1. EXAM PREP COURSE – 2016 SESSION UNIT 1 BY DONALD E. SHANNON CPCM,CFCM, FELLOW Certified Federal Contracts Manager © 2015 – Rio Grande Chapter NCMA

2. Copyright Notice This presentation is the property of the Rio Grande Chapter of the National Contract Management Association © 2015. All rights reserved. This presentation is intended for the private, non-commercial use of the Rio Grande Chapter of the National Contract Management Association (NCMA) for the education and training of candidates seeking certification by the NCMA as a Certified Federal Contracts Manager. This presentation may not be duplicated, reproduced or used in any form or by any means including photocopying and recording or by any information storage and retrieval system without permission in writing from the publisher.

3. Foreword This presentation is part of a series of tutorials designed to assist a group of student prepare for the Certified Federal Contract Manager Certification from the National Contract Management Association. It is not intended to be a stand-alone program. Rather it is intended to be a component in a structured program of study which includes:  A detailed review of the Federal Acquisition Regulation  The companion “Certified Federal Contracts Manager Study Guide” Second or Third Editions  A knowledge of definitions included in the “Desktop Guide to Basic Contracting Terms” Seventh Edition  Selected readings from Contract Management Magazine, The Journal of Contract Management or other publications  Selected legal decisions

4. CFCM Requirements A Bachelor’s Degree or higher from an accredited university 1 One year of experience 80 Hours of continuing professional education 2 Successfully passing the CFCM exam Subscribe to the Contract Management Code of Ethics See: http://www.ncmahq.org/learn-and-advance/certification/cfcm/eligibility 1.Ten years experience may be considered in lieu of a degree. Contact NCMA HQ (1-800-344-8096 or certification@ncmahq.org) for information.certification@ncmahq.org) 2.CPE credits are awarded for this prep class 1 credit per 50 minutes

5. Study Group This group will assist in preparing you for the CFCM exam Question. Have you registered for the exam  Application form is online  Application fee is $150 for NCMA Member or $275 for non- member  Once application is approved – register for test  Online exam – Kryterion = $95.00  Paper exam – Through chapter = $50 Member - $90 non-member

6. This Is a Review Session Our expectation is CFCM candidates are familiar with the Federal Acquisition Regulation  CON 090 for Government Contracts Specialists  FAR Study Group for Others This is NOT a spoon-fed program for those who have not taken the time to read the FAR This is a review of key concepts and terms associated with Government contracting  We will go fast and if you have not prepared you will struggle to keep up

7. What is a Contract Manager Government usage  Contracting Officer (senior)  Procurement Specialist/Buyer Commercial use  Director / VP of Contracts (executive)  Contract Manager (senior)  Contract Administrator

8. Federal Contracts Management Guided by extensive set of laws and regulations  Code of Federal Regulations (48 CFR)  Federal Acquisition Regulation  Departmental Supplements (e.g., DFAR)  Departmental policy  Case Law  Other policy/guidance  GAO  OMB

9. Federal Contracts Management Our challenge  To know and apply the governing law and regulations to specific actions  To conduct business on a professional basis  Ethical  Courteous / Polite

10. As a CFCM You will be designated a professional  Similar in nature to a CPA or a PMP  You will be considered an authority Many companies tie salary to certification levels  5 – 10% premium for CFCM Duty to mentor  You and others have invested in your certification – pay it forward.

11. Study Group Rules Our assumptions  You are here to prepare for the CFCM exam  You meet the general eligibility requirement for a CFCM certificate (less the test)  You have a working knowledge of the FAR through work experience, FAR study group, or other means.  You have the CFCM study guide This is your group – you will run it You will be here each week ready to participate in discussion.

12. Study Group Resources CFCM Study Guide On-Line access to the FAR Other resources  Desktop Guide to Basic Contracting Terms  Contract Management Body of Knowledge*  Practice exams*

13. Proposed Schedule Feb 18 – Organization & Overview Feb 25– Part 1A (to Page 18 of Second Edition) March 3 – Part 1B March 10 - Parts 2 & 3 March 17 – Part 4 and 5A (to page 72 of Second Edition) March 24 – Remainder of Part 5 March 31 – Part 6 April 7 – Mock Exams

14. Important Notice 1 Notice to CFCM Candidates: The CFCM Study Guide, 2nd Edition, was published in 2012 and contains FAR changes through Federal Acquisition Circular (FAC) 2005-57. FAC 2005-83, effective October 1, 2015, contains updates of inflation adjustments of acquisition-related thresholds. CFCM candidates who test on October 1 and later are responsible for knowing the new thresholds. The 3rd Edition of the CFCM Study Guide is scheduled to be published by January 2016. 1. NCMAHQ.ORG website Last accessed October 29, 2015

15. Exam Questions per FAR Part Expect a total of 150 questions on the exam If taken before April, 2016 the distribution of questions by FAR Part is as shown If you take the new test (after April 2016) the distribution will be changed slightly and there will be no questions on less used parts of the FAR like Part 51.

16. THE CODE OF ETHICS OF THE NATIONAL CONTRACT MANAGEMENT ASSOCIATION (NCMA) ESTABLISHES PRINCIPLES FOR MEMBERS OF THE CONTRACT MANAGEMENT PROFESSION. THIS CODE IS INTENDED TO CREATE PUBLIC TRUST AND CONFIDENCE IN THE INTEGRITY OF THE CONTRACT MANAGEMENT PROCESS. THE CODE REQUIRES MEMBERS OF THE CONTRACT MANAGEMENT PROFESSION TO CONDUCT THEMSELVES IN SUCH A MANNER AS TO BRING CREDIT UPON THE PROFESSION. ALL MEMBERS OF NCMA SHALL ABIDE BY THE LETTER AND SPIRIT OF THIS CODE. NCMA Code of Ethics

17. General Obligations 1 Integrity: Members fulfill their duties without deception or misleading practices. Members actively support and encourage others in adhering to this code. Accountability: Members accept responsibility for their own conduct and performance. Good faith: Members conduct all business in good faith, make any required disclosures, and avoid actual or apparent conflicts of interest (whether by reason of a financial interest, family relationship, or any other circumstances). Professionalism: Members make themselves knowledgeable on all aspects of the contracting profession, and apply this knowledge to the best of their ability to serve their employers, customers, clients, business partners, and the public interest. This includes sharing one’s knowledge and experience to contribute to the development of the profession. Members provide objective advice free from improper influence. 1. See: http://www.ncmahq.org/discover-our-profession/code-of-ethicshttp://www.ncmahq.org/discover-our-profession/code-of-ethics

18. General Obligations Confidentiality: Members protect confidential information concerning the business affairs of any present or former employer, governmental agency, business partner, or public body on which they serve. Compliance with laws: Members comply with all laws and regulations governing contract management activities in all jurisdictions in which they conduct business. Trust: Members conduct themselves in such a manner as to establish and maintain trust and confidence in the integrity of the contract management process. Respect: Members are respectful of others in the conduct of their professional duties.

19. Obligations to Profession Professional reputation: Members avoid disparaging statements affecting the professional reputation of other contract management professionals. Members act so as to bring credit upon the profession and the association. Mutual accountability: Members hold each other accountable for compliance with this code. Professional development: Members keep informed of developments in the contract management field to maintain knowledge, skill, and professional competence.

20. Obligations to Profession Advancement by qualification: Members encourage hiring and promotion within the contract management profession based upon an individual’s professional qualifications. Professional qualifications and certification: Members make only truthful claims concerning professional qualifications, certification status, or experience. Members use any professional certification or designation only in accordance with the practice and rules of NCMA or other certifying or granting body that granted the certification or designation.

21. Obligations to the Association Service: Members offer service to the association willingly, including serving in chapter and national offices without compensation, in order to advance the profession of contract management. Violations: Members report any suspected violations of this code to an official of NCMA at the appropriate level (chapter or national). Violations of this code are subject to discipline in the judgment of NCMA up to, and including, revocation of membership and certification. Members shall not retaliate in any form against anyone who raises a valid concern under this code.

22. LET’S SET THE STAGE Government Contracting Overview

23. Government Contract Law Basics Contract Laws are enacted by Congress, implemented by the Executive Branch and interpreted by the Judiciary As the sovereign, the government enjoys certain protections and privileges  Sovereign Immunity  Termination for Convenience  Socio-economic programs “ Necessary and Proper” clause of the U.S. Constitution Appropriation of funds

24. Government Contract Law Basics Substantive laws affecting procurement  Armed Services Procurement Act  Federal Property and Administrative Services Act  Competition in Contracting Act  Streamlining Acquisition Regulations Act Authorizations and Appropriations  Authorization act allows congress to propose appropriations within a defined ceiling  Appropriation provides funding to a specific agency for a defined purpose.

25. Budgeting Basics Budgeting Process  Inputs aggregated by OMB  OMB negotiates with agencies to compile proposed budget  Congress (House) then establishes Authorized and Appropriated budgets  Senate provides additional input  Final budget is passed by Congress and sent to president for signature

26. Budgeting Basics Approved budget sent to OMB who then allocates it to each agency Continuing Resolution  Essentially extends earlier period’s authorized and appropriated budget into next fiscal period  Severely restricts new acquisitions while continuing to fund existing contracts.

27. Budgeting Basics Restrictions on Government funds  Purpose for which they may be used (“color of money”)  O&M (057 3400)  R&D (057 3600)  Military Construction (057 3300)  Limit on time frame in which those funds may be spent i.e., obligated  One Year (FY 2013)  Two Year (FY 2013-14)  Payment may extend over several years for money obligated in current year.

28. Funding Obligations – FPDS-NG

29. Applying the Law to a Specific Federal Contracting Instance FAR DFAR OMB Circulars Office of Federal Procurement Policy Agency Policy Case Law “Restatement of the Law”

30. Contract Interpretation Contracting professionals should always seek to resolve differences in the least formal and most collaborative manner possible. It is important for contract managers to understand contract interpretation principles in order to avoid and/or settle disputes. Judicial and administrative bodies interpret the contract language to determine the outcome of any dispute if it cannot be settled at a lower level.

31. Contract Interpretation Main point of contract interpretation is to determine a single interpretation of the contract that reflects the parties' intent. 1)Know/Read your Contract 2)Understand Key Terms 3)Extrinsic Evidence

32. Know Your Contract Before signing contract make sure that all parts work together and that there is no ambiguity. If one section of the contract may conflict with another, the parties should use an "order of precedence" clause to determine which section takes priority. According to the FAR, any inconsistency shall be resolved by giving precedence in the following order: o The schedule (excluding the specification); o Representations and other instructions; o Contract clauses; o Other documents, exhibits, and attachments; and o The specifications. (Derived from FAR 52.214-29 and 52.215- 8.)

33. Understand Key Terms Key term is not defined in the contract, then technical terms are given their technical meaning in that field. Negotiated terms take precedence over standard terms. o “Boiler plate“ = Standard terms that may be pre-printed on a form. Specific terms take precedence over general terms. If a term has several different meanings, it is interpreted against the party who wrote the ambiguous term.

34. Extrinsic Evidence Discussions and concurrent actions,  For example, discussions, meetings, teleconferences, e-m ails, or conduct submitting bids, quotes, or proposals may establish the intent of the parties about the disputed terms. In addition, the parties' behavior after contract award, but before the controversy, may also provide insight how to interpret the disputed terms. Prior course of dealing between the parties, and  A prior course of dealing can establish precedence based on past actions; thus, it can be used to establish the intent of the parties. Custom and trade usage.

35. For the Purposes of this Group We will only consider the Federal Acquisition Regulation (FAR)  Open acknowledgment that other sources may apply to your day-to-day activities  We will not consider departmental supplements  We will not consider departmental policy This approach establishes a “level playing field” for contracting professionals seeking the CFCM credential So.. For now none of those “other sources” are being considered and we will focus strictly on the FAR

36. A QUICK OVERVIEW OF WHAT’S AHEAD Welcome to the FAR

37. Role of the Federal Acquisition Regulation (FAR) Principle source of contracting guidance within the Federal Government Implemented April 1, 1984 “FAR System” comprised of  FAR  Agency Supplements (e.g., DFAR)

38. 48 CFR – Federal Acquisition Regulation System CHAPTER 1 - FEDERAL ACQUISITION REGULATION CHAPTER 2 - DEFENSE ACQUISITION REGULATIONS SYSTEM, DEPARTMENT OF DEFENSE CHAPTER 3 - HEALTH AND HUMAN SERVICES CHAPTER 4 - DEPARTMENT OF AGRICULTURE CHAPTER 5 - GENERAL SERVICES ADMINISTRATION CHAPTER 6 - DEPARTMENT OF STATE CHAPTER 7 - AGENCY FOR INTERNATIONAL DEVELOPMENT CHAPTER 8 - DEPARTMENT OF VETERANS AFFAIRS CHAPTER 9 - DEPARTMENT OF ENERGY CHAPTER 10 - DEPARTMENT OF THE TREASURY CHAPTER 12 - DEPARTMENT OF TRANSPORTATION CHAPTER 13 - DEPARTMENT OF COMMERCE CHAPTER 14 - DEPARTMENT OF THE INTERIOR

39. 48 CFR – Federal Acquisition Regulation System CHAPTER 15 - ENVIRONMENTAL PROTECTION AGENCY CHAPTER 16 - OFFICE OF PERSONNEL MANAGEMENT FEDERAL EMPLOYEES HEALTH BENEFITS ACQUISITION REGULATION CHAPTER 17 - OFFICE OF PERSONNEL MANAGEMENT CHAPTER 18 - NATIONAL AERONAUTICS AND SPACE ADMINISTRATION CHAPTER 19 - BROADCASTING BOARD OF GOVERNORS CHAPTER 20 - NUCLEAR REGULATORY COMMISSION CHAPTER 21 - OFFICE OF PERSONNEL MANAGEMENT, FEDERAL EMPLOYEES GROUP LIFE INSURANCE FEDERAL ACQUISITION REGULATION CHAPTER 23 - SOCIAL SECURITY ADMINISTRATION CHAPTER 24 - DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT CHAPTER 25 - NATIONAL SCIENCE FOUNDATION CHAPTER 28 - DEPARTMENT OF JUSTICE CHAPTER 29 - DEPARTMENT OF LABOR

40. 48 CFR – Federal Acquisition Regulation System CHAPTER 30 - DEPARTMENT OF HOMELAND SECURITY, HOMELAND SECURITY ACQUISITION REGULATION (HSAR) CHAPTER 34 - DEPARTMENT OF EDUCATION ACQUISITION REGULATION CHAPTER 51 - DEPARTMENT OF THE ARMY ACQUISITION REGULATIONS CHAPTER 52 - DEPARTMENT OF THE NAVY ACQUISITION REGULATIONS CHAPTER 53 - DEPARTMENT OF THE AIR FORCE FEDERAL ACQUISITION REGULATION SUPPLEMENT [Reserved] CHAPTER 54 - DEFENSE LOGISTICS AGENCY, DEPARTMENT OF DEFENSE CHAPTER 57 - AFRICAN DEVELOPMENT FOUNDATION CHAPTER 61 - CIVILIAN BOARD OF CONTRACT APPEALS, GENERAL SERVICES ADMINISTRATION CHAPTER 63 - DEPARTMENT OF TRANSPORTATION BOARD OF CONTRACT APPEALS CHAPTER 99 - COST ACCOUNTING STANDARDS BOARD, OFFICE OF FEDERAL PROCUREMENT POLICY, OFFICE OF MANAGEMENT AND BUDGET

41. Chapter 1 – Federal Acquisition Regulation Subchapter A – General (parts 1-4) Subchapter B – Competition and Acquisition Planning (parts 5-12) Subchapter C – Contracting Methods and Contract Types (parts 13-18) Subchapter D – Socioeconomic Programs (parts 19-26) Subchapter E – General Contracting Requirements (parts 27-33) Subchapter F – Special Categories of Contracting (parts 34-41) Subchapter G – Contract Management (parts 42-51) Subchapter H – Clauses and Forms (parts 52 & 53)

42. The FAR Council FAR is prepared, issued, and maintained jointly by:  Secretary of Defense  Administrator of GSA  Administrator of NASA Two councils who must agree to all changes  Defense Acquisition Regulation Council (DoD/NASA)  Civilian Agency Council (GSA) FAR is published and distributed by FAR Secretariat (GSA) Richard T. Ginman Director, Defense Procurement & Acquisition Policy, Department of Defense Mr. William P. McNally Assistant Administrator for Procurement National Aeronautics and Space Administration Mr. Jeffrey A. Koses Senior Procurement Executive General Services Administration

43. Proposed Changes to the FAR Proposed changes are published in the Federal Register Know as “FAR Cases” Public Comment Period Adoption of proposed change announced in Federal Register Electronic copy of FAR updated with revision

44. Coming Next Week

45. Class #2 Read Pages 1 thru 18 of the Study Guide FAR Part 1 – The FAR System FAR Part 2 – Definitions of Words and Terms FAR Part 3 - Improper Business Practices and Personal Conflicts of Interest FAR Part 4 – Administrative Matters FAR Part 5 – Publicizing Contract Actions FAR Part 6 – Competition Requirements