1 1 Contract Performance & Administration Breakout Session # XXX Andrew C. Obermeyer Tuesday, July 12, :30-3:45pm

Patents, Data & Copyrights 2 Government generally…. Encourages commercial use of discoveries Should be indemnified against patent infringement Honors rights in data from private development

3 Bonds and Insurance Miller Act requires performance and payment bonds for construction contracts greater than $100k Not generally used otherwise, except.. –When Govt property/funds are provided –Successor interests risks require –Substantial progress payments are made –For dismantling, demolishing or removal

4 Bonds and Insurance If subject to CAS 416 Insurance & Indemnification, contractors must obtain insurance or self-insure unless the Govt agrees to indemnify –Like workers compensation insurance Indemnity is never open-ended, must always be specific –Effective cost trade –High level approvals

5 Protests Filed with agency or GAO Timeliness is key, pre- & post- rules –Solicitations issues must be raised before proposal due date –All others within 10 days of knowledge, rule is known or should have known –Funds remain available for obligation until 100 after ruling is rendered

6 Protests Generally requires suspension of work on new contract awards until resolved HCA approval required to continue performance in face of protest Increasing volumes? 29 cent rule? Trends? Govt usually prevails

7 Disputes and Appeals Contract Disputes Act of 1978 Claims over $100k must be certified Claim is any written demand for –Payment of money in sum certain –Contract terms adjustment/interpretation –Other relief –If not certified when required, not a claim by definition

8 Disputes & Appeals Policy: resolve by mutual agreement at the COs level Alternate Dispute Resolution (ADR) COs Final Decision –Render within 60 days of written request –Can be longer with notification –Failure to render deemed denial

9 Contract Administration Agencies shall avoid duplication of audits, reviews, inspections, and multiple examinations by using Interagency agreements –Retained, or –Delegated (FAR a) Postaward Orientation

10 Contract Administration Corporate Administrative CO (CACO) –Determines final indirect cost rates –Advanced agreements –CAS at the corporate level Indirect Cost Rates –Billing rates –Final rate determinations –Disallowance of costs decisions

11 Subcontracting (Part 44) If contractor has approved purchasing system, consent to subcontract is required only as specified in the subcontract clause If purchasing system is not approved, consent is required for cost- reimbursement, time and material, labor hour, letter contracts and unpriced actions on fixed priced subs

12 Government Property Generally, govt is going out of the business of govt-furnished property Contractor acquired property Govt Property include govt-furnished and contractor acquired when title has shifted to the government – which happens when progress payments or cost vouchers are substantiated

13 Quality Assurance Acceptance Latent Defect – exists at acceptance but not discoverable by reasonable inspection Patent Defect – exists at acceptance but is not a latent defect

14 Types of Contract Quality Requirements Commercial items – rely on ktr’s system Below SAT – rely on ktr acceptance Standard inspection requirements Higher level quality requirements –ISO –ANSI Nonconformance requires adjustment

15 Transportation Common carrier – holding oneself out to the general public for hire Contract carrier – continuing agreement with one or limited persons F.O.B. – Free on board, physical point at which title passes regardless of who pays the freight bill, but generally includes freight costs

16 Value Engineering Can be either voluntary or required Incentive approach – VECPs –Value Engineering Change Proposals –Ktr resources, shares in savings –Risks development costs if not approved Mandatory program –Govt pays development, retains savings –Can incentive through award fees, etc.

17 Terminations Convenience terminations are a sovereign right of the government Default terminations must have cause Not used below $5000 If multiple contracts, preference is given to small business to continue TCO – Terminating CO

18 Termination Settlements Order of preference: –Negotiated agreement –TCO determination –Costing out under SF1034 TCO responsibilities: –Negotiating settlement proposals –Keeping CO informed –Estimating/recommending release of excess funds

19 Ktr Duties -- Terminations ARO notice, prime shall stop work immediately on terminated portion –Stop placing subcontracts –Terminate subcontracts –Advise TCO if unable to stop, and why Perform continued work Promptly submit any REAs Protect and preserve GFP

20 Terminations for Default Triggered by actual or anticipated failure to perform –Govt not liable for cost incurred –Govt entitled to recoup payments –Ktr liable for reprocurement costs Failure to make timely delivery only requires termination notice Other failures require cure notice/show cause, and at least 10 days to cure TCO can authorize successor/continuation

21 Extraordinary Contractual Actions Public Law Executive Order Facilitate the national defense by entering into contracts, amending or modifying contracts without regard to other provisions of law Head of Agencies exercise the authority and may delegate same

22 Use of Govt Sources Can be authorized by CO for –Cost reimbursement contracts –Others where substantial savings may be realized –Javits-Wagner-O’Day Act (Ability One) FAR Part 51

23 Questions ?