CRA Training – Contracts September 19, 2018

Caveat: This training is focused on the material related to contracts likely on the CRA exam. This is NOT comprehensive Contracts Training.

What We’ll Cover: Federal Acquisition Rules and Statutes Grant v. Cooperative Agreement v. Contract Types of Federal Contracts General Process for Federal Contracts Pathway to the “FAR” General Construct of the “FAR” Primary Issues Important to Universities Sample “FAR” Clauses

FEDERAL ACQUISITION RULES AND STATUTES

FEDERAL ACQUISITION RULES AND STATUTES

Grant An award of financial assistance, the principal purpose of which is to transfer a thing of value from a federal agency to a recipient to carry out a public purpose of support or stimulation. More flexibility with deliverables, period of performance & reporting. Uniform Guidance applies. Broad research objectives/aims. Little to no involvement from the government on the programmatic side.

Cooperative Agreement An award of financial assistance that is used to enter into the same kind of relationship as a grant; and is distinguished from a grant in that it provides for substantial involvement between the federal agency and the recipient in carrying out the activity contemplated by the award. Uniform Guidance applies.

Contract Legal instrument used to acquire supplies, systems, IT, construction or services for the federal government’s direct benefit or use. Federal Contracts: Paid with appropriated funds & subject to the Federal Acquisition Regulation (FAR). Less flexibility with deliverables, period of performance & reporting.

Types of Federal Contracts: Cost Reimbursable Fixed Price Indefinite Delivery Indefinite Quantity (IDIQ) Time & Materials

Contract Risk

Cost Reimbursable Payment for “allowable and allocable costs” actually incurred in the performance of the project Estimated budget and funding ceiling (“not to exceed”) OMB Uniform Guidance cost principles apply FAR Part 31 Contract type risk is on the Buyer.

Fixed Price Funding for a specific dollar amount, regardless of costs actually incurred Usually includes milestones/tasks Contract type risk is on the Seller.

Indefinite Delivery Indefinite Quantity (IDIQ) General Terms and Conditions agreed upon, then Task Orders are issued for set quantities of goods or services Can think of it similar to a “Master Agreement”

Time & Materials Pay for supplies or services based on actual hours worked or material costs Not typically used with Universities, as time is tracked on a % of Effort rather than per hour basis

General Process for Federal Contracts Pre-Proposal Govt. identifies a need, conducts market research PI may talk with technical reps, potential subcontractors, etc. Solicitation/RFP/RFQ Govt. invites public to submit proposals (or sole source based exemptions provided by law) Includes terms and conditions applicable to award Questions/Clarifications Proposal University – LEGALLY BINDING States exceptions to terms & conditions Provides technical objectives and cost for the project Submits in proper format by the solicitation. Govt. reviews bids/offers/proposals – selection criteria in solicitation & FAR

General Process for Federal Contracts (cont’d) Negotiation/Discussions Govt. & Prime Recipient agree on applicable terms & conditions FAR & Other regs balanced with state & University policies/laws Award Issued Contract Administration Reporting – financial/technical Modifications Termination & Close Out

Contracting Officer v. Contracting Officer’s Technical Representative Contracting Officer (CO): Person who issues the award and/or modifications Can bind the Govt. contractually Authorized by a “warrant” Contracting Officer’s Technical Representative (COTR) may be referred to also as COR: Works with CO to monitor technical aspects of award Reviews/approves deliverables & invoices CANNOT bind the Govt. contractually

Pathway to the “FAR” United States Code (USC): Represents the laws of the US Code of Federal Regulations (CFR): Represents the policies and procedures of the US CFR is the implementation of the USC Title 48 of the CRF is the Federal Acquisition Regulation (FAR) System

General Construct of the “FAR” (cont’d) Each “PART” addresses a specific contracting topic Procurement, Audit, Conflicts of Interest, etc. Each PART is repeated across all Chapters Part 45 in Ch. 1 addresses Property Management (52.245-1) & Part 45 in Ch. 9 addresses Property Management specific to DOE (952.245-2)

General Construct of the “FAR” FAR is composed of 53 Parts Parts 1 through 6: General procedures, definitions, administrative mandates Parts 7 through 11: Acquisition planning Rest: Various topics such as pricing, competition and sole source rules, contract administration, services, quality assurance, labor laws, protests, clauses etc. All Parts are important, but most significant are: FAR 15 – Contracting by Negotiation FAR 19 – Small Business Programs FAR 27 – Patents, Data and Copyrights FAR 33 – Protests, Disputes, and Appeals FAR 52 – Contract Clauses Most Significant Misconception: Many acquisition professionals think FAR is for contracting only! FAR includes mandates for PM, Logistics, Engineers, Pricers, CORs, Security Officials, Organizational Management, PIs, Laborers, etc.

FAR Clause Numbering

Purpose of the FAR Reduce costs (administrative & price of services) Increase quality Create efficiencies Incuding establishing uniform acquisition procedures for all federal agencies Promote competition Improve government integrity, fairness & transparency re government contracts

Primary Issues Important to Universities Understanding terms of a Prime Award when University is a subawardee/subcontractor or is issuing a subaward/subcontract Right to Publish Intellectual Property Title Property & Equipment Cost Principles & Allowable Costs Export Control IT Security

Sample FAR Clauses DFARS 252.204-7000 Disclosure of Information Prevents the release of any information related to the project without advance approval of the govt. Prescribing Clause 204.404-70(a) requires its inclusion when contractor will have access to or generate unclassified information that may be sensitive (not just “classified”) and inappropriate for public release Tension: University mission & fundamental research exception (also impacts Export Controls)

Sample FAR Clauses FAR 52.227-3 Patent Indemnity Requires that the Govt. be indemnified for patent infringement in certain cases Tension: VA law prevents the University from agreeing to indemnify any entity in a research contract

Sample FAR Clauses FAR 52.232-22: Limitation of Funds Requires Contractor to notify the Govt. When expenditure reach threshold (usually 75%) AND If expenditures are more or less than obligated total Establishes that Contractor has 60 day period to request supplemental funding or an NCE Tension: Requires careful monitoring of expenses and proactive communication with CO

Sample FAR Clauses Fly America Act (Section 47) Transportation of government contracts must occur on a US flag air carrier Certain exceptions may apply Tension: Requires careful monitoring of travel – essentially restriction on use of funds v. individual booking travel at least expensive rate