contracts, possible motivators include withholding of payment and the fact
that the firm will gain a poor reputation. However, legitimate charges cannot be
withheld in a cost reimbursement arrangement. Accordingly, with this type of contract
the assurance of timely completion of the work effort is highly dependent on the
monitoring efforts of the Project Officer.
Failure to deliver on time almost always is the result of a build-up of factors
during performance. If the Project Officer keeps in close touch with the progress of the
work effort, such interim delays can be identified and corrective action initiated. The
Agency depends on the Project Officer to obtain and analyze progress information and to
develop a recommended course of action.
below:
All contracts contain a period of performance or delivery schedule, as shown
PCMD 9/89
310
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(1) Completion Contracts and Nonseverable Delivery Orders Under Indefinite
Delivery Contracts
Completion contracts and some orders under indefinite delivery contracts
call for a finite job, such as writing a handbook or collecting specific data
and delivering it in a certain format. These contracts or orders specify a
time for completion of the work and delivery of the results. The date must be
met for the contractor to fulfill its obligation. But often, other matters are
at stake. For example, the completed work may be required before other
work can begin. Untimely delivery can result in program delays, with a
cumulative effect beyond the initial work effort, impacting program effort,
personnel, and costs.
(2) Term Form (Level-of-Effort) Contracts and Severable Delivery Orders
under Indefinite Quantity Contracts
In these types of contracts, what is being purchased is an obligation by the
contractor to apply a specified level of effort towards a specific objective or
kind of work over a certain period of time. In these cases, the completion or
end date in the contract or order relates more to the contractor's obligation
to work than the completion of the effort. Once the end date comes, the
contractor has no further obligation to continue work on the order,
regardless of the status of job completion or hours remaining in the contract
or order. In such cases, there is no assurance that the work will be
completed and, therefore, there is potential waste. Close technical
monitoring is critical to ensuring completion of the product or service.
Assuring Quality
The quality of the contractor's work is most important. If it is poor, the product
or service may be useless.
Contracts for supplies can usually specify the physical attributes that will result
in an acceptable product. Contracts for services, particularly those involving creative
work or investigations, typically cannot describe specific attributes of the final result.
Quality control in service contracts can best be assured by monitoring both the
personnel assigned to the work and the methods used by the contractor as the work
progresses.
The quality of a study or analysis depends to a great extent on the methods used.
The validity of the conclusions may be suspect if the contractor failed to take into account
all data or relevant factors. Interim conclusions that are suspect may seriously
undermine all follow-on efforts, resulting in a total waste and possible requirement for
a new start.
Generally, in contracts for technical services, the Project Officer is responsible
for continuous monitoring of the contractor's efforts, as they progress, in order to
assure satisfactory quality of work performed. This does not mean taking charge of the
contractor's work effort. It does mean:
(1) Using technical expertise to identify contractor actions or lack of action that
affect the quality of the work.
(2) Identifying and calling the contractor's attention to deficiencies.
311
PCMD 9/89
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(3) .Keeping well-informed of what the contractor is doing.
(4) Working out appropriate action to remedy deficiencies.
Quality of the contractor's output is also dependent upon the competence of its
personnel. In many cases, the best way to assure quality of work performed is to assure
that personnel with the necessary capabilities, qualifications, and experience are
assigned to the work effort. This is true in service contracts calling for creative or
conceptual development or analysis. However, Project Officers should never appear to
act as the contractor's personnel department. These functions are the contractor's, not
the Government's. The Project Officer's role is one of reviewing and working with the
contractor to remedy any inadequacies.
If a "Key Personnel" clause is included in the contract (see Chapter 7), the
Project Officer should ensure, through monitoring, that such individuals have not been
removed or diverted from the contract work and that they are providing the required
level of effort. Key personnel should be working in those capacities and at the levels
agreed to by the contractor and the Government in the original proposal or work plan.
The competence of non-key personnel is also important in assuring the quality of
the work performed. If contractor personnel do not appear satisfactory with regard to
training, experience, or other factors, the Project Officer should direct this to the
attention of the contractor.
Under cost-reimbursement and some indefinite delivery contracts, the Project
Officer may learn a great deal about the number and types of contractor personnel being
utilized by reviewing invoices. Also, the Project Officer is normally permitted to ask
for and receive information (i.e., resumes, position descriptions, etc.) that is
reasonably required to determine if the personnel are qualified to perform the
assignment.
10.6 Effective Communication with Contractors
Successful monitoring of quality and timeliness absolutely requires continuous
and effective communication with the contractor. To accomplish this requires several
elements. First, communications must be frequent. Second, get all proposed changes in
due dates in writing. Third, be sure to discuss what you anticipate receiving in a report
and get a copy of the draft table of contents (and ideally, a draft outline of the entirety)
before a written deliverable is completed, so that you are sure that you are getting what
is needed. Fourth, be sure to bring the proper levels of personnel into all discussions,
that that time is not wasted with the wrong people present. Fifth, formally amend work
assignments and delivery orders whenever changes occur, and document all other
discussions where decisions are made. And finally, be sure to call in advance to confirm
meeting agendas, people attending, etc. or to confirm delivery requirements.
PCMD 9/89
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PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES
Government's expense or otherwise dispose of the
property .or (2) effect repairs to return the property to
its condition when inspected under the solicitation or,
if not inspected, last available for inspection under the
solicitation. After completing the directed action and
upon written request of the Contractor, the Contract-
ing Officer shall equitably adjust any contractual provi-
sions affected by the return, disposition, or repair in
accordance with the procedures provided for in the
Changes clause of this contract. The foregoing provi-
sions for adjustment are the exclusive remedy available
to the Contractor, and the Government shall not be
otherwise liable for any delivery of Government prop-
erty furnished "as is" in a condition other than that in
which it was originally offered.
(d) Except as otherwise provided in this clause. Gov-
ernment property furnished "as is" shall be governed
by the Government Property clause of this contract.
(End of clause)
(AV 7-104.24(e) 1965 APR)
52.246-1 Contractor Inspection Requirements.
As prescribed in 46.301, insert the following clause in
solicitations and contracts for supplies or services when
the contract amount is expected to be within the small
purchase limitation and (a) inclusion of the clause is
necessary to ensure an explicit understanding of the
contractor's inspection responsibilities, or (b) inclusion
of the clause is required under agency procedures. The
clause shall not be used if the contracting officer has
made the determination specified in 46.202- l(b).
CONTRACTOR INSPECTION REQUIREMENTS
(APR 1984)
The Contractor is responsible for performing or
having performed all inspections and tests necessary to
substantiate that the supplies or services furnished
under this contract conform to contract requirements,
including any applicable technical requirements for
specified manufacturers' parts. This clause takes prece-
dence over any Government inspection and testing re-
quired in the contract's. specifications, except for spe-
cialized inspections or tests specified to be performed
solely by the Government.
(End of clause)
(R 7-103.24 1968 SEP)
52.246-2 Inspection of Supplies—Fixed-Price.
As prescribed in 46.302, insert the following clause in
solicitations and contracts for supplies, or services that
involve the furnishing of supplies, when a fixed-price
contract is contemplated and the contract amount is
expected to exceed the small purchase limitation. The
clause may be inserted in such solicitations and con-
tracts' when the contract amount is expected to be
within the small purchase limitation and inclusion of
the clause is in the Government's interest.
INSPECTION OF SUPPLIES—FIXED-PRICE
(APR 1984)
PCMD 9/89
(a) Definition. "Supplies," as used in this clause, in-
cludes but is not limited to, raw materials, components,
intermediate assemblies, end products, and lots of sup-
plies.
(b) The Contractor shall provide and maintain an
inspection system acceptable to the Government cover-
ing supplies under this contract and shall tender to the
Government for acceptance only supplies that have
been inspected in accordance with the inspection
system and have been'found by the Contractor to be in
conformity with contract requirements. As part of the
system, the Contractor shall prepare records evidenc-
ing all inspections made under the system and the out-
come. These records shall be kept complete and made
available to the Government during contract perform-
ance and for as long afterwards as the contract re-
quires. The Government may perform reviews and
evaluations as reasonably necessary to ascertain compli-
ance with this paragraph. These reviews and evalua-
tions shall be conducted in a manner that will not
unduly delay the contract work. The right of review,
whether exercised or not, does not relieve the Contrac-
tor of the obligations under the contract
(c) The Government has the right to inspect and test
all supplies called for by the contract, to the extent
practicable, at all places and times, including the period
of manufacture, and hi any event before acceptance.
The Government shall perform inspections and tests in
a manner that will not unduly delay the work. The
Government assumes no contractual obligation to per-
form any inspection and test for the benefit of the
Contractor unless specifically set forth elsewhere in
this contract.
(d) If the Government performs inspection or test on
the premises of the Contractor or a subcontractor, the
Contractor shall furnish, and shall require subcontrac-
tors to furnish, without additional charge, all reason-
able facilities and assistance for the safe and convenient
performance of these, duties. Except.,as otherwise pro-
vided in the contract, the Government shall bear the
expense of Government inspections or tests made at
other than the Contractor's or subcontractor's prem-
ises; provided, that in case of rejection, the Government
shall not be liable for any reduction in the value of
inspection or test samples. ,
(e) (1) When supplies are not ready at the time speci-
fied by the Contractor for inspection or test, the Con-
tracting Officer may charge to the Contractor the addi-
tional; cost of inspection, :or test.
(2) The Contracting Officer may also charge the
Contractor for any additional cost of inspection or
test when prior rejection makes reinspection or retest
necessary.
(0 The Government has the right either to reject or
to require correction of nonconforming supplies. Sup-
plies are nonconforming when they are defective in
material or workmanship.or are otherwise not in con-
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52-173
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5Z246-2
FEDERAL ACQUISITION REGULATION (FAR)
formity with contract requirements. The Government
may reject nonconforming supplies with or without
disposition instructions.
(g) The Contractor shall remove supplies rejected or
required to be corrected. However, the Contracting
Officer may require or permit correction in place,
promptly after notice, by and at the expense of the
Contractor. The Contractor shall not tender for accept-
ance corrected or rejected supplies without disclosing
the former rejection or requirement for correction, and,
when required, shall- disclose the corrective action
taken.
(h) If the Contractor fails to promptly remove, re-
place, or correct rejected supplies that are required to
be removed or to be replaced or corrected, the Gov-
ernment may either (1) by contract or otherwise,
remove, replace, or correct the supplies and charge the
cost to the Contractor or (2) terminate the contract for
default Unless the Contractor corrects or replaces the
supplies within the delivery schedule, the Contracting
Officer may require their delivery and make an equita-
ble price reduction. Failure to agree to a price reduc-
tion shall be a dispute.
(i) (1) If this contract provides for the performance
of Government quality assurance at source, and if re-
quested by the Government, the Contractor shall fur-
nish advance notification of the time (i) when Contrac-
tor inspection or tests will be performed in accordance
with the terms and conditions of the contract and (ii)
when the supplies will be ready for Government in-
spection.
(2) The Government request shall specify the
period and method of the advance notification and
the Government representative to whom it shall be
furnished. Requests shall not require more than 2
workdays of advance notification if the Government
representative is in residence in the Contractor's
plant, nor more than 7 workdays in other instances.
(j) The Government shall accept or reject supplies as
promptly as practicable after delivery, unless otherwise
provided in the contract. Government failure to inspect
and accept or reject the supplies shall not relieve the
Contractor from responsibility, nor impose liability on
the Government, for nonconforming supplies.
(k) Inspections and tests by the Government do not
relieve the Contractor of responsibility for defects or
other failures to meet contract requirements discovered
before acceptance. Acceptance shall be conclusive,
except for latent defects, fraud, gross mistakes amount-
ing to fraud, or as otherwise provided in the contract.
0) If acceptance is not conclusive for any of the
reasons in paragraph (f) hereof, the Government, in
addition to any other rights and remedies provided by
law, or under other provisions of this contract, shall
have the right to require the Contractor (1) at no
increase in contract price, to correct or replace the
defective or nonconforming supplies at the original
point of delivery or at the Contractor's plant at the
Contracting Officer's election, and in accordance with
a reasonable delivery schedule as may be agreed upon
between the Contractor and the Contracting Officer;
provided, that the Contracting Officer may require a
reduction in contract price if the Contractor fails to
meet such delivery schedule, or (2) within a reasonable
time after receipt by the Contractor of notice of defects
or nonconfonnance, to repay such portion of the con*
tract as is equitable under the circumstances if the
Contracting Officer elects not to require correction or
replacement. When supplies are returned to the Con-
tractor, the Contractor shall bear the transportation
cost from the original point of delivery to the Contrac-
tor's plant and return to the original point when that
point is not the Contractor's plant. If the Contractor
fails to perform or act as required in (1) or (2) above
and does not cure such failure within a period of 10
days (or such longer period as the Contracting Officer
may authorize in writing) after receipt of notice from
the Contracting Officer specifying such failure, the
Government shall have the right to contract or other-
wise to replace or correct such supplies and charge to
the Contractor the cost occasioned the Government
thereby.
(End of clause)
(R 7-103.5(a) 1958 MAY)
(R 7-103.5(d) 1977 SEP)
(R 1-7.102-5)
Alternate I (APR 1984). If a fixed-price incentive
contract is contemplated, substitute paragraphs (g), (h),
and (1) below for paragraphs (g), (h), and 0) of the
basic clause.
(g) The Contractor shall remove supplies rejected or
required to be corrected. However, the Contracting
Officer may require or permit correction in place,
promptly after notice. The Contractor shall not tender
for acceptance corrected or rejected supplies without
disclosing the former rejection or requirement for cor-
rection, and when required shall disclose the corrective
action taken. Cost of removal, replacement, or correc-
tion shall be considered a cost incurred, or to be in-
curred, in the total final negotiated cost fixed under the
incentive price revision clause. However, replacements
or corrections by the Contractor after the establish-
ment of the total final price shall be at no increase in
the total final price.
(h) If the Contractor fails to promptly remove, re-
place, or correct rejected supplies that are required to
be removed or to be replaced or corrected, the Gov-
ernment may either (1) by contract or otherwise,
remove, replace, or correct the supplies and equitably
reduce the target price or, if established, the total final
price or (2) may terminate the contract for default.
Unless the Contractor corrects or replaces the noncon-
forming supplies within the delivery schedule, the Con-
tracting Officer may require their delivery and equita-
bly reduce any target price or, if it is established, the
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PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES
52.244-3
total final contract price. Failure to agree upon an
equitable price reduction shall be a dispute.
0) If accept ince -is not conclusive for any of the
reasons in paragraph (0 hereof, tht Government, in
addition to any other rights and remedies provided by
law, or under other provisions of this contract, shall
have the right to require the Contractor (1) at no
increase in any target price or, if it is established, the
total final price of this contract, to correct or replace
the defective or nonconforming supplies at the original
point of delivery or .at the Contractor's plant at the
Contracting Officer's election, and in accordance with
a reasonable delivery schedule as may be agreed upon
between the Contractor and the Contracting Officer;
provided, that the Contracting Officer may require a
reduction in any target price, or, if it is established, the
total final price of this contract, if the Contractor fails
to meet such delivery schedule; or (2) within a reason-
able time after receipt by the Contractor of notice of
defects or nonconformance, to repay such portion of
the total final price as is equitable under the circum-
stances if the Contracting Officer elects not to require
correction or replacement. When supplies are returned
to the Contractor, the Contractor shall bear the trans-
portation costs from the original point of delivery to
the Contractor's plant and return to the original point
when that point is not the Contractor's plant If the
Contractor fails to perform or act as required in (1) or
(2) above and does not cure such failure within a
period of 10 days (or such longer period as the Con-
tracting Officer may authorize in writing) after receipt
of notice from the Contracting Officer specifying such
failure, the Government shall have the right by con-
tract or otherwise to replace or correct such supplies
and equitably reduce any target price or, if it is estab-
lished, the total final price of this contract
(R 7-103.5(b) 1962 NOV)
Alternate II (APR 1984). If a fixed-ceiling-price con-
tract with retroactive price redetennination is contem-
plated, substitute paragraphs (g), (h), and (1) below for
paragraphs (g), (h), and (1) of the basic clause:
(g) The Contractor shall remove supplies rejected or
required to be corrected. However, the Contracting
Officer may require or permit correction in place,
promptly after notice. The Contractor shall not tender
for acceptance corrected or rejected supplies without
disclosing the former rejection or requirement for cor-
rection, and when required shall disclose the corrective
action taken. Cost of removal, replacement, or correc-
tion shall be considered a cost incurred, or to be in-
curred, when redetermining the prices under the price
redetennination clause. However, replacements or cor-
rections by the Contractor after the establishment of
the redetermined prices shall be at no increase in the
redetermined price.
(h) If the Contractor fails to promptly remove, re-
place, or correct rejected supplies that are required to
PCMD 9/89
be removed or to be replaced or corrected, the Gov-
ernment may either (1) by contract or otherwise.
remove, replace, or correct the supplies and equitably
reduce the initial contract prices or, if established, the
redetermined contract prices or (2) terminate the con-
tract for default Unless the Contractor corrects or
replaces the nonconforming supplies within the deliv-
ery schedule, the Contracting Officer may require their
delivery and equitably reduce the initial contract price
or, if it is established, the redetermined contract prices.
Failure to agree upon an equitable price reduction shall
be a dispute.
(1) If acceptance is not conclusive for my of the
reasons in paragraph (f) hereof, the Government, in
addition to any other rights and remedies provided by
law, or under other provisions of this contract, shall
have the right to require the Contractor (1) at no
increase in the initial contract prices, or, if it is estab-
lished, the redetermined prices of this contract, to cor-
rect or replace the defective or nonconforming supplies
at the original point of delivery or at the Contractor's
plant at the Contracting Officer's election, and in ac-
cordance with a reasonable delivery schedule as may
be agreed upon between the Contractor and the Con-
tracting Officer; provided, that the Contracting Officer
may require a reduction in the initial contract prices,
or, if it is established, the redetermined prices of this
contract, if the Contractor fails to meet such delivery
schedule; or (2) within a reasonable time after receipt
by the Contractor of notice of defects or nonconfor-
mance, to repay such portion of the initial contract
prices, or, if it is established, the redetermined prices of
this contract, as is equitable under the circumstances if
the Contracting Officer elects not to require correction
or replacement When supplies are returned to the
Contractor, the Contractor shall bear the transportation
costs from the original point of delivery to the Con-
tractor's plant and return to the original point when
that point is not the Contractor's plant If the Contrac-
tor fails to perform or act as required in (1) or (2)
above and does not cure such failure within a period of
10 days (or such longer period as the Contracting Offi-
cer may authorize in writing) after receipt of notice
from the Contracting Officer specifying such failure,
the Government shall have the right by contract or
otherwise to replace or correct such supplies and equi-
tably reduce the initial contract prices, or, if it is estab-
lished, the redetermined prices of this contract
(R 7-103.5(c) 1962 NOV)
52J46-3 Inspection of Supplies—Cost-Reimbursement.
As prescribed in 46.303, insert the following clause in
solicitations and contracts for supplies, or services that
involve the furnishing of supplies, when a cost-reim-
bursement contract is contemplated:
INSPECTION OF SUPPLIES—COST-
REIMBURSEMENT (APR 1984)
(a) Definitions.
31552-175
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52.246-4
FEDERAL ACQUISITION REGULATION (FAR)
"Contractor's managerial personnel,".as used in this
clause, means any of the Contractor's directors, offi-
cers, managers, superintendents, or equivalent repre-
sentatives who have supervision or direction of—
(1) All or substantially all of the Contractor's busi-
ness;
(2) All or substantially all of the Contractor's oper-
ation at a plant or separate location at which the
contract is being performed; or
(3) A separate and complete major industrial oper-
ation connected with performing this contract
"Supplies," as used in this clause, includes but is not
limited to raw materials, components, intermediate as-
semblies, end products, lots of supplies, and, when the
contract does not include the Warranty of Data clause,
data.
(b) The Contractor shall provide and maintain an
inspection system acceptable to the Government cover-
ing the supplies, fabricating methods, and special tool-
ing under this contract. Complete records of all inspec-
tion work performed by the Contractor shall be main-
tained and made available to the Government during
contract performance and for as long afterwards as the
contract requires.
(c) The Government has the right to inspect and test
the contract supplies, to the extent practicable at all
places and times, including the period of manufacture,
and in any event before acceptance. The Government
may also inspect the plant or plants of the Contractor
or any subcontractor engaged in the contract perform-
ance. The Government shall perform inspections and
tests in a manner that will not unduly delay the work.
(d) If the Government performs inspection or test on
the premises of the Contractor or a subcontractor, the
Contractor shall furnish and shall require subcontrac-
tors to furnish all reasonable facilities and assistance for
the safe and convenient performance of these dudes.
(e) Unless otherwise specified in the contract, the
Government shall accept supplies as promptly as'prac-
ticable after delivery, and supplies shall be deemed
accepted 60 days after delivery, unless accepted earlier.
(f) At any time during contract performance, but no
later than 6 months (or such other time as may be
specified in the contract) after acceptance of the sup-
plies to be delivered under the contract, the Govern-
ment may require the Contractor to replace or correct
any supplies that are nonconforming at time of deliv-
ery. Supplies are nonconforming when they are defec-
tive in material or workmanship or are otherwise not in
conformity with contract requirements. Except as oth-
erwise provided in paragraph (h) below, the cost of
replacement or correction shall be 'included in 'allow-
able cost, determined as provided in the Allowable
Cost and Payment clause, but no additional fee shall be
paid. The Contractor shall not tender for acceptance
supplies required to be replaced or corrected without
disclosing the former requirement for replacement or
52-176
PCMD 9/89
correction, and, when required, shall disclose the cor-
rective action taken.
(g) (1) If the Contractor fails to proceed with reason-
able promptness to perform required replacement or
correction, the Government may—
(I) By contract or otherwise, perform the re-
placement or correction and charge to the Con-
tractor any increased cost or make an equitable
reduction in any fixed fee paid or payable under
the contract;
(ii) Require delivery of undelivered supplies at
an equitable reduction in any fixed fee paid or
payable under the contract; or
(iii) Terminate the contract for default
(2) Failure to agree on the amount of increased
cost to be charged to the Contractor or to the reduc-
tion in the fixed fee shall be a dispute.
(h) Notwithstanding paragraphs (0 and (g) above,
the Government may at any time require the Contrac-
tor to correct or replace, without cost to the Govern-
ment, nonconforming supplies, if the nonconformances
are due to (1) fraud, lack of good faith, or willful
misconduct on the part of the Contractor's managerial
personnel or (2) the conduct of one or more of the
Contractor's employees selected or retained by the
Contractor after any of the Contractor's managerial
personnel has reasonable grounds to believe that the
employee is habitually careless or unqualified.
CO This clause applies in the same manner to correct-
ed or replacement supplies as to supplies originally
delivered.
(j) The Contractor shall have n'o obligation* or liabili-
ty under this contract to replace supplies that were
nonconforming at the time of delivery, except as pro-
vided in this clause or as may be otherwise provided in
the contract
(k) Except as otherwise specified in the contract, the
Contractor's obligation to correct or replace Govern-
ment-furnished property shall be governed by the
clause pertaining to Government property.
(End of clause)
(R 7-203.5(a) 1974 OCT)
(R 1-7.202-5)
52.246-4 Inspection of Services—Fixed-Price.
As prescribed in 46.304, insert the following clause in
solicitations and contracts for services, or supplies that
involve the furnishing of services, when a fixed-price
contract is contemplated and the contract amount is
expected to exceed the small purchase limitation. The
clause may be inserted in such solicitations and con-
tracts when the contract amount is expected to -be
within the small purchase limitation, and inclusion of
the clause is in the Government's interest.
INSPECTION OF SERVICES—FIXED-PRICE
(APR 1984)
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PART SI—SOLICITATION PROVISIONS AND CONTRACT CLAUSES
S2J46-6
(a) Definitions. "Services," as used in this clause,
includes services performed, workmanship, and materi-
al furnished or utilized in the performance of services.
(b) The Contractor shall provide and maintain an
inspection system acceptable to the Government cover-
ing the services under this contract. Complete records
of all inspection work performed by the Contractor
shall be maintained and made available to the Govern-
ment during contract performance and for as long
afterwards as the contract requires.
(c) The Government has the right to inspect and test
all services called for by the contract, to the extent
practicable at all times and places during the term of
the contract. The Government shall perform inspec-
tions and tests in a manner that will not unduly delay
the work.
(d) If any of the services do not conform with con-
tract requirements, the Government may require the
Contractor to perform the services again in conformity
with contract requirements, at no increase in contract
amount. When the defects in services cannot be cor-
rected by reperformance, the Government may (1) re-
quire the Contractor to take necessary action to ensure
that future performance conforms to contract require-
ments and (2) reduce the contract price to reflect the
reduced value of the services performed.
(e) If the Contractor fails to promptly perform the
services again or to take the necessary action to ensure
future performance in conformity with contract re-
quirements, the Government may (1) by contract or
otherwise, perform the services and charge to the Con-
tractor any cost incurred by the Government that is
directly related to the performance of such service or
(2) terminate the contract for default
(End of clause)
(R 7-1902.4 1971 NOV)
52.246-5 Inspection of Services—Cost-Reimbursement.
As prescribed in 46.305, insert the following clause in
solicitations and contracts for services, or supplies that
involve the furnishing of services, when a cost-reim-
bursement contract is contemplated:
INSPECTION OF SERVICES—COST-
REIMBURSEMENT (APR 1984)
(a) Definition. "Services," as used in this clause, in-
cludes services performed, workmanship, and material
furnished or used in performing services.
. (b) The Contractor shall provide and maintain an
inspection system acceptable to the Government cover-
ing the services under this contract Complete records
of all inspection work performed by the Contractor
shall be maintained and made available to the Govern-
ment during contract performance and for as long
afterwards as the contract requires.
(c) The Government has the right to inspect and test
all services called for by the contract, to the extent
practicable at all places and times during the term of
the contract The Government shall perform inspec-
PCMD 9/89
tions and tests in a manner that will not unduly delay
the work.
(d) If any of the services performed do not conform
with contract requirements, the Government may re-
quire the Contractor to perform the services again in
conformity with contract requirements, for no addition-
al fee. When the defects in services cannot be correct-
ed by reperformance, the Government may (1) require
the Contractor to take necessary action to ensure that
future performance conforms to contract requirements
and (2) reduce any fee payable under the contract to
reflect the reduced value of the services performed.
(e) If the Contractor fails to promptly perform the
services again or take the action necessary to ensure
future performance in conformity with contract re-
quirements, the Government may (1) by contract or
otherwise, perform the services and reduce any fee
payable by an amount that is equitable under the cir-
cumstances or (2) 'terminate the contract for default.
(End of clause)
(R 7-1909.5 1971 NOV)
52.246-6 Inspection—Time-and-Material and Labor-
Hour.
As prescribed in 46.306, insert the following clause in
solicitations and contracts when a time-and-materia]
contract or a labor-hour contract is contemplated:
INSPECTION—TIME-AND-MATERIAL AND
LABOR-HOUR (APR 1984)
(a) Definitions. "Contractor's managerial personnel,"
as used in this clause, means any of the Contractor's
directors, officers, managers, superintendents, or equiv-
alent representatives who have supervision or direction
of—
(1) All or substantially all of the Contractor's busi-
ness;
(2) All or substantially all of the Contractor's oper-
ation at any one plant or separate location at which
the contract is being performed; or
(3) A separate and complete major industrial oper-
ation connected with the performance of this con-
tract
"Materials," as used in this clause, includes data
when the contract does not include the Warranty of
Data clause.
(b) The Contractor shall provide and maintain an
inspection system acceptable to the Government cover-
ing the material, fabricating' methods, work, and serv-
ices under this contract. Complete records of all in-
spection work performed by the Contractor shall be
maintained and made available to the Government
during contract performance and for as long afterwards
as the contract requires.
(c) The Government has the right to inspect and test
all materials furnished and services performed under
this contract, to the extent practicable at all places and
times, including the period of performance, and,in any
event before acceptance. The Government may also
52-177
317
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5Z246-7
FEDERAL ACQUISITION REGULATION (FAR)
inspect the plant or plants of the Contractor or any
subcontractor engaged in contract performance. The
Government shall perform inspections and tests in a
manner that will not unduly delay the work.
(d) If the Government performs inspection or test on
the premises of the Contractor or a subcontractor, the
Contractor shall furnish and shall require subcontrac-
tors to furnish all reasonable facilities and assistance for
the safe and convenient performance of these duties.
(e) Unless otherwise specified in the contract, the
Government shall accept or reject services and materi-
als at the place of delivery as promptly as practicable
after delivery, and they shall be presumed accepted 60
days after the date of delivery, unless accepted earlier.
(f) At any time during contract performance, but not
later than 6 months (or such other time as may be
specified in the contract) after acceptance of the serv-
ices or materials last delivered under this contract, the
Government may require the Contractor to replace or
correct services or materials that at time of delivery
failed to meet contract requirements. Except as other-
wise specified in paragraph (h) below, the cost of re-
placement or correction shall be determined under the
Allowable Cost and Payment clause, but the "hourly
rate" for labor hours incurred in the replacement or
correction shall be reduced to exclude that portion of
the rate attributable to profit. The Contractor shall not
tender for acceptance materials and services required to
be replaced or corrected without disclosing the former
requirement for replacement or correction* and, when
required, shall disclose the corrective action taken.
(g) (1) If the Contractor fails to proceed with reason-
able promptness to perform required replacement or
correction, and if the replacement or correction can be
performed within the ceiling price (or the ceiling price.
as increased by the Government), the Government
may—
(0 By contract or otherwise, perform the re-
placement or correction, charge to the Contractor
any increased cost, or deduct such increased cost
from any amounts paid or due under this contract;
or
(ii) Terminate this contract for default
(2) Failure to agree to the amount of increased
cost to be charged to the Contractor shall be a dis-
pute.
(h) Notwithstanding paragraphs (0 and (g) above,
the Government may at any time require the Contrac-
tor to remedy by correction or replacement, without
cost to the Government, any failure by the Contractor
to comply with the requirements of this contract, if the
failure is due to (1) fraud, lack of good faith, or willful
misconduct on the part of the Contractor's managerial
personnel or (2) the conduct of one or more of the
Contractor's employees selected or retained by the
Contractor after any of the Contractor's managerial
personnel has reasonable grounds to believe that the
employee is habitually careless or unqualified.
(i) This clause applies in the same manner and to the
same extent to corrected or replacement materials or
services as to materials and services originally deliv-
ered under this contract.
(j) The Contractor has no obligation or liability
under this contract to correct or replace materials and
services that at time of delivery do not meet contract
requirements, except as provided in this clause or as
may be otherwise specified in the contract.
(k) Unless otherwise specified in the contract, the
Contractor's obligation to correct or replace Govern-
ment-furnished property shall be governed by the
clause pertaining to Government property.
(End of clause)
(R 7-901.21 1974 OCT)
Alternate I (APR 1984). If Government inspection
and acceptance are to be performed at the contractor's
plant, paragraph (e) below may be substituted for para-
graph (e) of the basic clause:
(e) The Government shall inspect for acceptance all
items (other than aircraft to be flown away, if any) to
be furnished under this contract at the Contractor's
plant or plants specified in the contract, or at any other
plant or plants approved for such purpose in writing by
the Contracting Officer. The Contractor shall inform
the contract administration office or Contracting Offi-
cer when the work is ready for inspection. The Gov-
ernment reserves the right to charge to the Contractor
any additional cost of Government inspection and test
when items are not ready at the time for which inspec-
tion and test is requested, by the Contractor.
(R 7-901.21 1974 OCT)
Alternate II (APR 1984). If a labor-hour contract is
contemplated, and if no specific reimbursement for ma-
terials furnished is intended, the contracting officer
may add the following paragraph 0) to the basic
clause:
0) The terms of this clause that govern reimburse-
ment for materials furnished are considered to have
been deleted.
52.246-7 Inspection of Research and Derelopment—
Fixed-Price.
As prescribed in 46.307(a), insert the following
clause in solicitations and contracts for research and
development when (a) the primary objective of the
contract is the delivery of end items other than designs,
drawings, or reports, (b) a fixed-price contract is con-
templated, and (c) the contract amount is expected to
exceed the small purchase limitation; unless use of the
clause is impractical and the clause prescribed in 46.309
is considered to be more appropriate. The following
clause may be used in such solicitations and contracts
when the contract amount is expected to be within the
small purchase limitation and its use is in the Govern-
ment's interest.
INSPECTION OF RESEARCH AND
318
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PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES
DEVELOPMENT—FIXED-PRICE (APR 1984)
(a) Ths Contractor shall provide and maintain an
inspection system acceptable to the Government cover-
ing the work under this contract Complete records of
all inspection work performed by the Contractor shall
be maintained and made available to the Government
during contract performance and for as long afterwards
as the contract requires.
(b) The Government has the right to inspect and test
all work called for by the contract, to the extent practi-
cable at all places and times, including the period of
performance, and in any event before acceptance. The
Government may also inspect the premises of the Con-
tractor or any subcontractor engaged in contract per-
formance. The Government shall perform inspections
and tests in a manner that will not unduly delay the
work.
(c) If the Government performs any inspection or
test on the premises of the Contractor or a subcontrac-
tor, the Contractor shall furnish and shall require sub-
contractors to furnish, without additional charge, all
reasonable facilities and assistance for the safe and con-
venient performance of these duties. Except as other-
wise provided in the contract, the Government shall
bear the expense of Government inspections or tests
made at other than the Contractor's or subcontractor's
premises.
(d) The Government shall accept or reject the work
as promptly as practicable after delivery, unless other-
wise specified in the contract. Government failure to
inspect and accept or reject the work shall not relieve
the Contractor from responsibility, nor impose liability
on the Government, for nonconlorming work. Work is
nonconforming when it is defective in material or
workmanship or is otherwise not in conformity with
contract requirements.
(e) The Government has the right to reject noncon-
forming work. If the .Contractor fails or is unable to
correct or to replace nonconforming work within the
delivery schedule (or such later time as the Contracting
Officer may authorize), the Contracting Officer may
accept the work and make an equitable price reduction.
Failure to agree on a price reduction shall be a dispute.
(0 Inspection and test by the Government does not
relieve the Contractor from responsibility for defects or
other failures to meet the contract requirements that
may be discovered before acceptance. Acceptance shall
be conclusive, except for latent defects, fraud, gross
mistakes amounting to fraud, or as otherwise specified
in the contract. If acceptance is not conclusive for any
of these causes, the Government, in addition to any
other rights and remedies provided by law, or under
other provisions of this contract, shall have he right to
require the Contractor (1) at no increase in contract
price, to correct or replace the defective or noncon-
forming supplies (work) at the original point of deliv-
ery or at the Contractor's plant at the Contracting
Officer's election, and in accordance with a reasonaole
PCMD 9/89
delivery schedule as may be agreed upon between the
Contractor and the Contracting Officer; provided, the
Contracting Officer may require a reduction in con-
tract price if the Contractor fails to meet such deliveiy
schedule; or (2) within a reasonable time after the Con-
tractor's receipt of notice of defects or nonconfor-
mance, to repayment of such portion of the contract
price as is equitable under the circumstances if the
Government elects not to require correction or re-
placement. When supplies (work) ate (is) returned to
the Contractor, the Contractor shall bear transportation
costs from the original point of delivery to the Con-
tractor's plant and return to the original point of deliv-
ery when that point is not the Contractor's plant.
(End of clause)
(R 7-302.4
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FAC 84-18
S2.246-9
JULY 30,1986
FEDERAL ACQUISITION REGULATION (FAR)
spections and tests in a manner that will not unduly
delay the work.
(d) If the Government performs any inspection or
test on the premises of the Contractor or a subcontrac-
tor, the Contractor shall furnish and shall require sub-
contractors to furnish all reasonable facilities and assist-
ance for the safe and convenient performance of these
duties.
(e) Unless otherwise provided in the contract, the
Government shall accept work as promptly as practica-
ble after delivery, and work shall be deemed accepted
90 days after delivery, unless accepted earlier.
(0 At any time during contract performance, but no
later than 6 months (or such other time as may be
specified in the contract) after acceptance of all of the
end items (other than designs, drawings, or reports) to
be delivered under the contract, the Government may
require the Contractor to replace or correct work not
meeting contract requirements. Time devoted to the
replacement or correction of such work shall not be
included in the computation of the above time period.
Except as otherwise provided in paragraph (h) below,
the cost of replacement or correction shall be deter-
mined as specified in the Allowable Cost and Payment
clause, but no additional fee shall be paid. The Con-
tractor shall not tender for acceptance work required
to be replaced or corrected without disclosing the
former requirement for replacement or correction, and,
when required, shall disclose the corrective action
taken.
(g) (1) If the Contractor fails to proceed with reason-
able promptness to perform required replacement or
correction, the Government may—
(i) By contract or otherwise, perform the re-
placement or correction, charge to the Contractor
any increased cost, or make an equitable reduction
in any fixed fee paid or payable under the con-
tract;
(ii) Require delivery of any undelivered articles
and shall have the right to make an equitable re-
duction in any fixed fee paid or payable under the
contract; or
(iii) Terminate the contract for default.
(2) Failure to agree on the amount of increased
cost to be charged the Contractor or to the reduc-
tion in fixed fee shall be a dispute.
(h) Notwithstanding paragraphs (f) and (g) above,
the Government may at any time require the Contrac-
tor to remedy by correction or replacement, without
cost to the Government, any failure by the Contractor
to comply with the requirements of this contract, if the
failure is due to (1) fraud, lack of good faith, or willful
misconduct on the part of the Contractor's managerial
personnel or (2) the conduct of one or more of the
Contractor's employees selected or retained by the
Contractor after any of the Contractor's managerial
personnel has reasonable grounds to believe that the
employee is habitually careless or unqualified.
(i) This clause shall apply in the same manner to a
corrected or replacement end item or components as to
work originally delivered.
(j) The Contractor has no obligation or liability
under the contract to correct or replace articles not
meeting contract requirements at time of delivery,
except as provided in this clause or as may otherwise
be specified in the contract.
(k) Unless otherwise provided in the contract, the
Contractor's obligations to correct or replace Govern-
ment-furnished property shall be governed by the
clause pertaining to Government property.
(End of clause)
(R 7-402.5(a)(l) 1974 OCT)
(R 1-7-402.5(a))
Alternate I (APR 1984). If it is contemplated that the
contract will be on a no-fee basis, substitute paragraphs
(f) and (g) below for paragraphs (f) and (g) of the basic
clause.
(f) At any time during contract performance, but not
later than 6 months (or such other time as may be
specified in the contract) after acceptance of all of the
end items (other than designs, drawings, or reports) to
be delivered under the contract, the Government may
require the Contractor to correct or replace work not
meeting contract requirements. Time devoted to the
correction or replacement of such work shall not be
included in the computation of the above time period.
Except as otherwise provided in paragraph (g) below,
the allowability of the cost of any such replacement or
correction shall be determined as specified in the Al-
lowable Cost and Payment clause. The Contractor shall
not tender for acceptance corrected work without dis-
closing the former requirement for correction, and,
when required, shall disclose the corrective action
taken.
(g) If the Contractor fails to proceed with reasonable
promptness to perform required replacement or correc-
tion, the Government may (1) by contract or other-
wise, perform the replacement or correction and
charge to the Contractor any increased cost, (2) require
delivery of any undelivered articles, or (3) terminate
the contract for default. Failure to agree on the amount
of increased cost to be charged to the Contractor shall
be a dispute.
(R 7-402.5(a)(3) 1974 OCT)
(R l-7-402.5(b))
52.246-9 Inspection of Research and Development
(Short Form).
As prescribed in 46.309, insert the following clause: |
9/89
320
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FAC 84-18 JULY 30,1986
PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES
52.246-12
INSPECTION OF RESEARCH AND
DEVELOPMENT (SHORT FORM) (APR 1984)
The Government has the right to inspect and evalu-
ate the work performed or being performed under the
contract, and the premises where the work is being
performed, at all reasonable times and in a manner that
will not unduly delay the work. If the Government
performs inspection or evaluation on the premises of
the Contractor or a subcontractor, the Contractor shall
furnish and shall require subcontractors to furnish all
reasonable facilities and assistance for the safe and con-
venient performance of these duties.
(End of clause)
(R 7-402.5(b) 1959 FEE)
(R 7-302.4(b) 1959 JUN)
(R l-7.302-4(b))
(R l-7.402-5(c))
52.246-10 Inspection of Facilities.
As precribed in 46.310, insert the following clause in
solicitations and contracts when a facilities contract is
contemplated:
INSPECTION OF FACILITIES (APR 1984)
(a) Definition. "Contractor's managerial personnel*"
as used in this clause, is defined in the Liability for the
Facilities clause of this contract.
(b) The Contractor shall provide and maintain an
inspection system acceptable to the Government cover-
ing the facilities and work called for by this contract,
Complete records of all inspection work performed by
the Contractor shall be maintained and made available
to the Government during contract performance and
for as long afterwards as the contract requires.
(c) The Government has the right to inspect and test
the facilities and work called for by the contract, to the
extent practicable at all places and times, including the
' period of manufacture. The Government may also in-
.spect the facilities and work at the plant or plants of
the Contractor or its subcontractors engaged in the
performance of the contract. The Government shall
perform inspections and tests in a manner that will not
unduly delay the work to be performed by the Con-
tractor under this contract or any related contract.
(d) If the Government performs inspection or tept on
the premises of the Contractor or a subcontractor, the:
Contractor shall furnish and shall require subcontrac-
tors to furnish all reasonable facilities and assistance for
the safe and convenient performance of these duties.
(e) The Contracting Officer may, at any time, require
the Contractor to correct or replace facilities or work
that is defective or does not conform to contract re-
quirements. Except as provided in paragraph (f) below,
corrections and replacements shall be at Government
expense if, under the terms of this contract, the facili-
ties or work corrected or replaced were initially fur-
nished, or required to be performed at Government
expense.
PCMD 9/89
(f) The Contracting Officer may, at any time, require
the Contractor to correct or replace facilities or work
that is defective or does not conform to contract re-
quirements, without cost to the Government under this
contract or any related contract or subcontract, if the
defects or failures are due to fraud, lack of good faith,
or willful misconduct on the part of the Contractor's
managerial personnel; or to the conduct of one or more
of the Contractor's employees selected or retained by
the Contractor after any of the Contractor's managerial
personnel has reasonable grounds to" believe that the
employee is habitually careless or unqualified.
(g) Corrected or replacement facilities or work shall
be subject to this clause in the same manner as facilities
or work originally completed under the contract.
(End of clause)
(R 7-702.6 1964 SEP)
52.246-11 Higher-Level Contract Quality Requirement
(Government Specification).
As prescribed in 46.311, insert the following clause in
solicitations and contracts when the inclusion of a
higher-level contract quality requirement is appropriate
(see 46.202-3):
HIGHER-LEVEL CONTRACT QUALITY RE-
QUIREMENT (GOVERNMENT
SPECIFICATION)(APR 1984)
(a) Definition. "Contract date," as used in this clause,
means the date set for bid opening or, if this is a
negotiated contract or a modification, the effective date
of this contract or modification.
(b) The Contractor shall comply with the specifica-
tion titled [Contracting Officer
insert the title and number of the specification], in effect
on the contract date, which is hereby incorporated into
this contract.
(End of clause)
(R 7-104.28 1967 AUG)
(R 7-104.33 1967 AUG)
(R 7-703.44 1967 AUG)
(R 7-203.5(b) 1967 AUG)
(R 7-302.4(c) 1967 AUG)
(R 7-402.5(c) 1967 AUG)
(R 7-602.10(b) 1967 AUG
(R 7-901.25 1967 AUG)
52.246-12 Inspection of Construction.
As prescribed in 46.312, insert the following clause in
solicitations and contracts for construction when a
fixed-price contract is contemplated and the contract
amount is expected to exceed the small purchase limita-
tion. The clause may be used in such solicitations and
contracts when the contract amount is expected to be
within;the small purchase limitation and its use is in the
Government's interest.
INSPECTION OF CONSTRUCTION (JUL 1986) |
52-181
321
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FINANCIAL MONITORING
OR....
THE PROJECT OFFICER'S
LAMENT —
WHERE, OH WHERE, DOES THE MONEY GO?'
PCMD 9/89
1 1-0
323
-------
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PROGRESS REPORT OUTLINE
EPA CONTRACT # 00-00-0000
Work Assignment #00
FINANCIAL
I. Workhours Proposed Vs. Actual Vs. Estimated to
Completion
II. Funds Budgeted Vs. Actual (Period Vs. Cumulative)
Vs. Estimated To Completion (By Task) And Variance
III. Average Cost Per Hour
IV. Summary of Travel (Budgeted Vs. Actual),
Description of Trips
V. Summary of ODC's (Budgeted Vs. Actual),
Description & Breakdown
VI. Subcontract Costs (By Subcontractor-Budgeted
Vs. Actual)
PCMD 9/89
11-1
325
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COMPARING ESTIMATED VS. ACTUAL
LABOR HOUR COSTS
Estimated Averaae Cost Per Direct Labor Hour
Estimated Cost Of Contract: $750,000
Level Of Effort Available:
Average Cost Per Labor Hour:
20,000 hours
$ 37.50
Incurred Averaae Cost Per Direct Labor Hour
Cost Incurred:
Level Of Effort Expended:
Average Cost Per Labor Hour:
$425,000
10,000 hours
$42.50
PCMD 9/89
11-2
326
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SAMPLE
MONITORING PERCENTAGE OF COMPLETION
(Completion Form Contract)
MONTHLY FINANCIAL REPORT FOR THE PERIOD
ENDING JUNE 30
Percentage Of Work Completed = 90%
Cost to Complete = $10,000
$120 _,_
100
80 J_
60
($95,000)
($100,000)
OCT NOV DEC JAN FEB MAR APR MAY JUN JUL
= Projected expenditures
= Actual expenditures
PCMD 9/89
11-3
327
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SAMPLE
MEMORANDUM
SUBJECT: Payment under Contract No.
FROM:
TO:
_, Project Officer
j Work Assignment Manager
You have been designated as a Work Assignment Manager for at
least one of the work assignments issued under subject contract. As
such, you are accountable and responsible for the monitoring of the
contractor's performance, within the allotted budget and time frame.
Accordingly, I look to you to provide me with a monthly Work Assignment
Notification so that I have a basis to certify the contractor's monthly
invoices. To this end, please forward to me by the 1st of EACH MONTH
a completed Work Assignment Status Notification, a copy of which is
attached hereto. A separate form should be submitted for each work
assignment which you manage.
Thank you for your cooperation.
PCMD 9/89
11-4
328
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SAMPLE
Work Assignment Status Notification
Contract No.
Invoice No.
I have reviewed the invoice costs and recommend
payment in full.
I have reviewed the invoice costs and recommend
suspension of amount for the
reasons set forth below.
PCMD 9/89
11-5
329
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SAMPLE
SUBJECT:
TO:
FROM:
Contract Invoice*
For Delivery Order#.
_, Delivery Order Project Officer
_, Project Officer, PM-213
382-xxxx
Enclosed is a copy of an invoice for services performed under your
Delivery Order on Contract Number . Payment is due
promptly.
I need your approval WITHIN ONE WEEK of the date above in order to
pay the invoice. Please indicate your approval by signing below, or by
calling me at 382-xxxx.
Thank you.
Delivery Order Project Officer:
Charges reflected in this invoice are appropriate for payment and are
mathematically correct.
Signed:
Date:
DOPO
PCMD 9/89
11-6
330
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VOUCHER PAYMENTS ON
MULTIPLE ACCOUNT FUNDED CONTRACTS
Whenever A Contract Has Multiple Account Funding,
The Project Officer Must Provide On Every Certification
For Payment The Accounts And Amounts To Be
Charged.
PCMD 9/89
11-7
331
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US Environmental Protection Agency
f± _ __ _ Washington, DC 20460
KVcPA Project Officer Invoice Approval
Instructions
1 Complete and return to the servicing finance office indicated responsive payment processing to the contractor. If you cannot
below, This form is required for every invoice. Submit only one approve payment, or if you approve partial payment, return the
Invoice par form. invoice with a memorandum of explanation.
2. Return the original copy; retain the yellow copy for your files. 4. Dollar amounts distributed by account number must equal
3. Send either a completed form or an explanation for disapproval total amount to be paid.
within five calendar days of your receipt of invoice to assure 5. You may attach invoices with specific account charging data
instead of completing Part II of this form.
Part 1. Identification
Servicing Finance Office;
US Environmental Protection Agency
Financial Management Division (MD-32)
Customer Assistance Unit
Research Triangle Park, NC 2771 1
Phone: Commercial (919) 541-1 148; FTS 629-1 148
Contractor
Contract Number
Invoice Number Date of Invoice
Part II. Account Charging Instructions
WA No, and/or DCN (Optional)
Account Number
Total Amount To Be Paid LJ as invoiced I — I partial payment
Dollar Amount
$
.
-
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Incomplete and inaccurate data on this form will delav oavrhent of the invoice.
Part III. Approval
1 have determined that the above cited contract has commenced and the
payment requested is commensurate with the contractor's level of pro-
grass on the contract.
LJ Goods or services have been delivered in full as requested by the
contract to support this payment.
1 — 1 Sufficient progress has been made by the contractor to support this
progress payment as authorized by the contract.
"•reject Officer's Name (Type or print legibly)
Payment Document
Requires Immediate
Action
Project Officer's Signature Date
•1 -1 0
PrWJMDOWea and Mail Code ' ' w
Office Telephone E-Mail ID Number 332
EPA Form 265O-19 (Rev. 5-86) Previous editions are obsolete.
SERVICING FINANCE OFFICE COPY
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TJ
O
O
to
8
SAMPLE
TRACKING SYSTEM FOR MULTIPLE ACCOUNT NUMBERS
ACCOUNT NUMBERS
VOUCHER #
#1
-*2
(O
#3
#4
BREAKDOWN
COST
FEE
COST
FEE
COST
FEE
COST
FEE
A
100.000
5,000
400
94,600
800
64
93.736
B
30.000
985
79
28,936
600
48
28.288
C
25.000
0
0
25,000
1,000
80
23.920
D
645.000
1,250
100
64,300
4,700
376
641.547
TOTAL
800.000
7,235
579
792,186
7,100
568
784.518
-------
Standard Form 1034-A
September W3
4 Treasury FKM 2000
PUBLIC VOUCHER FOR PURCHASES AND
SERVICES OTHER THAN PERSONAL
VOUCHER NO.
U S. DEPARTMENT, IUKAU. OX ESTAUISHMENT AND LOCATION
DATE VOUCHEK FtEPARED
SCHEDULE NO.
CONTRACT NUMSER AND DATE
PAID •¥
REQUISITION NUMBER AND DATE
PAYH'J
NAMt
AND
ADDMSS
L
"1
J
DATE INVOICE RECEIVED
DISCOUNT TERMS
PAYEE'S ACCOUNT NUMIER
SHIPPED fXOM
TO
WEIGHT
GOVERNMENT 8/1 NUMIER
NUMBER
AND DATE
OF ORDER
DATE OF
DELIVERY
OR SERVICE
ARTICLES OR SERVICES
(Enter description, item number of contract or Federal
wpply schedule, and other information deemed necessary)
QUAN-
TITY
UNIT PRICE
COST
?ER
AMOUNT
(Uw CMMiiwalten
if n«c*wify)
(Pay«« must NOT us* th* space below)
TOTAL
PAYMENTi
Q COMPUTE
Q] PAHTIAl
Q IINAt
Q PKOGMSS
PI ADVANCE
DIFFERENCES.
Amount verified; correct for
(Signature or initials)
MEMORANDUM
ACCOUNTING CLASSIFICATION
CHECK NUMIER
ON TREASURER OF THE UNITED STATES
CHECK NUMBER
ON (Name of hank)
CASH
DATE
U.S. GOVERNMENT PRINTING OFFICE: 1975-563-
-------
Standard Form 1039
September 197)
4 Tmwry FRM 2000
10)5-110
PUBLIC VOUCHER FOR PURCHASES AND
SERVICES OTHER THAN PERSONAL
CONTINUATION SHEET
voooei MO.
. 5
SCMCOULC NO
SHUT NO.
U.S. OVAITMtNT, MJHAU. Ot •MMIIMIHT
U.S. Environmental Protection Agency
NUMIER
AND OATC
Of ORDER
TAC CC
P.O. 1
Seven
tt»
OKSHVK*
RPORATI01
OX 12345
Seas, Tei
ARTICUS CHI SERVICES
(tmttr Jnmflmm. ium mmmttr »f cntrM tr FtJtrmi mpfij
ukijml*. **J Httr i*ftrm*thm tfnmtJ mttnmry)
Contract No. 68-OX-1234
nessee OOOOX
COST ELEMENTS
1. Direct Labor
2. Overhead and Fringe
Benefits '(111% of Direct Labor;
3 . Travel
4. Consultants
5. Subcontractors
6. Other Direct Costs
SUBTOTAL DIRECT COSTS
7. G & A Expenses (25% of
total costs)
TOTAL COSTS
8. Fixed Fee (10%)
TOTAL AMOUNT CLAIMED
11-11
„„_ UNITES
TITY cost ««
Esti nated Cost:
Fixed Fee (7.5%)
Total CPFP:
Current
Amount Claimed
$20,486
22,739
9,000
1,200
25,000
4,500
82,925
20,731
103,656
10,366
114,022
AMOUNT
$1,213,101
90,983
$1,304,084
Cumulative
Amount Claimed
$137,000
152,070
12,000
4,000
65^000
12,530
382,600
95,650
478,250
38,461
516,711
X'-*1^
> &PO: 197t 0-2II-U7 P.O. 4377
-------
CONDUCTOR'S COST PROPOSAL
(covers two-year base period)
1' Direct Labor 3449,016
2. Overhead and Fringe Benefits
(111% of iten 1) 498,408
3. Travel 10,000
4. Consultants 8,400
5. Subcontractors 42,890
6. Other Direct'Costs IS.OOP
SUBTOTAL SI,023,714
7. G & A Expense (18.5% of items 1-6) 189.387
SUBTOTAL 51,213,101
8. Fixed Fee (7.5%) 90.983
TOTAL (ESTIMATED COST PLUS FIXED FIE) 51,304,084
AVERAGE MONTHLY INCREMENTS
1. Direct Labor
2. Overhead & Fringe
3. Travel
4. Consultants
5. Subcontractors
6. Other Direct Costs
SUBTOTAL
7. G & A Expense
SUBTOTAL (AVERAGE MONTHLY ESTIMATED COST)
8. Fixed Fee
TOTAL (AVERAGE MONTHLY CPFT)
518,709
20,767
417
350
1,787
625
$42,655
7.891
PCMD 9/89
11-12
336
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INVOICE #3
SUPPORTING DATA
I. Direct Labor Breakdown
N'ane
J. Ihetsman
A. Haig
L. Thomas
S.E. Swing
T. D. Mixon
B. Goodman
W. Churchill
D. Racher
R. Lave11.
Category
Project Manager
y.p.
Sr. Researcher
Research Ass'c.
Pesticide Expert
Researcher
Staff Writer
Secretary
Clerk-Typist
Rate
Hours
Cost
TOTALS
S27.00
30.00
22.00
14.50
26.00
15.20
18.00
11.50
9.00(reg.)
13.50(01)
160
24
160
88
60
250
120
100
160(reg.)
40 (OT)
54,320
720
3,520
1,276
1,560
3,800
2,160
1,150
1.440
540
-r.112
S20,486
2. Travel Breakdown
a. 2 round-trips to Washington, DC
to meet with Project Officer
b. local mileage (100 miles 3 .205)
;
c. local parking expenses
d. 1 round-trip to Manhattan to
review pesticide data
S450
21
77
352
S900
3. Subcontractor Expenses
a. Enviro-nment, IncI
b. Mr. Clean Contractor Group
c. Cash ConfuoMrs, LTD
$9,200
6.500
9.300
S25.000
4. Other Direct Costs
a. purchase of personal computer
b. photocopying, office supplies,
mailing, etc.
S3,900
600
34,300
PCMD 9/89
11-13.
337
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PROMPT PAYMENT ACT
Requires Government To Pay Invoices Within
30 Days Of Invoice Receipt Or Incur Interest
Penalty.
Exceptions:
(a) Payment may be delayed because of dispute
between EPA and contractor over payment amount
or other issues regarding contract compliance.
(b) Does not apply to provisional, advance or
progress payments, although Agency policy is
to pay within 30 days regardless.
(c) Payments on construction contracts are due
within 14 days, unless a longer period has been
provided for in the solicitation to give EPA adequate
time to inspect the work.
(d) To obtain contractor discount, EPA must make
payment by discount date.
PCMD 9/89
11-14
338
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FIXED FEE
Authorizes Contracting Officer To Withhold
Up To 15% (Or Maximum of $100,000) Of
Fee As Reserve To Protect Government's
Interest
FIXED FEE (FAR/APR 1984)
(a) The Government shall pay the Contractor for
performing this contract the fixed fee specified
in the Schedule.
(b) Payment of the fixed fee shall be made as
specified in the Schedule: provided, that after -
payment of 85 percent of the fixed fee, the
Contracting Officer may withhold further payment
of fee until a reserve is set aside in an amount
that the Contracting Officer considers necessary
to protect the Government's interest. This reserve
shall not exceed 15 percent of the total fixed fee
or $100,000, whichever is less.
PCMD 9/89
11-15
339
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LIMITATION OF COST
CONTRACTOR MUST NOTIFY GOVERNMENT
WHENEVER:
Costs Within Next 60 Days Will Exceed 75%
Of Total Estimated Cost
Total Cost Will Be GREATER Or SUBSTANTIALLY
LESS Than Estimated Costs (Overrun Or
Significant Underrun)
PCMD 9/89
11-16
340
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FAR Clause
LIMITATION OF COST (APR 1984)
(a) The parties estimate that performance of this con-
tract, exclusive of any fee, will not cost the Govern-
mem more than (l)vthe estimated cost specified in the
Schedule or, (2) if this is a cost-sharing contract, the
Government's share of the estimated cost specified in
the Schedule. The Contractor afreet to use hs best
efforts to perform the work specified in the Schedule
and all obligations under this contract within the esti-
mated cost, which, if this is a cost-sharing contract
includes both the Government's and the Contractor's
share of the cost.
(b) The Contractor shall notify the Contracting Offi-
cer in writing whenever it has reason to believe that—
(1) The costs the contractor expects to incur under
this contract in the next 60 days, when added to all
costs previously incurred, will exceed 75 percent of
the estimated cost specified in the Schedule; or
(2) The total cost for the performance of this con-
tract, exclusive of any fee, will be either greater or
substantially less than had been previously estimated.
(c) As part of the notification, the Contractor shall
provide the Contracting Officer a revised estimate of
the total cost of performing this contract
(d) Except as required by other provisions of this
contract specifically citing and stated to be an excep-
tion to this clause—
(1) The Government is not obligated to reimburse
the Contractor for costs incurred in excess of (i) die
estimated cost specified in the Schedule or, (ii) if this
is a cost-sharing contract the estimated coat to the
Government specified in the Schedule; and
(2) The Contractor is not obligated to continue
performance under this contract (including actions
under the Termination clause of this contract) or
otherwise incur coats in excess of the f*»""MH cost
specified in the Schedule, until the Contracting Offi-
cer 0) notifies the Contractor in writing that the
estimated cost has been increased and (ii) provides a
revised estimated total cost of performing this con-
tract If this is a cost-sharing contract the
shall be allocated in accordance with the formula
specified in the Schedule.
(e) No notice, communication, or representation in
any form other than that specified in subparagraph
(dX2) above, or from any person other than the Con-
tracting Officer, shall affect this contract's estimated
cost to the Government. In the absence of the specified
notice, the Government is not obligated to reimburse
the Contractor for any costs in excess of the estimated
cost or, if this is a cost-sharing contract for any costs
in excess of the estimated cost to the Government
specified in the Schedule, whether those excess costs
were incurred during the course of the contract or as a
result of termination.
(0 If the estimated cost specified in the Schedule is
increased, any costs the Contractor incurs before the
increase that are in excess of the previously estimated
cost shall be allowable to the same extent as if incurred
afterward, unless the Contracting Officer issues a termi-
nation or other notice directing that the increase is
solely to cover termination or other specified expenses.
(g) Change orders shall not be considered an authori-
zation to exceed the estimated cost to the Government
specified in the Schedule, unless they contain a state-
ment increasing the estimated cost.
(h) If this contract is terminated or the estimated cost
is not increased, the Government and the Contractor
shall negotiate an equitable distribution of all property
produced or purchased under the contract based upon
the share of costs incurred by each.
PCMD 9/89
11-17
341
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LIMITATION OF FUNDS
Applicable To Incrementally Funded Contracts
Requires Contractor To Notify Government
Whenever It Expects Costs Within The Next
60 Days Will Exceed 75% Of The Incrementally
Funded Amount
PCMD 9/89
11-18
342
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LIMITATION OF FUNDS (APR 1984)
(a) The parties estimate that performance of dm con-
tract will DM cost the Government more than (1) the
estimated cost specified • the Schedule or, (2) if this is
a cost-sharing contract, the Government's share of the
estimated cost specified • the Schedule. The Contrac-
tor agrees to use its best efforts to perform the work
specified in the Schedule and all obligations under this
contract within the estimated cost, which, if this is a
cost-sharing contract, includes both the Government's
and the Contractor's share of the cost.
(b) The Schedule specifies the amount presently
available for payment by the Government and allotted
to this contract, the items covered, the Government's
share of the cost if this is a cost-sharing contract, and
the period of performance it is estimated the allotted
amount will cover. The parties contemplate that the
Government will allot additional funds incrementally
to the contract up to the full estimated cost to .'the
Government specified in the Schedule, exclusive of any
fee. The Contractor agrees to perform, or have per-
formed, work on the contract up to the point at which
the total amount paid and payable by the Government
under the contract approximates but does not exceed
the total amount actually allotted by the Government
.to the contract.
(c) The Contractor shall notify the Contracting Offi-
cer in writing whenever it has reason to believe that
the costs it expects to incur under this contract in the
next tO days, when added to all costs previously in-
curred, will exceed 75 percent of (1) the total amount
so far allotted to the contract by the Government or,
(2) if this is a cost-sharing contract, the amount then
allotted to the contract by the Government plus the
Contractor's corresponding share. The notice shall
state the estimated amount of additional funds required
to continue performance for the period specified in the
Schedule.
(d) Sixty days before the end of the period specified
in the Schedule, the Contractor shall notify the Con-
trading Officer in writing of the estimated amount of
additional funds, if any, required to continue timely
performance under tile contract or for any further
period specified in the Schedule or otherwise agreed
upon, and when the funds will be required.
(e) If. after notification, additional funds are not al-
lotted by the end of the period specified in the Sched-
ule or another agreed-upon date, upon 'the Contractor's
written request the Contracting Officer will terminate
this contract on that date in accordance with the provi-
sions of the Termination clause of dus contract If the
Contractor estimates that the funds available will allow
it to continue to discharge its obligations beyond that
date, it may specify a later date in its request, and the
Contracting Officer may terminate this contract on that
later date.
(0 Except as required by other provisions of this
contract, specifically citing and stated to be an excep-
tion to this clause—
FAR Clause
(1) The Government is not obligated to reimburse
the Contractor for costs incurred in excess of the
total amount allotted by the Government to this con-
tract; and
(2) The Contractor is not obligated to continue
performance under this contract (including actions
under the Termination clause of this contract) or
otherwise incur com in excess of (i) the amount then
allotted to the contract by the Government or, (ii) if
this is a cost-sharing contract, the amount then allot-
ted by the Government to the contract plus the
Contractor's corresponding share, until the Contract-
ing Officer notifies the Contractor in writing that the
amount allotted by the Government has been in-
creased and specifies an increased amount, which
shall then constitute the total amount allotted by the
Government to this contract
(g) The estimated cost shall be increased to the
extent that (1) the amount allotted by the Government
or, (2) if this is a cost-sharing contract, the amount then
allotted by the Government to the contract plus the
Contractor's corresponding share, exceeds the estimat-
ed cost specified in the Schedule. If this is a cost-
sharing contract, the mcreese shall be allocated in ac-
cordance with the formula specified in the Schedule.
(h) No notice. communtsatioB, or represaitstkm in
any form other than that specified in subparagraph
(0(2) above, or from any person other than the Con-
tracting Officer, shall affect the amount allotted by the
Government to this contract In the absence of the
specified notice, the Government is not obligated to
reimburse the Contractor for any costs in excess of the
total amount allotted by the Government to this con-
tract, whether incurred during the course of the con-
tract or as a result of termination.
(i) When and to the extent that the amount allotted
by the Government to the contract is increased, any
costs the Contractor incurs before the increase that are
in excess of (1) the amount previously allotted by the
Government or, (2) if this is a cost-sharing contract,
the amount previously allotted by,the Government to
the contract phis the Contractor's corresponding share,
shall be allowable to the same extent as if incurred
afterward, unless the Contracting Officer issues a termi-
nation or other notice and directs that the increase is
solely to cover termination or other specified expenses.
(j) Change orders shall not be considered an authori-
zation to exceed the amount allotted by the Govern-
ment specified in the Schedule, unless they contain a
statement increasing the amount allotted.
(k) Nothing in this clause shall affect the right of the
Government to terminate tab contract If this contract
is terminated, the Government and the Contractor shall
negotiate an equitable distribution of all property pro-
duced or purchased under the contract based upon the
share, of costs incurred by each.
(1) If the Government does not allot sufficient funds
to allow completion of the work, the Contractor is
entitled to a percentage of the fee specified or the
Schedule equalling the percentage of completion of the
work contemplated by this contract
PCMD 9/89
11-19
343
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LIMITATION OF COST CLAUSE
Manpower Program Analysis Consultation and Training Inc. (LBCA
No. 80-BCA-113, November 4, 1981. Contract No. 99-6-601-08-82)
FACTS
Finding of Fact
1. On August 27, 1976, the Institute for Manpower Program
Analysis Consultation and Training, Inc. (IMPACT) entered into
an agreement (subcontract) with the Small Business Administration
(SBA) (Contract No. SB 543(8a) 76-C-315) for the development and
field testing of a job bank openings summary data retrieval
system under the prime contract between SBA and the Department of
Labor (DOL) (Contract No. 99-6-601-08-82). The estimated total
amount of the contract prior to any modification was $88,696 and
the period of performance extended from August 27, 1976 through.
August 26, 1977.
2. The basic contract provided for estimated direct costs of
$68,234, indirect cost of $15,441 (32.8% of $47,804) and a profit
of $5,021.
The four-page Statement of Work, which was drafted by DOL
staff (Tr. 225-26), stated that the project was designed to
improve the effectiveness and efficiency of the Employment
Service system by improving the ability of the Job Information
Service staff to use and implement job search information and
techniques that facilitate job placements. Specifically, the
project was stated to involve the preparation of training
materials related to the job search function and training.
3. The General Provisions of the contract provide under clause
three/ Limitation of Cost:
"(a) It is estimated that the total cost to the Government
for the performance of this contract, exclusive of
any fee, will not exceed the estimated cost set forth
in the Schedule, and the Contractor agrees to use his
best efforts to perform the work specified in the
Schedule and all obligations under this contract
within such estimated cost. If, at any time, the
Contractor has reason to believe that the cost which
he expects to incur in the performance of this
contract in the next succeeding 60 days, when added
PCMD 9/89
11-20
344.
-------
to all costs previously incurred, will exceed 75
percent of the estimated costs then set forth in
the Schedule, or if, at any time, the Contractor
has reason to believe that the total cost to the
Government for the performance of this contract,
exclusive of any fee, will be greater or substan-
tially less than the then estimated cost hereof,
the Contractor shall notify the Contracting Officer
in writing to that effect, giving the revised
.estimate of such total cost for the performance of
this contract.
(b) Except as required by other provision of this
contract specifically citing and stated to be an
exception from this claus-e, the Government shall
not be obligated to reimburse the Contractor for
costs incurred in excess of the estimated cost set
forth in the Schedule, and the Contractor shall
not be obligated to continue performance under the
contract (including actions under the Termination
clause) or otherwise to incur costs in excess of the
estimated cost set forth in the Schedule, unless
and until the Contracting Officer shall have notified
the Contractor in writing that such estimated cost
has been increased and shall have specified in such
notice a revised estimated cost which shall thereupon'
constitute the estimated cost of performance of this
contract. No notice/ communication, or representation
in any other form or from any person other than the
Contracting Officer shall affect the estimated cost
of this contract. In the absence of the specified
notice, the Government shall not be obligated to
reimburse the Contractor for any costs in excess of
the estimated cost set forth in the Schedule, whether
those excess costs were incurred during the course of
the contract or as a result of termination. When and
to the extent that the estimated cost set forth in
the Schedule has been increased/ any costs incurred
by the Contractor in excess of the estimated cost
prior to such increase shall be allowable to .-the same
extent as if such costs incurred by the Contractor
had been incurred after the increase; unless the
Contracting Officer issues a termination or other
notice and directs that the increase is solely for
the purpose of covering termination or other specified
expenses.
-2-
PCMD 9/89
11-21
345
-------
"(c) Change orders issued pursuant to the Changes
clauses of this contract shall not be considered
an authorization to the Contractor to exceed the
estimated cost set forth in the Schedule in the
absence of a statement in the change order, or
other contract modification, increasing the
estimated cost."
4. On June 15, 1977, IMPACT submitted cost and technical
proposals to add two training sessions, 150 training packages
and 75 audio-visual presentations. Negotiations culminated in
September 1977 and a modification raised the contract amount to
$118,673 while extending the completion date to August 18,
1978.
5. On December 5, 1977, Ms. Patricia King, the DOL project
officer, spoke on telephone with Mr. Willis Thibado, the Director
of Appellant's Training Division, regarding certain alterations
in the work products. Predicated on this call, Mr. Thibado, in
his December 6, 1977 letter to Ms. King confirmed the following
understanding: (1) IMPACT would combine the use of the training
manuals with the audiovisual presentation; (2) the same number
of manuals would be developed and the same amount of time for
material development would be necessary; (3) there would be no
increase or decrease in costs in the development of the manuals}
(4) the slide/tape presentations would be organized to coincide
with the five chapters of the training manual and would be self-
contained; (5) the same number of slides, the same amount of tape,
and the same amount of time for material development would be
used; and (6) there would be no increase or decrease in costs for
development of the slide/tape presentation. During the month of
March, 1978 IMPACT completed three separate revisions of the
training manual as requested by Ms. King on behalf of DOL.
6. By letter to Ms. King dated June 6, 1978, Mr. Thibado
requested a modification of IMPACT'S cost proposal. The letter
indicated that IMPACT'S expenditures through May 31, 1978 exceeded
the Modification's cost estimates by $11,382.00 with an additional
$2,000.00-$4,000.00 to be spent in writing the final reports.
Several reasons were advanced by Mr. Thibado for the overruns,
including the following: (1) the change in emphasis of the
training materials that was imposed after the training needs
assessment was conducted; (2) the impact this change in emphasis
had on the size of the training manual; (3) the costs of
developing the training portfolios, materials not required to be
produced under the contract as executed; (4) the substantial
increases in the scope and size of the drafts of the training
manual and workbook that were required.
-3-
PCMD9/89
11-22
346
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7. After receipt of the June 6 letter, Ms. King requested that
IMPACT submit additional documentation in support of the request
for modification. No response to the request was received from
IMPACT during the period of contract performance. By letter
dated September 15, 1978, IMPACT submitted the requested
additional documentation and indicated that the request for
modification then amounted to $17,423.00.
8. All products and services which IMPACT was required to provide
to DOL were delivered and furnished prior to the date of contract
completion.
9. On May 22, 1980, the DOL Contracting Officer, disallowed all
amounts claimed by IMPACT in excess of the contract price of
$118,673, because IMPACT did not compy with General Provision 3,
"Limitation of Cost" clause, which .requires the Contractor to
notify the Contracting Officer in advance and in writing of a
possible cost overrun and to secure advance approval.
-4-
PCMD 9/89
11-23
347
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MONITORING GOVERNMENT
PROPERTY
A Significant Financial Responsibility In Some
Contracts Involving Monitoring Purchase, Use
And Disposition Of Government Property
Activities Involved:
(a) Review Reimbursement Vouchers To Ensure
That Acquisitions Are Authorized And Itemized On
EPA Form 1730-1.
(b) Review Contractor Inventory And Recommend
Appropriate Disposition Of Property To Property
Administrator
(c) Inspect Property Status And Use At Contractor
Site; ensure Appropriate Preventative Maintenance.
(d) Coordinate With Contractor, Contracting Officer
And Property Administrator On Desired Changes,
Alterations, Returns, Transfers, Or Trade-ins Of
Property.
(e) Ensure Filing Of Information To Property
Administrator Or Contracting Officer If Property
Is Lost, Stolen Or Damaged.
(f) Assure Appropriate Disposal, Return Or Transfer
Of Government Property At Contract Completion.
PCMD 9/89
11-24
348
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PROPERTY CERTIFICATION
I Certify That The Listed Property is Free Of
Biological, Radioactive, Chemical, Or Any
Other Contamination Hazardous To Health
And That The Property Is Safe For Disposal
And Reuse.
Signature
Title
Date
PCMD 9/89
11-25
349
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Forms and Instructions
.Chapter 7
Instructions: EPA Form 1730-1
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PCMD 9/89 ™
Contractor's Guide for Control of Government Property
-------
Chapter 11
FINANCIAL MANAGEMENT OF CONTRACTS
The degree of financial management required in monitoring contracts is directly
related to the type of contract and the amount of risk assumed by the Government. The
greater the risk which EPA is bearing, the greater must be our oversight. Thus, in a
firm fixed price situation where the Government bears almost no risk for the cost of
performance, the contractor has a strong incentive to perform the contract in the most
economical way. Little financial monitoring is needed.
Under cost-type contracts, however, the contractor has little incentive to control
costs, as he or she will be reimbursed for whatever he or she spends in doing the work
barring a determination that costs are unreasonable or unallowable. Most of the risk in
this situation is borne by the Government and a significant amount of oversight is
required. A time-and-materials, labor-hour, or fixed-rate indefinite-quantity for
services contract is of even more concern, for the contractor has a direct incentive not
to control costs or perform efficiently, because every additional hour of labor charged
will result in additional profit.
Federal employees have a responsibility to monitor the efforts of contractors in
order to prevent waste of public funds and to obtain the required services within the
amount budgeted. Therefore, the importance of diligent financial management of
contracts cannot be emphasized too strongly. This chapter provides guidance to Project
Officers on their role in this activity.
11.1 Cost-reimbursement Contracts
Under EPA cost-type contracts, there is a requirement for the contractor to
submit a combined monthly technical and financial progress report. While Project
Officers, Work Assignment Managers and Delivery Order Officers might properly be
particularly concerned about technical progress, the financial status of a project is of
equal importance. Project Officers are responsible for reviewing the financial portion
of the report each month and reporting to their Contracting Officer any problems they
see developing.
Format and content of the financial reports differ in a number of respects
between term form and completion form contracts. Term form (level of effort)
contractors are required to include the following information each month:
(1) Cumulative costs and direct labor hours expended from the effective date of
the contract through the last day of the current reporting month. A
cumulative incurred cost-per-direct-labor-hour-average computation
(actual "loaded" contract cost per labor hour) will be included, with a
comparison of the result to the cumulative average cost per direct labor hour
derived from the estimated cost of the contract.
(2) Actual costs and direct labor hours expended during the current reporting
month.
(3) Estimated costs and direct labor hours to be expended during the next
reporting period.
PCMD 9/89
351
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(4) Actual costs and direct labor hours incurred for each work assignment
issued and estimates of costs and staff hours required to complete each work
assignment.
Work Assignment Managers and Delivery Order Project Officers should review
the information for their own work assignments and delivery orders, while Project
Officers need to be concerned with the contract as a whole. Project personnel should pay
particular attention to the average incurred cost per hour versus the estimated cost per
hour, as this will help highlight any potential problem of the funding being depleted
before the hours have been expended. (See sample on page 326). This may signify
excessive use of higher labor categories than necessary or anticipated. Diligent
monitoring of remaining costs and hours is a must, and Project Officers should keep
track of actual costs and hours expended versus the amounts in the contract. If it
appears that more than 100% of the contract hours will be required, preparation should
begin as early as possible for supplemental contract support. In most cases, this will
have to be obtained competitively, which involves a substantial lead time before award.
Individual work assignments should be monitored from the perspective of
percentage of completion compared to the actual effort and costs expended. If a work plan
budget was prepared by the contractor, the financial status should be compared against
that. For example, if at 25% of completion of the effort, 50% of the estimated hours and
costs have been expended, the Contracting Officer may have to increase the number of
hours on that work assignment, and the Work Assignment Manager's own cost estimate
will have to be adjusted. The Contract Project Officer needs to be aware of this as well,
in order to track the financial status of the contract as a whole. The total contract hours
and dollars, in fact, are the controlling factors in financial management of a term form
contract.
Under a completion-form contract, the monthly financial progress report will
include a graph showing the actual and projected rate of expenditure against the total
estimated cost of the contract. (See sample on page 327.) This graph will enable
Project Officers to track the rate of expenditure each month, and spot potential problems
before they occur. The contractor's projected cost to complete the effort should be
compared to the remaining available funds, to determine whether or not additional funds
will be required before the contract is completed.
Monthly vouchers are another good way to identify potential problems. Vouchers
break down the monthly expenditures by cost element (i.e., direct labor, materials,
subcontracts, indirect expenses, etc.), which makes it easier to spot where the higher
level of spending has occurred. If further detail is necessary, the Project Officer should
request an explanation from the contractor and back-up documentation, e.g., copies of
vendor invoices, a breakdown of the direct labor charges, etc.
Project Officers should also request Work Assignment Managers and Delivery
Order Officers to review and sign off on contractor invoices routinely, since these
individuals are most likely to be aware of contractor performance. Sample forms for
Project Officers to use in such certification are included on pages 328-30.
Where it is evident that potential problems exist, the Contracting Officer should
be informed immediately. If only minor cost growth trends are indicated, they may be
susceptible to correction. For example, the Project Officer might be able to suggest to
the contractor that lower levels of personnel are acceptable for less critical portions of
a project, or convince him that fewer trips need to be taken at contract expense.
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Perhaps the contractor is simply not managing the contract in an efficient manner.
Measures can be taken to alleviate these types of problems.
However, if corrective action will not prevent the funding from being depleted
before the end of the period of performance, decisions regarding additional funding or
reducing the scope of the contract will have to be made. This should be done as early as
possible, and the decisions will have to be made jointly between the Contracting Officer
and the Project Officer.
All cost-reimbursement contracts contain a clause entitled "Limitation of Cost,"
which limits the Government's obligation to the amount set forth in the contract. (See
page 341 for text.) It also relieves the contractor of the obligation to proceed any
further once the estimated cost has been expended. (When the contract is incrementally
funded, the "Limitation of Funds" clause governs, relieving the contractor from
proceeding once the amount funded is exhausted. See page 343 for text.) And, both
clauses require the contractor to inform the Contracting Officer immediately when 75%
of that amount will be exceeded within the next 60 days, or any time he or she believes
that the total cost for performance will be either greater or substantially less than had
been included in the contract. This notification allows the Government to avoid a crisis
by making a decision about what to do before the funds are actually depleted.
If a contractor's costs exceed or are expected to exceed the estimated cost in the
contract, the contract is in a cost overrun situation. Legally, by the terms of the
contract, the Government is not obliged to pay the overrun if the contractor has failed to
notify the Contracting Officer. Formal notification of a possible overrun is required by
the "Limitation of Cost" or "Limitation of Funds" clause. However, if the Government has
other ways of being aware of the situation (e.g., through monthly reports or vouchers),
and by silence or other action encourages the contractor to continue working, the courts
and the Boards of Contract Appeals have ruled that such action (or inaction) effectively
obligates the Government to reimburse the contractor for the additional costs.
Therefore, Project Officers must take precautions to refrain from encouraging any
continuance of work once funds have been exhausted.
11.2 Time-and-Materials, Labor-Hour, and Fixed-Rate for Services
Contracts
The monthly reporting requirements for time-and-materials, labor-hour, and
indefinite delivery/indefinite quantity fixed-rate services contracts differ somewhat
from those for cost-reimbursement contracts. The following information is required to
be included:
(1) Cumulative costs and labor hours expended from the effective date of the
contract through the last day of the current reporting month.
(2) Actual costs and labor hours expended during the current reporting month.
(3) Estimated costs and labor hours to be expended during the next reporting
period.
(4) For indefinite quantity contracts, percentage of work ordered and completed
during the reporting period, actual costs and direct labor hours incurred for
each delivery order issued, and estimates of costs and staff hours required to
complete each delivery order.
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All contracts in this category contain an amount which represents the maximum
liability of the Government, and beyond which the contractor may not charge EPA. A
fixed rate, indefinite quantity contract also contains a minimum amount which is
guaranteed to the contractor unless the contract is terminated. Between the minimum
and maximum amounts, the Government will issue delivery orders for services within
the scope of the contract.
These contracts typically include a provision that establishes the agreed hourly
rate of compensation for each category of labor. The rate includes direct labor costs,
indirect costs, and profit. Estimates of the number of hours to be utilized in each
category are set forth in the contract. The Government may order up to these ceiling
amounts. (When total amounts are set forth in each delivery order, however, they are
treated as ceilings on hours in each labor category.) Each rate also represents a range of
actual salaries within each labor category. This means that the contractor may earn a
different amount of profit based on the salary of the employee actually used to perform
the work. For example, the category average is $15 per hour, but the actual salary
range in this category is $14 - $16. John S. is at the bottom end of the scale making
$14 per hour while Sue T., in the same labor category, earns $16. The fixed rate in
this category is $15 direct labor + $15 (100%) in indirect costs + $2.40 (8%)
profit, or $32.40.
The following breakdown shows what happens to the contractor's profit margin if
the contractor uses the lower paid employee to perform work on the contract:
category average
total fixed rate
direct labor
indirect costs (100%
of direct labor)
profit
$32.40
$15.00
$15.00
$ 2.40
(8%)
John S.
$32.40
$14.00
$14.00
$ 4.40
I SueT.
I
| $32.40
I
| $16.00
I
I
| $16.00
I
| $ .40
| M.25%1
Obviously, it is to the contractor's advantage to utilize John S. on the contract,
because the contractor receives 15% profit instead of 8%. But what does this mean for
the Government? Are we really getting the quality of service we require?
The fact that John S. earns $2.00 less per hour than Sue T. probably indicates
that he is somewhat less experienced, and may require more hours to perform the work,
thereby earning more profit for the contractor. But the contractor has the right to
assign John S. to the contract provided he meets the minimum qualification standards,
and the higher profit incentive means it is likely he will do so. And John's lesser
capabilities may result in more time required on the project. Every additional hour
spent means another $4.40 in profit returned to the contractor. Clearly, the contractor
has no incentive to control the total number of hours expended on a project, provided the
contractor stays within the ceiling of the delivery order. And, since ceilings are often
established based only on the Government's best estimate, they sometimes may not equate
to what the work actually costs.
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For these reasons, adequate surveillance of performance is necessary by both
EPA Project Officers as well as Contracting Officers. It is perfectly acceptable to pay a
visit to the contractor's facility if feasible, and survey the work being performed. The
Contracting Officer should be notified before the visit. Ask for labor records or find out
who is working on the contract. Many contracts require submission of staff resumes.
Monthly financial reports should be studied to spot problems. And invoices or vouchers
should be reviewed for information on each labor category. To avoid reaching ceilings
prematurely, Project Officers should keep a running check on total hours in each
category, both expended and estimated. It is also important to monitor the costs of
travel, materials, and other direct costs. This attention is critical, because if the
contract or delivery order ceiling is reached while a project is still in progress, EPA
may not realize any value from the work. Ceilings cannot easily be raised.
11.3 Financial Management Reviews
The Procurement and Contracts Management Division "Blue Team" often
performs financial management reviews on EPA cost-reimbursement and indefinite
delivery type contracts over $5 million. These reviews, held during the course of
contract performance, focus on the contractor's own financial management and
accounting procedures, including cost control, monitoring of each individual cost
element, payment to subcontractors, etc. The cost analysts who perform these reviews
also examine monthly progress reports and vouchers, and obtain from the contractor an
estimate of cost to complete performance. The reports issued as a result of these
reviews can be a very useful tool in financial management, and will be made available to
the contract Project Officer.
11.4 Cost Management - The Contractor's Job
The information in this chapter is designed to assist Project Officers in the very
important function of contract financial management. With proper attention,
Government funds will not be wasted. The more the contractor realizes that a close
watch is being kept on trie status of the funds and the contract expenditures, the more
incentive there is to be economical, A Project Officer who continually asks questions can
go a long way towards preventing a cost overrun or a depletion of funds before the work
is completed.
When working with contractors to correct problems which have arisen,
however, Project Officers must take care to remember that managing the contract work
is basically the contractor's job. The proper approach is to observe this management
activity, and require the contractor to proceed in an economical or efficient manner. It
is not the Project Officer's function to take over the management of the contract and
substitute his or her own judgment for the contractor's. If inefficient or wasteful
methods are being used by the contractor, report it to the Contracting Officer.
11.5 Voucher Certifications And Payments To Contractors
As stated in Chapter 2, the fundamental obligation of the Government is to make
payment to the contractor for supplies or services delivered and accepted. Processing of
payments begins with the submission of invoices or vouchers by the contractor.
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11.6 Project Officer Responsibilities
It is the Project Officer's responsibility to verify contractor invoices/vouchers.
Government personnel have a responsibility to process these documents for payment in a
timely fashion. Undue delay can cause financial hardship for the contractor and can
result in the case of fixed price contracts, in the Government's having to pay interest to
the contractor, as provided in the Prompt Payment Act (See section 11.8, below). All
vouchers should be certified and submitted to the Financial Management Division - RTP
(FMD-RPT) by the Project Officer within one (1) week of receipt.
The Project Officer's involvement in the processing of vouchers and invoices
differs depending upon 1) the type of contract, 2) the payment provisions of the
contract, 3) what is being purchased, and 4) the types of appropriations and accounts
which make up the funding on the contract. The following is an explanation of the
difference in the requirements:
(1) Provisional Payments Under Cost-Reimbursement Contracts and Fixed
Rate for Services Indefinite Delivery/Indefinite Quantity Contracts:
Provisional Payments are made subject to final audit to determine the
allowability, alienability, and reasonableness of the costs paid under cost-
reimbursement contracts, and to verify the accuracy of charges under
indefinite delivery/indefinite quantity contracts. The following are Project
Officer responsiblities for the processing of invoices/vouchers under these
types of contracts.
(a) Immediately upon receipt of the Project Officer Invoice Approval
Form (see EPA Form 2550-19 on page 332) from the FMD-RTP, the
Project Officer determines whether the payment request is
commensurate with the items delivered and/or services performed by
the contractor. This may required obtaining verification from Work
Assignment Managers and Delivery Order Project Officers. Project
Officer response is required within one (1) week.
(b) When no exception is taken, the Project Officer shall approve and sign
the Form 2550-19 and return it to the EPA Financial Management
Division (MD-32), Research Triangle Park, NC 27719 for further
processing. A copy of the invoice/voucher should be retained by the
Project Officer for the file.
(c) If, during the review, the Project Officer takes exception to any of
the costs being invoiced, he/she must prepare a memorandum setting
forth (a) the reasons for the recommended suspension, and (b) the
amount recommended for payment, and submit it together with the
invoice/voucher, to the FMD-RTP for appropriate action.
(d) At the same time, a copy of the memorandum recommending
disallowance or suspension, and a copy of the invoice/voucher, should
be forwarded to the Contracting Officer, who will investigate the
problem and determine the amount due and payable. If any deductions
are taken, the Contracting Officer will notify the FMD-RTP and the
contractor in writing.
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NOTE: Approval should not be given for payment of the entire minimum quantity
under indefinite delivery/indefinite quantity contracts unless the Project
Officer has verified that the minimum has been ordered and delivered.
(2) Completion Voucher. Cumulative Claim and Reconciliation Under
Cost-Reimbursement Contracts:
The completion voucher is submitted when the contractor has incurred all
costs under the contract. It is a provisional voucher designated
"completion" and initiates an audit of all costs incurred under the contract.
This voucher summarizes all direct and indirect costs incurred under the
contract. The Project Officer shall process completion vouchers in exactly
the same manner as provisional vouchers, as set forth above.
(3) Lump Sum Payments for Services. Supply, and Equipment Under Fixed-
Price Contracts:
(a) The Project Officer reviews the invoice and ascertains that the
contractor has performed and/or delivered all services and/or
materials contracted for; and that the Gbvernment has conducted final
inspection of, and has accepted, all contract services and/or materials.
(b) When no exceptions are taken, the Project Officer signs the Project
Officer Invoice Approval, EPA Form 2550-19, and returns it to the
FMD-RTP, retaining the copy of the invoice for the file.
(c) If, during the review, the Project Officer takes exception to any of
the services or items being invoiced, he/she must prepare a
memorandum setting forth (a) the reasons for the recommended
disallowance or suspension, and (b) the amount recommended for
payment, and submit it, together with the invoice, to the FMD-RTP for
appropriate action.
(d) At the same time, a copy of the memorandum recommending disallow-
ance or suspension, and a copy of the invoice/voucher, should be
forwarded to the Contracting Officer, who will investigate the problem
and determine the amount due and payable. If any deductions are taken,
the Contracting Officer will notify the FMD-RTP and the contractor in
writing.
(4) Progress and Partial Payments for Services. Supplies, and Equipment
Under Fixed-Price Contracts:
Partial payments refer to those made when a part of a fixed-price contract
is delivered, accepted, and paid. Progress payments are payments made
under fixed-price contracts that are based on the progression of work.
(Progress payments on fixed price contracts are only authorized if the
contract states for what the payment will be made, and if the work is
"priceable.") Payment for an order under an indefinite quantity contract is
similar to a partial payment under a fixed price contract, as the Government
is paying for a specified number of hours at the fixed rates in the contract.
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(a) The Project Officer reviews the invoice to ascertain that all
services and/or items billed have been satisfactorily performed and/or
received, inspected, and accepted by the Agency.
(b) When no exceptions are taken, the Project Officer approves and signs
the Project Officer Invoice Approval (EPA Form 2250-19) and returns
it to the FMD-RTP, retaining a copy of the invoice for the file.
(c) If, during the review, the Project Officer takes exception to any of the
services or items being invoiced, he/she must prepare a memorandum
setting forth (a) the reasons for the recommended disallowance or
suspension, and (b) the amount recommended for payment, and submit
it, together with the invoice, to the FMD-RTP for appropriate action.
(d) At the same time, a copy of the memorandum recommending disallow-
ance or suspension, and a copy of the invoice/voucher, should be
forwarded to the Contracting Officer, who will investigate the problem
and determine the amount due and payable. If any deductions are taken,
the Contracting Officer will notify the FMD-RTP and the contractor in
writing.
(5) Progress Payments Under Fixed-Price Contracts for Construction:
(a) The Project Officer reviews the invoice and ascertains that all services
and/or items invoiced have been satisfactorily performed and/or
delivered by the contractor and accepted by the Agency.
(b) If no exceptions are taken to the amount invoiced, the Project Officer
shall (a) sign the Project Officer Invoice Approval (EPA Form 2550-
19), signifying agreement with the amount invoiced, and (b) forward
the approved Notification form and the original and three copies of the
contractor's invoice to the Contracting Officer (not the finance office)
for further processing, retaining the fourth copy of the invoice for the
file.
(c) If, during the review, the Project Officer takes exception to any of the
work being billed, he/she should prepare a memorandum setting forth
(a) the reasons for the recommended disalllowance or suspension, and
(b) the amount recommended for payment, and submit it, together with
the invoice, to the Contracting Officer for appropriate action.
(6) Final Payments Under Fixed-Price Contracts for Construction.
The Project Officer approves the final invoice when the following conditions
have been satisfied:
(a) Final inspection has been made.
(b) All work, including the correction of punch list items, has been
accepted by the Government. The Project Officer then certifies and
dispatches invoice copies in accordance with (5) above.
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(7) Provisional Payments Under Time-and-Materials and Labor-Hour
Contracts.
(a) Immediately upon receipt of the Project Officer Invoice Approval
(EPA Form 2550-19) from the FMD-RTP, the Project Officer conducts
a review of the invoice and determines whether the payment request is
commensurate with the services performed and materials delivered by
the contractor. Project Officer response is required within one (1)
week.
(b) When no exception is taken, the Project Officer shall approve and sign
the Form 2550-19 and return it to the servicing finance office for
further processing. A copy of the invoice/ voucher should be retained
by the Project Officer for the file.
(c) If, during the review, the Project Officer takes exception to any of the
services or items being invoiced, he/she must prepare a memorandum
setting forth (a) the reasons for the recommended disallowance or
suspension, and (b) the amount recommended for payment, and submit
it, together with the invoice/ voucher, to the FMD-RTP for appropriate
action. At the same time, a copy of both the memorandum and the
voucher should be forwarded to the Contracting Officer, who will
determine the amount due and payable.
Project Officers should use EPA Form 2550-19, Project Officer Invoice
Approval (Page 332) to specifically state the account numbers to be charged by amounts
on the invoice. If the entire invoiced amount is to be charged to a single account, that
account number must be stated. If the invoice is detailed by work assignment totals and
each total is charged to only one account, it is acceptable to provide the account number
next to the work assignment amounts on the invoice itself. Where multiple accounts are
involved, however, the amount to be charged to each account must be noted on the form.
Any partial payment instructions must be accompanied by an explanation.
11.7 Guidelines for Suspension or Disallowance of Amounts Invoiced
Under the provisions of a cost-reimbursement contract, the contractor is paid
all allowable, allocable, and reasonable costs up to a pre-determined contractual
maximum in return for its best efforts to perform the work. The costs incurred by the
contractor in performing the work must be allowable, allocable, and reasonable as
defined in the Federal Acquisition Regulations. In addition, cost expenditure must be in
accordance with any special provisions of the contract,
The Project Officer, in reviewing costs submitted under a cost-reimbursement
contract, must examine them from the perspective of whether the expenditure is
attributable to the contract and what a prudent businessperson would pay under like or
similar circumstances. The Project Officer may recommend suspension of the cost(s)
and recommend payment of the vouchers less the suspended cost. Prior to recommending
suspension of costs, every effort within the time allowed should be made by the Project
Officer to obtain from the contractor the rationale! and back-up supporting the
expenditure. Lacking either the back-up or an acceptable rationale, the suspension
should be recommended.
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The contractor knows that while it has the right to manage the work effort, EPA
has the right to "disallow" costs that are unreasonable in nature or amount. This can be
a powerful means of persuading a contractor to manage efficiently. This right, which is
different from a suspension, can be exercised only by the Contracting Officer. A
disallowed cost is one where the Contracting Officer has made a final determination that
the Government will not pay the cost. When a contractor is aware that Project Officer is
keeping an eye on costs and may raise questions, there is a greater incentive to manage
the work effort economically. Indefinite Delivery, Time-and-Materials and Labor-Hour
contracts contain already agreed-to costs per labor hour. However, even though the
Government is generally obligated to pay for all hours incurred in good faith for contract
performance, the Project Officer still may question the contractor where it appears that
excessive labor hours are being used, or higher than required levels of personnel are on
the job.
The only time an exception should be taken on an invoice under a fixed price
contract is if the items were not delivered, services were not rendered, or the items or
services were not accepted by the Government. Otherwise, the contractor is ultimately
due the full fixed price of the contract, whether paid on a partial, progress, or lump sum
basis.
11.8 The Prompt Payment Act
The Prompt Payment Act (Public Law 97-177) was designed to encourage
Federal agencies to pay their bills on time. Amendments to the Act incorporating
clarifications and revisions went into effect for all payments made after April 1, 1989.
The Act and its Amendments authorize the charging of an interest penalty when payments
are made after 30 days from receipt of an invoice or when discounts are taken after the
discount period has expired. For this reason, any delays by Project Officers in
processing invoices might cause an interest penalty to be assessed against EPA. Any such
interest will be paid out of the appropriate program funds.
Although provisional, advance, and progress payments made during performance
of a contract are not subject to interest on overdue payments, prompt payment requires
the Agency to pay all vouchers within 30 days after receipt. Interest charges can only be
assessed on partial or lump-sum payments under fixed price contracts and final
vouchers under cost-reimbursement and fixed-rate indefinite quantity contracts when
payment is made late. Nonetheless, all employees handling vouchers should be mindful to
make payment within 30 days of actual receipt of an invoice or the payment due date.
On construction contracts, however, EPA is required to pay interest on progress
payment requests that are not paid within 14 days, unless a longer period has been
specified in the contract to enable the Government adequate opportunity to inspect the
work. EPA is also required to pay interest on any amounts which EPA has retained under
a prime contract clause providing for retaining a percentage of progress payments that
are approved for release, if payment is not made by the contract date or by the 30th day
after final acceptance. Interest is also due on all final payments or partial payments
made a) after the 30th day after receipt of a proper invoice, or b) after the 30th day
after Agency acceptance of the completed work or services.
Interest payments also do not accrue when payment is delayed because of a dispute
between EPA and the contractor over the amount of payment or other issues regarding
compliance with contract terms. However, the appropriate disputes procedures must be
followed and the Contracting Officer.
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If the contractor specifies a discount date on the invoice, EPA may take the
discount whenever economically justified, but only after acceptance has occurred. EPA
may not take the discount after the time specified by the contractor.
11.9 Processing Payments
Submission of invoices or vouchers with documentation supporting the
contractor's cost claims starts the payment process. Listed below are a few suggestions
which will help you, as Project Officers, to expedite the payment process:
1. Assign an alternate Project Officer who can fill in for you during your
absence. This can be accomplished by designating an alternate project officer in a
memorandum, sending the memorandum to the Contracts Office and a copy to FMD-RTP
and the alternate project officer.
2. Use E-mail and/or telefax media to communicate with FMD-RTP. In an
emergency situation, FMD-RTP will accept a telefax copy of the signed approval form.
The original invoice/voucher and approval form, however, must be forwarded to FMD-
RTP prior to actual payment to the contractor. FMD-RTP's E-mail ID is "EPA 3195
(RTP.CAP)." The telefax number is FTS 629-7971, or commercial (919) 541-7971.
3. If for some reason an invoice/voucher is "invalid," and the entire amount
must be rebilled by the contractor, do not return the invoice/voucher to the contractor.
Immediately notify FMD-RTP via phone or E-mail, and return the invoice/voucher to
FMD-RTP. FMD-RTP will return the invojqe to the contractor and delete it from the
delinquent file.
4. Contact FMD-RTP "Customer Assistance Office" immediately should you have
any questions. This staff is responsible for serving your needs. Hours of operation are
from 7:30 AM to 5:30 PM EST/EDT each workday. For your convenience, off hour
messages can be left through a phone service. This number is FTS 629-1148, or
commercial (919) 541-1148.
The Contracting Officer reviews all invoices/vouchers recommending suspension
to determine what costs should be allowed or paid. Where the contract provides for
reimbursement of indirect costs at negotiated rates, costs must be examined to assure
that there is no duplication of costs between direct and indirect cost items.
The degree of the Contracting Officer's examination depends on the circumstances.
Payment for questionable items can be suspended by the Contracting Officer pending
resolution, and over- and under-payment can be subsequently adjusted. Especially
under the Prompt Payment Act Provisions, it is important that the Project Officer
promptly advise the Contracting Officer of any concerns regarding an invoice or voucher
provided for review prior to payment.
The Contracting Officer has the authority to suspend payment while problems are
being resolved. (It should be noted that the interest penalty provisions do not apply to
progress, advance or provisional payments made to the contractor, but do apply to the
final payment.) The potential adverse impact of the Contracting Officer's failure to
exercise this important right on behalf of the Government was illustrated in a recent
case where a contractor was allowed to recover interest on over $34,000 in holiday pay
expenses as a fringe labor cost on the basis of its proof that holiday pay was
contractually excluded from overhead rates as an indirect cost. In part, the contractor's
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proof was based on the fact that the Project Officer responsible for approval and
certification of invoices routinely approved requests for holiday pay during more than
half the contract's duration. This case illustrates the need for clear expression of
contract provisions regarding costs, complete understanding of such provisions by
persons authorized to approve and certify invoices, and immediate communication
between the Contracting Officer and his or her authorized representative in the event of
any questions.
A detailed audit is conducted, in most cases, prior to final payment of cost-
reimbursable contracts. The Contracting Officer will seek clarification and justification
of any items of cost questioned by the audit. The Contracting Officer should make the
final decision, under the "Disputes" clause, to resolve the matter if agreement cannot
otherwise be reached. Acceptance of final payment releases the government from any
claims against it by the contractor. However, the government should also obtain a signed
release from the contractor.
11.10 Monitoring and Control of Government Property
Many government contracts do not involve any government property. In some
contracts, however, monitoring the purchase, use and disposition of government
property is a significant financial responsibility and needs be taken quite seriously by
the government monitor.
There are a number of activities involved in monitoring and controlling
government property in the possession of contractors which require Project Officer
involvement. These are summarized below:
(1) Review of Reimbursement Vouchers
Vouchers submitted by the contractor under cost-reimbursement contracts
are forwarded to the Project Officer by the Financial Management Office for
review and approval of contractor-acquired Government property as well as
other costs claimed. A copy of any such voucher must also be forwarded by
RPT to the Property Administrator as a means of notification of equipment
receipts. All direct charges to the contract for acquisition of nonexpendable
equipment and material must have been previously authorized within the
contract.
Such acquisitions must be individually itemized on EPA Form 1730-1,
"Report of Nonexpendable Government Property Acquired By Contractor", to
show the required personal property management information. (See sample
in Appendix and on page 350.) Those items acquired but not authorized
under the contract should be brought to the attention of the Financial
Management Office, the Contracting Officer, and the Property Administrator.
If the Project Officer determines that an acquisition was not required nor
authorized for the performance of a contract, he should recommend to the
Contracting Officer and Financial Management Office that the contractor not
be reimbursed for the purchase.
(2) Inventories
(a) The Property Administrator requires annual, final, or if necessary,
special inventories from contractors having contracts under which
property has been furnished or acquired. The inventory is performed
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by the contractor and includes property associated with particular
contracts. The process includes reconciling the inventory with the
Property Administrator's records.
Annual inventories include all accountable property (i.e., nonexpendable
personal property with an acquisition cost of $1000 or more and
sensitive items costing $300 or more) acquired, furnished, and/or
rented/leased. Final inventories also include accountable items, as well
as expendable items not consumed during the performance of the
contract, regardless of their value. The amount of accrued lease credits
for leased property are included on the final inventory. A copy of the
final inventory is furnished by the Property Administrator to the
Project Officer for disposition recommendation. Annual and special
inventories are available to the Project Officer on request. The Project
Officer may recommend that the Agency:
(i) reassign the inventory or a part thereof to another contract;
(ii) reassign inventory to a licensee by means of a Revocable
License Agreement for a loan;
(iii) have the inventory returned to the sponsoring program; or
(iv) report the inventory as excess to the needs of the
sponsoring program.
If the property is installed so as to necessitate removal and/or
restoration, the contractor should provide the Property Administrator
with estimated costs of removal and restoration and with a list of actions
required (e.g., disconnection of utilities, use of crane, special handling
equipment, etc.). The Project Officer should advise the Property
Administrator of any and all unusual circumstances related to the
inventory. For example, is the property contaminated or unsafe for
further use? Do any odors exist that could prohibt further use? How is
the property installed (underground, in a body of water)?
(3) Inspections
(a) During site visits, the Project Officer should ascertain or verify the
status of both contractor-acquired and/or Government-furnished
property that is in the possession of the contractor. The Project Officer
should also assure that the contractor has affixed Agency property
number decals to Government equipment in the contractor's possession.
In addition, a positive determination should be made that the property is
being used according to the contract performance requirements and is
still needed for performing the contract work. (Note: Equipment not
required for performance is to be reported by the contractor to the
Property Administrator for coordination with the Project Officer as to
future needs.) If equipment is not required, the Project Officer may
recommend it be: (1) assigned to another EPA contractor, (2) assigned
to a licensee through a Revocable License Agreement; (3) returned to
the sponsoring program; (4) made available to another EPA program; or
(5) declared excess to the program needs.
(b)
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(b) The Property Administrator will coordinate all disposal transactions
with the contractor after receiving written instructions from the
Contracting Officer and advice from the Project Officer.
(4) Preventive Maintenance
Project Officers should verify that preventive maintenance is performed on
a regularly scheduled basis by the contractor in accordance with approved
property system procedures to prevent malfunctions and to correct minor
defects before they result in serious consequences. An effective preventive
maintenance program must be established by the contractor, and records
must be maintained to disclose the maintenance actions performed and
deficiencies discovered as a result of inspections.
(5) Changes. Modifications, or Alterations to Property by Contractors
(a) A Project Officer desirous of requiring or allowing a contractor to
modify or alter property in the contractor's possession should request
authorization from the Contracting Officer before the actual transaction.
The Property Administrator will present the contractor/Project
Officer's request to the Contracting Officer to a three-member panel for
approval.
(b) Contractors may not modify or alter any property until written
approval is received from the Contracting Officer. Contractors may be
liable when Government property is damaged or destroyed, or when
there is evidence of unreasonable use or consumption.
(6) Return/Transfer of Property
(a) If property is to be returned to the Government before completion
of the contract, both the Contracting Officer and the Property
Administrator must be advised promptly in writing before the
transaction occurs so that an adjustment in accountability is made to the
contract.
(b) If the need arises to transfer an item of property from one contract
to another, the Contracting Officer and the Property Administrator for
both contracts must be advised in writing before the transaction occurs
so that all records (both contract and property) can be modified.
Detailed property information should be included in the correspondence
to assure that the proper item is transferred.
(7) Trade-in of Property
The contractor should first discuss the need or reason for a trade-in of
property with the Project Officer. If there are no reasonable alternatives,
such as reassignment of the needed item from in-house inventories to the
contractor, the Project Officer should advise the contractor to acquire quotes
for purchase prices with and without trade-in. Once the quotes are acquired,
they should be submitted to the Contracting Officer for review and approval.
The Contracting Officer may review the transactions with the Property
Administrator to determine whether outright purchase or purchase with
PCMD 9/89
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trade-in option is the most beneficial to the Government. Once the
Contracting Officer determines the appropriate method, a contract
modification will be issued to authorize the contractor to acquire the
property.
(8) Lost. Stolen, or Damaged Property
When accountable equipment is lost, missing, or damaged, a comprehensive
report must be filed with the Property Administrator by the contractor
within three days after the Contracting Officer determines the actual status
of the property. All the circumstances surrounding the transaction should be
outlined, including names of individuals involved in the investigation, their
title, and organization. The local police and the FBI must be advised of any
EPA property suspected of having been stolen. Damaged property should be
retained by the contractor until written notification is received from the
Contracting Officer relieving him of accountability. Attached to the report
for missing property should be copies of police and FBI reports.
A report of lost property should include a statement indicating what search
was made and which responsible individuals were contacted in attempts to
locate the property.
Any given case involving lost, missing or damaged property will be
considered open until the contractor receives a written response from the
Contracting Officer.
(9) Suspension of Payment
Whenever the Property Administrator has problems with the contractor in
acquiring final inventories, information to confirm shipment, or
transactions relating to lost, missing, or damaged items of Government
property, a memorandum will be provided to the Contracting Officer
recommending: (i) withholding of fee, (ii) that a given amount be suspended
from the next voucher; or (iii) that the amount of the item in question be
denied until the problem can be resolved. The Property Administrator will
furnish the Project Officer copies of all correspondence. The Contracting
Officer will notify the Financial Management Office of what action to take
until the problem is resolved.
11.11 Disposal, Return, or Transfer of Government Property
At the end of the contract period of performance, Government-owned property
must be removed from the contractor's possession unless title has been vested in the
contractor or a follow-on contract is awarded. The contractor can purchase the property
from EPA. In most situations the property will either be returned to EPA or transferred
to a new contractor. However, if there is no longer a need for an item, or it is no longer
useable, the Contracting Officer may authorize it be abandoned or disposed of. In all
situations, it is imperative that the Property Administrator be advised of the
recommended disposition of the property. He or she will make the appropriate
arrangements and coordinate with the contractor.
Upon completion, certain contracts require that any Government property which
has been exposed to hazardous or toxic substances must be certified by the Contractor
that it is free of biological, radioactive, chemical or any other contamination hazardous
PCMD 9/89
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to health and that the property is safe for shipment or acquisition by others. The
following certification must be signed by an authorized official of the contractor for each
excess declaration transaction or for the final inventory and forwarded to the Property
Administrator with a courtesy copy to the Project Officer:
PROPERTY CERTIFICATION
I certify that the listed property is free of biological, radioactive, chemical,
or any other contamination hazardous to health and that the property is safe
for disposal or reuse.
Signature
Tie
Date
When the contractor is unable to decontaminate the property for shipment, the
condition shall be identified on the final inventory or by special letter to the Property
Administrator. A copy of such information will be sent to the Project Officer who should
provide information to the Property Administrator recommending further procedure to
process the property. This information will be submitted to the Contracting Officer.
Once the Property Administrator receives disposal instructions from the
Contracting Officer, the contractor will be advised as to how to dispose of the property.
The Property Administrator will determine whether the property is needed within the
Agency or whether it is excess to EPA's needs, and will advise the Contracting Officer.
Sale of Property
Specialized equipment needed for a contract which cannot be used by EPA because
of its specialization may be authorized for purchase by the contractor. A contractor may
be authorized to secure at his expense the services of an independent appraiser,
acceptable to the Government, to evaluate and determine the current on-site, fair
market value of the equipment. The contractor will then credit the contract for the
amount estimated by the appraiser, thereby transferring title to the contractor. These
transactions usually take place at the end of the contract.
Disposal of Installed Personal Property
Installed personal property falls into three categories. The first is property that
can be readily removed from the contractor's facility with simple labor services (i.e., it
is not installed into any utilities, and it requires no restoration). The second category is
property that is installed in the contractor's facility and that requires restoration of the
contractor's premises. The third category is property installed into (i) contractor's
PCMD 9/89
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equipment and/or equipment in the possession of the contractor but owned by another;
(ii) EPA equipment authorized for use under another contract for which the period of
performance has not expired.
A determination regarding restoration of the contractor's facility or equipment
should be made by the Contracting Officer and incorporated into the official contract at
the same time the property is authorized in the contract.
On-Site Transfer of Equipment to a New Contractor
The transfer of Government-owned facilities or property between two
contractors requires extremely close coordination by both the Project Officer and
Property Administrator. Both the present contractor and the new contractor must
conduct their own physical inventories independently of each other and submit their
findings to the Property Administrator for reconciliation and resolution. The inventory
from the present contractor is used as its final inventory, and if completed to the
satisfaction of the Property Administrator, authorization of contract property
administration closeout is granted.
The inventory provided by the new contractor is used to ensure that the
Government-furnished property is accurately stated in the contract and any problems
are resolved with the previous contractor before contract property administration
release. Many contracts involve significant inventories, and it is to EPA's advantage to
ensure that the new GFP listing in the contract is totally correct. Discrepancies between
the old and new contracts may require the issuance of a contract modification to the new
contract to reflect the differences. Project Officers are requested to assist in resolving
any overages and/or shortages reported by either contractor and, if necessary, in the
preparation of supporting documents to determine liability.
PCMD 9/89
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FAC 84-7 APRIL 30,1985
PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES
52.216-7
Contractor -shall provide complete details to support
any claimed reduction in refunds.
(3) If the Contractor fails to submit the quarterly
statement within 45 days after the end of each quar-
ter and it is later determined that the Government
has overpaid the Contractor, the Contractor shall
repay the excess to the Government immediately.
Unless repaid within 30 days after the end of the
statement submittal period, the amount of the excess
shall bear interest, computed from the date the quar-
terly statement was due to the date of repayment, at
the rate established in accordance with the Interest
clause.
!(h) Subcontracts. No subcontract placed under this
contract may provide for payment on a cost-plus-a-
percentage-of-cost basis. The Contractor shall—
(1) Insert in each price redetermination or incen-
tive price revision subcontract the substance of para-
graph (g) above, and of this paragraph (h), modified
to omit mention of the Government and to reflect
the position of the Contractor as purchaser and of
the subcontractor as vendor, and to omit that part of
subparagraph (g)(2) above relating to tax credits; and
(2) Include in each cost-reimbursement subcontract
a requirement that each lower-tier price redetermina-
tion or incentive price revision subcontract contain
the substance of paragraph (g) above, and of this
paragraph (h) modified as required by subparagraph
(1) above.
(i) Disagreements. If the Contractor and the Contract-
ing Officer fail to agree upon redetermined prices
within 60 days (or within such other period as the
parties agree) after the date on which the data required
by paragraph (c) above are to be submitted, the Con-
tracting Officer shall promptly issue a decision in ac-
cordance with the Disputes clause. For the purpose of
paragraphs (e), (0, and (g) above, and pending final
settlement of the disagreement on appeal, by failure to
appeal, or by agreement, this decision shall be treated
as an executed contract modification.
(j) Termination. If this contract is terminated before
price redetermination. prices shall be established in ac-
cordance with this clause for completed supplies and
services not terminated. All other elements of the ter-
mination shall be resolved in accordance with other
applicable clauses, of this contract.
(End of clause)
(AV 7-109.3(b) 1980 FEB)
52.216-7 Allowable Cost and Payment.
[ As prescribed in 16.307(a), insert the following clause:
ALLOWABLE COST AND PAYMENT (APR 1984)
(a) Invoicing. The Government shall make payments
to the Contractor when requested as work progresses,
but (except for small business concerns) not more often
than {once every 2 weeks^in amounts determined to be
allowable* by ilie Lollliacting Officer in accordance
with Subpart 31.2 of the Federal Acquisition Regula-
tion (FAR) in effect oh the date of this contract and
the terms of this contract. The Contractor may submit
to an authorized representative of the Contracting Offi-
cer, in such form and reasonable detail as the repre-
sentative may require, an invoice or voucher supported
by a statement of the claimed allowable cost for per-
forming this contract.
(b) Reimbursing costs. (1) For the purpose of reim-
bursing allowable costs (except as provided in subpara-
graph (2) below, with respect to pension, deferred
profit sharing, and employee stock ownership plan con-
tributions), the term "costs" includes only—
(i) Those recorded costs that, at the time of the
request for reimbursement, the Contractor has paid
by cash, check, or other form of actual payment
for items or services purchased directly for the
contract;
(ii) When the Contractor is not delinquent in
paying costs of contract performance in the ordi-
nary course of business, costs incurred, but not
necessarily paid, for—
(A) Materials issued from the Contractor's in-
ventory and placed in the production process
for use on the contract;
(B) Direct labor;
(C) Direct travel;
(D) Other direct in-house costs; and
(E) Properly allocable and allowable indirect
costs,* as shown in the records maintained by the
Contractor for purposes of obtaining reimburse-
ment under Government contracts; and
(iii) The amount of progress payments that have
been paid to the Contractor's subcontractors under
similar cost standards.
(2) Contractor contributions to any pension, profit-
sharing, or employee stock ownership plan funds that
are paid quarterly or more often may be included in
indirect costs for payment purposes; provided, that
the Contractor pays the contribution to the fund
within 30 days after the close of the peruod covered.
Payments made 30 days or more after the close of a
period shall not be included until the Contractor
actually makes the payment. Accrued costs for such
contributions that are paid less often than quarterly
shall be excluded from indirect costs for paymen
purposes until the Contractor actually makes thu
payment.
(3) Notwithstanding the audit and adjustment o
invoices or vouchers under paragraph (g) below, al
lowable indirect costs under this contract shall bt
obtained by applying indirect cost rates established ii
accordance with paragraph (d) below.
(4) Any statements in specifications or other docu
ments incorporated in this contract by reference des
ignating performance of services or furnishing of mu
terials at the Contractor's expense or at no cost t>
PCMD 9/89
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51216-7
FEDERAL ACQUISITION REGULATION (FAR)
tfae Government shall be disregarded for purposes of
-^£pst-reimbursement under this clause.
F '-) Small business concerns. A small business concern
' be paid more often than every 2 weeks and may
a» • and be paid for recorded costs for items or
set ~
-------
PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES
52.216-10
known to the Contractor on the date of the
execution of the release, and that the Contractor
gives notice of the claims in writing to the Con-
tracting Officer within 6 years following the re-
lease date or notice of final payment date,
whichever is earlier; and
(C) Claims for reimbursement of costs, includ-
ing reasonable incidental expenses, incurred by
the Contractor under the patent clauses of this
contract, excluding, however, any expenses aris-
ing from the Contractor's indemnification of the
Government against patent liability.
(End of clause)
(R 7-203.4
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Chapter 7
Forms and Instructions
Sample EPA Form 1730-1: Supporting Property Costs Claimed on Voucher
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PCMD 9/89
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371
Contractor's Guide for Control of Government Property
-------
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EVALUATING PERFORMANCE
AND DELIVERABLES
AND GIVING FEEDBACK
PCMD 9/89
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CONTRACTOR PERFORMANCE
EVALUATION
1. On-Site Inspections
2. Written Communications
3. Evaluation Of Deliverables
4. Evaluation Of Overall Performance On
Each Work Assignment
5. Summary Evaluation By Project Officer
On Contract As A Whole
PCMD 9/89
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GIVING CONTRACTORS FEEDBACK
ON PERFORMANCE
1. DON'T DELAY! Give Feedback Immediately When
A Problem Is Discovered.
2. BE SPECIFIC: Indicate Specific Problem, Using
Specific Example(s). Be Accurate. Avoid
Generalities. Give Examples Of Correct Performance,
If Possible.
3. KEEP RECORDS: Record Time/Date Of Feedback
And Feedback Given. Record Contractor's
Response. Write Memo To File Following
Feedback Session And Give Copy To Contractor.
4. REINFORCE POSITIVE PERFORMANCE: Give
Positive As Well As Negative Feedback.
PCMD 9/89
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GIVING CONTRACTORS FEEDBACK
ON PERFORMANCE
(Cont.)
5. BE PREPARED: Have Agenda For All Contractor
Meetings; Review Materials In Advance And Have
Comments Ready.
6. DEAL WITH PRIME CONTRACTOR ONLY: Give
Feedback Directly To Prime, Not To Subcontractor.
7. KEEP PROJECT OFFICER/CONTRACTING OFFICER
INFORMED.
PCMD 9/89
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OPTIONS FOR HANDLING DEFICIENT
OR DELINQUENT PERFORMANCE
1. Fixed Price Contracts: Reject Deliverable.
2. Cost Reimbursable Contracts: Discuss Deficiencies
With Contractor. Since The Contractor Only
Guarantees Best Efforts, Government Must Pay
For Reperformance. If Contractor Does Not
Correct Deficiencies, Government Can Suspend
Payment On Future Payments.
3. LOE Contracts: CO Can Disallow Contractor's
Costs If Contractor Ignored Agency's Written
Technical Direction Or Clearly Exceeded Scope Of
Work Requested By Agency (I.e., Contractor
"Volunteered") Or Where Contractor Failed To
Inquire About And Clarify Obvious Ambiguities
Or Acted In Bad Faith.
4. Government Can Claim Liquidated Damages If
The Original Contract So Provided.
PCMD 9/89
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SAMPLE
DELIVERABLE REVIEW FORM
Contract*.
Del. Order/Work Assignment*.
Deliverable Due Date:^
Date of Receipt:
Deliverable Number & Title:
Description of Deliverable (Exact Contract Specifications)
(Attach if more space needed)
Decision: [] Accepted [] Rejected (See Comments)
[ ] Amendment Proposed (See Comments)
Comments:
1. Were all specifications met, to the desired level of
quality? If not, what is missing?
2. Was deliverable timely? If not timely, did delay make
deliverable of reduced value to government? Why was
it not timely?
3. What, if any, changes are needed to meet specifications
or improve quality or usefulness?
4. Will any changes requested/desired affect the
contractor's scope of work or constitute a contract
or work assignment modification?
Reviewer:
Date Reviewed:
PCMD 9/89
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379
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REVOCATION OF
ACCEPTANCE
(Fixed Price)
EPA May Revoke Acceptance Of A Deliverable
On The Following Conditions:
Latent Defects
Contractor Fraud
Gross Mistakes
Guarantees Or Warranties Provided By
Contractor That Are Not Met
PCMD 9/89
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WAYS TO IMPROVE
CONTRACTOR PERFORMANCE
1. Use Of Fixed Price Contracts
2. Refusal To Accept Deficient Performance
(Services Or Deliverables); Requiring Reper-
formance With No Additional Fee
3. Refusal To Pay Contractor Invoices Pending
Correction Of Deficiencies
4. Effective Feedback On Performance;
Appropriate Use Of Praise Or Criticism
5. Careful And Thorough Contract Monitoring
6. Periodic Performance Evaluations
7. Exercising Of Contract Option Years
8. Use of Award Fee Contracts
PCMD 9/89
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E.XHI3I7 V-4
ERCS CONTRACTOR PERFORMANCE SUMMARY
OSWER Directive 9242.2-011
(10/87)|
PAGE I Of ;
t CONTRACT NO.
2. DELIVERY ORDER NO.
4 DELIVERY ORDER CBUNG AMOUNT:
i ISSUED TO: CONTRACTOR l/Wwrw. AOOrm* vxl & CtxMI
3. EPA REGION/USCG DISTRICT:
S.ZONE:
7. RESPONSE LOCATION: [Sin N*nt. Jkaant* «tf Lo Codtt
• RESPONSE MANAGER: (Mwnt «M fHem Ato.)
9. ON-SCENE COORDINATOR: l/Wwn* «mf MOM Ma.)
10, OESCRliE SCOff Or WORK:
11. PERSONNEL ANO EQUIPMENT ON SITE WITHIN REQUIRED RESPONSE TIME? COMMENT:
12. WORK PERFORMED IV: ERCS CONTRACTOR
SUBCONTRACTOR («•«•»
13. INITIAL COST ESTIMATE:
RNAL COST: ^_____
14. ANY PROBLEMS RESULTING FROM
USI OP SUICONTMACTOR7
19. REASONS FOR COST SAVINGS/ OVERRUN. IP ANY:
It. EVALUATION OP CONTRACTOR'S COST CONTROLS:
17. DAILY COST REPORTS:
CURRENT.
ACCURATE
V-17
PCMD 9/89
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_„„,.___ .,„,,, . OSWER Directive 9242.2-01B
EXHIBIT V-4 (Continued) (10/87)
PAGE 2 Of 2
ERCS CONTRACTOR PERFORMANCE SUMMARY
CONTRACT NO.
DeUVEnT OHDen NO.
IS. PERSONNEL ANO EQUIPMENT USED IN AN EFFICIENT MANNER? COMMENT:
20. INTERACTIONS IETWEEN ERCS CONTRACTOR ANO OTHER ON-SCENE PERSONNEL I/'.*. TAT. fi£M/ftT.
COOOO C SATISFACTORY C UNSATISFACTORY COMMENT:
21. NECESSARY SAFETY PRECAUTIONS TAKEN? w YES C NO COMMENT:
22. UNUSUAL MOSLEMS/OCCURRENCES AFFECTING CONTRACTOR'S PERFORMANCE:
23. OVERALL ASSESSMENT OF CONTRACTOR'S PERFORMANCE:
Nta» at On-Scv*
V-18
PCMD 9/89
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EPAAR Clause
AWARD FEE (APR 198A)
The Mount of award fee the Contractor earns, if any, is based on •
subjective evaluation by the Government of the quality of the Con-
tractor's performance in accordance with the award fee plan. The
Government will determine the amount of award fee every
months beginning The Fee Determination Official
(FDO) will unilaterally determine the amount of award fee. The FDD's
determination will be in writing to the Contractor and is not subject
to the "Disputes" clause. 'The Government may unilaterally change the
award fee plan at any time and will provide such changes in writing to
the Contractor prior to the beginning of the applicable evaluation
period. The Contractor may submit a voucher for the earned award fee.
Available award fee not earned during one period does not carry over to
subsequent periods. ,
PCMD9/89
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COST PLUS AWARD FEE (CPAF)
CONTRACTING
Elements of a CPAF Contract:
1. ESTIMATED =
COST
2. BASE FEE =
3. AWARD FEE =
POOL
Negotiated Cost
Fixed Dollar Amount - Normally
3% Or Less
Based On Negotiated Estimated
Costs X (.07). Maximum Amount
Available To Award Good Perfor-
mance - Normally 7%
(Base And Award Fee Amount Normally Does
Not Exceed 10% Of The Estimated Cost.)
PCMD 9/89
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S SAMPLE
I COST PLUS AWARD FEE (CPAF) CONTRACTING
Fee Allocation Matrix
Contract No: Contractor:
EVALUATION
CATEGORY:
Sampling & Analysis
Emergency Response
Technical Support
Data Security/Risk Analysis
Program Management
Total Available Dollars
PERFORMANCE EVALUATION PERIODS
1
10%
20%
10%
10%
50%
$30K
2
30%
20%
10%
10%
30%
$35K
3
35%
20%
10%
10%
25%
$25K
4
30%
20%
15%
10%
25%
$20K
5
30%
20%
15%
10%
25%
$20K
6
25%
20%
20%
10%
25%
$35K
7
25%
20%
20%
10%
25%
$35K
8
20%
20%
25%
10%
25%
$30K
ro
N>
Approved:
Date:
u
00
en
Chairman, Performance Evaluation Board
PROCUREMENT AND CONTRACTS MANAGEMENT DIVISION
-------
"0
o
o
(O
8
CPAF CONTRACT PERFORMANCE REPORTING
REVIEW AND EVALUATION PROCEDURE
Letter of Performance And Award
FEE DETERMINATION OFFICIAL (FDO)
* Performance Of Evaluation Report
* Fee Award Recommendations
CONTRACTOR
PERFORMANCE EVALUATION BOARD (PEB)
ro
* Event Summary (Form No. 1900-41 A)
* All Reported PE's (Periodically)
CONTRACTOR
EVALUATION COORDINATOR
* Individual PE Report
(Form No. 1900-41B)
Contractor's Reports Of
Individual Performance
Events
j [
1
[
i
i
u
00
Performance Monitors
PROCUREMENT AND CONTRACTS MANAGEMENT DIVISION
-------
CPAF CONTRACT INDIVIDUAL PERFORMANCE EVENT
CONTRACT NO.
CONTRACTOR
TASK ORDER NO.
REPORTING ELEMENT
DATE OF REPORTED EVENT
PERFORMANCE EVALUATION CATEGORY
WAS CONTRACTOR NOTIFIED ?
CZ] YES
NO
BY WHOM?
WHEN?
DESCRIPTION OF PERFORMANCE EVENT
MONITOR
SIGNATURE OF MONITOR
DATE
COORDINATOR'S ASSESSMENT
COORDINATOR
SIGNATURE OF COORDINATOR.
DATE
PCMD 9/89
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•o
o
D
(O
§
10
i
_i.
01
DEFINITION OF PERFORMANCE
The Performance Monitors will observe the following definitions of
Contractor performance in reporting and judgijng observations:
(1) Superior
(2) Satisfactory
(3) Subtandard
The observation is
indicative of performance
which exceeds the
satisfactory level.
The observation is
indicative of an acceptable
level of performance.
The observation is
indicative of performance
which is less than satisfactory.
PROCUREMENT AND CONTRACTS MANAGEMENT DIVISION
to
03
(O
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Chapter 12
EVALUATING PERFORMANCE AND DELIVERABLES AND GIVING FEEDBACK
What is the Government's remedy if the contractor is not performing properly,
in accordance with the terms of the contract? What should a Project Officer do if he or
she is not satisfied with an intermediate deliverable, or the final work product? How do
we handle a deficiency discovered after acceptance of an item? The answers depend upon
the type of contract involved and the specific provisions contained therein, as well as the
actions of the Government during the course of contract performance. If the contract is a
firm-fixed-price type, the contract is usually very clear on the rights and
responsibilities of the parties. But in a contract for research and development, for
example, where the Statement of Work is vague, the situation may involve the exercise
of judgment and discretion by the Contracting Officer. If the contract is a cost-plus-
award-fee contract, an intermediate performance evaluation can send the contractor a
clear financial message.
12.1 Evaluating Contractor Performance
There are a variety of ways and points in the life of a contract to formally
evaluate contractor performance. One method, the conduct of inspections, was discussed
earlier in Chapter 10. Conduct of an on-site inspection is appropriate whether the
contractor is providing a service or a deliverable.
Evaluation of deliverables is a second means of formal contractor evaluation.
Formal evaluation should also take place at the conclusion of each work assignment or
delivery order, as well as at the conclusion of the entire contract. And finally, for very
large and long contracts, a schedule of periodic formal evaluation may be built in. Award
fee contracts incorporate such a periodic evaluation.
12.2 Giving Contractors Feedback On Performance
The importance of prompt Government action if potential deficiencies are
discovered during the contract performance cannot be stressed enough. The longer
problems drift along, the worse they tend to get, the more difficult and time-consuming
they are to resolve, and the greater the chance exists that the Government may lose its
contractual rights. The goal in contract monitoring is to be aware of all situations
arising under the contract. Proper and timely action on the part of technical personnel
gives the Government the time and opportunity to make decisions and adjustments as
problems arise.
Several common-sense rules apply in giving contractors feedback on
performance.
a. Don't Delay. First and foremost, feedback should be immediate. Once a
problem is discovered, act immediately to document the problem and inform
the contractor.
b. Be Specific. In giving feedback, indicate the specific problem, using specific
examples. Don't use generalities. If possible, give positive examples of the
desired performance, preferably drawn from the contractor's existing work to
date. Be sure to be accurate.
PCMD 9/89
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c. Keep Records. Document the time and date the feedback is given, and the
nature of the feedback, as well as the contractor's response. Write a memo to
the record following the feedback session, and give a copy to the contractor.
(Or ask the contractor to summarize it for you. But if you do, be sure to
verify its accuracy.)
d. Reinforce Positive Performance. Positive feedback reinforcing the desired
performance Is extremely important, particularly when it comes to making
the contractor aware of exactly what the Government wants, and creating good
communication with the contractor. Be sure to reinforce the positive work the
contractor has done along with pointing out the deficiencies.
e. Be Prepared. Before contractor meetings, prepare an agenda, and be sure
to have reviewed all materials for the meeting and have comments prepared.
Identify in advance (for yourself and the contractor) what the objective of the
meeting is, and what you want to accomplish.
f. Deal Only With The Prime Contractor. Unless there is a contractual exception
(e.g., as there may be with some Superfund contracts), give feedback only to
the prime contractor, even if the feedback relates to subcontract work. It is
the prime's responsibility to communicate feedback to its subcontractors.
g. Keep The Contracting Officer Informed. When there are deficiencies in
contractor performance to be communicated, be sure to inform the Project
Officer for the contract, as well as the Contracting Officer. Both can advise as
to the appropriate way to proceed. And it certain cases, it may be their
responsibility to proceed rather than yours.
12.3 Deficiencies Discovered During Performance
Contractors guarantee their performance in fixed price contracts. Fixed price
contracts for supplies generally call for inspection during performance. If this takes
place, and an item is found to be defective, it will be rejected immediately and the
contractor notified. New items will have to be produced. If this is not done or they are
still defective, or if future delays can be clearly foreseen the contractor will be
formally notified that the Government considers this a condition endangering
performance, and the contract may be terminated for default if the problem is not
corrected. Hopefully, this will be sufficient to get performance back on track. If not,
the Contracting Officer has the option of termination for default (see Chapter 14) or of
accepting the items which are late or defective at a reduced price or in exchange for some
other form of consideration.
Under a cost-reimbursement contract, the contractor is required only to use his
best efforts to perform the work. Quality is a subjective opinion, and the statement of
work does not always clearly express what the Project Officer had in mind when
envisioning the work results. For this reason, diligent contract monitoring is
important. Early discussion with the contractor in order to redirect the effort can help
avoid delivery of services which are of poor quality. In most cases, the contractor will
be responsive to this approach and will voluntarily take action to improve performance.
When a Project Officer discovers that a contract requirement is not being met, he
or she should call attention to the discrepancy and first seek a voluntary commitment by
the contractor to take remedial action. The Contracting Officer must be notified
PCMD 9/89
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immediately, and follow-up action is necessary to ensure that the deficiency has been
corrected.
In cases where the contractor disputes the existence of the discrepancy, claiming
the requirements of the contract are, in fact, being met, the Government must determine
the grounds for the contractor's claim. This must be in writing, and must involve the
Contracting Officer at the earliest stage possible. If the Project Officer believes the
contractor's position is wrong or unreasonable, he or she should inform the Contracting
Officer in writing, and the Contracting Officer will make a decision. If the contractor
disagrees, the matter will become a Dispute. (See Chapter 14.)
Failure to perform on time is another possible deficiency to watch for.
Depending upon the situation, when a delay is anticipated, there might be alternative
actions available. Work may be accelerated by applying greater resources, e.g.,
personnel, overtime, or equipment. (The availability of resources and money must be
determined by the program office.) At times, a new technical approach or system may
be used to solve the problem. It is possible that the program office may find the delay to
be acceptable. However, the Project Officer is not authorized to waive the requirements
of the delivery schedule. It must also be understood that if the contract to be accelerated
is of a cost-reimbursement type, the accelerated effort will most probably increase the
cost to the Government. If it is a fixed-priced completion contract and acceleration is
needed to avoid default, the cost of acceleration will be borne by the contractor.
One powerful right of the Government is the right to suspend payment of
authorized progress payments on fixed price contracts unless and until satisfactory
progress has been shown or deliveries made. If a Project Officer is not satisfied with a
contractor's progress, the Contracting Officer should be notified immediately. A decision
will then be made as to whether progress payments should be withheld. In cost-
reimbursement contracts, however, the right is merely one of suspending payment. The
government must ultimately reimburse the contractor for work performed by the
contractor in response to the government's written technical direction regardless of the
government's satisfaction with the work produced. The government can refuse payment
only where Contracting Officer determines that the contractor exceeded the scope of work
requested, charged for hours not spent on the contract, proceeded in bad faith, or some
similar circumstance. Costs that are reasonable, allowable and allocable must be paid.
Liquidated damages are another means of adjusting for deficiencies in contract
performance, but they must have been negotiated into the original contract agreement
before they can be assessed during performance. Usually, they take the form of dollar
reductions for each day of delayed performance. Liquidated damages provisions are not
often used in EPA contracts.
12.4 Acceptance or Rejection
Every contract has some type of inspection clause which sets forth the rights and
responsibilities of the contracting parties concerning the delivery or performance of
acceptable supplies or services. The impact of the clause is dependent upon the type of
contract involved as well as whether the contract is for supplies or services. Some of
the various rights and responsibilities are listed below:
(1) The contractor is required to provide and maintain an inspection system
acceptable to the Government and maintain complete records of such
inspections.
PCMD 9/89
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(2) The Government has the right to inspect supplies or services before
acceptance. With this right goes the responsibility to make inspection in a
manner that will not unduly delay the work.
(3) The Government has the right to reject supplies that do not conform to
contract specifications. In cost-reimbursement type supply contracts, the
Government may, up to six months after acceptance, require the contractor
to replace or correct supplies that are nonconforming at the time of delivery.
(4) In fixed-price supply contracts, acceptance by the Government is not
conclusive with regard to latent defects, fraud, or such gross mistakes as to
amount to fraud. (See Chapter 14).
(5) In cost-reimbursement service contracts, if services performed do not
conform to contract requirements, the Government has the right to require
the contractor to perform the services again for no additional fee. However,
the Government must pay the contractor's costs for reperformance.
If the products or services conform to contract requirements, they should be
accepted by the Project Officer. But if they do not conform, the CO must reject them
immediately. To exercise its right of rejection, the Government must notify the
contractor of the rejection. The notice should be prepared by the Project Officer and
signed by the Contracting Officer. The written notice should:
(1) Specifically identify what is rejected;
(2) Identify the basis for rejection; that is, the specific failure to conform to
contract requirements;
(3) State what corrective action is required; and
(4) State whether correction should be made at the Government facility or
elsewhere.
Page 378 provides a sample deliverable review form that Government personnel
can use to document the results of their review of deliverables and communicate it to the
contractor. This form can be modified to suit the individual contract needs.
Unless the contract provides otherwise, acceptance or rejection must be made as
promptly as is practical after delivery, since a delay in such notice may, in some
circumstances, imply acceptance. Inspection of partial products or work in process does
not relieve the contractor of the responsibility for correcting defects discovered prior to
acceptance of the final product or the completed work. Furthermore, Government
failure to inspect, and to accept or reject, does not relieve the contractor from
responsibility for a defect.
12.5 Revocation of Acceptance
Normally, once a product or service is accepted by the Government, acceptance is
final and binding. However, in a few instances, the Government has a right to require
correction after an item has been accepted. One of the following conditions must be
present:
PCMD 9/89
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(1) Latent Defects
A patent defect is one that could reasonably be discovered by normal
inspection methods. A latent defect is one that could not be reasonably
discovered using normal inspection techniques. It does not have to be
impossible to discover. A defect discoverable by special tests (X-ray) is a
latent defect if such special tests are not normally used to inspect that kind of
item.
The fact that the contractor could have very easily discovered the defect does
not make it patent. Government contracting personnel or full-time quality
assurance/quality control specialists are qualified to determine if a defect
discovered after inspection is patent or latent. Only latent defects discovered
after acceptance are subject to correction by the contractor without cost to
the Government under a fixed price contract.
(2) Fraud
The Government has the right to revoke acceptance if it was deceived into an
acceptance by fraud. Fraud involves an intentional deceit or falsehood.
Acceptance due to fraud may be revoked even if the defect was patent.
(3) Gross Mistakes
If the contractor's conduct with respect to a defect involves a mistake so
gross as to amount to fraud, the Government has the right to revoke
acceptance as if there were fraud.
(4) Guarantees or Warranties
A guarantee or warranty is a promise or affirmation given by a seller to EPA
regarding the nature, usefulness or condition of the supplies or performance
of services to be furnished. The principal purposes of a guarantee/warranty
are. to delineate the rights and obligations of the contractor and EPA for
defective items and services and to foster quality performance. Generally,
warranties survive acceptance of the contract items for a stated period of
time or use, or until the occurrence of a specified event, notwithstanding
other contractual provisions pertaining to acceptance by the Government.
Thus, they allow EPA additional time after acceptance in which to assert a
right consistent with the warranty or guarantee.
When acceptance is properly revoked, the Government has the same remedies
available as when the defects are discovered prior to acceptance and the items
rejected at that time.
12.6 Periodic Formal Performance Evaluations
The conduct of periodic formal performance evaluation is a very useful means of
giving the contractor feedback and attempting to provide an incentive for improved
performance. Such evaluations can be scheduled on a routine basis (e.g., quarterly or
semi-annually), or be tied to the completion of work assignments or deliver orders.
Several of the Superfund contracts have established forms for the conduct of such
evaluations, e.g., see pages 382-3. The final evaluation of contractor performance
PCMD 9/89
395
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conducted as part of contract closeout is discussed in Chapter 14. A sample form for
conducting such an evaluation is provided on page 451.
12.7 Cost-Plus-Award-Fee Contracts
Another means the government has for encouraging high performance quality is
to provide monetary incentives for good performance. This is done through use of cost-
plus-award fee contracts.
All the policies and requirements covering CPAF contracts are contained in the
Environmental Protection Agency Acquisition Regulations, Part 1516.4. Project
Officers can obtain a copy of these from their Contracting Officers. Presented here is a
brief summary of the contract administration functions relating to these contracts.
An award fee plan is included in the solicitation and incorporated into each CPAF
contract. This document describes what criteria the Government will use to determine
the fee to be awarded the contractor each period. The following elements must be
included:
(1) The base fee amount;
(2) The total award fee pool;
(3) Performance areas to be evaluated;
(4) Criteria to be used in evaluations;
(5) Relative weights to be assigned to performance areas and to the evaluation
criteria;
(6) Frequency and timing of award fee determination;
(7) Proportion of the total award fee pool to be available for each evaluation
period; and
(8) Procedures to be followed (the timing involved) in evaluating performance
and determining the award fee.
The Government may unilaterally change the award fee plan (except base fee
amount and the total fee pool), but must notify the contractor prior to the evaluation
period in which any changes will take effect. If the plan is incorporated into the
contract, a contract modification is required.
A Performance Evaluation Board (PEB) is a board of EPA officials established
before the award of an CPAF contract. These individuals perform the in-depth review of
all aspects of contractor performance at periodic intervals (usually every 4 months)
during the period of the contract. They then recommend to the Fee Determination Official
(FDD) an appropriate amount of fee to be awarded to the contractor. The FDO makes the
final determination of the award fee. (The Fee Determination Official is the Chief of the
Contracting Office which is administering the CPAF contract). The PEB Chairperson and
the other members are initially appointed by the Director, PCMD; thereafter, any
changes are approved by the PEB Chairperson. One voting member of the PEB will
always be a representative from the contracts office.
PCMD 9/89
396
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The PEB evaluates performance on the basis of Performance Event Reports (see
page 388) which are submitted each period by Performance Monitors (individual EPA
employees who observe the contractor's performance on a close, continuous day-to-day
basis). Performance Monitors report on either technical or business aspects of the
contractor's performance, and report their observations on individual "events" which
occur during the period, and which are representative of contractor performance.
Events are reported on EPA Form 1900-41B, CPAF Contract Individual
Performance Event (See page 388), and submitted to the Evaluation Coordinator.
Performance monitors should assess the performance using the definitions stated in the
contract. The EPAAR specifies the following rating plan:
(1) Superior - "+" - The performance event exceeds the satisfactory level.
(2) Satisfactory - "o" - The performance event is acceptable.
(3) Substandard - "-" - The performance event is less than satisfactory.
However, some programs have been granted deviations, e.g., the Superfund TAT
(Technical Assistance Team) contracts, five levels of rating criteria are being used:
exceptional, exceeded expectations, satisfactory, marginal, and unsatisfactory. These
are summarized on pages 398-9, and accompanied by more detailed performance
observation reports. Emergency Response contracts (ERCs) also have their own
performance summary and CPAF performance event reports (see pages 400ff).
The Evaluation Coordinator will present these reports to the Performance
Evaluation Board (PEB), along with a summary of significant events. The PEB will
review these reports against each performance evaluation category and determine the
recommended award fee for each category. A Performance Evaluation Report will then be
prepared and forwarded to the Contracting Officer, who will present it to the Fee
Determination Official for final determination of the amount of fee to be awarded to the
contractor.
A letter will then be sent to the contractor's general management, informing
them of the amount and basis of the fee awarded, and any changes to the award fee plan to
be effective during the next evaluation period. The contractor is then authorized to
invoice for the award fee earned during the previous period.
PCMD 9/89
397
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•o
§
o
I
EXHIBIT VIM 1
RATING GUIDELINES FOR PERFORMANCE EVALUATION CRITERIA
HATING
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OJ
-4
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UNSATBFACTORY
TAT PERFORMANCE EVALUATION CRITERIA
PROJECT njuttwta
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a
-------
OSWER Directive 9242.4-01A September 1987
EXHIBIT VII-12
Award Fee Percentages vs. Performance Assessment Definitions
PERFORMANCE SPECTRUM
20 40 50 60 80
100
0-19 Performance below 20 is indicative of serious
mismanagement; negligence, and/or incom-
petence. Continued performance at this level
may require the Government to consider contract
termination for cause.
20 - 39 Performance between 20 and 39 is substandard,
and requires the contractor to take immediate
corrective action. Areas of adequate or better
performance are offset significantly by poorer
performance in other areas.
.40 - 59 Performance between 40 and 59 is satisfactory,
with the 50 point being the expressed level of
satisfactory performance that can be expected
from a good CPAF contractor. Areas requiring
improvement are approximately offset by better
performance in other areas.
60 — 79 Performance between 60 and 79 is superior. The
satisfactory level is exceeded and the monitors
can cite only a few minor areas requiring im-
provement .
80 - 100 Performance of 80 or above is outstanding.
There are no significant areas of poor
performance and there are factors indicating
creativity, ingenuity, initiative, and/or
excellent performance under very adverse
circumstances.
VII-38
PCMD 9/89
399
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OSWER Directive 9242.4-01A
EXHIBIT V-4(l)
i.yo i
Cost Center
ACKNOWLEDGEMENT OF COMPLETION
PERTORMANCg OBSERVATION REPORT; PARTI
Contract Nee
68-O1 -7367
Contractor
BoyF.VVtelon.lne.
TDD No,
Repotting Element
Date(t) of Reported Observation
Apprcx Na of Hours
Performance Evaluation Category.
Description of Coittiactor Observation By?
O Format Report
O Letter Report
a Formal Briefng
0 Otter (Specify)
Name/Tele
Rating: 5.4A2.1
Signature of Contractor
Date:
Deecnpten of ER^ Obeervation By:
Name/Tide
Rating: 5,4A2.1
Signature of EPA:
Si^natura of Rogionai POR CoonSnaKvz
HQ Coordhetor's Evaluafcjn By:
Name/Tfe
Rating: S.4A2.1
SignatinofHQ:
DPOActtort
DAccepUd
Q Accapiad wlh Exoap>on>
Q Rejected
CoetlbOe
IbtalCoetlbCkaunK.
Actual Total Hount
certify tttatttw aiacned mattrtalB meet and comply witti al
requirements of»» subject TIXX
WL Signature (Intenm)
TWL Signature (Final)
Final
acknowledge mat I have been provided witti he material! and
•eryicec specified in the subject TDD wiWn to original or
evtsed time djiiios.
Da*
DPO Signature (mtenm>
Final
UPOSignatumlFiniO
Sheet 1 White • Hdqtn Coordinator
Sheet 2 White - DPO Copy
Sheet 3 Blue - TATL Copy
Sheet 4 Green • ZPM Copy
Sheet S Canary • Project Officer Copy
Sheet 6 Pink • Contracting Officer Copy
Sheet 7 GoWenrod • DPO (Interim Copy)
V-25
PCMD 9/89
400
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EXHIBIT V-4f 2)
COSTCfure*
ACKNOWLEDGEMENT OF COMPLETION
PERFORMANCE OBSERVATION REPORT: PART 1
CONTRACTOR: _ . . _ . . ,
Ecology and Environment. Inc.
REPORTING ELEMENT:
OATEISI Of RETORTED OBSERVATION
APPROX NO. OF HOURS
CONTRACT NO..
68-01-7368
TOO NO.
ACCOUNT NO.
f
PERFORMANCE EVALUATION CATEGORY:
DESCRIPTION OF CONTRACTOR OBSERVATION BY:
RATING: S. 4.3.2.1
SIGNATURE OF CONTRACTOR:
DATE:
DESCRIPTION OF EPA OBSERVATION BY:
NAME/TITLE
RATING: 5. 4. 3. 2. 1 SIGNATURE OF EPA:
SIGNATURE OF REGIONAL FOR COORDINATOR:
HO COORDINATOR'S EVALUATION BY.
NAME/TITLE
RATING. 5. 4.3. 2.1 SIGNATURE OF HO:
DPO ACTION: ("1 ACCEPTED Q ACCEPTED WITH EXCEPTIONS
CflfTT^nATB, . HATf.',. „.. ,_ . ACTUAL TOTAL MOUM;
T«>T ALMOST TO eLOfUBf, _ ., , ,
1 CERTIFY THAT THE ATTACHED MATERIALS MEET AND COMPLY WITH ALL
REQUIREMENTS OF THE SUBJECT TOO.
TATL SIGNATURE (INTERIM) TATL SIGNATURE IFINALt
1 ACKNOWLEDGE THAT 1 HAVC BEEN PROVIDED WITH THE MATERIALS AND
SERVICES SPECIFIED IN THE SUBJECT TOO WITHIN ITS ORIGINAL OR
OPO SIGNATURE (INTERIM) DPO SIGNATURE (FINAL!
Shwt 2 Wftin • OPO Coor
SltMt 3 •!»• - TATL CMV
SIMM 4 On*» - 2PM Coev _-
SH«»l S Cwwrv • PO Co»y V~2D
SUM • PHW • . CO CMV
WMER 7 QAlcMHfOd • BPO ifHBBrMH
DATE:
DATE: '
DATE:
Q REJECTED
*
DATE:
INTERIM
FINAL
DATE:
INTERIM
FINAL
—
TOOSAO:
PCMD 9/89
401
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EXHIBIT VM
OSWER Oir«ctiv« 9242.2-01B
(10/87)
CPAF CONTRACT INOCV10UAL PERFORMANCE EVENT
CONTHACTNQL CONTMCTOfl 1 TABJOflOBINO.
wonrwaojaert'
OATBS) Of WOKTH) eVBff
KNFOMMNCE EVAUMTON CATBOOKY
vmcoNTmcTonNunngn r~| YES f~~i NO I»WNOM» MMCMT
OOC*mON OF K9WOM4WCS BVBff
CATEQOffT
A.IMNMaCNT
1. ilil^i«i j iii«««u>mr«mMa«(Mnlni«u«t
7. Ai»nrn«l>mriiin«i«»ii»i«9i(Mimnd>»dliii«n«
t. Adiirtfc
OVMM Raring far Cattgoiy:
8. SCHEJUi
2> FrtBw (MrtMrtn^ Miri QMKflntMn •! •uboMmMfli^
OvwaN Ruing for CtMgoiy:
C.COST
2. »m«M|f UK mnniiii nin a cxi am* mi mu upmi.
IKMMM. >M •«*••<( dM*.
3> rlMV RMnAMlflf flt •UtOflnmcMT OML
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t
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91
4.
SUPPORTMQ COMMENTS FOR OVERAU
CATEOOmmTM
• Suomr (»). 3«HHc»iy «& SutamMd (•)
•.aOM- ' MMnXJMOFUOMTOfl ' OA7C
CCCMOMATONa AMCStt«
-------
EXHIBIT VI-4
OSWER Dir»ctiv« 9242.2-OIB
(10/87)
SUMMARY OF PERFORMANCE EVENT REPORTS
CONTRACT #
DELIVERY
ORDER
NUMBER
CONTRACTOR
TOTAL
HOURS
REGION EVALUATION PERIOD
FROM: TO:
RATING
EPA
CON-
TRACTOR
EVALUATION COORDINATOR
SIGNATURE
DESCRIPTIVE TITLE
OF WORK
DATE
Vl-16
PCMD9/89
403
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OSWER Directive 9242.2-01B
(10/87)
Preparing an evaluation package for the PEB containing
individual PERs and a Summary of PERs
Attending the PEB review meetings, serving as PEB Executive
Secretary, and presenting information contained in the
evaluation package.
Upon receipt of the PERs from each Regional SPA office, the Project
Officer should review each PER. Particular attention should be given to
comparing EPA's assessments with the contractor's assessments, whenever
possible. Discrepancies in ratings should be noted by the Project Officer
on the PER. The Project Officer can modify the ratings in either the EPA
or contractor PERs, as appropriate. Any such modifications should be
explained in the box designated for "Coordinators Assessment."
In reviewing the PERs, the Project Officer should assess evaluation
ratings and supporting comments for consistency and clarity. If problems
are encountered, the Project Officer should resolve them through
discussions with the OSC who originated the PER.
After reviewing and commenting on each PER, the Project Officer
should sign and date the PER, and assemble it with other PERs from that
Region for submission to the PEB.
3.2 The Summary of Performance Evaluation Reports
Prior to submitting the PERs, however, the Project Officer should
prepare a Summary of Performance Evaluation Reports. Exhibit VI-4 shows
the form that should be used for this purpose. The Project Officer is
responsible for completing this Summary, which provides a quick assessment
of the contractor's overall performance. Contractor and EPA overall
ratings are listed for each Delivery Order evaluated during the period.
along with a brief description of the activities carried out under the
VI-1S
PCMOfi/89
404
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CONTRACT MODIFICATIONS
PCMD 9/89
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405
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MODIFICATIONS
Modifications Can Result From Any Of The
Following Circumstances:
- Changing Agency Needs
-- Inadequate Specifications That Resulted In
Inadequate Deliverables
» Need to Increase or Decrease Funds
-- Exercise of Options to Continue Work
- Extensions to Provide Additional Time
-- Suspension of Work
» Equitable Adjustments
PCMD 9/89
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407
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A 4
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BILATERAL MODIFICATIONS
Bilateral Modifications Result From Any Of
The Following Circumstances:
- Novation Agreements
-- New Procurement That Increases The Scope
Or Quantity Of Work
-- Inspection And Correction Of Defects (Cost-
Reimbursement Supply And R&D)
Equitable Adjustments
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AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
1. CONTAc ID CODE
PAQC OF PAQCS
I. AMENDMENT/MODIFICATION NO.
3. EFFECTIVE DATE
4. REQUISITION/PURCHASE REQ. NO. S. PROJECT NO. (If tPfUctbtt)
«. ISSUED BY
CODE
7. ADMINISTERED BY (It otntr Ulan tttm «)
CODE
0, NAME AND ADDRESS OF CONTRACTOR Wo., «
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Instructions for items other than those that are self-explanatory, are as follows:
(a) Item 1 (Contract ID Code). Insert the contract type
identification code that appears in the title block of
the contract being modified.
(b) Item 3 (Effective date).
(1) For a solicitation amendment, change order, or
administrative change, the effective date shall be
the issue date of the amendment, change order, or
administrative change.
(2) For a supplemental agreement, the effective date
shall be the date agreed to by the contracting
parties.
(3) For a modification issued as an initial or confirm-
ing notice of termination for the convenience of
the Government, the effective date and the modi-
fication number of the confirming notice shall be
the same as the effective date and modification
number of the initial notice.
(4) For a modification converting a termination for
default to a termination for the convenience of
the Government, the effective date shall be the
same as the effective date of the termination for
default.
(5) For a modification confirming the contracting
officer's determination of the amount due in
settlement of a contract termination, the effec-
tive date shall be the same as the effective date of
the initial decision.
(c) Item 6 (Issued By). Insert the name and c.~.Jress of
the issuing office. If applicable, insert the appropriate
issuing office code in the code block.
(d) Item 8 (Name and Address of Contractor). For modi-
fications to a contract or order, enter the contractor's
name, address, and code as shown in the original con-
tract or order, unless changed by this or a previous
modification.
(e) Items 9, (Amendment of Solicitation No.—Dated).
and 10, (Modification of Contract/Order No.-
Dated). Check the appropriate box and in the corres-
pond mg blanks insert the number and date of the
original solicitation, contract, or order.
(f) Item 12 (Accounting and Appropriation Data). When
appropriate, indicate the impact of the modification
on each affected accounting classification by inserting
one of the following entries:
(1) Accounting classification
Net increase $
(2) Accounting classification
Net decrease $
NOTE: If there are changes to multiple accounting
classifications that cannot be placed in block 12.
insert an asterisk and the words "See continuation
• sheet".
(g) Item 13. Check the appropriate box to indicate the
type of modification. Insert in the corresponding
blank the authority under which the modification is
issued. Check whether or not contractor must sign
this document. (See FAR 43.103.)
(h) Item 14 (Description of Amendment/Modification).
(1) Organize amendments or modifications under the
appropriate Uniform Contract Format (UCF)
section headings from the applicable solicitation
or contract. The UCF table of contents, however,
shall not be set forth in this document.
(2) Indicate the impact of the modification on the
overall total contract price by inserting one of the
following entries:
(i) Total contract price increased by $
(ii) Total contract price decreased by $
(iii) Total contract price unchanged.
(3) State reason for modification.
PCMD 9/89
(4) When removing, reinstating, or adding funds,
identify the contract items and accounting classi-
fications.
(5) When the SF 30 is used to reflect a determination
by the contracting officer of the amount due in
settlement of a contract terminated for the con-
venience of the Government, the entry in Item 14
of the modification may be limited to —
(i) A reference to the letter determination; and
(ii) A statement of the net amount determined
to be due in settlement of the contract.
(6) Include subject matter or short title of solicita-
tion/contract where feasible.
(i) Item 16B. The contracting officer's signature is not
required on solicitation amendments. The contracting
officer's signature is normally affixed last on supple-
mental agreements.
STANDARD POHM 30 BACK (MKV. 10-«J)
412
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THE CHANGES CLAUSE
The Government May Unilaterally Direct A Change,
Within The General Scope Of The Contract, In Any
One Or More Of The Following:
-- SUPPLY CONTRACTS
1. Drawings, Designs Or Specifications*
2. Method Of Shipment Or Packing
3. Place Of Inspection, Delivery Or Acceptance
-- SERVICE CONTRACTS
1. Description Of Services To Be Performed
2. Time Of Performance (Hours Of The Day,
Days Of The Week, Etc.)
3. Place Of Performance Of The Services
* This Does Not Apply To Commercial Specifications.
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CHANGES—CQST-FPMBURSEMENT
1994)
(a) The Contracting Officer may at any tune, by
written order, and without notice to the sureties, if any,
make changes within the general scope of this contract
in any oae or more of the following:
(1) Drawings, designs, or specifications when the
supplies to be furnished are to be specially manufac-
tured for the Government in accordance with the
drawings, designs, or specifications.
(2) Method of shipment or packing.
(3) Place of delivery.
(b) If any such change causes an increase or decrease
in the estimated cost of, or the time required for, per-
formance of any part of the work under this contract,
whether or not changed by the order, or otherwise
affects any other terms and conditions of this contract,
the Contracting Officer shall make an equitable adjust-
ment in the (1) estimated cost, delivery or completion
schedule, or both; (2) amount of any fixed fee; and (3)
other affected terms and shall modify the contract ac-
cordingly.
(c) The Contractor must submit any "proposal for
adjustment" (hereafter referred to as proposal) under
this clause within 30 days from the date of receipt of
the written order. However, if the Contracting Officer
decides that the facts justify it, the Contracting Officer
may receive and act upon a proposal submitted before
final payment of the contract
(d) Failure to agree to any adjustment shall be a
dispute under the Disputes clause. However, nothing in
this clause shall excuse the Contractor from proceeding
with the contract as changed.
(e) Notwithstanding the terms and conditions of
paragraphs (a) and (b) above, the estimated cost of this
contract and. if this contract is incrementally funded,
the funds allotted for the performance of this contract,
shall not be increased or considered to be increased
except by specific written modification of the contract
indicating the new contract estimated cost and, if this
contract is incrementally funded, the new amount allot-
ted to the contract. Until this modification is made, the
Contractor shall not be obligated to continue perform-
ance or incur costs beyond the point established in the
Limitation of Cost or Limitation of Funds clause of
this contract
(End of clause)
(R 7-203.2 1967 APR)
(R 1-7.202-2)
Alternate I (APR 1984). If the requirement is for
services and no supplies are to be furnished, substitute
the following paragraph (a) for paragraph (a) of the
basic clause:
(a) The Contracting Officer may at any time, by
written order, and without notice to the sureties, if any,
make changes within the general scope of this contract
in any one or more of the following:
(1) Description of services to be performed.
(2) Time of performance (i.e., hours of the day,
days of the week, ett:).t 3-8
(3) Place of performance of the services.
FAR Clause
414
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FAR Clause
CHANGES—TIME-AND-MATERIALS OR
LABOR-HOURS (APR 1984)
(a) The Contracting Officer may at any time, by
written order, and without notice to the sureties, if any,
make changes within the general scope of this contract
in any one or more of the following:
(1) Drawings, designs, or specifications.
(2) Method of shipment or packing.
(3) Place of delivery.
(4) Amount of Government-furnished property.
(b) If any change causes an increase or decrease in
any hourly rate, the ceiling price, or the time required
for performance of any part of the work under this
contract, whether or not changed by the order, or
otherwise affects any other terms and conditions of this
contract, the Contracting Officer shall make an equita-
ble adjustment in the (1) ceiling price, (2) hourly rates,
(3) delivery schedule, and (4) other affected terms, and
shall modify the contract accordingly.
(c) The Contractor must submit any "proposal for
adjustment" (hereafter referred to as proposal) under
this clause within 30 days from the date of receipt of
the written order. However, if the Contracting Officer
decides that the facts justify it, the Contracting Officer
may receive and act upon a proposal submitted before
final payment of the contract
(d) Failure to agree to any adjustment shall be a
dispute under the Disputes clause. However, nothing in
this clause shall excuse the Contractor from proceeding
with the contract as changed.
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CARDINAL CHANGES
A Cardinal Change Is One Which Is Outside The
Scope Of The Original Contract, I.e., Not Within The
Contemplation Of The Parties At The Time Of Award.
A Cardinal Change Issued Under The Changes
Clause Constitutes A Breach Of Contract By The
Government.
13-10
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EQUITABLE ADJUSTMENTS
FOUR BASIC PRINCIPLES:
-- Both Parties Should Be Made Whole As A Result
Of The Adjustment.
- Neither Party Should Gain An Advantage Or
Suffer A Loss.
- Profitable Contracts Should Remain Equally
Profitable.
-- Existing Losses Should Not Be Borne By The
Government.
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NOTIFICATION OF CHANGES (APR 19*4)
(a) Dtflititioiu. "Contracting Officer." M uaed in this
clause, does not include aay representative of the Con-
tracting Officer. "Specifically aatborind representative
(SARV as «Md in this denes, means aay person the
Contracting Officer has so dnalgmiiul by written notice
(a copy of which shaQ b* provided to the Contractor)
which than refer to tUs aabparagraph sad shall be
issued to the designated representative before the SAR
exercises such authority.
(b) Notict. The primary parpose of tins clause is to
obtain prompt reporting of Government tumhKt that
the Contractor considers to constitute a change to tins
contract Except for changes identified as such m writ-
ing and signed by the Contracting Officer, tiw Contrac-
tor thill notify the Administrative Contracting Officer
in writing promptly, withm...M(i0 a* acfMMtar) calaa-
dar days from the date that the Contractor identifiss
any Government conduct Qreiixfjng actions, inaction,
and written or oral communications) that the Contrac-
tor regards as a change to the contract terms and
conditions. On the basis of the most accurate informa-
tion available to the Contractor, the notice shall state—
(1) The date, nature, and circumstances of the con-
duct regarded as a change;
(2) The name, function, and activity of each Oov>
eminent individual and Contractor official or em-
ployee Involved in or knowledgeable about each
conduct;
(3) The identification of aay documents and the
substance of any oral communication involved in
such conduct;
(4) In the instance of alleged acceleration of sched-
uled performance or delivery, the basis •poo which
h arose;
(5) The particular elements of contract perform-
ance for which the Contractor may sack aa equitable
adjustment under this clause, including—
(i) What contract line hems have been or may
be affected by the alleged change;
(ii) What labor or materials or both have baaa
or may be added, deleted, or waited by the aOcgad
change;
(ii)/ To the extaat practicablai what delay aad
disruption in the aaaaaar and sequence of perform-
ance and effect oa ooallnmirt performance have
been or may be caaasd by the aBegad change;
(iv) What adjaatawaas to contract price, delivery
schedule, and other proviaioas affected by the al-
leged change an estimated; aad
(6) The Contractor's estimate of the time by which
the Government must respond to the Contractor's
notice to minhnire cost, delay or dianiptina) of par-
formaac*. :
(c) Continued fgffamnet. Following snhmisainn of
the notice required by (b) above, the Contractor shall
diligently continue performance of this contract to the
maximum extent possible a accordance with to tcrna
and conditions as construed by the Contractor, aalns
the notice reports a diractioa of the Contracting Offi-
cer or a communication from a SAR of the Contract-
ing Officer, • either of which avaats tha
FAR Clause
snail continue perionnance; frmteted, however, that if
the Contractor regards the direction or g^""""iv^tioii
as a change as described in (b) above, notice shall be
given in the manner provided. AH directions.«~—«~i-
cations, interpretations, orders aad ^*Hsr actions of
the SAR shall be reduced to writing promptly aad
copies furnished to the Contractor and to the Contract-
ing Officer. The Contracting Officer shall promptly
countermand any action which exceeds the authority of
the SAR.
(d) Gtntrnmuu rufont. The Contracting Officer
shall promptly, within..... (to *r MfMfcud) ^«yH*'
days after receipt of notice, respond to the notice in
writing. In responding, the Contracting Officer
(1) Confirm that the conduct of which the Con-
tractor gave notice constitutes a change and when
necessary direct the node of further performance;
(2) Countermand any communication regarded as a
change;
(3) Deny that the conduct of which the Contractor
gave notice constitutes a change aad when necessary
direct the mode of further performance; or
(4) In the event the Contractor's notice informa-
tion is inadequate to make a decision aader (IX (2),
or (3) above, advise the Contractor what additional
information is required, aad attabtiah the date by
which it should be furnished and the data thereafter
by which the Goverameat win respond.
(e) Efiubit •djtatmmu. (1) If the Contracting Offi-
cer confirms that Government' conduct effected a
change as alleged by the Contractor, aad the conduct
causes an increase or decrease in the Contractor's cost
of, or die time required for, performance of any part of
the work under this contract, whether changed or not
changed by such conduct, an equitable adjustment shall
be made—
0) In the contract price or delivery schedule or
both; and
Cri) la such other provisions of die contract as
may be affected.
(2) The contract shall be modified in writing ac-
cordingly, la the case of drawings, designs or specifi-
cations which arc defective aad for which 'the Gov-
ernment is responsible, the equitable adjustment shall
include the coat aad time extension for,delay, reason-
ably incurred by the Contractor in attempting to
comply with the defective drawings, designs or
specifications before the Coattactor identified, or
reasonably should .have identified, such defect When
tha coat of property aude obsolete or excaat as a
result of a change confirmed by the Contracting Of-
Otis clause is iaduded ia the equitable
dw Contracting Officer shall have die
right to prescribe dw manner of disposition of dw
property. The equitable adjustment shaU aot include
I eons or time cncnskws for delay resulting
i dw Contractor's fiulure to provide notice or to
performance a* provided, respectively, m
(b) aad (c) above
MOTE: Tha phrases, "contrast price" and "cost"
whatever dwyl appear ia dw eJavsa, may be appropri-
awry asodifted to apply to cost-reimbursement or incen-
tive ooatractSt or to fftmifoiMfM?*^ dwraof. *
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SUPPLEMENTAL AGREEMENTS
A Supplemental Agreement Is Any Contract
Modification Which Is Accomplished By Mutual
Agreement Of The Parties.
It Must:
- Involve Consideration For Both Sides.
- Not Eliminate Or Change Any Contract Clause
Required By Law.
- Not Waive Any Substantive Right Of The
Government Without Consideration.
- Contain All Six Elements Of A Contract:
An AGREEMENT
Between COMPETENT PARTIES
For A VALID CONSIDERATION
To Accomplish A LAWFUL PURPOSE
With TERMS CLEARLY SET FORTH
In The FORM REQUIRED By Law.
13-13
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OPTIONS
An Option Is A Unilateral Right Of The Government To:
- Obtain Increased Quantitites Of Supplies Or
Services Within The Existing Contract Period.
-- Obtain Additional Periods Of Performance.
13-14
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OPTIONS
WITHIN AN EXISTING CONTRACT PERIOD
May Not Exceed 50% Of The Base Quantity
Without Approval Of The Director, PCMD
Will Usually Be Restricted In Terms Of Time,
Frequency And Increments In Which They
Can Be Exercised
TO EXTEND THE PERIOD OF PERFORMANCE
- Total Contract Period May Not Exceed 3 Years
Without Approval Of The Chief, Contracts
Office
-- Written Notice Of Intent To Exercise The Option
Must Be Furnished To The Contractor At Least
60 Days Before The Effective Date Of The
Option
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EPAAR Clause
OPTION TO EXTEND THE TERM OF THE CONTRACT—
COST-TYPE CONTRACT (APR 1984)
The Government has the option to extend the terii of this contract for
additional period(a). If more than 60 day* remain in the
contract period of performance, the Government, without prior written
notification, may exercise this option by issuing a contract modifica-
tion. To exerciae this option within the laat 60 days of the period of
performance, the Government must provide to the Contractor written
notification prior to that laat 60-day period. This preliminary
notification does not commit the Government to exercising the option.
The Government's estimated level of effort is direct labor
hours for the first option period and for the second. Dae
of an option will result in the following contract modifications:
(a) The "Period of Performance"
base period from to ..
to and ....
clause will be amended to cover a
and option periods from
to
(b) Paragraph (a) of the "Level of Effort" clause will be amended to
reflect a new and separate level of .effort of • ••...'•.... for the first
option period and a new and separate level of effort of for
the second option period.
(c) The "Estimated Cost and Fixed Fee" clause will be amended to
reflect increased estimated costs and fixed fee for each option period
as follows:
Option 1
Option 2
Estimated Cost
Fixed Fee
Total
(d) If this contract contains "not to exceed amounts" for elements of
other direct costs (ODC), those amounts will be increased as follows:
Other Direct
Coat Item
Option 1
Option 2
............
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EPAAR Clause
OPTION FOR INCREASED QBANTITT—COST-TYPE CONTBACT (APR 1984)
By issuing a contract •edification, the Government may increase the
estimated level of effort by •••• direct labor hour* during the
baae period, during the first option period, and
during the second option period. The Government may issue a maxima of
orders to increase the level of effort in blocks of
hours during any given period. The estimated cost and fixed fee of
each block of hours is as follows:
Base Period Option 1 Option 2
Estimated Cost
Fixed Fee
Total
When these options are exercised, paragraph (a) of the "Level of
Effort" clause and the "Estimated Cost and Fixed Fee" clause will be
modified accordingly.
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OPTIONS - EXERCISE OF OPTIONS - TIMELY NOTICE
Fourth Street Estates, Inc.
GSBCA No. 5813. September 1, 1981, Contract No. GS-03B-6116
Facts
On March 28, 1972, the United States Government, through its
General Services Administration, entered into a lease with Fourth
Street Estates, Inc. (FSE), whereby the Government leased the
premises known as 400 T Street, NE, in Washington, DC, together
with its adjacent parking lot. The term of the lease was five
years, beginning June 1, 1972 and ending May 31, 1977 at an annual
rate of $1.43 per square foot, payable monthly. The lease con-
tained an option in favor of the Government to renew the lease for
five one year renewal terms at the same rental rate. To exercise
its renewal option the Government was required to give notice in
accordance with the following lease provision:
"This lease may be renewed at the option of the
Government, ... provided notice be given in writing
to the Lessor at least 60 days before the end of
the original lease term or any renewal term; ...."
The Government exercised its renewal options during the
years 1977, 1978, and 1979, without incident, or objection by
FSE. The notices of renewal for the years 1977 and 1979 were sent
more than sixty days before the end of the then current term. The
notice for the year 1978 was nine days late, but FSE made no
objection. In the year 1980, the Government hand delivered its
lease renewal notice to the office of FSE's agent on April 2 at
4:15 p.m. The agent refused to accept it because it was given less|
than sixty days before the end of the current term. On the same
date FSE offered to re-lease the premises at $7 per square foot.
At the date of hearing, March 24, 1981, the Government was in
possession of the premises and had been paying the rent set out in
the lease. Appellant had accepted those payments.
In response to FSE's position that the renewal notice was not
given in time, the contracting officer issued a final decision on
July 11, 1980, that found the renewal notice timely and the renewal
lease in effect. FSE challenges that decision.
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COMPETITION IN CONTRACTING
ACT (CICA)
Effective April 1, 1985
Requires Government To Compete All
Procurements Above A Certain Amount
Unless Criteria Justifying The Use Of Other
Than Full And Open Competition Are Met.
Applies To Both New Awards And
Modifications To Existing Contracts That
Increase The Scope Of The Contract, I.e.,
Additional Performance Periods.
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JUSTIFICATION FOR OTHER THAN
FULL AND OPEN COMPETITION
ONLY ONE RESPONSIBLE SOURCE*
--When The Supplies Or Services Required
By The Agency Are Available From Only
One Responsible Source, As Determined
By A Market Search, And No Other Type Of
Supplies Or Services Will Satisfy Agency
Requirements.
UNUSUAL AND COMPELLING URGENCY*
--When The Agency's Need For The
Supplies Or Services Is Of Such Unusual
And Compelling Urgency That The
Government Would Be Seriously Injured
Unless The Agency Is Permitted To Limit
The Number Of Sources From Which It
Solicits Bids Or Proposals.
EPA Generally Uses Only #1, 2 And 5.
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JUSTIFICATION FOR OTHER THAN
FULL AND OPEN COMPETITION (Cont.)
3. INDUSTRIAL MOBILIZATION, OR EXPERIMENTAL,
DEVELOPMENTAL OR RESEARCH WORK
- - When It Is Necessary To Award The Contract
To A Particular Source Or Sources In Order
To:
1 ) Maintain A Facility, Producer, Manufacturer,
Or Other Supplier Available For Furnishing
Supplies Or Services In Case Of A National
Emergency Or To Achieve Industrial
Mobilization, Or
2) Establish Or Maintain An Essential
Engineering, Research Or Development
Capability To Be Provided By An
Educational Or Other Nonprofit Institution
Or A Federally Funded Research And
Development Center.
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------- An error occurred while trying to OCR this image.
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JUSTIFICATION FOR OTHER THAN
FULL AND OPEN COMPETITION (Cont.)
NATIONAL SECURITY
--When The Disclosure Of The Agency's
NeedsWould Compromise The National
Security Unless The Agency Is Permitted
To Limit The Number Of Sources From
Which It Solicits Bids Or Proposals.
PUBLIC INTEREST
—When The Agency Head Determines
That It Is In The Public Interest In The
Particular Acquisition Concerned And
Notifies Congress At Least 30 Days In
Advance Of Such An Award.
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CONSTRUCTIVE CHANGE
An Implied Change, I.e., An Act (Or Omission)
By The Contracting Officer Or Other Authorized
Government Official Which, By Its Nature, Can
Be Construed To Have The Effect Of A Formal
Written Change Order, Entitling The Contractor
To Equitable Adjustment Under The Changes
Clause.
E.g., A Requirement That The Contractor
Perform Work Different From That Prescribed
By The Original Terms Of The Contract.
EPA Contracts Require The Contractor To
Immediately Notify The CO When Any
Government Action Implies A Contract Change.
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RATIFICATIONS
Government Agreement To Assume Legal
Liability For An Action Taken By Government
Personnel Lacking Formally Delegated
Contracting Authority.
I.e., The Government Takes The Federal
Employee Off The Hook For Personal Liability
For Unauthorized Action.
However, Ratification Can Only Occur If The
Action Would Have Otherwise Been Valid If
Made By A Contracting Officer. EPA Cannot
Ratify Illegal Actions.
The Assistant Administrator Of OARM Sends A
Formal Notification Of The Person's
Unauthorized Action And Its Ratification To
The Pertinent Assistant, Associate Or Regional
Administrator. (Very Visible!)
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Chapter 13
CONTRACT MODIFICATIONS
Contract administration would be a fairly routine procedure if everything in the
original wording of a contract, work assignment or delivery order remained the same
throughout the period of performance. Unfortunately, that is not always possible, and
changes to the terms or conditions of a contract often become necessary as a result of
unforeseen circumstances, ambiguous or unclear provisions, deficient specifications, or
changes in the Government's requirements. Such changes are effected through a device
called a contract modification. The various types and the regulations surrounding their
use are examined in this chapter.
13.1 Unilateral vs. Bilateral Modifications
Contract modifications fall into two major classes: unilateral and bilateral.
Unilateral modifications require only the signature of the Contracting Officer, and are
classified either as administrative modifications, or changes that the contract schedule
itself authorizes on a unilateral basis (such as change orders that are issued under the
authority of the "Changes" clause, exercise of options within the time period allowed, or
notices of termination). Bilateral modifications, which require the signature of both
parties (the Contracting Officer and the contractor), include all supplemental
agreements and any other changes not authorized to be issued unilaterally. Below are
examples of typical contract modifications and their classifications:
Purpose of Modification Unilateral
Changes in:
specifications, designs, X
drawings, place of
delivery, inspection,
acceptance, or method of
shipping or packing.
Exercise of option X
Termination X
Administrative changes X
Novation agreements
New procurement: increase in
scope or quantity of work
Equitable adjustments:
Definitization of change orders
Differing site conditions
Suspension of work
Government property (fixed-price and R&D)
Inspection (fixed-price supply and R&D)
Inspection and correction of defects
(cost-reimbursement supply and R&D)
Bilateral
X
X
X
X
X
X
X
X
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Whether a modification may be executed unilaterally or bilaterally depends on
whether it is administrative or a- new agreement, or whether the provisions of the
contract give the Government the right to act unilaterally. Administrative changes are
ones that do not affect the rights or obligations of either party; examples are changes in
accounting or appropriation data, or the designation of a new Project Officer or
Contracting Officer. A bilateral change affects the price, quantity, quality, or delivery,
or the terms and conditions of the contract. Administrative changes may be effected
unilaterally by the Contracting Officer; other changes may be made unilaterally only if
the contract so provides in its language.
13.2 The "Changes" Clause
The "Changes" clause in Government contracts provides that the Contracting
Officer may unilaterally direct a change, within the general scope of the contract, in any
one or more of the following:
CONTRACTS FOR SUPPLIES
(1) Drawings, designs, or specifications (in the case of supplies, only where the
supplies are to be specifically manufactured for the Government);
(2) Method of shipment or packing; or
(3) Place of inspection, delivery, or acceptance.
CONTRACTS FOR SERVICES
(1) Description of services to be performed;
(2) Time of performance (i.e., hours of the day, days of the week, etc.); or
(3) Place of performance of the services.
Such changes may be directed without the consent of the contractor, who is
obligated to proceed with the work as changed when a change order is issued. If there is
an impact on schedule, cost, or any other contractual aspect, the contractor may submit
a proposal for an equitable adjustment within thirty (30) days of receipt of a change
order. If the cost of work is decreased as a result of the change, the Government has a
similar right to a downward equitable adjustment in the contract price. Negotiation of an
equitable adjustment is a subsequent action, and is considered a supplemental agreement
effected by a bilateral contract modification.
An extremely close review of the contractor's proposal for an equitable
adjustment must be made, as there may be a tendency for the contractor to use this as a
means of recovering losses under a fixed price contract or disguising an overrun under a
cost reimbursement contract. Equitable adjustments should cover only the cost impact
of the change.
Changes are limited to the above types and must fall within the general scope of
the contract. Change orders should be issued in writing by the Contracting Officer.
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13.3 Supplemental Agreements
A supplemental agreement is any contract change which is accomplished by
mutual agreement of the parties. It must always involve consideration for both sides,
just like a contract. This type of modification is preferred over a change order because
negotiation usually precedes its issuance, thereby allowing the Government to assess the
cost impact of the change and negotiate both cost and technical aspects before directing
the contractor to proceed. A supplemental agreement may affect any part of a contract,
but may not eliminate or change any contract clause required by law, nor waive any
substantive right of the Government without consideration.
Both change orders and supplemental agreements may be requested by the Project
Officer; if a cost increase is anticipated, a Procurement Request must be submitted with
the request. Contract modifications are executed on Standard Form 30 (See page 411 for
sample.)
13.4 Equitable Adjustments
Under the "Changes" clause, equitable adjustments to price, estimated cost,
delivery schedules, or other areas impacted by the change must be reflected in a
supplemental agreement. In addition to "Changes," several other clauses call for
equitable adjustments under certain circumstances. Among these clauses are:
(1) Differing Site Conditions (construction);
(2) Suspension of Work (construction);
(3) Government Property;
(4) Inspection (fixed-price supply and fixed-price R&D); and
(5) Inspection and Correction of Defects (cost-reimbursement supply and
cost-reimbursement R&D).
The most common adjustments arise under the "Changes" clause. Basic
principles apply to all equitable adjustments. Both parties should be made whole as a
result of the adjustment. Neither party should gain an advantage or suffer a loss.
Profitable contracts should remain equally profitable and any existing losses sustained
by the contractor should not be borne by the Government. That is the essence of the term
"equitable."
Most adjustments are based on costs, although they may be priced by reference to
catalogs or market value of supplies or services. If based on costs, adjustments must
consider the effect of the change on the entire contract, not just the portion of the work
affected by the change.
Changes in costs may also require a change in profit or fee to reflect the
circumstances of the new situation. In some cases an adjustment may be negotiated only
with respect to the fee - for example, in the event of delivery of nonconforming supplies
in a cost-reimbursement contract.
If the contractor's claim is for a few dollars, it is not safe to assume that little
examination is required. For example, the deleted work may be labor intensive, with
costs comprised primarily of direct labor and, therefore, subject to overhead charges.
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The added work may be capital intensive, and the costs not subject to the same extent of
overhead. Unless care is taken, the contractor could compare only the direct costs of the
deleted and added work and end up collecting overhead expenses as well.
Often, estimating the cost of a change is difficult. Out of necessity, such
estimating requires a particularly thorough and careful cost or price analysis by the
Contracting Officer before a supplemental agreement can be negotiated.
Difficulty may still be encountered even though cost data is available. The
estimates of costs of work deleted can be based on either (1) the cost estimated at the
time the contract was negotiated, or (2) the costs at the time the change was made. If the
original estimate is used and costs have risen, then the contractor will suffer a smaller
loss or more profit. If the reverse is true, then the contractor will have a greater loss
and less profit. Contractor-suggested changes should be thoroughly reviewed to assure
that the contractor is not suggesting changes to enhance its profit position.
Pricing adjustments after the work is done is much easier than estimating costs
in advance. The contractor's data may clearly show the actual costs of the changes to
which a customary profit may be added. This is an appealing rationale, but it has its
dangers. If a change order has been issued and the work is completed prior to pricing the
adjustment, then the more that is spent on the added work, the higher the contractor's
cost may be. Even if the contractor can be trusted to control costs in such a situation,
the Government will not have had an opportunity to review the contractor's proposed
costs and possibly point out more efficient production methods or management controls.
Forward pricing, that is, issuance of a single supplemental agreement instead of a
unilateral order followed by an adjustment, allows for a complete negotiation on
technical as well as price aspects of a change. It may not be practical to do this for all
changes, especially if there are many small ones to be made. In that case, a single
negotiation session resulting in a single supplemental agreement may be preferred.
13.5 Exercise of Options
Options that were included as part of the original contract may be exercised
unilaterally by the Contracting Officer within the period stipulated. They are not
considered to be new procurements, as they were clearly within the contemplation of the
parties at the time of award.
Options may be either additional quantities during a specific contract period, or
may extend the contract period with increased quantities in the new term. It is even
possible to include options within options (e.g., during Option Period I, there is a level
of effort of 5000 hours, with an option of 2000 additional hours during the period).
Generally, options for increased quantities are limited to 50% of the basic quantity, and
the total term of the contract is limited to 3 years, unless you obtain prior approval of
the Director, PCMD. The cost or price of all options is provided for in the basic
contract, and is negotiated with the basic contract amount.
Unless otherwise stated in the contract, all service contracts employing option
periods require that a preliminary written notice of the Government's intention to
exercise the option be furnished to the Contractor at least sixty (60) calendar days
prior to the end of the current period. Failure to provide such preliminary notice within
the timeframe established in the contract waives the Government's right to exercise the
option unilaterally and may require a justification for other than full and open
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competition and the negotiation of a bilateral contract modification in order to extend the
period of performance where such an extension is authorized.
When the term of the service contract coincides with the fiscal year and delays in
receipt of authority to obligate funds for the new fiscal year are anticipated, the
Contracting Officer, if the contract so provides, may, within 60 days after the end of the
fiscal year, unilaterally exercise an option to extend the term of the contract. Project
Officers must provide advance notice to their Contracting Officers in order that the
notice be issued to the contractor within the time required. The option may be exercised
only if funds become available within the 60-day period. In the event that sufficient
funding is not available within the 60-day period, the Government waives the right to
exercise the option unilaterally, thereby rendering any additional requirements subject
to normal competitive procurement procedures.
The Contracting Officer, if the contract so provides and subject to certain
conditions, may exercise an option contingent upon the availability of funds. To exercise
such an option, the contract must contain the clause entitled "Availability of Funds".
Under no circumstance shall any action be taken which could be construed as creating a
legal liability on the part of the Government until a formal notice of availability of funds
in the form of a contract modification has been issued by the Contracting Officer.
Acceptance of any goods or services under such an arrangement is strictly prohibited
until funds are obligated.
13.6 Cardinal Changes
Mutual agreement is not always enough to authorize use of a sole source
modification. Certain changes are not permitted because they are outside the scope of the
contract. Additional work or additional hours not covered in options fall within this area
and are considered new procurement; they must be obtained competitively or fall within
the seven (7) statutory exceptions to full and open competition (see 13.8, below).
The scope of the contract is defined as whatever was within the contemplation of
the parties at the time of entering into the contract. Any change order issued under the
"Changes" clause which is outside the scope is defined as a "cardinal change", and
constitutes a breach of contract by the Government. For this reason, many changes
which Project Officers seek to improve their contract will be refused by their
Contracting Officer. Within the area of "permissible" changes, Contracting Officers will
support the program office to the fullest exent possible, but cardinal changes are not
within any Contracting Officer's authority.
13.7 increases in Scope
Many times, the initial amount of contract support provided in a contract proves
to be insufficient. Increases in the contract are often necessary to complete a job
already underway, if no options exist allowing for a greater quantity of hours or
services. Depending upon the type of contract involved, it may or may not be possible to
obtain an increase.
Completion form cost reimbursement contracts may be increased (in the cost
portion only) if the original work cannot be completed within the estimated cost; the
contractor receives no increase in fee to complete the work called for by the contract.
This is not considered an increase in scope. An increase in the scope of work required,
however, (i.e., additional hours) would constitute new procurement. Work assignments
under term form contracts and delivery orders under indefinite delivery/indefinite
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.quantity contracts may be increased within the total contract limits of hours and dollars,
but any increases in these contract maximums are also considered new procurements.
Fixed price contracts would never be increased unless the requirements changed (quality
or quantity), and such increases in scope would be new procurements, as well.
13.8 Exceptions to Full and Open Competition
Because of the regulations concerning full and open competition, such new
procurements will normally have to be made on a competitive basis, and there is no
guarantee that the same contractor will win the award. The Competition in Contracting
Act, which took effect on April 1, 1985, severely limited the Government's ability to
award other than fully competitive contracts or contract modifications. There are now
only seven (7) statutory exceptions to the requirements for obtaining full and open
competition. These are:
(1) Only One Responsible Source (when the supplies or services required by
the agency are available from only one responsible source, as determined by
a market search, and no other type of supplies or services will satisfy
agency requirements);
(2) Unusual and Compelling Urgency (when the agency's need for the supplies
or services is of such an unusual and compelling urgency that the
Government would be seriously injured unless the agency is permitted to
limit the number of sources from which it solicits bids or proposals);
(3) Industrial Mobilization: or Experimental. Development, or Research Work
(when it is necessary to award the contract to a particular source or sources
in order (i) to maintain a facility, producer, manufacturer, or other
supplier available for furnishing supplies or services in case of a national
emergency or to achieve industrial mobilization, or (ii) to establish or
maintain an essential engineering, research or development capability to be
provided by an educational or other nonprofit institution or a federally
funded research and development center);
(4) International Agreement (when precluded by the terms of an international
agreement or a treaty between the United States and foreign government or
international organization, or the written directions of a foreign government
reimbursing the agency for the cost of the acquisition of the supplies or
services for such government);
(5) Authorized or Required by Statute (when (i) a statute expressly authorizes
or requires that the acquistion be made through another agency or from a
specified source, or (ii) the agency's need is for a brand name commercial
item for authorized resale);
(6) National Security (when the disclosure of the agency's needs would com-
promise the national security unless the agency is permitted to limit the
number of sources from which it solicits bids or proposals); and
(7) Public Interest (when the agency head determines that it is in the public
interest in the particular acquisition concerned and notifies Congress at least
30 days in advance of such an award).
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If a situation does not fall within one of the above exceptions, competition must be
obtained. If a sole source procurement can be authorized, the Project Officer must
prepare a Justification for Other than Full and Open Competition (JOFOC) with the
assistance of the Contracting Officer. It's a good idea to meet or talk with the Contracting
Officer and the EPA Competition Advocate, who must approve all JOFOC's over
$100,000, before undertaking this effort to be sure there is sufficient justification to
limit competition.
Increases in scope could often be justified in the past on a sole source basis, but
the new regulations clearly limit that possibility now. For this reason, the use of
options is encouraged if the possibility of increased requirements exists, and Project
Officers should take care not to allow wasteful utilization of contract resources. Diligent
financial monitoring will also help spot shortages early, and a redirection of effort at
that time may eliminate the problem altogether.
13.9 Constructive Changes
Sometimes, the Government, by its actions, changes the contract without a formal
written modification. This is an implied change, also known as a "constructive" change,
and is defined as an oral or written act or omission by the Contracting Officer or other
authorized Government official which is of such a nature that it is construed to have the
same effect as a formal written change order under the "Changes" clause. In other
words, the Contracting Officer, by requiring a contractor to perform work different
from that prescribed by the original terms of the contract, may actually change the
contract without issuing a change order, and the contractor is entitled to relief (an
equitable adjustment) under the "Changes" clause. Therefore, it is critical that any
actions on the part of a Contracting Officer do not imply a contract change.
The conduct of a Project Officer may have the same effect. Therefore, care should
be taken to avoid crossing the line between providing technical direction and inferring a
change. Project Officers do not have the authority to direct any action that will affect the
cost or price, description of the work, or the time or place for performance or delivery.
What might not seem important at the time, may end up having a substantial effect on
final costs, or the work product required, and the contractor is entitled to file a claim.
EPA contracts contain a provision requiring the contractor to notify the
Contracting Officer immediately when any action on the part of Government personnel
implies a change to the terms and conditions of a contract. This allows the Contracting
Officer either to issue a formal change order, or require the contractor to discontinue
work on the implied changes. However, it may be impossible not to formalize a
constructive change if the Government has received any benefits, and program offices
will be assessed the cost of any equitable adjustments resulting from such changes.
At times a contractor may suggest modifications to the contract. Often the change
will technically improve the contract services or supplies and the Project Officer should
realize this. However, it should be kept in mind that contractors, especially those who
are experiencing a loss under a contract, will suggest changes so as to provide a chance to
better their profit position. It is important to review the contractor's expenditures on a
contract and technical progress made to attempt to verify if the contractor is possibly
trying to recover from a loss position. The Project Officer also must beware of leading
the contractor to believe that the Project Officer's opinion authorizes the contractor to
proceed. Such improper authorization would be in effect a constructive change.
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If the contractor makes the change and later claims extra costs, the Government
may find it very difficult to deny these claims for costs if they were incurred in good
faith (especially if the agency benefits). The Project Officer's action would be improper
and unauthorized since only Government personnel designated as Contracting Officers
have the authority to obligate the Government.
The Project Officer has considerable responsibility for identifying need for
change orders, even though only the Contracting Officer has the power to issue such
orders. Since the Project Officer monitors the contract performance, he or she will
often be in an excellent position to recommend changes that meet the Government's
requirement and can help formulate that change. The Project Officer can also be of
significant assistance in determining both what a reasonable price/cost of the change
should be and the effects of the change on the contract. It is important that all potential
effects of a change are examined, so if additional funding is required it can be obtained
prior to issuing the change order.
After a change order has been issued, the Project Officer is responsible for
assuring that the contractor is implementing it.
13.10 Ratifications
If actions are taken by Government personnel who do not have formally delegated
contracting authority, they do not necessarily obligate the Government for the
expenditure of funds. However, under certain circumstances, unauthorized actions may
be ratified. Ratification of an unauthorized action can only occur if the action would have
been valid had it been made by a Contracting Officer. If an unauthorized action is
otherwise improper, a Contracting Officer cannot ratify it and the Agency must deny
legal liability, in which case the person committing the unauthorized action may become
personally liable. Therefore, extreme caution must be taken to avoid such a situation.
Unauthorized procurement actions are not limited to new procurements or
purchases. Increases in scope and other changes to existing contracts, directed by an
unauthorized person, or even a change in the period of performance, are unauthorized
actions.
When an unauthorized action has been revealed, the following procedures apply:
(1) The program office must notify the cognizant contracting office by
memorandum of the circumstances surrounding the action. The memorandum
must include:
(a) All relevant documents and records;
(b) Documentation why the work was necessary to and for the benefit of
the Government;
(c) A statement of steps taken or proposed to prevent reoccurrence of the
unauthorized action;
(d) Approval of the Division Director (or equivalent) of the responsible
office;
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(e) If expenditure of funds is involved, the notification must' also include, a
Procurement Request/Order (EPA Form 1900-8) with sufficient funds
to cover the supply or service involved; and
(f) If the service or supply was beyond the scope of the existing contract, or
involved any new procurement on a sole source basis, the notification
must include a justification for other than full and open competition
(JOFOC).
(2) After receipt of the notification, the Contracting Officer:
(a) Makes a determination and findings regarding ratification of the
unauthorized act. Additional information may be required from the
contractor and an opinion from the General Counsel;
(b) Informs (at the Contracting Officer's discretion) the Inspector General
through the Director, PCMD; and
(c) Prepares a memorandum from the Assistant Administrator for Adminis-
tration and Resources Management to the Assistant, Associate or Regional
Administrator of the program advising of the person committing the
unauthorized action.
Accomplishment of (2) (b) and (c) above for actions that would entail small
purchase procedures is at the discretion of the Chief of the Contracting Office or the
Management Division Director or equivalent at a regional or field activity.
13.11 Amendments to Work Assignments or Delivery Orders
As noted above, it may be necessary to amend part of a work assignment or
delivery order (rather than the contract itself) as a result of the contractor's work plan
or because of unforeseen developments which arise during the course of performance.
An amendment may take many forms, such as increasing the number of hours or the
ceiling price, decreasing a portion of the effort, changing the period of performance, or
modifying the Statement of Work. Any anticipated amendments should be discussed as
soon as possible with the Contracting Officer, as certain types of changes may require
formal negotiations with the contractor, and some may not be within the scope of the
contract and therefore cannot be executed unless certain other actions are taken.
When a decision has been made to amend the assignment or order, a written
request should be forwarded through the Project Officer to the Contracting Officer. (See
page 63 for a sample work assignment amendment form.) The basis for the change
should be explained, with whatever specific wording changes or substitutions are
necessary. If a revised work plan will be required of the contractor, this should be
indicated.
Only the Contracting Officer can direct a change to any terms or conditions of a
contract, work assignment, or delivery order. A contractor who is advised of a change
without the signature of the Contracting Officer is required to notify the Contracting
Officer immediately and identify any adjustments to the cost or delivery schedule which
are affected by the change. The contractor is prohibited from proceeding with the change
unless formal approval is given by the Contracting Officer. Project Officers, Work
Assignment Managers or Delivery Order Officers who direct unauthorized changes to a
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contract may be relieved, of their authority by the Director, PCMD, and may become
personally liable for any increase in costs.
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DISPUTES, CLAIMS, TERMINATIONS
AND CLOSEOUTS
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HANDLING DISPUTES:
Contract Disputes Act of 1978
1. First Step: Final Decision of Contracting Officer
2. Second Step: Appeal to Agency Board of
Contract Appeals
or
Direct Petition to Claims Court (lengthy
procedure)
3. Third Step: Appeal to Federal Court of Appeals
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CONTRACT TERMINATION
TWO TYPES:
Termination For Convenience Of The Government:
When Supplies Or Services Are No Longer
Needed Or It Is Otherwise In The Government's
Best Interests.
Termination For Default:
When The Contractor Has Failed To Perform Its
Contractual Obligations.
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TERMINATION FOR CONVENIENCE
-- Can Stop Contract At Will Of Government
- Contractor Gets AH Or Negotiated Portion
Of Fee
-- Settlement Costs
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TERMINATION FOR DEFAULT
The Government's Right To Terminate For Default Is
Based On The Contractor's Failure To:
1) Perform On Time.
2) Perform Any Other Provision Of The Contract.
3) Make Progress, To The Extent That The Delay
Endangers Contract Performance.
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STEPS IN CONTRACT TERMINATION
FOR DEFAULT
1. Government Issuance Of Notice To Cure
2. Government Issuance Of Show Cause Letter
3. Passage Of Required 10-Day Period
4. Notice of Termination
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PROJECT OFFICER RESPONSIBILITES
IN CONTRACT CLOSEOUT
1. Certifying That All Technical Requirements Of The
Contract Have Been Met, That The Products Or
Services Have Been Satisfactorily Completed Within
The Contract Amount, And That The Final Report And
All Other Deliverables Have Been Received And
Accepted.
2. Recommending The Disposition Of All Government
Property In The Contractor's Possession.
3. Reviewing And Determining The Accuracy Of The
Contractor's Reporting Of Inventions, Data Rights,
Copyrights And Software Development.
4. Examining And Approving The Completion Voucher
(On Cost-Reimbursement Contracts).
5. Evaluating The Contractor's Performance.
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PROJECT OFFICER'S EVALUATION OF CONTRACTOR PERFORMANCE
(Read instructions on reverse before completing form)
1.FROM
2. TO
3. FORWARD (original only) TO:
Quality Assurance Section (PM-214)
Washington, DC 20460
4. CONTRACT NO.
5. ACTIVITY
6. CONTRACTOR'S NAME AND ADDRESS
7. PROJECT OFFICER'S NAME
8. TECHNICAL PROGRAM
9. BASIC CONTRACT COST
10. FINAL CONTRACT COST
11. CONTRACTOR PROJECT OFFICER'S NAME
12. PROJECT TITLE
13. EVALUATED CONTRACTOR'S TECHNICAL ADHERENCE TO SCOPE OF WORK AND COMMITMENT OF PERSONNEL (Circle one
of the following and give narrative of rating) E VG A P U
14. EVALUATE CONTRACTOR'S TECHNICAL PERFORMANCE AND TECHNICAL APPROACH TO THE PROJECT (Circle one of the following am
give narrative of rating) E VG A P U
1B. EVALUATE CONTRACTOR'S SUBMISSION/DELIVERY OF PROGRESS REPORT. FINANCIAL REPORT. FINAL REPORT. EQUIPMENT fdrel
on* of the following and give narrative of rating) E VG A P U
16. EVALUATE CONTRACTOR'S DELIVERED END PRODUCT (Report Equipment, etc.) (Circle one of the following and give narrative of rating
E VG A P U
17. HAS CONTRACTOR Q OVERRUN, OR Q UNDERRUN THE CONTRACT (Explain reason for either)
18. RECOMMENDATIONS AND ADVICE TO PERSONNEL CONSIDERING THIS CONTRACTOR FOR FUTURE AWARDS
19. PROJECT OFFICER'S SIGNATURE
20. DATE
21. OVERALL RATING (Check on
E VG A P U
- 4~84> Pr*vtous "dtioiw are obsolete.
U. S. OOVHUMOR PRINTING
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INSTRUCTIONS
Prepare in duplicate and distribute as follows:
Original to be forwarded to Headquarters, Quality Assurance Section (PM-214), Washington, DC 20460.
Copy to be forwarded to Contract Administrator for contract file.
The following guidelines are to be used by the Project Officer responsible for the project in the preparation of the form j
the completion of the technical phase and/or acceptance of the final end product of the contract. The information must I
accurate, as it will provide other program staff personnel or anyone else in the agency an orderly and uniform method I
determining and recording the effectiveness of contractors in meeting their contractural commitments for futul
consideration in contract awards. The information will be filed in the contract file, and with the contractor's bidde|
application file. The Project Officer's technical rating of the contractor and the contracting officer's business ? ating will I
entered in the contractor performance evaluation system maintained by the Quality Assurance Section. AH items ha{
been numbered to identify specific instructions as they pertain to individual items.
Rate Contractor in areas listed in items 13, 14, 15, 16, and 21 by circling one of the following on the form:
/
E (Excellent); VG (Very Good); A (Average); P (Poor); or U (Unsatisfactory)
Provide a detailed narrative of background material to support the rating. Attach additional sheets, if necessary.
FOLLOWING ITEMS TO BE FILLED IN BY THE CONTRACT ADMINISTRATOR*
RESPONSIBLE FOR THE CONTRACT.
ITEM(S)
I thru 4 Self-explanatory
5 Activity responsible for the project such as Washington, DC, RTP, Cincinnati, Region No. or Laborato|
6 and 7 Self-explanatory
8 Name of Section or Division within the Program responsible for the project.
9 and 10 Self-explanatory.
11 Self-explanatory.
12 Self-explanatory.
FOLLOWING ITEMS TO BE FILLED IN BY COGNIZANT PROJECT OFFICER
13 Has contractor fulfilled the requirements of the scope of work as specified in the contract? Did
Contractor adhere to his proposal, including his proposed commitment of personnel?
14 Indicate degree of creative contribution (level of technology) made by the contractor in response to tr
understanding of EPA's mission. If engaged in study contract or consulting contract, contractc
understanding of Federal Laws affecting the work (e.g., for a consultant on impact statements, und|
standing of NEPA and all related guidelines and significant court decisions).
15 Did the contractor submit the report or equipment as per contract schedule? If not, give reason.
16 Is the report or equipment delivered of high value and/or good quality? Did the report require mi
corrections, and did the contractor balk at making the corrections without additional cost?
i
17 Information desired is: give number of overruns and reasons for this (do not consider scope char
where contractor had to submit a proposal for the additional work); ratio of additional funding
limitation of cost provision to original estimated costs. Was underrun achieved by reducing the scope
work or through the development of new methods?
EPA Form 1900-27 (R«v. 4-84) Ravm*
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Chapter 14
DISPUTES, CLAIMS, TERMINATIONS AND CLOSEOUTS
Most contracts are completed as planned with few problems, and once work is
completed, the contract closeout process occurs. However, disagreements do arise from
time to time which are difficult to resolve. If a Project Officer notes an emerging
difference of opinion regarding the rights or obligations of either party, he or she should
immediately notify the Contracting Officer to attempt to resolve it to everyone's mutual
satisfaction. The longer a disagreement goes on, the harder it is to settle and the more
time and effort will be required in the process.
If a controversy cannot be satisfactorily resolved, the Contracting Officer will
attempt to negotiate a formal bilateral agreement. One possible outcome is contract
termination. If no agreement can be reached, the Contracting Officer will issue a final
decision under the disputes clause, and the procedures are governed by statute and the
provisions of the contract.
14.1 Contract Disputes Act of 1978
The Contract Disputes Act of 1978 is applicable to all types of disagreements
(except fraud) under Government contracts and provides for 1) a decision by the
Contracting Officer, then 2) an appeal (if desired by the contractor) to either the Board
of Contract Appeals or directly to the U.S. Court of Claims. It requires the contractor to
proceed diligently with performance of the contract (in accordance with the Contracting
Officer's final decision) while the dispute is under appeal. The Act sets forth time
frames under which disputes'and appeals must be filed and decisions must be issued. It
also provides for payment of interest on contractor claims should the dispute be resolved
in favor of the contractor.
The disputes procedure is the traditional means for resolving conflicts arising
under a contract which cannot be resolved by means of negotiation and mutual agreement.
The contract clause entitled "Disputes" implements the law and sets forth the procedures
the contractor must follow in the event of a dispute. Because the Government would be
unable to fulfill its lawful duties if all contract work stopped every time a disagreement
arose, the administrative disputes procedure requires that contract work continue
during the appeals process.
14.2 Contracting Officer's Final Decision
It is Government policy that all contractual issues be resolved at the level of the
Contracting Officer without litigation, if at all possible. Informal discussions will be
held first, with participation by the Project Officer, and might also include individuals
uninvolved in the dispute, if necessary to resolve the disagreement. When such
measures are unsuccessful,.the contractor may request, in writing, a final decision by
the Contracting Officer. (In some situations, the Contracting Officer may issue such a
decision without such a request by the Contractor.)
The law requires that a written decision be issued by the Contracting Officer
before the contractor can take the case elsewhere. The decision must be issued within 60
days of receipt of a monetary claim if it is $50,000.00 or less, and within a reasonable
time if over $50,000.00 provided the contractor is notified within the 60-day period
as to when the decision will be issued. Failure to issue a decision within the required
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time may be deemed a denial of the claim, and the contractor is authorized to file an
appeal.
The decision of the Contracting Officer is the first step in the disputes procedure.
It is based upon a review of all available facts and on the advice of legal counsel, and may,
on occasion, go against the position of the Project Officer if the facts so warrant.
Therefore, early coordination of problems with the Contracting Officer will help avoid
this possibility at a later date.
Any amounts which are owed to a contractor under a claim but are not in dispute
must be paid promptly, without awaiting the results of an appeal. Payment for work
which continues during the appeal will also be paid in accordance with contract payment
provisions.
14.3 Board of Contract Appeals
If a contractor disagrees with the final decision issued by the Contracting Officer,
he has the right to appeal to the Agency Board of Contract Appeals. Pursuant to a
longstanding interagency agreement between EPA and the Department of Interior, the
Department of the Interior Board of Contract Appeals (IBCA) will hear appeals from
final decisions of EPA Contracting Officers.
An appeal must be filed within 90 days after receipt of the Contracting Officer's
decision. If an appeal is filed, EPA must submit an answer to the complaint. This must
be accomplished within 30 days, and will probably require Project Officer input if the
dispute involves something in the Statement of Work or any other technical aspect. The
IBCA will conduct an administrative hearing at which both parties may be present or
represented. Presence is not required, however. The Board of Contract Appeals has the
following time periods in which to issue a decision:
Claims of $10,000 or less - 120 days
Claims of $50,000 or less - 180 days (whenever possible)
Claims of over $50,000 - no time limit
If the decision is in the contractor's favor, it is up to the Contracting Officer to
implement the decision of the Board. Interest is payable on the amount due on the claim
from the date the Contracting Officer receives it to the date of payment. The Government
can only appeal the decision with the approval of the Agency Head and the Attorney
General of the United States.
Contractors who wish to appeal a decision of the IBCA must do so within 120
days. Appeals are heard by the Court of Appeals for the Federal Circuit. The ruling from
this court is final.
14.4 Court of Claims
Rather than file an appeal of a Contracting Officer's decision with the Board of
Contract Appeals, the contractor has direct access to the claims court, and may file a
petition with the court within 12 months from the date of receipt of the final decision.
he or she chooses to go this route, the IBCA will not get involved. As a practical matter,
this option is rarely pursued unless the amount of the claim is substantial, as
proceedings in this court may take years to be resolved.
If
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14.5 Contract Termination
The laws which give the Government the power to enter into contracts also give it
the right to terminate such contracts. Most contracts provide for termination by the
Government for either of two reasons: default of the contractor or convenience of the
Government. The ability to terminate a contract is a unilateral right of the Government;
the contractor does not have any such rights.
Terminations may be complete or partial. A complete termination requires the
contractor to stop all work under the contract, while a partial termination discontinues
only a portion of the uncompleted work. Whether a contract is partially or completely
terminated is dependent upon the exact circumstances surrounding the decision to
terminate.
It is preferable to work out possible solutions to contracting problems before
resorting to contract termination. Terminations can be costly and time-consuming, and
often wind up in litigation. Nonetheless, terminations are sometimes unavoidable. The
two types are explained in detail in this chapter.
14.6 Termination for the Convenience of the Government
Under the Termination for Convenience clause, the Government has a right to
cancel work under a contract whenever it determines that it is in its best interest. Such
a decision is a unilateral right of the Government. It is not, however, a decision that can
be made lightly. Cancellation of the work under a contract is an expensive and
undesirable course of action. A default termination may result in a need to reprocure,
which can be expensive and time-consuming; it may require payment of the contractor's
entire fee as part of settlement. Generally, such terminations occur because of changes
in Government requirements or because contract funding is not available. However,
there may be other circumstances which make termination advisable, such as an
unavoidable organizational conflict of interest, a decision that it would be more cost-
effective to do the work in-house, etc.
The Termination for Convenience clause outlines the actions of the contracting
parties to be taken in consumating the termination of work and settlement. In
terminating a contract, there may be extensive adminstrative effort involved on the part
of the Government with respect to the various actions necessary to complete the
settlement.
The first step in a termination for convenience is written notification to the
contractor by the Contracting Officer. The notice clearly indicates that the contract is
being terminated for the convenience of the Government. It also gives: (1) an effective
date for the termination (usually the date of the notice); (2) the extent of the
termination identifying what portion, if any, should be continued; and (3) any special
instructions.
Upon receipt of the notice, the contractor is obligated to comply with the
Termination clause and the terms of the notice, which generally include:
(1) Stopping work on the terminated portion of the contract;
(2) Terminating related subcontracts;
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(3) Continuing with the unterminated portion and promptly requesting any
equitable adjustment in price on the continued portion;
(4) Taking action to protect and preserve any Government property or to return
it as directed by the Contracting Officer;
(5) Settling claims and liabilities arising from terminated subcontracts; and
(6) Promptly submitting its own claim for settlement. (The contractor has one
year to submit such a claim.)
The Contracting Officer directs the actions of the contractor, reviews the
settlement proposal, and promptly negotiates a settlement. A number of people,
including the Project Officer, may be involved in fulfilling these multi-faceted duties.
One of the activities of the Contracting Officer in which the Project Officer may
participate is the settlement conference. At the conference, the Contracting Officer will:
(1) Explain the general principles governing settlements under the relevant
clause, including the contractor's obligations with respect to subcontracts;
(2) Determine the status of the work, and, if necessary, clarify the extent of the
termination;
(3) Determine the subcontracts being terminated and who is handling them for
the contractor;
(4) Make all arrangements for proper handling and disposition of Government
property;
(5) Discuss the form of the settlement proposal and the accounting data
required; and
(6) Establish a tentative schedule for negotiation of the settlement.
Aside from possibly making the recommendation to terminate for convenience,
the Project Officer will be involved in settlement conferences, advising the Contracting
Officer on the disposition of property and evaluating the reasonableness (quantitatively
and qualitatively) of the contractor's settlement proposal.
14.7 Termination for Default
The Government has a contractual right to terminate, in whole or in part, the
contractor's right to proceed with the work when it has failed to perform its contractual
obligations. The decision to terminate is discretionary. Termination may not be in the
best interests of the Government even if a default termination is justified, because of the
lengthy time required to procure another contractor and get the new contractor up to
speed. The Contracting Officer should exhaust all reasonable efforts to prevail upon the
contractor to correct whatever problems exist.
If a contract is terminated for default, however, and it is determined afterwards
that the contractor was not in default or that the default was "excusable" (see section
14.10, below), the termination will be considered to be for the convenience of the
Government. The rights of the parties are then governed by the Termination for
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Convenience clause. Or, if the Contracting Officer determines it to be in the best
interests of the Government, the contract may be reinstated by mutual agreement.
The Government's right to terminate for default is based on the contractor's
failure to:
(1) Perform on time, as provided in the contract;
(2) Perform any other provision of the contract; or
(3) Make progress, to the extent that the delay endangers contract performance.
Although not expressly provided for in the Default clause, the Government
may immediately terminate for default if the contractor definitely exhibits
an intention not to perform within the time fixed in the contract, even if he
is not yet "late."
Depending upon contract type, the following consequences may result from a
termination for default:
(1) Under fixed-price type contracts, the Government does not have to pay the
costs of uncompleted work, but only the costs of products delivered to and
accepted by the Government. In the case of a cost-reimbursement contract,
the Government is liable for costs incurred up to the date of termination,
plus a proportional part of any fee. In this situation, Government is not
liable for settlement expenses, nor for any profit on costs of preparation for
work in progress;
(2) The contractor must return any progress or advance payments;
(3) The Government has the right to take over the contractor's inventory,
subject to a negotiated compensation;
(4) Under fixed-price type contracts, the contractor may be liable for any
excess costs the Government has to pay in repurchasing the supplies or
services. (However, a cost-reimbursement contract does not contain any
provision for recovery of excess repurchase costs.); or
(5) The contractor may also be liable for breach of contract damages.
Prior to taking any default action, the Contracting Officer will normally take
action on one of the following remedies short of termination. At this time, the
Contracting Officer should also determine:
(1) Whether it would be effective to withhold payment until satisfactory
performance is demonstrated;
(2) Whether, if default action is taken, there is an alternative source of supply;
(3) Whether the contractor's financial condition is such that it would be able to
reimburse the Government for the excess costs of repurchase;
(4) What would be the impact of default upon the contractor's ability to liquidate
progress payments or continue to perform under other Government
contracts;
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(5) Whether continued performance under a revised delivery schedule would be
more in the Government's interest;
(6) Whether the Government's interest would be better served by offering
advance payments or some other special financing agreement;
(7) Whether, if the contractor cannot continue to perform, an arrangement to
have the contract performed by a capable subcontractor might be an
appropriate solution;
(8) Whether, where a capable organization declines to perform as a subcon-
tractor, a novation agreement can be arranged whereby the desired
performance can be obtained from that organization while the original
contractor still remains legally liable for the contract;
(9) Whether there is a surety or trustee in bankruptcy who would be willing
to take over the responsibility for performing the contract; and
(10) Whether, where the requirement for the supplies or services no longer
exists and the contractor is not liable to the Government for damages, a no-
cost termination agreement should be executed.
The Contracting Officer, with the assistance of the Project Officer, has a
reasonable time to determine if it is in the Agency's best interest to exercise its right to
terminate a contract for default. The definition of a reasonable period of time depends
upon the facts of each case and varies from case to case. The contract file must be fully
documented to explain the reason(s) for default and the Agency's rationale for evoking
the Default provision.
The Government is not required to give notice of failure or notice of the
possibility of default prior to issuing a termination for default if the basis for default is
failure to deliver or to perform on time. If, however, the Government fails to enforce
the provisions related to timely delivery, or takes any action that might be construed as
a waiver of the delivery or performance date, then the Contracting Officer must send a
preliminary notice to the contractor, proposing or setting a new date. It is important
that Project Officers do not take actions that could possibly be construed as a waiver of
the Government's contractual rights.
14.8 Cure Notice
In cases where the failure to perform involves provisions other than those
concerned with timely delivery, or failure to make such progress as to endanger
performance altogether, the Contracting Officer must give the contractor notice of such
failure and allow at least ten (10) days for cure (remedy) of the failure before issuing a
termination notice. This "ten-day cure notice":
(1) States that a termination for default may arise unless the failure to
perform and make adequate progress is cured within ten (10) days (or
longer);
(2) Calls the contractor's attention to its contractual liabilities in the event
of default;
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(3) Requests an explanation of the failure to perform and plan for correc-
tive action;
(4) States that failure to present an explanation may be taken as an
admission that there is no valid explanation; and
(5) Where appropriate, invites the contractor to discuss the matter at a
conference.
If the contractor responds with a valid explanation of an "excusable delay", or
cures his or her failure to perform within the 10-day period, nothing further is done
except to keep a close eye on future progress. If, however, the failure to perform is not
remedied, and/or there was no existence of a condition of "excusable delay", the
Contracting Officer may decide to terminate the contract for default.
14.9 Termination
Once the Contracting Officer determines that termination for default is in order,
then the Contracting Officer will issue an official written notice of termination that:
(1) Sets forth the contract number and date and describes the acts or omissions
that constitute the default;
(2) States that the contractor's right to proceed with performance of the
contract (or a portion of the contract) is terminated;
(3) States, if the Contracting Officer has not determined whether the failure to
perform is excusable, that it is possible that the contractor will be held
liable for any excess costs the Government must pay in repurchasing
terminated supplies or services;
(4) States, if the Contracting Officer has determined that the failure to perform
is inexcusable, that (1) the notice of termination constitutes such a
determination and is a final decision under the Disputes clause, (2) the
contractor will be held liable for any excess costs of repurchase, and (3) the
contractor has the right to appeal under the Disputes clause;
(5) States that the Government reserves all rights and remedies provided by law
or under the contract; and
(6) States that the notice represents a decision that the contractor is in default
as specified and that the contractor has the right to appeal under the Disputes
clause.
14.10 Excusable Delays
The contractor has certain defenses against the Government's notice of
termination for default which are contained in the Default clause.
If the failure to perform is caused by factors beyond the control of the
contractor, and without contractor fault or negligence, the contract cannot be terminated
for default. If the failure to perform is caused by a subcontractor (at any tier), and if it
is caused by factors beyond the control of the contractor and subcontractor and without
their fault or negligence, then the contract cannot be terminated by default unless the
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supplies or services to be furnished by the subcontractor were obtainable elsewhere to
meet the required delivery dates.
Simply put:
- A contractor's default is excusable if it is not caused by either contracting
party, or if it is caused by the Government.
- A contractor's default is inexcusable if caused by the contractor's own fault
or negligence, by that of something or someone within its control, or by that of
one of the subcontractors.
There are several excusable causes listed in the excusable delay section of the
Default clause, some of which are:
(1) Acts of God or the public enemy;
(2) Acts of the Government in either its sovereign or contractual capacity;
(3) Fires, floods, epidemics, or quarantine restrictions; and
(4) Strikes, freight embargoes, or unusually severe weather.
In every such case, the failure to perform must be beyond the control and without
fault or negligence of the contractor. Also, the excusable cause must be the direct cause
of the failure to perform. If actions by both the Government and the contractor
contribute to the default, and the specific causes and effects of the responsibilities of
each are so intertwined as to defy disentanglement, then the contractor's default will not
be excused.
If, prior to issuance of a notice of termination, the Contracting Officer
determines that the contractor's failure is excusable but the termination is in the best
interests of the Government, the Contracting Officer can take either of these actions:
(1) Terminate for convenience where the contract contains a Termination for
Convenience clause; or
(2) Negotiate to terminate at no cost to either party, where the contract does
not contain a Termination for Convenience clause.
If the Contracting Officer is not able to determine whether the contractor's
failure is excusable prior to the issuance of the termination, the Contracting Officer will
issue a written decision as soon as possible. The written decision will be delivered to the
contractor promptly, with advice on the contractor's right to appeal under the Disputes
clause.
14.11 Waiver of Default
Personnel who are involved with contractors must take extra precautions not to
act in a manner which will waive the Government's rights to terminate for default. The
situations described below are of special concern:
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- After the contractor is found to be in default, the Government's rights will be
waived if (1) the Government acts or fails to act and thus encourages the
contractor to continue performance, and (2) the contractor, relying on that
encouragement, continues to work and incurs costs in performance of the
contract.
- If, after default, a contractor continues to perform and incurs costs, the Board
of Contract Appeals will carefully examine the contract administration
personnel to see if they said or did anything, or failed to say or do anything,
that may have encouraged the contractor to continue. If the Board finds such
evidence, it will hold that a waiver is the result.
- The following kinds of acts on the part of Government personnel have been held
to waive a default:
(1) Accepting late delivery;
(2) Ordering and accepting corrective action after default;
(3) Encouraging continued performance;
(4) Negotiating a revised delivery schedule; or
(5) Revising other contract terms.
- The following kinds of acts on the part of Government personnel have been
held to not waive a default:
(1) The Contracting Officer conducts negotiations concerning revisions of
delivery times, without implying to the contractor that late delivery
is acceptable without any consideration.
(2) If, after default, the contractor does nothing to continue work or
incur costs, then there will normally be no waiver, in spite of
anything the contract administration personnel may have or have not
said or done. The Government's right to terminate for default will
remain intact.
(3) The Government attempts, unsuccessfully, to revise other contract
terms.
The best way to avoid waiver of default is to have good rapport and communication
between the Contracting Officer and the Project Officer so that all personnel who are
involved with the contractor will know the contract status, the Government's position,
and what each party is supposed to do and not do.
When it is concluded that the Government's action or failure to act is grounds for
a waiver of the contractor's default, the Contracting Officer should take immediate steps
to establish a new delivery schedule. These steps will revive the Government's right to
terminate for default so that the right is available in the event of a new default.
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14.12 Contract Closeout
A contract is considered complete when 1) all deliverables have been delivered
and accepted, or 2) all required services have been performed and accepted, and 3) the
period of performance, including all option provisions which have been exercised have
expired. Contracts that are physically complete must be administratively closed out,
which involves the settlement of all outstanding contractual issues and the documentation
of the file. The Contracting Officer is responsible for closing out the contract with the
assistance of the Project Officer.
14.13 Closeout Procedures
The contract closeout process encompasses all those actions required to see that
the Government has received the goods or services under contract, the contractor has
been paid the correct amount, Government property is accounted for, all required
reports have been received and the file is properly documented and transmitted to the
records center.
The Federal Acquisition Regulations set forth the following time standards for
closing out contract files:
Firm Fixed Price Contracts - 6 months from the date on which the Contracting
Officer receives evidence of physical completion.
Cost Reimbursement And Indefinite Quantity Contracts Requiring Settlement of
Indirect Cost Rates - 36 months from the date on which the Contracting Officer
receives evidence of physical completion.
All Other Contracts - 20 months from the date on which the Contracting Officer
receives evidence of physical completion.
Timely closeout of contracts is important because there might be payments due
the contractor, and EPA's financial accounts need to be closed out. Excess funding must
be returned to the Treasury Department, typically because closout occurs so long after
funding that excess funds cannot be deobligated and reprogrammed for use at EPA. Also,
allowing completed contracts to remain open can generate late claims and disputes.
After all costs have been incurred under a cost-reimbursement contrat, and/or
items delivered, the contractor will submit a completion voucher, summarizing all costs
claimed throughout the contract period. (This step is not necessary for firm fixed price
contracts, as the voucher submitted after the items are accepted will specify the fixed
price of the contract and contractor costs are irrelevant.) The Project Officer will be
requested to examine the voucher from the perspective of (1) was the work performed
and (2) are the costs allocable and reasonable.
The completion voucher serves as the basis for requesting a final audit, which
will provide to the Contracting Officer a report on the contractor's actual costs and
serves as the basis for negotiating a final cost settlement. The Contracting Officer must
then determine the allowability, allocability, and reasonableness of costs claimed and
may enter into negotiations with the contractor. A final cost is then negotiated and final
payment can be made. The final voucher submitted by the contractor is certified by the
Contracting Officer (not the Project Officer) and is subject to all provisions of the
Prompt Payment Act (see Chapter 11). Other requirements of closeout of completed
contracts are:
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- proper disposition of Government property;
- release of all future claims from the contractor;
- proper disposition of any classified material; and
- disclosure of all inventions.
14.14 Project Officer Responsibilities
Project Officers will be requested to assist in part of the contract closeout
process. Listed below are the tasks the Project Officer normally will be responsible for
performing:
(1) Certifying that all technical requirements of the contract have been
satisfied, that the products or services have been satisfactorily completed
within the contract amount, and that the final report and all deliverables
have been received and accepted;
(2) Reviewing and determining the accuracy of the contractor's reporting of
inventions;
(3) Examining the completion voucher (on cost-reimbursement contracts); and
(4) Evaluating the contractor's performance under the contract.
Most of these activities will be requested by the Contracting Officer in writing,
so the Project Officer need only respond to the written request. Nonetheless, it is
essential that the tasks be performed as quickly as possible, as contract closeout is a
time-consuming process and many steps are dependent upon completion of the preceding
steps. Project Officers must take care to be responsive to these requests, as their duties
as Project Officers do not end until contract closeout is completed.
It is essential that contractor evaluations be well thought out by Project Officers
and backed up by documentation. These evaluations can later serve as the basis for
evaluating past performance of a potential contractor in consideration for award of
future requirements.
Good or bad experiences can be used by the Contracting Officer and thus enhance
EPA's acquisition program in later years. EPA Form 1900-27 (See page 451) will be
used for this purpose, and will be forwarded to the Project Officer by a PCMD contract
specialist or contract administrator during the closeout process.
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MISCELLANEOUS CONTRACT
PROVISIONS AND SPECIAL
CONTRACT TYPES
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SPECIAL PROVISIONS
1. Patents
Generally, Contractor may elect to retain
title to invention made in performance of
contract work, but Government receives
license to practice invention worldwide;
contact EPA's Patent Advisor for information.
2. Data Rights
Contracts involving acquisition of limited
rights data (developed at private expense that
is trade secret, commercial, financial,
confidential, or privileged), or restricted
computer software, must contain clauses
defining the respective rights of Government
and contractor regarding its use, duplication
or disclosure.
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SPECIAL PROVISIONS (Cont.)
3. Peer And Administrative Review
All scientific, informational or educational
material designed for public distribution and
attributable to EPA and produced by an EPA
employee, consultant, contractor or grantee,
must undergo EPA's review process prior
to publication by EPA or the contractor.
4. Contractors' Working Files
Contractor must maintain accurate working
files on all work documentation required in
performance; Contracting Officer can require
contractor to provide EPA with all such
information.
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SPECIAL PROVISIONS (Cont.)
5. Confidential Business Information
Contractor given access to proprietary
data submitted to EPA must protect its
confidentiality. Contractor must:
Use data only to carry out contract work
Not disclose information to other than
EPA employees unless prior written
approval
Return all copies to Contracting Officer
Not use it to compete against related
businesses
Get Contracting Officer consent prior to
entering into subcontract requiring
disclosure
Include disclosure restrictions in sub-
contracts.
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SPECIAL PROVISIONS (Cont-)
6. Drug-Free Workplace
Offerer/contractor required to certify and
agree that offerer/contractor and employees
will not engage in unlawful manufacture,
distribution, dispensing, possession, or use
of a controlled substance in the performance
of a government contract
Offeror/Contractor with employees agrees to:
Notify employees of prohibition/that required
to notify employer if convicted under criminal
drug statute within 5 days of conviction;
provide copy drug-free certification statement
Establish drug-free awareness program
Notify contracting officer of any violations
and take appropriate personnel action
Make a good-faith effort to maintain a drug-
free workplace
Penalties: Suspension of contract payments;
termination for default; suspension; debarment
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CONTRACTS SUBJECT TO
SPECIFIC LABOR LAWS
Government Contracts Are Subject To The Following
Labor Laws Requiring Certain Minimum Pay Standards
CONTRACT WORK HOURS AND SAFETY
STANDARDS ACT - applies to laborers &
mechanics for contracts over $2500, and
contraction contracts over $2000
WALSH-HEALEY PUBLIC CONTRACTS ACT -
applies to ail contracts over $10,000
for manufacture or furnishing of materials,
supplies, articles or equipment
FAIR LABOR STANDARDS ACT - applies to
ail government contracts
SERVICE CONTRACT ACT - applies to service
employees on service contracts over $2500
DAVIS BACON ACT - applies to all contracts
for construction, alteration or repair over
$2000.
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CONSTRUCTION CONTRACTS
Construction Contracts Have Unique Requirements,
Including:
Contractor Must Furnish Performance
And Payment Bonds If Contract Over
$25,000
If Site Conditions Differ Materially From
Those Known When Fixed Price Contract
Bid Submitted, Contractor Entitled To
Adjustment
Special Contractor Evaluation Is Required
By FAR For Contracts: 1} $500,000 Or
More; 2) $100,000 Or More If Any Element
Either Unsatisfactory Or Outstanding; 3)
$100,000 Or More, If Contract Terminated
For Convenience Of Government.
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SECTION 8(a) CONTRACTS
Section 8(a) Of Small Business Act Authorizes
SBA To Contract With Federal Agencies And
Then Subcontract Work To Socially/Economically
Disadvantaged Small Business. 8(a) Contracts
Have Special Requirements:
Contract Modifications Require Two
Changes - One With SBA Prime Contract And
One Between SBA And Subcontractor
Payment Is Made Directly To Subcontractors
(Not Thru SBA); Advance Payments May Be
Issued And Should Be Expedited
May Require More Project Officer Assistance
Because Of Government's Special Responsibility
Award of 8(a) Contract Excluded From
Requirements For Full And Open Competition
Agency Restricted In Terminating Contract;
Must Terminate With SBA First.
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Chapter 15
MISCELLANEOUS CONTRACT PROVISIONS AND SPECIAL CONTRACT TYPES
It is impossible to describe in this chapter all of the many contract provisions
which require special administration duties. Many are only applicable to one type of
contract or certain specific situations. Nonetheless, presented here are several which
are common to many EPA contracts and are of interest to Project Officers. Others may
be included in individual contracts; in these situations, Contracting Officers will advise
their Project Officers of their responsibilities with respect to these unique provisions.
15.1 Patents and Data Rights
(1) Patents
A patent is a grant given by the Government to an inventor, which gives the
inventor exclusive control for 17 years of the invention and the opportunity to enforce
that control by court action against any infringers. The Government's policy is to
encourage the use of inventions in performing contracts, even though the inventions may
be covered by US patents. In those cases where the Government has authorized or
consented to the manufacture or use of an invention covered by a patent, any suit for
infringement of the patent based on a Government contractor's use or manufacture of the
invention can be maintained only against the Government and not against the contractor
or subcontractor.
However, if the patent infringement results from performance under construction
contracts or contracts for supplies or services that normally are sold by any supplier to
the public in the commercial open market, the liability may ultimately be borne by the
contractor or subcontractor. Therefore, the Government may require that the
contractor agree to indemnify the United States against liability for patent infringement
in these situations.
The general rule is, where the contractor performs work or provides supplies which are
unique to the Government and which he does not ordinarily make for his commerical
customers, the Government assumes the risk of indemnity and does not include an
indemnity clause. But where the supplies or services are "standard commercial" and
have been sold to the general public, the contractor must assume the risk. EPA
contractors are required to notify the Contracting Officer of all claims of infringement
that come to their attention in connection with contract performance.
Under the terms of most EPA contracts, the contractor may elect to retain title to
any invention made in the performance of work under the contract. If this occurs, the
Government will receive a nonexclusive, nontransferable, paid-up license to practice
any such invention throughout the world. Under certain circumstances, the Government
is granted only limited rights, or takes title to the invention itself.
To exercise its right to retain title to an invention, the contractor must disclose
it to the Contracting Officer within two months after it is disclosed to the contractor by
the inventor. The contractor must decide within a certain period of time after disclosure
whether it elects to retain title to the invention, and must file its initial patent
application within another specified period after that. (The time periods vary depending
on whether the contractor is a small or large business or a nonprofit organization). The
contractor is also required to submit annual reports on the utilization of any invention
when title is vested in the Government.
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Since the majority of EPA's contracts cover services rather than supplies,
inventions are infrequently created under our contracts. EPA does have a Patent Advisor
in the Office of General Counsel who is available to answer questions if the issue does
arise.
(2) Rights in Data and Copyrights
It is necessary for EPA, in order to carry out its missions and programs, to
acquire or obtain access to many kinds of data produced during or used in the
performance of its contracts to meet programmatic and statutory requirements,
including regulatory activities. At the same time, EPA recognizes that its contractors
may have a proprietary right or other valid economic interest in certain data resulting
from private investment, and that protection from unauthorized use and disclosure of
this data is necessary in order to prevent the compromise of such property right or
economic interest, avoid jeopardizing the contractor's commercial position, and
maintain EPA's ability to obtain access to or use such data.
The protection of this data by EPA is necessary to encourage qualified contractors
to participate in EPA programs and apply innovative concepts to such programs.
Subpart 1527.70 of the Environmental Protection Agency Acquisition Regulations
(EPAAR) set forth specific policies, procedures, solicitation provisions, and contract
clauses relating to the acquisition of data and the rights in data or copyrights relative
thereto.
It is important for Project Officers to recognize that acquisition of data involves
not only the identification and definition of the data to be acquired and the circumstances
of its use, but also the rights of the Government to the use of such data. In fact, in many
cases, the Government is acquiring the right to use of the data rather than title to the
data itself. It is EPA's practice to identify and define its data requirements to the extent
possible in the statement of work of the contract. Recognizing that this may not always
be feasible, EPA has made provisions for the acquisition of data subsequent to award of
the contract. In either event, since preparation, maintenance and storage of data
generally represent a substantial expense to both the Government and contractor, data
requirements shall be kept to a minimum consistent with program needs.
Following are definitions of various terms as they are used in the EPAAR:
(a) "Computer software" means computer programs, computer data bases, and
their documentation.
(b) "Data" means recorded information, regardless of form or media and
includes computer software. It does not include information incidental to
contract administration such as financial, business or management
information.
(c) "Form, fit, and function data" means data relating to, and sufficient to
enable physical and functional interchangeability; as well as data identifying
source, size, configuration, mating and attachment characteristics,
functional characteristics, and performance requirements.
(d) "Limited rights" means the rights of the Government in limited-rights data,
as set forth in a Limited Rights Notice if included in the data rights clause of
the contract.
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(e) "Limited-rights data" means data that embodies trade secrets or is
commercial or financial and confidential or privileged to the extent that
such data pertains to items, components, or processes developed (or with a
backup computer in case of inoperability) at private expense, including
minor modifications thereof. (Contracting Officers may, with the
concurrence of the Project Officer, use the following alternate definition:
"Limited-rights data" means data developed at private expense that embodies
trade secrets or is commercial or financial and confidential or privileged).
(f) "Restricted computer software" means computer software developed at
private expense and that is a trade secret, or is commercial or financial and
confidential or privileged, or is published copyrighted software.
(g) "Restricted rights" means the right of the Government in restricted
computer software as set forth in a Restricted Rights Notice if included in a
data rights clause of the contract or as otherwise may be included or
incorporated in the contract.
(h) "Unlimited rights" means the right of the Government, without additional
cost to the Government, to use, disclose, reproduce, prepare derivative
works, distribute copies to perform publicly and display publicly, in any
manner and for any purpose, and to have or permit others to do so.
All contracts which involve the acquisition of data discussed and defined above
must contain clauses which define the respective rights of both the Government and the
contractor regarding such matters as its use, duplication and disclosure. The type of
contract, the particular subject matter of the contract, or the intended use of the data,
must be considered in selecting the appropriate contract clause. It is therefore essential
that all Project Officers whose acquisition includes data be familiar with the various
clauses so that they may assist the Contracting Officer in selecting the clause which best
serves both the Government and the program being supported.
Following is a brief general discussion of the various clauses. Their full text is
contained in EPAAR Temporary Regulation 1 (effective date: July 15, 1984) and may be
obtained by contacting your supporting Contracting Officer. Specific questions regarding
the selection of clauses, appropriate to program needs, should be addressed to the
Contracting Officer early in the pre-solicitation phase of the acquisition process.
(a) Rights in Data - General (EPAAR 1552.227-71)
(i) This clause balances EPA's program and mission needs with the
Contractor's right to protect property and valid economic interest
stemming from private investment. The Contractor is protected from
unauthorized use or disclosure of limited rights data or restricted
computer software either by withholding delivery or by placing a
"Restricted Rights Notice" authorized by the clause on the data to be
restricted. Further, the categories or types of data which the
Government is to acquire with limited rights are specifically identified
along with an enumeration and definition of the use or disclosure rights
of EPA. Although the Contracting Officer may revise these purposes
consistent with EPA's needs, appropriate purposes include: use by
support service contractors, evaluation by non-Government evaluators
and use where required by other contractors participating in the same
program.
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(ii) Pursuant to this clause, contractors may establish or maintain
copyright protection for data first produced and/or delivered under the
contract. However, the Government will normally be granted a
nonexclusive, irrevocable license, which includes the rights to
reproduce, prepare derivative works, and distribute to the public. The
Contractor is permitted to establish claim of copyright to scientific and
technical articles based on, or derived from, the contract work and
published in academic, professional, or technical journals. Such
permission may also be granted in other cases.
(iii) Regarding restricted computer software, the means of protection
afforded the contractor are the same as those for limited rights data.
However, the Contractor may also substitute form, fit and function data
or deliver the software with restricted rights relative to its use,
disclosure, and reproduction. It is important in circumstances when
such software is needed for use in more than one computer that the
number be specified in the contract schedule.
When EPA acquires software with restricted rights, it may use the
software (or copy for use) in or with the computer or computers for
which it was acquired. EPA may also reproduce it for archival or
backup purposes, modify, adapt or combine it with other software (the
resultant software is subject to the same restriction in rights). It also
may be disclosed or reproduced by support contractors or their
subcontractors, subject to the same restrictions in rights.
(iv) In the event EPA questions the Contractor's authority to limit the use
of data or restrict the use of software, procedures are provided by the
clause.
(b) Rights in Data - Special Works (EPAAR 1552.227-72)
(!) Generally, this clause is used in contracts which are primarily for
the production or compilation of data (other than limited rights data or
restricted computer software) for EPA's internal use, or when there is
a need to limit the distribution or use of the data or to obtain indemnity
for liability that may arise from the content, performance, or use of the
data. It would also be used where "existing works" are being modified.
(ii) The following are circumstances under which use of the clause is
required:
(A) Production of audio-visual works;
(B) Agency histories;
(C) Recruiting, morale, training, or career guidance works;
(D) Works involving instruction or guidance of Government
officers and employees;
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(E) Works intended for use in connection with EPA regulatory
or enforcement activities not involving research,
developmental or experimental work;
(F) Collection of data containing personally identifiable
information, the disclosure of which would violate rights of
privacy or publicity;
(G) Investigatory reports; and
(H) Works, the early release for EPA regulatory or enforcement
activities.
(iii) Under this clause, EPA has unlimited rights in all data delivered and in
all data first produced, the right to limit the Contractor's claim to
copyright, and the right to limit the use and release of data except for
purposes specifically provided for in the contract.
(iv) The contractor indemnifies the Government and its officers, agents, and
employees against liability resulting from violation of trade secrets,
copyrights, a right of privacy or publicity, provided the Government
gives timely notice of its intent to make such a claim.
(c) Rights in Data - Existing Works (EPAAR 1552.227-73)
(i) This clause is used in contracts for the acquisition (without
modification) of such works as motion pictures, videotapes, sound
recordings, literary, pictorial or other similar works. The contract
may limit the use of such work in terms of means of exhibition or
transmission, time, audience, or geographical locations.
(ii) In the case of existing computer software, no special clause is required,
although the contract must contain terms sufficient to permit EPA to
fulfill the need for which the software is being acquired. Care should be
exercised to ensure that any vendor's standard commercial lease,
license, or purchase agreement be consistent with EPA's purpose for
acquisition. As with the acquisition of other computer software, Project
Officers should consult early on with the Contracting Officer regarding
EPA's intended use and the establishment of the contract language
necessary to protect the rights of EPA in that use.
(iii) Contracts for other existing works, being acquired off-the shelf with
no intent of reproduction or use which may be prohibited by the author's
or publisher's rights, need and contain any of the clauses discussed
above.
(iv) Modification of existing works is considered to be "Special works" for
rights in data purposes.
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(4) Additional Data Requirements (EPAAR 1552.227-74)
In recognition of the fact that in some contracting situations, it may not be
possible or appropriate to ascertain all data requirements at the time of
contracting, this clause permits the Government to order data any time
during contract performance or within three years of final payment any data
which was first produced or specifically used in the contract. It provides for
compensation to the Contractor for formatting, production, and delivery.
15.2 Peer and Administrative Review
The Administrator has implemented an internal review process for EPA
scientific, informational, and educational materials designed for public distribution.
Any such materials attributable to EPA, whether produced by an EPA employee,
consultant, contractor, or grantee, must be reviewed through the control system
established in the EPA Order prior to public distribution. The intent of the Order is to
ensure the high quality, completeness, and accuracy of materials attributable to EPA.
A contract clause restricts the contractor from independently publishing or
printing material generated under contract until after completion of the EPA review
process. A copy of any paper, article, or other dissemination of information intended for
publication must be submitted to the Contracting Officer at least 30 days prior to
publication. The Government is to notify the contractor of review completion within the
number of calendar days specified in the contract clause after the contractor's
transmittal to the Project Officer of material developed under the contract. If the
contractor does not receive Project Officer notification within this period, the
contractor is to notify the Contracting Officer in writing.
The contract clause will establish statements the contractor must include in any
public distribution of the contract-generated material, whether or not the Agency has
decided to publish the material.
15.3 Contractors' Working Files
EPA contracts may provide that contractors must maintain accurate working files
(by task or work assignment, if applicable) on all work documentation required in
performance. The Contracting Officer has the right to require the contractor to provide
EPA with all information contained in these working files.
15.4 Treatment of Confidential Business Information
Periodically, the Agency has requirements that call for a contractor to review or
analyze proprietary data that has been submitted to EPA. Contract clauses exist which
protect the confidentiality of such data by requiring the contractor to:
(1) use the confidential information only for the purposes of carrying out the
work required by the contract;
(2) not disclose the information to anyone other than EPA employees without
the prior written approval of EPA's General Counsel;
(3) return all copies of the information to the Contracting Officer when it is
no longer required or upon completion of the contract;
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(4) not use any confidential information supplied by EPA or obtained during
contract performance to compete with any business to which the confidential
information relates;
(5) obtain the written consent of the Contracting Officer prior to entering into
any subcontract that will involve the disclosure of such confidential
information to the subcontractor; and
(6) include the same requirements in any subcontract which will involve the
furnishing of confidential business information to the subcontractor.
More specific procedures are included in contracts which involve access to
confidential business information, related to either the Federal Insecticide, Fungicide,
Rodenticide Act or the Toxic Substances Control Act.
Project Officers who discover that a contractor is not in compliance with any of
the contract requirements in this area must immediately notify their Contracting
Officer.
15.5 Certification Regarding a Drug-Free Workplace
In March of 1989, a new FAR regulation (at 52.223-5 and 6) was published
requiring that all offerers for Government contracts certify that they will not engage in
the unlawful manufacture, distribution, dispensing, possession, or use of a controlled
substance in the performance of the government contract. Failure to so certify renders
the offerer unqualified and ineligible for the award of a government contract.
In submitting any offer for a government contract, the offerer (if other than an
individual) certifies that it will:
(1) publish a statement notifying employees that the unlawful manufacture,
distribution, dispensing, possession, or use of a controlled substance is
prohibited in the offerer's workplace, and specifying the actions to be taken
against employees for any violation of that prohibition;
(2) establish a drug-free awareness program to inform employees about
the dangers of drug abuse in the workplace, the Contractor's policy of
maintaining a drug-free workplace, available drug counseling,
rehabilitation, and employee assistance programs, and the penalties for drug
abuse violation;
(3) provide all employees engaged in contract performance with a copy
of the statement of (1) above;
(4) notify employees that they are required to abide by the terms of the
statement and to notify the employer of any criminal drug statute conviction
within five days of such conviction;
(5) notify the contracting officer within 10 days of any such notification
by an employee or otherwise receiving actual notice of such conviction;
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(6) impose sanctions or remedial measures on any employee convicted of
drug abuse violations occuring in the workplace (including personnel actions
up to and including termination, or requiring the employee to satisfactorily
participate in a drug assistance or rehabilitation program); and
(7) make a good faith effort to maintain a drug-free workplace through
implementation of the above (1) through (6).
In addition, any individual offerer/contractor that has no more than one employee
including the offerer/contractor agrees, by award of the contract or acceptance of a
purchase order, not to engage in the unlawful manufacture, distribution, dispensing,
possession, or use of a controlled substance in the performance of the contract. The
contractor's failure to comply with these requirements may render the contractor
subject to suspension of contract payments, termination of the contract for default, and
suspension or disbarment.
Project Officers who discover that a contractor is not in compliance with any of
the contract requirements in this area must immediately notify their Contracting
Officer.
ADMINISTRATION OF SPECIAL TYPES OF CONTRACTS
Certain types of contracts contain provisions which demand special
administration techniques. While it would be too lengthy to discuss them all here, the
most typical ones used at EPA are set forth in this chapter with a short discussion about
their unique provisions.
15.6 Contracts Subject to Specific Labor Laws
All Government contracts contain provisions requiring certain pay standards.
Various laws have been promulgated for the protection of these employees; these are
summarized below:
(1) Contract Work Hours and Safety Standards Act - applicable to laborers and
mechanics on all contracts over $2500 ($2000 for construction contracts);
(2) Walsh-Healey Public Contracts Act - Applicable to all contracts over
$10,000 for the manufacture or furnishing of materials, supplies, articles,
or equipment;
(3) Fair Labor Standards Act - applicable to all government contracts
regardless of size;
(4) Service Contract Act - applicable to service employees on all service
contracts over $2500; and
(5) Davis Bacon Act - applicable to all contracts for construction, alteration, or
repair which are over $2,000.
Much of the enforcement of the labor laws is handled by the US Department of
Labor. Nonetheless, EPA has certain responsibilities, and any Government employee who
is aware of or suspects a violation of any such law is responsible for reporting it to the
Contracting Officer, who will refer the matter to the appropriate authorities.
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The last two acts listed above require the most monitoring by the contracting
agency. Both require the inclusion of wage determinations in those contracts which are
applicable and the enforcement of minimum wage standards for the employees affected.
Most of the administration of the Service Contract Act requirements is handled by the
Department of Labor (DOL). EPA Project Officers and Contracting Officers, however,
are responsible for ensuring that 1) DOL is notified of the existence of all such
contracts, 2) all contractors are fully informed of their responsibilities, and 3)
contractors post DOL Form SC-1 in a prominent place at every job site.
The Davis Bacon Act, applicable to construction contracts, requires the review of
weekly payroll records for all employees (whether employed by the prime contractor or
any subcontractor) to verify compliance with the minimum wage rates and other
provisions of the law. Project Officers must ensure that wage determinations are posted
in a prominent place at the work site, and they may be asked to verify that the
employees' classifications on the payroll records conform with the work actually
performed.
Violations of these labor laws may result in suspension of payment, liquidated
damages assessment, or ultimately, suspension or debarment of the contractor from
receiving future Government contracts. Technical personnel who are assigned to
monitor contracts with any of these provisions should review the requirements and their
own responsibilities with their Contracting Officers immediately after award.
15.7 Construction Contracts
Besides the administration of the Davis Bacon Act provisions, construction
contracts carry with them a number of unique requirements with which technical
personnel should become familiar. The majority of the Agency's construction activities
which are contracted are in the Superfund program, and the majority of these are
handled as subcontracts under the remedial planning program. Therefore, much of the
administration is managed by the prime contractors. However, Project Officers should
know the requirements, and there are a certain number of prime contracts for
construction awarded in EPA, which do require special administration activities. ,
One unique feature of construction contracts over $25,000 is the requirement
for the furnishing of both performance and payment bonds by the contractor. A
performance bond is a guarantee that the contractor will fulfill 100% of the obligations
of the contract; a payment bond assures payment to all persons supplying labor or
material under the contract. This means that if the contractor fails to fulfill either of
these requirements, a "surety" is named to be legally liable for the debt. Prime
contractors will usually require the same guarantees from their subcontractors.
Fixed price construction contracts also provide that if site conditions differ
materially from those known at the time of submission of a bid or proposal, the
contractor may be entitled to an adjustment in contract price as a result. Project
Officers will be required to provide input on the evaluation of contractors' claims if or
when this occurs.
Finally, special contractor evaluations are required by the FAR for each
construction contract of 1) $500,000 or more, 2) $100,000 or more, if any element
of performance was either unsatisfactory or outstanding, 3) more than $10,000, if the
contract was terminated for default, or 4) $100,000 or more, if the contract was
terminated for convenience of the Government. The evaluation must be prepared by the
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Contracting Officer with input from the Project Officer within two weeks after final
acceptance of the work or contract termination.
15.8 Contracts with the Small Business Administration Under the 8(a)
Program
Section 8(a) of the Small Business Act, as amended, authorizes the Small
Business Administration (SBA) to contract with Federal agencies and then to subcontract
the work to socially and economically disadvantaged small business. Any type of service
may be contracted for under the 8(a) program.
SBA delegates the administration of 8(a) subcontracts to the procuring agency,
which results in certain differences in contract administration. For example, contract
modifications must be accomplished by two changes: one with the SBA prime contract,
and the other between SBA and the subcontractor.
Some 8(a) contracts may call for advance payments, since these firms are small
businesses and often do not have the cash flow to finance their contracts to completion or
until receipt of progress payments. It is therefore important that Project Officers
expedite payment requests from these firms to avoid possible disruptions in contractor
performance caused by cash flow problems. Under the terms of the contracts, payment
is made directly to the subcontractors, and does not "pass through" SBA.
It is a special responsibility of the Government to assist an 8(a) contractor in
becoming a viable business entity. Project Officers may become particularly involved
in spending extra effort in guiding and directing the firm's performance. Hopefully, this
will result in a better product or service than might otherwise have been obtained. In
addition, because awarding a contract to an 8(a) firm requires no statutory exemptions
for other than full and open competition, program offices may gain benefits through
follow-on or succeeding contracts with the same company, not often possible with other
firms, due to the requirements for competitive acquisitions.
The 8(a) subcontractor is subject to the termination clauses contained in the
prime contract with SBA. However, independent exercise of the termination right by the
agency is restricted. Normally, the SBA will try to reach an agreement to modify the
requirements of the contract to avoid termination. If this fails, the agency may actually
terminate the contract with SBA, who cannot be held liable for any excess costs of
repurchase (see Chapter 14). If this occurs, SBA in turn will terminate the
subcontract.
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APPENDICES
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ETHICS PRETEST AND RESPONSES
Which of the following circumstances would EPA view as ethical employee behavior.
(Indicate yes/no/comments)
1. EPA employee accepts Christmas gift from EPA contractor who has been personal
friend for 10 years and has been giving Christmas gifts during that entire period.
Response: Issue is whether personal friendship preceeded EPA contractor
relationship. Okay, if gift result of personal friendship that preceeded EPA
contractor status. However, if employee is managing EPA contract with contractor at
time of gift, is not acceptable.
2. EPA employee speaking on behalf of EPA at professional meeting two hours from
Washington accepts ride to meeting with other speaker from private company.
Response: Issue is whether transportation is considered "incidental" and whether
other speaker is personal friend/professional acquaintance or EPA contractor. If
incidental, okay; if personal friend/professional acquaintance, okay. If not incidental
and also EPA contractor, not okay. This would be considered incidental and okay.
3. EPA employee attends federal office automation trade show and accepts the following
items from vendors there:
a) desk calendar;
b) discount coupon for software worth $99.00;
c) disk holder with vendor's name and address (worth $12.00 retail);
d) pen with vendor's name and address (worth $4.99 retail);
e) free buffet lunch.
Response: Issue is value of promotional item (if less than $10.00 retail value) and
if it would give appearance of preference (e.g., vender's name is prominently
displayed and employee uses in office.) a) okay; b) no; c) no; d) okay; e) okay if all
attendees receive.
4. EPA employee in OSWER has received proposals from several companies in response
to solicitation. The lowest bidder presently has contract with OARM. OSWER
employee calls project officer in OARM to inquire if lowest bidder has been
performing satisfactory work and within original contract budget. Is project officer
permitted to respond?
Response: Issue is how the project officer responds. Okay to offer facts;
inappropriate to offer subjective opinions. Information received can't be used by
inquirer in scoring proposals.
5. EPA employee receives unsoliciated proposal, but has no funds to fund proposal.
One year later, EPA employee writes RFP for competitive procurement based on
proposal submitted, and divulging the methods proposed in the unsolicited proposal.
Is this permissible? Does the original submitter have a right to protest?
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Response: Issue is whether the RFP divulged confidential procurement information.
If the methods are unique and employee can't describe them without giving away the
approach, is not permissible. If divulges, original submitter has right to protest.
6. EPA employee receives invitations from EPA contractors to attend Christmas parties.
To avoid any showing of partiality, EPA employee decides to attend all parties.
Response: Not appropriate, because may have appearance of conflict of interest.
However, it has been considered proper to attend such an event where the EPA
employee has recently worked for the company, under the personal relationship
exception.
7. EPA employee attends all-day briefing by EPA contractor at contractor's office.
Contractor provides buffet lunch for all attendees, both public and private.
Response: Issue is whether there is any way for the EPA employee to pay for the
lunch. If not, it's permitted under the "widely attended gathering" exception.
8. EPA employee's husband has substantial private stock in EPA contractor company,
representing 25% of husband's net worth; employee is husband's beneficiary. EPA
employee serves on technical review panel for major procurement, where EPA
contractor has submitted proposal.
Response: Employee should recuse self from the panel.
9. EPA employee receives and accepts invitation to speak on behalf of EPA at private
conference at the Greenbriar funded by state government funds. Invitation includes
transportation, meal and lodging expenses and $200 honorarium. Employee also
attends separate reception and dinner for speakers sponsored by private company
arranging the conference.
Response: Acceptance directly from the state is okay if there is an IPA agreement, or
the private company is a 501(c)(3) (charitable or educational) organization. If so,
acceptance of travel and meals is okay. If private company, acceptance is not
permitted except for meals available to all attendees. If the Greenbrier offers a deal
whereby they charge regular rates for everyone else and government rate within per
diem amounts for government speakers, this could also be acceptable. Honorarium
may not be accepted because this is official appearance.
10. EPA employee is friend of local official running for reelection, and assists official
in telephone poll on specific election issues totally unrelated to federal activities or
issues.
Response: Hatch Act prohibits if assistance is on behalf of partison candidate or
(except in local counties with large number of federal employees) if any of the
candidates is a Republican or Democrat.
11. EPA employee prepares competitive procurement RFP. During the alloted response
period, employee leaves EPA and joins firm that is bidding on the RFP, assists firm
in preparing bid proposal, and appears as staff in the proposal.
Response during suspension of Procurement Integrity Act: Appearing as staff is
okay. However, if the procurement were noncompetitive, approval of Assistant
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Administrator for Administration would be required. However, this may be viewed
as unfair competitive advantage depending on nature of procurement.
Response when Procurement Integrity Act implemented: Not acceptable to appear as
staff on contract. Under Act, no official who has participated personally and
substantially in conduct of Federal agency procurements shall participate
personally and substantially on behalf of the competing contractor in the
performance of such contract during the period ending two years after the last date
such individual participated personally and substantially in the conduct of such
procurement.
12. EPA contract is due to expire and be recompeted. Existing contractor requests EPA
project officer for information regarding anticipated requirements and continuation
work. EPA project officer gives information to contractor.
Response: As long as contractor requests information and it is actively solicited by
contractor, is permissible, if the information is also available upon request to
other contractors. To avoid creating situation of giving competitive advantage to any
specific contractor, however, information should be made available to all
prospective contractors at same time.
13. If a bribe if offered, the employee should not accept anything, but indicate a
willingness to consider the offer, and then contact EPA's Office of Inspector General.
Response: Yes, because rejection of the bribe may threaten the briber and cause the
briber to attempt to throw the blame on the employee by reporting that the
employee solicited the bribe.
14. An EPA employee served on a technical evaluation panel for a contract award. After
he left EPA, he went to work for the contractor and was assigned to work as project
manager for the contract he helped to award. A dispute arises over the meaning of a
contract provision and the company's management asks the former employee to
prepare a written submission to EPA for signature of the company's president.
Response during suspension of Procurement Integrity Act: Okay, because the statute
bars only representational activity, and not aid and assistance. Could not send under
his own name. Is okay to work on the contract. Is not acceptable for former
employee to service as project manager, however; only as staff.
Response after implementation of Procurement Integrity Act: Not acceptable to
work on contract. No Government official or employee who has personally reviewed
and approved the award, modification or extension of any contract for a
procurement shall, during the period ending two years after the last date such
individual personally reviewed and approved the award, modification or extension of
any contract for such procurement, shall participate personally and substantially
on behalf of the competing contractor in the performance of such contract.
15. An employee is the treasurer of an environmental group which has applied to EPA
for a grant. The employee receives no pay for this activity.
Response: The employee is barred from participating in any way, even by advice or
recommendation, in the EPA decision on the application, since he is an officer of an
organization which has a financial interest in the matter.
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16. Which of the following qualify as indicators of potential fraud: (Circle ones that are
indicators)
a. Purchasing items and services from single source. (Yes)
b. Selective release of information concerning requirements and pending purchases.
(Yes)
c. Providing mailing list of potential contractors to contracting officer for mailing
outRFPs. (No)
d. Defining statement of work and specifications to fit products/capabilities of
limited set of contractors. (Yes, unless minimum needs are described)
e. Using statements of work, specifications or sole source justifications developed
by or in consultation with a specific contractor. (Yes, if that contractor is
permitted to bid. That contractor must be prohibited from bidding.)
f. Splitting up requirements to fit within the small purchase requirements
($25,000). (Yes)
g. Vague specifications. (Yes. It allows offerers to determine government needs.)
h. When requested by a contractor to recommend possible subcontractors or experts
with the desired expertise, providing references to several known individuals or
groups. (No. It's okay if the contractor asks; but don't recommend any given
one.)
i. Acceptance of a late bid (e.g., five minutes after deadline). (Yes)
j. Wide variance between the technical rating given the best proposal and all other
proposals. (Yes)
k. Bidders who are qualified and capable of performing fail to bid with no apparent
reason, and relatively fewer than normal bids are submitted. (Yes. May be
collusion; may have lost faith in EPA's competitive process.)
I. Identical bid amounts on a contract line item by two or more contractors. (Yes.
May be collusion.)
m. Contractor includes interest costs as part of contract costs to be reimbursed by
the government. (Yes not allowable.)
n. Contractors submits progress payment request for work completed but not yet
accepted by the government, (No, Is okay if is not final payment.)
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DECISION
[1 15,436] MANPOWER PROGRAM ANALYSIS CONSULTATION AND TRAINING, INC
LBCA No. 80-BCA-113.
601-08-82.
November 4, 1981. Contract No. 99-6-
Cost Principles — Limitation of Cost Clause — Timely Notice
Because he failed to give the proper notice under the
Limitation of Cost clause, a contractor was not entitled to be
reimbursed for additional costs incurred under a cost reimburse-
ment contract for a data retrieval system. The contractor claimed
a cost overrun of $17,423 and requested funding of that amount
under the contract. Under the Limitation of Cost clause, a
contractor must notify the contracting officer when he has reason
to believe that the costs he expects to incur within the next
60 days will exceed 75 percent of the estimated cost, or that the
total cost of performance' will be substantially greater or less
than-the estimated cost. Although the contractor gave notice to
government administrative personnel, he did not address such
notice to*the contracting officer. Approval of an overrun by
the administrative personnel would have had no effect. Even if
the notice had been submitted to the proper person, it was
questionable whether he had not already incurred the costs. In
that case, notice would have been untimely.
490
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DECISION
Fourth Street Estates, Inc.
Exercise of a lease renewal option by the government was
ineffective because the notice requirement in the lease was not
met. Whether" the notice on April 2, 1980, satisfied the lease
requirement that renewal notice be given 60 days before the end
of the current term—in this case May 31, 1980—depended on how
the days were counted. The government took the position that in
calculating the notice period the notice-day was to be counted,
but the board found the better view to be that the day of the
notice should not be included. Therefore, beginning on April 3
and counting the days there were 28 remaining in April and 31 in
May, a total of 59. Furthermore, even though the lessor accepted
rent at the old rate, this did not constitute waiver of his right
to insist on timely notice of renewal. The lessor objected to
the late notice at the time of delivery, refused to accept it,
and has maintained his objections since.
The attempted lease renewal was ineffective. This appeal
is remanded to the contracting officer for such action as is
deemed appropriate. Appellant is entitled to the difference
between the rent paid by the Government after May 31, 1980, and
the fair market rental value of the premises during the period
of Government occupancy, subject to limitations imposed by law,
together with interest according to law until paid. 50 AM JUR
2d, Landlord and Tenant 1(1200; 41 U.S.C. 1(611 (Supp. II, 1978).
491
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WORK PLAN NEGOTIATION
Instructions-for EPA Work Assignment Manager
Ypu are John Wamo, working for EPA. You drafted the
attached work, assignment, and have worked with TAG before on
previous work assignments. You were somewhat surprised to
receive TAC's work plan and discover the task expansion (e.g.,
site visits, telephone follow-up, briefings, extra reports)
included in it. You wanted to complete this task assignment,
plus the testing phase (option year), for a total of 2500
hours. TAG has proposed to use 2350 for this assignment
alone.
Your role is to get TAG back to the original 1500 hours
you had contemplated for the task, or minimally/ to get the
total work (including option year) for no more than 2500
hours. You know the testing program in the option year
will take at least 800 contractor hours, so you have some
leeway for negotiation (up to 1700 hours) on the first year,
although not a great deal. There is also, a possibility that
you can get some additional funding for the option year, but
no more than an additional 300 hours (for a total of 2800
hours.) You can't count on the additional funding, however.
You recognize the value of doing some telephone followup, but
the site visits seem rather unnecessary to you. You are
shocked at the amount of travel proposed by the contractor.
You also want to make sure that TAG will consider your
father-in-law's gardening firm for the testing phase to be
performed in the option year. Although this session is only
supposed to cover the current work assignment, you want to
lay the groundwork now, before TAG gets geared up for the
testing phase. You realize you cannot force TAG to use your
father-in-law, but since you know he is cheaper than anyone
else, you want to make sure he is considered.
Negotiate the best possible deal for EPA, within these
parameters.
492
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WORK PLAN NEGOTIATION
Instructions for Technically Acceptable Corporation (TAG)
You are Jay Theisman,. Project Manager for TAG. You have
submitted the attached work plan for carrying out EPA's Work
Assignment #13. You are fully aware that your work plan exceeds
the scope of the work assignment contemplated by EPA. However,
your company currently has a cash flow crunch because you just
lost a big contract, and you need to provide additional coverage
for your staff. You have therefore added additional tasks and
hours to the proposed work assignment, in hopes of providing
additional coverage. You want to avoid any subcontractors,
and have proposed none, to ensure that TAG gets the most
staff coverage. You also believe, of course, that those
tasks will improve the assignment.
You also would like to have the opportunity to visit
Japan and France, and see the site visits as a nice "benie"
for yourself. You have deliverately included the Work Assignment
Manager as part of the site visit team, as an incentive for
him to approve the site visits. TAG'S President, however, has
requested you to negotiate for additional staff hours rather
than direct costs such as travel, because staff hours best,
assist the company. As far as you know, EPA has the additional
funds to fund this assignment.
Your role in this negotiation, is to convince EPA -to
accept your work plan, with its additional subtasks and hours.
493
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INDEX
Acceptance of deliverables.performance 380,393-4
Accounting technician 26,40
Acknowledgement of completion 400,401
Amendments 441
Administrative change 434
Administrative Delivery Order Officer, defined 6,22,38-9,86
Advisory and assistance services 217a-b,232
Agent 35
Allowable, allocable, reasonable See Costs, reasonable, allowable, allocable
Appearance of impropriety 130,228
Appropriations 89,91,97-101,103ff,114ff
Allocation 109
Annual 91,97,103
Multiple 100-2
Multi-Year 91,98,104
No-Year 91,99,104,107
Authority
Delegation of 15,17,37,76
Actual vs. apparent 17,37
Award fee 45,47,54,78,80,81,194,384ff,396
Base fee 54,385396
Best efforts 53,80,280,310,378,392
Bid protest 145-6
Bona Fide Need 92,104,117
Blue Team 40,355
Boilerplate 47,73
Certification 5,7,8
Changes 45,48,409,434ff,439
Administrative 434
Cardinal 416,437
Clause 409,413-15
Increase in scope 437
Notification 418
Change orders 434
Claims 456,458
Commitment of funds 89,103
Communication with contractors 303,312,376,381,391
Competition in Contracting Act 425,438
Completion-form contract 55,78,97,156,311,351
Confidential business information 133,142,471,480-1
Conflict of interest 144-5,228,306
Consent to subcontract See subcontract approval .consent
Constructive change 306,430,439.439
Consultant approval 173,231
Continuing funds 103
Contract
Closeout 450,464
Definition 12,35
Definitizing 61,85
Elements of 12,35,45,73
PCMD 7/90
494
-------
Contract (cont.)
Funding 89
Modification 231
Parties to a contract 13,36
Duties of parties 14,36-7,76ff
Breach of 36
Termination See Termination
Types 49ff
Contract types, defined 74ff
Cost-plus-award-fee 385ff, 396-7 See also award fee
Fixed fee 339,370
Fixed-price 49,50,51,75,464
Construction 473,483
Cost-reimbursement 49,50,52,53,54,55,77ff,292,351 -3,464
Time-and-materials 49,50,56,81,84,294,353
Labor-hour 49,50,56-7,82,84,295,353
Indefinite delivery/indefinite quantity 49,50,58,59,83ff*,353,464
Letter 49,85
Requirements 58,83
Mission 60,85,157
Section 8(a) 30,474,484
Small purchase orders 60,85
Contracting Officer, defined 18,38
CO Warrant 6,61
Contract Specialist, defined 26,39
Costs
Allowable See Costs, Reasonable, allowable, allocable
Direct Labor 202-3,224,326,351
Disallowance 359-60,378
Estimating 202-6,224ff,254,268,300,352-3,436
Estimate to completion 325
Fee 205,227,292
Fringe benefits 20
General and administrative (G&A) 205,206,226
Indirect 254,354,368
Labor overhead 203,226
ODCs 204-5,224-6,254,268,325
Percentage of completion 327,352-3
Reasonable, allowable, allocable 54,79,80,111,359,368,393,464
Suspension 359-60,378,393
Cost overrun 280,353
Cost Analyst/Auditor 26,40
Cure notice 449,460
Data rights 469,476-80
Default 310,458,462ff See also Termination
Waiver 462-3
Defect 410,435 See also deficient performance, latent defect
Deficient performance 378,381,392
Deliverables 155,168,173
Acceptance.rejection 75-6,378,393-4
Deliverable Review Form 168,379,394
Delivery order 188ff,224ff,311
Defined 61
Delivery Order Officer, defined 6,21,38-9
PCMD7/90
495
-------
Delivery Order Project Officer, defined 6,22,38-9
Deobligation of funds 110-11,120ff
Directing the contractor 207,224,229,289
Disputes 45,111,362,393,445,455
Disclosure of procurement information 133,143
Document Control Number (DCN) 107
Drug-free workplace certification 471b,481-2
EPA Forms
Contractor Communications Record 169,296
Deliverable Review Form 168,379,394
Form 347, Order for Supplies and Services 67,84,188-9,224
Form 1730-1 Non-Expendible Property 236,348,350,371
Form 1900-8, Procurement Request 71,84,224
Form 1900-27, Evaluation of Contractor Performance 168,451,465
Form 1900-41B, CPAF Contract Individual Performance Event 168,388,402
Form 1900-65 4,7,29,151,165,223
Form 2550-19, Invoice Approval 332,356-9
Meeting Record 170,297
Performance Observation Report 400-401
Procurement Request Rationale Checklist 217b
Standard Form 30, Amendment of Solicitation/Modification of Contract 189,411
Task Directive 69
Work Assignment Request 63
Equitable adjustment 111,407,410,417,430,435,439
Ethics 127ff,139ff
Evaluation of performance See performance evaluation
Excusable delay 458,462
Extensions 106,407,422,437
Fee 205,227,292,339,370
Feedback See Communication with contractors
File plan 173,179,181
Financial disclosure 140
Financial monitoring 323ff;351ff
Fixed fee 47,52,53,78,78,194,370
Fixed price 84
Fixed rate 47,81,82,84,200-1
Forward pricing 436
Fraud 380,395
Full and open competition 438ff,474,484
Government furnished data 192
Government furnished property 30,31,164,218,234ff,269,348ff,362,435
Certification 249,366
Gratuities 132,139,142
Gross mistakes 380,395
Guarantees 380,395
Hatch Act 131,141
Incorporation by reference 73,178
Incremental funding 110,409
Indefinite delivery/indefinite quantity 47,58-9,97,121,201,311
Inherently governmental 285,306
Interest 360
Inspection 48,291 ff,307-6,313ff,363,435
Issuance of work 223ff
PCMD 7/90
496
-------
Invoice 171,174,312,332-7 (see also voucher)
Justification for other than full and open competition 426-9,436,438,441,440,484
Key personnel 30,45,47,151,175,179,215-6,231,312-
Labor classifications 195-9,225
Labor laws
Contract Work Hours and Safety Standards Act 472,482
Davis Bacon Act 472,482
Fair Labor Standards Act 472,482
Service Contract Act 472,482
Walsh-Healey Public Contracts Act 472
Latent defect 77,380,395
Lease vs. purchase analysis 219
Level of Effort/cost reimbursement contract 47,149,156,193-4,223ff
Liquidated damages 77,378,393
Limitation of cost 47,340-1,344,353
Limitation of funds 47,342-3,353
Loaded rate 57,204-6226,351
Modifications 31,164,405ff,433ff
Bilateral 408,410,433
Unilaterial 408-9,433
Multiple account funding 108-110,331,333
Nonseverable Services 95-6,104,114ff
Obligation of funds 103,225
Options 31,48,105,121,407,409,420-4,436
Order of precedence 46,47,74
Organizational conflict of interest 33,47,208-10,227
Patents 469,475
Payment 171,179,355-9,360-2,268ff,368ff,381
Clause 76
Suspension See Costs.suspension
Peer/administrative review 470,480
Percentage of completion 327,352
Performance bond 473
Performance evaluation 174,375,381 ff,391 ff,395,451,465,473
Period of performance 106,192,224-5,422
Personal services 217,231,239ff,288,306
Personally and substantially 134,144-5
Post-award orientation 32,175,178
Post-employment restrictions 134,139,144-5
Privity of contract 230-1,289-90
Procurement Analyst 26,40
Procurement Integrity 133,136-7,139,144-5
Procurement Request 71,224
Profit See fee
Profit margin 354
Project Officer, defined 5,19,38
Progress payment 171,358,393
Progress reports 28,48,298-302,308,325
Prompt payment 338
Prompt Payment Act 76,360-1
Property Administrator 26,40
Proprietary information (see Confidential Business Information)
Provision payment 356
Ratification 431,440
PCMD7/90
497
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152-4,173,178,186-7,192,223,291
Recertification 120
Recordkeeping 163ff, 179ff
Recuse 139
Regulations
FAR 27,40;73-4,178
EPAAR 27,41 ;73-4
CMM 27,41
PCMD Acquisition Handbook 27,41
Rejection of deliverables See Acceptable of deliverables, performance
Reporting requirements 175,179
Revocation of acceptance 280,394
Schedule of tasks and deliverables
Senior employees 135,144
Severable services 93-4,105,311
Sole-source contract 135,144
Specifications 46,74,164,379,413
Specialized terms and conditions 45,47,73-74
Staffing plan 188-9,253
Standards of conduct 130ff,139ff
Standard terms and conditions 45,47,73-74
Statement of work 155ff, 175,190-32,224
Restrictions 207-8,224
Subcontracts 48
Subcontract approval.consent 45,173,175,179,211-4,229,289
Supplemental agreement 419,435
Task/technical directive; techical direction memorandum; technical instruction
directive 61,69,86,267,270,286-7
Task plan 267,271
Technical direction 47,168,283-5,305-6
Technical monitoring 28'1ff,307ff
Term-form contracts 55,78,97,149,311,351
Termination 32,45,77,111,310,409,445,457-461,484
For convenience 447,347,473
For default 448-9,458
Tracking systems 172
Vouchers 110,331,334ff,352,355,362
Completion 465
Work assignment 185ff,223ff
' Amendment 41
Defined 61
Elements 192,223
Issuance process 185,223ff
Work Assignment Manager, defined 5,20,38-9
Work assignment request 63,223
Working files 470,480
Workload limitations 6,7,23-25, 30,39
Workplan 29,173,186-7,251 ff,259,267-9,275ff ,291,310
Reaching consensus 275-80
PCMD 7/90
498
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-------
NAME
DATE
LOCATION
FINAL EXAMINATION
CONTRACT ADMINISTRATION COURSE
ANSWER SHEET
Mark "X" Through The Correct Answer
True or False
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Mult
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
T F
T F
T F
T F
T F
T F
T F
T F
T F
T F
iple Choice
a. b. c.
a. b. c.
a. b. c.
a. b. c.
a. b. c.
a. b. c.
a. b. c.
a. b. c.
a. b. c.
a. b. c.
d.
d.
d.
d.
d.
d.
d.
d.
d.
d.
True or
11. T
12. T
13. T
14. T
15. T
16. T
17. T
18. T
19. T
20. T
31. a. b. .
32. a. b.
33. a. b.
34. a. b.
35. a. b.
36. a. b.
37. a. b.
38. a. b.
39. a. b.
40. a. b.
False
F
F
F
F
F
F
F
F
f
F
c.
c.
c.
c.
c.
c.
c.
c.
c.
c.
d.
d.
d.
d.
d.
d.
d.
d.
d.
d.
499
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P*g« 2 - Final Examination (cont.) Name
Fill-in-the-blink
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
500
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CONTRACT ADMINISTRATION TRAINING COURSE FOR
PROJECT^ OFFICERS, WORK ASSIGNMENT MANAGERS, AND DELIVERY ORDER OFFICERS
EVALUATION FORM.
Student reactions to this training course in contract administration are
very important in evaluating the quality and effectiveness of training
being provided by PCMD. Your pertinent Garments on any aspect of this
course will be welcomed and considered. (Do not limit remarks to the
form's questions.) Please return this form to the instructor at the end
of the course.
NAME (Optional)
DATES
OFFICE (Optional)
LOCATION
INSTRUCTOR
Are you currently serving as a : Project Officer? Work Assignment
Manager? Delivery Order Officer? Do you expect to hold one or more
of these positions in the near future?
What were your personal objectives for taking this course?
Did you read the course objectives as stated by EPA? Yea No
Were the stated course) objectives the same aa yours? Yea NO
Did you feel the course was . too complex for your current job?
not detailed enough? just right?
Please check the box on the following page that neat accurately
your feelings about the areas being evaluated:
501
-------
X. COURSE
A. Hew wall did the course content
support the stated course
objectives?
Ul
01
Cc]
3
B. How well structured/organized was
the course—i.e., sequence of
materials, mixture of lecture/
cases, etc.?
C. How well were your personal
objectives for attending the
course met?
ycu rate tl*c ccr.tu*t ci
hew
the course naterials?
E. Vhat is your overall rating of
the course?
IX* INSTRUCTOR
A. Demonstrated knowledge of subject
matter.
B. Responded to
late question*.
C. Encouraged participation where
appropriate*
D. Ability to clearly
and facts.
rept*
B. Sensitivity to claa* needs.
F. overall rating of instructor.
-------
III. TRAINING FACILITY
A. Hew viould you rate the training
facility vath respect to
comfort, access, ftcyiiatics,
adequacy of space, ability to
see, etc.
•g
hi
W
3
i
§
S
z,
e6
tal
1
1
1
1
1
1
Q
Q
'
.
X
o
u
00
^4
CO
as
1
i
•
IV. Did this training relate to your current job?
(If no, explain)
V. Would you recottnend this course to other EPA employees ___ Ye
(If no, explain)
VI. Please state additional
regarding the course.
its or
ndations you nay have
-------
-------
The Office of Administration and Resources Management has established
the Contracts Management Awards Program to reward outstanding project
officers and other contract managers. You are encouraged to nominate
program employees who have made exceptional contributions in managing
the Agency's contracts. Award,s range from $1,000 to $5,000. Up to 6
awards may be presented.
Nominations are due in January each year and awards are made in May.
To obtain additional information regarding this program and a nomination
package for the current year, please contact the Quality Assurance Staff
of the Procurement and Contracts Management Division (PM-214F),
FTS 260r6081.
REMEMBER MANAGING CONTRACTS CAN BE REWARDING!
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