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65-476: The Marine Corps awarded a US$ 33,647,022 firm, fixed price contract to Protective Products International (subsidiary of Protective Products of America) in 2006 to produce 60,000 vests and began fielding them in 2007. In 2008, the Marine Corps awarded a followup indefinite delivery/indefinite quantity contract for an additional 28,364 MTVs. After conducting a survey of more than 1,000 Marines and finding that

130-457: A Draft Best Practices Guide on Contractor Performance . The term "personal services contract" means a contract with express terms or administration which makes the contractor personnel appear effectively to be Government employees. Such contracts are prohibited by the FAR (Subpart 37.104) excepting where specifically authorized by statute. "Nonpersonal services contract" means a contract under which

195-583: A Government employee or to an organisation owned or substantially owned by one or more Government employees. Similar wording was previously included in the Federal Procurement Regulations prior to 1984, with several GAO decisions confirming that an agency does not violate this subpart if neither the Contracting Officer not the selection officer has knowledge of such ownership or business connection. A ratification

260-573: A determination and finding (D&F) (per FAR Subpart 1.7 and DFARS Subpart 237.104) for this DFARS 237.170-2 forbids non-performance-based contracts unless exception done under DFARS 237.170-2 If an agency is hiring experts, read over 5 USC 3109, Employment of Experts and Consultants, Temporary or Intermittent to see if it applies to FAR 37.104(f). Office of Personnel Management (OPM) has established requirements that apply in acquiring personal services for experts or consultants in this manner (for example, benefits, taxes, conflicts of interest), "therefore,

325-452: A fair and reasonable price obtained for non-commercial services or goods obtained using FAR Parts 12 and FAR 13 under these circumstances. FAR Part 14 details the requirements for conducting a "sealed bid" tender, where federal requirements can be stated "clearly, accurately, and completely" and price is the only determinant of contract awardee. Under this part, Unnecessarily restrictive specifications or requirements that might unduly limit

390-498: A fully negotiated procurement, which requires vendors provide cost and pricing information, to verify a fair and reasonable price. In other words, FAR Part 12 was intended to increase the number of competitors available to the US Government by jettisoning all of the unique requirements, including cost accounting systems, which are forced upon Federal contractors by acquisition processes such as FAR Parts 14, 15, 36 etc.; instead,

455-513: A great extent, therefore deviating in many particulars from the mandatory clause language. See also FAR 12.211, Technical Data; FAR 12.212, Computer Software; FAR 12.213, Other Commercial Practices for additional authority to deviate or "tailor" FAR clauses and provisions in the context of commercial items/services. Part 3 addresses various improper business practices and personal conflicts of interest . Within this section, subpart 3.6 generally prevents government contracts being knowingly awarded to

520-530: A majority of the Marine Corps had been overall highly satisfied with the MTV, in January 2009 the Marine Corps announced that it would be making some modifications to the MTV to improve comfort, mobility and safety. The MTV includes the following features: The vest is donned and doffed using a hook-and-pile " cummerbund ," which fastens around the waist, and a buckle atop each shoulder. Some users have complained that

585-735: A proposal. Part 16 identifies the types of contracts available for use in government contracting and the rules governing the selection or negotiation of contract types. Special rules apply to service contracts. They must be performance-based to the extent practicable, with measurable outcomes. FAR 37.102 and FAR Part 37.6 describe performance-based methods. FAR 37.601 has specific requirements for performance work statements (PWS) for service contracts requiring performance-based standards. Agency supplements also require performance-based acquisitions. (See, e.g., DFARS 237.170 Approval of contracts and task orders for services; DFARS 237.170-2 Approval requirements.) Performance Based Service Acquisition (PBSA)

650-415: A second one 60% of the time. Fixed-price contract A fixed-price contract is a type of contract for the supply of goods or services, such that the agreed payment amount will not subsequently be adjusted to reflect the resources used, costs incurred or time expended by the contractor. This contract type may be contrasted with a cost-plus contract , which is intended to cover the costs incurred by

715-407: A specific contract. These provisions and clauses are of six types: (i) required solicitation provisions; (ii) required-when-applicable solicitation provisions; (iii) optional solicitation provisions; (iv) required contract clauses; (v) required-when-applicable contract clauses; and (vi) optional contract clauses." If the FAR requires that a clause be included in a government contract, but that clause

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780-519: A specific service performed or specific outcomes to be achieved. For purposes of these services –7affan (ii) market prices mean current prices that are established in the course of ordinary trade between buyers and sellers free to bargain and that can be substantiated through competition or from sources independent of the offerors. Note the emphasis in the FAR 2.101 definition for for commercial items on established market prices. The reason why Simplified Acquisition Procedures are permitted for items above

845-561: Is DFARS Subpart 231, Section 205, Subsection 22 (cited as "DFARS 231.205-22"). Part 1 refers to a "vision" and certain "guiding principles" for the Federal Acquisition System . The vision foresees "delivery on a timely basis [of] the best value product or service ... while maintaining the public's trust and fulfilling public policy objectives". Compliance with the Regulation , along with the use of initiative in

910-423: Is a good resource expertise in this particular area. Use of FAR Parts 12 and 13 without rationing of demand through a single commodity control council or finding other solutions is likely to create more problems than it solves. Non-commercial contracting methodology and clauses should be used for any acquisition where Government demand overwhelms civilian supply. It is highly unlikely there will be any cost controls or

975-637: Is a process and way of defining requirements that yields well written work statements that are outcome oriented and measurable thus enforceable. Deming / Six Sigma style quality assessments and process analysis can help define performance work statements. A Performance Work Statement (PWS) has: The DOD PBSA guide has a "performance requirements summary" matrix which can serve as an outline for work statement provisions. Army Federal Acquisition Regulation (FAR) Supplement (AFARS) has an outline for performance-based service contracts. Additional Resources for PBSA: The Office of Federal Procurement Policy (OFPP) has

1040-601: Is clearly not appropriate in view of the basic reasons commercial item acquisition authority was created by Congress. FAR 2.101, which is concerned with definitions, provides that a commercial item means – (6) services of a type offered and sold competitively in substantial quantities in the commercial marketplace based on established catalog or market prices for specific tasks performed or specific outcomes to be achieved and under standard commercial terms and conditions. This does not include services that are sold based on hourly rates without an established catalog or market price for

1105-602: Is closely governed by the FAR. Nearly every major cabinet-level department (and many agencies below them) has issued such regulations, which often place further restrictions or requirements on contractors and contracting officers. One of the best-known examples of an agency supplement is the Defense Federal Acquisition Regulation Supplement (DFARS), used by the Department of Defense , which constitutes Chapter 2. Chapter 3

1170-516: Is contract pricing, which is addressed throughout the FAR, but especially in Subpart 15.4, Parts 30 and 31, and Subparts 42.7, 42.8, and 42.17. A large part of the FAR, Subchapter D, describes various socio-economic programs, such as the various small business programs, purchases from foreign sources, and laws written to protect laborers and professionals working under government contracts. The final three chapters of Title 48 (61, 63 and 99) establish

1235-474: Is freely available to consumers in that market on the relative merits of each vendor's products and pricing which permits easy comparison of each vendor's products to each other. FAR Part 12 commercial items acquisition authority was intended to take advantage of the WalMart's (R) and Microsoft's (R) of the world where there is no need to go through the extensive, formalistic and resource/ time-consuming process of

1300-518: Is not prohibited by law, the ratification is in accordance with agency procedures, etc.; (4) The contracting officer determines that the price paid was fair and reasonable and recommends payment, and legal counsel concurs. There are dollar limits to the authority to ratify unauthorized commitments. A Chief of Contracting Office can approve up to $ 10,000. A Principal Assistant Responsible for Contracting can approve up to $ 100,000. A Head of Contracting Authority can approve higher amounts. Ratifications in

1365-469: Is omitted, case law may provide that the missing clause is deemed to be included. This is known as the Christian Doctrine , which is based on the underlying principle that certain government regulations have the force and effect of law, and government personnel may not deviate from the law without proper authorization. Prospective contractors are presumed to know the law, including the limits of

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1430-462: Is required before a US certificated aircraft or pilot can fly in Iraq under Special Federal Aviation Regulation (SFAR) 77; if there are very few, or only one, vendor who can participate in this requirement, there are no vendors out there for meaningful competition which is the bedrock assumption of FAR Parts 12 and 13. In view of the above, the airborne recon contract is NOT a commercial service – therefore

1495-445: Is the Department of Health and Human Services Acquisition Regulation (HHSAR); Chapter 4 is the Department of Agriculture's Acquisition Regulation (AGAR); etc. The Department of Veterans Affairs' Acquisition Regulation (VAAR) implements and supplements the FAR. The required format for agency FAR supplements is to follow the basic FAR format. To continue the example above, the supplemental DFARS section on legislative lobbying costs

1560-725: Is the principal set of rules regarding Government procurement in the United States , and is codified at Chapter 1 of Title 48 of the Code of Federal Regulations , 48 CFR 1 . It covers many of the contracts issued by the US military and NASA , as well as US civilian federal agencies. The largest single part of the FAR is Part 52, which contains standard solicitation provisions and contract clauses. Solicitation provisions are certification requirements, notices, and instructions directed at firms that might be interested in competing for

1625-411: Is the proper authorization by a contracting officer of an earlier procurement by a Government employee who was not authorized to do it. A ratification package has a legal memo that says an unauthorized commitment was made, that the commitment could properly have been done by contracting officers, and that funds were and are available for it. Other regulations and agency rules apply too, such as those from

1690-485: Is to identify markets unaffected by the Government demand and seek to acquire goods and services through that other market. When the situation of overwhelming government demand occurs in a faltering or damaged economy, Government demand that is in excess of what the local vendors can supply to both Government and non-Government consumers should be met by vendors who operate out of the market in question, including through

1755-630: The Civilian Board of Contract Appeals , the Department of Transportation Board of Contract Appeals, and the Cost Accounting Standards Board, respectively. The Armed Services Board of Contract Appeals has been established by charter within the Department of Defense. The proper way to cite a regulation within the FAR is by part, subpart, section, subsection, without respect to chapter or subchapter. For instance,

1820-499: The Enhanced Small Arms Protective Inserts (ESAPI). The ESAPI Rev G, the latest model of such armor plates, will protect the wearer against two rounds of .30-06 M2AP at 868 meters per second and will stop multiple hits of lesser threats such as 5.56×45mm NATO , 7.62×51mm NATO , and 7.62×39mm . This is opposed to Rev A versions, which would stop M2AP 1.6 times, once with complete confidence, and

1885-538: The PMBOK (7th edition) by the Project Management Institute (PMI), Fixed Price Economic Price Adjustment Contract (FPEPA) is a "fixed-price contract, but with a special provision allowing for predefined final adjustments to the contract price due to changed conditions, such as inflation changes, or cost increases (or decrease) for special commodities". According to the PMBOK (7th edition) by

1950-448: The Project Management Institute (PMI), Fixed Price Incentive Fee Contract (FPIF) is a "type of contract where the buyer pays the seller a set amount (as defined by the contract), and the seller can earn an additional amount if the seller meets the defined performance criteria". US government procurement policy strongly favours use of fixed-price contracts, although Federal Acquisition Regulations do outline when they are "suitable" and

2015-399: The $ 250,000 simplified acquisition threshold for commercial items is there is an efficient market pricing mechanism which pressures market participants to provide goods and services at a fair and reasonable price which represents very efficient / non-wasteful pricing mechanisms. Generally, the more efficient and well-developed markets have a large number of participating vendors and information

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2080-459: The Army discussed below. Ratifications are governed by FAR 1.602-3 (Ratification of Unauthorized Commitments), originally added to the FAR in 1988, which defines a ratification as the act of approving an unauthorized commitment by an official who has the authority to do so. Unauthorized commitment means an agreement that is not binding solely because the Government representative who made it lacked

2145-650: The Code of Federal Regulations (CFR). Chapter 1 is divided into Subchapters A-H, which encompass Parts 1-53. Chapter 1 appears in two volumes, with Subchapters A-G appearing in Volume 1 while Subchapter H occupies all of Volume 2. The volumes are not formal subdivisions of Title 48, but refer instead to the fact that the FAR is printed by the Government Printing Office in two volumes for convenience. The single most heavily regulated aspect of acquisition

2210-423: The FAR rule on legislative lobbying costs is found at FAR Part 31, Section 205, Subsection 22 (cited as "FAR 31.205-22"). The table of contents, as of the edition published October 1, 2012, is available. As the original purpose of the FAR was to consolidate the numerous individual agency regulations into one comprehensive set of standards which would apply government-wide, the issuance of supplemental regulations

2275-434: The FAR. FAR Subpart 1.4, Deviations from the FAR, provides the steps needed to document deviations from the mandatory FAR or agency FAR supplement. Deviation documentation is needed if there is a precise FAR clause or provision for the issue. The Department of Defense has published many class deviations to enable faster contract actions in war environments. FAR 12.401 allows contracts for commercial items to be tailored to

2340-534: The Federal Government could act more like a normal buyer in a fully functioning commercial market where the Government was but one of a large number of consumers seeking the same or highly similar products or services. However, FAR Part 12 was never intended to apply where the US Government was the only or one of a very few buyers for an item or service not in demand by the commercial market place. What happens when there are very few market participants and

2405-615: The GSA Schedule system if the damaged market is outside of the United States. Resources and expertise are in the Federal Government that are designed to assist in cases where Federal demand overwhelms civilian supply, one example being the Industrial College of the Armed Forces (ICAF). The ICAF's charter is to maintain the ability to nationalize an economy to achieve strategic objectives or a wartime mobilization, this

2470-417: The Government's remedies in these cases. Specific clauses should be in the contract to deal with Government Furnished Equipment (GFE) situations and bring your own device (BYOD) situations. The authority under FAR Part 12, Commercial Items (and services), must be used thoughtfully and carefully. It is very tempting for a contracting officer to use FAR Part 12 and hence FAR Part 13 in situations where such use

2535-486: The U.S. Army call for a signed statement describing the unauthorized commitment, the value of the procurement, and other documentation. Then a contracting officer is to study the case and recommend action. If the procurement is not ratified, the matter may be handled under FAR Part 50 and DFARS Part 250 ( Public Law 85-804 ) as a GAO claim or some other way. FAR Part 45 provides rules on the Contractor's obligations and

2600-462: The ability of the contractor to absorb unexpected cost overruns . Airbus 's German chief executive Tom Enders indicated that the fixed-price contract for the A400M transport aircraft was a disaster based on naivety , excessive enthusiasm and arrogance, stating, "If you had offered it to an American defence contractor like Northrop , they would have run a mile from it". He stated that unless

2665-499: The additional sizes will encourage Marines to wear the IMTV in combat. The Corps does not want to design female-specific body armor and has found that the issue was different statures related to the length of the torso. The IMTV can fit women as well as smaller stature men. The vest has slots for NIJ Level 3A analogue (it is not tested against .44 SWC ) kevlar soft armor inserts, with additional slots for hard armor plates, in this case

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2730-418: The authority of government personnel. Thus, a mandatory clause that expresses a significant or deeply ingrained strand of public procurement policy will be incorporated into a Government contract by operation of law, even if the parties intentionally omitted it. A contract award can be challenged and set aside if a protester can prove that either the contracting agency or the contract awardee did not comply with

2795-411: The authority to enter into that agreement on behalf of the Government. A ratifying official may ratify only when: (1) The Government has received the goods or services; (2) The ratifying official has authority to obligate the United States, and had that authority at the time of the unauthorized commitment; (3) The resulting contract would otherwise be proper, i.e., adequate funds are available, the contract

2860-497: The civilian sources of supply. As the US Federal Reserve will attest to, inflation is one of the most damaging elements in an economic system to investment, capital markets and economic activity. In this case, the effect of driving massive cost inflation directly impacts civilians and non-Government consumers who are also competing for the same goods and services against the US Government acquisition commands; ultimately

2925-628: The contract was renegotiated, the project must be abandoned. The U.S. A-12 Avenger II aircraft development contract was a fixed-price incentive contract, not a fixed-price contract, with a target price of $ 4.38 billion and ceiling price of $ 4.84 billion. It was for a unique, stealthy, flying wing design. On 7 January 1991, the Secretary of Defense canceled the program. It was the largest contract termination in United States Department of Defense history. Rather than saving costs,

2990-472: The contract), regardless of the seller's costs". The contractor or vendor usually bears all the risk of cost increases, although guidance such as that issued by the US Department of Defense may allow for specific circumstances "where an accommodation can be reached by mutual agreement of the contracting parties, perhaps to address acute impacts on small business and other suppliers". According to

3055-440: The contracting officer shall effect necessary coordination with the cognizant civilian personnel office". Note that personal service contracts are potentially subject to salary caps. "Inherently Governmental Functions" may not be performed by contractors other than a specific Personal Services Contract under the authority of P.L. 86-36 or 5 USC 3109. Inherently Governmental Functions are defined by P.L. 105-270 (FAIR Act of 1998) as

3120-412: The contractor plus an additional amount for profit , and with time-and-materials contracts and labor-hour contracts. Fixed-price contracts are one of the main options available when contracting for supplies to governments . Fixed prices can require more time, in advance, for sellers to determine the price of each item. However, the fixed-price items can each be purchased faster, but bargaining could set

3185-503: The deep pockets of the Government win out against the lesser buying power of the non-governmental market participants. In such cases, as the US Government did during World War II, commodity control councils must be established to identify all available sources of supply and ration supply to the various consumers, including US Government consumers, sometimes with price controls (although this is very dangerous because it frequently leads to black markets run by criminals). One solution in this case

3250-418: The following types of contract with a fixed price element: Economic price adjustment may take account of increases or decreases from an established and agreed-upon price level, actual costs or a price index. According to the PMBOK (7th edition) by the Project Management Institute (PMI), Firm Fixed Price Contract (FFP) is a "fixed-price contract where the buyer pays the seller a set amount (as defined by

3315-447: The goods or services are not widely available to the public? Let's take surveillance systems in a military overseas contingency environment as an example. Battlefield full motion video is not something that is found in the commercial sector – Wal-Marts don't sell this; moreover, frequently there are special restrictions which impact on commercial firms ability to engage in work of this nature. For example, special FAA Administrator permission

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3380-593: The interests of the Government in areas not specifically addressed in the FAR or prohibited by law, are required and expected of all members of the Acquisition Team . The Acquisition Team consists of all those who participate in Government acquisition: The role and operation of those involved as a 'team' in government procurement is defined in FAR 1.102-3 and RAR 1.102-4. The FAR system is intended to promote "teamwork, unity of purpose and open communication". FAR Part 2 defines words and terms used frequently in

3445-498: The most expensive, especially when the risks or costs are unknown in advance. According to the Project Management Body of Knowledge (7th edition) by the Project Management Institute (PMI), fixed-price contract is an "agreement that sets the fee that will be paid for a defined scope of work regardless of the cost or effort to deliver it". The United States' Federal Acquisition Regulation (FAR) provides for

3510-559: The necessary basis on which "fair and reasonable prices" can be determined. They are suitable, in particular, for the supply of products available commercially. Fixed-price contracts are often used by military and government contractors to require vendors to incur the risk of cost overruns, and to control costs. However, historically when such contracts are used for innovative new projects with untested or undeveloped technologies (such as new military transports or stealth attack airplanes), it often results in failure if costs greatly exceed

3575-415: The new type of aircraft was projected to consume 70 percent of the U.S. Navy 's aircraft budget within three years. The U.S. Boeing KC-46 Pegasus contract was a fixed price contract. Due to its history of cost overruns, it is an example of how fixed price contracts place the risk upon the vendor, in this case Boeing . Total cost overruns for this aircraft have totaled about $ 1.9 billion. However, Boeing

3640-399: The non-standard variant – the Government is the only buyer of this particular variant of the commercially available item. What about situations where Government demand overwhelms the commercial markets supply? In this case, the Government is actually competing against itself because it has swallowed the market whole and usually has multiple requiring activities competing against each other for

3705-449: The number of bidders are prohibited. Subpart 15.6 covers unsolicited proposals, i.e. business proposals offering new and innovative ideas outside the context of innovative proposals invited and offered within a government-initiated procurement procedure. The regulations suggest the executive agencies make provision for acceptance of unsolicited proposals and for prior contact with individuals or organisations contemplating submission of such

3770-820: The personnel rendering the services are not subject, either by the contract's terms or by the manner of its administration, to the supervision and control usually prevailing in relationships between the Government and its employees. Advisory and assistance services (A&AS) are permissible (See FAR Subpart 37.2) Personal services are not permissible (See FAR 37.104 and Classification Act) without specific authority to obtain such services (meaning statutory authority) Permissible to acquire expert and consultant services (5 USC 3109 or 10 USC 129b – expert services) or 10 USC 1091 – health services), as well as health services, intelligence, counter intelligence or special operations command operations requirements under DFARS 237.104, Personal Services Contracts and 10 USC 129b – Contracting must do

3835-481: The price for an entire set of items being purchased, reducing the time for bulk purchases. Also, fixed-price items can help in pre-determining the value of an inventory, such as for insurance estimates. Such contracts continue to be popular despite a history of failed or troubled projects, although they tend to work when costs are well known in advance. Some laws mandate a preference for fixed-price contracts, however, many people maintain that such contracts are actually

3900-497: The requirements of the solicitation. A successful protest can result in reconsideration of the decision to award the contract or award of the contract to the protester in lieu of the original awardee. Even though a successful protester may not ultimately be awarded the contract, the government agency may have to pay the protester's bid and proposal costs. The Federal Acquisition Regulation is contained within Chapter 1 of Title 48 of

3965-456: The same goods and services. This is exemplified in cases where numerous contracting offices demand the same goods and services, unknowingly driving prices up against each other. Frequently in these case, contracting commands accept take-it or leave-it prices from relatively few vendors (compared to demand) who know that these contracting offices are not coordinating amongst each other or establishing commodity control councils to ration demand against

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4030-400: The use of FAR Part 12 commercial items contracting processes is wholly inappropriate and not permissible under the applicable laws governing Federal acquisition. Taking another example, what happens when significant research and development is needed to adopt a commercial item for Government use? Should FAR Parts 12 and 13 be used here? Absolutely not. There are no market pricing mechanisms for

4095-551: The vest is more time-consuming to don (especially with a full combat load attached) when compared to the Interceptor's single hook-and-loop flap. The quick-release system was designed in response to concerns that the Interceptor was difficult for medical personnel to remove from incapacitated troops and in some cases had to be cut off. When pulled firmly, a cord at the bottom of the vest causes the cummerbund to separate into two pieces. The shoulder buckles can then be unfastened and

4160-476: The vest removed in pieces, with no need to change the casualty's body position. In July 2013, the Marine Corps announced its Improved Modular Tactical Vests. The IMTV is made for smaller stature Marines who cannot wear the full-sized MTV comfortably. The vest comes in small-short, medium-short, and large-short sizes. Most Marines use the Scalable Plate Carrier in the field, so it is hoped that

4225-521: Was able to absorb those costs and has gained US Air Force approval to begin producing the KC-46. The Canadian Construction Documents Committee's "Stipulated Price Contract" (CCDC-2), revised in February 2008, provides for a property owner and prime contractor to agree that work is done for a fixed price or lump sum. Federal Acquisition Regulation The Federal Acquisition Regulation ( FAR )

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