· Sealed Bidding· FAR Part 14· Competition in Contracting Act.docx

· Sealed Bidding
· FAR Part 14
· Competition in Contracting Act
· Statutory - P.L. 98-369
· Preference for competition
· Removed preference for formal advertising
· Created:
· Sealed bidding
· Competitive Negotiation
· Exceptions to Competition
· One Responsible Source
· Unusual and compelling urgency
· Industrial Mobilization
· International Agreement
· Otherwise Authorized by Statute
· National Security
· Public Interest
· Sealed
Bidding
· Must be used per CICA if:
· Time permits
· Award will be made on the basis of price and price related factors
· It is not necessary to conduct discussions
· There is a reasonable expectation of receiving more than one bid
· Sealed
Bidding
· Very Formal
· Closely Regulated
· Award must be made to the lowest
· Responsive
· Responsible Bidder
· Designed to give all interested bidders and equal opportunity
· Solicitation
· Use an Invitation for Bid (IFB)
· Display of IFB in public place
· Announcement in newspapers or trade journals
· Publication in synopsis form in the Commerce Business Daily or electronically (fedbizopps.gov)
· Mailing to the bidders list
· Bidder’s
Lists
· Additions
· Research, experience
· Bidder may apply
· Long Lists
· Removal
· Responsiveness
· Refers to the bid
· Determined at time of bid opening
· Bid must meet the “material” terms of the IFB
· price
· quantity
· quality
· delivery
· Responsiveness
· Minor informalities
· Bid Acceptance Period
· Binding Legal Obligation
· Firm Price
· Completeness
· Ambiguities
· Responsibility
· Subjective Contracting Officer decision
· CO must make an affirmative finding of responsibility
· Buy-ins
· Special Requirements
· Preaward Surveys
· Bid
Opening
· Unopened, in a safe or locked box
· IFB number written on the bid
· Publicly opened
· Precise Time
· Late Bids
· Telegraphic Bids & Mods
· IFB
Deficiencies
· Defective IFB
· Before bid opening
· After bid opening
· Mistakes
in Bid
· Apparent Clerical Errors
· Preaward mistakes
· Bid verification
· Postaward mistakes
· Award
· Procedures
· Acceptance period
· Notification
· Quantities
· Rejection of all bids
· Savings
· Specifications
· Others


· Defense Contracting Environment
· Elements of
a Contract
· Offer and acceptance
· Terms and conditions
· Consideration
· Competent Parties
· Lawful Purpose
· Certainty of Terms
· Form Required by Law
· Rules
· Legislative Branch
· Makes the rules
· Executive Branch
· Enforces the rules
· Judicial Branch
· Interprets the rules
· Rules
· Laws
· Regulations
· Policies
· Instructions
· Un-written rules
· Rules
· Agents and
Authority
· An agent is the representative of another
· Contracting Officer
· Program Manager
· Contracting Officer Representative
· COTR
· Actual Authority
· Apparent Authority
· Government as a Customer
· Monopsony
· Public Money
· Cyclic Funding
· Create Technology
· Sovereignty
· Personnel
· No Profit Motive
· Government as a Customer
· Social Programs
· Many Players
· Short Term relationships
· Audits
· Defense
Industry
· Ol.

1. · Sealed Bidding
· FAR Part 14
· Competition in Contracting Act
· Statutory - P.L. 98-369
· Preference for competition
· Removed preference for formal advertising
· Created:
· Sealed bidding
· Competitive Negotiation
· Exceptions to Competition
· One Responsible Source
· Unusual and compelling urgency
· Industrial Mobilization
· International Agreement
· Otherwise Authorized by Statute
· National Security
· Public Interest
· Sealed
Bidding
· Must be used per CICA if:
· Time permits
· Award will be made on the basis of price and price related
factors
· It is not necessary to conduct discussions
· There is a reasonable expectation of receiving more than one
bid
· Sealed
Bidding
· Very Formal
· Closely Regulated
· Award must be made to the lowest
· Responsive
· Responsible Bidder
· Designed to give all interested bidders and equal opportunity

2. · Solicitation
· Use an Invitation for Bid (IFB)
· Display of IFB in public place
· Announcement in newspapers or trade journals
· Publication in synopsis form in the Commerce Business Daily
or electronically (fedbizopps.gov)
· Mailing to the bidders list
· Bidder’s
Lists
· Additions
· Research, experience
· Bidder may apply
· Long Lists
· Removal
· Responsiveness
· Refers to the bid
· Determined at time of bid opening
· Bid must meet the “material” terms of the IFB
· price
· quantity
· quality
· delivery
· Responsiveness
· Minor informalities
· Bid Acceptance Period
· Binding Legal Obligation
· Firm Price
· Completeness
· Ambiguities
· Responsibility
· Subjective Contracting Officer decision
· CO must make an affirmative finding of responsibility
· Buy-ins
· Special Requirements
· Preaward Surveys
· Bid

3. Opening
· Unopened, in a safe or locked box
· IFB number written on the bid
· Publicly opened
· Precise Time
· Late Bids
· Telegraphic Bids & Mods
· IFB
Deficiencies
· Defective IFB
· Before bid opening
· After bid opening
· Mistakes
in Bid
· Apparent Clerical Errors
· Preaward mistakes
· Bid verification
· Postaward mistakes
· Award
· Procedures
· Acceptance period
· Notification
· Quantities
· Rejection of all bids
· Savings
· Specifications
· Others


· Defense Contracting Environment
· Elements of
a Contract
· Offer and acceptance
· Terms and conditions
· Consideration
· Competent Parties

4. · Lawful Purpose
· Certainty of Terms
· Form Required by Law
· Rules
· Legislative Branch
· Makes the rules
· Executive Branch
· Enforces the rules
· Judicial Branch
· Interprets the rules
· Rules
· Laws
· Regulations
· Policies
· Instructions
· Un-written rules
· Rules
· Agents and
Authority
· An agent is the representative of another
· Contracting Officer
· Program Manager
· Contracting Officer Representative
· COTR
· Actual Authority
· Apparent Authority
· Government as a Customer
· Monopsony
· Public Money
· Cyclic Funding
· Create Technology
· Sovereignty
· Personnel
· No Profit Motive
· Government as a Customer
· Social Programs

5. · Many Players
· Short Term relationships
· Audits
· Defense
Industry
· Ologopoly
· Cyclic
· Lack of Planning
· No industrial Planning
· High Concentration
· Dependence on Foreign Sales
· Entry & Exit Barriers
· Entry
Barriers
· Unique Environment
· High Capital Investment
· Engineering/Scientific Requirements
· Large Cash Reserves
· Specialized Reporting
· Detailed Federal Regulations
· Security Clearances
· Political Considerations
· Exit
Barriers
· Government R&D
· Large Overhead
· Specialized Equipment
· Low-Bid Awards
· Specialized Labor
· Specialized Marketing
· Military Specifications
· Economic Market Theory
· Homogeneous Product
· Many Buyers and Sellers
· Freedom of Entry/Exit
· Perfect Information

6. · Individuals Have Insignificant Influence
· No Collusion
· Maximization of Utility/Profit
· Systems
Theory
· Buyer-Seller Coupling
· Loose (Market Bargaining)
· Tight (Cooperative Relationship)
· Full (Vertical Integration)
· Components
· Suppliers in Supply Pool
· Credible Commitment
· Dispute Resolution
· Communication Flow
· Transaction Cost Economics
· Objective
· Economize on
· Transaction Cost
· Production Cost
· Socioeconomics
· Small Business Preferences
· Goals
· Set-asides
· Small Business Administration
· Certificates of Competency
· 8a programs
· Equal Access to Justice
· Prevailing party
· Other
Programs
· Labor Surplus
· Nondiscrimination Requirements
· Walsh-Healey Act (wages)
· Buy American Act
· Environmental Protection
· Drug-free workplace

7. · Contract Types
· Forms of
Contracts
· Completion – A product is delivered
· Cost or Fixed Price
· Product must be delivered
· Contract completed on delivery and acceptance
· Term – Level of Effort
· Amount of labor delivered over time
· Use personnel and facilities as spelled out
· General Rules
· Fixed Price
· Perform work, deliver product, get paid
· Contractor is at risk
· Cost
· Contractor provides “best effort,” works to a percentage of
negotiated costs and then notifies the government
· Which Type?
· Nature and complexity of effort
· Urgency
· Period of performance
· Competition
· Difficulty in defining performance
· Availability of data
· General
Budgeting Rule
· PMs must budget to the “most likely price”
· Most likely price
· Varies by contract type
· Cost
Reimbursement
· Establish an estimate of total cost for the purpose of
obligating funds and establishing a ceiling that the contractor
may not exceed except at his own risk

8. · Provide payment of ALLOWABLE incurred costs to the extent
provided in the contract
· Cost-Plus-
Fixed-Fee
· Pays all reasonably incurred and allowable costs plus a fixed
dollar amount as a fee
· Fee based on the estimated cost of the contract and stays
“fixed” regardless of actual costs
· CPFF
· Appropriate when estimates of cost, performance, and
schedule are uncertain
· Flexibility is needed
· Monitoring needs are high
· Change is anticipated
· CPFF
· Contractors recover costs
· Provides least incentive to contractor to control costs and be
efficient
· Incentive to underrun is because the fixed fee becomes a
higher percentage
· Trade-offs between cost and technical excellence
· Budget to expected cost plus fixed fee
· Cost-Plus-
Award-Fee
· Acts like a CPFF except the fixed fee is 0% or some small
base fee
· Contractor earns more fee through and “Award Fee Plan”
· Award is the unilateral right of the government
· CPAF
· Appropriate when estimates of cost, performance, and
schedule are uncertain
· More incentive is desired than CPFF
· Administrative capability is available
· Award is based on judgment of Award Determining Official
· Budget to expected costs plus entire available fee
· Cost-Plus-

9. Incentive-Fee
· Shift cost risk to contractor
· Contractor should assume more risk:
· More detailed specs
· Less uncertainty
· Better able to estimate costs
· Contractor now shares in overruns and underruns
· CPIF
· Negotiate certain items
· Target cost
· Target fee
· Max fee
· Min fee
· Share line
· Regardless of cost the fee is never more than the max, nor less
than the min
· CPIF
· Appropriate when uncertainties can be identified and
quantified to some degree
· Used to incentivize the contractor when uncertainties still
preclude Fixed Price
· Used in R&D when uncertainties can be resolved by $$
· Share
Formula
· Expressed as a percentage with the government’s share first
· Example:
· 80/20 share means that the government pays 80% of overruns
or keeps 80% of underruns
· Contractor’s fee is reduced by 20 cents for every dollar of
overrun
· Contractor’s fee is increased by 20 cents for every dollar of
underrun
· CPIF
· Budget to expected cost and fee
· Fixed Price
Contracts

10. · Funding of cost overruns is not possible
· Contractor obligated to deliver specific product at the price
negotiated regardless of cost
· Appropriate when cost, performance, and schedule uncertainty
is low of manageable
· Firm-Fixed-
Price
· Contractor must manage cost within price
· Highest profit potential
· More cost means less profit
· Completion form
· Can have FP elements of a contract
· Level of Effort can be at a fixed price
· Budget to final negotiated price
· Fixed Price
Incentive Firm
· Uncertainty too great for FFP
· Completion form
· Contractor must perform
· Contractor performs at own expense when costs exceed
ceiling price
· FPIF
· Negotiate
· Target Cost
· Target Profit
· Ceiling Price
· Share line
· Profit is more than target if final cost is less than target cost
and decreased if final cost is more than target cost
· Regardless, the ceiling is firm
· FPIF
· FPIF
· Budget to the target price of the contract
· Budgeting to the ceiling price indicates that the government
does not believe that the incentives will change contractor
performance

11. · FP w/Economic
Price Adjustment
· Price negotiate on assumptions regarding economic prices of
materials or labor
· EPA clause kicks in if assumptions fail and some trigger is
set-off
· Can be pre-negotiated or based on an index
· Budget to anticipated price
· Does not include EPA
· EPA adjustment should be unlikely


· Acquisition Planning
· FAR
Part 7
(a) Agencies shall perform acquisition planning and conduct
market research (see Part 10) for all acquisitions in order to
promote and provide for --
(1) Acquisition of commercial items or, to the extent that
commercial items suitable to meet the agency’s needs are not
available, nondevelopmental items, to the maximum extent
practicable (10 U.S.C. 2377 and 41 U.S.C. 251, et seq.); and
(2) Full and open competition (see Part 6) or, when full and
open competition is not required in accordance with Part 6, to
obtain competition to the maximum extent practicable, with due
regard to the nature of the supplies or services to be acquired
(10 U.S.C. 2301(a)(5) and 41 U.S.C. 253a(a)(1)).
· FAR
Part 7
· (b) This planning shall integrate the efforts of all personnel
responsible for significant aspects of the acquisition. The
purpose of this planning is to ensure that the Government meets
its needs in the most effective, economical, and timely manner.
Agencies that have a detailed acquisition planning system in
place that generally meets the requirements of 7.104 and 7.105
need not revise their system to specifically meet all of these

12. requirements.
· Acquisition
Plan Format
· Acquisition Background
· Plan of Action
· Funding and cost consideration
· Technical considerations
· Contract considerations
· Environmental consideration
· Security
· Special considerations and waivers
· Describing
Agency Needs
· State requirements in terms of
· Functions to be performed
· Performance required
· Essential physical characteristics
· Goals
· Provide contractors maximum opportunity
· Leverage the expertise of industry
· Requirements
Docs
· Lots of Names
· SOW-statement of work
· SOO-statement of objectives
· Specifications
· Types
· Design Specifications
· Performance Specification
· Design
Spec
· Actual description of the product to be purchased
· Precise measurements, tolerances, materials, tests, quality
control, inspection, and all other known information
· Used when technical requirements are firm and can be clearly
communicated to potential contractors

13. · Performance
Spec
· Identify operational characteristics of the item to be acquired
· What does it need to do?
· Tells potential contractors what the item needs to do rather
than specifying what the item is

· Good
Practices
· Be thorough and complete
· Emphasize results rather than design or management directives
· Limit contractual references
· Allow flexibility
· No-Nos
· Don’t be restrictive
· Don’t compromise requirements to increase competition
· Don’t use non-standard industry terminology
· Don’t allow potential competitor to do your job
· Market
Research
Market Research is a process used to collect, organize,
maintain, analyze, and present data for the purpose of
maximizing the capabilities, technology, and competitive forces
of the marketplace to meet an organization’s needs for goods
and services
· Market
Research
· Regulatory Requirement of FAR
· Federal Acquisition Regulation
· Maximize
· Competition
· Expertise
· Capability
· Existing Technology
· Commercial Items
· What is

14. Commercial
· Case Law
· Comptroller General Decision B-277241.8
Determining whether a product or service is a commercial item
is largely within the discretion of the contracting agency. . .
Unless it is shown to be unreasonable.
· Why do
I care?
· Cheaper
· Already proven
· No cost data required
· Easier acquisition procedures!!!!!!!!
· Acquisition
Plan
An acquisition plan is a document or collection of documents
that addresses the technical, management, and other significant
considerations. The acquisition plan will define the major
players and the sequence of events from requirements definition
through contract award.
· Acquisition
Plan Format
· Acquisition Background
· Plan of Action
· Funding and cost consideration
· Technical considerations
· Contract considerations
· Environmental consideration
· Security
· Special considerations and waivers
· Plan for
Post-Award
· Contract administration is longer!
· Ensure compliance
· Use personnel and resources efficiently
· Identify potential problems early
· Kick-off meetings

15. · Understand proposal
· Answer contractor questions
· Clear and mutual understanding
· Solicitation
Types
· Commercial Item (FAR Part 12)
· Simplified (FAR Part 13)
· Sealed Bidding (FAR Part 14)
· Best-Value (FAR Part 15)
· Competitive
· Sole-source
· Who Prepares
this?
· Program Manager is responsible
· Delegates parts to team members
· Contracting Officer is a critical source for information
· Contractual commitments
· Changes
· Cost issues
· Discrepancies
· Contact with
Contractors?
· Maintain arm’s length relationship
· Contractor should determine how to meet contractual
requirements
· Do not suggest solutions
· Do not become overly influenced
· Listen up! Contractor’s are smart!