TIDEWATER GOVERNMENT INDUSTRY COUNCIL How to Analyze Party Obligations Under a Contract By Damien Walsh and Beverly Arviso

TIDEWATER GOVERNMENT INDUSTRY COUNCIL Objectives Learn how to read/review a solicitation Learn contract types and payment matters by contract type Learn the legal and pricing obligations stated in the RFP Are you willing and capable to assume the performance risks?

TIDEWATER GOVERNMENT INDUSTRY COUNCIL Uniform Contract Format

TIDEWATER GOVERNMENT INDUSTRY COUNCIL Anatomy of Contract Numbers

TIDEWATER GOVERNMENT INDUSTRY COUNCIL Anatomy of Contract Numbers “Position 9” Letter Description ABlanket Purchase Agreement BInvitation for Bids CContracts of all types except IDIQs DIDIQ Contracts FContracting actions placed with or through other Government agencies or departments, e.g., AbilityOne and UNICOR GBasic Ordering Agreement PPurchase Orders QRequest for Quote RRequest for Proposal

TIDEWATER GOVERNMENT INDUSTRY COUNCIL Understanding the Contract Type Firm Fixed Price (FFP) Time-and-Materials (T&M) Cost Reimbursement Indefinite Delivery/Indefinite Quantity (IDIQ) Delivery vs. Task Order Permits multiple contract types Government Wide Acquisition Contracts (GWACs) Multiple Award Contracts

TIDEWATER GOVERNMENT INDUSTRY COUNCIL Understanding the Contract Type Contract Type Examples: FFP contracts place all the burden on the contractor Cost Reimbursement type shares responsibility between the government and contractor T&M contracts impose more of a burden on the government (not a preferred method) Are the deliverables clear? Prepare a compliance matrix Include assignments and responsible author with clear due dates Schedule kick-off meeting with teaming partners

TIDEWATER GOVERNMENT INDUSTRY COUNCIL Payment Issues by Contract Type Cost type contract date sensitive contractors are entitled to be paid allowable costs which have been incurred (not necessarily paid) regardless of whether work has been completed up to the established estimated cost ceiling Fixed fee is paid up to the established fixed fee ceiling Fee withholds can be imposed once fixed fee has reached 85% of the funded fee Incurred cost submissions are due within 6 months after the fiscal year end Invoice dates are subsequent to month end

TIDEWATER GOVERNMENT INDUSTRY COUNCIL Payment Issues by Contract Type T&M type contract date sensitive contractor is entitled to be paid hourly rate for each hour worked as supported by timesheets and any other direct cost and applicable handling rates Withholds can be imposed at 5% of the labor portion up to $50,000 Fixed price type contract contractor is only entitled to be paid for accepted work milestone or progress payments are permitted

TIDEWATER GOVERNMENT INDUSTRY COUNCIL Understanding the Contract Type Impact of Contract Types The amount of government financial review and surveillance is determined by the type of contract awarded The government will have greater interest in the company’s accounting practices where incurred costs are the primary factor in establishing the amount the contracting agency ultimately pays for the work performed When the final contract price is unaffected by actual cost or performance, government procurement policy requires considerably less review and surveillance

TIDEWATER GOVERNMENT INDUSTRY COUNCIL Understanding the Requirements Obtain a clear understanding of the requirements Read the solicitation (and read it again, and again, and again…..) Determine the contract type(s) (See Section M) Section B, Supplies or Services and Prices/Cost Section C, Statement of Work Section L, Instructions, Conditions, and Notices to Offerors Section M, Evaluation Factors for Award Clarifications, discussions, and negotiations Evaluated price vs. proposed price

TIDEWATER GOVERNMENT INDUSTRY COUNCIL Reviewing the Solicitation Identify legal and pricing responsibilities to see if they are worth pursing Start with identification of the contract type. This is found in the last section of the RFP as one of the FAR clauses (e.g. FFP, Cost Reimbursement, etc.) Identify the pricing and payment risks Do the requirements fall with the scope of your core skills and business model?

TIDEWATER GOVERNMENT INDUSTRY COUNCIL Reviewing the Solicitation Review Section B CLIN structure Does it align with invoice instructions? Will you have trouble getting paid? Labor category requirements and implications post- award Cost volume should align with the technical volume Provide the government what they ask for and deliver what is promised in the proposal Optional and/or alternate proposals may not be permitted or evaluated

TIDEWATER GOVERNMENT INDUSTRY COUNCIL Reviewing the Solicitation Section I Clauses Allowable Cost and Payment ( ) Penalties ( ) Data Rights

TIDEWATER GOVERNMENT INDUSTRY COUNCIL Questions Damien Walsh, Attorney Advisor Joint Staff Beverly Arviso, CPA, CPCM, CFCM, NCMA Fellow Arviso, Inc