Discussion

If you work in the Government acquisition world, this podcast is for you. (not just for Contracting Officers!)

What is a Sources Sought Synopsis?  What about a Sources Sought Notice?  Same thing?  What is one of these things used for?  Who uses this tool?  When?

Kevin and Paul discuss one of the market research techniques used by the Government to identify sources (meaning, vendors) who can satisfy Government requirements for a particular need.

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Kevin Jans and Paul Schauer created the Contracting Officer Podcast to help Government and Industry acquisition professionals understand more about how the other side thinks.  Admittedly, the podcast’s name sounds very limiting.  It is not just for contracting officers or even just for those in the contracting profession.  Anyone with an interest in the Federal acquisition world can benefit from the insight and down-to-earth explanations of complicated topics provided by the hosts.

by Shelley Hall

Not according to a recent GAO decision on Atlantic Systems Group, Inc., B-413901 (Jan. 9, 2017).

The agency issued a Request for Quote (RFQ) pursuant to Federal Acquisition Regulation (FAR) 8.405-2, Ordering Procedures for Services Requiring a Statement of Work.  The procurement was set-aside for service-disabled veteran-owned small business (SDVOSB) concerns holding General Service Administration (GSA) Federal Supply Schedule (FSS) under Schedule 70, General Purpose Commercial Information Technology Equipment, Software, and Services, Special Identification Number 132 51, Information Technology Professional Services.  The requirement was for technical, engineering, management, operation, logistical, and administrative support for the Department of Education’s cybersecurity risk management program.

The solicitation provided for the issuance of an order on a best-value tradeoff basis, considering, in descending order of importance, the following factors:  technical approach, resource plan, management plan, corporate experience, past performance, and price.

According to the GAO, when an agency conducts a competition under the FSS provisions of FAR 8.4, they will review the record to ensure that the agency’s evaluation is reasonable and consistent with the terms of the solicitation.  In reviewing a protest challenging an agency’s technical evaluation, GAO will not reevaluate the quotations, but examine the record to determine whether the agency’s evaluation conclusions were reasonable and consistent with the terms of the solicitation and applicable procurement laws and regulations.

The solicitation requested corporate experience of the organization and past performance information for the offeror, but did not mention subcontractors.  FAR part 8 does not require that an agency to consider the past performance of its proposed subcontractors.  Accordingly, GAO did not find that the solicitation was “ambiguous, and it was reasonable for the agency to consider the experience and past performance of the offeror (i.e., the entity that submitted the offer) and not its subcontractors.”

The protest challenging agency’s evaluation of proposals under technical approach and past performance factors was denied where evaluation is reasonable and in accordance with the solicitation.  Protest that agency was required to consider proposed subcontractor’s past performance was denied where solicitation is conducted under Federal Acquisition Regulation part 8 and where the solicitation only requested past performance information for the “offerors.”

So this is pretty interesting.  If you are bidding on GSA/FSS competitive requirements, you need to understand that your subcontractor’s past performance does not need to be considered unless the RFQ specifically states that the agency will review it.

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If you work in the Government acquisition world, this podcast is for you. (not just for Contracting Officers!)

CapitolThis episode is brought to you by Deltek.  https://www.deltek.com/en/products/business-development/govwin

Kevin and Paul discuss the importance of identifying opportunities earlier than you need to.  Learn why both Government and Industry can benefit through open communication early (even earlier than you think) in the acquisition process.

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Kevin Jans and Paul Schauer created the Contracting Officer Podcast to help Government and Industry acquisition professionals understand more about how the other side thinks.  Admittedly, the podcast’s name sounds very limiting.  It is not just for contracting officers or even just for those in the contracting profession.  Anyone with an interest in the Federal acquisition world can benefit from the insight and down-to-earth explanations of complicated topics provided by the hosts.

If you work in the Government acquisition world, this podcast is for you. (not just for Contracting Officers!)

Today we welcome special guest Kevin Lothridge, the CEO of the National Forensic Science Technology Center.  Our Kevin Jans discusses teaming with Kevin Lothridge so that you can learn from his experience developing effective partnerships to succeed in this market and achieve better acquisition outcomes for both Government and Industry.

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Kevin Jans and Paul Schauer created the Contracting Officer Podcast to help Government and Industry acquisition professionals understand more about how the other side thinks.  Admittedly, the podcast’s name sounds very limiting.  It is not just for contracting officers or even just for those in the contracting profession.  Anyone with an interest in the Federal acquisition world can benefit from the insight and down-to-earth explanations of complicated topics provided by the hosts.

by Shelley Hall

DoD, GSA, and NASA issued are issuing a final rule amending the Federal Acquisition Regulation (FAR) to implement a section of the National Defense Authorization Act for Fiscal Year 2016 to raise the simplified acquisition threshold for special emergency procurement authority from $300,000 to $750,000 (within the United States) and from $1 million to $1.5 million (outside the United States).

The proposed rule published June 20, 2016, implemented 816 of the National Defense Authorization Act for Fiscal Year 2016.

FAR 2.101, 13.003, 19.203, and 19.502-2 are being revised to increase the simplified acquisition threshold for special emergency procurement authority from $300,000 to $750,000 (within the United States) and from $1 million to $1.5 million (outside the United States). The rule would apply to acquisitions of supplies or services that, as determined by the head of the agency, are to be used to support a contingency operation or to facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack.

The primary benefit of increasing these limits is to allow COs in contingency situations to award contracts faster and more efficiently using simplified acquisition procedures (SAP).  These types of acquisitions require significantly less time and documentation and usually special emergency procurements are time-sensitive.

Simplified acquisition procedures are contained in FAR Part 13, and are intended to (a) Reduce administrative costs; (b) Improve opportunities for small, small disadvantaged, women-owned, veteran-owned, HUBZone, and service-disabled veteran-owned small business concerns to obtain a fair proportion of Government contracts; (c) Promote efficiency and economy in contracting; and (d) Avoid unnecessary burdens for agencies and contractors.

For contractors (especially small businesses) who provide the items and services used in special emergency procurements, this is a step in the right direction.

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If you work in the Government acquisition world, this podcast is for you. (not just for Contracting Officers!)

Sometimes a contract needs to be modified after award.  Some changes are administrative.   Other changes may impact cost, schedule, or the requirements.  In the Government acquisition world, this kind of change is usually called an Engineering Change Proposal.(ECP)

Learn why ECPs aren’t usually easy or fast and how the relationship between the Government and Industry players can impact the negotiation of an ECP.

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Kevin Jans and Paul Schauer created the Contracting Officer Podcast to help Government and Industry acquisition professionals understand more about how the other side thinks.  Admittedly, the podcast’s name sounds very limiting.  It is not just for contracting officers or even just for those in the contracting profession.  Anyone with an interest in the Federal acquisition world can benefit from the insight and down-to-earth explanations of complicated topics provided by the hosts.

by Christi Gilbert

When pricing work for the government, contractors must be aware of which costs are allowable under the FAR (Subpart 31.2).  Allowable costs include both direct (labor, materials, etc.) and indirect (fringe, overhead, G&A) costs. There are specific costs which are not allowable against any government contract, for example costs for alcoholic beverages.

The determination of what is allowable is only the first step in the process. Depending on your accounting system structure, the same type of cost might be direct or indirect. For example, contract administration costs might be a direct charge or might be included in an indirect pool. For a manufacturing company, there might be small supplies (expendables, for example) that could be direct or indirect. How do you decide whether it should be direct or indirect?

Costs that meet the “Single Cost Objective” standard should be direct. Materials ordered for a specific contract for example would be for a single cost objective, i.e. that contract. Similarly, labor that supports a specific contract and only that contract also qualifies as a direct cost for a single cost objective. Indirect costs that are applied to all contracts should not contain costs that are for a single cost objective (contract). It’s important to be consistent in how you allocate direct and indirect costs. It wouldn’t be fair, for example, to have Contract “A” charged direct for its contract administration and have contract administration costs for other programs in an indirect pool that will also be applied to Contract “A” as an indirect burden. Contract “A” would be double-charged then for that function. The same applies to tools and supplies that are used in the production of items that will be sold under multiple contracts. Those costs are not allocable to a single contract and are therefore appropriately included in an indirect cost pool that is applied to all contracts.

As another example, if employees on Contract “A” are required to have specific training, training that is not required or particularly useful on other contracts, the cost of that training is for a single cost objective and should be directly charged to that contract because it does not benefit other contracts. That does not necessarily make it an allowable cost on a cost reimbursable contract. Depending on the terms of the contract, it could be unallowable and therefore would reduce the profit on that contract. On the other hand, training costs for certain classes of employees who support multiple programs to maintain certifications or keep them abreast of developments in their fields can be indirect costs and therefore applied to all contracts through an indirect burden.

Auditors, in reviewing your accounting system, will be looking at whether you are appropriately and consistently allocating your direct and indirect costs in a manner that treats all contracts fairly. Where reasonable and allocable, they expect costs incurred for a single cost objective to be charged to that objective (contract).

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If you work in the Government acquisition world, this podcast is for you. (not just for Contracting Officers!)

200off_250x285This episode is brought to you by the Government Contract Pricing Summit. www.GCPSummit.com/podcast

What is the difference between a Firm Fixed Price contract and a Cost Reimbursable contract?  If you’ve ever asked this question, this podcast is for you.  We provide an overview of the 2 basic contract types used by the Government with examples of when they may be used and the risks each party assumes.

(this is an encore presentation of one of our earliest episodes…enjoy!)

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Kevin Jans and Paul Schauer created the Contracting Officer Podcast to help Government and Industry acquisition professionals understand more about how the other side thinks.  Admittedly, the podcast’s name sounds very limiting.  It is not just for contracting officers or even just for those in the contracting profession.  Anyone with an interest in the Federal acquisition world can benefit from the insight and down-to-earth explanations of complicated topics provided by the hosts.

If you work in the Government acquisition world, this podcast is for you. (not just for Contracting Officers!)

200off_250x285This episode is brought to you by the Government Contract Pricing Summit. www.GCPSummit.com/podcast

Commercial Off the Shelf? (COTS) Is that the same as a Commercial Item?  Good question!

Kevin and Paul explain COTS and how the already streamlined ruleset for commercial acquisition in FAR Part 12 is further streamlined if you’re buying (or selling) COTS.

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Kevin Jans and Paul Schauer created the Contracting Officer Podcast to help Government and Industry acquisition professionals understand more about how the other side thinks.  Admittedly, the podcast’s name sounds very limiting.  It is not just for contracting officers or even just for those in the contracting profession.  Anyone with an interest in the Federal acquisition world can benefit from the insight and down-to-earth explanations of complicated topics provided by the hosts.

by Shelley Hall

DoD, GSA, and NASA issued are issuing a final rule amending the Federal Acquisition Regulation (FAR) to implement a section of the National Defense Authorization Act for Fiscal Year 2016 to raise the simplified acquisition threshold for special emergency procurement authority from $300,000 to $750,000 (within the United States) and from $1 million to $1.5 million (outside the United States).

The proposed rule published June 20, 2016, implemented 816 of the National Defense Authorization Act for Fiscal Year 2016.

FAR 2.101, 13.003, 19.203, and 19.502-2 are being revised to increase the simplified acquisition threshold for special emergency procurement authority from $300,000 to $750,000 (within the United States) and from $1 million to $1.5 million (outside the United States). The rule would apply to acquisitions of supplies or services that, as determined by the head of the agency, are to be used to support a contingency operation or to facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack.

The primary benefit of increasing these limits is to allow COs in contingency situations to award contracts faster and more efficiently using simplified acquisition procedures (SAP).  These types of acquisitions require significantly less time and documentation and usually special emergency procurements are time-sensitive.

Simplified acquisition procedures are contained in FAR Part 13, and are intended to (a) Reduce administrative costs; (b) Improve opportunities for small, small disadvantaged, women-owned, veteran-owned, HUBZone, and service-disabled veteran-owned small business concerns to obtain a fair proportion of Government contracts; (c) Promote efficiency and economy in contracting; and (d) Avoid unnecessary burdens for agencies and contractors.

For contractors (especially small businesses) who provide the items and services used in special emergency procurements, this is a step in the right direction.

For instant access to over 200 articles like this one (as well as the two new ones we add every week), join the Skyway Community.
Visit http://skywaymember.com for details.

If you work in the Government acquisition world, this podcast is for you. (not just for Contracting Officers!)

200off_250x285This episode is brought to you by the Government Contract Pricing Summit. www.GCPSummit.com/podcast

Another year, another potential Government shutdown.  What does this really mean for Government contractors?  What does it mean for Government acquisition personnel?

Kevin and Paul explain why a Government shutdown isn’t really a shutdown and describe the common impacts to Government contracts.  Learn why communication (especially with the Contracting Officer) is essential for navigating the annual threat of a Government shutdown.

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Kevin Jans and Paul Schauer created the Contracting Officer Podcast to help Government and Industry acquisition professionals understand more about how the other side thinks.  Admittedly, the podcast’s name sounds very limiting.  It is not just for contracting officers or even just for those in the contracting profession.  Anyone with an interest in the Federal acquisition world can benefit from the insight and down-to-earth explanations of complicated topics provided by the hosts.

If you work in the Government acquisition world, this podcast is for you. (not just for Contracting Officers!)

This episode is brought to you by the Government Contract Pricing Summit. www.GCPSummit.com/podcast

200off_250x285Writing a Request for Proposals (RFP) without understanding industry’s capabilities and the state of the market is like writing a novel for a stranger.  The same goes for writing and submitting a proposal to a customer you don’t understand. (What does that even mean? Listen and Learn!)

Kevin and Paul take a different route through a couple foundational Contracting Officer Podcast topics: communication and targeting.  Learn how communication between Government and Industry during the acquisition directly impacts the quality of RFPs and proposals and   why targeting is important to each side.

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Kevin Jans and Paul Schauer created the Contracting Officer Podcast to help Government and Industry acquisition professionals understand more about how the other side thinks.  Admittedly, the podcast’s name sounds very limiting.  It is not just for contracting officers or even just for those in the contracting profession.  Anyone with an interest in the Federal acquisition world can benefit from the insight and down-to-earth explanations of complicated topics provided by the hosts.

by Shelley Hall

On January 5, 2017, the Office of Federal Procurement Policy (OFPP) issued a memorandum discussion the best practices to “maximize the return on its acquisition investment and to ensure access to high-quality solutions” through the effective use of debriefings.

In December 2014, the OFPP sent out a memo outlining a series of “myths” about federal contracting.  One of the “myths” addressed the need to increase communications between the agency and industry.

Per the most recent memo, “debriefings afford offerors on a competitive solicitation an explanation of the evaluation process, an assessment of their proposal in relation to the evaluation criteria, a general understanding of the basis of the award decision, and the rationale for exclusion from the competition.”

OFPP suggests that agencies establish or adopt debriefing guides if they do not already have them.  Additionally, agencies are encouraged to post any debriefing guidance, training tools, or materials by March 1, 2017 and share debriefing instructions with current and potential industry partners, including those new to federal procurement.

The Appendix to the January 2017 memo contains “Misconceptions and Facts about the Debriefing Process” which anyone planning on doing business with the federal government should read.

This is a good step forward because communication is so important during the source selection process – starting with the sources sought synopsis and continuing throughout the life of the contract once awarded.

If everyone doesn’t understand the requirement, scope, risks, evaluation factors, etc., it is impossible to conduct a source selection that will result in award to the offeror who represents the true best value to the government.

If you are a contractor, ask questions throughout the process.  Request debriefings (even if you are the awardee!).  This is how you learn what you did well and what you did not so well.  Every lesson learned is another rung in your ladder to success.

For instant access to over 200 articles like this one (as well as the two new ones we add every week), join the Skyway Community.
Visit http://skywaymember.com for details.

If you work in the Government acquisition world, this podcast is for you. (not just for Contracting Officers!)

This episode is brought to you by the Government Contract Pricing Summit. www.GCPSummit.com/podcast

200off_250x285Profit can be a divisive issue in the Government market.  How much is appropriate?  How much is too much?

Kevin and Paul discuss why profit matters to both Government and Industry.  Learn the statutory limits on profit and how the Government assesses how much profit is “fair”.  You’ll also gain an appreciation of how profit potential drives decision making for industry and how the Government can attract the best companies to the Government market.

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Kevin Jans and Paul Schauer created the Contracting Officer Podcast to help Government and Industry acquisition professionals understand more about how the other side thinks.  Admittedly, the podcast’s name sounds very limiting.  It is not just for contracting officers or even just for those in the contracting profession.  Anyone with an interest in the Federal acquisition world can benefit from the insight and down-to-earth explanations of complicated topics provided by the hosts.

by Shelley Hall

The Small Business Administration (SBA) is attempting to expand the Supreme Court’s Kingdomware ruling, applying the “rule of two” to all task and delivery orders under the Simplified Acquisition Threshold (SAT) if the request for proposals comes under the General Services Administration’s (GSA) Schedule.

In the June 2016 Kingdomware case , the Supreme Court made a unanimous decision and ruled that the Veterans Affairs Department must continue to apply the “rule of two” for veteran-owned small businesses even if the agency surpassed its annual prime contracting goal. The “rule of two” states if an agency can find two or more qualified small businesses through market research of a contract under the Simplified Acquisition Threshold — between $3,000 and $150,000 — it must set aside the solicitation.

SBA issued a memo on Oct. 20 2016 telling its Procurement Center Representatives (PCRs) that the Kingdomware decision should apply to similar statutes because task or delivery orders under multiple-award contracts are considered contracts.

SBA briefed GSA, OFPP and the federal Office of Small and Disadvantaged Utilization (OSDBU) before issuing the memo, but GSA and OFPP didn’t sign on to the interpretation right away.

John Shoraka, SBA’s associate administrator for Government Contracting and Business Development, said if GSA schedules were held to the “rule of two” requirement, it would add another $756 million to the small business totals, raising it to about $91 billion in fiscal 2015 — a 0.21 percent increase.

But SBA’s interpretation creates a major policy shift that’s reversing previous opinions that task and delivery orders were not “contracts” under the FAR and other legal definitions.

From a CO’s perspective, I think it depends.  I can see cases where a TO/DO would be considered a contract and others where they would not.  It’s not a black and white decision.  The battle will likely end up back with the Supreme Court to get a final response as to whether they were considering orders as contracts.

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If you work in the Government acquisition world, this podcast is for you. (not just for Contracting Officers!)

When is a cost-reimbursable contract not completely reimbursable? The Government’s obligation is limited to the estimated cost and/or current funding listed in the contract. (which sounds obvious, but is easily misunderstood once performance begins)

Kevin and Paul discuss FAR 52.232-20 (Limitation of Cost) and FAR 52.232.22 (Limitation of Funds).  Learn the notification requirements and thresholds that warrant Industry’s awareness and why tracking and reporting expenditures are crucial to avoiding unpleasant impacts to contract performance due to lack of available funding.

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Kevin Jans and Paul Schauer created the Contracting Officer Podcast to help Government and Industry acquisition professionals understand more about how the other side thinks.  Admittedly, the podcast’s name sounds very limiting.  It is not just for contracting officers or even just for those in the contracting profession.  Anyone with an interest in the Federal acquisition world can benefit from the insight and down-to-earth explanations of complicated topics provided by the hosts.

If you work in the Government acquisition world, this podcast is for you. (not just for Contracting Officers!)

Today we welcome back special guest Shelley Hall to discuss contract closeout.

Paul and Shelley provide an overview of what happens between when a contract ends and when it is officially closed out.  Learn why it is important for both sides to diligently keep records during contract performance to ease the closeout process.

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Kevin Jans and Paul Schauer created the Contracting Officer Podcast to help Government and Industry acquisition professionals understand more about how the other side thinks.  Admittedly, the podcast’s name sounds very limiting.  It is not just for contracting officers or even just for those in the contracting profession.  Anyone with an interest in the Federal acquisition world can benefit from the insight and down-to-earth explanations of complicated topics provided by the hosts.

by Shelley Hall

This situation is discussed in a recent GAO bid protest, Genesis Design and Development, Inc., B-414254 (Feb. 28, 2017). The protestor alleged it was unfair for the government to reject their proposal because the required three PPQs were never completed by previous customers.

Past performance documentation of some kind is required in almost every government acquisition.  It is often considered an evaluation factor.  So contractors must provide “recent and relevant” past performance to be considered for some proposals.  The government often uses PPQs as a way to determine the offeror’s ability to perform a future contract.

What might happen if the government point of contact doesn’t bother to return a completed PPQ? As this GAO decision demonstrates, if the solicitation requires offerors to return completed PPQs, the agency is not required to contact government officials who don’t return the PPQs.

FAR 15.304(c)(3)(i) requires the agency to evaluate past performance in all source selections for negotiated competitive acquisitions expected to exceed the simplified acquisition threshold. The government has many tools to get past performance information.  They can use information provided in the proposal or check the Contractor Performance Assessment Reports System (CPARS).

PPQs have become a favorite way of gathering this information.  These PPQs are sent out to Contracting Officers, Contract Officer Representatives, Program Managers, etc., who have worked with the offeror in the past on previous acquisitions.  The person is requested to compete the PPQ and return it (1) to the offeror or (2) directly to the procuring agency.

So what’s the problem?  Well, first of all, there’s no requirement in the FAR that says the folks that are sent PPQs are required to respond.  All the folks in this process are busy people and completing forms is usually the last thing on their list.  If a PPQ is especially burdensome, it may simply be ignored.

Of course, there are also the issues or (1) sending the PPQ to the wrong person, (2) having a bad email address, (3) having the person respond to a bad email address, and (4) all the other possibilities that exist when computers are involved.

The solicitation from this particular protest required offerors to provide three completed PPQs from previous customers to demonstrate that the offerors had successfully completed all tasks related to the solicitation requirements. The solicitation allowed the agency to eliminate proposals lacking sufficient information for a meaningful review. The award would be made to the lowest-priced, technically acceptable offeror.

While the protestor submitted a proposal, none of the PPQs they provided with the proposal had been completed. The PPQs only provided contact information for prior customers.  As a result, the agency found the proposal was technically unacceptable, because they failed to include completed PPQs. The protestor was eliminated from the competition and award was made to another contractor.

The eliminated offeror filed a GAO bid protest challenging its elimination. They understood that the PPQs had not been completed by its past customers, but stated they “reasonably anticipated that the agency would seek the required information directly from its clients.” The protestor claimed that it “is often difficult to obtain such information from its clients because they are often too busy to respond in the absence of an inquiry directly from the acquiring activity.”

GAO responded that “an offeror is responsible for submitting an adequately written proposal and bears the risk that the agency will find its proposal unacceptable where it fails to demonstrate compliance with all of a solicitation’s requirements.” Here, “the RFP specifically required offerors to submit completed PPQs,” but “Genesis did not comply with the solicitation’s express requirements.” Accordingly, “the agency reasonably rejected Genesis’ proposal.” GAO denied Genesis’ protest.

So this decision needs to be understood and taken into consideration when PPQs are part of the evaluation portion of an acquisition.  It is up to the offeror to obtain the completed PPQs.

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If you work in the Government acquisition world, this podcast is for you. (not just for Contracting Officers!)

This is an encore presentation of a topic that has made the news as our new President’s administration considers what can be done to streamline the Government’s acquisition processes.  Simplified Acquisition Procedures!

How can the Government buy commercial items efficiently? Good question! One streamlined acquisition process has now become an official part of the FAR. (after years as a “test program”) FAR 13.5 describes Simplified Acquisition Procedures (SAP) which allow Contracting Officers to skip or greatly simplify the process for buying commercial items when certain criteria are met.

Kevin and Paul describe when and where SAP can be used and why it is important for both Government and Industry to understand and take advantage of this most useful FAR language.

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Kevin Jans and Paul Schauer created the Contracting Officer Podcast to help Government and Industry acquisition professionals understand more about how the other side thinks.  Admittedly, the podcast’s name sounds very limiting.  It is not just for contracting officers or even just for those in the contracting profession.  Anyone with an interest in the Federal acquisition world can benefit from the insight and down-to-earth explanations of complicated topics provided by the hosts.

by Shelley Hall

DoD has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) by providing that contracting officers are not required to further justify a decision to provide customary contract financing, other than loan guarantees and advance payments identified in FAR part 32, for certain fixed-price contracts.

In the past, CO’s had to provide justification for providing contract financing on any fixed price contract.  Now, contracts meeting the strict parameters of the final rule will not require any special justification.

DoD published a proposed rule in June 30, 2016, to revise the DFARS regarding the use of customary contract financing, other than loan guarantees and advance payments identified in FAR part 32, on fixed-price contracts with a period of performance in excess of one year that meet the dollar thresholds established in FAR 32.104(d). No comments were received on this proposed rule so there was no change to the wording in the final rule.

DoD determined that the use of such customary contract financing provides improved cash flow as an incentive for commercial companies to do business with DoD, is in the Department’s best interest, and requires no further justification of its use.

This final rule only provides DoD policy regarding providing contract financing for certain fixed-priced contracts. The rule does not add any new provisions or clauses or impact any existing provisions or clauses.

DFARS 232.104 was added and reads as follows:

232.104 – Providing contract financing.

For fixed-price contracts with a period of performance in excess of a year that meet the dollar thresholds established in FAR 32.104(d), and for solicitations expected to result in such contracts, in lieu of the requirement at FAR 32.104(d)(1)(ii) for the contractor to demonstrate actual financial need or the unavailability of private financing, DoD has determined that—

(1) The use of customary contract financing (see FAR 32.113), other than loan guarantees and advance payments, is in DoD’s best interest; and

(2) Further justification of its use in individual acquisitions is unnecessary.

Hopefully this new guidance on contract financing will create the incentives expected to lure more companies to do business with DOD.

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